Blair’s End

March 31, 2006

It’s said that all political careers end in failure, and Blair has chosen ID cards for his exit.

His new law (my ellipsis) requires:

– every Brit resident to carry an ID card with 10 fingerprints, 2 iris prints and a photo;

– a national ID database;

– millions of scanners for bureaucrats and cops to read citizens’ biometrics and ID cards;

– a very large & secure data network to enable scanned cards to be checked against the database.

More than half a century after Britain got rid of its wartime identity cards, laws to set up a similar scheme were given Royal Assent yesterday.

Some of the world’s largest IT companies are likely to line up for the work…A report published by the London School of Economics last year – and fiercely disputed by the Home Office – estimated the cost of implementing an ID cards scheme at between £10.6 billion and £19.2 billion.

It will be a high-risk project, with the prospect of its being scrapped never far away, so the private sector will probably demand hugely profitable fees.

Contrary to my predictions, the scheme will be highly disruptive. Starting 2008:

(It) will involve a visit to one of 70 offices around the country to give all 10 fingerprints, two iris prints and a photograph (by each of the) about six million people each year (that) renew or apply for a passport…

But Blair’s man hopes the scheme will survive Labour being turfed out by the electors:

(The home secretary) said that he did not think the Conservatives…would…reverse the scheme (after the next election) because it would be too far advanced by then… (However) David Davis, the shadow home secretary, said: “Under a Conservative government, the scheme would be scrapped and the savings put to other uses – including strengthening our security.”

The third Brit party, the Liberal Democrats, would also scrap the scheme:

The Government’s identity card scheme will be expensive and ineffective. We would scrap it and use the savings to put 10,000 more police on the streets, and equip them to combat crime more effectively.

The next election is due by May 2010. By then the project – like all previous Brit government IT projects – will be well over budget, and the first wave of 6 million Brit men women and kids will have been annoyed by being forced to spend 1/2 a day each to get the Big Brother treatment.

Blair’s party has at a stroke alienated the Brit electorate and given their two opponents strong cause to form a coalition against them.



New York’s Loss, London’s Gain

March 30, 2006

NASDAQ’s failure to acquire the London Stock Exchange (LSE) highlights the damage done to US financial markets by Sarbanes-Oxley (SOX). Because of SOX, foreign companies now avoid listing in the US, and NASDAQ was trying to regain their business by diversifying to less-regulated London. Unfortunately, investors there see NASDAQ as a trojan horse for SOX, so the deal never had a chance.

When I took part in an IPO on NASDAQ six years ago, it was the only show in (any) town. Here’s how the train wreck happened (my ellipsis):

… US legislation was signed into law by President Bush in 2002 after a string of corporate scandals that left many investors penniless. The collapse of Enron, the bankruptcy of WorldCom and the corruption at Tyco – added to a disintegration of trust in corporate America and the sense that investing in Wall Street was akin to handing over money to executives who were happy to steal and lie with no thought for small retail shareholders.

SOX (was)…designed to change all that. It imposed additional layers of regulation and requirements to ensure investors were protected. Estimates suggest companies have paid tens of billions of dollars in compliance fees.

Perhaps the most contentious part is Section 404, which demands each annual report carry an “internal control report” stating that management is responsible for an adequate internal control structure. In addition, that report must be examined by external auditors who must attest to its accuracy.

What that means is that if there are any errors in the accounts, management faces jail and evisceration by trial lawyer. SOX also effectively eliminates the use of stock options as a compensation tool. Since taking risks and using options to conserve cash are two key weapons in the entrepreneur’s locker, SOX is poison to startups. So:

…last year for the first time, London surpassed New York as the market of choice for international IPOs, while Europe as a whole overtook the US in terms of the value of all new listings. In an LSE survey of international firms, some 90pc said the demands of SOX made listing in London more attractive.

The numbers confirm this (hat tip New Economist):

Daily foreign-exchange turnover in London is £432 billion, 31% of the world total. About 70% of the eurobond trade is in London. London dominates global turnover in foreign equity — companies quoted outside their country of nationality — with 43% of the total.

…London has increasingly been taking business from the New York Stock Exchange (NYSE). Non-UK flotations on the LSE raised more than £9 billion last year; non-US flotations on the NYSE raised only £2 billion.

Six of the 10 biggest floats in London last year were registered abroad… So far this year there have been only two non-US initial public offerings on the New York exchange. There have been 32 non-UK listings in London.

I don’t see US lawmakers fixing SOX until the horrors of Enron, WorldCom and Tyco have faded from investors’ memories, so London should go from strength to strength. Still, at least it keeps world’s finances in the Anglosphere – Frankfurt and Paris have been left in the dust!

Israeli Disengagement

March 29, 2006

The Israeli elections show them – without enthusiasm – deciding to wall Israel off from the Arabs. Israelis have very good reasons for that decision, and the US should give them its unconditional support and not meddle.

The Kadima party, which promotes Sharon’s disengagement policy, won the most seats – 28 of the the 120 available & will now put together a coalition with some of the other 11 parties that won seats.

Kadima’s leader promises to give to the Palestinians up to 90% of the West Bank territories captured in the 1967 war, telling them:

“During thousands of years, we planted the dream of greater Israel in our hearts … but in recognition of the reality, we are ready to compromise, and concede parts of the beloved land of Israel,” Mr. Olmert said, “and evacuate with much sadness Jews living there to create the conditions that will allow you to achieve your dreams and build alongside us a state of your own.”

Which means (my ellipsis):

…(he)…plans to remove thousands of Jewish settlers, he would incorporate Arab East Jerusalem and three large chunks of occupied territory, where the bulk of Jewish settlements are located.

With the erection of a “security fence” to protect this new frontier, Israel will de facto have redrawn an international border. The move is likely to produce an outcry internationally, but that in itself will not deter a new Government which has the clear backing of the Israeli people.

Disengagement will leave Israel just 15 miles wide in places – not a great idea with a state committed to its destruction next door. Israel is doing this because the alternatives are worse.

Alternative 1: Ethnic Cleansing

The easiest way for a conquerer to take over territory is to kill or expel the natives. That’s what the Romans did to the Jews, how the Russians took over East Prussia in 1945, how Indians and Pakistanis settled their frontier in 1948 and Serbia, Croatia and Kosovo separated their populations (in spite of NATO attempts to stop them). And how, to Western indifference, the Muslim government of Darfur has now killed or expelled 2 million people. And, for that matter, how in 1948, the new state of Israel pushed 711,000 Arabs out of its territories and the Arab nations ejected 900,000 Jews.

Even if the Israelis had the stomach for such a brutal operation, its major ally – the US – would not permit it. So that’s out.

Alternative 2: Occupation And Enslavement

The Jewish people suffered this in biblical times. The Germans used it across occupied Europe in WW2, and it’s a staple of fear states today – Saddam is on trial for it and the Russians are using it in Chechnya.

In this approach, the occupier gets compliance by reprisal – if one of its soldiers is killed, all the inhabitants of a local village are killed. A Nazi favorite was shooting all the men then burning all the women and kids in the local church, a tactic they repeated in thousands of villages across Europe – including Oradour sur Glane. It worked pretty well, and absent allied liberation, Europe would probably now be pacified.

But modern & democratic Israel does not have the will to follow this policy. There are plenty of Arabs in Israel (about 20% of the population), and Israelis meet them every day. They see messy but lively villages of traditional houses, with kids playing in the streets, men working in family businesses, women raising the families, old people sitting on doorsteps chatting. It’s hard to abuse all these people because a minority become or shelter murderers.

Israelis also dislike the effect occupation has on their conscript kids (who join the IDF at age 18, men for 3 years, women for 2). About 10% of the males in any society are either psychopaths or violent, and Israel is probably no exception. These will bully and brutalize. Perhaps another 10% are radicalized in the opposite direction, and become alienated from their country. The 80% in the middle do the dirty work of occupation, while holding their noses – but after their 2 or 3 year stints return home psychologically scarred.

Option 3: Disengagement

So this is the least bad option. At the cost of incorporating a few more Arabs, Israel removes the trauma and corruption of occupation from its people and tidies its borders. It will of course continue to face threats from the Palestinian, Syrian and Iranian governments, all of which define themselves by their commitment to destroy Israel.

Israel will need US support – moral and material – to achieve disengagement while keeping these dogs at bay. That should be freely given, without meddling from State.

The State Of Israel

March 26, 2006

Israel is a splendid country that quite confounded my expectations.

It’s not a desert dotted with kibbutzes

Much of the countryside is green and pleasant – not unlike Oxfordshire, Umbria or Virginia. There are deserts at the extreme east and the Negev, but everywhere else rainfall is same as London – 20 inches – but follows the Southern Med pattern of concentrating in the winter months.

It’s not wall-to-wall condos

Outside Tel Aviv (like LA) and Jerusalem (unequaled), it’s small towns and villages set in fields and orchards. Land that would be heavily cultivated in Greece and Italy is left to reforest with native oak.

As a result of the above, it’s crawling with wildlife

Even the desert regions have plenty of birds and in the greener parts there was a kingfisher – very rare in the UK. Plus foxes, ibex, mongoose and a distant relative of the elephant that looks like a small but irritable groundhog.

Although there’s plenty of security, it’s not intrusive

It’s not much different to London or Chicago – the occasional police roadblock and armed patrols strolling the streets. Many stores and restaurants have a security guard out front, but nothing like the gated downtown areas the Brits had in Northern Ireland when the IRA was bombing shopping malls. Vulnerable groups, usually of kids, will be accompanied by a young guard with a rifle slung.

There place is swarming with kids

That’s because Israeli women have 2.44 kids each, compared with 1.66 in the UK and 2.08 in the US.

Some Israelis are black

These are Ethiopian Jews, fine men and gorgeous women.

It’s not militaristic

Israeli soldiers wear simple khaki overalls, whatever their rank, and don’t strut, stamp, or (as far as I could see) march. They’re competent though.

And Israelis in general aren’t inclined to take orders, so running their army must be akin to herding cats. That individualism gave them great advantages in warfare – in 1973 for example, Sharon decided to attack across the Suez canal against explicit orders, and minced up the enormous Egyptian offensive. He wasn’t fired.

Israeli Arabs are poor but hospitable

They’re a typical low-trust community. Very strong family ties, so all their businesses stay family-sized. Many of them are emigrants, and they have their own parties. I liked their cuisine and preferred their traditional style architecture to that of non-Arab Israelis.

The Druze community, which is non-Muslim Arab, seems more prosperous. Unlike Muslim Arabs young Druze get to serve in the IDF, where they’re regarded as fearless fighters.

Another Arab community, the Bedouin, is also respected in the army – they make great trackers, and you see them leading patrols along the anti-infiltration fences.

Israelis are reluctant warriors

They aren’t a martial people, they prefer to disagree with eachother rather than march in lockstep. But they are smart realists, and know their survival depends entirely on their own competence and prowess.

Most Israelis have friends and family killed by Arabs in war or terrorism. The second Intifada, which ran between 2000 and 2005, killed 1,000 Israelis. Scaled for population (Israel is just 6 million people), that’s the equivalent of 10,000 Brits or 50,000 Americans, so 9/11 and 7/7 are small compared to Israeli losses.

The Arab hatred of Israel has no easy fixes. It’s like the ethnic enmity in the former Yugoslavia, the alienation of much of the US black population, or the hatred of the Roman Catholic minority in Northern Ireland for the Brits.

Israelis bear many costs to stay constantly on guard. The upside is that this pressure has produced a tough, industrious and creative people, and it’s impossible to see them succumbing to either internal decay or external assault.

Declining Religions

March 25, 2006

On current events and judged as businesses, Christianity and Islam are headed for Chapter 11, takeover and breakup.


Failing businesses often abuse their customers. The once-mighty Xerox, struggling for revenue in the 1980s, lost its reputation by locking in its customers with abusive leasing contracts. The customers headed for the (Japanese) hills.

Islam – in Afghanistan at least – is following the Xerox model, attempting to hold its customer base by killing defectors:

The chief judge trying an Afghan man who faces a death sentence for converting from Islam to Christianity defended the court’s autonomy yesterday amid reports the man could be freed.

This policy opens Islam to attack by religions that reward rather than abuse their followers.


Companies that dump their core values suffer in the marketplace – Google is a current example. The Christian “peace activists” our troops just rescued in Iraq dumped a lot of Christian values. Here’s what they were doing there (my ellipsis):

CPT (Christian Peacemaker Teams) initiated a long-term presence in Iraq in October 2002, six months before the beginning of the U.S. led invasion in March of 2003.

So they began by providing cover for a mass murderer – not very Christian.

After the removal of said murderer:

The primary focus of the team for eighteen months following the invasion was documenting and focusing attention on the issue of detainee abuses and basic legal and human rights being denied them.

Didn’t the dead in their mass graves also merit Christian action?

Then their mission crept again:

Issues related to detainees remain but the current focus of the team has expanded to include efforts to end occupation and militarization of the country and to foster nonviolent and just alternatives for a free and independent Iraq.

In the course of this they got themselves kidnapped, and men risked their lives to rescue them, at great cost. And in their pride, they won’t acknowledge this (my ellipsis):

Before flying out of Baghdad on (a taxpayer-funded) RAF aircraft yesterday, (the) hostages released a brief statement that said nothing about the rescue force.

The hunt for (the) hostages involved:

250 men from the Task Force Black US/British/Australian counter-kidnap unit

100 men from Task Force Maroon, the Paras and Royal Marines backing special forces

15 men in helicopter crews

And tens of thousands of pounds spent on helicopter and transport aircraft flights

By inserting themselves into Iraq, these so-called Christians forced others to pay for and die for them.

The stock of Christianity is already low in Europe, and this episode will speed its decline.

Mrs G, fresh from India, reports that the Hindu religion is in good shape – it puts no gatekeepers between believers and their god, kills no apostates, and promotes the behaviors traditionally associated with Christianity and Islam – maybe Hinduism is the next new thing.

Back In The Fog

March 24, 2006

The amorality of the BBC comes as a shock after 10 days of Israeli clarity.

I avoid the BBC, but the train from Heathrow airport into central London screens its news bulletins. Here’s how it described the ETA ceasefire (my emphasis):

ETA has suspended its armed struggle in which over 800 people have died.

In fact ETA has not been “struggling” – in an open society like Spain’s, any psychopath can sneak a bomb into a public place at minimal risk to himself. And the people killed don’t just “die” – they are deliberately murdered. Here are some examples (my ellipsis):

December 1973: Prime Minister Admiral Luis Carrero Blanco is assassinated in Madrid in retaliation for the government’s execution of Basque separatists (for murder).

June 19, 1987: A car bomb explodes in the underground car park of an Hipercor supermarket in Barcelona, killing 21 civilians and injuring 45, among them several small children.

1997: Abduction of Basque councilor Miguel Angel Blanco, prompting six million Spaniards to join mass demonstrations against ETA. The organization asks the government to relocate all imprisoned ETA terrorists in prisons closer to the Basque Country. When the government does not accept this demand, Miguel Angel Blanco is assassinated.

December 24, 2003: ETA attempts to blow 50 kg of explosives inside Madrid’s busy Chamartín Station at 3:55 PM on Christmas Eve. The police thwarted the attempt when they stopped Garikoitz Arruarte trying to load 28 kg of explosives into a Madrid-bound train in San Sebastián. Another bomb with over 20 kg of explosives was then found inside a second train passing near Burgos, already several hundred kilometers on its way to Madrid.

I wasn’t there to hear Israel National Radio describe the event, but guess it was along these lines:

The ETA gang says it will suspend its terror campaign. It has murdered over 800 people.

On The Road

March 14, 2006

Visiting Israel for 8 days, back on line on 3/24.