Not in her class but not willing to be left out either.

Watching TV together.

At Jacksonville, Florida airport and on holiday at Amelia Island Plantation, Florida..

Each month we receive a copy of Time Out New York for Kids, listing all sorts of activities going on in the City for kids. Elizabeth has taken to studying this magazine religiously on the prowl for fun things to do. She can’t read but she knows logos and numbers.  It is quite fun to be a 3 year old City Kid. Jeremy is the happiest person in the world when he is happy, and the saddest most pathetic person alive when he is sad. He doesn’t talk yet but he seems to understand everything going on around him. We were in the Discovery Room at the Museum of Natural History; they announced that the session was over and that everyone had to leave and he started heading toward the door.

We're waiting to hear if Elizabeth gets accepted into the nursery school of her choice. We're not talking about pre-Harvard here, but in Manhattan, there are more students than seats so we have filled out application forms with 9 essays (I only had to do 3 for my college app) and attended interviews which are essentially structured as play dates. I had heard from another parent that the interview involved Play Dough so of course we had our nanny emphasize Play Dough for a week before the interview -- you never know what these decisions are based upon, like if the kid picks pink or blue? OK, so it is all really silly but actually we are very excited about the school we applied to for Elizabeth which we think will offer her a really great educational and formative experience which matches our sorta funky philosophy of life -- heck, I'd like to go there myself -- and we are waiting for decisions to be mailed out on 4 March.

We took a vacation over a federal holiday weekend to Amelia Island Plantation, Florida, about 20 miles north of Jacksonville, Florida. It was a very enjoyable and good-money-value family friendly resort with a nice secluded beach, but it was chilly in mid-February with highs in the mid 60's – I would recommend this in March. The nearby village of Fernandina Beach, Florida was a pleasant place to walk around with pretty parks, a state park with a fort along the beach, and a pretty park on the resort grounds along a marshland. We got a great deal here, but all things considered it would have been worthwhile to pay more money and be in short sleeves rather than sweaters and jackets on the beach. There was a nature center, we could ride little golf carts around, and there was a tram service to get you around the resort if you didn’t want to drive. The important caveat is that the family condos are about a mile away from the main resort.

During January we also took a weekend off to Bermuda; though it is a few hundred miles further north, it is a tad warmer. Yeah, you wear a sweater to the beach, but the kids don't care. They are just thrilled to be outside on the grass and sand playing around; every morning at 7 Jeremy would bang on the glass doors to be let outside. Bermuda also offers me access to BBC World which I have tried for years to replicate here but guess what -- you can now watch it 24/7 in the US with the Real Player and then you subscribe to the channel for $7 a month. Real has offered BBC World for years but not in the US until now. As long as you have a fast internet connection, you're set and can even hook it up to your LCD television as a monitor.

One of our neighborhood friends moved to Israel 6 months ago and told us that for several months they haven’t left a 4 block radius of their home with their kids because kids are in school there 6 days a week. For that amount of schooling, you’d hope it was good. They live in an expatriate ghetto known as Ra’nana that offers a ratio of 28 students to one teacher in elementary public schools; the rest of the country runs at a 35:1 ratio. In the day school they used to attend in Manhattan, there were 3 teachers for 24 kids and in public schools the ratio is generally 1 teacher for between 20-25 students. There are very few private alternatives, I’m told. They said that unless your kid is aggressive and a genius, you basically fall by the wayside. On a practical basis, I can’t see the attraction of living there with kids if you could have normal weekends to do stuff with your kids and much better school conditions here in the US.

I know this is a free country but guess what? Try and find Teletubbies DVD's on sale anywhere. The BBC's license on this stuff expired and they've been pulled from every conceivable source. But I found the videos available in China and had them sent over. At least globalization still trumps all else, which I guess gives us hope.

Obama’s First Month

A few years ago I wrote that the main difference between Bush Sr. and Jr., and Clinton is that Clinton would get up every day wondering what he could do as president and the Bush’s wondered what he had to do as president. We are back to the Clinton model now and what Obama has going for him is the moral authority that a tainted Clinton lacked. It is the best opportunity in a generation for sweeping change since everybody realizes that the status quo is not maintainable. An economist amigo says that he thinks the previous government’s actions on the economy have been under-rated and that things will look a lot better a year from now than people expect. Even if that is so, confidence of everyone is near all-time lows and the psychology of the markets needs a lift. If Obama’s actions are as fierce as his persona during his inaugural address, it should help engineer such a turnaround.

The comedian Jackie Mason was biting in his satire about Obama last summer when I saw his show on Broadway. I mentioned it here. He said that Obama talks about change, doesn’t say what he is going to change, and will probably not change much of anything. He said that Obama didn’t know squat to become president and would be at his day job except that he was black. Based on what we see so far, Mason might get the last laugh if Obama’s team doesn’t get its act together.

So far, I’m not sure that the stimulus package is anything more than same-old. Some of the money is clearly a political sop going to where the unions are and have no relation to actual need. The cap on executive compensation is total BS; it is easy to get around the rules and the rule is a bad idea. Obviously done for public consumption. The foreclosure protection plan outlined this week is similar to what Bush offered in December. I don’t know how to solve the banking problem but there is too much out there stating that the proposed solutions won’t work. Maybe you just have to do something quick that involves printing money and then try again later for something more meaningful, but considering that the Obama team has supposedly been studying things for months and was supposed to enter with guns blazing, I don’t see it. What I see so far confirms my earlier suspicions that he really doesn’t have any new ideas and that not much will really change – it will be Clinton era management continued but without the interns.

The economy will eventually recover; it may take an extra year if the government is pushing measures that are the minimums necessary but not the full dosage. So far, there is zero market confidence bubbling up from Team Obama’s actions. I don’t see any problem printing money in the short term – the world has no alternative but to invest in the US dollar. Until the US consumer starts spending, the rest of the world has no economy. The US banks don’t trust each other to lend to each other and everyone beyond, and they won’t until we worry less about who will get the better of whom in terms of their assets and just deal with the problem head on.

Personally, I think the stimulus would make more sense if they would send trucks filled with money to every town square in America and just drop twenty dollar Amex gift certificates from the tallest church steeple. It would probably be more efficient to have the government open up a network of banks and just start lending people money. And I’d put out a hundred billion to Venture Capital and just start funding start ups. My own company is sitting on a half million dollar investment in software because right now there is no VC funding for second stage development except on lousy terms so it makes more sense for us to shelve our innovation rather than develop it. As Thomas Friedman says, it makes more sense for the US to fund startups than to feed morphine to GM and Chrysler, both of which are terminally ill anyway.

I’m sorry Obama lost Daschle for health; hope he can find others, but so far all I am seeing is the same old ideas being used to solve problems. Nothing fundamentally different. Maybe you have to go to the insiders with experience to solve problems, but I’ll bet that the solutions are also going to be the ones that have been tried before. It is also an interesting irony that those who want to raise our taxes seem to have a problem paying them. Maybe they shouldn’t keep raising them. All they are going to get by raising taxes on the wealthiest corporations and people is more of them moving offshore to other jurisdictions simply because they can.

Israel / Gaza / Elections

What about that Gaza operation? I didn’t say much about it during the month, because to a certain extent I think it will be a footnote. On the surface, it seems like a turning point; over the long run, it is a curious state of affairs, and I will explain as I go along.

You wake up one day this month and read that Shimon Peres, a rather liberal person, admits that he was wrong to support the unilateral withdrawal from Gaza several years ago. The same day, a rather conservative Alan Greenspan says he favors nationalizing banks in the US. What should one believe?

First, here are my observations about the operation:

A month after Israel withdrew from Gaza in 2005, I was in DC in a car on the way to the Spy Museum and listening to the news, and it was a day or two after they actually turned over the territory to the Palestinians. Militants went out and destroyed some greenhouse concern that a US billionaire by the name of Wolfenson paid the Israelis $10 million not to abandon and to turn over to them instead. Within a few weeks, Wolfenson got disgusted and retired from his position in the region which was US Special Envoy for Gaza Disengagement and I knew it would be 3-5 years before the Israelis would return and that things were just not going to work out.

Here’s a question: If the Israelis knew for a week that over 200 leading Hamas militants were sitting in an Israeli-built bunker underneath the main Gaza hospital, why didn’t they go in and get them? That’s the #1 question I’d want to ask Ehud Barak, a guy who has been involved in such daring raids. 

Another thing we don’t know is the real state of the relationship between Egypt and Israel. It was weird to be seen to be signing memos of understanding with Washington that dealt with the obligations of Egypt. The Egyptians were saying that the Israelis were dealing around them instead of with them. Nowadays, the Israeli lead negotiator with Egypt is blasting the prime minister over the negotiations to such an extent that makes no sense within a government and we see that he was dismissed from his position.

Hamas was disappointing as a fighting force. When the Israeli invaders came, after all the taunts and threats about the hell they were going to face, the defenders hid behind skirts and kids, sent out one or two grunts at a time and kept all their commanders and the bulk of their forces under the ground. Very few had suicide and martyrdom on their minds and they obviously knew they couldn’t win a fair fight mano a mano. This is in line with estimates given to me by Israelis who said the Hamas as well as the Hizbullah were overrated. I guess they were right. 

Despite the bravado statements coming from Nasrallah in the north and the Hamas leaders in the south, I think they know they had their shoes licked and probably have very little interest in doing anything but re-arming and waiting to fight another day. They basically want to take pot shots at Israel from the outside but don’t want to actually fight face to face. The question is whether the civilians around them will object to the re-arming if they think doing so will lead to another round of war.

The Israelis have restored their crazy-man deterrence in the region. Screw with Israel and you will suffer a disproportionate response is probably well understood at this point. The Israelis have also made it clear that hiding behind kids and skirts is not going to let anyone in the vicinity out of the consequences; presumably Hamas miscalculated because they never expected this kind of response. The ramifications of using civilians as shields has come home to roost in Gaza and everyone has been lowered in their humanity as a result of doing things they would rather not do. The Israelis came to the conclusion that they were suckers if they were going to let their soldiers be put in danger because the other side wanted to increase the Israeli exposure to civilians to prevent them from engaging in a fair fight. The hope is that the lessons will have been learned so that the exercise does not require repetition.

Here’s another question: What do Gazans want? The EU says they aren’t going to throw money at Gaza reconstruction without knowing that the civilians there want a lasting peace, and that Hamas is not interested in such a thing. The minute they started bringing in pipes to fix the water system the week after the truce was declared, Hamas stole them and used them to make rockets. Do the civilians want a unity government with the PA? If they do, the Israelis should encourage it and even consider building the free passageway between Gaza and the West Bank. I’ve been told that the Israelis might go into Gaza cities the way they have been going into West Bank cities for the past few years to make sure they keep Hamas under control. If Hamas can be contained without worrying that they will take over the West Bank, it is possible to think about such things. Otherwise, the desire of Israel, Egypt and the other moderates will be to continue to isolate Gaza.

I’m being told that even if the Egyptians want to stop smuggling in Rafah, which is the only border to Gaza not controlled by Israel, they can’t. They can’t stop the Beduin, the bribe-taking and the fact that Mubarak just doesn’t control the bureaucracy which would have to do it. If this is so, it’s going to be a real problem because the key to controlling Gaza is (1) the southern border and (2) the will of the Gazans if they can prevail over the mafia that controls the guns and butter. The guns are obvious; the butter is less obvious but the Gazans know that they pay more because Hamas controls the smuggling and jacks up the prices to siphon off its salaries and supplies. Because there is no possibility of working in Israel, there is no income save for whatever they get from Hamas or the PA.

Long term, Gaza’s only future potential is if its people can work in Israel or the West Bank. There is nothing on the Egyptian side of the border to keep them busy. For them to go to the West Bank, they have to pass through Israel and the Israelis have to feel comfortable about them. So it really is up to the Gazans to figure out and declare what they want. No amount of peace-making is going to be relevant if the Gazans want to be the Iranian outpost to the south of Israel.

Nobody except a person who is so full of self-justification that he cannot feel empathy can lose feeling for the humanity of what happened to Gaza. The lives of thousands of people have been ruined. Yes, they were mostly sympathetic to Hamas and bought into this jihad and thought that the events of the past 3 years were a precursor to the end of the Jewish state. And yes, there are those in Gaza that hate what is going on around them but are powerless to say aloud what they feel or to escape the fate that awaited them. There was the doctor who worked for peace alongside Israelis who saw several of his kids killed and his house bombed and has no idea why. You could see the Israeli news anchorman wanting to cry on live TV when he got the call from this person asking for emergency assistance. Turns out the Israeli military had called him for several days asking him to leave his home because militias were camped out in the immediate area, and he didn’t heed the calls. They did arrange to evacuate him and his children afterward and investigated the matter to the satisfaction of that doctor who issued a conciliatory public statement afterward. 

Not that I want to seem insensitive, but analytically I’m actually surprised at the low casualty figures considering over 20 days of what appeared to be heavy military activity. Compare Gaza against the US military in Fallujah, Iraq in November/December 2004. There were 5,000 insurgents among 100,000 civilians in a city of 300,000 (200,000 evacuated after American warnings). There was an American airstrike followed by 9 days of heavy action and 37 days of mopping up. Of 200 mosques, 66 were destroyed, 30,000 buildings were demolished or significantly damaged, and 6,000 civilians killed. In Gaza, the population was 1.5 million (and there was nowhere to evacuate to), there were 20,000 armed militiamen, 20 mosques were destroyed, 25,000 buildings demolished or damaged, 894 civilian dead according to the Palestinians -- 500-600 according to the Israelis.

So far, the bulk of UN investigations as to the major headline-grabbing incidents such as those having to do with schools and UNRWA institutions have favored the Israeli version, as far as I can tell.

Meanwhile, you read that right after the Israeli withdrawal, over 100 Fatah people have been killed and several hundred tortured by Hamas in Gaza within a day or two. This was going on during the fighting and has no doubt continued since. They are going after anybody suspected of collaborating with Israel, taking out their eyes and turning hospitals and schools into detention centers. More Gazans killed in a day by Palestinians than were killed by Israelis in a typical day of the war. I don’t see reports of this on Al-Jazeera or anywhere in the Arab world. Dog bites dog ain’t news. I guess that unity government with the PA can’t be far behind in that climate, right?

The campaign was messy; these things are never pretty. But in context and as military campaigns go, it had a lot going for it and the lessons learned by all the players are more likely to be how to conduct a war rather than how not to conduct one.

OK, so those are my observations for whatever they're worth. Now to the more important question, which is what’s next?

I expect that Bibi comes out on top of all this. Barak prefers to work with Bibi than Livni and everybody expected Barak to be the defense minister after elections. Problem is that after his party did so poorly in the elections, he has basically lost influence and his bags are packed.  If the coming weeks sees ceasefire violations from Hamas, it will only help Bibi as people wonder why the Israelis unilaterally ceased fire. Israelis are never pleased, so I can’t see how Livni comes out on top, especially when she gets no help from Olmert who detests her. And now we see that Lieberman, who as far as I can tell is some kind of Russian racist-populist, has won big because the people want to vent their disgust at the political parties that have brought them mess after mess. So the elections have brought about another mess – a narrow right-wing government that will be a nightmare for Bibi Netanyahu but that will not be saved by Livni giving him cover. That government will perhaps do all the nutty things the right wing wants to do and they will either succeed or fail, and then voters will vote again, maybe sooner than later.

But Bibi has a few things going for him. He said several years ago not to pull out of Gaza. He said it would turn into Hamastan with rockets raining on Israel, which it did. The last two wars in Lebanon and Gaza were a direct result of withdrawals from Arab territories by Israel by governments that failed to negotiate bilateral deals and simply walked away as a risk for peace hoping the move would be reciprocated. If you believed in land for peace, the theory was turned on its head. Bibi said there needed to be peace for peace, and people voted for him because they felt that leftist governments created wars because they were perceived as weak over their withdrawals.

The second item is Iran. Everyone is trying to avoid the reality which is that Iran is hellbent on becoming a nuclear power and all the evidence is that they are close to the point of no return. Bush, when push came to shove, didn’t want to deal with it and stopped the Israelis from military action. I was really surprised that Bush essentially wimped out; I thought he had a sense of divine purpose about him on this issue but basically Bush got walked on by lots of parties such as the Russians in Georgia so it is not all that surprising. Netanyahu is not going to be a pushover in this regard, certainly not with Lieberman in his government who comes across as a crazy kinda guy sufficient to make even the mullahs in Teheran lose sleep at night. If God’s plan is that Iran has to be put out of business, then it is very simple to explain why Bibi just got elected and we will just have to sit back and watch the show unfold. Livni is not made for this kind of thing and it needs to be remembered that Shaul Mofaz, the likely defense minister, has been holding the Iranian portfolio for the past few years and he himself is Persian.

I’ve always felt that the keys to Hamas and Hizbullah are Syria and ultimately Iran. Gaza is a footnote because it is a manifestation of Iranian designs. Mubarak saw Cairo get bombed today because Iran is punishing him for basically siding with Israel over Gaza. Gaza will never see a ceasefire as long as the reality is that it is a launching pad for terrorists who are tools of a foreign power. There is no good reason for the Israelis or Hamas to ceasefire; they will basically return to a situation of consistent military activity within Gaza sufficient to provide as much quiet as possible on the Israeli side of the border.

The problem for Israel, and for me in terms of figuring all this out, is that the political situation in Israel is so utterly corrupt and bankrupt that it is almost impossible to predict what a government will do because logic has no relevancy when all is corrupt and petty. There is no question that the Israeli soldier Gilad Shalit’s captivity has been so long and the aftermath of the Gaza operation utterly squandered partially because of personal infighting within the Israeli government.  How do you explain that a top Turkish official offered Israel $850 million to build a children’s hospital near Jenin and to guarantee all security concerns, all top politicians in Israel and the PA favored the move but some defense ministry officials opposed it and nixed the project? You could also consider that Marwan Barghouti would be out of prison by now if it weren't for the personal rivalries of those in the Palestinian leadership. A pox on both houses.

Despite all of the above, I expect that on matters of utmost necessity such as Iran, those at the top will have their act together and will do what is necessary and do it competently. For everything else though, I expect that there will be much to ignore in the coming year or two, and that the US is not going to have much success in brokering any agreements between the Israelis and Palestinians. There might not be anything to agree to, and it might be that the Syrian track is more promising, but that also depends on where Bibi’s head is at, and how tight his coalition partners have him on agreeing to anything. Given the ease at which right-wing led governments have fallen in that country over the slightest concessions, I am going to assume that not much will happen. Maybe we shouldn’t care – the only thing that really matters at this point is what is done about Iran. If this problem isn’t dealt with, the whole complexion of the region will change and it may not matter how any other problem is dealt with. I am very sorry in terms of looking forward, but it mostly looks like a holding pattern on most matters for the next year or two, even if Obama is ready to lead.

Russia / Afghanistan / Pakistan

Much is being made of a strategic choice facing Obama, which is whether to make a deal with Russia in order to secure a better transit route to the troops in Afghanistan since the Pakistan route is being compromised. This assumes that the US wants to double down in Afghanistan and that all of the viable supply routes run through Russia. The price Russia wants is for the US to recognize a sphere of influence in the Baltics, Ukraine and Central Asia – in essence to go back to the old Soviet Union de facto. Russia knows that if the US gives in, these countries will have no choice but to embrace Russia again. One of the chief gains under the first half of Bush’s administration was in redrawing this board and that gain is jeopardized under this scenario.

I think it is a false choice. First, I think the US shouldn’t double down on Afghanistan. It should work with the Saudis to bring the Taliban to the table and cut a deal with the Taliban as part of the country’s political system and see if the Pakistanis can also help create a more stable situation that benefits both countries since they have been so far trying to destabilize Afghanistan as they favor the Taliban elements. Trying to prop up Karzai to me is a loser since his government has no legitimacy within the country and is utterly corrupt. We should thus reduce our dependence on Pakistan and let India do what it wants to deal with them if Pakistan falls apart. India is clearly in a position to have its way with Pakistan and there is no reason to allow Pakistan to create chaos in the region just so it can assist the US with Afghanistan, particularly when Pakistan is playing a double game and is part of the problem there. Iran is no friend of the Taliban and they can also be counted on to do their part to keep them at bay out of their own self-interest without us having to give them anything for it.

As far as Russia, this removes their leverage. For all intents and purposes, Germany has agreed to not contest the Russians over the Ukraine and this is the root of the 3-way deal this past month on gas between Russia, Germany and the Ukraine. Georgia is pretty much neutralized and being left alone; the Russians have what they want with the two secessionist regions and don’t need anymore out of that country. The Central Asian republics are really of interest to China and it is fair game to let China duke it out with Russia over their strategic value. The US should basically stay neutral on Ukraine, the Baltics and Central Asia and say that it won’t actively support anti-Russian elements in the country but will generally support any friendly government in power. It should trade the nuclear bases in Eastern Europe for support over Iran’s nuclear aims. It should maintain air bases in Central Asia unless the Russians and Chinese deliver solid guarantees over Iran. Other than Iran, there is not that much for the US and Russia to deal with; and the above describes the quid pro quo that exists for that issue to be resolved. If you believe that military action against Iran will be enough to solve the problem, then you might not need to trade anything with the Russians, but I think that you need the Russians long term to be out of trouble-making mode and not to be constantly walking around with an inferiority complex without good reason.