About Finance and Politics

Gordon Brown said, in a meeting of self-proclaimed world leaders, that unless the trend was reversed there was a risk that it would imperil the process of globalisation, damaging prosperity around the world for years to come.

All I can do it quote Einstein once more: we can't solve problems by using the same kind of thinking we used when we created them.

Is it just possible that globalization is the problem?

This is a posting I blogged nearly a year ago, and I think that now, following the recent events, it is even more relevant.

In one of my previous blogs when I mentioned the word Israel, all of a sudden, by mentioning the unmentionable I seemed to have triggered a response like never before. Never in my blog-life did I encounter such strong responses, not when I talked about drugs, prostitution, slavery or harvesting organs from prisoners. Why is that?

Let’s look at some facts. Israel’s birth was out of war. Like most other wars it’s controversial, and there are numerous viewpoints and interpretations of the events. Undoubtedly, both sides had their fair share of atrocities. Yet, no other birth of a nation has created such one-sided hatred.

Nowadays the existence of Israel is a fact. None of those who took part in the birth of the country is in a position of power any longer. Most of them are dead. So even those who feel that Israel was born in sin must admit that most living Israelis had nothing to do with the birth of their country. Yet they are our target of hatred.

There is no doubt that the Arab-Israeli conflict is ugly. No doubt that this has been a horrible war in which both sides committed atrocities. But there is also little doubt that either side is the sole responsible. The situation is rather hopeless, and nobody, absolutely nobody, has a solution. Yet, we hate Israel.

The Arab-Israeli conflict is far from being the bloodiest conflict in the world. It’s far from having the worse record of atrocities. Let’s look at some numbers (all taken from the Historical atlas of 20th century Matthew White):

The total death toll of the Israeli Arab conflict in over 100 years claimed about 60,000 people, out of which 6,000 Arabs were killed in the 40 years of occupation (btw, do you know how many Israelis were killed in the same period?) . It’s a horrible number indeed. However, in the same period 83 million people were killed as a result of tyranny and genocide. That is, Israel has been responsible for 0.07% of all such killings, even though it’s population is 0.1% of the world population. Not so bad considering that the country has been in a war the entire period.

In China 40m killed under Mao
In Russia 20m killed under Stalin
Sudan conflict has consumed 225,000
Somalia 400,000
Romania 150,000
Cambodia 225,000
Algeria 100,000 (fundamentalist Moslem insurrection only, not including the Algerian war)
Kurdistan 300,000
Liberia 150,000
Angola 550,000
Philippines 50,000

Not that any of these numbers justify the Arab-Israeli war, but one must wonder why the hatred in the street is focused on Israel rather than on Algeria or Angola, for instance.
How come Israeli scholars are banned from many English academic conferences unless they condemn their government? Why don’t we ask the same from Burmese, Sudanese or Chinese scholars? And why, when any Muslim decides to detonate a bomb anywhere in the world, let it be London or Bali, calls against Israel are heard in the street?

Is it because blaming the bomber can lead to more religious hatred, and more bombs, while it’s safe to blame Israel? After all, no bomb, suicide bomber, airplane hijacking by an Israeli has ever taken place?
Is it just possible that we still hold the very same views that led London to blame the Polish when they were first occupied by Hitler?

The amazing emergency landing of the Airbus A320 on the Hudson River after the aircraft struck a flock of geese is a demonstration of risk management at its best.

Before this time, landing on water had never been successfully attempted, yet, simulators were built to simulate such events, procedures were put in place, and pilots were trained. None of these were based on historical events, but rather on foresight. It was this foresight that made the difference, and saved the lives of the 155 people aboard the plane.

But this is not the only thing the financial industry can learn from the airline industry. Learning from mistakes and disasters can be just as educational.

Last year a pilot of a Garuda Indonesia, who had crashed his aircraft, was charged with negligence and deliberately causing an accident. It was shown that the captain had deliberately ignored 15 warning signals from an onboard warning system and from his co-pilot, force-landing the Boeing 737 which skidded off the runway and burst into flames killing 21 people.

The investigation found that had he listened to the warnings and followed the proper procedures, he’d have to go round a second time, which would have consumed more fuel and cost him his ‘saving fuel bonus.’ Isn’t it the very reason that so many financial institution crashed – ignoring the bad signals to get better personal remuneration?

We too often forget that the financial industry is not the only place risk is encountered. Many industries and disciplines – from airline to drug manufacturing, from space exploration to building submarines – have developed their ways to handle risk. None is based on historical analysis alone, as is the common practice in the financial industry. And yet, the financial industry has arrogantly chosen to ignore all these important development and reinvent the wheel. This time, however, it seems that they invented a square one.

So why don’t we force our regulators and those who invest our money to learn what other disciplines do with their risk management. After all, reality showed us that we cannot rely on the financial industry to make their own decisions. So let’s force them. Isn’t that what democracy and capitalism all about?

Europe minister Caroline Flint listed five tests that have to be met for England to join the Europe. I think she forgot the most important one: desperation.

When England economy was strong, England saw no benefit in joining the Euro, although at the time it had much power to dictate the conditions. Now, being weak, it might have no choice and will have to take whatever conditions Europe is willing to offer.

And some still politicians still claim that they understand the meaning of foresight

Since my previous post on Gaza, I've received a few love emails that would not shame any hard-core serial killer. So today, I wanted to share with you that I was stopped by some nice people who asked me to donate money to support the people of Gaza. I asked them how money would help those poor people. After all, it would not stop the bombardment of Israel, it would not stop the Hamas from using them as human shields, and it would open neither the Israeli nor the Egyptian borders for new supplies. Besides, Arafat’s wife has already got 2 billion of their money here in London, and it does not seem to help them at all.

Those lovely people in the street didn’t have an answer, but thought that raising money was a good idea. And I thought that they must be the same well-intending people that a couple of years ago poisoned a pond full of bird life as part of their anti-hunting campaign.

It’s very disappointing that Obama, whose election motto was CHANGE, is taking advice from the very same economists whose policies led us here.

CHANGE Mr. Obama, starts with getting rid of that which has been proven not to work. So why don’t you simply get rid of all those who until less than six month ago refused to see where these policies would lead us, and employ those few and far between who understand. As for the rest of the economist, let them join the ever growing unemployment cycle. They may learn something there.

I am not going to delve into the complexity of the situation in the Middle East, and the futility of the solutions offered by so many mass-media-informed citizens of the world, who seem to have a deep knowledge how to solve the problem between the two sworn enemies. No, Israel withdrawal will not solve any problems (for Israel, I mean) as Israel did withdraw from Gaza a couple of years ago, and the launching of missiles into Israeli cities has only intensified ever since. No, Israel opening of the boarder would not solve the problem (for Israel, that is) as whenever they tried it, suicide bombers from Gaza blew themselves up in Israeli cities.

If you are honest with yourself, you must admit that you do not have a solution, and that it’s hard to find a single side to blame, as both are at fault. It is quite tribal thinking that forces us to take sides, favouring one over the other rather than try and look at the complexity of the issues and seek a solution.

Anyone who claims that Israel should let missile fall on its land, and suicide bombers explode in its cities, is a bit out of touch with reality. The first role of a country is to defend its own citizens. However, if you object the Israeli attack as you don’t believe it would solve the problem, I would fully agree, but do you have another solution? What would you have done if you lived there? What would you have done if busses exploded in London weekly, or if missiles were launched on Kent from France? All this is rather difficult and lazy thinking, although makes one feel good, has never solved anything.

The thing I am most perplexed about is why are the heated emotions here in England? After all, there were no demonstrations in the two weeks leading to the attack, when Hamas fired missiles on Israel and Israel made it clear that it would respond if the firing continued. Why didn’t you demonstrate to stop the attacks on Israel, even if not to protect Israel but merely to stop the unavoidable?

Why didn’t we see any demonstrations against Shiites killing Sunnis (and vice versa) in Iraq, against the war against PKK in Turkey, the genocide in Darfur; against Hamas killing the Fattah supporters in Gaza, Iraq’s invasion of Kuwait, Iraq-Iran War, the massacre in Algeria, Russia in Chechnya, the war in old Yugoslavia, and many others. There were no demonstrations in London, even if the death tolls were much higher.

Is it possible that under the intellectual and liberal veils, some good old anti-Semitism is raising its head? Just be honest with yourself and think why you are more emotional about Gaza than about the PKK or Sri-Lanka for instance. Are you simply the product of the mass media brain washing, or maybe you are not as liberal as you want to believe you are?