Tom Friedman on Israeli Attitudes toward Race

Tom Friedman deals with Israeli attitudes toward race in his book From Beirut to Jerusalem, first published in 1989. Since he's Jewish, I cite him as someone who should not be anti-Semitic. On page 269 of my paperback copy, he says:

The Lebanon invasion [in the 1980s] reopened the fundamental division in Israel over the questions: What kind of society is Israel to become? What kind of values does it stand for? Is it going to be a Jewish South Africa, permanently ruling Palestinians in West Bank homelands, is it going to be a Jewish Prussia, trying to bully all of its neighbors, or is it going to be a state with borders that will be based solely on considerations of what will preserve a secure, democratic, and Jewish society at peace with its neighbors?

These are almost exactly the same questions Jimmy Carter raised in his book, Peace Not Apartheid, and for which he was severely chastised by the Jewish community.

Friedman also deals with Israeli attitudes toward the Holocaust a few pages later. He describes how fatalistic and pessimistic Israelis are, in part because of their connection to the Holocaust. But then he says:

If Israel wasn't founded on the basis of such a fatalistic outlook, then how did it take over? ... In the early years of the state of Israel it was common for nativeborn Israelis to feel contempt for the Jews who died in the Holocaust, and even for some of those who survived, because they were viewed as sheep who simply went off to slaughter, while the Zionists were men of bold initiative, who went ou and found the British and Arabs and built a Jewish state.

Ruth Firer, an Israeli who came to Israel from Poland via Siberia during World War II said:

"When I was a student here [in Israel] in the 1950s, the Holocaust was a family secret -- a shame.... The feeling, the whole atmosphere, was that the future must triumph over the past. All of us, parents and kids, tried to cover up what had happened. When we taught the Holocaust then, we taught the heroism of the Warsaw Ghetto -- that was it."

Friedman continues:

The change began, I believe, with the trial of Nazi war criminal Adolf Otto Eichmann in 1961, which brought both the Holocaust and the survivors out of the Israeli closet.... Today -- unfortunately -- the teaching of the Holocaust is an essential element of Israeli high-school education and in the Israeli officers' course. No one goes to Kibbutz Degania [an early kibbutz founded in 1909] anymore. Most Israeli younsters I met had no idea what it represented. dEgania is not viewed as the gateway to Israel. Instead, that role has been taken over by Yad Vashem, the massive hilltop memorial in Jerusalem honoring the 6 million Jews killed in the Holocaust.... Israel today is becoming Yad Vashem with an air force. The past has caught up with the Zionist revolution and now may be in the process of overtaking it. The Holocaust is well on its way to becoming the defining feature of Israeli society.

Republicans Are the New Communists

Rice's decision to call the US's UN Amb. Khalilzad on the carpet, as reported by Reuters, for appearing publicly with the Iranian ambassador at Davos smacks of the old Communist methods. Condi should know them well, since she used to be a Soviet analyst. She was probably under pressure from the right-wing apparatchiks like John Bolton, who emulate the methods of the old Soviet Union to maintain thought control.

While on the subject of X is the new Y, it looks like Israelis are the new Nazis. The turmoil in Gaza, with imprisoned Palestinians breaking out into Egypt, has shown that Gaza is the new Warsaw ghetto. Jews have all kinds of racist profiling methods that they use against Palestinians and other Arabs, but locking them in the Gaza ghetto is clearly reminiscent of Nazi policies against Jews during World War II. The race hatred that is seething in Israel is hard to fathom.

What about Inflation and the Dollar?

Bernanke's rate cut, expected to be followed soon by additional rate cuts at the next Fed meeting, helped the stock markets and the rich investors avoid a deep drop last week, but what effect will it have on inflation in the US and the value of the dollar? It's likely to be negative on both counts. The usual monetary tool to stop inflation is higher interest rates, which also depresses business. Unfortunately, cutting interest rates tends to encourage inflation, and it is likely to do so in this case. Furthermore, currency traders tend to invest in currencies that give a good rate of return, interest, on their holdings. Lowering interest rates discourages people from investing in that currency, the dollar. Therefore the rate cut will likely have the effect of lowering the value of the dollar. The effect may not be immediate, because the dollar is currently at almost historic lows against most major currencies, the yen, euro and pound. It may take a while for people to get used to even lower values for the dollar.

The US has a great incentive to allow inflation and devaluation of the dollar because of our huge debt. It's a common practice for third rate developing countries to run up huge debts with foreign lenders and then devalue their currencies so that they pay off the debt with cheaper money. Thus, if the dollar eventually is worth many less Chinese yuans, the US will have to sell a lot fewer goods overseas to pay off the billions we owe China. That's not going to happen immediately because the Chinese persist in pegging the yuan to the dollar, but if the dollar really starts to tank, they may change their mind. But it's a complicated case, like the one where if you owe the bank $1,000 and can't pay, you are at the bank's mercy, but if you owe the bank $10 billion and can't pay, the bank is at your mercy. Thus we and the Chinese each have leverage on each other.

The Economist magazine takes Bernanke to task for his precipitous cut in interest rates, mainly because it smacks of panic. But it's also likely to have some harmful long-term effects.

The Bernanke Put

It will be interesting to see how Fed Chairman Bernanke's rescue of the stock market works out. It may be easy to compare his approach with a less activist approach, since all the other central bank governors appear to be resisting the temptation to rescue their stock markets. The Bernanke put seems to have replace the Greenspan put, allowing big investors to maintain an option to sell their stocks at a higher price if the market goes down too much. In essence this administration has said that it will rescue the rich investors immediately, and maybe later it will do something for the small fry.

The Europeans so far seem to think that the stock markets and the rich investors can take care of themselves. If they make some bad investments, they should have to live with them. This runs the risk of being a drag on the economy in the short term, but it gets the trash out of the financial system and creates a foundation for future growth. Bernanke and Greenspan are acting in the present, but are they mortgaging the future? Greenspan had twenty good years, which argues that his approach may work out. But the turmoil we have today is at least in part due to Greenspan's decision to keep credit cheap and let the good times roll.