Middle East

Important Reading

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Fouad Ajami on Obama and the politics of crowds. Excerpt:

My boyhood, and the Arab political culture I have been chronicling for well over three decades, are anchored in the Arab world. And the tragedy of Arab political culture has been the unending expectation of the crowd — the street, we call it — in the redeemer who will put an end to the decline, who will restore faded splendor and greatness.

Via Betsy, who has some interesting commentary:

I heard Mark Steyn say the other day that so many schools today have posters with abstract nouns in the halls like Achievement, Effort, and Character and that it’s no coincidence that a generation educated among such posters would fall hard for a candidate of Hope and Change.

Israelis Support John McCain

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…most of them do, anyhow. Polls show that 70% of Israelis would vote for McCain if they were eligible to vote in the U.S. election.

And some of them are. There are an estimated 40,000 Americans residing in Israel who are eligible to cast absentee ballots, and many of them will be voting in swing states. The chairman of Republicans Abroad in Israel predicts a 75% vote for McCain, although other reports show a large number of undecideds.

From a Weekly Standard article via Soccer Dad:

We respect war heroes in Israel, especially those like McCain who were POWs,” notes Mitchell Barak, managing director of the Jerusalem-based Keevoon Research, Strategy & Communications. “We see Obama fantasizing about how he wants to sit down and talk to the terrorists, and he loses a lot of Israelis right there. He comes off as unrealistic and insensitive to the existential challenges facing the Jewish state, and as naïve.”

Naïve, indeed. It’s a theme that popped up frequently when I mentioned Obama’s name. Obama lacks experience. Obama doesn’t understand how to deal with terrorists in general, and radical Islamic terrorists in particular. Obama thinks a court of law is the right forum for dealing with terrorists. Obama thinks the U.N. is a dandy place to solve difficult problems. Obama would have happily lost the Iraq war. Obama would cede regional hegemony to the Iranians. And so on.

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McCain Bad for Jews/Israel?

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Ron Coleman disagrees and provides an alternative hypothesis:

Like a good Zionist, Goldberg looks everywhere for Israel’s disastrous state but the most obvious place: Israel. The vast majority of its awful policy decisions, whether in terms of defense, international relations, tactics, economics and domestic policy, are not in any way decided or even on the radar on Pennsylvania Avenue. They are the result of a string of breathtakingly incompetent governments purporting to run a depressingly corrupt kleptocracy to please an obsolescing and self-loathing elite that lacks the will to even purport to lead a confused and mainly unmotivated populace that obsesses on a slim minority of practitioners of its own religion in its midst as the bogeyman that explains its existential hopelessness. A preposterously irrational and self-destructive foreign policy is almost besides the point and is hardly a surprise — but a secular Zionist can hardly be expected to wrestle with this honestly when there are Republicans to blame and election in the air.

I don’t share Ron’s disdain for secular Zionists, not all of whom are leftists and not all of whom are unwilling to blame Israel for its own mistakes. However, I agree that Israel’s current problems are largely of its own making, the consequence of years of bad leadership. Bush II has been, until recently, the most pro-Israel US president since Truman, and I see no reason to think McCain would be much worse. (I do think there’s reason to expect Obama to be worse, a la Jimmy Carter.) Goldberg ignores the fact that Israel’s leaders have made numerous bad decisions (empowering Arafat, withdrawing precipitately from Lebanon and Gaza, not attacking Syria or destroying Hezbollah in 2006, etc.), and have always had the option of saying no to ill-conceived US proposals. Israel’s central problem is its corrupt political culture — largely the result of socialism, a poorly designed electoral system that makes leaders unaccountable, and an addiction to US subsidies. I don’t know what the remedy for Israel’s fundamental problems is, or if there is a remedy, but blaming Bush or McCain seems way off the mark.

Shooting Down Missile Defense

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In late June, the U.S. Missile Defense agency conducted a successful test of THAAD, the Terminal High Area Defense system. THAAD is intended to provide the upper level of a multilayer defensive shield, with a lower-level defense provided by Patriot or a similar system. It is particularly intended as a defense against short- and intermediate-range ballistic missiles, although it also offers some capability against intercontinental missiles.

I don’t think Barack Obama would be much of a THAAD supporter. In this speech, he says he would cut investments in “unproven missile defense systems” and indeed seems pretty hostile to defense technology programs in general.

I guess THAAD counts as an “unproven technology,” given that it has not yet been combat-tested or even deployed. The radar-and-communications network that protected Britain from air attack during WWII was also an “unproven technology” when it was deployed: it is very fortunate that Neville Chamberlain, rather than Barack Obama, was Prime Minister of Britain at the time.

THAAD is a hit-to-kill system: it destroys its targets via force of impact, rather than with an explosive charge. This is basically “hitting a bullet with a bullet,” an idea that opponents of missile defense have long mocked.

An aerodynamicist once supposedly “proved” that it was impossible for bumblebees to fly; however, the bumblebee continues flying happily, unaware of the impossibility of its behavior. Similarly, THAAD “hits a bullet with a bullet,” not deterred by the supposed impossibility of this action.

Very clearly, “progressives”–and even many mainstream liberals–have long been hostile to the very idea of missile defense. They were hostile to it when the principal threat was from the Soviet Union, and they are hostile to it when the principal threat is from rogue states, terrorists, and a brutish theocracy. They were hostile to it when the latest thing in computer technology was the IBM System/370, and they are hostile to it several generations of technology later. It seems to really bother them that any system should be so presumptuous as to interpose itself between Americans–and citizens of allied nations–and those who would launch missiles at them.

Why?

A Scary Ratio

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Barrons (7/14) contains the following sentence:

Even more impressive is the value of the oil reserves of petroleum-exporting countries, which now total an estimated $140 trillion, nearly three times the size of global equity markets, which have a combined market value of around $50 trillion. (emphasis added)

There are a couple of things wrong with this comparison. It is not correct, IMNSHO, to compare a cash flow stream which will be recognized over years/decades to a current market value–the cash flow stream should be discounted to present value. (Equity market values already represent, at least in theory, the discounted present value of their corresponding free cash flow streams.) Also, I’m pretty sure reserve value is a gross value, which doesn’t take production costs into account. For a place like Saudi Arabia, these may be minimal at present, but they will not remain minimal over the life of the asset.

But even after these adjustments are applied, you will probably come out with something like:

The value of the oil reserves of petroleum-exporting countries is equal to the size of global equity markets.

Think about what this means. Ownership of the land under which oil resides is roughly equal in value to ownership of the equity interest in all the world’s publicly-traded companies, with their factories, mines, brand values, and intellectual capital…the accumulated work and knowledge of centuries.

This represents in a sense a return to the pre-industrial age, in which the ownership of land was the predominant form of wealth. If this situation is sustained, it will represent a tremendous change in the world economic order, and not at all a positive one.

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