Turning of the Tide

As Obama departs Israel, the white house has put out a press release declaring Israel has apologized to Turkey (for the mistakes made in the Marmara incident), that financial compensation (by Israel) to the families of those killed is forthcoming, that Turkey is once and for all dropping the accutsational rhetoric, the litigation of Israeli servicemen, restorating diplomats and that relationships between Israel and Turkey are re-normalised.

Huge bang for buck for Obama. Obama has more important things to do, the vast majority of which are inside America's borders. He has neither time nor spare resources to spend on fixing an Israeli-Palestinian conflict that neither the Israelis nor the Palestinians seem serious about wanting to solve.
A rich, highly-publicized, PR-laden visit to Israel, where 10 minutes before jumping on the plane he whips out a sledgehammer and hits the Israel-Turkey relathions machine in -exactly- the right spot, gets the machine to roar back to life, departs with a smile, ticking off a big-ticket achievement for his resume and not needing to worry about this area of the world again (and its associated lobbies) for the rest of his term.

Masterfully done.

Huge win for Turkey's Erdogan, in the eyes of both his voters (Turks) and his clients (Liberal Muslims the world over). You see, Erdogan is in business, and the world's Muslims are his market.
He is in the business of selling to them a new brand of liberal Islam that competes with the Iranian Shiite, Saudi Wahabi and Egypt's Salafist conservative dinosaurs.
His product's proposition? A proven version of political Islam largely compatible with western values, boasting a functional economy, sitting on a solid platform of a material (and vocal) NATO contributor as well as rich trade ties with both the Middle East and the West.
He's selling a vision every arab-spring revolutionary (note: both the secular freedom fighters of Syria and Lybia or the possibly to-be fanatic fruitloops of the radical Al-Nusra brigades) want to buy.


He's doing very good, thank you for asking.
And he's just handed his PR department a "hard-earned" win in an arm-wrestling match with Israel.

Oh, he's happy all right.

And... Israel.
This is a win for Israel for a long list of obvious technocratic reasons.
It restores business and trade, probably starting with the reinstatement of some parked defense contracts. Money talks.

It restores diplomatic ties and improves support for Israel's position in the world (both West and Muslim), as with "Turkey's cooperation on improving the situation with Palestinians" comes a silent approval-by-default of what Israel does there, except where explicitly stated otherwise. That in turn impacts trade with other places in the world. Money talks.

It lays the ground for trust to start building up, (and tourism business to start coming back
and so forth. So money talks.)

Despite the pride, Israelis seem to intuitively understand this. Ynet - Israel's main tabloid where sensationalism, an entire industry of paid talkbacks and hoards of emotionally-swayed readers are famous for running high on the national stiffy scale - even this readership qualified the decision with a 55% support rate.

All that is true.

But there's a bigger picture here. A seismic happening underwater, whose first visible effect is the apology we're witnessing.

Understanding it is understanding that Bibi Netanyahu - Israel's Prime Minister - is not (and has never been) the bus driver. Bibi Netanyahu is merely the bus. In Israel's minoritocratic (e.g. perpetual hung parliament) political system, policy is made by the coalition partners, not by the main party glueing them together.

In the years past, this policy was driven by the person who had a foreign-policy-oriented political gun to Bibi's head - Avigdor Lieberman, a hawkish (at times, to the point of fascism) major coalition partner representing the hard-line soviet-immigrant seventh of the Israeli voting public.

Two things happened in these elections - he merged his entire party into Bibi's just before (securing a personal position for himself in the current parliament), and his voters (quite literally, all of them) walked out. His material contribution (in parliament seats) to the Likkud ended up being zero growth (albeit, perhaps, no shrinkage).

Lieberman's nationalistic stiffy is still in full swing, rest assured, quoted in the media saying the whole apology to the Turks is a mistake.
But Lieberman is now completely irrelevant.

The new coalition partners - the new influencers and drivers of policy - all sing a very, very different policy song. We can evidence it in this apology and will be in decisions to come - 

Hatnua - Livni's party, with Livni herself tasked with leading the Palestinian negotiations, has been the most pragmatic, sensible and well-meaning voice in normalising relations with all of Israel's neighbours (in a realistic, security-minded, non-unicorns kind of way).

Yesh Atid - Lapid's party, swept a sixth of the nation on a platform of sensible pragmatism that bolsters prosperity. They'd weigh in towards whatever helps the nation pay the bills and keep the lights on.

Even "Habait Hayehudi" - Benett's party that raked in all of Lieberman's hawkish voters - is a settler/liberal-entrepreneur philosophical hybrid. Even to them, entrepreneur-supporting pragmatism would counterweigh theoretical ideology enough not have gotten in the way.

The common thread to these three parties is their focus on economic prosperity rather than firmer borders as the principle method of nation-building (yes, even Benett, compared to the previous representatives of the same electorate), a method particularly popular with that younger generation forming the guts of the electorate of these three parties. It is no coincidence Obama addressed his Israel speech to them rather than a roomful of statesmen. These young people, embodied in the three newformed parties, are now quite literally the policy makers, and they share their nation-building dogma with their US counterparts - those who overpowered Romney and put Obama in office.
Obama was pumping morale into the veins of the local equivalent of his own team back home.

Bibi's new government coalition partners have emerged bearing a re-thought agenda for Israel, and if under the decades of letting his coalition partners drive his policy Bibi himself has any similar intentions of his own, his current assembly would allow him to play these out with a long overdue dose of pragmatism.

If the Israeli apology to the Turks won Erdogan and Obama a battle, Israel, as a nation locked in a struggle with its own demon, has just sounded the horn of a turned tide in an epic, generations-old war.

Wow.

A Reply to Malcolm Turnbull

I just caught this on paper print in the Fin Review today.

In Malcolm Turnbull's address to the nation for the upcoming Australia day, the following words profoundly resonated with me:

"The keys to prosperity have not changed. Our greatest assets are not under the ground, but walking on top of it."

I can't express how happy it makes me that our RIGHT WING is seeing and saying this.

Now, Malcolm, all you have to do to help tap our rich human capital and make your vision a reality is make it less painful for us Aussie entrepreneurs to spin up globally-competent high-growth businesses.

If you want a future that truly taps our national potential, it will not come from BHP Billiton or IBM. That stuff will all go to Asia.
To justify those high Aussie dollar wages, it'll come from a couple of guys in a garage (or a Melb Uni dorm), multiplied by the highest number you and I and all of us can make happen.

Undo the damage done by Howard, who advocated for small business at the expense of high-growth (read: mostly tech) entrepreneurship, and who laid out a vision where tertiary education is the privilege of the few. It should not be.

It's the small things that favored small businesses over large ones... but kicked out our best and brightest starter uppers in the crossfire. Like making it hard to crowdfund stuff. Like taxing stock options on the day they're given. Like all manner of stuff making it harder for small businesses to become big businesses.
Howard got 20 years worth - a generation - of our smartest and bravest to go to the US east coast to build their visions there instead.

Set in place BIG incentives to be the first country with an industry that tackles HARD PROBLEMS. Being first is a big ticket. It means you won't just sell locally. It means you'll sell to the entire world.

Like Denmark did with its tax incentives - making them a tiny 6-million-odd nation that sells 40% of the world's wind turbines. They put the right problem in front of their smartest people. And as a nation, they solved it before everyone else did. They now have a big-ticket item on their GDP to show for it.

Like Julia did with the carbon tax. Tell our boys that if they'll do the undoable and find ways to reduce emissions, you will help put wind in their sails, not let Gina Reinhart anchor them to the ocean floor.

The smart people are here. We have an exemplary education system. We've got the best engineers and scientists in the world. It's policy - coming from government - that can direct them to exploiting their capacity in ways that will matter on a global scale.
Help us make it happen here.

Rebrand the tall-poppy syndrome, that makes us revile those who succeed at fixing something.
The good sentiment is already there. Look at the Aussie faces glued to the telly watching our boys and girls shovel in gold at the Olympics after four years of grueling training. Look at the emotional connection, the spirit and the pride. Look at how we admire the Nick Caves, Kylies and Russels of the world - those of us who made it to Holywood.

We can and we should re-connect that sentiment to the people behind the Lyfx's, the Hitwises and the Atlassians - our self-made entrepreneurs that challenged the world and emerged victorious.

I want to be able to tell my 9-year-old that if he is brave enough to take worthy risks, solve hard problems and build a successful business around him as a result, this country, its government and people will embrace him for it.

Why Bibi Will Not Win

I'm only half-prophesying here. And I think it matters little how the 5-way center-left block will shape up.

It's mid-day in Israel and all we know is what the polls tell us (that Bibi will win). And that the turnout has been off the charts relative to all elections in history.

This is not surprising. And what it spells out is simple.

There are two competing approaches at nation-building. One involving stronger borders. Another involving a stronger spot in a collaborative global supply chain.
Mitt Romney argued the former, a point far more favorable in the 50+ age group phasing out than in the 25-30 group phasing in. Tom Friedman makes a good case for the latter. As the older generations leave us, support for it will only increase.
In the Israeli context, a very different debate is being held around very much the same topic - how to go about building the nation.
Bibi (and Naftali Benet) say stronger borders, playing the security to what his extreme right friends want to hear to support him. The center-left block says nation-building is directly tied to the prosperity of the middle-class.

The backdrop to both the US and Israeli situation is not 'the world is where it has always been, give or take some opinion'.
It's 'the entire world is on a clear, major economic trend'. It's not about how many humans live on this rock. It's about how many of them consume and require resources - steel, aluminium, copper, clean water, energy, engineers. It's not about the increase in population, it's about the increase in the percentage of it that consumes cars, mobile phones, ipads and everything in between.

And that number has gone up by over 400% over the past 6 decades.
Supply of the raw resources required to feed this, however, has not.
Result: As more big consumers (say, yet another 300 million in China, yet another 300 million in India, more in SE asia, East Europe and more in the Middle East...) buy stuff, prices of everything, everywhere will continue to drive up in absolute terms.
More expensive steel means more expensive tractor. More expensive tractor means more expensive butter.

If you live in Tanzania, you probably won't notice. You've likely been unable to afford consuming stuff on a developed-country-resident scale, and you're even further from it today.

If you live in Australia, you probably won't notice either. Your strong local economy, cheap debt and ready access to every raw material under the sun give you a big economic shock absorber, making the global price hike a barely noticeable phenomena. The worst that could happen is that your next phone will be an Android phone rather than an iPhone.
This is why Occupy Melbourne got zero attention. It didn't sting enough for anyone to care.

And then there's the countries whose middle class lives on the cusp.

Like the USA.
Like Israel.

Countries where the steady increases in cost just made 20% of the middle class drop out of the middle class. They don't degrade themselves, mind you. They just borrow, and realise at some point that they can't make ends meet anymore.

To them, it's not giving up the iPhone. It's giving up having a phone altogether.

This is why Occupy Wall Street was big.
This is why in September 2011, Palestinians held their first ever protest not against Israel, but against their own government and the cost of living.
And this is why in Israel, 100,000 people, nearly 1.5% of the country's population, got together last year and said there's a BIG problem.

Those people have a simple message: "We are dropping out of the middle class. Help."

Superficially, Bibi has an economic agenda. He has relieved Israel of 30% of its public debt over the past term. A more prudent look at indexmundi.com shows the Israel's private debt increased by the same 30 odd billion over this term. Bibi hasn't so much covered a sizeable chunk of the national debt... as moved it from the shoulders of the whole nation to the personal accounts of the middle class. Rather than economically benefiting the nation, he simply moved the problem to where he is no longer accountable for it - which drives me to assert his nation-building is not about building economic strength. All he is left with is what it says on the box - nation-building through stronger borders.

The high turnout in this election is not coincidental. Nor is it some baby boom that happened exactly 18 years ago. It's a measure of the number of people that got kicked out the middle class, and hurt enough to give a fuck about an election they otherwise did not care enough about. Their percentile strength is double-digit, and their pain swings only one way on the political spectrum. It's the same sentiment that just got Obama his second term ticket by a landslide the polls didn't predict.

Whatever distribution the polls (accurately) predict in the broader Israeli voting public will not apply to this added group.

Their nation-building starts with them being in the middle class, and nobody on the right side of the map is handing out middle-class tickets.

They will tip the scale. And Bibi will not win.

Weaponized Marketing - A Glimmer of Hope

The Israel-Hamas conflict has taken on a new turn. I'll give some commentary in the form of Q&A.

Q: Is this good or bad?
A: People getting killed isn't good. But what's happening is different in some subtle ways, and that difference could be a good thing.
I have never been as optimistic about the conflict moving off to new ground.
Possibly new ground that would no longer be able to sustain the ghastly status-quo for decades on-end, change the rules of the game, and lead everyone to re-think what's in their best interests.


Q: How has this played out in the past? (because the next question will be "what's changed?"
A:
[a] Hamas gets paid the bulk of its sustaining revenue by Iran, in exchange for teaching its kids to hate and fight an attrition proxy war of harassment against Israel.

In the present environment, this is done by throwing rockets (artillery), randomly, into Israeli cities. Not disputed territories. Not military targets. Not Strategic objectives that happen to be near a school or a hospital.

[b] Like any sane nation having its cities - schools, offices, hospitals, residences - bombarded, Israel's government is tasked with making it stop.
That's not a good situation to be in, but the response is predictable and understandable. It's to defend themselves. I don't buy into arguments against one's right to self-defence. They're hypocrisy. Guess what happens when someone threatens those who argue it.

Israel's approach to date has been to find a (typically rare) opportunity when they know the whereabouts of, say, the Hamas military wing chief executive, and have a gunship pop an anti-tank missile in his face.

What they argue happens as a result of this approach:
a - An analogue of Osama Bin-Laden gets vaporised (they should have stressed this comparison further as there is already widespread global acceptance sentiment towards putting an end to Bin-Laden)
b - The next guy to follow in his shoes is allegedly sent a very clear message on who he's messing with.
c - The next guy might be less Osama-Bin-Laden-Crazy than the current one.

In reality, only 'a' happens. Again and again we see how the theory that predicts 'b' and 'c' is wrong.
Israel has done this many, many times, and each 'the next chief executive' (or whoever) of the Hamas military has neither been trending towards sanity, nor heeding any particular message of who he's messing with.
It's a nice theory, but it just doesn't work. Evidence-based practice and all.

The cons of this approach don't stop with it not doing what it says on the box. It also creates wholesale collateral. It kills innocent people too.

It's bad because Israel's government is signing the death-warrants of innocents, bystanders, children. I am not against getting rid of the Osama Bin Ladens of the world. But I do think how we go about it sets us apart from them, and I do believe there is more than one way to skin a cat.
It's not the -consequences- of killing children, but the actual killing thereof. If your anti-tank weaponry ends up shredding a 9-year-old, I'm sorry, but you're bloody doing it wrong.

That said, it absolutely is bad because of the consequences of this collateral. It gives the Hamas a moral leg to stand on, or rather, cuts off Israel's moral legs so it's left legless on the floor, right next to that eliminated chief executive who lobbed rockets into Israeli schools.
And while any Israeli can successfully argue the difference, insofar as the rest of the world is concerned, it doesn't fly half the time.

Q: So what's changed?
Well, the IDF just grew up a notch (I'd argue that so did the Hamas, except the Hamas has made this particular step 20 years ago).

They finally (yes, in 2012, in a nation with an unprecedented technological literacy rate) realized this is a war that will be won with communication, public opinion, political pressure and the subsequent flow of big dollars, not just with bullets. If bullets could have won this, they would have long ago.
This time around, Israel has mounted an unprecedented PR offensive, that seems to be handled by professionals whose job is to convince large groups of people. Marketers.
The Hamas has been fighting this war in the BBC and CNN for years now, where the traditional media repeatedly falls for "Palywood" - an industry of staged newsbytes, produced to help victimize the Palestinians in the international psyche and level the moral playing field between the Hamas and Israel.


In the eyes of the Hamas, as in the eyes of all  dictatorial regimes, propaganda, lies, staged content and self-serving half-truths are totally fair game, as they are required to keep any dictator in power.

 They've spent the last decades perfecting an industry that time and time again successfully manipulates western media into misrepresenting the situation on the ground. By far not always, there's no cabal of Palestinian Illuminati controlling the world from a secret room in Venice (or of Jewish ones for that matter) but this nevertheless happens far too often. I've brought two documented examples here from the past week alone.

This time though, Israel's campaign didn't bother with the CNN and BBC. Instead, they went straight for the jugular - the social media.

Q: They have both been on Facebook and Twitter for a while. How is now different all of a sudden?
A. Being on social media is one thing. Changing what you say to increase the likelihood of getting your message out is another.
But to do that, you don't just call the Facebook office and ask them for exposure. You need social traction. You need a compelling message many people will care to like.
To that end, their campaign no longer says "We are victims" as loudly. It says "We are like you. We are sane.".
And that's very important, because on Facebook and Twitter, you live or die on how many times you get shared. In my personal experience as an Israeli expat, many of those who live abroad and intuitively understand that no matter how hard we say we're victims, nobody buys into this, would welcome a message with better capacity to convince.
Given such a message, they would go to the effort of sharing it with their non-Israeli friends, who in turn are more likely to bite and re-share. And it's these non-Israelis who are the target market of the campaign, as the Israelis expats themselves need no convincing.

Q: Big deal. How will a few more likes change anything on the ground? How will it change the attitude of the leaders of either side?
A: It already has, and it will go further.

Let's look back for a moment longer. The one set of ground rules Hamas did strongly heed are the rules of what it takes to get your message out.

They used to bomb restaurants with suicide bombers. The goal was not to get themselves reviled by the world. The goal was attrition on the Israeli populace, making Israelis live in their own borders never knowing where death would strike next. Terror, quite literally.
The Hamas then figured out they can achieve this same goal using artillery (rockets) too, and it would create far less of a PR mess for them than exploding Israeli restaurants do.
When was the last time you saw Hillary Clinton vigorously demonize them on CNN?
Mainstream media treats rocket fire with a 'meh'.
A marketing imperative drove a change in their strategy. And we're about to witness this again, further, only this time on both sides.

Q: How is Israel changing?
A: After the colossal failure of Israel's PR machine in the Gaza Flotilla incident, Israel has now very visibly laid out its intention to prioritise communication to the world's audience in its war effort, using our favorite social mediums. These have some physics governing them too, and both parties are already forced to bow to these to get traction.

One such rule - for the message to be popular beyond the in-crowd, they need to appeal to a globally shared set of morals.
Israel realised it needs to get back onto the moral high ground where their target audience sees itself to be. They need to sell a stronger moral position. They chose "We are as sane and well-meaning as you are" - a good start.

After a certain amount of singing this tune on a global stage, the cost of saying sane things but continuing disputed practices (e.g. Collateral-rich assassinations) will be:
a. a successful gunship pilot
b. a failed marketer
c. minimal or no vital message spread versus a strong anti-Israel message spread by Hamas on the backs of the innocents caught in the crossfire
d. An Israeli leader who gets ridiculed and pushed by global policies. And Israel is no autarky (too many people there say "we'll do whatever the hell we like as a nation" by day and complain about cost of imported goods by night.
No friends, expensive trade. Israel  needs trade, both in and out, to afford food, fuel and US dollars to buy steel to make guns.

Denial will eventually dissipate and the marketer's efforts will eventually get priority.

Q: How is the Hamas changing?
A: A different version of the same thing. Facebook and Twitter are not BBC. They're a two-way medium where criticism cannot be squelched, where 30 seconds are not it, and where lies and misinformation are perhaps easy to start but harder to sustain, because people with more access to real facts and no gun pointed to their head get to vote. Not four million Palestinian people, but over a billion Muslims, quite a fair few of which are sane and online. They vote with their like and share buttons, and THEY decide how mass-promoted and viral a claim gets. And guess what. A lot of them used to live under someone very much like the Hamas, and sacrificed friends, relatives, livelihoods and limbs to get rid of that shit. They'll have a thing or two to ask the Hamas before 'liking' and 'sharing' their song.
If you read Arab blogs, that long-overdue housecleaning process is already in full swing.

For the Hamas message to continue being appealing and viral to a post-Arab-spring Muslim world that is increasingly technologically literate and wants an India/China outcome for itself more than a Pakistan one, the Hamas will need to align with answer with those who control the outcome of their struggle - Qataris, Turks, Egyptians. They need to appeal to these people, because they need them to click on 'like' and 'share'. Like their move from restaurants to rockets, they'll need to move their core message a notch closer to sanity, and one notch further from victim and towards merit and earned prosperity.

Q: How is the environment around them changing?
A: The geopolitical backdrop has never been better - a shattered Iranian economy where what Iran can afford to give the Hamas diminishes by the day, the (inevitable, in my opinion) demise of Assad's Syrian regime, and Iran's brand of Islam losing major ground to Turkey's (and Egypt's, tho the jury is still out) newer, more liberal brands means less and less of the old world that the Hamas can go back to. This is a one-way road to eventual sanity, a shared moral ground and a shared realization everyone is better off with new untried ideas than with an old horrible yet morbidly tolerable status-quo.

Here's to optimism.