Gaza - The dumb and the dumber

For the past several days Israel has rained down rockets on Gaza, causing hundreds of deaths, including those of children. Israel justifies its actions as a response to continued rocket attacks on its civilians by armed members of Hamas, the party which rules Gaza. The stupidity and blindness of all the parties in this latest bout of the Israeli-Palestine conflict is painful to witness.

Why is Israel doing this? And why is it really doing this? The answer to the first question is: to put a stop to Hamas's actions of launching crude and indiscriminate rocket attacks on civilian areas of Israel. Which Hamas have undeniably been doing. The real reason however is to attempt to de-legitimise Hamas within Gaza and the wider Arab world. Both strategies are doomed to fail.

Morally, any government whose citizens suffer indiscriminate and murderous attacks is justified in attempting to destroy the aggresors. In fact they are duty-bound to do so. And this line has been put out by everyone from Tzipi Livni, Israel's current foreign minister, to internet commentators. The problem is that things are not quite as clear-cut as that.

Israel occupied Gaza in 1967 and hundreds of thousands of Palestinians have been crushed into that tiny area ever since. Following decades of uprisings and conflicts Israel withdrew its forces from Gaza in late 2005. In 2006 Hamas defeated the ruling Fatah party in Gaza elections, garnering 42% or so of the vote and becoming the elected representatives of Gaza. They consolidated their role in a power-struggle with Fatah's armed wing. The reaction from Israel, the US and the west was to immediately attempt to overthrow this democratically elected party, by arming and training Fatah fighters and then by a crushing blockade of Gaza itself. This is the key to today's bloodshed - the attempt at regime change of a democratically-elected government. It doesn't sit easily with the 'Bush doctrine' of overthrowing dictators and dealing with democrats.

In its charter Hamas openly calls for the destruction of Israel, denying its right to exist. It is therefore condemned by Israel and the US as a 'terrorist' organisation. History has shown us, however, that this word is a pretty loaded one. Today's terrorist is tomorrow's freedom fighter, interlocutor or even statesman. Its happened countless times, especially in Iraq and Afghanistan. So Hamas finds few friends in Western governments today. The Palestinian President, Mahmoud Abbas, condemns Hamas for creating this situation. But then he would - he is a Fatah leader, their rival, and is backed by the US as an alternative leader.

Here's the irony. When Israel had the chance to negotiate with Fatah, and its then leader Yasser Arafat, they did everything they could to undermine them and discredit him. Now the more secular, Arab nationalists of Fatah have been sidelined, Israel has to deal with the more Islamist Hamas. And now, of course, Israel wants Fatah back. Bit late now though, isn't it?

So Israel's devastating air attacks on Gaza aren't really about Hamas's rather puny rocket attacks, even allowing for the fear and casualties they cause amongst the Israeli civilians on the receiving end. It is about attempting to manipulate Palestinians' representatives. The theory is that Hamas will have been shown to have brought misery on the Palestinian people and so will be rejected by the Palestinian voters. It is a strategy absolutely guaranteed to fail. As indeed it will fail to bring security for Israelis.

Israel will have Palestinians, and Arabs, as their neighbours forever. Outside backers like the US will come and go, but the Palestinians will never go away. Hamas is indeed stupid and immoral for playing their part in the conflict, for deliberately murdering civilians and for marginalising pragmatic Palestinians. But Israel has also killed innocent civilians; they may have a slight moral edge in that it is clear Israeli jets to not deliberately target civilians, but there is no doubt whatsover that Israel's actions constitute 'collective punishment' on a civilian population, which is explicitly outlawed under international law, treaties and conventions. It is also perfectly obvious that air strikes in such as crowded area are absolutely guaranteed to produce civilian deaths.

Finally, Israel has left moderate Arab opinion swinging against them, and they're the ones they will eventually need to be able to strike any sort of deal. The short-termism of Israel's actions is so stupid and counter-productive it's unbelievable. Apparently there's an election coming up in Israel. I don't suppose the current attacks have anything to do with that, do they?

Road Hogs - the auto bailout

The US car giants - GM, Ford and Chrysler - have won themselves a taxpayer-funded multi-billion dollar bailout to prevent their destruction. $17.4 billion, in fact. This picture should put a smile on your face for Xmas. Or maybe not once you think about it.

Let's look at this logically. Car manufacturers are up merde creek because people aren't buying their cars. Why is this? Well, firstly it's because, as the poster explains, American (and British) cars are rather crap, and the public knows it. In the UK you see French, German and Japanese cars everywhere. Not Fords. The European and Japanese models are better value, more reliable and (frankly) look better. Secondly because times are tough and people want to balance their books and save right now, not splash out on a new motor.

So the US car industry has failed, and has only itself to blame. (The management that is, not the general labour force.) If the bailout goes ahead the message will be that no matter how ossified your business strategy, how incompetent your leadership and how poor your sales, you will never, ever, go to the wall. You are immortal. And when times are tough the government will take money from more efficient, more successful businesses, and ordinary families, and use it to bail you out.

Of course this money can come from only 3 sources: higher taxes, higher borrowing or printing more notes. Any of these options will ultimately cost jobs in other, more efficient, sectors. There's no escaping that, however you try to cut it. So on balance it's probably better to let the industry die. Harsh, indeed. Which is why the US and UK governments probably won't do it.

Now lots of people's jobs are tied up in the car industry. And no-one wants to lose their job, so I feel a lot of sympathy for those whose livelihoods are at risk. It's not their fault. But it is the fault of the management. Why didn't they adapt and produce cars the public want? They could have saved themselves. But then of course they are a powerful lobby. So if the US and UK governments are going to bail out the car industry, they should insist on big changes. Fire the management. Demand changes to contracts with unions and suppliers and take preferred shares to at least have a chance of re-couping some of the money. Whenever there is a bailout, governments have to make it plan that there's no such thing as a free lunch.

Note to Gordon Brown: Debt is not good

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Mr Micawber, "David Copperfield".



Readers of Dickens will be familiar with Mr Micawber's injunction against indebtedness, but it seems that the British Labour government has not heeded this warning from English literature. The debtors gaol was where the financially reckless ended up in Dickens' time; Downing Street is where they seem to end up nowadays. The problem is that the root cause of the crisis - debt - is being posited as the solution.

Thanks to 11 years of spending beyond our means, both public and private sectors in the UK are crippled by debt. The idea, therefore, that a fractional decrease in VAT is going to get the economy going again is laughable. Think about it: are you going to charge into the shops on a spending spree because iPods and clothing are now a pound or two cheaper? The stores themselves have 25% or even 50% sales, so what difference is VAT of 15% going to make? Not a jot, which is why politicians in Germany have rightly been mocking the Prime Minister's stratgegy. People's desire, understandably, is to save. That is the sentiment, and you can't buck it. So what should the government do?

In the 1930s government spending constituted a much smaller percentage of GDP than it does today so to 'pump' the economy the government of the day could increase public expenditure. Today government spending has soared and the tax take is a huge proportion of GDP. They say that generals always fight the last wars, but Gordon Brown's government seems to be fighting the slump of the 1930s - and it won't work.

To change the economy you have to chime with people's sentiment. This is because the crisis we are in is first and foremost about confidence. So - removing as many businesses and private citizens out of tax altogether will give them extra cash. Once they have this money they will use it - not to spend on things - but to reduce their debts and increase their cash holdings. This in turn will re-liquidate the banks, reducing their 'Please Sir, I want some more' begging-bowl act with the government (to continue my Dickensian theme). By doing this a virtuous circle of reduced debt will be created.

It is people, and their improved confidence - not meddling politicians - who will drag us out of recession. So Gordon Brown and his absurd Chancellor Alistair Darling could make a start by massively raising the tax threshold for as many people and businesses as possible. By contrast Brown's plan to borrow massively, cut VAT a little and mollycoddle the banks will be futile, and even worse will saddle us and our children with gargantuan debt for a long time to come.

How to live on half your salary

With recession upon us, now is the time to save pounds by spending smarter. Follow my quick and dirty guide to getting by – on half your earnings.


FOOD

Eat Your Greens
Whatever happens, you’ll need to eat. The price of chicken, beef and lamb has rocketed in the last few months, but vegetables have stayed more constant. So start filling your shopping basket with more veg, which pound for pound are much cheaper than meat. And remember that supermarkets these days have a huge range of vegetables, so you don’t have to stick to just carrots, potatoes and swedes like mum used to.


The internet is a source of good (and free) recipes with vegetables – check out
http://www.vegetarian-and-low-calorie-recipes.com/vegetarian-meal-recipes.html
and
http://www.vegsoc.org/cordonvert/recipes/easy.html


Bulk out meals with rice and bread – risotto, for example, is very filling. For all your foodstuffs, try buying in bulk from the cheaper supermarkets such as Lidl and Aldi.

If you want your meat, try pork as a better value alternative to chicken. And instead of binning your veg left-overs, just throw them in a wok with some soy sauce and chilli sauce for a very easy stir-fry. Yum.

The great coffee rip-off.
For many of us, if we added up how much we spent in a year on skinny lattes we’d probably need an extra-strong espresso just to pick ourselves off the floor. So bring a jar of instant to the office instead. Or club together with your work colleagues for shared supplies.

The same goes for sandwiches. Instead of buying on the high street try making your own the night before so you’re not in a mad rush in the morning. If you fancy some salad with your main filling add that in the morning so it doesn’t go all mushy in the fridge overnight.

Eat Out for Less
You can save a fortune on restaurant bills by not ordering wine. For a lot of us the wine list makes about as much sense as a trigonometry test (to paraphrase Seinfeld) so try giving it a miss next time. Also, do you really need that bruschetta starter when you’re having spag bol for your mains? After all, would you have that at home? Omitting wine and the starter can knock up to 30% off your bill.

It depends on your taste, but Middle Eastern restaurants are generally good value, and the tradition of sharing smaller dishes means you feel you are getting more for your money. The higher the snob value of the European-style restaurant, the more the quality varies – cheap French is not a good idea.

For pubs, pints represent better value than bottles, and if you want to hit a nightclub go extra early before the entry charges kick in. If you can’t get public transport home organise a designated driver, or order a cab well in advance to share with as many people as possible.

Style
If you want a new hairstyle but want to avoid paying £50 for it go to the free consultations that many expensive salons offer. Once you know what you want go to a cheaper place and describe it. You could also try hairdressing academies or colleges, they need models to practice on and they’re usually free. Just be sure to keep an eye on what they’re up to!

If you see a stunning outfit that’s beyond your budget try it on, make a note of the exact style and size then search on e-Bay for it. If you prefer real shops try the smaller, independent shops late on a Sunday, because you will often have a lot of scope for haggling. Don’t forget, retailers are worried by the credit crunch too.


Getting Fit
Face it, gyms are expensive. And if you’re paying a monthly membership and only going once a week, it’s likely to be very expensive indeed.

If you’re driving to the gym so you can jog on the treadmill then you probably need to re-examine your lifestyle! But if you want to live on half your salary while still getting, or staying fit, there are solutions.

If you have a flight of stairs at home, a block or a park to jog around and a perhaps an exercise ball and some weights at home you could probably get as good a workout as you got on the treadmill and the fixed weight machines. As well as your own shower. Nice.

If you prefer the camaraderie and the atmosphere of fellow gym-goers then consider taking up a martial art. The classes generally work out much cheaper than gym memberships, plus you have lots of fellow kickers and punchers to encourage you along the way. If you did, say, kickboxing 3 times a week you can be sure that after 6 months you would be pretty darn fit as well as having learned a useful skill. You would have to take out insurance but it’s a drop in the ocean compared to those pesky gym fees.

TV and Mobiles
No matter how many channels you have, it’s almost certain that in reality you only watch a very small number of them regularly. So doesn’t it makes sense to ditch the ones that just show endless American sitcoms from the 80s? (Unless they’re your thing.)

Cable and satellite companies, like Virgin Media, are experts at offering a great initial package, then slowly upping the monthly subscription fee every month. Solution? Phone up and ask for the cancellation department. In a panic they will start making you offers, and this is where your bartering skills will come in handy. It’s the same story with your mobile phone provider. No matter what your tariff, if you phone up and say you want the code to switch suppliers you will always get a better deal. Job done.


Holidays
You needn’t necessarily give up your annual breaks, but consider better value options. The pound’s recent slide has seen American and European destinations become more expensive, whereas Turkey and Egypt are still great value destinations - and they have the weather as well. Geographically they sit just on the fringes of Europe so the flights will be reasonable, and being outside the Euro zone they will still feel very cheap. Just beware – although late night flights may be a little cheaper, the cost of late night cabs could cancel out the saving.

With changes in the travel industry it’s generally a good idea to book earlier rather than later. Travel company mergers have left Thomson and Thomas Cook with market dominance, and the later you book the more desperate they assume you are, so prices will usually be higher.

Transport – 2 wheels beat 4 wheels
Try leaving the car at home for shorter journeys. Fuel consumption is disproportionately higher on shorter trips and using a bicycle may just get you fitter too. For driving, as any driving instructor will tell you, braking less harshly and driving in a higher gear is more fuel efficient and creates less wear and tear. Remember it’s cheaper to replace worn brake pads than a worn gearbox - or engine.

If you need a new set of wheels go for a ‘nearly new’ instead of brand new car. The main reason is the depreciation. A brand new vehicle will lose 50% of its value after 2 years. Try visiting a franchise dealer (one attached to a big manufacturer) as the warranties they offer are as good as those on new cars. And don’t forget to haggle! Remember the dealers are having a hard time too, and if you don’t ask you don’t get. If they won’t budge on price, focus on the warranty.



Finally….make a list
If you don’t have a list of all your direct debits and outgoings, now’s the time to make one. You’ll find it a lot easier to see where to economise if you know where the money’s going. Don’t forget to include forgotten extras like snacks. Over the course of a week write down everything you spend, so you know where that money is ending up. Start doing it tonight.

The drama of Obama

Barack Hussein Obama has won the 2008 US Presidential election and will be the 44th President. Congratulations to him - my American friend in Seattle is ecstatic, as are many others. I wish him well.


There is a level of hype - even hysteria - around Barack which only the election of JFK seems to compare with. To be fair there is no denying the cultural significance of his victory. Just 150 years ago a man like him would have been considered the personal property of his white owner; just 50 years ago many states would not have allowed him to sit on a bus seat designated for his white neighbour. And yet here he is, the Commander-in-Chief. It is also a rebuke some here n the UK who insisted that America was not 'ready' to elect a black man, and that white America would abandon him in the privacy of the polling booth.How close do they think that Britain is to having a black Prime Minister?

Of course it would be impolite - churlish even - to suggest that Obama only won because of the colour of his money rather than the colour of his skin. Or that his victory probably has as much to do with the present incumbent of The White House as its next resident. Or that, like Bill Clinton, the economic climate gave him an advantage. That's the past, after all. But the past informs the present. And once the hullabaloo of Obama's win gives way to the unpleasant business of the day job we will see that there are strong grounds to lower our expectations.



Obama didn't achieve much as Senator for Illinois. He never really ran anything of note. But he was known for his consistent opposition to the Iraq war. That would have made him an instant winner in Europe, but the USA isn't Europe. In fact until the economy displaced Iraq as voters' number one concern Obama was trailing McCain in the polls. It's easy to be anti-war when you don't have to make any hard decisions and people's lives don't depend on you. But Obama's desire to quit Iraq looks precipitous at best, foolish at worst. US troops will have to leave eventually. But to do so before the Iraqi Government has the stability and force of arms to govern without US support risks that government collapsing or being overthrown . Civil war could even erupt, with the victor being simply a Saddam version 2.0, and we're back to where we started. It will all have been for nothing. Any weakness on the part of the legitimate, democratically-elected government there will leave Iran as the dominant power in the country, which some people think it already is. So Obama's 'quit Iraq' strategy is naive, and his generals will probably tell him this, if they haven't already. In short, don't expect any significant improvement in Iraq in the short-term just because Obama has taken charge.



On Afghanistan Obama is more hawkish. He wants more troops and is threatening Pakistan with military action. The struggle in central Asia is as much for the soul of Pakistan as Afghanistan and nothing would do more to turn Pakistan to extremism than to carry out punitive raids there. We have to help the Pakistan government, not sign its death certificate. Obama may be blundering if he carries out his threats.

On Iran, by contrast, Obama is of a peace-loving hippie than even the Swiss could ever hope to be. Or at least that's the image he seems to want to project. His stated desire to talk to the Iranians without preconditions could be a bold and imaginative move...or he could find himself made a fool out of as the theocracy there (just a reminder that's it's NOT a democracy) ignores him and builds a nuclear weapon. Even the EU countries who shuddered as George Bush's sabre-rattling are getting nervous at Obama's conciliatory stance. Reaching out to enemies who hate you is fine, as long as you can find common ground. But I fear that this approach could leave him acting like Jimmy Carter did in Iran, as opposed to how Richard Nixon reached out to China.

Then we come to the economy. Sooner or later the penny will drop and people will realise that Obama has as few options open to him as the outgoing Administration. His early campaign promises about universal healthcare, green technology and tax cuts for 95% of Americans seem to have been quietly forgotten. But these are all crushingly expensive, and with the massive Wall St bailout, the huge $10 trillion debt and a few wars on the go, any action he takes will be severely constrained. The turning point of the Presidential campaign was McCain's ill-advised utterance that the fundamentals of the US economy were 'sound'. Obama just stayed tight-lipped and said little. He played it safe, but people mistook non-committal for calm. Not saying the wrong thing is a lot easier than saying the right thing. Unless America wants more debt, the level of spending is going to have to be slashed, as it is right across the world, and Obama (if he is smart) must know that.

So yes let's celebrate the renewing of passion in American politics, the rehabilitation of America's international reputation and possibly the arrival of a 21st Century cultural icon. But don't expect world peace, the solving of the credit crisis and cars that run on water overnight. Welcome to the real world, Obama.

The Faulty Towers

"He's from Barcelona". If you're too young to remember this catchphrase from Fawlty Towers then you're probably baffled by the brouhaha which has greeted Russell Brand and Jonathan Ross's faux pas last weekend. Or more accurately, Radio 2's faux pas. They employed them after all. What initially seemed like a storm in a teacup has now morphed into a public frenzy of indignation, egged on by certain sections of the press.

I won't dwell on whether Brand and Ross's call was "offensive". You can make your own mind up by watching it here.

It's a pretty rambling, incoherent and generally shambolic scene, interspersed with a few crudities that are pretty tame in comparison to a lot of what we hear on the box (or on the internet) these days.

What is more pertinent is what the whole saga says about British society.

When the show went out 2 people complained. That's right, 2. After a Mail on Sunday story of outrage the number of complaints rocketed to 30,000 . Why the snowballing outrage? It's because we're all sofa-bound judges now, and technology has empowered us to instantly register our outrage, at the click of a button. No need for posting a letter nowadays. I'll wager that most complainers haven't actually heard the offending prank. It just doesn't add up.

But add to the mix a few more combustible elements. The first is money, or more accurately, resentment at money. Or more accurately still, envy. We have to pay our licence fee under pain of imprisonment. And people don't like seeing their millions of their money going to people who annoy them. Because Ross and Brand annoy a lot of people. The mob love to see the mighty brought low, the arrogant humbled.

The feeling that we sit in judgement over transgressors is empowering and allows us to stare down haughtily from the moral high ground. Licence fee payers' resentment and irritation towards entertainers who grate on the sensibilities has finally found an outlet.

Self-righteousness has a symbiotic relationship with another two other quintessentially British traits, the championing of the underdog and the sense of 'fair play'. Andrew Sachs was an in a sitcom a few decades ago, where he played a fool who could speak no English. He is fondly remembered as that fool. He is almost a national institution and belongs to a different era. He is certainly not viewed as a legitimate target for ridicule. If Ross and Brand had chosen a Big Brother contestant with a big mouth who has made more money than we have they would have got away with it. But the public now views them as bullies, kicking sand in the face of a much-loved old actor. Wrong target, guys.

As for Sach's grand-daughter she's now sold her 'story' to The Sun, so embodying another feature of modern society, the fetish for self-abasement for money.

Now The Mail on Sunday seems to specialise in outrage. It seems to have a patent on it. If there were no outrage, the MoS would be outraged at the lack of outrage, other papers would pick up the story and soon message boards and inboxes would be full of outraged messages bemoaning the scarcity of Things To Be Indignant About. From Mr Outraged from Orpington.

None of us would like to see our elderly relatives publicly humiliated. What Ross and Brand did was ungentlemanly and some form of censure would have sufficed. If you think this is untrue, ask yourself if you would remain silent if your granddad was treated similarly. But this is now nothing to do with helping an old man up off the floor. It’s a reflection of the media-obsessed, self-righteous age in which we live, where the trivial is elevated to the important, where the media hue-and-cry can make people lose all sense of perspective and where the herd instinct of large swathes of the public says more about the state of this country than a few overrated comedians.

Short Sellers, Wrong Culprits

The other day I went for drinks and dinner with an old university friend of mine who now works in the corporate finance arm of Santander, the Spanish owners of Abbey National. He had an interesting perspective on the knee-jerk headlines in the tabloid press to what have variously been termed 'speculators' and 'spivs' - or more accurately, short sellers. No, not vertically-challenged grocers, but stock market traders who make a living betting against the market.

Put simply, they sell before they buy. How, you ask? Well they are allowed to by regulators, providing they buy back their shares when they are required to. Guess what – if the share value has dropped by the time they have to buy, they pocket the difference. Tidy, as they say. So as share values fall, they keep selling, and await the falling price. But of course the very act of their selling depresses the price even further and a vicious circle emerges. Sounds like an unmitigated evil. Except that it isnt’ always so. As my friend explained, short sellers serve a purpose as a useful ‘corrective tool’ for a market that is overvalued – as many markets we now know were. By betting against trends they help to stabilise prices. In fact they play a critical role in regulating the share price.

By going short during the current crisis, many hedge funds actually reduced the size of the bubble and therefore the subsequent crash. There was, I believe, an argument for stopping short selling when panic set in and share prices began to plummet. But guess what? When short selling was halted, the price dive continued. Not a very convincing case for the prosecution. As my friend was at pains to point out to me, there are no such thing as ‘speculators’. They don’t exist. It is a pejorative word used by those who want to believe that whoever is making money must be responsible for the current crisis.

Whenever there's a crisis you can always rely on politicians or journalists with an agenda to jump on a bandwagon. In Germany politicians were particularly hostile. So virtually every politician in need of a soundbite, and every tabloid wanting to shift a few copies has tried to blame the 'speculators'. Because it's easy. And because everyone (they think) must share their belief that if someone's doing well, it must be the cause of someone doing badly. Except that the truth is more complex, and unfortunately, more worrying than that.

Point the finger at greedy and stupid banks, but mostly blame stupid governments for overspending, for forcing banks to give out bad loans, for sustaining a credit bubble and then for being asleep while banks loans went bad. Governments and banks forgot – there’s no such thing as a free lunch.

How to learn for free on the internet

An article on personal finance I wrote for the website http://www.moneymagpie.com/, explaining how learn for free using the internet:

"How about boosting your earning potential by learning a new skill - for free? Use Moneymagpie's guide and find courses that will cost you absolutely nothing.
There are many online courses available - but most will charge you. However, there are colleges, universities and voluntary organisations out there that are prepared to share knowledge and skills over the internet without demanding a fee...."

Read the full article here:
http://www.moneymagpie.com/article/boost-your-job-prospects-for-free

Beat the Credit Crunch - get super-cheap flights

My article on how to travel to Asia cheaply by being a courier, from the website http://www.moneymagpie.com/

"If you're prepared to be a courier for the airline industry you can snap up some super-cheap bargains on long-haul flights.
A courier flight is when you accompany a vetted package on a flight, allowing you to buy heavily-discounted flights to certain long-haul destinations...."

Read the full article here:
http://www.moneymagpie.com/article/get-50-off-flights-be-a-courier/53

Travel write-up: Seattle

My review of Seattle, USA, from website http://www.travelbite.com/
-------------
"Caramel macchiatto anyone? How about a grande non-fat latte? No? Well, not to worry. Even if these varieties of Seattle's most famous beverage aren't your cup of tea, there is plenty besides coffee in this gem of a city to whet your appetite. Nestled up in the north-west corner of the United States, just 50 miles from the Canadian border, Seattle has spent 40 years forging its own unique identity, separate and distinct from the sprawling metropolises of America's east and west coasts. Of course, being the home of Starbucks, coffee is its most famous export - as you'd expect from a city with over 300 Starbucks shops. If the coffee doesn't keep you awake then the attractions may well do so instead....."

For more go to
http://www.travelbite.co.uk/feature/north-america/united-states/sleep-less-in-seattle-$1227452.htm