Guest Article: Where China Is Headed

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by

Iliya Atanasov*

India on the Rise?

The trend is your friend, but all trends come to an end. China’s resurgence is no exception to this time-tested maxim. Rising powers tend to get mired in multi-decade crises, often never to re-emerge. Such is the nature of the world and of human hubris. Yet, the consensus – including much of China’s own political and intellectual elite – gleefully extrapolates from the country’s meteoric rise. Just about everyone appears certain that within a decade or two China will surpass the US economically and mount a credible challenge to American military dominance in the Pacific. Reality and history, however, beg to differ. The foreseeable future is obvious: China’s current path ends in India.

To be sure, a quarter-century of breakneck economic growth has made China the envy of the world. Some half a billion people found new homes in its mushrooming cities. From skyscrapers and bullet trains to satellites and fighter jets, China quickly adopted just about every advanced technology. The country seemingly sailed through the global financial crisis of 2008-2009 as if it was happening on a different planet. More trillions of dollars of foreign ‘investment’ poured in at the tail end of a multi-decade industrial and real-estate boom. Invincible China’s omniscient leaders could make no misstep.

This mythic ascent to global pre-eminence has been just that – a myth. The reality is much less lustrous. Since the late 1980s, the state-controlled banking system has undergone several wholesale bailouts. China’s rulers blazed new ground in mathematics and statistics as the total of provincial GDPs quite often surpassed the central government’s nationwide figure. In leaked diplomatic cables, then-future Premier Li Keqiang was quoted as smiling that GDP numbers are ‘for reference only’. Yes, China’s economy has grown spectacularly, but probably much less so than widespread perceptions. And it happened on the wings of the most epic debt binge in human history. Years and decades of uncorrected malinvestment have inflated colossal bubbles in stocks, real estate and industrial capacity.

As the facts become too loud to ignore, the mainstream groupthink has struggled to find a counter-narrative. Chinese apparatchiks and foreign pundits peddled ‘soft landing’ as a substitute for the unravelling myth of economic miracle. But years of empty talk about rebalancing the economy have only added up to more – much more – of the same. China’s growth story was mostly based on debt-funded fixed investment: plants, real estate and infrastructure.

By 2014, fixed capital formation remained stubbornly anchored at about 45% of GDP, according to the government’s own statistics. In 2015, China still accounted for 57% of global cement output. The much-touted shift away from investment did not materialize. The country produced 30% more cement in the past three years than the US did in the past 116 years

Here is the problem. Any ‘rebalancing’ would require the instantaneous transmutation of tens of millions of semi-literate factory workers into computer programmers. Or laying them off. Neither is feasible, so Beijing has had to backtrack sheepishly every time real reform was attempted.

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Every move to put the brakes on the rabid debt inflation that keeps China’s multiple bubbles from imploding has sent shockwaves through its banking system and the global economy. After housing showed signs of slowing, Beijing ushered in a stock bubble by allowing mom-and- pop day traders to lever up to the hilt. When that bubble burst, the prospect of social unrest forced a ham-fisted government takeover of the securities markets. Reports have surfaced that the authorities are busy inflating still other bubbles – this time in venture capital and commodities. Meanwhile, official statistics say fixed investment grew over 10% last year. Some rebalancing indeed.

Historically, explosive growth has invariably led up to a protracted and painful crisis period to correct for its excesses. China today is deeper in debt than the US at the outset of the Great Depression. Some recent data put Chinese bank ‘assets’ alone at 367% of GDP, up from 196% in 2007. A bank’s asset typically is someone else’s debt. And it is anybody’s guess how much more unserviceable debt festers on the balance sheets of local governments, state-owned enterprises and the shadow-banking sector, which collectively financed much of the fixed-investment rampage. The People’s Bank of China tallied new ‘total social financing’ at a neat $1 trillion just in the first quarter of 2016. Japan, with its measly 450% debt-to- GDP ratio, must have long been left in the dust by all-conquering China.

What China is experiencing is neither a rebalancing nor a landing, hard or soft; it is a crash. If American experience is any guide, the peak-to- trough contraction in China could easily reach 40% of GDP. It took the US stock market a quarter-century, a world war and a baby boom to recover to its 1929 levels.

Large-scale economic collapse, like market crashes, is not a singular event but a process that unfolds over many years. China’s economy has long been precisely this kind of slow-motion train wreck. And the 2015 stock-market plunge dealt a fatal blow to the soft-landing narrative. Hot money – foreign and domestic – rushed for the exits. Amid plummeting foreign trade, Beijing imposed ever more stringent currency controls while devaluing the yuan, thereby feeding an all-too- familiar vicious circle of capital flight.

According to consensus estimates, some $800 billion fled China in just a year. Chinese looking to park their money out of the country have caused epic property bubbles in major global cities. China’s debt problem is a threat not merely to its economy but the entire world. Yet, in terms of the country’s long-term prospects as a global power, the debt overhang pales in comparison to the demographic and environmental crises that are already baked in the cake. As a consequence of the one-child policy, ever-smaller cohorts with ever-greater job expectations are entering the workforce. China’s higher-education bubble has produced a generation demanding well-paid desk jobs but with even fewer marketable skills than its American counterpart. Meanwhile, millions of illegal immigrants from neighbours such as Vietnam and Burma already toil in China’s factory towns, as local Chinese become unaffordable for manufacturers to employ. This is Japanization writ large.

And then there is the aforementioned concrete. The permanent smog screen over the industrial heartland is one of the country’s lesser environmental challenges. Life in the cities is prohibitively expensive for many migrant workers. As they age and as industrial growth slows and reverses, millions of unlicensed migrants will have to head back, but may not like what they find at ‘home’. The Chinese have literally cemented over large swaths of what used to be agricultural land mostly populated by subsistence farmers.

There is no telling how much heavy metals and toxic chemicals have been dumped into China’s soils and aquifers. The effects of this yet-unfathomed ecological calamity will unfold for decades, impacting everything from productivity to healthcare costs in an already aging society.

Against this backdrop, expectations that China will inevitably subvert US dominance are premature. Granted, economic troubles are not much of an obstacle for nationalism and militarism. But China’s nationalist resurgence and recent maritime adventures are a sign of weakness rather than strength. Careening away from Maoism and towards Leninism underscores the leadership’s acute awareness that the economic story will not last much longer as a source of legitimacy for one-party rule. Such concerns are behind President Xi’s taking direct command of the army. Chinese elites may well decide to inflate a nationalism bubble, just as they encouraged stock-market speculation to deflect attention from real estate. Nationalism is both cheaper and more sustainable.

But then there is the geopolitical context. On the other side of the Himalayas, another giant is awakening from its stupor. India’s economy is much smaller than China’s and shares many of the same pollution problems. But India has three great strategic advantages in the ‘long game’ that China is playing. India has a much younger population and more than twice the population growth rate. It will surpass China over the next decade or two as the world’s most populous country. In addition, India is much closer to the Persian Gulf, where the planet’s most important energy source is concentrated. When it comes to petroleum, India literally stands in the way of China. It also has a tradition of worryingly friendly relations with Japan, which can be a source of capital if an alliance is pursued more actively. Finally, India’s government and economic system are decentralized. In a decentralized economic system, mistakes are more likely to remain localized and less likely to be perpetuated by large-scale bailouts. This is why India has been developing in fits and starts, but also why its growth will be much more sustainable than China’s.

With relatively low levels of debt, India’s explosive surge is just a matter of when. The talk of China’s economic decline does not even begin to capture the size and scope of the global impact. The sheer scale of economic mismanagement puts to shame all previous bubbles, so it is hard to say whether the world as a whole, not just China, will be able to dig itself from this hole without major war. Yes, China’s odds of recovering 20-30 years down the line are not terrible, but in the meantime the new rising power in Asia is going to be India. Per capita, India’s economy is still in its infancy. But watch out – they grow up fast.

*Iliya Atanasov is founder & CEO of moneyfact.org and senior fellow on finance at the Pioneer Institute for Public Policy Research in Boston, Massachusetts.

What I Learnt from La-Isha

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La-Isha is the largest and most important Israeli women’s magazine. It is affiliated with Yediot, the daily paper and media empire which sells more copies each day than the rest of Israel’s papers combined. My goal in looking at it was to answer Freud’s famous question: What do women want?

laIsha-coverThe issue I am now honored to have in front of me hit the newsstands on 8 May, just before Israel’s Independence Day. It is printed on quality paper, costs NIS 18 (about $ 4.7) and contains 162 pages. Exclusive of advertisements. The front cover shows a young woman wearing heavy make-up and parted lips. Dressed in a tank top, she may be the dream of many young and not so young women; however, she is also just the kind you do not want in the office. Partly because she looks as if she has never done a day’s work in her life; and partly because you have other hobbies besides defending yourself or your company against sexual harassment suits.

Supposing you are young and foolish, or for that matter old and foolish, the one place you might want her is in bed. But even there she might turn out to be the type who considers herself too beautiful to be touched by a coarse male hand and only wants to show you off to her friends.

The rest of the issue does not disappoint. I counted: on the list of contents there are thirty-six major items, excluding numerous minor ones that take up just a few lines. Most major ones are grouped into six categories. To wit, “Health and Happiness,” (how to find a restaurant that will offer healthy food); “Tourism” (beautiful places in Israel to visit; this, after all, is Independence Day); “Consumerism” (how to spend your money buying things); “Style” (no explanation needed; this group contains more items than any other); “Design” (just one piece); and “Mini-Chef” (how to cook). Why is this group is called “Chef,” which in Hebrew is the masculine form, rather than “chefit”, which would be the feminine one? Another case of penis-envy, no doubt. If anyone has a better explanation, I’d be very happy to post it here.

Two articles allow readers to ask questions and receive answers. Interestingly, both respondents are male professors. One is an expert on education, the other a physician. The articles on plastic surgery and the one called “In Bed” are also written by a male physicians. Don’t Israeli women trust women to advise them on their problems?

The longest single article, “Standing to Attention,” is five pages long. Five pages? Can women really read that much? Incredible! Calm down: 90 percent of the space in question are covered by pictures. The article, such as it is, deals with young female soldiers who, while on leave, quickly change into more attractive clothes. Needless to say, not one of them is shown standing to attention. Let alone carrying a weapon of any kind; even penis envy has its limits, it seems.

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And then there is the standard weekly fare. A letter from the editor, by her photograph another fairly young and quite attractive woman. “The Letter that Was Never Sent” dealing with the musings—would you believe it—of a young female Israeli soldier who, while riding a bus, shared a seat with an Arab woman in traditional garb.

I shall spare the reader the complete list of all items; instead, let me focus on just a few. A woman named Assi Friedman has discovered an art exhibition dealing with, of all things, flour. As well as an easier way to wipe floors and a particularly good spot for buying milk. There is a column called “In Your Free Time” (no explanation needed); one named “In Bed…” (ditto); one appearing under the heading, “Relationships Are Everything;” and one called “The best-Looking [female] Friends.” The issue concludes with more sagacious advice on physical and mental health as well as the inevitable whoroscope (compliments to Erica Jong, who to my knowledge invented the expression).

Incidentally, all twelve weekly fates being forecast take it for granted that readers are of age. Notwithstanding that Israel has the highest fertility rates in the entire Western world, not one so much as mentions motherhood. It is further assumed that women work, and also that none of them are on pension. Though Israel has one of the world’s longest life expectancies, old women do not seem to count. In other words, the only women who count are those who are adult, are of working age, have a career, and are or expect to be in some kind of relationship. So much for sisterhood.

And then, surprise surprise. To repeat, the normal issue consists of 162 pages. This time, however, in honor of Independence Day, readers also got a special supplement containing 124 pages. Free of charge, the lady behind the counter said. What a treat! The name of the supplement? Stiletto. Precisely the kind of shoe many feminists profess to hate as a symbol of male oppression. The contents? Almost exclusively photographs of young ladies in swimsuits. Including three of Bar Refaeli, the most famous Israeli model whose presence is almost as indispensable as the whoroscope. Currently she is pregnant, a fact that the photographs do not show. Hence they must have been taken some time ago.

Not a single word about such “role models” as Hillary Clinton, who currently stands a good chance of being elected the most powerful person in the world. Not a single one about Angela Merkel who, at the moment, may be more popular in Israel than she is at home. Or about Janet Yellen, head of the Federal Reserve (whom the woman-hating Donald Trump has sworn to fire because, so he says, he does not like her). Or about several female ministers, MKs’ and top-level bankers in Israel itself. Why? Let me guess. Because all these women are quite old. La-Isha readers neither want to see their pics nor can identify with them.

Is that what women really want?

Happy Birthday, Israel

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A year ago at this time of the year, I posted an article arguing that Israel has been the most successful political creation of the entire twentieth century. Demographically, economically, politically, militarily, scientifically, culturally—no other country started from so little and no other achieved so much in such a short time. Let me remind readers that, a hundred something years ago, even the language—Hebrew—was moribund. Used almost exclusively for prayer, it had to be rebuilt almost from the beginning. Today, to celebrate my country’s 68th birthday, I want to focus on a particularly touchy question: namely, the place occupied by, and the feelings of, Israel’s 1,300,000 strong Arab community.

The research was done by Prof. Sami Samocha, a professor of sociology at the University of Haifa. He has been monitorings_a relations between Arabs and Jews in Israel for 35 years, no less. Thanks also to my colleague, Prof. Alex Yakobson, who drew my attention to Samocha’s work.

The following information pertains to the year 2015. It presents, in somewhat simplified form, the responses to 19 out of 178 questions Samocha asked Arab-Israeli citizens. Needless to say, the questionnaires were anonymous.

Bad news first:

61.1 percent strongly oppose or oppose their children attending Jewish schools, whereas only 38.4 percent would strongly like or like them to do so (0.5 percent did not answer this question; since the number of non-respondents to this and the remaining questions is very small, in what follows I did not bother to mention them). 67.9 percent greatly fear or fear serious infractions of their civil rights, whereas only 31.6 percent are very certain or certain that will not happen. 56.5 percent greatly fear or fear they may one day be “ethnically cleansed,” whereas only 44.8 percent do not fear such a possibility or do not fear it at all. 32.2 percent strongly believe or believe in the government, whereas 67.8 percent disagree or strongly disagree.

And now, to the good news:

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76.1 percent of Arab Israelis strongly agree or agree that Arabs and Jews should work together in common organizations, against only 22.6 who either disagree or strongly disagree. Working side by side with Jews, 65.8 percent feel completely at ease or at ease versus only 26.6 percent who disagree or strongly disagree. Visiting a shopping center also frequented by Jews, 58.8 percent feel either completely at ease or at ease whereas only 31.11 disagree or strongly disagree. 53.6 percent strongly agree or agree that Palestine is the common homeland of both peoples, whereas only 45.6 percent strongly disagree or disagree. 66 percent strongly agree or agree that Israel is a good place to live, whereas only 35.8 percent disagree or strongly disagree. 59 percent strongly prefer or prefer living in Israel than in any other country in the world, whereas only 40.8 percent strongly disagree or disagree.

75 percent are quite ready, or ready, to have Jewish friends whereas only 24.3 percent reject, or strongly reject, that possibility. 52.3 percent strongly believe, or believe, that Jews have many positive qualities Arabs should adopt whereas only 35.5 percent disagree or strongly disagree. 58.1 percent strongly believe, or believe, that Arab Israelis resemble Jewish Israelis more than they do Palestinians in the west Bank and the Gaza Strip, whereas only 41.2 percent disagree or strongly disagree. 27.5 percent would be very ready or ready to live in a Palestinian State, whereas 72.4 percent would either reject or strongly reject such a possibility. 65.8 percent strongly hold or hold that Israel has a right to exist, whereas only 33.8 percent disagree or strongly disagree.

Finally, 89.4 percent say either that, as Arabs, they had never been threatened or hit by Jews, or else that this had only happened once or twice. Only 10.3 say that this had happened to them more often. 77 percent say either that being Arab never made them feel discriminated against or that this only happened once or twice; whereas only 22.5 percent said that they had felt so more often than this.

Let me end this with two anecdotes. My oldest son lives in northern Israel in a town called Carmiel. Nearby is Dabach, known after the head of the family tribe, a big man whom I last saw while he was snoring peacefully away in his office. The complex includes a supermarket, several shops, a restaurant, and a large parking lot. Currently the family is busy building a second complex in Haifa. Since prices are low, Dabach is frequented by both Arabs and Jews, me—when I get there—included. Never in any of my visits did I witness any problems between Arabs and Jews.

The second anecdote goes as follows. The other day I was listening on the radio to the mayor of Umm el Fahem, an Arab-Israeli town of over 50,000 inhabitants adjacent to the northern part of the West Bank. The interviewer asked him about the possibility that, in some eventual peace agreement, the border would be moved slightly to the west so that he and his people would live in a Palestinian State. In response, the man almost got a stroke. With good, reason, too. Given that Arab-Israeli per capita GDP is more than ten times higher than that of the Palestinians in the West Bank and Gaza; and given also the truly terrible things that are currently happening in Arab countries such as Iraq, Syria, Libya, Yemen, the Sudan, and the Sinai.

So have a happy birthday Israel. To expect Arab Israelis to wax enthusiastic about that birthday, let alone celebrate it, would be too much. I do, however, hope that as many of them as possible will make use of it to have a merry day off.

Trillhaase, Or So the World Changes

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Visiting an art fair in Cologne, Germany, a couple of weeks ago, I came across an artist of whose existence I had never been aware. He was Adalbert Trillhaase (1858-1936), a retired merchant and amateur painter who did his best work during the late 1920s. Normally he is classified as “naïve.” To me, however, he is anything but; rather, seeing him using crude forms and apparently poking deliberate fun at the world around him, I would call him an expressionist. Another hint pointing in the same direction is provided by the fact that he was close to the much better known Otto Dix, who at one point did a painting of Trillhaase and his family. If so, that would explain why the Nazis, classifying him as a “degenerate” artist, placed him under a so-called Malverbot (prohibition to paint). But this is a point the reader should judge for him- or herself.

trillhaasegerichtThe painting that struck me most carried the title, “A Meeting of the Court.” It shows four judges, each wearing a different expression but all of them men and all of them mustachioed, sitting at the bench. To the left is the scrivener, also a man, who appears be resting from his labors or fallen asleep. There is a male lawyer who has thrown his arm over the shoulder of a woman, presumably either a witness or the defendant. Judging by the number of judges present, the issue at hand must have been quite serious. Completing the painting are five women who form the audience.

Just what stage the proceedings have reached is by no means clear. The lawyer may be leading the woman towards the black volume lying on the table in the foreground, presumably a Bible, in order to make her swear on it. Or what we see may be a recess, or else the woman may already have been convicted. In that case her lawyer may be trying to console her. Or he may not.

Anyhow. The painting made me think, the best thing a work of art can do. First, judging by the way they are dressed, the ladies in the audience seem to be middle class. All five have ample bosoms; obviously the idea that they should starve themselves so as to achieve as slim a figure as possible has not yet occurred to them. Nor is there any reason why it should have. After all, this was the immediate aftermath of World War I. Inflation was gathering steam and many Germans were almost literally starving. Having enough to eat was a blessing, not a shame.

Next, the lawyer. Not only is he male—at that time, female lawyers were almost as rare as unicorns. But he is making the sort of gesture which, today, might cause him to be charged with sexual harassment. And four—four—men sitting in judgment of a single woman? Who has heard of such a thing?

Briefly, what the painting told me was that the world has changed. Follow a few of the changes which, judging purely by what we see, it has undergone:

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First, as I just said, in our day and age a court made up entirely of men, mustachioed men what is more, sitting in judgment over a woman would have been all but inconceivable. Except in places like Saudi Arabia, Iran, and some Israeli rabbinical court, of course. Long before the first judge would have opened his mouth for the first time, such a court would have been condemned for being male chauvinist, incapable of understanding women, oppressive of their rights, and generally unfair and unworthy.

Second, the scrivener would almost certainly have been a woman. A young one dressed very differently from the ladies we see. And instead of writing up the record by hand, as he seems to be doing, she would have used some kind of computer or other electronic gadget.

Third, the lawyer would as likely have been female as male.

Fourth, the ladies in the audience, besides being slimmer-looking, would be very unlikely to wear hats indoors. Interestingly enough, except for the fact that they are spectators what they are doing there is anything but clear. Almost certainly they have cleaning ladies to look after the household. Probably they do not hold paid jobs, or else they would hardly have leisure to attend the court. Yet they do not look as if they are oppressed or discriminated against in any way, do they? To me at any they look quite self-conscious, ready to take on anyone and anything.

What Trillhaase is providing us with, quite unintentionally of course, is a door into a different world that has long since passed away. Like the one in which my late grandmother, who was born in 1893, might have lived in while busy having one child after another (she ended up by having six). Was it worse than the one in which we live today? Or, perhaps, better? Who is to say?

White Elephants

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At least since 9/11, and possibly since the First Gulf War back in 1991, it has been clear that the most immediate threat facing developed countries is not other developed countries. It is terrorism, guerrilla, insurgencies, asymmetric war, fourth generation war, war among the people, nontrinitarian war (my own favorite term), whatever. Follows a list-–a very partial one, to be sure—of expensive new American weapons and weapon systems, now in various stages of development, all of which have this in common that they are not relevant to the threat in question.

  1. The USAF’s new bomber. America’s last bomber, the B-2, was an absolute disaster. Originally the program, which went back to the late 1980s, was supposed to result in a fleet of 132 aircraft. That figure was later reduced to just 20, plus one used for all kinds of experimental purposes. The machines cost $ 500,000,000 each, which is far more than almost any conceivable target. Some sources, taking development costs into consideration, provide a much higher figure still. Yet so vulnerable are the machines that, when they are not in the air, they need to stay in air-conditioned hangars. That in turn means that they can only be operated from the Continental US and take hours and hours to reach their targets. Nevertheless, fixated on bombers as the USAF has been for so many years, none of these problems have prevented it from going for an even more ambitious program. This is the so-called Next Generation Bomber of which 175 are planned. Suppose, which in view of past experience seems rather unlikely, that anything like this number is in fact produced at a cost of God knows how many dozens and dozens of billions. The contribution to effectively fighting the kind of organization that has mounted 9/11? Zero. Zip.
  1. The USAF’s new ICBM. America’s last ICBM, known as the Peacemaker, was deployed from 1986 on (as so often, cost overruns reduced their number from the original 100 to just 50). In 2005 the last of them was decommissioned. Why? The answer is by no means clear. The START II Treaty, which prohibited putting multiple warheads on a single launcher, was already dead. Killed by President G. W. Bush’s decision to go ahead with missile defense, another unbelievably expensive system which to-date has only yielded a handful of launchers totally unable to stop either a Russian or a Chinese attack. Or perhaps it died because running too different ICBM systems, one made up of Peacemakers and the other of the older Minutemans, was too expensive? In any case, the warheads were put on the old Minuteman missiles and the launching crews retrained for operating them; a rare case of fortunes being spent so the old can take the place of the new. And the contribution of all this to effectively fighting the kind of organization that has mounted 9/11? Zero. Zip.
  1. The USAF’s new F-35 fighter. Originally it was supposed to be a cheap alternative to the F-22, itself an expensive failure (which is why, out of 750 originally envisaged, only 187 were built). By now, however, each F-35 is expected to cost as much as an F-22. The program has been marked by numerous delays and developmental uncertainties. Only to result in an aircraft that can carry less ordnance than some older ones could. In terms of the critically important thrust to weight ratio it is actually inferior to no fewer than ten different American, Russian, and European fighters. One sometimes feels that the Air Force has forgotten all about the late John Boyd, his concept of energy maneuverability, and the F-16 whose mastermind he was. Instead it has returned to the days when Soviet-built Mig-17s, flown by North Vietnamese pilots, had little difficulty shooting heavier, less maneuverable, American F-105s out of the sky. And the contribution of all this to effectively fighting the kind of organization that has mounted 9/11? Zero. Zip.
  1. Ford class carriers. Compared to its predecessors, the Nimitz class carriers, these huge warships (100,000 ton capacity when fully loaded) are said to have an improved nuclear power plant, electromagnetic catapults, and superior stealth characteristics. Originally they were also supposed to be able to generate a larger number of sorties per day, but there now seems to exist some doubt whether that objective will, in fact, be achieved. Early estimates put the cost of each carrier at $ 10.5 billion; now the estimate stands at $ 12.9 billion. And even this “outrageous” (John McCain) increase is most unlikely to be the last word. The carriers’ contribution to effectively fighting the kind of organization that has mounted 9/11? Zero. Zip.

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  1. The army’s new ground combat vehicle. Originally there was a call for a relatively light vehicle. One capable of being rapidly airlifted to wherever it may be needed so that any trouble might be dealt with before it could spread. What emerged, instead, was an 84-ton monster heavier and more unwieldy than any tank now in existence. One reminiscent of Germany’s projected 100, 188, and 1,000 ton tanks during World War II (see image). Thank God this one was cancelled in mid stride—as, incidentally, Hitler’s tanks also were. Or else the black hole that is the national debt would have been blessed with another white elephant.

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Will they ever learn?

 

*Thanks to my friend Bill Lind, whose work always inspires my own.

To Complain or Not to Complain

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5XQHL_V3RWFor those of my readers, the great majority, who are not Israelis, here is a short reminder. Israel today is one of the world’s worst places to be a man. Hardly a day goes by without some more or less senior public (male) figure—heads of state, ministers, MKs, army officers, police officers, businessmen, actors, TV and radio announcers, physicians psychologists, teachers, and professors—being accused of sexual harassment at best and rape at worst. One day one leads a perfectly normal life. On the next, coming totally out of the blue, one finds oneself under fire as a serial sexual offender.

Let me make myself clear: sexual harassment does exist. It has to be dealt with by society and, where necessary, the public prosecution and the court system. But not in the way this is done in Israel, and to a lesser extent many other self-proclaimed “advanced” countries, today. Many of the accusations are anonymous. Coming out of nowhere on one of the social networks, they tend to snowball as other women, like the frogs in Aristophanes’ play of that name, join the unholy chorus. Most of the accusations carry no proof whatsoever; but no sooner do they surface than the man in question is done for, finished, liquidated. Often for life. Even if, as rarely happens, the investigation to which he is subjected ends by the charges being dropped.

Hitting men, especially well known men, with accusations of “sexual harassment” has become a favorite method to settle accounts with them, take away their positions and/or jobs, and wreck their lives. All this is part cause, part consequence, of an entire industry. Its members form a filthy coalition made up of female MKs, feminist organizations, lawyers and public and relations experts. Driven by envy, hatred, an, not least, sheer greed, their sole purpose in life is to punish male “sexual criminals” while assisting female “victims” to avenge themselves and also extort as much money as they can. If necessary by pushing them to complain even against their will.

Worst of all, when matters come to court the ordinary rules and procedures, which in Israel as in all other liberal-democratic countries were originally designed to protect the accused against arbitrary punishment, are violated. This happens not just as a matter of routine but as a matter of course. The accusers’ names may not be published. Evidence is taken from women who claim to have been “victimized” long before the statute of limitation, meaning years and years ago. A woman’s sexual history may not be brought up and used against her; a man’s may and almost always serves as the main basis for convicting him.

Alibis, even such as are produced by the state’s own secret service, are dismissed—as happened, for example, to former President Moshe Katzav who is currently serving a seven-year jail sentence for a “rape” he almost certainly did not commit. Dubious evidence based on “suppressed memory” is not only allowed but actively encouraged. There is no penalty for bringing false charges, not even the option of bringing a civil suit against those who do so. Briefly, the goddess of Justice has her eyes wide open and the scales she holds are heavily weighted on one side.

Why things have come to this pass in Israel of all countries is hard to say. At bottom, perhaps the real reason is that Israel is a country born and bred by war, an activity in which women have always played and still play a rather marginal part. Since only Israeli men can defend women against other men—Arab men, as it happens—this fact put a premium on masculinity and even on “male chauvinism.”

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The proof of this pudding is in the eating. When the famous feminist Simone de Beauvoir visited Israel just before the 1967 War, the gospel she tried to spread was met with total incomprehension on the part of Israeli women. Three years later Golda Meir, who as it happens was the first female prime minister in any country, gave an interview with the late Italian journalist Oriana Fallaci. In it she called feminists “crazy” and “nuts.”

As the frequency and intensity of the Arab-Israeli wars started diminishing after 1985 or so, though, Israeli feminists, some of the most prominent of whom were US-educated, raised their heads. With the result that, thirty-something years later, Israel has the dubious honor of being the country that leads the world in terms of the percentage of convicted “sex offenders” among all criminals.

But nothing lasts forever. While the situation remains far from satisfactory, over the last few weeks there have been some early signs that Israeli society (and hopefully others as well) is getting sick and tired of the snake it has so eagerly, and so foolishly, embraced to its bosom. The first indications may be found among the so-called “talk-backists.” In Modern Hebrew, a “talk-backist” is a person who responds to newspaper articles as published on the Net. Judging purely by the numbers, as well as by the way the people in question identify themselves, most Israeli men and many Israeli women now feel that things have gone much too far and that some sort of corrective action is urgently required.

There are also some other encouraging signs. Here and there an accused “sex offender” has being acquitted by the courts—something that, until very recently, was almost unheard of. One, held by the police for five days on suspicion of “rape,’ even got the state to pay him 1,000 NIS ($ 250) in compensation! The newly appointed chief of police has announced that, from this point on, anonymous accusations would no longer be looked into. He also refused to fire a policeman accused of “harassing” a woman (who was not part of the police force) before his trial had even started. Notwithstanding the storm of criticism that followed his decisions, he stuck to his guns. And the attorney general, who like the chief of police is new to his job, has said he would look for ways to punish women who had falsely accused men—something which, as things are at present, cannot be done.

And how did the various feminist organizations react to these early attempts to re-institute some kind of sanity? By threatening that, should any of the measures go into effect, women will stop complaining.

To which one can only say, Amen.

Guest Article – Let’s Elect an American President Who Focuses on the Right Things

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by

Nicolas Besrggruen*

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The fight against the self-proclaimed Islamic State, Al Qaeda or other jihadi terrorist groups is not going to make or break America. When the West overreacts to their attacks, the jihadis win. We have too often been played by the terrorists, who, like judo fighters, leverage our own strength against us with minimal effort and sustainable capacity. Tragic as it is, the situation in the Middle East is, in the end, a matter for battling local and regional players to settle. Have we not learned from 15 years of war after 9/11, only to see the rise of ISIS, that outside intervention is counterproductive? 

For the first time since the end of the Cold War, two major world powers with distinctly different cultural and political orientations — the U.S. and China — are contending to shape the global order. By lifting itself out of poverty and rising to the top ranks of the world economy, China has enabled other emerging countries to grow and has become an indispensable engine for global prosperity in the decades ahead.

The 21st century will only find peace and security if America and China work together and do not become enemies. To avoid that historic blunder, mutual respect and understanding need to be built through a working relationship between the next U.S. president and China’s President Xi Jinping.

While standing firm on American interests such as cyber defense and opposition to changing borders by force, the next U.S. president must also seek to avert pushing China and Russia into a more formal alliance. Russia, like the U.S. itself, isrefurbishing its nuclear arsenal.

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The worst geopolitical development would be for the world to break up once again into rigid bloc systems fortified by a new nuclear arms race. Even if the ethical calculus is not clean, working with Russia is also essential for global security. In many ways, President Putin just wants respect. And the next U.S. president should grant that respect with no less illusions than during the stable years of détente with the Soviet Union.

For the West to remain strong in facing this new competition with the East, the U.S. needs a powerful civilizational ally in Europe. Europe today, however, is no longer functional as a reliable partner. On the contrary, it is paralyzed by every crisis it faces — from Greek debt to refugees — and is disintegrating before our eyes.

As the de facto leader of the West, the next American president should press for a Europe that, at a minimum, federates fiscal and foreign policies, immigration and energy policies — in short, a common Europe that is the other pillar of the West. Otherwise America will have to rely on a series of nations, each too small to matter alone, yet each also hobbled by the straightjacket of being part of a dysfunctional European Union.

There are positive developments for the next American president to capitalize on: The Paris climate accords; lower oil prices; the chance to bring Iran back into the fold of the world; winds of change in Argentina, Venezuela and Cuba; and the olive branch that Indian Prime Minister Modi has extended to Pakistani Prime Minister Sharif in that volatile part of the world.

The next American president will face some of the greatest challenges — but also the biggest opportunities — history has to offer. The coming U.S. election could not be more consequential. Responsible voters should make the right choice by choosing a president who will focus on the right things.

*Nicolas Berggruen is a philanthropist and investor. He is the founder and president of Berggruen Holdings, a private investment company and the Berggruen Institute

“Not-Hot”

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The recent celebration of “international women’s day” gave the Israel Defense Force (IDF) an opportunity to publish some figures as to the number of women serving in its ranks and the Military Occupation Specialties (MOS) in which they do so. What makes the question important is the fact that the IDF is the only army in the world to conscript women. Consequently it has more of them, proportionally speaking, than any other. From 1949 to about 1970 it was also the only one which gave them weapons training, albeit one that was purely symbolic. Foreigners attending the annual Independence Day parades, or happening to meet the women as they went on route marches, marveled to see the combination of cleavage and Uzi submachine guns. One which, for reasons Freud might explain, few could resist.

3As Western armed forces, with the American one at their heads, started expanding the role of women beyond administration (secretaries) and medical services (mainly nurses), from 1970 on, the IDF was left behind. Only in the late 1970s, owing to the vast expansion occasioned by the 1973 Arab-Israeli War, did an acute shortage of manpower lead to a reassessment. The next push was given by American-style feminism which reached Israel in the mid-1980s, not long after peace with Egypt was signed. Since then Israeli feminists have been loudly demanding women’s right to serve in any capacity, combat included. Now that the figures have been published we can answer the question, how successful have they been?

First, the background. The IDF active force, including both regulars and conscripts, numbers 176,000 troops. Of those about 30 percent (58,000) are female. The mobilized force, reservists included, numbers 600,000 (on paper). However, since women in spite of recent changes in the law rarely serve in the reserves, their percentage in it is much lower. According to the figures, the total number of female “fighters” in the regular force is said to be 1,593. All are volunteers; unlike men, who are assigned, women only serve in “combat” if and when they want to. In other words, under 3 percent of female soldiers serve in “combat” units.

Women’s inferiority to men in respect to physical strength, aerobic capacity, endurance and, above all, robustness, is obvious to all. The price is paid by their male colleagues; when a female trainee in a mixed unit breaks down, as often happens, guess who is going to carry her and/or her weapons and pack? But the price women have paid for serving in “combat” units has been much higher. Many of the documents in question are classified so as to avoid angering Israeli feminists, an aggressive and often obnoxious lot, by presenting them with the facts. Some, however, have been published by a former student of mine, Colonel (ret.) Raz Sagi.

The picture that emerges is not pretty. Less than 3 percent of IDF “combat troops” are female. However, over the last few years they, or the lawyers acting in their name, have served 10-15 percent of the suits concerning compensation for injuries suffered while on “operational activity” (whatever that may mean). In proportion to their numbers, women sue three to five times more often than men. Sagi’s book bristles with interviews with young women who served as, or trained for, “combat” MOS and were seriously injured, sometimes for life. Such cases are brought before the courts almost every day.

Now let’s take a closer look at what “combat” actually entails. The largest group, 442 out of 1,593, serve in three mixed battalions named “Caracal,” “Leopard,” and “Lions of the Jordan” respectively. In each of these they form 60 percent of the total. What all three have in common is that they are permanently deployed along the borders with Egypt and Jordan. Those in turn have this in common that, over the last forty years, they have seen hardly a shot fired in anger. The remaining women are divided between “combat intelligence collection” (meaning that they look for all kinds of interesting things after the battle is over), border police (meaning that they stand guard against terrorists, as Hadar Cohen, who was mentioned on this blog a few weeks ago, did), civil defense, and artillery.

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It so happened that, a day after I completed this article, I watched a clip of artillery troops on a route march. The men, heavily loaded with equipment of all kinds, sweated, grunted and did their best to keep up. One or two female soldiers were marching along, carrying a much smaller pack and looking as if they were on a lark. Whatever they may have been doing there, clearly they were not being tested as the men were. (You can find the clip on https://www.facebook.com/ynetnews/videos/10154114053990572/.)

Neither the infantry, nor the armored corps, nor the engineers, nor the special units, which between them form the bulk of the IDF’s “teeth,” have any women at all. Scant wonder that, during Operation Protective Edge back in the summer of 2014, out of 66 Israeli troops who died not one was female.

Meanwhile the terminology has been changing. Having just celebrated my seventieth birthday, I can remember the time when the term lohem, meaning fighter or warrior, used to be the highest compliment anyone in Israel could receive. Nine cases out of ten, it referred to a soldier, a male one of course, who actually fired at, and was fired on by, the enemy. Now its female form, lohemet, also refers to all the above units, not one of which are meant to face an armed and trained enemy soldier able to fire back. Scant wonder that, in popular slang, the plural form of lohemet, lohamot, is often explained as meaning lo-hamot, “not-hot.”

Why does all this matter? For four reasons. First, as the term “not hot” implies, in Israel as in all other modern countries armed forces the presence of women has contributed to the decline in the prestige of those forces and, with it, their ability to attract high-quality male manpower. Presumably that is why the “Lions” (arayot, in Hebrew) battalion, in spite of being made up mostly of women, is not called leviot “Lionesses.” Or else surely any proper man would have shot himself rather than serve in it.

Second, in Israel as in all other modern countries that presence has led to “gender norming” and, with it, falling standards which, in case of war, could be dangerous. Third, as the above figures show, too many women who, whether out of idealism or sheer penis envy, volunteer to serve in “combat” units are injured, with bad consequences both for themselves and, since they have to be paid pensions, the defense budget. Fourth, outside Israel quite some people, being misinformed about the true state of affairs, still take the IDF as an example to follow.

But this is 2016, not 1967.

Whom the Gods Want to Destroy…

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IDF-Soldier-who-shot-neutralized-terrorist-is-suspected-of-murder-Israel-PalestineThe killing last week by an Israeli soldier of a wounded Palestinian terrorist who was lying helplessly on his back has sent the country into a turmoil. No sooner was the picture published on the Net then the Israeli media mounted a wave of protest. Taking up from there, Prime Minister Netanyahu, Minister of Defense Yeelon, and chief of staff Eisenkot quickly denounced the deed and promised that the soldier in question would be put on trial and punished. This was followed by the Israel Defense Forces (IDF) attorney general’s announcement that the charge would be murder.

Israelis like to think that theirs is “the most moral army in the world.” Consequently there was much palaver about the IDF’s “ethos,” its “values,” and so on. But not everyone agreed that the killer was in fact being treated as he deserved to be. Not only did his family and friends stand by him, but images of him, in handcuffs, led to an equally strong wave of protest in his support accompanied by rioting. That caused Netanyahu, a weathervane if ever one there was, to soften his original stance on the case pending a court investigation. Not content with that, right-wing politicians, smelling blood, entered the fray. They lionized the soldier and accused the chief of staff of failing to back his troops. One notorious extreme right-wing activist, Itamar Ben Gvir, demanded that the police investigate Be-Tzelem, the humanitarian organization responsible for taking the image and spreading it. One rabbi has even suggested that, for having the soldier tried, the chief of staff himself should be put on trial.

In his defense, the soldier claimed that the terrorist was moving and that he was afraid that he, the terrorist, might be carrying an explosive belt on his body. This was denied by the man’s commanders and made doubtful by the fact that the terrorist, who had been lying there for no fewer than six minutes before he was killed, had been examined and found unarmed. As always happens in such situations, charges and countercharges quickly multiplied until they congealed into a single opaque, stinking, tissue of truths and falsehoods. I do not know what the outcome is going to be. But I am prepared to bet that the soldier will not be punished as murderers in Israel usually are, i.e. with life in prison. Assuming he is punished at all, almost certainly he will get a pardon of some kind.

All this is still in the future. Meanwhile the fallout from the case is splitting Israeli society from top to bottom. Not to mention other soldiers’ justified fear that, should they be caught in a similar situation or commit a similar deed, their superiors, instead of backing them up, will wash their hands of them. To be sure, the State of Israel and the Israel Defense Forces (IDF) are not the world’s worst human rights offenders. Unfortunately, though, they are bad enough.

Sun Tzu, in the first chapter of his celebrated On War, says that victory will go to the side who keeps the favor of heaven—meaning, the moral advantage—by formulating rules of behavior and sticking to them. I agree. For those of you who have never read my best-known book, The Transformation of War, or who have forgotten its contents, here is what I wrote about this topic a quarter century ago:

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“[Suppose a war] where one belligerent is much stronger than the other. Under such circumstances, the conduct of war can become problematic even as a matter of definition… Over the long run… fighting the weak demeans those who engage in it, and therefore undermines its own purpose. He who loses out to the weak loses; he who triumphs over the weak also loses. In such an enterprise there can be neither profit nor honor. Provided only the exercise is repeated often enough, as surely as night follows day the point will come when enterprise collapses… Since the very act of fighting the weak invites excess, in fact is excess, it obliges the strong to impose controls in the forms of laws, regulations, and rules of engagement… The net effect of such regulations is to demoralize the troops who are prevented from operating freely and using their initiative. They are contrary to sound command practice if they are observed and subversive of fighting discipline of they are not. Hence Clausewitz’s dictum, plainly observable in every low-intensity conflict fought since World War I, that regular troops combating a Volkskrieg are like robots to men.

A sword, plunged into salt water, will rust…A strong force made to confront the weak for any length of time will violate its own regulations and commit crimes, some inadvertent and others not. Forced to lie in order to conceal its crimes, it will find the system of military justice undermined, the process of command distorted, and a credibility gap opening up at its feet. In such a process there are neither heroes nor villains, but only victims: whom the gods want to destroy, they first strike blind.”

Mr. Netanyahu, are you listening? For God’s sake, GET OUT OF THE TERRITORIES!!!

Topoi

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Some time ago, someone called me a “cranky old man.” Now it so happens I am exactly the same age as Donald Trump (and Ronald Reagan, at the time he became president). So I decided to take it as a compliment.

The reason why Mr. X paid me the compliment was because I have written, in a forthcoming book, that the US armed forces, along with the remaining Western ones, had gone soft. As did the societies in which those forces are rooted. Understandably the idea that wealth, highs standards of living, and luxury can cause one’s people to go soft is not popular in the countries in question. That is precisely why I want to explore it a little further here.

From Lycurgus, Solon, Heraclitus, Herodotus, and Plato on, many ancient statesmen, philosophers and historians believed that history was cyclical. Rise and fall, rise and fall. Repeated over and over again. Medieval sages such as Honoré Bonet and, in the Islamic World, Ibn Khaldun agreed. So did some twentieth-century scholars such as Oswald Spengler and Arnold Toynbee. The details vary from one thinker to the next. But the gist of the argument is always more or less the same; if ever there was a topos, (Greek, singular of topoi), meaning a theme or archetypical story that people keep telling themselves, this is it.

soldiersAs this particular topos goes, originally war was waged by men of poor, nomadic tribal societies like those of which, long ago, all of us used to be a part. At first they fought over such things as access to water, hunting- and grazing ground, domestic animals, and, not least, women. At some stage one tribe, often headed by a particularly able leader, defeated all the rest and united them into some kind of league, confederation, or federation. As the ancient Assyrians, Babylonians, Persians, Huns, Magyars, and Mongols all did.

Next, the victors took on their richer, settled, neighbors. They fought, triumphed, conquered, and subjugated. Having done so, they discarded their nomadic traditions and took up life in the cities under their rule. Exploiting the labor of others, they grew rich and soft. They also indulged in every kind of luxury, allowed themselves to be governed by women, and witnessed a sharp decline in fertility.

Having abandoned the military virtues, at some point they started looking down on them. Hiring foreigners to fight in their stead, they ended by losing the qualities that had made them great. Attempts to substitute technology for fighting power, such as were made both in fourth-century AD Rome and, repeatedly, in China, did not work. Nor is there any reason why they should, given that the barbarians could often capture or imitate the technologies and find renegades to operate them. As, for example, Genghis Khan and Timur did. Each empire in turn was overrun by its poorer, but more virile and aggressive, neighbors. More often than not subject peoples, long oppressed, rose and joined the invaders. The end was always the same: ignominious collapse.

The cycle formed the stuff of which history was made. Polybius, the sober, businesslike second-century BC Hellenistic historian, says that, in his time, “men turned to arrogance, avarice and indolence [and] did not wish to marry. And when they did marry, they did not wish to rear the children born to them except for one or two at the most.” And he goes on: “When a state has escaped many serious dangers and achieved an unquestioned supremacy and dominion, it is clear that, with prosperity growing within, life becomes more luxurious and men more tense in rivalry about their public ambitions and enterprises.”

The historian Livy, who lived about the time of Jesus and experienced the empire’s power at its height, says that Rome was “struggling with its own greatness.” And the poet Juvenal, a century later: “we are now suffering the calamities of a long peace. Luxury, more deadly than any foe, has laid her hand upon us, and avenges a conquered world.” Previously, he adds, success in life depended on military excellence. Now it led through some rich woman’s vulva.

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Some of these thinkers and doers also proposed solutions. Lycurgus prohibited his Spartans from using gold and silver and made them lead lives so austere that they have become proverbial. Plato wanted his imaginary state to avoid external trade, as far as possible, so as to prevent it from growing luxurious. Interestingly, both of these also emancipated women. The former gave them much greater freedom than any other Greek city-state did. With the result, Aristotle says, that they became licentious and utterly useless. The latter liberated them from the need to look after their children, thus putting them on an equal footing with men in everything but physical strength.

Isocrates, the fourth century BC Athenian statesman, argued that, if Athens wanted to avoid repeating the cycle that had led to the ruin of its first empire, moderation and benevolence were the right tools to use. Three centuries later Cicero, the Roman orator and statesman, did the same. Polybius on his part claimed that Rome made war on the Dalmatians in 150 BC because “they did not at all wish the Italians to become effeminate owing to the long peace… [and] to recreate, as it were, the spirit and zeal of their own troops.”

In 101 BC Metellus Numidicus, censor and therefore in charge of Roman public morality, held a famous speech. The Republic, he said, was short of military manpower. But the solution was not to open the legions to property-less men as Marius had suggested. Instead he demanded that upper- and middle class men should share the burden, marry and have children. The title of the speech? De ducendis uxoribus, “about leading (marrying) women.”

Nor is the softening effect of wealth and civilization by any means the only topos around. One very widespread topos is the story of the helpless young woman who is waked up by prince charming (Snow White, Sleeping Beauty). Another, that of the prodigal son who, after many years of wandering, returns to his desolate father, mother, or girlfriend (Peer Gynt; Ruby Murray, “Goodbye Jimmy, goodbye”). Yet another, that of the noble loser who, having fought bravely, goes under through no fault of his own but maintains his dignity to the end (Spartacus, Robert E. Lee, Erwin Rommel). You get the idea.

Admittedly, all of these and many others are topoi. But that does not mean they are not true to life. To the contrary: it is precisely because they are often true that they developed into topoi and grew as popular as they did.

Food for thought here, no doubt.