Wednesday, March 21, 2007
Brav-Obama
In sum, Soros asserted that the Bush administration was wrong ("blundering") not to negotiate with Hamas. He further asserted that the famed AIPAC (the fame "Jewish lobby") was covertly behind the monopoly on American foreign policy opinion on the matter, because both Democrats and Republicans were so heavily "influenced" by AIPAC.
Obama, to his full and everlasting credit, was delighted to disagree with Soros -- claiming that the Bush Administration is doing the right thing by choosing not to engage with Hamas. Other Democratic Party representatives were less clear in the their repudiation of the strategy per se, and instead defended AIPAC and denied an AIPAC conspiracy.
Well, the ironies are manifold. But again, let's recognize and congratulate Obama for a genuine and serious Sister Souljah moment. By openly repudiating the musings of a significant source of political funding to his party, and instead agreeing publicly with the Administration position on the subject, Obama made a very important impression on me. This is either a very serious guy, or at a minimum a very shrewd one.
To the core matter -- why should one elect not to negotiate with Hamas? Trust is at the basis of any negotiation. The entire process of negotiation is predicated upon each party proceeding in good faith. When your negotiating counterparty (or adversary) denies the existence of, and asserts the desire to destroy you and that which you represent, there is simply no basis upon which to negotiate. There is no trust, no good faith. Thus there is no point to a negotiation. Agreeing to negotiate under false pretenses is simply an expression of weakness.
Any US trained business person or lawyer innately understands this because that is one of the foundations of our functioning Anglo Saxon society and culture. George Soros, raised in Hungary and trained in the capital markets, doesn't agree with or understand that premise. His presumption I guess is that everything is always negotiable for everybody, regardless of one's good or bad faith intentions. And it maybe that Arab culture comports more with Soros's understanding than Anglo Saxon culture.
All of which is to say that I think Obama deserves recognition for staking out the right position on the subject, in a fashion which distinguished him from his competitors and distanced him from some of his erstwhile supporters.
9 Comments:
By 
, at
Wed Mar 21, 03:13:00 PM:
In arbitrage, there is no negotiation, only the end-game, the summing-up, the profit and loss. One always knows perfectly where one stands, absolutely and relatively.
The rest of the world lacks that perfect clarity, and often geo-politics can frustratingly lack any clarity at all.
But Soros' professional background isn't the main issue here it seems to me. His background plays a role, perhaps, in that he seems to regard our own politics as he would one great big currency swindle (sorry.. "trade"), and perhaps he believes that if he can talk down the national self-image as effectively as he manipulated the Sterling market perhaps he'll have achieved his goal of exercising a vast influence "to the good". I suppose that might explain why he so casually uses such ridiculous adjectives in his public talks: he's playing for effect. No serious person, after all, would regard America as needing to be "de-Nazified", only the crazies would symathetically understand language like that.
He sees America not as bright, shining city upon a hill, not as the last, best hope or as a beacon for all mankind, but rather banally as only the sole superpower with too much influence and too much power.
Soros wants to be the instrument, or an important instrument, in leveling the international field. In doing so he believes he will have done a good thing, purely in realpolitic terms. But he lacks completely any central, unifying and inspiring idea. He is boring and a little creepy.
Americans won't buy his act for long, even the neo-isolationists in the Democratic party (like E.J. Dionne) only agree with Soros for tactical reasons. We're a country of the "big idea". Now, a Presidential candidate finally has found a use for Soros-- but only as a punching bag. His time is quickly passing, and perhaps American politics will also be changing for the better soon.
Big elections have a way of bringing on unanticipated, significant change. Personally, I'm hoping we can move away from the increasingly destructive political cycle we've been in since Bork.
By 
Cardinalpark, at
Wed Mar 21, 05:32:00 PM:
Anon - you are onto a few things, and completely off on others. For one, soros did not "manipulate" the Sterling market. He recognized that the British monetary authorities couldn't afford any longer to prop up the value of their currency. In other words, he (and really Stan Druckenmiller, his CIO at the time) and other currency traders overwhelmed the British monetary attmept to manipulate the Sterling. This is a distinction with a difference, I think.
Soros has written a pretty impenetrable book on his theory of "reflexivity." It's simple, though he makes it sound more complicated. That is, markets overshoot. And individual misperceptions drive more overshooting. So we are almost always in a state of disequilibrium. There is some truth to this. His theorems are pretyt much the opposite of those of Nobel Laureates like Bill Sharpe, for instance.
I am not sure of how this intersects with his politics, to be honest. I think he likes attention. I think he is fearless about expressing his views. But what I find intriguing really is this. Mostly what made him a successful trader was 2 key attributes: 1) the remarkable ability to rapidly identify losing trades and get out of them remorselessly and 2) the aggression and risk appetite to pile on to a winning trade. The first skill is survival instinct, the second killer instinct.
On his politics, none of this applies. Think of it this way -- he put on a John Kerry trade and shorted Bush. He was dead wrong. He could not get out of the trade. But he was publicly committed. Getting out of the Kerry trade was impossible. So he went donw in flames -- which he never did in business.
Pretty interesting, but not easily explainable.
By Escort81, at
Wed Mar 21, 05:47:00 PM:
CP -
Obama is indeed very bright (editor of the Harvard Law Review) -- perhaps brighter than either of the Clintons. I think he does genuinely disagree with the idea of Israel negotiating with Hamas under the current circumstance, and he also saw the opportunity for (as you put it, with just a hint of irony) a Sister Souljah moment with Soros. The effect of that moment is to lay his card on the table with the 80% of American Jews who are Democrats and vote in Democratic primaries. Some of that 80% are secular Jews like Soros who may have no particular use for Israel (and also are somewhat to the left of the Democratic Party mainstream) and perhaps they might look elsewhere for a candidate beyond Obama or Clinton. Obama may also have felt the need to dig out of a small hole because of his recent statement regarding the suffering of Palestinians.
Regarding your "core matter," I suppose it could be tactically worthwhile in certain situations to negotiate with a counterparty that was not trustworthy, with the intention of entering into a deal you knew might well be broken, simply to illustrate to any number of third parties that you made best efforts ("go the extra mile") and held up your end of the deal but were done in by the perfidy of the other side. It's pretty tough to do that when the other side isn't just unreliable but actually wishes you physical harm, but if you ultimately need the support of those third parties, it may be worth jumping through the hoops. But probably not.
I don't think the fact that Soros was born in Hungary is the cause of his seeming lack of acceptance of the ground rules for serious negotiations. My mother was born in Budapest, attended Catholic boarding school there for a time, and came to the U.S. when she was about 10 years old, and certainly bought into the Anglo-Saxon format for worthwhile negotiations. That said, there is an old joke about a Hungarian (and I think I have joke-telling immunity on this matter via my mother's ancestry) being someone who goes into a revolving door behind you and comes out ahead of you.
By the way, what about the other side of the equation that -- would Hamas members of a unity government actually sit down at a table with Israeli government officials? If they don't recognize the "Zionist Entity," doesn't that put them in a bit of a philosophical conundrum -- the very act of negotiating with Israeli officials legitimizes the state of Israel, doesn't it?
Your explanation of Soros "shorting" Bush is an interesting one, and it sounds like you have more knowledge about him than the average blogger. I only know what I read, and Soros has written that he has had problems in certain parts of his life with a "messiah complex," so I can only guess that's what is driving him into these political venues. Without question he was a brilliant financial trader, perhaps, with Druckenmiller at his side, one of the best in history. Michael Jordan was the best basketball player in history (well, being from Philly, throw Wilt in there as well), but he didn't have the bat speed to hit minor league pitching. Brilliance in one area doesn't always translate to brilliance in another.
Geffen, Soros ... who is the next billionaire Democrat to get slapped around by a candidate?
By , at
Thu Mar 22, 12:28:00 AM:
DEPORT THIS GEORGE SOROS TO A PLACE FAR FAR AWAY LIKE THE ICE PLANET OF HOTH
By , at
Thu Mar 22, 07:59:00 AM:
Cardinal:
You defence of Soros and his technical skills is interesting. It still does not get past the fact that Soros and Company did indeed try to destroy the basis of at least one country's currency.
Soros is using the same skills to shape the future. The fact that he has not been successfull is more to do with the fight back than his lack of skill.
As far as Barack goes - Intelligent? he was on CNN and basically said Israel was the probelm. In the next breath he said he no one was suggesting that Israel is the problem (no I cannot find the comment - but check CNN).
Obama has all the hallmarks of a press driven candidate. Comments like the one above would suggest that he is far more of an empty shell than his educational background would indicate.
By Cardinalpark, at
Thu Mar 22, 10:12:00 AM:
A couple of responses:
E81 - Funny, my mother and her parents were Hungarian as well. Definitely not an Anglo Saxon negotiating style. There were extremely mistrustful people, even paranoid. I would speculate (get it?) that Soros doesn't trust anybody and therefore believes you have to be able to negotiate with no presumption of good faith.
As for your question (sort of) about Israel choosing to negotiate with a bad partner, I think they feel they did that already with Oslo -- and look how it turned out for them. First, they had to watch Rabin shake hands with Arafat. Then, one of their own killed Rabin over Oslo. Then after going through all that, and caving all the way down to the Camp David meetings, they got Intifada II.
So, in reply, I think Israel feels they already demonstrated their good faith effort, and I think the US agrees (even Clinton has acknowledged Barak did everything he asked, Arafat wouldn't make the deal). And Intifada II proved Palestinian bad faith and continuing objective of Israeli annihilation. Hamas elections proved it reflected Palestinian popular sentiment as well. Thus Israeli popular sentiment responded with Sharon and the Fence. No negotiations, but a fait accompli on the ground.
It's all actually quite logical and predictable once the true Palestinian objective ebecomes clear after 2000. It has nothing to do with the US administration, and everything to do with the facts and reality on the ground. this of course in turn leads to last summer as well as the Palestinians and their supporters in Hezbollah and Iran realize that the Fence ends the bleeding and the headlines.
Davod - I gather from your post you don't operate in financial markets as a professional. A currency trader doesn't "destroy the basis of...one country's currency." A curency trader spots an inefficiency and exploits it to make a profit. The British monetary authority was trying to artificially support an unsustainable combination of low interest rates and a strong currency. They had a limited set of reserves to defend the currency. Soros and Druckenmiller saw that, and sold sterling short. When every other currency trader with a 130 IQ and higher saw the trade, they piled on. The Brits didn't have the reserves to keep buying the pound (like chumps, by the way). They gave in, and down went the pound to its natural market level. The manipulators were the central government and bank authorities, not the traders. The manipulators got hosed down. Don't mess with mother market.
Soros has no idea that he is absolutely fighting "the market" in the US. He lives in NY, and thinks his views are mainstream (even in NY, he's pretty far left). He has no earthly idea that he is a man from Mars in the rest of the country. If he was using "his skills to shape the future", as you say, he would rapidly realize he is riding a losing trade and he would drop it. But politics is vastly different that economics.
Finally, yes, I think Obama is very bright. That doesn't preclude him from being wrong alot. My kids are really bright and wrong all the time. They have no experience. And that's Obama's problem I think. Growing up a politician with a single minded desire to be President and having no other experience besides being a trained lawyer, a state senator and now a US senator, he simply hasn't done anything. That doesn't mean that he isn't smart and isn't capable of a good decision, like backing away from Soros's remarks about Hamas.
By , at
Thu Mar 22, 03:54:00 PM:
"Think of it this way -- he put on a John Kerry trade and shorted Bush."
That's no hedge, CP- putting on those two trades is nothing more than a double up on one trade. Since we know Soros must have hedged, Stanley D. being absent or not, I can only think there was some part of this deal we haven't yet seen, and I'll bet it wasn't high-minded at all (since, so far, I haven't seen anything high-minded about Soros' involvement in politics!).
Moving from metaphorical trades to the real for a moment, would anyone here be at all surprised if there isn't a largish commodities deal with the Russians somewhere in Soros' portfolio right now that wasn't there in 2004 or 2005? How's that for a conspiracy theory! Actually, I admit it, it's not a conspiracy theory at all- it's way too casual a sideswipe speculation to be called a "theory"; it's nothing more than a cynicism bred from long experience analyzing trades and deals. But, still, would anyone be shocked if it were true? Not me.
But, to be slightly serious for a moment, I agree that any candidate would perceive that arguing against negotiations with Hamas is mainstream popular among all of you foreign policy cognoscenti. But, in my estimation, this position only makes Obama a foreign policy poseur. It's an easy position to take, doesn't require deep or prolonged analysis, but looks informed. Likewise, taking issue with Soros on a foreign policy matter is hardly brave- Soros isn't going to suddenly become a Baker Republican because of the "dispute", and Obama gets to look moderate for a teensy little moment.
If Obama is indeed serious in his views on "no negotiations with Hamas", then why hasn't he reacted equally strenuously to the sub-rosa "discussions" the congressional leadership was so strongly rumored to be holding with Hamas after the election? Call out Nancy Pelosi, Barack!
By Escort81, at
Thu Mar 22, 06:49:00 PM:
CP -
Of course you are correct about the Israelis feeling as though they have already gone the extra mile in negotiations. It hasn't bought them much good will from the rest of the world, I suppose principally because of the settlements on the West Bank being perceived as a big problem. Aside from all of that, the facts on the ground are that a clear majority (in every poll I've seen) of Palestinian Arabs do not want to live side-by-side with Israel in their own state, they want Israel ejected from the playing field. How we get from there to a two state solution is beyond me.
You may be right about the Hungarian mindset with respect to negotiations. I don't think my mother was a typical Hungarian, and certainly was educated in a western fashion when she came to the States (George School, Barnard, Oxford). I think the history there -- being overrun by Turks, Austrians, Germans and Russians -- may have understandably led to a certain paranoia, which Soros perhaps inherited. My mother's family was possibly more western-looking -- her father had position and a title, which of course did him no good when he was forced to flee the Soviet occupation after the war (he was a involved with a party that was the rough equivalent of the Christian Democrats and was to be part of the coalition government before the Soviets said "thanks, but no thanks" to free elections). He spent the rest of his life in Buenos Aires with his third wife. His experience certainly colored my mother's (and my own) anti-Soviet attitude, and led to her evolution from an FDR Democrat to a Reagan Democrat. Anyway, it's nice to virtually meet a fellow Magyar, and I could cook up a mean batch of palacsinta for you and your family if we ever meet. If you have a hankering in the meantime and are in central NJ, try this place.
By Cardinalpark, at
Fri Mar 23, 09:36:00 AM:
Escort81 - the parallels don't end in Budapest. My mother's family emigrated to Buenos Aires in 1932. So my mother was actually raised an Argentine, speaking Hungarian at home, until moving to the US with my father in 1954. Though he in turn was born in BA, his family had escaped Belarus in 1920. So while your folks escaped the commies, mine were getting away from Fascists and Pogrommists. In truth, I think my father's side were commies (not so unusual with Jews in the Russian sphere of influence, given the Tsar's treatment of Jews.
Thanks for the palacsinta invitation. For those not in the know of hungarian cuisine, palacsinta are a cross between crepes (though not as delicate) and blintzes (though typically jam filled).
I haven't had one since my grandmother died....mmm.
As an aside, my old man lives in BA now.
And finally, back to politics, I actually do think Israel has been given wider birth to act in its interests since the Camp David Arafat debacle, certainly by the US foreign policy establishment, and even by the Europeans. Think about what actions Israel has taken since 2000. It has acted unilaterally to fairly minimal complaint to create new facts on the ground and a separation fence. Sharon pointedly, aggressively went after French anti-semitism to a very modest response. They forced Arafat to spend his final days in a miserable, broken down shoebox surrounded by the Israeli military. Pretty ignominious conclusion for that dirtbag. As TH pointed out the other day, the French (of course, for their own raisons) gave Israel the green light to lay waste to Syria if it wanted in connection with the Hexbollah incursions into Israel). We shouldn't minimize these things.
