Howard Epstein

HOWARD EPSTEIN: THIS YEAR IN JERUSALEM

 

HOWARD EPSTEIN: THIS YEAR IN JERUSALEM

Last Words on President Obama

If we remember nothing more about the emergence as a presidential candidate of Obama, it will surely be the mantra, with which he seduced the American people: Yes we can. Now, after eight years of a certain kind of goody-goody liberal, word-twisting, moralizing hell, we can reply with certainty: No you didn’t.

Readers of this blog will know that I have been lamenting the retreat of Pax Americana under Obama. Two other commentators had their say last week, thus Henry Kissinger: “the world, no matter what they thought of Obama, believes that America stepped back”, whilst a highly-respected Israeli deployed one word to describe the American retreat: “castration”. It is not often that such an ugly word is also the mot juste, but it is surely as accurate as it is succinct.

First Words on President Trump

The closest thing to an independent candidate has been sworn in as the President of the United States of America. Despite there being several new pages already at the website: www.whitehouse.gov, what we so far know about his detailed policies may summed up in the following

 

 

We do, however, know this about the new president: from his son-in-law, Jared Kushner (Senior White House Adviser) down, President Trump is surrounded by those whose empathy with Israel is diametrically opposed to the team that a president Hillary Rodham Clinton would have assembled. We should allow ourselves, after eight years of tension, a moment of pleasure, for we are closer today than ever before to being able to say This Year in Jerusalem. Whether Team Trump will have the freedom of movement in terms of Realpolitik to move the US embassy from Tel Aviv to Jerusalem matters less than the fact that the threat to do so is more real than under any president since Congress passed the Jerusalem Embassy Act of 1995. Vetoed by every succeeding president, what Trump has to do in this regard is nothing but respect the law.

 

A Brit Illuminates a European Truth

Boris Johnson, the British Foreign Secretary (presumably, given his pro-Israel sentiments, asleep on the job when his less-inclined-to-love-of-the-Jewish-people deputy, Alan Duncan, allowed to pass (or facilitated) the UNSC resolution that sought undermine Israel’s position outside the Green Line) redeemed himself last week. “Cripes” Johnson, always the wag, condemned EU opposition to Prime Minister May’s Brexit proposals as “punishment beatings”.

The visceral antipathetic outcry that Johnson’s WWII reference elicited from his European cousins betrayed a sense of “the truth always hurts”. By their response, the Euros demonstrated clearly their awareness of the French, Dutch, Belgian and others punishingly beating their Jewish co-citizens onto the German-supplied rolling stock (sorry, did I say German? I meant Nazi, for we must not be beastly to the Germans) that would take them to places unlikely to be more comfortable than Nazi/German-occupied Europe. Had the local gendarmes and railways workers done the Germans’ bidding with less enthusiasm, it would not be only Italy that Yad Vashem would praise for having saved 85% of its Jews. In every other place, saving more than 15% would have been an achievement. (The German-occupied, but otherwise British, Channel Islands, were rendered 100% Jüdenrein (by the deportation of two defenceless, single women), in a glimpse of how it would have been had Hitler prevailed over Churchill and occupied all the other British Isles.)

 

North Korea Again

Last week, I suggested the pre-emptive destruction of the offensive capability of North Korea, an entity that is a center of excellence for only two projects: famine for most of its 25 million slave population and the aim of delivering a nuclear device to the western seaboard of the USA. The little feedback I had was essentially that it would be unnecessary because of the US defensive missile shield, which would prevent any incoming missiles from reaching their targets (and no moralising about collateral damage – innocent Korean lives lost).

Well, if defensive missile shields could be relied upon, no non-rogue nuclear power (the USA, the UK, Russia, France, Pakistan, India or Israel) would have bothered to develop a second-strike capability. That (and not an unreliable missile defense shield) is the quintessential element of Mutual Assured Destruction (MAD), the paradigm that kept the peace throughout the Cold War (which looks like it is about to perform reprise between Russia and the West); and it is MAD that will prevent Iran from ever seeking to destroy Israel with the nuclear weapons that it craves, and that Obama’s JCPOA (the worst deal in history according to President Trump – and the writer) guarantees that Iran will, in the fullness of time, deploy.

Kim has neither the sophistication nor the time to worry about the second strike, for he believes he can pre-empt that ability by delivering an ultimatum about taking out other US cities as he destroys the first. The reality is that with North Korea, you have to defang the beast before it rips your throat out. It will be interesting to see when President Trump “gets” this. The Pentagon surely does already.

I asked a well-known and well-respected Israeli political commentator last week (the same trenchant individual as I quoted at the start of this piece) what he thought of this problem, and suggested the idea of “doing a deal with China”, whereby they would rein in North Korea (which I scotched last week). And if that does not work (as it has not so far)? I asked. “Then, I don’t know,” came the reply. “It’s a problem.” As for a direct answer to my question of him whether Trump might find his inner Harry Truman and reach his Hiroshima moment, answers came there none.

ISRAEL AND THE WF21CC

Since the rest of the future looks as blank as my three enumerated Trump detail points above, let us return to planning the World’s First 21st Century City (WF21CC), some 40 minutes south-east of Tel Aviv by High Speed Train (or 20 by Hyperloop), where the air will always be pure, overcrowding non-existent, yet almost everything that Tel Aviv boasts can be replicated at Paran, about a hundred kilometers north of Eilat. We should start planning the WF21CC this year in Jerusalem.

 

 

 

Can We Afford It?

The program is plainly ambitious, and ambition costs money. So how well-placed is Israel to plan it and put it into effect, fiscally-speaking? The answer, in a word, is “uniquely”. Consider the following:-

  • GDP per capita (GDP/Cap) is a reasonable measure of how wealthy a country is. (For this purpose I ignore the Gulf states, as they have only fossil-fuel and massive unemployment, but not “real” economies). In each case below, I state the figure for 2016; and
  • projected GDP growth (PGDPG) informs as to how GDP/Cap might be enhanced over time. In each case below, I state the average as projected for the six years 2016 to 2021.

(Note: the following numbers have been extracted from statisticstimes.com)

Some Statistics

Switzerland’s GDP/Cap was an impressive $79,578, but its PGDPG average is only 1.47% pa, which may show that when you are that wealthy it is hard to keep increasing your wealth. (In any event, unknown quantities of Switzerland’s wealth may be regarded as ill-gotten gains for reasons that we do not need to explore here, save to conjecture how much of it was stolen by its banks from Holocaust victims, dead and alive.)

At the other end of the spectrum, Egypt’s PGDPG average is 5% pa but its GDP/Cap was a mere £3,806, which may show that when your base figure is low, the first few per cent of annual growth is easy. (The Egyptian future may not be as rosy as its PGDPG average rate suggests. Egypt staves off bankruptcy and feeds its 85 million people (soon to be 100 million) only by the good grace of Saudi Arabia and its gifts of liquidity – which may be about to evaporate, given that the Egyptian courts have just ruled against Al-Sisi transferring two strategically-placed island back to the Saudis. So all bets on Egypt are off.)

Israel’s GDP/Cap was (still in 2016) $36,557 and its PGDPG, for the same six years as above, an impressive 2.90% pa.

Let us look at some diversified economies in the developed world, at first sight a little wealthier than that of Israel. The respective GDP/Cap of each of Japan, France, the UK, Belgium, Canada, Germany, Finland and Austria all lay (in 2016) in the range $37,304 (Japan) to $44,561 (Austria) – but their PGDPG average was in the range 0.49% pa (Japan) to 1.79% pa (Canada), with the others somewhere in between.

Who comes close to Israel? Australia has an impressive combination of healthy GDP/Cap at $51,593 and a PGDPG average of 2.87%. But Australia has a worrying trade deficit with the rest of the world of -$56.20 billion and foreign exchange reserves per capita of only $2,027. Israel’s like-for-like figures are a trade surplus of £12.27 billion and foreign exchange reserves per capita of $11,569.

Would you care to know how the USA and China – the world’s greatest debtor and creditor nations respectively – measure up? The USA (GDP/Cap: $57,294 but PGDPG: 1.86%) has a trade deficit of -$484.10 billion, with China (GDP/Cap: $8,261 and PGDPG: 6.08%) in positive territory with a trade surplus of $293.20 billion (both of which we instinctively knew, roughly). Worse for the USA, its foreign exchange reserves per capita are $358 (3.1% of that of Israel). China’s foreign exchange reserves per capita are $2,208 (19.08% of that of Israel). (Should nations need to rely on their foreign exchange reserves to survive, Israel can do so 33 times longer than the USA and five times longer than China.)

Of course, I am not suggesting that Israel is as wealthy or as powerful as the USA or China, but I believe that I have plainly demonstrated that Israel has one of the most dynamic economies in the world, with a base similar to those of developed western nations, but a projected growth rate that outstrips each and all of them, with other key factors the envy of the world. (And the gas is not yet streaming!)

It gets better. Israel’s export-led economy succeeds despite trading with a currency (the New Israeli Shekel) that is both stable and expensive. Compare and contrast with that other great export-led economy, Germany’s, whose currency (for as long as the European project survives) is subsidised by the much weaker economies of the somewhat inelegantly termed PIGS: Portugal, Italy, Greece and Spain. The “Pigs” all know, of course, that the straight-jacket of the euro both harms them and subsidises the selling price of every Audi and BMW exported from Germany; but short of closing down the European project, there is little, if anything, they can do about it. In the meantime, the Germans are laughing all the way to the Bundesbank (thus supporting one of Trump’s supposedly deplorable statements about Europe) and unemployment in the Eurozone runs at around 9.8%. In Israel the unemployment rate is 4.7% – better than 50% lower.

 

Pride in Israel’s economic achievements would not be out of place, this year in Jerusalem.

 

A Light Unto…

The UK was (according to the economics editor of Sky News, Ed Conway) ridiculed at Davos last week over Brexit, thus: You are a small island nation and you want to be independent and poorer? Fine.” Yet Israel is a small island nation – the Med to the west and a sea of aggression surrounding us on all other sides – and is somewhat independent. It is the ocean of hatred that has forced us to grow our resourcefulness (absent the fossil resources which we are only now about to enjoy). Needs must as the devil drives. The devil of European animus, too, is not unknown to Israel, and the UK need not shrink from it. Even if we are not a light unto the nations (but merely a source of envy), there is no reason why the UK, an important part of the newly-identified Anglosphere (the USA, the UK and Australia), who reportedly stand ready to defend our name in the future – with Kerry gone, we can sleep more easily, this year in Jerusalem – should not be inspired by Israel’s success.

Light for the Dark Continent

A piece in The Times (of London) last week urged UK Inc (UK plc to the Brits) to wake up to the potential of Africa, where:-

∎ the population will double to 2 billion by 2050 ∎ GDP growth is projected at 4.5% next year ∎ only three countries do not now hold regular elections ∎ English is the official language in 19 countries ∎

Proficiency in English is one of Israel’s great assets, that much of Europe has not grasped yet. (It is reported that when a French general complained that English was the most used language in NATO proceedings, someone whispered that without the UK, Canada and the USA, the only language of importance for the French today would be German.) Until Europe “gets” English, it will be a laggard on the world stage.

Moving Israel’s Center of Gravity

In the past year, we have seen Israeli industry and commerce begin to make serious inroads into Africa, whose time zone is just one hour different from ours. Top officials from 13 West African states came to Jerusalem last December to discuss sustainable productivity in arid and semi-arid regions (according to The Times of Israel of January 22, 2017). In addition to the Africans queuing up to be customers of Israel Inc, Muslim countries are beginning to shake off their taboo that prevented their admitting their cooperation with Israel (PM Netanyahu having recently returned from visiting Azerbaijan and Kazakhstan). Many African countries are Muslim, so there would be a virtuous circle as the old enmities are dissolved by the hunger for Israeli technology. Paths are being beat to our door, this year in Jerusalem.

Moving the center of gravity of Israel towards the East (China and the other burgeoning markets of the Orient) by building our WF21CC at Paran, brings Africa closer too.

Can We Afford It?

Israel’s economic record and prospects have reached a sweet spot – a better position on GDP per capita, with a higher rate of projected growth, a healthy balance of payments surplus, a comfortable level of foreign reserves per capita and low unemployment – as compared with every country that could be a competitor or customer.

Now add in Israel’s competitive advantage. Let us start with one area of activity only, but the most crucial for the survival of every modern state: cyber technology. To say that Israel leads the world in cyber technology is to fail to communicate its dominance. Half the world’s companies in that sphere are in Israel, whose cyber-technology software exports last year were, at $6 billion, greater than the value of its military exports (where it is in the top five or better, depending on sources consulted, globally). And we have not got into the other twenty plus fields where Israel is a world leader from cleantech to medical advancements.

An individual or a corporation being in so healthy a financial position would be encouraged to borrow big and invest in the future. That is what Israel should now be doing by planning the World’s First 21st Century City.

If its scale were to appear a little ambitious, and that resulted in the reduction of the strength, and value, of the shekel, that would have the welcome effect of boosting exports.

Israel’s future is nothing if not exciting. This year in Jerusalem – perhaps the US embassy. Next year in the Negev: first we made the desert bloom, now let’s make it boom!

[Next week: More WF21CC town, and financial, planning.]

© January 2017 – Howard Epstein

Howard Epstein is a political commentator and the author of Guns, Traumas and Exceptionalism: America in the Twenty-First Century, published by Amazon and on Kindle. He writes:-

There is no need for me to tell you that the scourge of gun crime is perhaps the most pressing issue in the USA. My book takes a new approach – support failing gun control by viewing gun crime through the prism of gun culture.

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