Archive for March 29th, 2011

Neoconomics: Conscription and War as Wealth

Neoconomics: Conscription and War as Wealth

Posted By Grant Smith On March 27, 2011 @ 11:00 pm In Uncategorized | 15 Comments

Start-Up Nation: The Story of Israel’s Economic Miracle is a 2009 Council on Foreign Relations book brimming with anecdotes, assumptions, and advice.  Dan Senor and Saul Singer explain Israel’s entrepreneurial successes as products of Israeli national character through pithy quotes, high-tech case studies, and selective histories. The pair recommends America become more entrepreneurial by replicating Israel’s conscription based national service model.  But the authors’ foray into the economics of national entrepreneurship and innovation utterly ignores the demand side of this equation — Americans who increasingly view Israel more as a liability than asset — at their peril. 

To understand Start-up Nation‘s ideological framework, it is important to understand the biography of the book’s primary advocate and campus barnstormer Dan Senor.  The former American Israel Public Affairs Committee intern has previously credited AIPAC in his career trajectory, “whether I was learning the ins and outs of Washington with my fellow interns or attending briefings on Capitol Hill, my internship at AIPAC prepared me for my work in politics.” In 2003 the Harvard Business School graduate worked as civilian spokesperson in CENTCOM HQ in Qatar and later for the Coalition Provisional Authority in occupied Baghdad.  Senor co-founded a neoconservative think tank, the Foreign Policy Initiative with William Kristol and Robert Kagan “that promotes continued U.S. engagement — diplomatic, economic, and military — in the world and rejection of policies that would lead us down the path to isolationism; robust support for America’s democratic allies…”  Perhaps tellingly, little of this biography appears on the book’s jacket, which trumpets Senor’s experience as an investment banker.  Co-author Singer was an advisor to Congress before he moved to Israel.

Start-up Nation is peppered with accounts of how Israeli entrepreneurs leverage personal contacts made as battle tested conscripts in Israel’s army, navy and intelligence services.  Top telecommunications service and equipment vendors spring all but fully formed from Israel’s elite intelligence services while Israel’s other armed services purportedly provide an experience “much better than college.” We learn that Israel was “largely a barren wasteland” before being transformed by the entrepreneurial vision of national CEO David Ben-Gurion.  Palestinians, the Nakba, and Arabs in general don’t much figure in Start-up Nation except as “terrorist infiltrators” the nemesis of Israelis “kidnapped by terrorists” or to provide the menacing, isolating, encircling armed presence over which Israelis must constantly innovate to prevail.  But Arabs are never a potential market — past, present, or future.

Central to Start-up Nation‘s explanation for entrepreneurialism is the effect of “chutzpah” described as an Israeli trait of questioning everything in a manner bordering on insolence and insubordination.  The Israelis needed to improvise and operate creatively at the lowest ranks of the armed forces to beat Egypt and other adversaries in various armed conflicts, resulting in a smaller officer corps and ability of lower level conscripts to collectively throw out leadership that fails to perform.  This, according to the book, has created a culture of harsh “debriefings,” irreverence, and intolerance for mediocrity that migrates into the private sector.  Multinational corporate executives visiting subsidiaries or on tour in Israel are likely to face a corporate culture of unnerving questions such as “why are you the boss?  How come I’m not your boss?”

However, Start-up Nation airbrushes one vital and enduring truth — when Israel faces sovereign barriers to foreign trade routes, weapons, or technology; it tends to break other country’s laws and steal what it thinks it needs.  Ever sensitive to Israel’s righteousness, members of the massive Haganah arms theft and smuggling ring in the US in the book were merely David Ben-Gurion’s “emissaries” to America, not felons violating US arms export laws.  Theft of French Mirage jetfighter plans stolen to build the Israeli Kfir were justified to correct Charles Degaulle’s arms embargo, a “betrayal by a close ally.”  Al Schwimmer, a felon convicted for violating US arms export controls that went on to become a player in the Iran-Contra scandal, is a “swashbuckler” in Start-up Nation

Curiously, the book abides by Israeli military censor protocols when discussing Israel’s nuclear arsenal, referring to a “nuclear capability” while coyly suggesting clandestine entrepreneurial funding and covert operations “has reportedly made Israel a nuclear power.”  Start-up Nation hero Rafael Eitan’s role stealing highly enriched uranium from the US and Shimon Peres’ newly discovered (by another wing of the Council on Foreign Relations) offer to sell nuclear tipped Jericho missiles to apartheid South Africa go unmentioned in Start-up Nation, since they present unsavory (though representative) examples of entrepreneurial activity of the clandestine variety.  The implications and benefits of Eitan’s Lakam economic and nuclear espionage network, operational over decades in the US with American alumni such as Jonathan Pollard and Ben-Ami Kadish, also brooks no deep introspection in Start-up Nation

In public discussions of Start-up Nation, Dan Senor makes clear his core assumption is that “the West owes Israel” while focusing on how new Israeli businesses will cash in this chit by selling high value added exports into already competitive Western markets.   The incredible boon of early, ongoing, and total access to the US military and consumer marketplace (which accounted for the leading share, up to 38%, of Israel’s total exports over the past five years) is a demand-side factor that goes entirely unmentioned (and unthanked) in Start-up Nation.  The 1984 joint Israeli-AIPAC covert operation to purloin and leverage still-classified US industry secrets in order to win coveted market access is still an embarrassing secret unknown to most Americans.  The resultant bilateral agreement is the subject of ongoing complaints by US exporters that can’t overcome Israeli non-tariff trade barriers and floating infant industry tariffs, after a quarter century of trying.  Israel’s top exports to the US still more resemble those of pirates than innovators sailing winds of discovery into new markets.

In 2010 Israel’s second largest export (at $5.3 billion) to the US after gem diamonds, cut stones, and other baubles ($7.7 billion) was pharmaceuticals.  US drug makers have been long incensed over Israeli theft of patent medicine clinical dossiers submitted as a requirement to enter Israel’s market.  The Ministry of Health passed them on for use in “at risk” Israeli manufactured generic drug launches in the US and Israeli copycat drugs made for export to world markets.  Buttressed by an army of lawyers, Israeli generics producers can capture “80% of [US] innovators market…through patent challenges” according to industry analysts.  Israel, for years placed on a punitive US Trade Representative “Special 301 Watch List” for patent violations is since 2010 on probation (PDF), promising to pass laws in sync with developed country intellectual property norms and to stop undermining US industry innovations.  

Perhaps the major error of omission in Start-up Nation is that Israel has long benefited from demand subsidies created by “memorandums of understanding” quietly negotiated and signed with the Pentagon for Israel to provide services and equipment to US armed forces, gain access to the US military procurement system, and weapons purchase “offsets” and joint development agreements passed by Congress that create jobs in Israel rather than America.  None of this demand would exist absent a vast network of legal and illegal bribery*campaign contributions, favors to politicians, foreign policy conducted outside the purview of elected government, election law violations, embedded propaganda infrastructure, and unlawful activities for which Israel’s US lobby is almost never held accountable.

What makes the neoconservative economics of Start-up Nation so galling is the authors’ refusal to account for these massive non-market subsidies and distortions.  Adding insult to injury, the book recommends that the US now implement its own conscript-based “national service” in order to replicate the camaraderie, social networks, and national sense of purpose that allegedly propel Israel’s innovation society.  With the US unable to commit further troops to conflicts erupting across the Middle East, it’s highly suspect — though not surprising — that leading neoconservative advocates are subtly calling for the return of conscription, but would it truly be good for America?

As a major and well-publicized work, Start-up Nation has no less damage potential than such previous neocon manifestos as A Clean Break or Rebuilding America’s Defenses.  Unlike its ideological forebears, the dangerous assumptions behind Start-up Nation have not yet wreaked havoc on America’s social fabric, armed services, and treasury.  Start-up Nation‘s single redeeming quality is its loud and persistent call for irreverence and chutzpah.  This is an arm that concerned US taxpayer and stakeholders in Middle East peace should immediately take up against flawed “neoconomics.” 

The drive to normalize Israel’s state of perpetual conflict into a “comparative advantage” deserves a broad and contemptuous challenge.  “Why should America follow Israel’s conscript-based model, because there aren’t enough Americans already in uniform deployed in the Middle East?”  “Do gun sights really provide market insights that international internships and business development that respect rule of law cannot?”  “After years on the dole, doesn’t Israel now owe the West something, such as a bona fide effort to make peace with its neighbors and the return of captured territories?” 

American thought leaders should also ask hard questions.  If the US continues to subsidize this particular start-up nation, is it only exchanging venture capital for guaranteed perpetual conflict?

Read more by Grant Smith

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Thirteen Members of Congress Join Board of Advisors as The Israel Project (TIP) Expands on Capitol Hill

From: The Israel Project []
Sent: Monday, March 28, 2011 2:57 PM

Subject: Thirteen Members of Congress Join Board of Advisors as TIP Expands on Capitol Hill

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Thirteen Members of Congress Join Board of Advisors as TIP Expands on Capitol Hill
Tip Board of Directors Welcomes Robert “Bobby” Copeland and Randall Levitt Washington, D.C. Mar. 28 – The Israel Project has added 13 distinguished American legislators to its new Board of Advisors and two accomplished businessmen to its Board of Directors, expanding the organization’s reach and strengthening its efforts to educate the press, policy makers and the public with facts about Israel and the Middle East.

“I appreciate the commitment to Israel and to TIP by all our new members of the Board Directors and the Board of Advisors and welcome them to our expanding organization,” TIP Founder and President Jennifer Laszlo Mizrahi said in a statement. “It is gratifying to see that both Republicans and Democrats, both Representatives and Senators, as well as distinguish community leaders support TIP’s work and commitment to Israel and truth. We look forward to working with each and every one our Board of Directors and the members of Congress.”


Randall James Levitt is the president of the Nellis Corporation, a commercial real estate investment company based in Rockville, Md. He currently serves on the governing boards of Capitol Bank, the Jewish Institute for National Security Affairs and the United Jewish Endowment Fund of the Jewish Federation of Greater Washington. He is a graduate of Yale Law. 

Robert O. Copeland is the managing director of RST Development, a real estate development and management company. He is on the Board of Visitors for Old Dominion University. He currently serves as vice chair of the Institutional Advancement Committee and as a member of the Administration & Finance Committee. He is extremely active in his local Jewish Federation where he is a major leader. 


Sen. John Barasso, M.D.
(WY, R)

Senator John Barrasso, M.D. (WY, R)
Senator John Barrasso was sworn in to the U.S. Senate in 2007. He serves on the Republican leadership team as vice-chairman of the Senate Republican Conference as well as on the Senate Committee on Energy and Natural Resources, where he is on the Subcommittee for Energy. He is also on the Senate Committee on Foreign Relations, where he is the ranking member on the Subcommittee for European Affairs.

Sen. Robert Casey (PA, D)

Senator Robert Casey (PA, D)  Sworn into the U.S. Senate in 2007, Senator Robert Casey is on the Senate Committee on Foreign Relations and serves as the chairman of the Subcommittee on Near Eastern and South and Central Asian Affairs, which has jurisdiction over Afghanistan, Pakistan, Iraq, Iran, Israel and the Middle East. He is a leader in promoting nuclear security and combating the threat posed by terrorists obtaining nuclear material. Sen. Casey introduced the bipartisan Iran Sanctions Enabling Act, which authorizes the divestment of public pension money from companies doing business in Iran’s oil and natural gas sector, and cosponsored the Iran Refined Petroleum Sanctions Act to strengthen the president’s ability to impose sanctions on companies that help Iran import or develop refined petroleum. Both measures are now law.
Rep. Gary Ackerman
(NY-5, D)

Rep. Gary Ackerman (NY-5, D)
Now serving his fifteenth term in the U.S. House of Representatives, Rep. Gary Ackerman is on the House Foreign Affairs and Financial Services Committees. He helped craft the new, tough Iran sanctions law. He also authored a measure, invoked by President Bush, to impose sanctions against the Palestinian Authority for non-compliance with signed peace agreements.

Rep. Howard Berman
(CA-28, D)

Rep. Howard Berman (CA-28, D)
Elected to Congress in 1982, Rep. Howard Berman is on the House Foreign Affairs and Judiciary Committees. He was appointed chairman of the House Committee on Foreign Affairs in 2008 and currently serves as the ranking member. Together with the late Republican Henry Hyde, Rep. Berman wrote a law authorizing embargoes on nations that support terrorism.

Rep. Russ Carnahan
(MO-3, D)

Rep. Russ Carnahan (MO-3, D)
Serving on the House Committee on Foreign Affairs, Rep. Russ Carnahan has emphasized the importance of building strong relationships and promoting international cooperation as a way to further our national interests. He was sworn into the U.S. House of Representatives in 2005 and is currently the ranking member of the Foreign Affairs Subcommittee on Investigations and Oversight.

Rep. Michael Coffman
(CO-6, R)

Rep. Michael Coffman (CO-6, R)
Now serving on the House Committee on Armed Services, Rep. Michael Coffman previously served in the U.S. Marines and was deployed to Iraq twice. He is on the Armed Services Subcommittees on Military Personnel; and Oversight and Investigations. He was first elected to Congress in 2008.
Rep. Ted Deutch (FL-19, D)

Rep. Ted Deutch (FL-19, D)
A freshman representative and a lifelong activist in the pro-Israel community, Rep. Ted Deutch is on the House Committee on Foreign Affairs and is an expert on divestment from Iran’s energy sector. Rep. Deutch introduced the Iran Transparency and Accountability Act in the 112th Congress, with Senators Kirsten Gillibrand (NY, R) and Mark Kirk (IL, R) sponsoring the companion bill in the U.S. Senate, and Rep. Dan Burton (IN-5, R) cosponsoring it in the House.

Rep. Robert Dold (IL-10, R)

Rep. Robert Dold (IL-10, R)
Rep. Robert Dold was elected to the U.S. House of Representatives in 2010 and serves on the House Committee on Financial Services, which has jurisdiction over international finance, international monetary organizations and efforts to combat terrorist financing. He traveled to Israel last year and, in his first floor speech, declared Iran’s pursuit of nuclear weapons as a great threat and a strong U.S.-Israel relationship as the best counterforce.
Rep. Michael McCaul
(TX-10, R)

Rep Michael McCaul (TX-10, R)
A member of the House Committees on Homeland Security and Foreign Affairs, Rep. Michael McCaul is also the founder and co-chair of the Congressional High Technology Caucus, Green Schools Caucus, Congressional Cyber Security Caucus, Sudan Caucus and the Childhood Cancer Caucus. First elected to Congress in 2004, Rep. McCaul previously served as chief of counter terrorism and national security in the U.S. Attorney’s office in Texas, led the state-wide Joint Terrorism Task Force charged with detecting, deterring and preventing terrorist activity and served as Texas Deputy Attorney General under current U.S. Sen. John Cornyn.

Rep. Cathy McMorris Rodgers (WA-5, R)

Rep. Cathy McMorris Rodgers (WA-5, R)
First elected to the U.S House of Representatives in 2004, Rep. Cathy McMorris Rodgers has served as a member of the Republican leadership team since 2009. She focused on expanding and improving the use of new media. She is now vice chair of the House Republican Conference. She also serves on the House Committee on Energy and Commerce, where she champions a comprehensive energy independence strategy encompassing conservation and innovation while utilizing and expanding domestic energy sources.

Rep. Thaddeus McCotter
(MI-11, R)

Rep. Thaddeus McCotter
(MI-11, R)
First elected to Congress in 2002, Rep. Thaddeus McCotter serves on the House Financial Services and Intelligence Committees. McCotter was elected by his colleagues in November 2006 to serve as chairman of the Republican House Policy Committee, a leadership position which he chaired through 2010. He frequently writes articles about the Middle East and Iran.
Rep. Devin Nunes
(CA-21, R)

Rep. Devin Nunes (CA-21, R)
Rep. Devin Nunes was first elected to Congress in 2002 and serves on the Intelligence and Ways and Means Committees. A leader in the Republican Conference, Nunes currently serves as an Assistant Republican Whip. Nunes, whose family is of Portuguese descent, is in dialogue with officials from Brazil, Cape Verde, Mozambique and Angola about the establishment of democratic institutions, free trade and more open government. The American Made Energy Freedom Act, a Nunes bill, proposes the largest investment in clean renewable energy in history.

Rep. Adam Schiff (CA-29, D)

Rep. Adam Schiff (CA-29, D)
First elected to Congress in 2000, Rep. Adam Schiff serves on the Appropriations and Intelligence Committees. In 2007, Schiff became a member of the House Committee on Appropriations and its subcommittees – the Commerce, Justice, Science and Related Agencies Subcommittee and the State, Foreign Operations and Related Programs Subcommittee. Prior to working on the Appropriations Committee, Rep. Schiff served for six years on the House Committee on International Relations. He is now the ranking member on the Intelligence Committee’s Subcommittee on Technical and Tactical Intelligence, which oversees the technical aspects of intelligence gathering, as well as cyber security.

The Israel Project is grateful to Nancy Epstein and Richard Levitt, who have rotated off the Board of Directors, for their dedication and efforts to help The Israel Project over the years.

The Israel Project is an international non-profit organization devoted to educating the press and the public about Israel while promoting security, freedom and peace. The Israel Project provides journalists, leaders and opinion-makers accurate information about Israel. The Israel Project is not related to any government or government agency. The Israel Project authorizes and welcomes use of any part or all of this release/statement free of charge and without attribution.    

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