Sunday, September 1, 2013

Obama's Most Brilliant Decision Corrects His Worst Mistake

I think Barack Obama has been a pretty good president.  Most Americans are much better off today in virtually all aspects of our lives than we were five years ago and Obama has had something to do with that.

But a year ago, he made a huge mistake that in recent months he has come to regret.  He succumbed to pressure from the pro-Israel and Republican Right to intervene in the horrific mess that was evolving in Syria by stating, perhaps in an effort to seem as tough as his Israeli counterpart Bibi Netanyahu, that Obama had his Red Lines too and if the Syrian government ever used chemical weapons against its own people the the U.S. would have to take strong and forceful military action..

It was an inexcusable error since Red Lines have no place in our dynamic and fast changing world.  Our leaders need to constantly update their information and determine what course of action makes sense at any point in time.  That applies even moreso in the Arab Muslim countries of the Middle East which have been involved in dramatic internal upheavals that have nothing to do with us and which we don't begin to understand. 

It was a particularly unfortunate statement for Obama to make since he himself had stated in 2007 that no president has the right to unilaterally commit American troops without the approval of Congress.  So last year, Obama essentially promised to do something that he had stated was clearly illegal if his Red Line was crossed in Syria.

When it became clear a few weeks ago that the Assad government had used chemical weapons to murder more than a thousand of his own citizens, Obama was about to reap the harvest of his Red Line bravado.

As George W. Bush did regarding Iraq, Obama seemed on track to allow his ego and desire to save face to overcome common sense and plunge our country into an armed conflict in a part of the world where we really don't know as much as we need to know and, more important, where it would be impossible for us to make a positive difference.

The Israeli blogger and J Street friend Bernard Avishai made the complexity of the Syrian mess and the futility of armed intervention by the U.S. in Syria perfectly clear in his brilliant blog the other day.  Avishai set the following as a backdrop:

Let's get things straight. Syria is now fractured into zones controlled by 1) Assad, armed by Russia and backed by Iran, 2) Hezbollah, backing Assad's Alawite Shi'a sect, 3) the Kurds, always looking for ways of unifying the Kurdish homeland on the Iraqi border, 4) an insurgent Sunni-Islamist group, Jadhat al-Nusra--admiring (if not loyal to) Iraqi Al-Quaeda--and, 5) a (more or less) secular and (more or less) puny Free Syrian Army, the heart of an opposition ("maybe 1200 free floating groups") backed by Qatar, and led ("this month, anyway") by Ahmad Jarba, with ties to Saudi Arabia.

His conclusion was that an armed attack on Syria, no matter how "limited in scope" it might be at first would be an exercise in futility since we have no idea who the good guys are over there, quoting PBS commentator Ivo Daalder:

a punitive send a message to the regime that this kind of behavior is unacceptable"--is something like trying to stabilize the picture on an old TV by smacking it. What good it does bears no relationship to how good it feels.

Faced with the prospect of making a disastrous decision just to save face--and also facing enormous pressure in Washington and from around the world to do just that--Obama came through with a courageous and brilliant decision.

Instead of focusing on saving face, our president staked out the moral and legal high ground by stating that he favored taking action against Syria but believed it would be in the best interest of our country and true to our laws to do so only with the approval of Congress.

Think about how smart that is.  First, it forces those on Capitol Hill who have spent the last five years doing nothing on their own except criticizing the president to actually become engaged in a conversation and determine a course of action.

It is already clear how much confusion and disorientation that has created in Washington.  Republicans who have never said a good word about Obama in their lives have been issuing statements that the president did the right thing.  Many liberal Democrats who always support Obama are saying they disagree with the president.  The partisan divide that has defined Congress for the last four years seems to be in total disarray--at least for the time being.

None of the major pro-Israel organizations has had a word to say about what they think should be done.  J Street did come out with a statement condemning Syria's use of chemical weapons but, as an active participant in J Street's leadership online forum I can tell you I have never seen an issue where there were more heartfelt and compelling opinions and arguments on all sides of any issue.

On the Obama hating hard Right there of course has been focus on what a horrible leader Obama has been on this and every other issue. ran an article by Bruce Thornton which began with the accusations that Obama is a "malignant narcissist" and "incompetent" and made the obligatory comparisons to Chamberlain's appeasement of Hitler.  As is usual for FrontPage and the other sites which exist only to smear Obama and Muslims, none of the charges or insults was backed by a single fact or quote or any source material. 

I really encourage you to click on the link and read the whole piece--counting the number of serious accusations made against the president in the harshest of terms and then counting the number of facts or quotes or source materials used to support those provocative claims.

But after Thornton worked through the obligatory litany of unsupported smears of Obama, he made his major point-:

By far the biggest mistake of our contrary president is to ignore the wisdom every global power has known from Rome to the British Empire: the importance of prestige, which a great power nurtures by consistently rewarding its friends and punishing its enemies. Both friends and enemies have to believe your promises and threats will be followed by meaningful action. But this president gets it backwards: just make empty threats and preen morally, and then rationalize a failure to act by invoking “international law” and “U.N. mandates”

So our contrary president has managed to destroy our prestige, alienate our friends, embolden our enemies, increase contempt for our power, and leave behind a Middle East more violent, murderous, and hostile to our security and interests than it ever has been. Just what you would expect from someone who sees the world backwards.

In other words, if a president screws up or allows political pressure or the passion of the moment to cause him to make a statement that he later regrets, it is better, according to Thornton, to follow through on what might be a catastrophic mistake rather than risk losing face and prestige by changing course based on new facts and developments.

We actually just had a president who did that.  George W. Bush successfully pushed for war against Iraq based on his belief they possessed weapons of mass destruction that posed a threat to the security of the United States.  He was wrong and within a matter of months he KNEW he was wrong.  But rather than lose face and prestige, he pressed forward with a war that was based on a faulty premise causing the death and maiming of tens of thousands of patriotic Americans and hundreds of thousands of Iraqis--not to mention the devastation it wrought on our world standing and financial health.

Thankfully, our current president--who also took a position a year ago that was ill advised--had the courage and wisdom to regroup and rethink and pursue a different course of action.

He may lose face over this in the eyes of some.  The media is already replete with stories about what an embarrassment it would be if Congress does not approve the limited strikes that Obama has said he favors.  There are also complaints coming from Israel and the Syrian rebels and others around the world that American can no longer be trusted to deliver on its promises.

This could be a rough patch for Obama politically and he will have to brave many slings and arrows for his wisdom and bravery which, by the way, is not unfair since he did screw up in the first place. 

But thankfully for our country and for the world he had to courage reconsider and change course rather than keep doubling down and pushing more resources and lives and treasure into the pot as our previous president did--long after he and everyone else knew he was playing a losing hand.

You have to know when to hold 'em and know when to fold 'em.  We are lucky that Barack Obama understands that far better than the man who came before him.

Friday, July 5, 2013

What the Hell is Going on With the Market?

Although the end of the first half of the year now behind us, the volatility in the financial markets in recent weeks warrants an immediate comment.

I continue to believe that, now more than ever, it makes sense for investors to own outstanding American companies for long-term growth.  For several years now my accounts have been fully invested in reasonably-priced quality companies and every quarter my client letter has said the same thing.  “We are seeing a bubble in gold and bonds that will at some point burst in an ugly way and stocks will emerge as the most attractive investment of choice.” 

It had to happen—the only question was when.  For many years, there were net inflows into bond and gold funds which were falsely labeled as “safe havens.”  Most of the money that fueled those bubbles came out of stock funds which suffered two full years of monthly outflows even as the market averages doubled. 

The media ads promoting gold flooded the airwaves and the pitchmen were often the same conservative “news” reporters who had been predicting economic catastrophe as a result of our government’s policies.  Their status as wise people gave them even more credibility with their audience and the ease with which investors could participate in gold and silver through Exchange Traded Funds helped inflate the bubble even more. 

Last month, Federal Reserve chairman Bernanke stated the obvious—that the U.S. economy was steadily improving and if that continued the Fed could and should taper the size of its bond purchases in the open market.  That innocuous announcement served as a wake-up call to investors.  When Bernanke repeated the obvious again last Wednesday, it was apparently the needle that popped the bubble.

During the ten trading sessions since then, 10-year interest rates have soared to over 2.70 percent—up from their lows of 1.60 percent just weeks ago.  Gold has plummeted to its lowest level in years.  Massive mutual fund redemptions are causing the rout to feed on itself.

These developments should have been great news for stocks.  The economy is getting better.  One would think that much of the money suddenly flooding out of bond and gold funds would be reallocated to equities.  Most stocks are trading at valuations that seem quite reasonable by historical standards.  So why are stock averages down by more than 7 percent in recent weeks?  If those of us who have favored stocks have been so right about the fundamentals, why is the stock market going down when it should be going up?

Here are a couple of thoughts. 

First, we are in an environment where the majority of trading in all markets is dominated by huge hedge funds and high frequency traders which has added to short-term volatility.  As a result, in this interconnected world, nothing happens in a vacuum.

For example, one large hedge fund manager reportedly saw his gold holdings drop by almost $200 million in value last Thursday when gold fell by almost $100 an ounce.  When huge leveraged funds suffer big losses, they don’t just sell off their gold—they sell whatever they can to raise the cash to meet margin calls and rebalance their models.

In addition, even as the U.S. markets have held up reasonably well in recent months and are still well ahead for the year, overseas and emerging markets have fared much worse.  The Dow is still up by almost 10 percent for the year while the MSCI Emerging Market Fund (EEM) is down by almost 20 percent.  The Chinese market in particular has been quite weak and fell by 5.6 percent today alone. 

Second, our media have become addicted to crises and do their best to scare investors whenever possible.  It is bad for the country but good for ratings.  By any reasonable measure, the downturn of the last week does not yet qualify as a crisis or a major turning point in the market.  What we have right now is a 7 percent correction in an ongoing bull market.  Last year, the market suffered two 10 percent corrections in what turned out to be a very good year.  This could just be part of the normal volatility that goes along with being a long-term investor in stocks.

The other media mantra is that stock prices have gotten way ahead of themselves and investors are way too exuberant.  But the fact of the matter is that a smaller percentage of Americans own stocks today than ever before in recent history.  On top of that, a recent CNN poll showed that 87 percent of Americans believe this is a bad time to be in the stock market.

During my 33-year career I have learned what a market top looks like.  In 1999, investors were firing their brokers for “only” producing 20 percent annual returns and were losing sleep at night because they didn’t own enough internet stocks and were missing out on the rally.  That is what a top looks and feels like.  It is almost the exact opposite of the sentiment among investors today.

So on balance, we live in a dynamic world where no reasonable person could say that “nothing has changed.”  A lot has changed and more is changing every day.

But our investment outlook remains the same.  Now more than ever, we believe that owning quality, well-run, reasonably priced American companies will prove very rewarding for investors with a medium to long-term investment horizon.

















Saturday, June 22, 2013

Israelism Revisited

I have received a number of responses to yesterday's article in which I coined the term "Israelism" to describe the over zealousness on the part of many of my fellow Jews who are loving Israel to death.  Perhaps more damaging are their slanderous accusations of anti-Semitism against dozens of decent people and public figures--many of whom are Jewish themselves.

Some people have thanked me for "hitting the nail right on the head" and "saying what needed to be said."  But others, including many close friends, were annoyed and even angry over my use of the term "Israelism."

Here is part of what my good long-time and very intelligent friend Bruce had to say:

Your use of labels makes you, if not equal, then worse, then those you criticize. You are worse, because by criticizing those who falsely label others as anti-Semites, you admit that you know how wrong it is to label this way, yet you do it anyway.
You seek to support the branding of Israelism and Israelists to be a dirty word. Just what we need is a new title to label and brand another Jew. This is what Judaists think will return civil discourse?
Imagine if you were successful. We would all learn to hate Israelists. We would root out the ugly Israelists amongt us. Sort of like the new Amalekites. Supporting Israel must make you a dirty Israelist. And Israelism will eat your soul. Hell, if you were successful enough, your term would catch on and the mass media would begin to call any supporter of Israel an Israelist. Now, wouldn't that be wonderful?

First and foremost, I do not use "Israelist" to describe the vast majority of Jews who, like myself, feel a strong connection to the land and people of Israel and who take pride in the many accomplishments of the Jewish state.  It is only descriptive of the small but vocal and powerful group that claims to speak for the Jewish community (although it clearly doesn't) and violates most of the key Jewish prohibitions against using slander, distortions, and lies in an overt effort to destroy the reputations and careers of good people.

As always, I fell back on a sports analogy.  I can't help myself.  Before I was God's gift to money management and then the savior of the Jewish people I worked for ten years as a TV news reporter.

I am a big University of Arizona basketball fan. Like all successful programs they have a strong booster club (AIPAC?) which holds pep rallies where they sing the school song (Hatikvah?).and show highlight films which feature the great plays made by our team and the dirty plays made by the other team because the booster club is not there to educate or provide balance. Their goal is to get their fan base whipped up and make them even more devoted to the team. That is all a good thing.  I attend these pep rallies myself.
When I go to the games--which I love--the most vocal and rabid fans sit in a corner the student section--the Zona Zoo. In past years, a small but vocal group of self-described fans have shown their support for the team by spitting on and swearing at members of the other team.  Often these fans (which of course is short for the word "fanatic") did some research and found personal details about opposing players and used personal insults about their families as part of their desire to help the home team.  It got so bad that two opposing coaches said they wouldn't play at Arizona again unless their teams didn't have to walk through the tunnel that is always flanked by the abusive Wildcat fans.
 I don't think it is hateful for me as a fan to speak out against those who are giving the rest of us a bad name. Quite the opposite. I am proud that the University of Arizona revoked the season tickets of several of those fans, publicly apologized to their victims, and made it clear that this kind of "support" is in conflict with the schools values and ethics.  The players and coaches also made it clear that this kind of behavior actually hurts and embarrasses the team that these fans were trying to help. 

As an aside, a strong and healthy team also has radio talk show and blogs where fans like me who have opinions--sometimes positive and sometime critical-- can weigh in and be heard. That was the huge void in the pro-Israel infrastructure that was missing before J Street came along.

 My friend, we have studied Torah and Jewish wisdom together and you have worked with me for years on Federation and Israel Bonds campaigns and you know I was a past board member of AIPAC. I am a bigger fan of Israel than I am of either the Packers or the University of Arizona about which I am borderline fanatic.
The last thing in the world I would do is demonize or perjoratively label people who support the democratic Jewish State of Israel. But I think we need to rise up as a community and police our own ranks and make it clear that those who violate  principals of Jewish values and ethics by unfairly and publicly slandering public officials and fellow Jews and smear them as anti-Semites are crossing the biggest of red lines.

And when their behavior is as shameful and outrageous as those cited in my article from yesterday, they should be stripped of their tickets and asked to leave the stadium. Not because I disagree with their right to express their opinions and certainly not because they consider themselves staunch supporters of Israel but because those who engage obscenity and vulgarity and disregard for Jewish values should not be allowed to claim they speak for our Jewish community and reflect our values.

Friday, June 21, 2013

Israelism--The Religion That is Destroying Our Jewish Community

Last year I wrote about the two new denominations of Judaism that have emerged and made the traditional Orthodox, Conservative, and Reform labels less relevant. 

Now the most meaningful distinction is between Aspirational Jews who look to Judaism as a value-added app that will help them live happier, better, and more productive lives and Tribal Jews whose main goal is to not grant Hitler a posthumous victory and to remain vigilant against the ongoing threats of anti-Semitism and our many enemies who are still out there trying to destroy us.

Most American Jews incorporate some mix of these approaches to Judaism viewing it as encouraging hope for the future while remaining aware of life's harsh realities.  The Book of Proverbs tells us not to "veer too far to the right or the left."  The conversation and tension between the approaches is healthy.

But in recent years, a small but vocal sect of passionate Tribalists have taken the tone of conversation to a new and much uglier place and it is driving a new and deep wedge into our already-fractured community.

These Jews who are damaging our community in the name of saving it have emerged on the scene with a renewed vigor and venom in a way that further threatens our ability to have a civil conversation about Israel and the important challenges we face.  Unlike extremists on the Left, who can be annoying but are far less affluent and organized, this group tends to be wealthy, well positioned, and very influential.

I call this group the Israelists and Israelism has become their religion.  Not just because they feel a deep connection as Jews to the state and land of Israel as we all do but because they have used their passion as license to attack those who do not share that passion with stunning disregard for the clear Jewish prohibitions against slander and negative speech about others.  Their focus and tunnel vision has risen to cult status where it has functionally become their defining connection with their Judaism.

Elevated passions and Tribal views on the part of many older, wealthier American Jewish "leaders" is not a new phenomenon.  Jeffrey Goldberg of the Atlantic wrote about it more than five years ago in his New York Times article entitled "Israel's American Problem."   His words are even more relevant today.

Jewish leaders, who live in Chicago and New York and behind the gates of Boca Raton country clubs, loathe the idea that Mr. Olmert, or a prime minister yet elected, might one day cede the Arab neighborhoods of East Jerusalem to the latent state of Palestine. These are neighborhoods — places like Sur Baher, Beit Hanina and Abu Dis — that the Conference of Presidents could not find with a forked stick and Ari Ben Canaan as a guide. And yet many Jewish leaders believe that an Israeli compromise on the boundaries of greater Jerusalem — or on nearly any other point of disagreement — is an axiomatic invitation to catastrophe.

This is an existentially unhealthy state of affairs. I am not wishing that (President Obama) be hostile to Israel, God forbid. But what Israel needs is an American president who not only helps defend it against the existential threat posed by Iran and Islamic fundamentalism, but helps it to come to grips with the existential threat from within. A pro-Israel president today would be one who prods the Jewish state — publicly, continuously and vociferously — to create conditions on the West Bank that would allow for the birth of a moderate Palestinian state.

The situation that Golberg described back then was serious, but look how things have deteriorated since then. 

In recent months I heard former Assistant Secretary of State Elliot Abrams--the featured speaker at AIPAC's annual event in Tucson--accuse award-winning columnists Joe Klein and Thomas Friedman of being "Jewish anti-Semites" because they expressed opinions that were critical of specific actions of AIPAC and the Iseraeli prime minister. 

The Israelist Right--using tactics made popular by Tea Party activists--has smeared caring Jews like Peter Beinart and J Street executive Jeremy Ben Ami as anti-Israel and anti-Semitic, even though each has lived in Israel and has worked tirelessly to promote conditions that will enable it to survive as a Jewish democratic state..

Most recently, the Israelist rhetoric has kicked up to a new level as Islamophobe Pamela Geller's group has taken out ads in New York and Washington subways comparing Muslims to "savages" in the name of the Jewish people and those who support Israel.

The vitriol and accusations of anti-Semitism have expanded well beyond Jews in recent months.  When twice-decorated war hero and former Senator Chuck Hagel was nominated to be the next Secretary of Defense, the Emergency Committee for Israel and other Israelist groups ran an expensive smear campaign against him labelling him an anti-Semite--again in the name of American Jews.  lAnd what was Hagel's sin that qualified him as a Jew hater?  He had complained seven years ago about the heavy-handed tactics of AIPAC--an opinion I have heard from dozens of members of Congress.

Also appalling is the recent campaign against Samantha Power who is nominated to be our next Ambassador to the United Nations.  As soon as she was nominated, the Israelist hit squad ran articles branding her as an anti-Semite in headlines based on a two minute out-of-context snippet culled from an interview she gave on an obscure cable channel eleven years ago.

The email campaign waged hot and heavy until people like Abe Foxman of the Anti-Defamation League and Rabbi Shmuley Boteach chimed in that they thought Power would be an excellent choice based on her past performance and commitment to Israel.

But the crusher came when Israeli Ambassador to the U.S. Michael Oren defied precedent and wrote a passionate endorsement of Power..  The respone from the Israelists who smeared her as an anti-Semite has been deafening silence.

It brought back visions of Goldberg's article about Israelist American Jews who are far to the Right and far more strident than the counterparts in Israel they claim to represent. 

What is most striking (and most troubling)  is that the terms anti-Israel and anti-Semite have become synonymous and are used interchangeably.  Neither Friedman, Klein, Hagel, or Power ever said anything negative about Jews or Judaism.  What few comments they made were about the tactics and/or policies of AIPAC and/or the Israeli government.  Can you imagine if every person who is sincerely critical of the policies of the U.S. government was branded as anti-America or unpatriotic? 

In a recent interview on Jackie Mason made the following telling comment to David Evanier in Tablet Magazine when he asked Mason if he has experienced anti-Semitism in his life

I did 45 years ago, but I haven’t in the last 30 because the Gentiles in America have changed from looking down at a Jew 40 years ago to looking up to a Jew today. They used to condescend to a Jew; now they apologize to me for not being a Jew. They say their sister-in-law is a Jew, they’re married to a Jew, they’re trying to move into a Jewish neighborhood, they want to be a Jew. The only anti-Semitism that I suffer from today is from Jews.

Although they claim to be obsessed with concern about the future and safety of Israel and the Jewish people, much of what they write and forward in emails are criticisms--often laced with lies or distortions--about the evils of Arabs, Palestinians, and Islam.

Many of these Israelists are bright, caring people who are my very good friends.  I have spent the last three decades working along side them as I have chaired Federation and Israel Bonds campaigns, worked to raise and have given money to day schools and synagogues. 

But isn't there a risk that the Jews who cry "anti-Semite" so frivilously will not be listed to if real anti-Semitism rears its ugly head.

Going forward, Judaism will thrive or wither not based upon our ability to idenify and demonize our perceived enemies but rather upon its ability to provide people with a wonderful values and wisdom based system that can help them live happier, better and more productive lives.  It is a complicated and nuanced mix of those values along with ritual observance, culture, and a unique relationship with the land of Israel and, in recent years, the democratic Jewish state that has been built on that land.

As so often before in Jewish history, our people is facing a number of existential threats. For the first time in Jewish history, the most serious of those threats is internal--not coming from outsiders who want to destroy us but from the likely outcome of disastrous decisions being made by those who claim to be our leaders.

As the great Talmud scholar Rav Pogo once said, "We have met the enemy, and he is us."

We might not be able to eliminate Jew hatred in the world and control the forces of evil out there that target Jews, but can't we at least find a way to call off the circular firing squad.