Jake Wallis Simons
Grenades seized by the Israelis last November aboard MV Francop, a container ship on course from Iran to Syria
“Netanyahu thinks he is the superpower,” remarked Bill Clinton bitterly in 1996, “and we are here to do whatever he requires.” Today, as the Americans and the Israelis refuse to budge on the fraught issue of settlements in East Jerusalem, this statement rings truer than ever. US-Israeli relations are at a historic low. But the current standoff is about much more than settlement-building. Underlying it is Washington’s concern that Netanyahu’s repeated gestures of provocation—like the establishment of Jewish heritage sites in the Palestinian territories—are drawing the region towards a conflict unprecedented since 1948. And this time there is a nuclear dimension.
The widely-reported Israeli “insult” to the US—publishing tenders for the construction of apartments in the contested territory of East Jerusalem just as Vice President Joe Biden was in the country announcing peace talks—was considered so audacious that Obama’s tough response has been largely supported, even in overwhelmingly pro-Israel America. The same was the case for Clinton in 1996. This time, however, US-Israeli differences run far deeper. The muffled drums of war have been gathering volume in the middle east for some time, and Obama is seizing the chance to send a clear message: that the US will not be drawn into conflict by the Israelis.
Much has changed as a result of Israel’s near-defeat at the hands of Hezbollah in 2006. Traditionally, the Israel Defence Force (IDF) has enjoyed a mythical status, based on a history of devastating operations such as the surprise attack on the Egyptian air force at the start of the Six Day War of 1967 (the entire fleet was destroyed before they could even leave the ground); the commando incursion into Entebbe in 1976 to rescue the Jewish hostages (Netanyahu’s elder brother was the only commando killed in the raid); and the audacious bombing of Saddam’s secret nuclear reactors in 1981. Not any more. Filled with renewed confidence, Hezbollah has since been resurfacing the roads near Israel’s border; next time the sabre is rattled, men-at-arms may be transported with far greater ease and efficiency. Israel, in turn, has intensified flights over Lebanese airspace. Ehud Barak, Israel’s defence minister, gave these operations a chilling significance: “we see Hezbollah expanding inside Lebanon and its growing influence, political and otherwise,” he said. “We wish to make clear to the Lebanese leadership that we see everything, and we will hold the parties which cause increased tension responsible.”
Yet such threats ring increasingly hollow. Although Israel attempted to restore the IDF’s battered reputation through the use of awesome force in Gaza in 2009, what these school-bully tactics really indicated was how vulnerable Israel is feeling. The assassination of the Hamas gun-runner in Dubai in January, which made headlines across the world, is another case in point. Every petty shoplifter is aware of the need to avoid CCTV, yet these highly-trained Mossad assassins neglected to avoid the security cameras. Could there be any doubt that a breadcrumb trail was being laid to Jerusalem? Clearly, the Israelis are desperate to gain the upper hand in the propaganda war. They are jittery and starting to overcompensate.
And with good reason. In a development that has far-reaching implications—and is of grave concern to Washington—the middle-eastern powers are beginning to align to a degree never seen before against the Jewish state. In February, the Popular Front for the Liberation of Palestine (PFLP) convened the latest in a series of meetings of all the major players in Palestinian militancy, seeking to reconcile their differences in order to unite against Israel. This has been mirrored throughout the region. Hassan Nasrallah, the leader of Hezbollah, has started to warn, for the first time, of an alliance between Iran, Syria, Hezbollah and Hamas in the event of war.
During talks with his Syrian counterpart Bashar Assad, the Iranian leader Mahmoud Ahmadinejad stated that “we need to put an end to the Zionist regime once and for all.” Emboldened by this, the Syrian Foreign Minister Walid Moallem delivered a stark warning to Israel. “I tell them, stop acting like thugs,” he said. “Do not test the resolve of Syria. You Israelis, you know that war at this time will reach your cities. If such a war breaks out… it will indeed be total war.”
It’s impossible to tell how much of this is bluff. Nonetheless, Israel’s choice of Mahmoud al-Mabhouh for assassination in Dubai indicates that the strengthening of their enemies’ alliances is what most worries them: Al-Mabhouh was responsible for smuggling arms from Iran to Gaza, and as such is symbolic of this new level of cooperation.
When pressing for tougher sanctions against Iran in Febraury, Netanyahu’s logic was revealing. “At least we will know it’s been tried,” he said. In his mind, at least, it appears that military confrontation with Iran is inevitable. He has previously claimed in Moscow that “we are not planning any wars.” Ahmadinejad, on the same day, said Israel is “seeking to start a war next spring or summer.” Obama’s biggest concern is that all of these statements may be right. After all, everyone knows that Israel prefers not to wage war in the winter.
Read Jonathan Power on Obama’s foreign policy headache on the Prospect blog
Renegade
Thanks to freedom of information, we know all about Sarah Palin’s tanning habit
In January, when Obama hailed the bank reform plan of the octogenarian Paul Volcker, the conventional wisdom swiftly decided that Treasury Secretary Tim Geithner was toast. In an administration whose attention to podium placing is reminiscent of the old Soviet Politburo, Geithner’s demotion to the side of the stage as Obama announced “the Volcker plan” was seen as the prelude to the exit. But not long after Geithner was embraced by his president as Obama walked to the podium to deliver the state of the union address. Together with the announcement of a 5.7 per cent growth rate in 2009’s final quarter, suddenly Geithner looked safe again.
But then someone tipped off MIT professor Simon Johnson, who wrote on his influential blog that “The White House is floating, ever so gently, the notion that they are open to nominations for the position of ‘Tim Geithner’s successor.’” Johnson is a former chief economist of the IMF (and Prospect’s public intellectual of the financial crisis—see p18 for his column).
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Simon Johnson
At last the Obama administration seems to be contemplating a decisive move against America’s banking elite. Following the recent electoral setback in Massachusetts the proposals laid down by former Federal Reserve chairman, Paul Volcker, to reduce the market power of the banks, are being dusted off.
Until now it has been a very different story—essentially a victory for the big banks since spring 2009, when some of the healthier ones were allowed to start paying back any funds they had drawn from the US treasury’s Troubled Asset Relief Programme. That, in turn, allowed them to escape even the very weak conditions that had been laid down relating to bonuses and pay.
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Tom Streithorst
Barack Obama spent most of 2009 bailing out banks and placating bankers. But last week, after the embarrassing Massachusetts defeat which saw the Democrats lose their crucial 60-seat senate majority, he finally responded to populist rage and proposed a range of radical policies long advocated by the 82-year-old former Federal Reserve Chairman, Paul Volcker. With Volcker by his side (and top economic Larry Summers and Tim Geithner relegated to the back of the room) Obama announced what he termed the “Volcker rule”: a move to restrict banks’ speculative (and high risk) trading. It is by no means a return to Glass-Steagall—an act introduced in the 1930s in order to restrict speculation—but it is a step in that direction. And, predictably, bankers (used to treasury secretary Geithner’s mollycoddling) reacted with fury.
Volcker, the architect of the right-wing 1980s transformation of our financial world, may now actually be the most leftist economic adviser in Obama’s administration. Let us take a jaunt back to the 1970s, to recollect what Volcker accomplished then. It was a tough decade for business: high inflation, stagnating stock markets, powerful unions, corporations held in scorn. During those years, workers saw their real wages go up, while the holders of wealth took a big hit. With real interest rates negative, putting money into the bank made it evaporate. Bonds lost money, as did shares. Business Week magazine told investors that equities were dead. Inflation became self-perpetuating as workers habitually demanded wage hikes greater than the cost of living. The future seemed anywhere but business. In those days, everybody wanted to be a working-class hero, and even the children of the wealthy dressed down, avoided any bling. Capitalism wasn’t cool. The highest paid executive on Wall Street made $500,000; experienced analysts made $30,000.
Almost single-handedly, Volcker changed all of that. His goal was simple: eradicate inflationary expectations from the economy. His tool: brutally high interest rates. Macroeconomists have long known the trade-off between inflation and unemployment, that raising interest rates would goose unemployment and so lower inflation. The difference was that Volcker was courageous enough to raise rates until the economy screamed. In the 1980s this manufactured the largest recession of the postwar era but, in the process, eradicated inflation for a generation. During that time, Volcker (and his transatlantic counterpart, Margaret Thatcher) also crushed the unions, caused a bull market in shares, and made capitalism hip. In short, Volcker transformed our world.
Unlike Thatcher, or Alan Greenspan (who succeeded him as Fed chairman in 1987), Volcker was no ideologue. Nor was he ever seduced by Wall Street. A spartan man of simple tastes, money didn’t motivate him. Even after he retired, he remained that old fashioned paragon: the dedicated public servant. The world changed all around him, but his understanding of it stayed the same.
Atypically for a man of his power and influence, he continued to be an independent thinker, unswayed by conventional wisdom. In 2004, when the housing bubble was still in its sprightly adolescence, Volcker predicted a financial crisis within the next five years. In 2005, when most economists and central bankers were patting themselves on the back for having engineered the “great moderation,” he wrote: “Altogether the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot.”
Volcker, more than most, recognised the danger of debt-fuelled consumption, and saw that its unravelling would probably come through financial crisis. Perhaps that is why, in January 2008, when most pundits gave Hillary Clinton the Democratic nomination, Paul Volcker endorsed Barack Obama, lending the freshman senator much needed gravitas.
After Obama won the election, Volcker was naturally touted as a possible treasury secretary. His advanced age may have worked against him and he was given a largely ineffectual post as an economic adviser. Larry Summers and Tim Geithner, more moderate and more committed to the existing structure on Wall Street, dominated Obama’s economic thinking. Volcker seemed iced out, only occasionally meeting with the president. But as the economy remains weak (even while Goldman Sachs books record profits), a populist backlash is threatening to overwhelm both Geithner and perhaps even Summers. And so Obama has taken the big man off the bench.
The logic behind Volcker’s proposal is that, since banks receive an implicit government guarantee, they should not engage in speculative behaviour. If risky bets pay off, the bankers take the money. If they fail, we, the taxpayers, pay the price, creating moral hazard and impelling bankers towards ever riskier behaviour. The “Volcker rule” now has to make its way through congress, where finance industry lobbyists are sure to try and water it down. But considering what he has already achieved over so many years, combined with his wisdom and his charisma, only a fool would underestimate Paul Volcker. He cannot be dismissed as radical or inexperienced. Bankers, watch out.
Renegade
Senator Robert Byrd of West Virginia
The current US senate turns out to be the oldest on average of any senate in history. It makes a good selling point for young challengers, but it’s really a side effect of increasing longevity. The Senate Historical Office reports that the average age of senators at the start of this, the 111th congress, was 62.7 years. The average in the first congress, over 200 years ago, was a mere 47.
The last three congresses have each been the oldest on record until the next bunch of near-geriatrics arrived? The average is boosted by Senator Robert Byrd of West Virginia, now 92. With 50 years in office, he is not only the longest-serving senator in history but, with six years as a congressman, the longest-serving US legislator of all time. When ambulances were rushed to his Virginia home in September, there was talk of retirement. But the Democrats fear losing his seat so he soldiers on.?
Meanwhile, a survey by JP Morgan has claimed that Obama’s cabinet has the least private sector experience of any administration going back to 1900. The report looked at the heads of 15 departments and concluded that over 90 per cent of them made their careers in the public sector. But website Politifact disagreed, arguing that a third of these cabinet members had corporate or business experience. The survey’s author has backpedalled, calling his methodology “100 per cent subjective.”
This article first appeared in the January issue of Prospect
Climate Consultant
"There is tremendous anger and frustration, but the protests tell a misleading story"
International negotiations aren’t what they used to be. When Metternich convened the Congress of Vienna in 1815, the crowned heads of state (including the Czar, British King and various obscure dukes) spent six months wining and dining each other and did deals over late-night cards in the ballroom. Relieved at having got rid of Napoleon, the Austrian government picked up the tab.
130 years later, when Roosevelt, Stalin and Churchill met at Yalta, only a few select diplomats accompanied them. The world’s media were entirely absent: the Royal Air Force did not deem it necessary to shuttle them to the Crimea via Liberia and Egypt (Roosevelt’s approach route) or by flying boat through Gibraltar and the Dardanelles (as Churchill arrived). There was no civil society present when Churchill drew the post-war balance of power in Europe on a paper napkin and Stalin nodded his assent.
By contrast, Copenhagen 2009 has been, until the last 48 hours, an open, democratic process. The Bella Centre, a vast hangar on the outskirts of the Danish capital, has room for 15,000 people. Over 45,000 people applied for passes, most of them associated with non-governmental organisations. Even the official parties to the negotiation, who had preferential access to the centre, included many participants who were neither diplomats nor government figures. The delegation I went to see got me a ‘party’ badge. (I never found out if there was an ‘after-party’ badge).
The conference may be doomed to failure, but in part this reflects impossibly high expectations. A multilateral negotiation process, involving over 200 countries and many other non-state entities, cannot possibly lead to a mutually satisfactory ‘global deal’. Global deals, by their nature, involve small numbers of powerful people talking to each other in closed rooms. To be successful, they require a sense of urgency (even fear), extraordinary levels of gumption, a willingness to take risks even though the numbers and implications are unclear. We’ll know in the next 48 hours if those conditions were present.
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Renegade
Is comparing President Obama to Spock from Star Trek really logical?
We should have guessed at the 2008 Democratic convention in Los Angeles, when Barack Obama spotted Leonard Nimoy and gave the double-finger Vulcan sign to the man who played Spock in the original Star Trek. Yes, Obama is a Trekkie. This endears him to Canadian prime minister Stephen Harper, King Abdullah of Jordan and Arnold Schwarzenegger, who were all delighted to find a fellow fan. And it gives him some common ground with Al Gore, whose Harvard roommates said he spent more time watching the show than studying. (Colin Powell is another avid fan.)
Just as the world divides into Beatles and Stones fans, Trekkies are split into fans of cerebral Spock and those who prefer Captain Kirk (whose character was dreamed up in the 1960s as an echo of JFK). Even without considering his prominent ears, no prizes for guessing which way Obama leans—and what is more, the president is often compared to Spock.
Obama’s mixed heritage finds a parallel in Spock, who is half-human and half-Vulcan. And they both make calm, controlled, logical decisions. Roberto Orci, scriptwriter of the latest Star Trek film, says he researches new aspects of Spock’s character by watching Obama. Leonard Nimoy has said he thinks the comparison is “a compliment to him and to the character.”
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Brian Semple
The internet: a dictator's best friend?
When Barack Obama met with Chinese students yesterday in Shanghai, he called for greater internet freedom in China, saying that “the more freely information flows, the stronger the society becomes.”
However, in the upcoming issue of Prospect web guru Evgeny Morozov argues that the west has not only vastly overestimated the power of repressive regimes to censor the internet, but is also misguided in thinking that the internet is good for democracy. Instead, authoritarian regimes are finding new ways to control the web:
The “great firewall of China,” which supposedly keeps the Chinese in the dark, is legendary. Such methods of internet censorship no longer work. They might stop the man on the street, but a half determined activist can find a way round. And more often than not, official attempts to delete a post by an anti-government blogger will backfire, as the blogger’s allies take on the task of distributing it through their own networks. Governments have long lost absolute control over how the information spreads online, and extirpating it from blogs is no longer a viable option. Instead, they fight back. It is no trouble to dispatch commentators to accuse a dissident of being an infidel, a sexual deviant, a criminal, or worst of all a CIA stooge.
The December issue of Prospect is available to buy in shops from Thursday 19th November, and subscribers can read the piece online at www.prospectmagazine.co.uk
James Crabtree
Scissors make a nice present
On 4th November 2008, Barack Obama won the American presidential election. One year on, and voters in Virginia and New Jersey last night elected Republican governors—the latter especially surprising, given the conventional wisdom that the hugely rich Democrat incumbent, John Corzine, had fought a campaign just about expensive and dirty enough to win. But, as I argue in my essay in Prospect this month (now free to read online today, to mark the president’s first birthday), we shouldn’t be distracted by such setbacks in judging the president.
In truth, Obama is doing just fine. His first year has been successful: the interesting thing about it is how unlike the promise of his campaign it has been. In any case, here are three quick thoughts about yesterday’s result to try and put them in a small amount of context:
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Brian Eno
It feels, at last, that the 21st century has arrived. Until recently we’ve been at the end of the 20th, but now it’s different. Obama, of course, but something else as well.
There’s been a conversation going on—a wider, more inclusive and better-informed conversation than humankind has ever experienced before. You may have noticed the explosion of conferences, seminars, blogs, chats and twitters. What’s it all about? Two recent books—Paul Hawken’s Blessed Unrest and Clay Shirky’s Here Comes Everybody— sounded the alert. It’s about the unexpected synergy of information. Informed, data-rich communication is reaching critical mass.
In the absence of data, you theorise. In an abundance, you just need to do the maths. And, because of all those super-efficient search engines, we share more and more data. Data dissolves ideology.
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