TCS Daily


IPO Nation

By Jerry Bowyer - May 21, 2008 12:00 AM

Israel just turned 60 years old. In human-years, that's middle aged; in nation-years, that's adolescence. The stories will be almost all about national security, and why shouldn't they be? The state of Israel has been in mortal peril more than any state in memory. But what about Israel as a wealth creator, why ignore the money miracle?

Israel punches way above its weight class in initial public offerings, patents, and technology in general. It should - the nation is itself, after all, an IPO. In 1948, the country was an act of entrepreneurship - an idea, an implementation plan, setbacks and then success. In this way, it's a lot like its closest ally, America: utopian vision, harsh reality, painful lessons, improved performance. Like America, it had its failed experiments with central planning and inflationist policies in the 70s. Like the US it lurched towards markets in the 80s, and again in the 90s. Like America, it has staked much of its future on commerce with other nations.

But Israel has had a much tougher row to hoe. Its foreign conflicts are existential, not optional. Its local markets are far too tiny to sustain its economy. It needs trade in a way that very few nations in the world need trade to survive. Perhaps that's the secret to Israel's success - very small margins of error. My friend, and serial entrepreneur, Ron Morris (known to radio listeners as The American Entrepreneur) says that when he's broke his IQ goes up 10 points. Scarcity forces him to be smarter. Fat, dumb and happy go together with bad policy - thousand year old nations sitting on huge natural resources can afford mistakes. Refugees from genocide with brains, but not much more than the clothes on their back, can afford very, very few errors, and no really big ones.

The difference is in the national DNA, not the racial DNA. Israelis and Arabs are one race, cousins really, descendents of half-brothers, themselves descended (by their own traditions) from father Abraham. What, if not, different tutors of different histories explains why cousins living on different banks of the same river have such different levels of economic achievement that they can be seen not only from the stock charts, but from the satellite photos? Personally Israel's experience tells me that there's hope for us all.

Mr. Bowyer is chief economist of BenchMark Financial Network and a CNBC contributor. A version of this appeared on CNBC.com


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133 Comments

This is very true and…
I would add that the constant conflict Israel has endured has been an important catalyst as well. Necessity can be the mother of invention, and Israel has had to develop it's own arms industry to dfend istelf. A lot spun off that need.

So why didn't that happen for their Arab opponents?

The Arabs relied on the "buy, borrow, beg or steal" method to obtain and maintain the military and they are the dominant group in the region so they usually have each other to rely on. Also, none of them have ever been in danger of being wiped out, not even the Palestinians; which is still the possibility for the Israelis.

It should come as little surprise that they've also used this enterprising spirit in civilian endeavors.

Insha'Allah
I think this translates to 'mañana'.

American Revolution was not Utopian
If I remember correctly (which is probable but not certain these days), the American Revolution posited that whatever the outcome, a society that is politically and economically ordered after natural law (Revised Enlightenment Code) is better than its predecessors as measured by principle rather than material outcomes.

The Founders, being politicians, may have promised the Colonists two chickens in every pot, but I doubt they believed that they would be able to deliver. And they didn't deliver; the Colonists delivered themselves, particularly because King George no longer swiped the second chicken out of the pot. But sadly, it was all for naught, as we've replaced King George with Uncle Sam, who's just as jealous for his pound of flesh.

The Economics of Military Intervention
Yes Robert, I agree. Now Uncle Sam is the leader in the field of worldwide military intervention. The U.S. involvement in Afghanistan and Iraq is only the beginning. Africa is next. I guess everybody knows that.

The world order of the 21st century will require a global infrastructure that is safe and secure. It must become more advanced, and is ready for tremendous progress.

How will the global infrastructure be safe and secure?
Especially when so many of the world's citizens live under tyranny?

I hope you're wrong about the military intervention ...
But even if you're not wrong, I compare the costs of social intervention at home to military intervention abroad and note that the former vastly exceed the latter. America's economic implosion from unfunded entitlements may not occur if she returns to a principled approach to economic policy, but I can't see this happening in America or Europe, which shares the same fate with the added whammy of demographic decline.

The world has moved on since the Founders, and democratic governments have become little more than brokers placing hand-outs with constituencies, all of the foregoing being utterly blind to principle and consequences. And if the West no longer provides the backbone of the global economic infrastructure, who will?

Recall that capital goes to where it's treated best. 30 years from now, it's anyone's guess where that place will be.

The battle
The battle is convince voters to have principles that respect life, liberty and property.

If the Bible is any indication, God has been trying for thousands of years with little success.

Let's Look At The Important Race Issue
It has been my observation that people typically vote for their own self-interest. Take the good ol' "race card" for instance. Regardless of the race of the individual voter, individuals will overwhelming vote favorably for an issue that favors their race.

Liberty favors no race
Voters should then vote for liberty at all times.

Liberty As An Ideal Versus Fact In The Natural World
You have expressed a belief in an ideal. I only meant to describe an observation of the real, or natural world.

If you don't aim high...
Liberty is not natural?

I would rather strive for the 100% ideal solution and settle for 90% than aim for 50% and get it.

Still wondering...
how you propose to keep the global infrastructure safe and secure.

Auotmation
AUTOMATION

Of what?
Sky Net?

Aiming High 47 years ago
" I believe we possess all the resources and talents necessary. But the facts of the matter are that we have never made the national decisions or marshalled the national resources required for such leadership. We have never specified long-range goals on an urgent time schedule, or managed our resources and our time so as to insure their fulfillment."

" First, I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth. No single space project in this period will be more impressive to mankind, or more important for the long-range exploration of space; and none will be so difficult or expensive to accomplish."

"Secondly, an additional 23 million dollars, together with 7 million dollars already available, will accelerate development of the Rover nuclear rocket. This gives promise of some day providing a means for even more exciting and ambitious exploration of space, perhaps beyond the moon, perhaps to the very end of the solar system itself.

Third, an additional 50 million dollars will make the most of our present leadership, by accelerating the use of space satellites for world-wide communications.

Fourth, an additional 75 million dollars--of which 53 million dollars is for the Weather Bureau--will help give us at the earliest possible time a satellite system for world-wide weather observation."

http://www.jfklibrary.org/Historical+Resources/Archives/Reference+Desk/Speeches/JFK/Urgent+National+Needs+Page+4.htm

President John F. Kennedy
Delivered in person before a joint session of Congress
May 25, 1961

After that goal was achieved, the country decided to aim low and contemplate navels.

Yes
That's Right (especially in Africa)

Interesting, enlightening debate ...
... you two are having; that's why I check in on TCS regularly.

I think you're both right: Liberty is the best ideal, but when people are given an opportunity, they'll vote to burden others for their own benefit because they can't understand that in the long run, they'll be wearing the same chains of bondage.

Examples abound. If I'm not mistaken (meaning I'm going off of memory and not recent research), the federal income tax began at 1% of income on something like the top 5% of income earners. Today the AMT threatens to ensnare the middle class in the top tax rates. How did the federal income tax get from Point A to Point B? Elementary, dear Watson: The premise stated in the second paragraph above.

Politics proceeds simultaneously on battlefields spanning several areas, like 3D chess. There's the battle of ideas, the battle of constituencies (tribes), and the battle of jurisdictions (Congressional districts). For example, a God fearing, gun loving union member from Pennsylvania may vote for Rep. John Murtha because he brings home the earmarked bacon, regardless of Rep. Murtha's ideological failings, which are legion. Another observation: The most ideologically motivated voters may tend to be those who are in the best position to forgo direct federal handouts, such as the limousine liberals of San Fransisco. Senator Obama's appeal to suchlike must be ideological given his light-weight track record.

What's going on right now in politics posits a complex equation whose solution relies on too many unknown variables to either understand or predict at this time. That's probably what makes following it so entertaining.

?
?

The equation if very simple.
People make it complicated because they don't want to take responsibility for their actions.

Mr. Bennett, I believe you said you were a lawyer.

If people were honest, you would be out of a job.

It is really that simple.

You can just be honest...
and say you don't have a clue.

You can't be responding to me?

Eve
The very first story of people in the Bible is about how someone broke the law, lied about, tried to cover it up and blame someone else.

What has changed in those thousands of years?

Of course.

No, Not Really- But I Have An Excellent Plan
The world needs a great super-billionaire to arise in the early 21st century. The installation of a new, more advanced standard of living could yield this wonderful result. Our new world leader (American super-billionaire) could finance a large private army. Recruits could come from the world labor market. After basic training, the soldiers could earn $100 per week. Keep in mind, over 3 billion people on the earth currently earn less than $4 per day. (U.S. dollars)

While new inventions are required, with innovative automated technologies; a great global humanitarian project can occur. There's one more thing- full cooperation with the U.S. Air Force is required.

It's not April 1st again is it?

American Foreign Legion
" One solution that can be quickly implemented would be to create an American Foreign Legion that could assume a number of duties currently handled by the Army and Marine Corps. Here is my concept for such an organization:

* The American Foreign Legion would consist of three 8,000-man mechanized infantry divisions whose members would be non-U.S. citizens serving under a cadre of regular Army officers.
* Each enlistee would agree to serve in uniform for a minimum of ten years, after which he and his immediate family would be naturalized as American citizens. While serving, each AFL soldier would receive a salary and benefits similar to those received by the active-duty military.
* Initial training would consist of an intense, six-week English-language course for those unable to communicate effectively in English. Following that, the recruit would attend a 12-week Army basic training program. The training focus would be on basic mechanized infantry tactics and security operations. Every graduate would be qualified as a rifleman with specialized training conducted within the AFL division as required.
* The American Foreign Legion would have split responsibilities similar to that of the U.S. Coast Guard for peacetime and wartime conditions. "

http://www.military.com/NewContent/0,13190,Defensewatch_012104_Foreign,00.html

"The good news is that there is a large untapped resource of potential manpower that has not ever been considered by the army: huge numbers of young foreign military age males who have green cards and are eagerly seeking U.S. citizenship, or are awaiting visas in their homelands.

In exchange for U.S. citizenship at end of enlistment, these young men could be vetted and recruited by the army on five-year terms at recruiting stations in the United States andaround the world. Placed in their own infantry units, and led by seasoned U.S. citizen officers and noncommissioned officers, they could be trained in the latest techniques of light infantry tactics and counterinsurgent warfare, and appropriately equipped for that mission - forming, in essence, an American Foreign Legion.

Once ready, these Legion units could be folded into the deployment cycle of the all-U.S. units to Southwest Asia, thus easing the strain there. Eventually, this would permit a number of U.S. regular forces to be withdrawn from the deployment cycle and earmarked for other missions.

Equal pay and modified benefit issues would have to be worked out, and the overall expense might require some army hi-tech developments to be placed on hold, but that would be a small price to pay for relief of the current problem."

http://www.iht.com/articles/2006/02/28/opinion/edlong.php

With A Deep And Personal Consideration Of Your Opinion
That's a big 10-4, Joanie. I'll keep your advice in mind.

My disagreement is about only one thing.
When foreign soldiers serve in the U.S. Armed Forces; it is not a requirement for them to be allowed to become U.S. citizens, in my opinion.

Even better, people can defend themselves.
Iraqis are beginning to take control of their defense.

Japan is taking more responsibility for its defense.

The US has been encouraging this policy for decades. That is one of the tasks of the Green Berets, train a professional military in other countries to defend themselves.

The US sells its military systems to other countries which supports interoperability.

In addition, the second amendment must be enforced which will allow all of us to defend ourselves.

Even better: free market economy
An even better way to get the third world to participant in the world economy is to eliminate socialism and political corruption.

"“We used to look at Botswana as our poor cousin, but now we do all of our shopping there,” said David Coltart, an opposition member of the Zimbabwean parliament, when I met him a few months ago. The Coltarts are doing relatively well. David’s successful legal practice and parliamentary salary enable them to shop in Botswana—if only to buy basic necessities. Most of their countrymen do not have that option.

Zimbabwe suffers from an 80 percent unemployment rate and, according to the International Monetary Fund, an inflation rate exceeding 150,000 percent. Since 1994, the average life expectancy for women in Zimbabwe has fallen from 57 years to 34 years; among men it has dropped from 54 years to 37 years. Some 3,500 Zimbabweans die every week from the combined effects of HIV/AIDS, poverty, and malnutrition. Half a million Zimbabweans may have died since 2000, while some 3 million fled to South Africa alone. "

"That brings me to probably the most important legacy of Khama’s presidency: a limited government and one of the freest economies in Africa. (In its 2007 Economic Freedom of the World report, Canada’s Fraser Institute ranked Botswana’s economic freedom on par with that of Belgium and Portugal.) According to Scott Beaulier, an economist at Beloit College, “Khama adopted pro-market policies on a wide front. His new government promised low and stable taxes to mining companies, liberalized trade, increased personal freedoms, and kept marginal income tax rates low to deter tax evasion and corruption.” "

http://www.american.com/archive/2008/may-05-08/botswana-and-zimbabwe-a-tale-of-two-countries

Imagine:
"Imagine that you have taught your child that individual liberty is the highest political good, because if it isn’t, then there is no limit to the wrongs that can be justified against any individual in the name of some other good, such as the good of “the American people” or the good of “society” or the good of “the poor” or “the little guys” or “minorities” or “hard working families.”

Now suppose that this young man or woman you have raised according to these ideals becomes old enough to vote. How eager do you think he or she will be to vote for a candidate whose programs use the power of government to take something from some persons without their consent and give it to others? How eager do you think he or she will be to vote for government regulations that restrict freedom rather than enhance it? "

"It looks like about half of all Americans don’t understand how life and liberty really work, or they wouldn’t be voting for the madness that passes for modern liberalism. No one committed to the ideals of self-reliance and voluntary cooperation or any of the other ideals just noted can reasonably seek the morally bankrupt collectivism that dominates our contemporary political scene. So we’d better take a second look at how were bringing up our kids -- and ourselves. We’d better take a second look at what we expect from government. A lot of people these days feel entitled to health care, child care and retirement benefits paid for by someone else. A lot of people expect governments to care about them, feel their pain, and provide for their material security. Not a lot of people these days understand that freedom takes work. Not a lot of us are willing to assume the responsibilities of competent adults."

"Judging from how we vote, many of us would rather be children of the state. Maybe the burdens of freedom are too heavy for us Americans. Maybe the price of freedom is too high for us."

http://www.townhall.com/columnists/LyleHRossiterJrMD/2008/05/26/competence_and_freedom?page=2

It is still a simple equation. Liberty or tyranny.|

Cell Phones Improve Public Safety
Now that many young people carry cell phones, the level of safety for students is better when they are walking to and from school.

Especially now they can be tracked.
Parent can now track their children's cell phones and know precisely where the cell phone is.

What a great way to condition our children to government monitoring!

Cell phones can be tracked without your permission
"No one saw the fiend who dumped Imette St. Guillen's body by the muddy shoulder of a dead-end Brooklyn road.


But a tall, blue electronic sentinel stands just around the bend — and sources say it puts prime suspect Darryl Littlejohn at the scene about 2 1/2 hours before St. Guillen's corpse was found.

The NYPD traced Littlejohn to that lonely corner of East New York, off the Belt Parkway, by tracing the invisible "pings" that his T-Mobile cell phone sent to the antenna-studded tower, sources said.

The big, blue tower apparently took notice that Littlejohn's cell phone was nearby, even though he wasn't making a call — and it stored that information, which was later retrieved from T-Mobile by cops.

"It's a way to track people that is stronger than relying on witnesses," a police source said. The Daily News found the tower, about four blocks from where St. Guillen was discovered, and at least a dozen more along the 5.7-mile stretch between the site and Littlejohn's Queens home.

http://www.nydailynews.com/news/crime_file/story/399849p-338804c.html"

"Oh, and one more item to keep in mind: remember, your phone doesn't even have to be 'on' for this to work. So long as the battery is plugged in, it is 'live'. And if they want to, your cell phone company (at the behest of the authorities?) can turn on the mic to listen in on your conversations even when you aren't using the phone.

Yeah, you're carrying a tracking device in your pocket. And a 'bug'. Welcome to the future."

http://www.unscrewingtheinscrutable.com/node/1621

The only way to ensure your cell phone is not being tracked is to remove the battery.

When your phone is on, it is in constant contact with the closest cell tower and the signal can be triangulated from other towers.

What have (and WHY should) Bible and GOD got anything to do with politics (voters)?
And, from a purely strategic point of view, why do you promote a method that has been - in your own words - failing for "thousands of years"?

What do you reccommend?
How do you propose to convince irrational human beings to have principles that respect life, liberty and property?

God's method has so far been the most effective, but it has obviously not worked for all. Free will and all that.

Why should emotion have anything to do with politics?
"the total complex of relations between people living in society "

This is one definition of politics from MW.

Religion is involved in the complex relations between people living in a society.

To ignore any complex relations among people living in a society will render the politics incomplete.

A moral case against big government
"A good but limited government is one that serves its citizens by exercising well its particular task and refraining from other tasks. Essential to government’s particular task is ensuring that other social institutions are free to exercise their own particular tasks."

"Identifying the proper tasks and limits of various social institutions is bound up with a society’s understanding of the good life and the good community-its moral vision of its defining goods and purposes. The case for good, limited government is therefore incomplete if it proceeds only in terms of the effects upon individual freedom or the fiscal implications of expanded government programs. Governing is a moral task, and the size and scope of government have moral implications for society, including its members’ ability to fulfill their ethical obligations to one another."

"Sustaining limited government and freedom turns on the question of how virtue is cultivated and which communities and institutions are most appropriate for this task. Local forms of association, especially the family and religious congregations, generate the thick, personal bonds that unite and motivate individuals toward the good for themselves and others."

"A good but limited government will thus acknowledge that other social institutions are better able to cultivate virtuous citizens, care for those in need, and further
true democratic freedom while exercising its own crucial responsibility to protect its citizens and social institutions from injustice."

http://conservativecolloquium.wordpress.com/2007/10/14/a-moral-case-against-big-government-how-government-shapes-the-character-vision-and-virtue-of-citizens/

How well any social institution, including religion, can support virtuous people will affect politics.

Any failure is not the fault of religious principles but of those people who choose not to follow them.

Marjon says that GOD fearing people are IRRATIONAL?
B'coz, that is exactly what the following posted by him means :-

"How do you propose to convince irrational human beings to have principles that respect life, liberty and property?

God's method has so far been the most effective, but it has obviously not worked for all. Free will and all that."

Still don't have a solution?
Why am I not surprised.

You still have work to do.
Why should I make you angry?

If I do, where is your charity?

So you accept that GOD fearing people are irrational? You sure are one of them
Otherwise, you won't talk of a "solution" to "free will and all that".

That is the nature of the beast.

I said people are irrational.
That includes ALL people.

Do you disagree?

Thanks Marjon, for confirming that you are IRRATIONAL. But speak for yourself
.

Spoken like a true military ignoramous
You say - "Equal pay and modified benefit issues would have to be worked out, and the overall expense might require some army hi-tech developments to be placed on hold, but that would be a small price to pay for relief of the current problem."

How ignorant and rediculous. You undid a pretty interesting idea with a single statement. Each "Hi-Tech" development placed on hold means means more years of wear and tear on old, out-dated equipment.

The Blackhawk, M1 tank, A-10, Bradley Fighting Vehicle and even the M-16 rifle and many others are in need of replacement with newer designs. Some of these are coming on line, others on on the drawing board, none is a non-critical peice of equipment for a mechanized infantry division; and every replacement piece is "high-tech". Many of these are also old, not just old designs, but old frames built in the 80s and early 90s. 20-Years is the general usable life of most of this equipment, and some of this dates back to the end of the Vietnam era 35 years ago. the M-1 began rolling off the assembly line nearly 30-years ago.

Marjon, any expansion of the military requires and needed and equitable expansion in funding. When you rob from one aresnal to create another you degrade your entire military force. Then, when the sh!t hits the fan you find yourself either overwhelmed or playing catch-up.

I would much rather reduce the size of our military and keep it supplied with next-generation weapons than go the opposite direction. To go the way you suggest just makes the personnel even more expendable than they already are.

Read the sources
I was just pointing out that many have proposed an American Foreign Legion for quite some time.

I agree the military needs new equipment and they need to change the procurement system to allow them to upgrade systems as improvements are made.

The IR Maverick is a great system but it was designed and built in the mid 80s. It still works but attempts to replace it have failed most likely due to the procurement process.

Old TV Mavericks were upgraded to CCDs. Why not extend the process and adapt the system to upgrade as capability improves? The Standard Missile system is another fine example of spiral upgrades.

I did say ALL.
You claim not to be an irrational human being?

So, that is your view of Man, an IRRATIONAL being? That is why you want God and Religion?
Again, speak to yourself.

CORRECTION to the above. The Message should read "Again, speak for yourself"
..

You claim to be a perfectly rational human being?
Wow, I have never met one of those.

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