Existential Crisis Most Likely to Bring New Elections

 

Prime Minister Netanyahu and Prime Minister in his own mind Yair Lapid had their fateful meeting where the real Prime Minister basically laid out what would be required from Yair Lapid and his party members in order to continue the current coalition. One of the problems which have struck the coalition has been the idea by the other party leaders that they should be the Prime Minister and run the government. Yair Lapid was rumored to even have attempted to patch together his own coalition and exercise a coup of sorts and take over the government through a deal with opposition parties thus forcing a new government without having new elections. Then we have the twisted dreams of Tzipi Livni who believes that she is fated to be Prime Minister because she honestly feels she has been robbed of her opportunity to lead the nation and will likely continue to pursue this phantom reality for the rest of her political life. There is the expected leader and head of the opposition parties Yitzhak Herzog, the leader of the Labor Party, has already claimed his rightful position as Prime Minister in waiting convinced that new elections will serve as the cleansing of the government of Prime Minister Netanyahu and instead bring a liberal wave sweeping Herzog into the Prime Minister slot. He was quoted speaking of the inevitable results of new elections stating, “The Labor party will lead the bloc that will win the election and give hope and a new reality for the citizens of Israel.” Apparently these Prime Ministerial candidates holding these delusional beliefs have either not read any of the polling done or they believe, as Yitzhak Herzog stated just the other day, that the polls are meaningless as they have sampled those they know and all of the people in their circle agree that new elections will place them at the head of the next government. If I were to ask those closest to me if I would win the coming elections and get to form the next coalition government I am sure that at least one or two would play along and assure me that I was not delusional, but they would also realize I was joking. Unfortunately for Israel, these Prime Minister wannabes are not joking and believe their own propaganda that they are the next chosen one.

 

This crisis was brought to a head when the proposed Jewish State Law which was intended to restate and reaffirm that Israel is the home of the Jewish People as well as a democracy where every citizen is guaranteed their respective rights as citizens. To any casual observer this law would be a no brainer but instead it became the initial protest vote where both Yair Lapid and Tzipi Livni threatened their voting against the Jewish State Law should it be brought to the Knesset for a vote. This led to rewording the bill in attempts to make it palatable to the few who insisted on remaining unappeasable. The reality is that both party leaders were actually more upset that the governing coalition refused to tow their line and follow their agendas and instead were following the agenda put forth by the Prime Minister and originally voted for as part and parcel of joining the coalition upon its formation. So, it now appears that Israel is about to go into another election with all the usual posturing and backstabbing starting with each party holding their disparate meetings or votes or some combination thereof in order to present their list of proposed Knesset Ministers for well past their polled expectations to receive once the election results are finalized. The expectations from current polling, something that is almost meaningless as elections have historically brought surprises and twists beyond belief, has Likud remaining the largest block of Ministerial positions and thus most likely to be chosen to form the next coalition. There are indications that the next largest party might be Jewish Home which will be a surprise to the leftist parties who are expecting the Israeli voters to cast off both Likud and Jewish Home in favor of Labor, Meretz and Yesh Atid. The polling has also indicated that Lapid’s Yesh Atid Party will only manage to win half the number of seats in the Knesset than they did in their initial and surprising success in their inaugural presentation before the voting public in the last election. These polls also depicted Tzipi Livni’s HaTnuah Party as barely making a minimal entry number of seats if even breaking the threshold required to be represented in the Knesset, let alone receive the nod to form the next government. The one hope all of those vying to be the next Prime Minister can invest their aspirations upon is that the least likely thing which was unexpected by all the pollsters, party leaders, experts and prognosticators and initially dismissed as insignificant can still resonate with the Israeli public while remaining below the radar and surging forth on election day to produce the unexpected results in the next elections completely throwing all the news outlets an unseen curve which they will be at a loss to explain. The elections may prove once again that there is no such thing as a sure bet when the voting public gets to make the decisions.

 

Of course new elections are not yet guaranteed as it will take a vote in the Knesset to dissolve the parliament and hold elections and there is the possibility that Yair Lapid will return to the fold and swallow his pride for the good of the coalition and by such an action garner some new supporters which always is a desired result for any politician. Lapid was given five acts he must agree to if he desires to avoid new elections. These were to stop attacking the coalition and especially to end his criticisms of the building plans in Jerusalem, Judea and Samaria and the Israeli relations with the United States. Next he was to transfer the six billion shekels to the defense budget as promised for their development of Iron Dome systems and armored personnel carriers. Third was to release the funding for the IDF relocation to the new Negev as was agreed upon by coalition agreements, something Lapid was blocking going so far as to have frozen this funding taking what he referred to as a principled stand. Fourth was for him to support the final version of the Jewish State Law. Finally he would be required to surrender and shelve the zero percent VAT relief bill he had been pushing for very determinedly. This final demand is expected to be the last straw and the one Lapid will refuse to meet thus likely forcing new elections.

 

One reading the polls would expect that Lapid would find it easier to remain in the current coalition where his Yesh Atid Party enjoys nineteen seats in the Knesset, a far cry better than the nine seats which many polls have indicated he would receive from new elections. The guessing here believes that Yesh Atid would probably suffer an even bigger embarrassment and only manage six or maybe seven seats and be on its way to extinction unless Yair Lapid could find a path back to the promises and apparent ideals he initially presented as the guiding essentials set forth in the last election. Those who suspected that much of the Zionist and nationalist line that Minister Lapid had professed was more ruse than ideological foundation as it was presented. These suspicions proved to be valid as once in the government Yair Lapid appeared to inexorably veer to the left and discard much of his nationalist agenda and instead attempt to inject his liberal slant into policy even at the expense of manipulating the budget which he had promised certain arrangements and allocations which he in the end did not deliver on. And this may only be the tip of the iceberg of potential changes which might be produced by holding new elections. The largest changes are always the ways in which the factions and parties arrange their own coalitions’ makeup. The most evident breakup has already taken place in which the one-time marriage of Likud with Yisrael Beiteinu which will also mean that Avigdor Lieberman will be leading his own party rather than being second on the combined ticket with Bibi Netanyahu taking the top slot. Netanyahu is probably expected by most to continue to take the top slot on any Likud ticket but that may not be as guaranteed as one might believe. There will be a credible challenge to Netanyahu in the voting for the Likud ticket as Danny Danon is expected to give Netanyahu a challenge from the right and even more nationalistic Zionist side of the party. We could potentially see a Likud ticket with a new face at the helm which may signal a changing of the guard within Likud even should Danny Danon fall short in his challenge. Danon is definitely one of the future leaders in Likud and the time is rapidly approaching for these new leaders to step forth. Other than the breakup of Likud and Yisrael Beiteinu, there may be other alterations to more parties and combinations than could be readily covered in this article and are best left for after the parties have all filed and made public their intents. Then there will be the leadership challenges in parties other than Likud. We have to wait and see if the somewhat controversial leader of Jewish Home, Naftali Bennett, remains the top man on their ticket and whether they will continue with their current makeup or if some factions might go it on their own. Then there may be a contest for the leadership position of the Haredi parties, largely concerning in Shas and whether the more liberal and left leaning Arye Deri remains in the number one slot or if Eli Yishai or Ariel Atias will make a successful challenge from the more nationalist and right leaning side of the party. With the passing of Rabbi Ovadia Yosef there can now be a true contest for the leadership of the Shas Party. Labor just recently had a change in leadership with Yitzhak Herzog taking the top spot replacing Shelly Yachimovitch. After all is said and done the next government may very well have a similar outward appearance to the current coalition but within there will be some changes, just how many and how far this difference proves to be remains to be seen. If Likud has a new person topping their ticket, such a change could excite the electorate or perhaps the shock of Bibi Netanyahu being replaced will be too much for the Israeli public. Then there are some polls which have shown Jewish Home Party actually replacing Likud as the leader in the Knesset and thus very likely making their first name on their Knesset list the next Prime Minister. It still remains to be seen if that name will continue to be Naftali Bennett. And then again, there is still hope for yours truly as, after all, those I have talked to still hold out hope for me to be picked to form the next government, and why not? Talk about strange happenings, that would take the cake.

 

Beyond the Cusp

 

Upcoming Midterm United States Elections, a Slightly Different Look

Who is ahead in the different races depends on the state and even on the political leanings of the news or talk shows one follows. If you go to polling it gets even more confusing. Not only are the polls often slanted depending on who ordered the polling but it also depends on what the subject the poll is covering. Here are a few examples from some polls. A CBS poll recently showed that fifty percent of those responding said the Democrats are the party that “cares more about the needs and problems of people” while only 34 percent chose the Republicans. Meanwhile, the Republicans have a nine point lead concerning the economy, an eleven point lead on foreign policy and a twenty-one point lead on addressing terrorism in an October CBS poll. So, who wins; the party of the people or the party which appears to be more competent? These numbers are nothing new as often the Democrats have polled well on sympathy and feeling the people’s pains while the Republicans historically win on foreign policy and confronting threats from the outside world. The fact the Republicans are polling slightly ahead of Democrats on the economy is not nationally definitive enough to be applied to every race. The probability is that in the traditionally Democrat leaning states the Democrats will probably poll even or ahead of the Republicans while in traditionally Republican states the Republicans will poll ahead. The place where that mere nine point lead for the Republicans becomes evident will be in what is often referred to as the ‘purple’ states where the parties have split the wins between them would thus likely give the Republicans a slight lead on the economy. Unfortunately that may not transfer to votes as there is also the personality of the candidates as well as the effectiveness of their campaigns and whether there are third party or independent candidates on the ballot and from which side they will draw away votes. Libertarian and Constitution Party candidates tend to take more votes from Republicans while Green and sometimes Libertarian Party take more votes from the Democrats. But other than their campaign, their affability or their campaign commercials and use of media and social networks, the most important determining item will simply be which party gets the voters to the polls, period.

With this year not being a Presidential election year, the national party machines are operating but there are far fewer volunteers and fewer funds for them to make a large determining difference. This means that it will be up to the State and even more local party machines and the candidate supporting campaign staff which will make up a significant part of the get out the vote efforts. States with Gubernatorial elections this election will have more party influence than those without. What makes these midterms so difficult to make predictions is because there is no real enthusiasm evident in the electorate and it is very possible that both of the major parties will suffer from miserable voter turnout and thus calling the elections near impossible. There will be some states where polling data is so skewed to one candidate that there is almost no challenge to picking the likely winner short of an unseen stumble where the leading candidate is caught in a criminal act or other compromising situation. They do not even need to actually be guilty as that will depend on a court of law, but such accusations can sway the court of public opinion and that is exactly what elections are, the court of public opinion choosing those they feel are less guilty of potentially bad leadership. That has been the truth in all too many elections in the United States in recent times where people are literally trying to choose which evil is less harmful. Some have gotten to the point that they have finally refused to vote for the lesser from two evils and they refuse to ever again vote for evil no matter how slight. These voters are demanding the parties to put forth candidates who are capable of leading and representing the people with integrity and virtue. This might even lead to making a third party or independent candidate to have a real possibility to take elections and possibly change the American political landscape once again. Perhaps it is time for a new political movement as the last great movement was the Abolition Movement which birthed the Republican Party and the Whig Party was laid to rest. The more likely bet is that the two major parties have so slanted and poisoned the election laws throughout the United States that it has become next to impossible for any third party or independent candidate to make the ballot, let alone have any funds remaining should they manage to make ballot, and trust I know from where I speak. This is really a sad problem as this may prevent a new direction to be proposed and placed before the American electorate and instead continue forcing them to choose between two toxins, progressive Democrats who want to double the size of government every decade, or the progressive Republican who wishes to slow government growth so that it doubles only four or five times each century. Since both the major parties are in favor of growing government and the sole difference is exactly the rate of growth the American people can rest assured that over time the Republicans will seem like the Democrats of a few decades back while the Democrats will be breaking new ground which the Republican will fall in love with a few decades hence. Should this trend not be reversed soon the United States will continue in decline and only accelerate with time.

Beyond the Cusp

Putin Threat Harbinger of Greatest Danger to America

Putin made an unveiled, direct threat focused to cause President Obama to stop and consider if he really desires to enter a financial war with Russia when he threatened to end his nation’s practice of utilizing the Dollar as their reserve currency. In many ways such a threat is an empty one holding little credence as very few nations would accept the Russian Ruble in payment for resources or other transactions between nations and would still demand that Putin pay them in Dollars or at least Euros. But that is this very moment and the future does not promise that the dollar will continue to be the reserve currency of the world. That begs the question of what will become the world’s reserve currency and what will such a change do to the power and credibility of the United States?

There have been many in the recent few years who have sought to find an alternative to the American Dollar as the reserve currency of the world. Most of those proposing such oppose the United States though they are not adversaries on the brink of actual war. These nations all have a couple of items in common. They are all developing nations recently joining the advanced industrial world and are entering the information economic world and are struggling to be on a par with the United States. For the reason of gaining an advantage of equal footing with the United States, many of these nations have proposed a multi-currency reserve usage if not their currency replacing the Dollar. Now there are those who believe that virtual is better who talk of a world currency driven by demand to set its value such as the bitcoin. Where the bitcoin is a quaint idea and the whole concept of a virtual universal currency, such an idea has one very glaring drawback, no nation is going to go willingly to such a system that is outside the political control of governments, though such would provide a useful reality in the monetary markets of the world. Bitcoin is an unlikely choice as the originators are not quite as well connected as would be required for nations to trust such a system thus bitcoin would need to compromise with international political powers before they could be accepted as the new universal currency. Expect some more prominent and well know entities to enter the market of virtual money with Pay-Pal, which is mostly Dollar centric, having already taken steps in that direction.

Some of the major competitors to the Dollar are the European Euro; the main reason behind the European Union was to establish a trade center equal to the United States market and the establishing of a currency to rival the Dollar, the Chinese Yen and a few others. Which nations and currencies are vying for the title of the replacement currency for the Dollar is unimportant as long as the Dollar retains sufficient stability and recognized value making it the continued universally accepted currency. Even those places which have decided to accept currencies other than the Dollar still rely on the Dollar for the setting of the value of the other currencies thus even when using the Iranian, the Chinese Yen or the Euro; these currencies are accepted in trade depending on their value as measured against the Dollar. So, even if you are paying with some other currency, your bill is still being charged in Dollars and your payment is in an equivalent amount of another currency.

So, what will it take to change the reserve currency of the world? One large step would be to have OPEC begin to use a different currency for purchases of crude oil. There is a reason the Dollar is often referred to as the Petro-Dollar, because the true value of the dollar is the amount of oil that can be purchased with a set amount of Dollars. Thus far, the only places accepting alternate payment for crude largely have been Iran. The reasons are obvious; Iran is attempting to weaken the Dollar as part of their offensive against the United States and the Western nations. The real test would be if the GCC (Gulf Cooperation Council) and especially Saudi Arabia were to stop accepting Dollars and choose another currency or group of currencies in payment for their crude oil. Even should these nations simply start accepting alternate currencies it would weaken the value of the Dollar and would be the initial step to the devaluing of the Dollar to the point that it would be dropped as the reserve currency of the world. If you question what affect such an event would have on the United States if the Dollar of today ceased to be the reserve currency of trade tomorrow, you only need look to the nation that once before minted the dollar that was the reserve currency of the world, Spain. The Spanish dollar which was the originator of the phrase “pieces of eight” as it was a bar of gold that was able of being separated into eight equal pieces that was the currency of trade. Part of the reason behind this was the Spanish exacted a serious penalty for anybody caught shaving their dollar, death. We need to remember the death of the Roman currency system and possibly a large contributor to the death of their empire was the shaving of Roman monies by, at first, the most unscrupulous and eventually it becoming almost commonplace such that it became necessary to weigh each Roman coin before accepting its value.

The Dollar is currently being shaved by a new destructive force, inflation. Because the United States has adopted the practice of simply printing monies in order to finance the government stimulation of the economy, a practice with a dodgy history and limited effect currently, there is going to come a time of rampant inflation in the United States which will result in a drastic devaluation of the Dollar. This devaluing of the Dollar will hurt far more peoples than simply the American public; it will hurt any nation holding large reserves of Dollars. This looming threat is also behind many nations’ nervousness with holding any excessively large amount of Dollars or American certificates or bonds which are Dollar based. This is what urged China to finally stop purchasing more American debt by buying bonds backed by Dollars. This, in turn, led to the Federal Reserve purchasing the Treasury Notes necessary to print additional Dollars, a practice which has artificially sustained the stock market prices and is leading them to new heights. This is an empty valuation as with time the Dollar will have to fall compared to the other currencies of the world which will make the higher priced stock market return to a value that truly represents its actual worth. The real fallout of this eventuality are the other nations whose currencies are directly tied to the Dollar and any nation with excessive holdings in Dollars as well as all those heavily invested in American companies’ stocks which are valued in Dollars. The first signs of the near universality of the effect of a devalued Dollar have been displayed each time the Federal Reserve had threatened to stop its constant Quantitative Easing which is a euphemism for making money, Dollars, out of thin air, and never a good idea. The nations whose currencies took direct hits resulting from such Federal Reserve threats are the nations most vulnerable due to their heavy investment in Dollars. This is what was behind the Chinese fire sale selling off a large portion of their Dollar reserves a few years back. That sell off came within six months of China refusing to purchase additional Treasury Notes, i.e. Dollars. Yes, the Dollar has become extremely vulnerable and yes, the Dollar may very well be on the verge of a collapse and no, we have no idea what the far ranging effects on the economies and currencies of the world when the American Dollar falls beyond the cusp into a great chasm of debt riddled valuelessness. We may not have to wait decades for an answer, but it would be best to never be in the position of realizing that everything we thought had value had become worth the cloth/paper it was printed on and not the value the pretty designs and numbers inferred. That will be a day of reckoning, a great and painful reckoning.

Beyond the Cusp