Loose Change, Part V

Rate this item
(0 votes)

Last week we examined one of the “changes” Americans are looking for, and we focused on Russia. This week let’s look at a remarkably similar situation, namely:

Israel

As with Russia, when Barack Obama left office America’s relations with Israel had hit rock bottom, as bad as they had been since the State of Israel was formed in 1948. And as with Russia, this was hardly all America’s fault. Benjamin Netanyahu’s irredentist government seemed to go out of its way to annoy and embarrass the Obama Administration and to spit in the face of international opinion on the subject of the settlements in the West Bank.

All this came to a sordid end when, at the very end of Obama’s Presidency, America declined to veto a UN Security Council resolution condemning Israel — the first time that had happened in 22 years. This was followed by a bizarre, hour-​long rant by the usually-​more-​sensible John Kerry. Kerry’s speech was bizarre not so much for its content, which was the usual criticism of Israel for not committing to a “two-​state” solution, but for the fact that it happened at all. It all smelled badly of the actions of a lame duck Administration indulging its own frustrations while knowing it wouldn’t have to deal with the consequences.

As is the case with Russia, Israel has been surrounded by enemies since it was founded as a nation, and as with Russia this has made numerous Israeli governments paranoid – including, especially, the Netanyahu government.

The two-​state solution to the Israeli-​Palestinian deadlock seems, from afar, to offer an ideal way to end the gridlock — and possibly the killing. But since US Presidential Administrations began pressing for the adoption of the two-​state solution back in the dinosauric days of Lyndon Johnson, it has become ever more unpopular in both Israel and Palestine. (Fatah still clings faintly to the two-​state solution, but the more popular Hamas rejects it. Indeed, Hamas rejects the very idea of Israel’s existence as a state.) However ideal a solution might seem theoretically, after fifty years of zero progress on it you might suppose that a light would dawn. So far it hasn’t.

In recent years the Palestinian question has been moved not just to the back burner, but all the way off the stove as a result of far more pressing issues in the Middle East: the Syrian Civil War, the rise of ISIS, the European refugee crisis, and the increasingly violent schism between Sunni and Shia Islam. That’s one reason why the UN resolution was the wrong place for America to make a stand. But there are two other reasons, both of which seem to be ill-​understood by American policymakers and both of which cry out for “change” in America’s relations with Israel.

The first of these has to do with the revolution in Israeli politics that has occurred over the past four decades and that has been blithely ignored by one US Administration after another. Israel’s founders were committed socialists — and that was hardly a surprise. Immediately after World War II virtually the entire world was socialist in one form or another: China and the USSR, of course, but also Central Europe, Eastern Europe, Western Europe, India, most of Latin America, large parts of Arab and non-​Arab Africa.

The socialist party of Israel’s founders — the Labor Party — controlled Israel from its founding until 1977, and because most senior Labor Party politicians had worked directly with David Ben-​Gurion, the Labor Party remained committed to its socialist ideology long after socialism had gone into (one hopes) terminal decline elsewhere, and long after the Israeli public had grown fatigued with socialist dogma.

The Israeli Labor Party would have continued to weaken no matter what, but its demise as a political force was significantly hastened by the emigration into Israel of more than 1.5 million refugees from the Soviet Union and it satellites. For these Jews, socialism wasn’t a glorious idea that simply had a few real-​world glitches. They had lived under socialism and they knew all too well where the ghastly socialist end game wound up. Thus, while elite Israelis, mainly well-​educated, affluent Ashkenazim, continued to support Labor, the new immigrants flocked to conservative and religious parties that had no interest in returning the West Bank.

Labor managed to elect the military hero, Ehud Barak, as its last prime minister in 1999, but even including Barak, Labor has been out of power for all but eight of the last forty years. As a result, despite intense international pressure the West Bank has effectively been part of Israel for nearly half a century, since the end of the Six Day War in 1967. Fifty years is a virtual Biblical eternity in a country not yet seventy years old.

Instead of harping on a West Bank solution that has no chance of happening — more than 400,000 Israeli’s live there today — American policy might, instead, refocus itself on the existential problem inside Israel. The Arab population of Israel is, today, about 21% of the total. But that population is reproducing much faster than Israel’s Jewish population, and if Israel formally annexes the West Bank, two million more Arabs (Palestinians) would reside in Israel. You don’t have to be a demographic genius to see that Israel’s future is as an Arab-​majority nation.

How will the Israelis deal with that future? Expulsion of the Arab population? Apartheid? Giving up Israel’s identity as a Jewish state and accepting Arab dominance? The future of the West Bank certainly plays into this problem, but it’s a side issue compared to the cultural, religious and demographic cluster bomb facing the Israeli state.

Will a Trump Administration be able to depart from fifty years of American focus on the West Bank and a two-​state solution? I have no idea. But, as with Russia, this is an area where US policy reached a dead end long ago and where “change” is fervently to be desired. Fortunately, the conclusion by Sunni nations, especially powerful ones like Turkey, Saudi Arabia and Egypt, that Israel is far less a threat than Iran, opens up whole new possibilities for dialogue.

Next up: Loose Change, Part VI


Greg Curtis

Gregory Curtis is the founder and Chairman of Greycourt & Co., Inc., a wealth management firm. He is the author of three investment books, including his most recent, Family Capital. He can be reached at . Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.

Explore Related Stories:

Welcome to Pittsburgh Quarterly
Keep up with the latest

Sign up for our enewsletter, Pittsburgh Quarterly This Week.

We’ll keep in touch, but only when we think there’s something worth sharing. To receive exclusive Pittsburgh Quarterly news and stories, please fill out the form below. Be sure to check your email for a link to confirm your subscription!

View past newsletters here.

Keep up with the latest from Pittsburgh Quarterly.

Enter your email address to receive exclusive Pittsburgh Quarterly news and updates via our enewsletter, Pittsburgh Quarterly This Week. We’ll keep in touch, but only when we think there’s something worth sharing — and worth your time.

Already signed up? Please click the “Don’t Show This Again” button below

First Name(*)
Please let us know your name.

Last Name(*)
Invalid Input

Your Email(*)
Please let us know your email address.

Please check the box for security purposes.
Invalid Input