This morning my daughter Elizabeth started wheeling Jeremy in a dump truck toward the front door. Where are you going, I asked? To the supermarket, she said. So my 2 year old is already dumping boys. This week she had her first night in a real bed and got her first bicycle.

Spring is in the air and today it is about 70 degrees in New York City. We are going offline for a month of holidays and started this past weekend in upstate New York and then going to Florida for Passover and the Blue Ridge Mountains of western North Carolina for the first week of May. We have zoos and gardens to visit, pictures to take, outfits to wear, bubble blowers and kites to play with, and we kindly ask all terrorists to stay away or go on vacation themselves. We had a wonderful weekend at the Mohonk Lodge, about 90 minutes drive from the City in upstate New York. Beautiful mountain and lakeside views, 3 meals a day included with free child care, and lots of fun activities such as sing-a-long, dancing at night, blacksmith demonstration and horse carriage ride. Very good value and evidently quite popular – I had to bug the manager to find us a room anytime this summer to go back.

The Financial Times had a whole section on March 17 about art in the Middle East. I guess I have to eat my words of a column I wrote a year ago in which I said there was nothing indigenous and new coming out of that region and that it seemed that the art scene there consisted mostly of implants of western art being licensed.

The Economist’s survey on Chinese colonialism was an excellent contextual study showing what is and isn’t happening. All the copper going from Congo to China is less than 1/3 the amount held by a single American company there. China is only 14% of Australia’s exports and in 2006 it was only 17th in foreign investment in Australia. Chinese investment of $12 billion in Congo represents 3x the country’s national budget and 10x what the Western world has promised that country. But there is a lot more talk than deals and China’s subsidies winds up subsidizing the price of oil which means that in terms of its own imports drives up its own consumption which is ultimately to its detriment. No chance of it cornering the markets in anything, says the Economist. Congo, it adds, is rated among the very lowest in the world in terms of countries to do business. Sudan, another China objective in Africa, ain’t far behind. So China makes for some great scary upward looking statistics but ultimately is a bottom feeder and not very important. One of our company’s professors who just spent some time in Shanghai says their universities are like our high schools and that apart from them hiring professors not much is going on there that matters.

Hillary is in big trouble. I heard 2 people on the streets of New York a few minutes apart making fun of her after the news of her exaggerations about getting off the airplane in Serbia made the rounds of the tabloids and late-night comics. I’m waiting for the funny looking commercials to come out showing her making peace in Mars (if not Ireland) and racing across a chicken farm being crapped on by killer pigeons. For a politician, ridicule is the surest form of death. McCain is also having money problems; he is not attracting heavy duty fund-raisers, probably because they don’t want to invest their time working on his campaign. Obama is pulling ahead of Clinton in Pennsylvania and so far he is not suffering any loss of stature from his wife’s comments about America or his ties to that church reverend. Whether the Republicans will be able to tar and feather him (almost literally) over the next 6 months depends on what everyone else will choose to hear. To me it’s an open question. The fact that the Iranians seem on the defensive in Iraq and seem close to working out a deal with the US over that country is to McCain’s benefit. The worst of the credit crunch may be over but the economic fallout has not yet been determined; it could be bad for the first half of the year and recover in the second half and despite the talk about recession the corporate earnings have been strangely optimistic and the stock market has lost very little of its equity value over the past few months and if it remains quite for the rest of the month I might buy back in. I think that ultimately on this one assuming that Iraq is not a big issue in the fall, the election will rise or fall on the economy. If the economy sucks, people will vote Democratic for a change and if Iraq is not a big issue, it will be safe to vote Democrat. If Iraq is a big problem, they will be disgusted and vote Democratic anyway. So to me Iraq adds nothing to the Republican side but it can hurt them.

Interesting how payoffs is very much determining things in the Middle East. The main reason for the improved situation in Iraq is that the US has been paying off the various militias – something that Hussein used to do to keep the peace. I read about this years ago in Woodward’s book I think; and we finally figured out that what we have to do is go back to the old playbook. In Lebanon and even Saudi Arabia, Iran is paying off Sunni clerics to say nice things about them helping them bridge the Sunni/Shiite divide. I think McCain is correct in stating that there is no difference between Sunni and Shiite at least on the jihadist level – these guys cooperate with each other tactically at the highest levels because they agree that they hate America, the West and various Arab governments.

OK, so now to try and figure out what’s going on in the Arab-Israeli arena? Shimon Peres said on March 23 that he wasn’t interested in peace with Syria because it is simply becoming a client state of Iran and giving them the Golan Heights would lead to Syria using it to destabilize Lebanon. Coming from Peres, the guy who chases peacemaking, that’s a mouthful. I read an interesting article suggesting that in Gaza the Israelis should use conventional annoying tools such as loud music, stink bombs, flyovers and tear gas and automatically use them for short periods in residential areas every time they get attacked over the border so that the people of Gaza will realize that these attacks are very annoying and tell their own militants to cool it. Made a lot of sense to me.

The $1 billion question is when is Israel going to start the next war? I think it’s pretty obvious that Hamas and Hizbullah do not want a war right now but the Israelis are not interested in waiting for the other side to declare when it is convenient. I would have thought that with  Passover and the 60th anniversary celebrations and visits from world leaders coming in the next 2 months the last thing the Israelis would want right now is any kind of delayable war. Yet the timing might be right since nobody expects it and the military is not always interested in tourists or politics, particularly if it feels the time is right. Lots of things are going on – the Americans are buying up foreign oil reserves for no good reason, their war ships are parked off Lebanon, the Israelis now 6 months after striking Syria want to go public about why they did it, and high level meetings are going on in Oman this week between American and Iranian officials. Israel’s foreign minister is to be in Qatar talking to the Syrians as well as anyone else from Arab countries who happen to be there. The Israelis, Egyptians and Syrians are not talking peace – they are talking about how the war that is coming is going to be conducted. Interesting that the Saudis at the highest level are being found to be complicit in the murder of the Hizbullah chieftain. The Iranians are leaking it and the Syrians are afraid to announce it and the Israelis are very coy.

What it adds up to me is this: Israel has no choice but to bring Hamas and Hizbullah to heel. Hamas has no interest in the Palestinian Authority ever achieving statehood in Ramallah – the only state they want is one they control and they want a state to fight against Israel and will never make peace with it because they are not indigenous to the Palestinians – they are Iran’s finger in the eye in the Levant. The internal dynamics within Israel and the Palestinians have become confused; people in the peace camp and commentators among the Arab and Israeli press don’t even agree anymore what kind of peace they think the region wants to have (ie: two states; a binational state of Israel with Jews and Arabs together; three states with Hamas in Gaza and the PA in Ramallah), and this is because the Iranians have succeeded in driving the issue by forcing people to concede the presence of Hamas in the Palestinian dynamic because the other structures headed by Abbas are so flimsy. The Palestinian “state” is totally dysfunctional and if Hamas took it over in the West Bank it is a guarantee that it would become a launching pad against Israel. Likewise in the North, Hizbullah is a guarantee against Lebanese statehood; it is there to break it up and hold that country subject to Iranian ambition. So, all things considered, the Israelis have to get the game board back on track and have to take out these dudes or else risk being sucked in anyway at a more inconvenient time against an enemy that is working constantly to increase its strength. Hamas is so boxed in with Gaza that it is a tinder box waiting to explode. I think the Israelis prefer to rattle sabers now, make temporary deals that they know Hamas will break anyway, and then fight during July when Visiting Days are over. But I somehow expect to be proven wrong on this because logic just doesn’t work in this region.

Happy Passover and  Best Wishes to you from our family.