So far I’ve been getting more sleep than I expected; my wife has been very good to me. Still, 6 week old babies fuss and I’m home early today nursing a cold. So much the better to write to you.

During the Super Bowl I went channel-surfing to find out what else was on. The Animal Planet Network was showing the Puppy Bowl. They took a bunch of puppy dogs and put them into an area that they made look like a football stadium and just left the cameras on them for a few hours. Every once in a while, they declared a foul such a when a dog was too rough with another dog and a guy in a referee's uniform came out and scolded the dog. This ran on national TV for about 9 hours. Yes, in America, they can show just about anything with a football field on it on Super Sunday and it will get an audience.

Of course, the hot subject this month is the Palestinian elections. Perhaps this will surprise you, but I’m cool with Hamas winning the elections and I’m glad they won with an outright majority. For the same reason that Israel needed their Sharon to bring the naysaying half to the table, Abbas was never able to get his naysaying half together and for that reason the peace process was a farce to all concerned. Had Hamas only gotten 40% of the vote, they could have continued vetoing the process and Abbas would remain the pathetic figure telling the Israelis that he couldn’t control his side but they should continue to deal with him anyway. Now, Hamas either has to get real or suffer the consequences. The Palestinians who voted for them also now have to get real or suffer the consequences. A majority of Israelis polled say they are cool with Hamas as long as they want to legitimately sit down and talk. At least Hamas is disciplined, fairly clean and can deliver. Mr. Dahlan, thought to be a major power broker, barely got a seat in his own district.

There is an opportunity here in that Olmert is more likely than Sharon to telegraph what he really intends to do. Sharon was going for a unilateral solution and such solutions can only be imposed by force; whether or not force would work to impose this is up in the air. A bilaterally negotiated deal is more likely to stick and the majority of Palestinians and Israelis want one. Olmert is a deal-cutting kinda clubhouse guy and that is a good reason why so much of the country’s political structure got behind him right away. Bibi was the opposite and that’s why everyone deserted him. Notice that the Hamas election hasn’t helped Likud in the polls.

Beyond all this, the Israelis look at the recent elections and figure that, even though they understand the vote was about corruption and not about destroying Israel, the Arabs are still somehow gripped by some kind of pathological hatred for Israel and truly want to destroy it. Many feel that the election of Hamas pulls the wolf away from the sheep’s clothing and that this will show the Arabs’ true face. Considering that Sharon was taken from us at a valuable time and Rabin was as well in his time, you have to wonder if God wants Esau and Jacob to remain in perpetual conflict. Getting people to believe in other people’s better natures is a fantasy and yet both sides are interested in peace, but not a peace process.

I haven’t yet had a good chance to make the rounds and hear what people in the region have to say. They are still figuring it out themselves. Nevertheless, my sense is that if Hamas wants to keep the lights on and deliver services to its people and Fatah is not going to let Hamas get the glory of governing without the responsibility, they will have to do what Sharon did when he reached the prime minister’s chair– say that the view from over here is different than the view from over there. 

Here’s another thought – stop thinking about Hamas recognizing Israel and decide that this doesn’t matter – Jews don’t need to request Arab recognition; they get theirs from a higher authority with the force of History as their witness. Both Jews and Moslems have religious issues that are non-negotiable. But Hamas leaders who have met with Israeli rabbis have a history of agreeing that they could easily agree to a long-term truce that declares that God will decide what his will is and that meanwhile we will live with arrangements that we will make in the indefinite meantime. See the article by the rabbi of Tekoah in the Forward newspaper published January 26 in which he says that the biggest obstacle to an agreement is the desire of secular political leaders to finalize arrangements when in fact they cannot be finalized without impermissible religious compromise. (Forward.com) This meshes well with thoughts given to me in Israel a few years ago from someone who always gets it right. Look in this direction for forward guidance.

 Other Middle East Thoughts this month:

Saudi Arabia deserves another look and I hope to take a visit there in 2007. I wasn’t impressed during my 1999 visit but I can’t ignore change. It is becoming hotbed for legitimate business, despite the fact that the stock markets there are a bubble. The country is gradually reforming and the countries around it are as well. Islam itself is being affected by commercialization; new developments near Mecca look like Disney. Ramadan is now a shopping month and it ain’t what it used to be. Presumably, as commercialization goes global, the desire to create shopping excuses permeates culture here too. 

A problem in this region is that there are too many aliens in these countries working to create instability from all sorts of loosely connected organizations. It’s worse than the cold war during communism where at least the aliens were people who were indigenous people controlled by the superpowers. Jordan, Lebanon, Iraq and the PA are all places where such people exist. Iran is trying to figure out what to do with Hizbullah’s Sheikh Nasrallah because he is too much in Syria’s pocket and playing ball in Lebanon. Iran is not interested in letting Lebanon be Lebanon. Neither are they interested in letting Palestine be Palestine; they want Hamas to be an outpost of their Revolutionary Guard. Might the Palestinians be trading their Tunisian mafia for an Iranian one? Al Qaida is trying to get into Jordan, Lebanon and now the PA. They have some problems, because Hamas is aligned with the Egyptian Moslem Brotherhood which doesn’t want Al Qaida to mess into its territory. Hizbullah is a Shiite organization as is Islamic Jihad, and Hamas is Sunni which means that Saudi Arabia is not going to sit idly by and watch Hamas get funded by Iran if the PA goes bankrupt. In case this is confusing, please note that though the Sunnis and Shiites hate each other, the exception is they cooperate when it comes to fighting Israel. Still, if you noticed, during the past month or so, Hamas has been quiet in the PA territories while it was Islamic Jihad that made the terrorist attacks against Israel. Israel in return has been laying off the Hamasniks and going after the Jihadis. Still, you wonder if all these Arabs want to be puppets of foreign handlers? Perhaps not – Jordan turned on Al Qaida after its attacks in the country last month. You just don’t do stuff like this in Jordan. Another thought to ponder which is a problem inside the problem: Hamas stays in business by attracting followers to its militant cause. If they get overtaken by Islamic Jihad, where will they get new blood from? Is it in everyone’s interest to let the terrorism market in Palestine be controlled by Iran via Islamic Jihad or should Hamas, if it is going to run the show there, keep a percentage so that it can control the show and over time bring down the level of rhetoric and violence. Saudi Arabia doesn’t want to have to watch its back having Palestine become an Iranian instrument on its back door. The first thing you have to have in order to be the government of an independent state is the monopoly on the use of force. I know it all sounds flippant and that we all prefer no terror at all or say that let them all just go and kill each other behind a tall wall, but these are the sorts of issues that real people have to deal with. It is obviously not my problem but I am sure that it is a problem that Israeli and Hamas leaders will be discussing when they meet – you bet they have, even if we don’t read about it soon.

Egypt and Jordan have a lot to lose here. Hamas, as I said, is an extension of the Egyptian Moslem Brotherhood, a major opposition organization in Egypt with close ties to its Jordanian counterpart. Because Palestine is under the wing of Israel, it is ironic that it has the best chance of introducing a democratic movement that could influence the entire region. Such movements would be the death knell of the Hashemite Kingdom of Jordan and Mubarak’s Egypt. However, if Hamas screws up in Palestine, it will set back this cause for decades because people will see that they achieved power and couldn’t exercise it well. For me that means that Hamas will do whatever it has to do in order to succeed and if its clerics have to bless doctrinal compromises with Israel, they will because the conflict with Israel is really a short-term play in terms of the Arab Middle East and, as I have said years ago, it will be Israel that has a hand in jumpstarting indigenous change in the rest of the region via the Palestinians. The conflict with Israel is going to end soon; for most of the Arab states it has already ended. The challenge for Hamas is to figure out how to take credit for it. They can oppose it but they will only create poverty for the Palestinians behind ever higher walls. Now that they are in government, they will have to deal with this or risk being thrown out a few years from now. 

Iran – Egypt is very nervous about Iran and won’t tolerate it going nuclear. Not that they can do much about it. Notice that the UAE this week for the first time didn’t say anything about Israel’s nuclear program and just said that Iran had to stop theirs. Saudi Arabia is working with Pakistan to know that it will have an option with them in case Iran gets the bomb. The Iraqi Shiite leader Muqtada Al-Sadr was recently in Saudi Arabia meeting with the Sunni King who probably would like to see him dead, and the King has been making the rounds of India and Pakistan. Clearly, they’re all nervous. Olmert, by the way, knows the Iran portfolio and may not be as weak as it appears to deal with this. Olmert is likely to utilize the counsel of his national security advisors in a way that Sharon didn’t and this augurs well for a more sophisticated and professional response by the Israelis to future crises. I don’t know if Iran wants the bomb or just the capability of delivering one so that it will achieve the level of deterrence it wants, but the world cannot tolerate a president who threatens to wipe other countries off the map. We’ve seen this show before in the past century. Just like Saddam before him, I feel it is a God-given miracle that such leaders can’t keep their mouths shut and instead tell people what they want to do; it almost seems that Iran’s president is begging the world and/or Israel to come after him. Despite the fact that I believe that over the coming years Iran might move toward a democratic government and that an attack would set this hope back, I can’t discount the fact that they have lots of oil and can stay in power another 50 years with it and, let’s face it, they’re causing trouble all over the globe. Therefore, I’m in favor of doing whatever is necessary to shut down Iran’s program. You might have noticed last month that 2 airplanes with people close to Iran’s president crashed in “accidents.” Hmm....

Here's why we need to deal with Iran....This regime with nuclear weapons will be involved in a war. It is an aggressive regime bent on foreign adventure and global jihadi aspirations. Its leadership is cocky even before having these weapons. Iranians will get hurt much more once their country goes nuclear. North Korea in contrast is a problem but basically contained. It is a tin-pot dictator saying leave me alone and I've got the bomb to make sure that you do. Action to humiliate this country's leadership and bring about an overthrow of this government is consistent with the grounds for foreign intervention outlined in my 2003 article. In that article I said that Iran would be become nuclear anyway, that we shouldn't try to stop it, and should instead foster change toward democracy within Iran and get them to change their government. Problem in the last 2 years is the rise of the country's new president and the absolutely irresponsible positions the country is taking and the exporting of troublemaking from Iran and the fear it is creating around the region. Remember I was in Jordan 2 years ago and a political party chief told me that if Israel knocked out Iran's nuclear capability he would go publicly to Israel to thank them afterward. I still remember the fear in Jordan before Saddam was knocked off; I can imagine what would happen in Bahrain and Saudi Arabia with a nuclear Iran and all thosee Shiites in those countries.

Lebanon – A friend of mine in Beirut says that the welcome development is that even Moslems in the country now tell Syria to get out. He feels the Americans are going to give Syria to the Sunnis and Iraq to Shiites, and that the long-term prognosis for America in the region is good. Hizbullah, he says, is being told to get with the program as a national participant. 

This thing about the Prophet Mohammed cartoons would normally be a joke or a 3-day story at most but the Danes have had their embassies burned in several countries and are really the wrong country to be picking on. I think this is bad for Islam because it is going to create a backlash in Europe against it – it is one thing to be sensitive to a religion, it is another to be threatened into self-censorship in a democracy where the government has nothing to do with the press and not being able to satirize something for fear of having fundamentalists go and burn your embassies. If the Jews did the same, they’d have burned most of the embassies in the world by now and the Arab world would probably have been nuked into the stone age. It may be taboo for Moslems to illustrate the Prophet but it is not a taboo which other religions have to honor and I don’t see any other way for the satirist in this case to get his message across; these same fundamentalist Moslems feel no qualms about violating everyone else’s taboos and offending them, I should add which is the primary reason we have such problems today and why 75% of this edition of Global Thoughts is dealing with issues from that part of the world. Will these same Moslems become more careful about blasting other people's religions? Think about it -- if you were truly offended by the cartoons and were Moslem, why would you go around this week publishing wildly anti-semitic cartoons to show how you were offended when there weren't any Jews near the publishing of the originally offensive cartoons? If anything, the editors of a good number of the reprints of these cartoons were Arabs. 

If you are going to make satire against Islam, Mohammed has to be able to be in the "picture" somewhere. Any figment of imagination no matter how unrealistic put to a drawing becomes an image. Having such a taboo and carrying it this far is a bit of a crutch for avoiding dealing with a sensitive topic worthy of public comment. I went on the internet to see the cartoons so that I could comment on this, but from what I’ve read they seem to be on the mark – they are basically making the point that Islam today has become synonymous in the western world with terrorism, rejectionism, violence and glorification of martyrdom. At its worst, the Islamists can't stand being ridiculed rather than feared because nothing like a cartoon takes the lid off a mask. At the very least, this episode shows this part of the world appearing to be completely unable to laugh at itself, always being insulted or outraged at some sort of perceived injustice. The problem with being insulted too often is that people begin to discount the insult and at some point get outraged with the insultee for crying foul all too much and starts throwing it back in their face, and I think that’s where this is going now. How this will play out at a certain point will be that all White Europeans will start hanging towels from their apartments with pictures of the cartoons on them or start marching in the street with same (or whatever the offending matter of that moment at that time will be).

Of course we know that the point of the cartoons isn’t true for the entirety of Islam and I'm not saying the cartoons should not be offensive to those who find it offensive, but they do show the way people are viewing Islam and it is the obligation of those who love Islam to get this to change by going within their own communities to isolate and ostracize these fringe elements and to cut off donations to them. Until a good number of mosques and certain governments change their tune and stop feeding hatred laced with prayer, it’s going to be a problem. To their credit, even the Saudis have gotten this point over the past 5 years (though it took terrorist attacks at home to get them sensitized) and have made some improvements to their school curriculums. Still, it is also in the hands of the individual teachers and it may take a generation before moderation gets implemented by a new school of teachers. This has so far been the case in places such as Jordan where the curriculum was updated but the teachers are still from the old school.

Back to the story about regional puppets. So far embassies haven't been burned in Europe and in Damascus notice that the US and French embassies weren't burned. That's because the same police that directed the demonstrations in Beirut and Damascus didn't want to pull a fight with the Americans and French at this moment while they were trying to help Iran deflect attention from its nuclear problems. The point here is that the cartoons are a story but the fire behind the embassies wasn't in the streets. The demonstrators were peaceful; it was the Syrians who brought in the troublemakers for their own purposes such as what I stated above as well as sticking it to Christians in their Beirut neighborhoods where the embassies are located. Outsiders using others to stir up trouble across the board in this region. Problem is that it's getting harder to get away with this. Lebanon doesn't want to be used. As long as this kind of violence stays in the Middle East, it's not going to create a backlash against Moslems in Europe.

Let’s keep some perspective – fundamentalism is a problem, but the last 5 years since 9/11 has been a net loss for fundamentalists across the board. The invasion of Iraq has set the deck of cards into a major reshuffle and the region is changing with reform. The new general in Iraq has done of a good job of bringing Iraqis into the pictures and getting American troops off the streets. There have been some major improvements there and the Americans have also become much more wily at figuring out how to deal with the various tribes in Iraq although the corruption and the doubledealing over there is beyond anyone’s comprehension. You have government officials paying off insurgents and sabotaging the country’s oil industry, just as one example. Unfortunately, there will be civil war in Iraq after the Americans leave to some extent but that is not our problem. You cannot say that it was better to leave Saddam in power so that Iraqis would stay away from each other’s throats. The same argument was made for keeping Tito in power in Yugoslavia. But after 5 years of civil war, they came around and made peace with each other and those countries are prospering. The same will happen in Iraq sooner or later after the Americans leave. I was hoping the Iraqis could figure out how to avoid this phase of its national development. But if the Americans hadn’t gone in there in the first place, nothing would have changed for Iraq or for anyone else in the neighborhood. The next generation would have been guaranteed no future and presumably fundamentalists would have had more fertile ground in which to work. My advice to all these fundamentalists: Think about universities, patents and careers. Actually they are....Women supporters of Hamas were a main reason for their victory and women will hold 7 seats in the parliament. They are also taking strong training in universities and if you look at places such as the UAE and Saudi Arabia, women are definitely in the front office now. One of the ministers of the UAE is female and I predict women will be driving in Saudi within 2-3 years. Look, there are rocks all around but the road to the future is being built and we are all going there.

Other World Matters – On the economic front, The real estate market is finally taking some hits. Stay tuned because it presumably gets better. Stratfor has revised its estimate on the US economy for 2006 and is more bullish. Germany will probably do well but not as well as expected, and Japan will probably do better than expected for 2006. I have basically bought into index funds and stayed there the past year. 

Health Insurance – The cost of providing this to my employees has more than doubled in the last 5 years and we have first pared down the coverage we offer and now we are putting new obstacles in the way of new hires. This is a bad thing. I can’t pool my insurance cost with other companies because the insurance industry forbids it, even though big companies get it for a fraction of the cost. Over 80% of businesses in America have fewer than 8 employees. Corporate America is actually looking for government to get back into the business of health insurance because the system we have isn’t working. Every time I get an Explanation of Benefits it is so convoluted that I have no idea what it means and I am pretty good at understanding things. Imagine everyone else. If I go to a chiropractor or an acupuncturist, they can often solve small problems that a medical doctor can’t and they do it at a fraction of the cost, but insurance either won’t pay them or pays them so little that they refuse to deal with insurance at all. Last year my employee went to India for a month, we had to pay $400 for his immunizations and the insurance company said they’d rather gamble with his health than pay for the shots. My chiropractor is getting even – he had me pay him a discounted rate and, then to cover both of us, filed a bunch of claims with insurance and told me that if they paid him off decently on them, he’d pay me back. I saw the list of claims he filed and they were for more than double what I paid him. It might be fraud or it might be legit under today’s rules, but the whole thing is ridiculous.

Retirement Savings – Here’s a scary statistic. Fifty percent of Americans have less than $25,000 in their retirement savings accounts and another 25% have nothing saved. A good reason is that the accounts are hard to work with and there are too many restrictions. Again, another area in which our system isn’t working.

Oil Dependency – Here’s a new term, in case you haven’t seen it before. Plug-in hybrid car. Nicholas Kristof wrote a good column in this past Sunday's New York Times about this and I can’t ignore this. Between him and Thomas Friedman, they are crusading to get the USA off its ass and starting to think about alternatives to oil. Even Bush talked about America’s addiction to foreign oil this week at the State of the Union address. The salient point is that right now the car itself can be bought for $3,000 more than the cost of a regular car and Japan is selling these cars. The estimate is that when mass production is introduced, another $3,000 would buy the battery. You would use the battery for rides under 50 miles, which would cover most people’s neighborhood and commute rides. The gas kicks in after the batter is used up. The battery can be recharged with a simple 120 volt adapter. Considering what people spend each year on fuel, it would seem that it would be a no-brainer for people to buy these cars. Certainly flat-panel TV’s don’t pay for themselves and people are buying them now and back when they were $10,000 apiece. I would suggest that if the USA offered the first 5 million purchasers of such cars in America $1,000 rebates it would stimulate and properly reward innovative production. The rebate would cost $5 billion but that is about what it costs to feed hamburgers and french fries to our troops abroad for a month who wouldn’t be there if it weren’t about the oil anyway. Rather than be squandered on research and development that might not work, it would reward those companies that convinced 5 million to go and purchase the car. Iran can think about driving up the price of oil and blackmailing the world, but if they do it just might break the camel’s back and into the arms of the hybrid car market. Better for them to play ball with the rest of OPEC and keep the price high but not too high.

Finally, kudos to Villeroy & Boch. They make lots of nice things you put on tabletops that we like without having everything they make look the same. Karen and I just enjoy the stuff they produce.