Friday, October 24, 2008

Wrap: Settlers, Beirut, 1983, Saint Pius?, Gilad Schalit, Joe the P., Iran, and economic panic

Herzl vs Hobbes

On Sunday, the Associated Press disseminated worldwide a photo of "a Jewish settler" confronting unseen Palestinians in northern Samaria. If a picture is worth 1,000 words, what to make of this: a bare-chested, pipe-wielding teen, ski-mask drawn over his face, goth T-shirt tied to a belt holding up camouflage trousers.

Move over, Peace Now. You've met your match. No group could better undermine the case for Jewish rights in the West Bank than settler radicals. In a world predisposed to see all of Judea and Samaria, and east Jerusalem, as Palestinian; at a time when our government, such as it is, remains incapable of articulating where our boundaries should be drawn - Israel can ill afford settlers behaving badly.

The phenomenon is nothing new; but lately it has spiked, serving to close minds and harden hearts to Israel's legitimate security concerns and historic civilizational tie to the West Bank. This behavior bolsters the notion that peace can be achieved only by a full Israeli withdrawal to the 1949 armistice lines.

TAKE WHAT happened outside Otniel, south of Hebron, on Wednesday, when Palestinian Arabs came to harvest their olives in coordination with the IDF. Suddenly, a group of 10 masked far-right youths appeared and instigated a confrontation. One soldier was hit on the head with a club. Another rowdy tried to grab a soldier's weapon, and was himself injured.

Or take what happened Saturday in the Tel Rumeida area of Hebron. Four Jewish youths were captured on camera - in footage broadcast incessantly on Arab stations - beating Abed Hashalmoun, a news agency photographer, as well as a foreign volunteer who had come to help local Palestinians pick olives.

The olive pickers had made no effort to liaison with the authorities, even though they were operating near a Jewish enclave, on Shabbat, in the heart of a tinderbox. It doesn't take a suspicious mind to surmise that their presence was something of a set-up, and that the settlers should have had the wisdom to stay away. The confrontation will now no doubt join other voluminous footage of "settlers behaving badly" already flooding the Web.

Also this week, radicals, many of them minors, protested outside the home of OC Central Command Maj.-Gen. Gadi Shamni. The message was explicit: "You try bringing your law to our turf, and we'll make you miserable."

Some settler leaders - think of them as "adult hilltop youth" - have been sending another not-so-subtle message: The more proponents of a deal with the Palestinians push their policies, the more settlers will react with violence on the ground. It's a tactic as brilliant as it is indefensible. Because we do not live in a Hobbesian state of nature.

Let's be clear. Only a small number of Israelis living over the Green Line are extremists. And in some areas, olive harvests really do pose a genuine security dilemma - with trees growing in proximity to schools, for instance. The possibility of terrorists exploiting the harvest season to infiltrate a settlement is not far-fetched; nor that farmers might pass on settlement security information.

Also, while kindhearted Israelis with pure motives have aided Palestinian harvesting, not a few foreign and Israeli "peace activists" have come on the scene to exacerbate tensions and provoke confrontation.

SETTLER leaders recently launched an advertising campaign to tell Israelis why we should feel connected to Judea and Samaria. But radicals running wild in the hills of Judea and Samaria achieve the opposite. How sad that a relatively small group of fanatics has been able to divert the spotlight onto their misbehavior.

As he helped pick olives north of Ramallah on Wednesday, reporters in tow, Palestinian Authority Prime Minister Salaam Fayad declared, in a sly juxtaposition: "The settlers being here [in the West Bank] is in itself illegitimate. And, on top of that, they engage in acts of violence..."

Meanwhile, in its long tradition of loaded questions, last week's Economist wondered: "Will the settlers stymie a two-state solution?"

Of course it is Palestinian intransigence that is torpedoing such a solution. But with everyone focused on settlers behaving badly, the Palestinians are getting a free ride.

Iwo Jima redux

At dawn 25 years ago today, a lumbering, yellow Mercedes truck smashed into US Marine headquarters near Beirut airport, detonating a gargantuan bomb that killed 241 peace-keepers. It was the Marines' biggest single-battle death toll since Iwo Jima.

A short while later, a car-bomb killed 74 French peace-keepers not far away.

Imagine this anniversary being celebrated by Iran's Supreme "spiritual" leader, Ayatollah Ali Khameni, in the company of Revolutionary Guard commandant Mohammad Ali Jafari and intelligence chief Gholam-Hussein Mohseni-Ejei. Khameni might make a toast - non-alcoholic - to the memory of Ayatollah Ruhollah Khomeini; Jafari might boast that their predecessors pulled off the killings in secrecy. Mohseni-Ejei, in all his vainglory, might remark that the entire operation was accomplished when the regime was but six years old.

Today will surely also not go unmarked by Hizbullah, founded by Iran in summer 1982 to propagate Khomeini's ideas among Lebanon's Arab Shi'ites.

Sheikh Mohammad Hussein Fadlallah, now in his 70s, is said to have blessed the truck and car bombers. Will he get an anniversary call from Hassan Nasrallah? Will they recall Abbas Musawi, Nasrallah's immediate predecessor as Hizbullah chief, who supervised the attacks? He was liquidated by the IDF in 1992.

There would also have to be warm thoughts for Imad Mughniyeh, once Fadlallah's bodyguard, later Nasrallah's operations chief. Mughniyeh, who was secretly indicted for the Marine bombing and also plotted the 1996 Khobar Towers atrocity in Saudi Arabia, was himself mysteriously removed from the scene in a February 2008 Damascus car-bombing.

One need not be predisposed to gloominess to raise the concern of Iran-Hizbullah selecting today as an auspicious occasion to attack an Israeli or Jewish target.

Extra vigilance is called for.

THE MARINES were sent to Lebanon as part of a multinational peace-keeping force after the IDF expelled the PLO leadership from Lebanon on August 30, 1982, and Christian militias massacred scores of Palestinians at the Sabra and Shatilla refugee camps on September 17.

President Ronald Reagan ordered the Marines not to engage in combat; they were to be a stabilizing influence.

Iran and Hizbullah, however, wanted to promote anarchy, not stability. They carried out scores of attacks on IDF forces in 1982 - two of them particularly horrendous, killing 36 in Sidon on November 4, and 75 in Tyre, November 11.

Local Shi'ites first welcomed Israel's bid to rid Lebanon of the PLO. Then, egged on by Iran, they violently opposed the newly-created IDF security zone in the South.

Next it was America's turn. On April 18, 1983, Iran ordered Hizbullah to car-bomb the US embassy in Beirut: 61 lives were lost. "Shadowy" Muslim extremists were blamed. Reagan declared that America would not be deterred.

Then came the simultaneous attacks this day 25 years ago. Reagan again declared that the US would not cut and run. Four months later, he pulled US forces out.

And still, Iran and Hizbullah, working as the "Islamic Jihad" or the "Revolutionary Justice Organization," kept up the pressure. The US embassy annex in Beirut was bombed on September 9, 1984. Next, TWA Flight 847 was hijacked; Western clergymen, academics and journalists were kidnaped. The world waited to see what America would do.

On October 5, 1984, The New York Times reported that the administration had decided: "A retaliatory strike against the Party of God or Iran would only produce an escalation in terrorist attacks against the United States."

IN THE intervening quarter-century, America, and especially Europe, have sought to avoid an unpleasant, even painful confrontation with Iran. And anyway, there was business to be done. There was, moreover, the delusion that the mullahs, once "engaged," could be cajoled into being good world citizens.

Consequently, both Iran and Hizbullah have grown ever more assertive. One works to build nuclear weapons; the other dominates Lebanon's polity.

Offstage, meanwhile, a little-known Sunni fanatic, Osama bin Laden, watched America's feeble response to Iranian and Hizbullah aggression. In a telling interview three years before September 11, 2001, he observed that, clearly, America had lost the will to fight.

It has since costs thousands of American lives to disabuse him of this notion. Would it not have been better to do so from the start?

Cui bono?

For having failed to speak out against the Nazis during World War II, the moniker "Hitler's Pope" has stuck to Eugenio Pacelli, later Pius XII. Yet every pope since he died, 50 years ago this month, has been a champion of his reputation and "sanctity."

Factions within the Church are pushing hard to have Pacelli beatified, a process that would lead to canonization - retroactively acknowledging him as a saint.

This momentum, however, has been temporarily halted, and the Vatican has asked those supporting and opposing the beatification to stop pressuring Pope Benedict XVI on the issue.

JEWS CANNOT help but think of Pius as a fatally flawed figure who managed to safeguard the Church's political and worldly interests from the Nazis, but only at the steepest of moral costs.

It was Pacelli, who as secretary of state in 1933, signed the Vatican Concordat with Germany. Hitler interpreted this treaty to mean that he had won the Church's approval "in the developing struggle against international Jewry."

On January 17, 1941, with the war against the Jews well under way, Berlin's Bishop Konrad Preysing - whose moral compass remained intact - wrote Pacelli, by then Pius XII, asking "whether the Holy See couldn't do something… issue an appeal in favor of these unfortunate [Jewish] people?"

No answer ever came.

At the height of the killing, in a letter dated June 22, 1943, the pope's representative reportedly wrote to US president Franklin D. Roosevelt, warning against the creation of a Jewish state in Palestine.

Even in October 1944, when the Jews of Rome were rounded up under his very window and sent to the gas chambers, the pope said nothing.

WHO BENEFITS, cui bono, from identifying Pius as a saint?

Perhaps those who want to quash the indictment, once and for all, that the Church's behavior during the Shoah was sinful. Perhaps it is simply Catholic traditionalists who want to honor Pius for strengthening the Church by having centralized ecclesiastical and political power within the Vatican at the expense of dioceses around the world.

His defenders argue, not unreasonably, that even if the pope had openly condemned the Nazis for their atrocities, they would have carried on anyway.

Far less convincingly, they say Pius feared the Germans would have retaliated against Jewish converts to Christianity; or even occupied the Vatican and expropriated its wealth. They say Pius was working "secretly" to help the Jews.

One thing is clear: Pius feared Bolshevism - which he may have associated with Jewry - as a menace even greater than Hitlerism.

Holocaust historian Saul Friedlander describes Pius as "distant, autocratic, and imbued with a sense of his own intellectual and spiritual superiority."

His measured assessment of Pacelli: "There is no specific indication that the pope was anti-Semitic or that his decisions during the war stemmed, be it in part, from some particular hostility toward Jews."

NO ONE benefits, however, from heightening enmity between Catholics and Jews.

Peter Gumpel, a Jesuit priest and Pacelli-canonization activist, has been exacerbating tensions by demanding that Yad Vashem, the Holocaust Martyrs' and Heroes' Remembrance Authority in Jerusalem, "revise" its exhibit, which accurately depicts Pius's failure to rescue. Gumpel threatens that not doing so will keep Pope Benedict from visiting the Jewish state.

But another Vatican spokesman, backtracking from Gumpel's hard line, says that the row with Yad Vashem will not be "the deciding factor" in any papal visit.

We claim no standing in telling Catholics whom to honor as a saint. For us, however, and for many Catholics as well, the undeniable legacy of Eugenio Pacelli is moral failure - his deafening silence as millions of Jews were persecuted, brutalized and finally murdered on an industrial scale.

If the Church wants historians to reevaluate pope Pius XII's wartime record, let it open the Vatican's archives to outside historians.

Let us recall the words spoken by Pope John Paul II in his March 2000 visit to Yad Vashem: "We remember, but an incentive to hatred."

In recent days, President Shimon Peres extended an invitation to Pope Benedict to visit the Holy Land. We respectfully urge him to make the journey and to continue the work of improving Catholic-Jewish relations.


The wrong target

Yesterday, scores of Israelis took part in a "Free Gilad Schalit" rally and motorcade near the Kerem Shalom crossing point, a porthole for Israeli-funneled humanitarian aid into the Gaza Strip.

On Sunday afternoon, Israel Radio broadcast a new song which expressed the collective longing of all Israelis to see our soldier return home after some 850 days in captivity.

One rally organizer said that "Hamas's demands are well-known and firm," implying that Israeli decision-makers should be more forthcoming.

Since the start of the holidays here, a number of "free Gilad Schalit" events have been held; more are scheduled through November.

"We are all Gilad Schalit" has become the battle cry of those who seek to keep the issue of his captivity high on the public agenda. But paradoxically, if domestic pressure forces the government to make dangerous concessions, there are likely to be many more Gilad Schalits.

Our hearts go out to Schalit's parents. With their son's life on the line, we do not presume to tell them to focus on the collective good. But the rest of us have precisely that obligation.

To Hamas, Schalit is a commodity in a Levantine bazaar. And the more Israelis pressure their own government to "bring Gilad home," regardless of the price, the more valuable an article of "merchandise" he becomes, and the less likely Hamas will be to cut a "reasonable" deal.

Yesterday, however, some protesters burned tires and sought to block the delivery of goods from Israel into Gaza until Schalit is set free - suggesting that the campaigners are not a monolithic group. While some want Israel to be more forthcoming, others appreciate where the difficulty really lies: with Schalit's captors.

The Hamas line is that no amount of pressure - not even the complete closing of the crossing points - will sway it into releasing our soldier. It wants its prisoners let loose - including the terrorist masterminds and facilitators of some of the most heinous bloodbaths of the second intifada, the Dolphinarium, Sbarro and Netanya Seder massacres.

THE BIGGEST mistake the Free Gilad Schalit movement could make would be to continue directing its energies against the government. Our democratic society has responsibilities that go beyond the welfare of a single Israeli hostage. We cannot allow either emotional blackmail - no matter how understandable its source - or media frenzy amid a political leadership vacuum to stampede the country into a bad bargain.

The demonstrations could play a positive role if they called attention to the fact that the terrorists on Hamas's ransom list are allowed visitors, while Schalit is denied all contact with the outside world. Buses from Gaza transport family members regularly to Israeli penitentiaries. Naturally, the International Red Cross and other NGOs have routine access.

Schalit enjoys none of these, none of the protections guaranteed by international human rights law or accepted civilized behavior.

Complicating efforts to free Schalit is Israel's recent history of having released terrorists to Hizbullah, and other prisoners to Mahmoud Abbas. Hamas no doubt feels the need to show its constituency it can do even better. One concession invites the next, leading to ever more intransigent ransom demands.

ANY APPEARANCE of further weakness and indecisiveness on the part of the Israeli leadership will magnify the enemy's incentive to carry out more abductions. So it is essential that those who campaign for Schalit's freedom hone their message, directing it at Hamas and not at Israel.

The approach some of the protest leaders have taken - pressuring our decision-makers - actually distances the prospect of a compromise Israel can safely live with.

One argument voiced by those active in the Free Gilad movement is that they do not want to see a repeat of the drawn-out, emotionally draining Ron Arad affair. Of course, there is no evidence that ongoing demonstrations in Israel would have saved Arad. It is Iran and Hizbullah who remain culpable for his fate - not the Israeli government.

We all join together in insisting that Gilad Schalit be freed. But the target of our anger and frustration needs to be Hamas - where it belongs.


In praise of Joe the plumber

The process of forming a new government in Israel is expected to take several more weeks - though success is hardly guaranteed. The United States, meanwhile, will be electing a new president and congress on November 4.

The contrast in how the two political systems choose their leaders underscores the need to reform the way Israel elects its representatives and to change the political culture of our campaigns.

In order to win, America's two parties vie for the middle ground because that's where most voters are. Israelis, by comparison, chose from over 30 mostly single-issue ideological parties in the February 2006 Knesset race. No party in history has ever achieved a majority which would enable it to pursue a coherent agenda. Kadima, which "won" the last elections with 29 seats, cobbled together yet another government of strange bedfellows.

No one would suggest that the American system is without fault. For one thing, electing a president takes too long and costs too much. Barack Obama declared his candidacy in February 2007; John McCain announced in April 2007. Together the campaigns have raised $1 billion.

America's system also has its quirks, as observers around the world discovered eight years ago when Al Gore won more popular votes (50,999,897) than George W. Bush (50,456,002), but lost the election because Bush captured the electoral college (271-266). The more people a state has, the more clout in the electoral college, but the paradoxical result is to dilute majority rule.

The US is a representative, not a "pure" democracy. Its constitutional framers created a system in which power was kept diffuse. Fearing tyranny above all else, they designed a system that does not permit power to be concentrated in any single body - not with the president, judiciary or congress (which they split in two).

Israel's founders, in contrast, fearing various groups would feel disenfranchised, created an unwieldily hyper-democratic system.

DESPITE being a nation of 300 million people, US voters can personally encounter presidential candidates with relative ease. Take Joe "the Plumber" Wurzelbacher from Ohio. He's been thinking about expanding his business, but worries that Obama's tax plan would rob him of incentives to invest in his company. Joe challenged Obama face-to-face on the campaign trail: "Your new tax plan is going to tax me more, isn't it?"

Obama readily acknowledged that he'd be raising Joe's taxes if he earned more than $250,000 a year. It was the equitable thing to do, Obama argued, to help people making less. In Israel, there's little chance "Yossi the instalator" would ever get close enough to a candidate for premier to engage in that kind of back-and-forth.

During the US campaign, voters have had ample opportunity to watch McCain and Obama and hear their views. The prospect that one of them would, upon election, pursue a totally unexpected policy on a fundamental issue is remote. For instance, Obama would never appoint a jurist to the Supreme Court pledged to overturning Roe v. Wade and re-criminalizing abortion.

In Israel, by contrast, any number of prime ministers have turned their backs on cardinal campaign promises.

America's two candidates have debated face-to-face. They met for a third and final time Wednesday and argued about the economy, negative campaign ads, judicial appointments character, abortion and taxes. In fact, Joe the Plumber's name came up - 26 times. "It's pretty surreal, man, my name being mentioned in a presidential campaign," Wurzelbacher told the AP.

In contrast, during Israel's last Knesset campaign, Kadima's Ehud Olmert simply refused to debate the Likud's Binyamin Netanyahu and Labor's Amir Peretz.

WE CAN only look on, dejectedly, as Tzipi Livni now tries to build a coalition. So far she's had to promise Labor's Ehud Barak that he will be "senior deputy prime minister, second only to the prime minister." She's made an opening offer to the Shas Party of NIS 1 billion (for child allowances). She needs to woo the collection of bickering curmudgeons known as the Gil Pensioners Party. And she needs to mollify the 98 year-old godfather of the United Torah Judaism Party who doesn't want his followers serving in a government led by a woman.

America has had 230 years to perfect its electoral system. Israel doesn't have that kind of time.

on Iran

Oct. 15, 2008
In a September 26 editorial, this is how Britain's Guardian judged Israel's efforts to convince the world that Iran's nuclear program poses an existential threat to the Jewish state, and that military action might be the lesser of two evils: "Israel has lost the argument, and we should all breathe a sigh of relief [that] pragmatism... has prevailed."

Beyond its left-liberal readership, the newspaper's stance reflects a wide swath of Western thinking.

The problem is that this view confuses pragmatism with appeasement. It is a "pragmatism" that does not demand the kind of biting sanctions that would force the mullahs to their knees - precisely in order to obviate the need for a military strike.

It's a pragmatism that does not mean, for instance, cutting virtually all trade with the Islamic Republic; or ensuring that no Western airliner lands in Teheran. These "pragmatists" support engaging Iran because there is profit to be made under the cover of a diplomatic minuet that pays lip-service to sanctions.

They paint Israelis as unreasonably hawkish, seeing an existential threat where none exists.

Yet these pragmatists heard President Mahmoud Ahmadinejad deliver the same September 23 speech to the UN General Assembly as we did.

Is it really pragmatic to look the other way as Ahmadinejad blames "underhanded Zionists" for stirring up trouble in Georgia and Ossetia? When he places responsibility for the global financial crisis on "a small but deceitful number of people called Zionists" who dominate "financial" and "political decision-making" worldwide?

Are not even these pragmatists discomfited to hear "Zionists" characterized as an "acquisitive and invasive people"?

Presumably, the pragmatists don't deny that Iran is scrambling to build nuclear weapons - even if one might quibble over precisely when Teheran will achieve its goals. Nor would they reasonably dispute that Iran is perfecting its capabilities to deliver nuclear warheads to Europe, and beyond.

They see, just as we do, that Iran fluctuates between denying the Holocaust outright, minimizing the number of Jews murdered, and cynically claiming that even - for argument's sake - if Hitler really killed six million Jews, the Palestinian Arabs should not have to pay for Europe's sins. In reality, of course, the sins the Palestinians are paying for are mostly self-inflicted: intransigence and bellicosity.

The pragmatists know, as we do, that Iranian diplomats have organized terrorist attacks against Western and Jewish targets; that Iranian intelligence co-directs Hizbullah; that Iran bankrolls Hamas and provides it with training, funds and diplomatic cover. And they well know that Hizbullah and Hamas are standard-bearers for anti-civilian warfare, fanaticism and an unalterable rejection of Israel's right to exist - within any boundaries.

IN FACT, there's nothing pragmatic about sweeping the Iranian problem under the rug. Just the opposite. By taking - for all intents and purposes - robust sanctions off the table, those who profess to being pragmatic are in fact being shortsighted. The unintended consequence of such false pragmatism is to bolster the most radical elements within Iran.

And of all the pragmatic countries in Europe talking sanctions while stoking the Iranian economy, none disappoints more than Germany. We could have sworn we heard Chancellor Angela Merkel tell the Knesset on March 18 that Berlin felt a special responsibility for Israel's security, and that it would be disastrous if Iran were to obtain nuclear weapons. And that "We have to prevent this."

Yet Germany remains Iran's main European trading partner.

Now comes the news that last month, the German ambassador to Iran, Herbert Honsowitz, in contravention of EU guidelines, sent his military attache to an Iranian military parade. Honsowitz, ever the pragmatist, is a strong booster of German-Iranian relations, including trade.

This newspaper takes at face value Ahmadinejad's October 26, 2005 pledge, before the ominously named World Without Zionism Conference, that "Israel must be wiped off the map."

We do not beat the drums of war. But if conflict comes, heaven forbid, the responsibility will fall on those who denigrated the dangers; removed the option of force from the international negotiating agenda, and undermined sanctions.

It will fall most heavily on those who fueled Iran's economy and were comfortable being spectators at the parade as the Shihab missiles rolled by.


Panic vs self-interest

If only Israelis had the luxury of addressing one crisis at a time - the turmoil in Acre, for instance, or the failure to form a new government; or signs that Fatah and Hamas are burying the hatchet, or freeing Gilad Schalit. That's even harder to do when the worst worldwide financial crisis in generations insists on monopolizing the headlines.

Israel is not immune to the economic tremors shaking the rest of the world. After a four-day holiday weekend, the Tel Aviv Stock Market opened an hour late Sunday to give traders time to take a deep breath. Even so, the market still suffered its biggest drop since 1997. Though closing steeply down, it managed to stabilize during the day as sellers discovered - lo and behold! - that there were still buyers out there.

MUCH HAPPENED while our markets were closed over Yom Kippur. Stocks worldwide plunged, with the Dow Jones industrial average falling 18 percent. Companies were hard-pressed to find lenders. Having expended its dwindling political capital on persuading a reluctant Congress to allocate $700 billion for the purchase of stocks tied to bad mortgages, the US Treasury seemed to radically revise its approach: The US government is now poised to, in effect, partially nationalize certain banks to "unfreeze" the credit markets.

Meanwhile, Iceland practically went bankrupt; its government said it would protect the deposits of its own citizens, but not those held by foreigners, including a number of local authorities in London which found themselves out in the cold.

While Israel enjoyed its trading hiatus, the Federal Reserve, the European Central Bank and the Bank of England finally managed to coordinate an interest-rate cut. And British Prime Minister Gordon Brown, whose popularity is as low as the market itself, found himself widely applauded for producing a genuinely systematic plan to address the crisis. Basically, it promises to guarantee new loans, in addition to providing cash to British banks. This could serve as a model for other nations.

Speaking in the Rose Garden on Saturday as finance ministers and central bankers from the G-7 nations stood stony-faced behind him, President George W. Bush declared: "All of us recognize that this is a serious global crisis, [which] therefore requires a serious global response." Those gathered around him generally agreed to coordinate their efforts to find a way out of the crisis since actions taken unilaterally - a la Iceland's - will only make a bad situation worse.

With 20/20 hindsight, we can speculate that America's failure to bail out Lehman Brothers catalyzed the current crisis. Looking back further, a convincing argument is being made that the American financial establishment's love affair with the poorly understood and grossly under-regulated tools known as "derivatives" contributed to the meltdown.

AS TO the here and now, Industry, Trade and Labor Minister Eli Yishai wanted Sunday's cabinet meeting to consider creating an "economic kitchen cabinet" that would address how to guarantee the safety of savings in our banks and the need to raise yields on government bonds. But, ridiculously, Cabinet Secretary Ovad Yehezkel pointed to a rule that requires agenda items to be submitted three days in advance.

To be fair, the government has been effectively grappling with how to steer Israel through this crisis emanating from beyond our shores. And analysts agree our economy's exposure to mortgage-related debt and derivatives is minimal, and that the biggest dangers are psychological.

To that end, Finance Minister Ronnie Bar-On reassured Israelis that his ministry and the Bank of Israel would intervene as necessary. They are reportedly indeed weighing plans to offer deposit insurance and, if necessary, inject capital into the banking system.

If anything makes people nervous, it is being told not to panic. And yet, Prime Minister Ehud Olmert is quite correct to tell the public just that.

If, rather than letting fear prevail, Israelis adhere to the "buy low and sell high" mantra, chances are we will all emerge to trade again another day.

Authorities here are doing their utmost to stem panic by making it clear that if necessary, they stand ready to intervene in a timely fashion. The rest of us can help by not getting caught up in the hysteria swirling around us.

Sunday, October 12, 2008

Acre riots

While most Israeli Jews spent Yom Kippur in prayer, contemplation or communing with their bicycles, a troublesome minority exploited the Day of Atonement to sin against public order.

In Kiryat Motzkin, Haifa, Beersheba, Holon, Rehovot and Jerusalem, loutish Jewish youths - overwhelmingly not haredi - stoned MDA ambulances in displays of juvenile delinquency that have become all too common in recent years.

Violence of a different order broke out in the northern town of Acre, where the population of 50,000 is about one-third Arab. Here, at about 11:30 p.m., Jewish youths hanging out on Yom Kippur took umbrage when Tawfik Jamal, an Arab resident of Acre's Old City, drove his car along Avraham Ben Shoshan Street in the Jewish part of town. Some of the youths claimed they feared he was about to carry out a vehicular terrorist attack - similar to those recently committed in Jerusalem.

Just what Jamal was doing on Yom Kippur eve in a Jewish neighborhood - where virtually no cars except emergency vehicles are on the road - is in dispute. His claim is that, accompanied by his son and the son's friend, he was picking up his daughter from her fiancé's place. The Jewish youths say he was blasting music and smoking a nargila in an act of ostentatious provocation. The initial police report backed the youths' version and suggested that Jamal was also intoxicated.

A verbal confrontation quickly deteriorated, with the Jews throwing stones and bottles at the Jamal party, which was eventually rescued by police.

An Arab who saw the altercation contacted a local sheikh and, within minutes, calls were made from mosque loudspeakers: "The Jews are attacking us!" Up to 2,000 rioting Arabs chanting "Death to the Jews" then converged on the Jewish part of town, rioting and looting. Hundreds of cars were damaged; scores of shops vandalized. The disturbances petered out with daybreak.

However, on Thursday night after the fast, sporadic violence reignited in areas where Jewish and Arabs neighborhoods abut. All told, about eight people were injured.

Several hours after Yom Kippur, the country's top cops were on the scene and taking charge. Some 700 specially-equipped police, outfitted for riot duty, were deployed. Israel Police Insp.-Gen. David Cohen ordered that no live fire be used in quelling any further disturbances.

Everyone recalls the October 2000 Arab riots which erupted simultaneously with the outbreak of the Aksa intifada. Jewish Israelis felt under siege then and the police reacted to the bloodshed as if it were a full-scale rebellion. A state commission of inquiry later criticized their handling of the violence in which 13 Arab citizens were killed.

What is essential now is that the violence, which has continued to flare intermittently over the weekend, not spread to other areas where Jews and Arabs live in close proximity. Constructively, over Shabbat, moderate Arab leaders publicly criticized Jamal for his insensitivity. Still, all eyes remain on Acre, where tensions have long been simmering between the mostly working-class populations, with the Arabs insisting that they're not getting a fair share of municipal services.

I have no sympathy with the band of Jewish youths who resorted to rioting when Jamal made his appearance. What they should have done was to call the police while seeking safety if they felt genuinely threatened. The behavior of the Arabs involved, many screaming "Itbah al-Yahud" [death to the Jews], disgusts me and is a reminder of how dangerously radicalized segments of the community have become. The police need to identify the lawbreakers and bring them to justice.

Sadly, the usual political arsonists played their predictable roles. MK Ahmed Tibi termed the Acre events a "Jewish pogrom," while MK Arieh Eldad also played the "pogrom" card. Eldad further fanned the flames: "One should not be surprised if Jews take up arms to defend themselves while the police does nothing to protect them."

Tibi and Eldad, predictably, got it wrong - as did local TV reports and several of the Friday Hebrew newspapers. Using the term "pogrom" in connection with Acre is an insult to the memories of the many Jews murdered in state-sponsored pogroms such as those organized by the Russian government in the 1880s.

A correct Zionist response is to insist that Arab and Jewish citizens live by the same rules and obligations. Anyone who advocates vigilantism undermines the Jewish state and should be shunned.

Edgy markets

Edgy markets
Oct. 6, 2008

Don't just do something - stand there. That's probably still the best advice economists can offer policymakers as Israel navigates its way through the global credit crisis.

Some of the uncertainty Israelis are experiencing is attributable to the country's political vacuum. A deeply unpopular prime minister has resigned and no successor is yet in place. Nor is there a figure of stature who can reassure the country, FDR-like, that "there is nothing to fear but fear itself."

This past Sunday's cabinet meeting addressed the economic crisis perfunctorily. On his way to Moscow, the premier allowed that the source of the problem was external. In a globalized world, however, this "insight" is small comfort.

Meanwhile, economists can't agree whether government spending next year should be increased beyond the planned 1.7 percent. If it is, the times demand that the additional monies contribute to growth and not be squandered on political payoffs.

Some of the uncertainty is psychological. With the word "panic" dominating US and European media coverage of the banking and credit crisis, Israelis can't help feeling a sense of spillover queasiness.

We went into Rosh Hashana with tabloid headlines screaming about how much the country's richest personalities - Shari Arison, Lev Leviev, Nochi Danker, Yitzhak Tshuva and the Offer brothers - had lost on their global investments. Implication: Their pain would trickle down.

So it was predictable that shares would take a beating when trading resumed Sunday on the Tel Aviv Stock Market. Yesterday the market also closed down across the board.

Sunday's losses were the worst in close to a decade. In fact, since January 2008 real estate shares have lost 67% of their value. Market gains elsewhere achieved over the past two years were largely wiped out.

GRANTED, it is hard for local policymakers to address the effects of the worldwide crisis on Israel when no one can yet fathom its scope.

But if the current global crisis has taught us anything, it is that calling for complete governmental noninterference with business is just as dopey as advocating a centrally planned economy.

Crucially, those charged with making economic decisions for the country need to do a better job of agreeing among themselves and communicating a coherent message - not just to big business, finance and the stock market, but to average Israelis as well.

We need to be hearing more from the top professional echelon at the Finance Ministry, the Israel Securities Authority and the Bank of Israel, among others. The media must resist the temptation to sensationalize the situation even as they keep Israelis abreast of developments. Finance Ministry Director-General Yarom Ariav's reassuring interview Monday morning on Army Radio is an example of the responsible coverage needed.

Israelis everywhere are watching developments. Those who run small businesses worry that it will be harder to obtain bank loans; those about to buy new homes hope mortgages will remain within reach. From builders to hoteliers, sectors dependent on overseas customers are watching to see how the crisis in Europe and America will affect them.

Israeli employers pay into a tax-exempt keren hishtalmut account - a sort of rainy day fund maintained for their employees. This money is invested until tapped cyclically. With the market down, so too is the value of these keren hishtalmut accounts, as consumer spending will probably soon reflect.

Many Israelis also belong to a pension scheme - kupat gemel - to which both they and their employers contribute. These funds, too, are invested in the market. Nine percent of pension savings have reportedly been lost since the beginning of the year.

Just about every Israeli has a bank account. But unlike in the US where the FDIC insures deposits - Israelis have no such insurance. Fortunately, Bank of Israel Governor Stanley Fischer assures us that the country's banks are stable - that no one expects a run on the banks.

Nevertheless, developing a plan to protect the deposits of average Israelis should figure high on the agenda of the next government.

Israelis need reassuring that those charged with regulating the country's business, finance, markets and economy are effectively looking out for their interests, even as they encourage efficient growth and investment.

And the winner is...

Oct. 7, 2008

I do hope you are right.
- Winston Churchill accepting the Nobel Prize for Literature, 1953

The Nobel Prize in Medicine was awarded this week to Francoise Barre-Sinoussi and Luc Montagnier "for their discovery of human immunodeficiency virus," and to Harald zur Hausen "for his discovery of human papilloma viruses causing cervical cancer."

Hausen, from the Cancer Research Center in Heidelberg, gets half the prize; while Mme Barré-Sinoussi, from the Pasteur Institute, and Montagnier, from the World Foundation for AIDS Research, share a quarter each.

No one questions the wisdom of awarding the prize to these virologists. Since 1981, when AIDS was first identified, 25 million people have died; 33 million live with this incurable disease. Roughly 5,000 AIDS cases have been diagnosed in Israel.

Barre-Sinoussi and Montagnier have made it possible not only to manage the illness, but to screen for HIV in the blood supply. Hausen's work will one day allow scientists to overcome the number two cancer killer among women. It is too bad, however, that the Nobel medical jury - Stockholm's Karolinska Institute - did not see fit to also recognize the contribution of Dr. Robert Gallo, an American virologist widely co-credited with discovering HIV. It's true that the jury was limited to three choices; still, Gallo's exclusion proves that the Nobel awarders don't always get it right.

Nobel, the Swedish inventor of dynamite, died in 1896 and left his fortune to endow the prize named after him. Nobel committees in various fields solicit nominations from academics, scientists, previous laureates and others.

Most of us will have to rely on the wisdom of the physics jury in selecting Yoichiro Nambu, Makoto Kobayashi and Toshihide Maskawa yesterday: Nambu for discovering the "mechanism of spontaneous broken symmetry in subatomic physics" and Maskawa, with Kobayashi, "for the discovery of the origin of the broken symmetry which predicts the existence of at least three families of quarks in nature."

The chemistry award will be announced today; literature follows on Thursday. The peace prize will be revealed Friday, and economics on October 13.

While many Nobel decisions are universally respected, others generate controversy.

For instance, PLO leader Yasser Arafat was awarded one-third of the 1994 prize, along with Yitzhak Rabin and Shimon Peres, for "efforts to create peace in the Middle East" - though he really specialized in creating chaos. Henry Kissinger and Le Duc Tho shared the 1973 prize for helping South Vietnam trade land for peace. Sometimes a peace prize, like the 1929 award to Frank Billings Kellogg, a US secretary of state, reflects the triumph of hope over experience. Kellogg crafted a treaty, ratified by scores of countries including Germany and Japan, which outlawed the use of force in international relations.

So who - of the 33 groups and 164 individuals nominated - will the International Peace Research Institute, the Nobel peace jury, tap this year? Among the leading candidates are two "disappeared" Chinese dissidents, Gao Zhisheng of the Falun Gong and environmental campaigner Hu Jia.

In literature, London bookies are betting on relative unknowns: Claudio Magris, Adonis - said to be one of the Arab world's greatest living poets - and Jean-Marie Gustave Clezio. Dark-horse contenders include Israel's Amoz Oz and Jewish American novelist Philip Roth. It's been 15 years since a US author won. Professor Horace Engdahl, a Scandinavian literature professor and Nobel juror, claims that "The US is too isolated, too insular" to generate world-class fiction.

Jews have done rather well in the Nobel, capturing 19% of the chemistry awards; 41% in economics; 13% in literature; 9% of the peace prizes; 26% in physics and 28% in medicine. Israelis have made their mark too: Robert Aumann for economics (2005); Aaron Ciechanover and Avram Hershko for chemistry (2004); Daniel Kahneman, economics (2002); Rabin and Peres for peace (1994); Menachem Begin, peace (1978); and Shmuel Yosef Agnon for literature (1966).

WHAT THIS suggests, simply, is that in the roster of some 780 prizes given to individuals (and 20 awarded to organizations) since 1901, Nobel jurors have made laudable decisions as well as egregiously foolish ones.

Isn't it good to know that some of the smartest people around are as fallible as the rest of us?

Four more weeks

Four more weeks
Oct. 10, 2008

Not surprisingly, on a day when the New York stock market dropped more than 500 points, the second presidential debate on Tuesday between Republican nominee Sen. John McCain and his Democratic rival Sen. Barack Obama in Nashville, Tennessee focused largely on the economy.

Obama tied the financial crisis to government deregulation and the Bush administration's lack of fiscal discipline, while McCain painted his opponent as a tax-and-spend liberal. He says he would have the federal government buy up bad mortgage debts to bring relief to regular Americans; the Obama campaign counters that such a plan is basically already in place.

On Tuesday, Obama declared: "A year ago, I went to Wall Street and said we've got to re-regulate. And nothing happened. And Sen. McCain during that period said that we should keep on deregulating because that's how the free enterprise system works."

But McCain says he has all along been advocating tighter controls over the sub-prime housing market and that it was Obama who thought such loans were a good idea.

The race remains close; surveys show Obama leading McCain by roughly 49 to 44 points.

The campaign is also getting personal. McCain's running mate, Alaska Gov. Sarah Palin, accused Obama of "palling around with terrorists who would target their own country," pointing to Obama's links with 1960s-era radical William Ayers. Palin says she's "just so fearful that this is a man who does not see America as you and I see it." McCain asks: "Who is the real Barack Obama?"

Anti-Obama bloggers continue to promote the ludicrous idea that he is a secret Muslim or - in the latest fantasy - a closet communist. Andy Martin, the blogger who first promoted the secret Muslim canard, has now been revealed to have had ties to a political action committee whose stated goal was "to exterminate Jew power in America..."

For its part, the Obama campaign is trying to undermine McCain's image as a maverick Washington outsider by reminding voters of his involvement in the 1989 Keating Five corruption scandal for which a Senate panel criticized his "poor judgment." Keating was convicted of securities fraud.

NOT MUCH foreign policy ground was covered in Tuesday's debate. McCain again took Obama to task for his willingness to "negotiate with [Iran] without preconditions," telling a questioner that "we can never allow a second Holocaust to take place."

Obama responded that it was "true... that I believe that we should have direct talks - not just with our friends, but also with our enemies - to deliver a tough, direct message to Iran that, if you don't change your behavior, then there will be dire consequences." He reiterated that he would "never take military options off the table," or give the UN veto power over US policy.

THIS AMERICAN election was always bound to hinge on domestic, not foreign policy, issues. A Pew Research Center survey found that US voters are taking an unprecedented interest in news about the economy. Barring some unforeseen calamity, the likely victor on November 4 will be the candidate who instills the most confidence among ordinary voters in his ability to rescue the ailing economy.

That said, it remains hugely important to all Israelis that the next American president be personally empathetic and diplomatically supportive to our cause. The Bush administration has requested $2.55 billion in security assistance for Israel - part of a new 10-year $30 billion security package. Whatever the issue - Iran, Hamas, or Hizbullah - Jerusalem needs a friend in the White House.

Fortunately, both candidates define themselves as pro-Israel. Frankly, we hope Obama clarifies his attitude toward borders and settlements to reassure us that an Obama administration would never pressure Israel back to the 1949 Armistice Lines. We'd also value hearing a similar message from John McCain.

Of course, we can't ask more of Obama or McCain than from our own government. The world knows where the Palestinian Authority stands - intransigently in our view - on the issues of borders, refugees and Jerusalem. So the most constructive step the next Israeli government can take - once it is finally in place, and preferably before the next president is inaugurated - would be to announce where Israel draws its "red lines."

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