Politics and Economics

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Defence? Existential Threat?

I do not understand how the leaders of the United States and the United Kingdom can continue to provide diplomatic cover, weapons and military support to Israel. The latest outrage, killing 90 and injuring 300 others in a safe area only confirms this is not a war against Hamas it is against the Palestinians. It was allegedly aimed at two Hamas leaders. It will be interesting to see how the doctrine of proportionality is applied to this.

The justification is that Israel has an absolute right to defend itself against the existential treat posed by the terrorist organisation Hamas, who are responsible for all the civilian deaths because they hide amongst them.

I may be missing something, but I think this justification has limited merit at best and none in relation to the scale and nature of the response to the atrocity.

On 10/7 approximately 1,200 Israelis were murdered and in addition “over 230” Israelis were taken hostage in a barbaric attack. Since the commencement of the war on Hamas, according to Wikipeadia, up until 24 May 2024, an additional 1,478 Israelis had died, giving a total of 2,678 Israeli’s killed at that point.

Over the same period approximately 35,500 Palestinians had died, many civilians, women and children. Killed in what appears to be an indiscriminate bombing campaign.

In addition Gaza has been reduced to rubble making most of its 2m plus inhabitants homeless, reduced to living in temporary accommodation without adequate, water, food, or medical support which it will take decades to recover from. In the West Bank some 500 Palestinians have been killed by the Israeli Defence Force or illegal settlers.

This is what an absolute right to defend oneself against an existential threat against a perfidious enemy who hides behind civilians looks like.

But does the justification that leads to such carnage stand up to scrutiny. The justification is not new. It is one which has been deployed by successive Israeli administrations.

Indeed, the State of Israel has been defending itself since its self-declaration in 1948, occasionally by taking pre-emptive actions against anticipated attacks, as in the Arab Israeli war of 1967.

What is common, and quite remarkable, in all of these campaigns of self-defence is how much territory Israel has gained at the expense of the Palestinians. The two maps below show the original borders of the Jewish and Arab States as proposed by the UN in 1947 and the current plan per PM Netanyahu.

The Israeli state is clearly very adept at defending itself. Existential threats have consistently failed in the past.  However, to be fair, the fact such threats have failed in the past does not mean such a threat does not exist now.

So, how credible is Hamas as a threat to the existence of Israel?

Comparing the relative military capacity of Israel and Hamas using rough and ready numbers secured mainly from the CIA World Fact Book shows that Israel has between 250 and 350 jet fighter bombers / Hamas has some (number unknown) Microlites; Israel has 170,000 trained military personnel on active service and 300,000 trained reservists / Hamas has between 40,000 and 50,000 trained soldiers; Israel has circa 1,300 tanks, 7 Corvette Warships, circa 90 Nuclear Warheads / Hamas has nil tanks, nil warships, nil nuclear warheads.

Israel receives c$3.5-$4bn per annum in military support from the United States and can freely import munitions and supplies from around the world.  Hamas is provided with rockets from Iran which have to get through an air, sea and land blockade into Gaza. The rockets when fired have to get through the Iron Dome missile defence system which is claimed to be effective in intercepting 90% of missiles targeted on Israel.

In terms of supporters, Israel has the United States, and that support becomes “ironclad” when any third party threat (Iran) seems imminent. When the War on Hamas started the US moved 14 warships into the Eastern Mediterranean to deter any such threat.

If Isael was engaged in a conventional war against Hamas, then Hamas wouldn’t even come second.

But, of course, it is not a conventional war. The Israeli Defence Force (IDF) has made much of the immorality of Hamas using the civilian population as a shield. As I have pointed out elsewhere this moral high ground is more than undermined by the IDF’s willingness to shoot through that shield.

But if we consider for a moment the logic of the critique by the IDF in the context of the asymmetric balance of military power. It amounts to a demand that Hamas, commit suicide.

Terrorists around the world, like the ANC in South Africa, The IRA in Great Britain, the Vietcong in Vietnam, and indeed the Irgun in Israel in 1946 have refused to fight fairly. They have refused to take head on the overwhelming military supremacy of an occupying power.  

The truth is there is no existential threat, this is not defence. At best it is ethnic cleansing. Unfortunately, the group being cleansed have nowhere to go. Which means the longer this goes on the less it looks like ethnic cleansing and the more it looks like genocide.

What is happening in Gaza and the West Bank is obviously a moral outrage. The longer our government continues to support it the lower our moral and diplomatic standing in the world. This is not and will not be mitigated by appeals to our having exhorted the Israeli government to stick within the rules of International Humanitarian Law.

What is happening needs to be condemned unequivocally. Further, there should be an immediate recognition of the State of Palestine. After 77 years the recommendation of the United Nations should be given some support on the Palestinian not just the Israeli side. Recognition would perhaps lead to a stronger commitment to serious negotiations on the Israeli side.

Whilst what is happening to the Palestinian people is horrendous and their capacity to respond in kind is nonexistent, my concern is not just for them. The Israeli people have been taken down a path by Prime Minister Netanyahu which will have, I fear, serious consequences for them. It will obviously be a moral stain difficult to eradicate and one which has and will continue to shift global public opinion against Israel.

Even when the “war” ends, as independent reviews of what happened are conducted, there will be a drawn-out documentation of atrocities.  Surely, it will start on 10/7, but then it will proceed. Covering month after month after month of death and destruction wrought on the Palestinian people. Slowly building a picture which is almost certain to undermine the credibility of the claim that Israel had to defend itself against an existential threat.

Ironically, and sadly, it may prove that the Israeli defence has created more of an existential threat than the Hamas attack.

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Alexi Navalny RIP

The death today is yet another example of what happens to critics of Vladimir Putin. An incredibly brave and industrious searcher for truth. His humanity and commitment to democracy in sharp contrast to that of the man who had him locked up and murdered after his first assassination attempt failed.

This is the man that ex President Trump said could do what he wanted to those states in NATO that did not invest 2% of their GDP in defence! If ever two threats to democracy deserved each other.

Here’s an example of Alexi’s work exposing the corrupt excesses of Putin world. It illustrates the enthusiasm and raw energy of a genuine patriot who cared for his country and ultimately gave his life trying to preserve it from the predatory gangsters led by Putin.

This is a sad day for Russia and the Russian people.

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Could the recently discovered LizKwasi-22 virus become a pandemic?

While the economy is still reeling from the impact of Covid-19, which
undermined government receipts and massively expanded its expenditure,
another viral challenge has appeared, LizKwasi-22.


The symptoms of this aggressive disease include a feverish increase in the
temperature of financial markets, political delirium, and public nausea. It results
in a weakening of national finances, accelerating economic decline, and national
despair. The cause appears to be a new strain of the BrexCon-16 virus which has
already mutated twice, each time becoming more deadly than before.

The latest variation seems to involve the ill thought through application of blunt
force trauma to national finances. So far attempts to overcome it with evidence
and common sense have had limited success. Indeed the virus seems to
continue to promote itself in new areas of economic policy.

One of the big lessons of the 2007/08 contagion was how incredibly interlinked and
fragile the national and indeed global financial system is. Problems in one area
have a habit of spreading quickly causing mayhem in areas thought to be unconnected.

Few people had ever heard of Liability driven investment strategy (LDI) prior to
last week. Those that had might have assumed, given it was to do
with pensions, that it would be a sleepy, low risk part of the market. Much like
home finance was assumed to be before 2007/8.

So when the Liz/Kwasi-22 fiscal intervention first struck it looked as though the
impact was all about a massive increase in the costs of public debt and,
consequently, mortgage costs. Over the weekend, however, the problem
metastasised. The increase in yield (effectively the interest charge) on
government bonds (gilts) is made to happen by pushing down the value of the
gilts.

Unfortunately, gilts were being used as security for sophisticated (ie. risky)
financial products to enable pension funds to manage the swings in value of their long term liabilities to pensioners.

As the value of gilts went down lenders to the pension funds demanded cash to
address the fall in their security. To fund this pension funds sold off gilts pushing
the price even lower creating a vicious circle of falling values and growing cash
calls. There was a growing risk of a £50bn fire sale of gilts which would have
taken Britain to the brink of financial crisis.

Staff from the Bank of England and the Treasury worked through the night of 27 September to create the £65bn support package which steadied the gilts market when announced the following
day.

If one wanted to see a benefit in this whole episode it might be that it had shone
a light on a massive part of the financial system (£1.5 trillion) where effective
regulatory inoculation does not exist.

Despite this near death experience Liz/Kwasi-22 continues to undermine the
health of the financial system. The latest outbreak related to the rejection of a
proposed limit on the number of low-tax investment zones. It is feared that this
may create a massive (£12bn) loss of government revenue, further undermining
investors’ confidence in the capacity of the government to pay its debts.

At least with Covid-19 there were sensible people around the world working to
identify a cure and a vaccine to inoculate the world. Sadly, LizKwasi-22 not only
causes damage to the bodies economic and political organs, it insidiously
undermines attempted cures by discrediting the doctors. Indeed it also “lays the
ground” for its further growth by destroying the regulatory vaccines that impede
its progress.

At the moment the main damage is confined to the UK, however there are well-
founded fears of contagion with the transmission of the disease to the global
economy. The IMF has already indicated it is keeping an eye on matters. Let
us hope it doesn’t have to declare LizKwasi-22 to be a pandemic.

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A Rock and Hard Places

In securing her position as leader of the Conservative Party Liz Truss spoke with fervent determination and committed to overturn the existing orthodoxy which was about the distribution of wealth and not its creation. Her overriding commitment would be to “growth, growth, growth”. And the way to secure that would be by reducing taxes and regulation which was choking entrepreneurialism.

Those that challenged her approach were quickly labelled the anti-growth camp. A camp which has grown to include Treasury mandarins, most of the economics profession, the Bank of England, the IMF a range of think tanks, obviously all the opposition parties, indeed, now one feels left out if not included in the anti-growth camp.

Leave aside the fact that few, if any, have said they are anti-growth. “Growth, growth, growth”, like “education, education, education” and “health, health, health” are slogans few people take exception to. Questioning whether low tax and light regulation lead to such growth, and also if it does whether it results in all boats floating is not the equivalent of being anti-growth. However, that is for another time.

The cack handed first steps toward implementing this break with orthodoxy has created widespread concern and a sharp focus on how the PM is going to resolve a problem of her own making.

She now has to explain how she is going to fund the debt created by the promises she has made. That is going to be tricky. She is caught between, on the one hand, the rock of investor demands, and on the other a series of hard places in voter and party members raised expectations.

Investors will not be bothered whether the funding of debt is through increases in government income, (higher taxes), or cuts in government expenditure, (austerity 2.0). One thing is certain, it is unlikely they will give much credence to the growth fairy. Unlike the long suffering British public they care nothing for the promise of jam tomorrow.

However, there are conflicting and powerful constituencies opposing or promoting both of these options. The public, and a large part of the Conservative Parliamentary Party will be very concerned with a second round of austerity when public services are already struggling. On the other hand, a large part of the Conservative Party membership and her close libertarian supporters within the party will not want to see tax increases.

Her strategy has not got off to a great start, to put it mildly. However, over the next few weeks as she wrestles with this dilemma it is set to become a whole lot more fractious. The only bright spot is that her claim she would be resolute in the face of opposition is not looking strong.

To misquote her hero, “U-turn if you want to. I’ll turn whenever I have to!”