A.LOEWENSTEIN ONLINE NEWSLETTER

• Privatising the lives of children (and Serco is mummy)
• Melanie Phillips loves to hate and Zionists cheer
• The old fashioned idea of backing public assets and keeping them
• So much for a Jewish majority state
• Colombo wants affection in the world (and Tel Aviv is keen to make love)
• Real reporters in war aren’t looking to paint troops in a lovely, glowing light

Privatising the lives of children (and Serco is mummy) 26 Nov 2010 Britain’s Yarl’s Wood detention centre is run by multinational Serco. This Channel 4 story documents the effects on children in detention, such as ten-year Iranian Mehrshad.

Melanie Phillips loves to hate and Zionists cheer 26 Nov 2010 When a Jewish bigot – loved by many in the Zionist Diaspora because she loathes Muslims and embraces apartheid Israel – is revealed as she really is: The Spectator and contributor Melanie Phillips today published an online apology to a prominent British Muslim they falsely accused of antisemitism. Today’s apology, published on the Spectator website, follows an out of court settlement in which the magazine and Phillips agreed to pay Mohammad Sawalha “substantial” compensation and his legal costs. Sawalha, president of the British Muslim Initiative, took legal action over a blog post by Phillips published in July 2008 in which she accused him of calling British Jews “evil/noxious”. The apology stated: “On 2 July 2008 we published an article entitled ‘Just look what came crawling out’ which alleged that at a protest at the celebration in London of the 60th anniversary of the founding of the state of Israel, Mohammad Sawalha had referred to Jews in Britian as ‘evil/noxious’. “We now accept that Mr Sawalha made no such antisemitic statement and that the article was based on a mistranslation elsewhere of an earlier report. We and Melanie Phillips apologise for the error.” Solicitors acting for Sawalha said he was “delighted” to be cleared of the false allegation. Sawalha, a long-time campaigner for community cohesion in Britain, took the dispute to the high court after the Spectator initially refused to correct Phillips blog post, which alleged that he had referred to Jews in Britain as “evil/noxious” at a protest in London of the 60th anniversary of the founding of the state of Israel. Instead, the Spectator published a second story by Phillips, titled “Taking the airbrush to evil”, repeating the false allegation and casting doubt on the suggestion that the “evil/noxious” quote was the result of a mistranslation of the transcript of an interview. They continued to defend the claim even after an independent expert commissioned by both sides had confirmed that the phrase in the original transcript could not be translated as referring to Jews as “evil/noxious”, before finally settling shortly before the case was due in court. In October, the Spectator paid substantial damages and legal costs to the campaign group IslamExpo, of which Sawalha is a director, for an article it also published in July 2008. Matthew d’Ancona was editor at the time, replaced by Fraser Nelson in August last year. The article, written by Jewish Chronicle editor Stephen Pollard, called IslamExpo a racist, fascist and genocidal organisation.

The old fashioned idea of backing public assets and keeping them 26 Nov 2010 The corporate love affair with privatisation shows no sign of slowing down. But what if the economics are less than convincing? Nicholas Gruen writes in Inside Story that governments should more closely examine what they’re backing and why public ownership of key assets needs to be seriously considered. It’s not socialism, you know: Rather than simply getting budgets into operating surplus – mostly a very good thing – Australian governments have embraced the notion that all debt is bad. But most of the time debt is only bad if it’s used to fund recurrent expenditure – see Charles Dickens on the difference between small sustained operating profits and sustained losses; it’s the difference between happiness and misery. But debt can also help us fund investment. By focusing on the costs of debt but not its potential benefits, we find ourselves where we could have expected to be. Australian government debt has been lowered to zero with a mix of asset sales and a string of Commonwealth surpluses made up of that portion of surging revenues from the mining boom that wasn’t refunded to taxpayers as tax cuts. State governments, which carry much of the capital investment burden of the Australian public sector, have also borne down on debt. But the glories of unburdened balance sheets have been purchased at the cost of growing deficits in precisely the thing that higher government debt might have funded – infrastructure. Partly filling the gap has been private investment in some kinds of infrastructure, funded by tolls on roads and/or rent payments by government to investors. While superficially attractive, and almost certainly better than no investment at all, most of these public-private partnerships, or PPPs – in all manner of infrastructure assets, from roads and railway stations to hospitals and desalination plants – have been built at a higher cost to the public than would have been the case if they had been built the way they used to be, as government-owned assets built with debt finance. There are many small reasons why PPPs generate bad value, and one big reason. The small reasons all relate to the artifice required to involve private investors in some specific piece of capital, like a road, a hospital or a desalination plant. They need reassurance from governments that some future government investment – say a competing road or hospital – won’t “strand” their asset. As a consequence, the transfer of risk to the private investor is always uncertain, and where it can be brought about it’s usually at the cost of the government’s binding its own plans for infrastructure well into the future. This can involve huge and uncertain costs. The big reason is straightforward. Given that infrastructure assets are typically highly capital intensive, and even allowing for some reasonable loading for the risk of specific infrastructure projects, governments face much lower costs to mobilise the necessary capital to build them. Just as arbitrary debt restrictions imposed upon a household or a firm would be a recipe for long-term impoverishment (at least relative to what it might otherwise have achieved), so too for the public sector – and obviously so. Indeed, as Australian households have borrowed more and more, there is a particular perversity in arbitrarily constraining the borrowing of the entity that enjoys the lowest borrowing cost – the government – especially at a time when our largest cities groan under the weight of a widely recognised infrastructure crisis. If it means anything, fiscal conservatism should mean prudently building the net worth of the public sector and doing so in a measured way – that is, at an acceptable risk. In an environment in which some infrastructure assets typically enjoy a rate of commercial return well above the cost of borrowing (not to mention additional returns to society and improved environmental amenity), borrowing should be encouraged up to the point at which further borrowing would constitute an unacceptable risk. This is how public companies and many households are run. Had the NSW government chosen to fund the toll roads that now encircle Sydney, the state would have acquired ownership of a stream of revenue with a net present value of around $12.8 billion (in 2009–10 dollars), at the cost of increasing its borrowing by $7 billion, according to indicative modelling in a recent study [2] my colleagues and I at Lateral Economics carried out for the councils of Western Sydney. In other words, by taking on a little more risk the state would have set itself up to increase its net worth by around $5.8 billion. Factoring in the additional risk the government was taking on, we calculate that its net worth could have increased by $4.6 billion. By today over 60 per cent of the original borrowing would have been paid off, leaving a cash flow to the budget of $379 million each year after interest payments and even after provisioning for further principal repayments. In the unlikely event that New South Wales suffered a credit downgrade as a result of funding these projects then the investment – even taking into account the additional interest costs associated with such a downgrade – would still have been very worthwhile. One touted benefit of privatisation is that the owners of an asset have the incentive to manage it for the long term – in contrast to politicians whose objectives are often dominated by the next election. Alas, as Australians are beginning to realise, far from liberating us from the tyranny of the short term, private investment in infrastructure is yet another manifestation of the dominance of short-termism in politics.

So much for a Jewish majority state 25 Nov 2010 Zionism, we have a credibility and morality problem: Jews no longer constitute a majority in the land between the Jordan River and the Mediterranean Sea, according to an expert on Jewish demographics.  Prof. Sergio DellaPergola of the Hebrew University told The Jerusalem Post on Thursday that Jews – as defined by the government – now number less than half of the total population in Israel, the West Bank and the Gaza Strip. “If people ask when Jews will lose their majority, then it’s already happened,” DellaPergola said. “If one combines the Palestinian population of the Gaza Strip and West Bank, includes foreign workers and refugees, whose numbers have grown rapidly in recent years, and omits Israelis who made aliya under the Law of Return but are not recognized as Jews by the Interior Ministry, then Jews are slightly less than 50% of the population.” The finding is potentially significant in the context of efforts to reach an accommodation with the Palestinians. Former prime minister Ariel Sharon made a late-life political turnaround, unilaterally dismantling the entire Gaza Strip settlement enterprise and trending toward separation from the Palestinians in parts of the West Bank, out of a concern that, in the absence of separation, demographics could leave the Jews as a minority between the river and the sea, with implications for the Jewish nation’s sovereign capacity to determine its future. Prime Minister Binyamin Netanyahu, who last year conditionally backed Palestinian statehood, has also often cited concerns about Israel maintaining a strong Jewish majority. The 2008 Palestinian census found 3.76 million Palestinians living in the West Bank, the Gaza Strip and east Jerusalem, up 30% from 2.89 million a decade earlier. Within Israel, according to Central Bureau of Statistics figures issued last year, there were 5,569,200 Jews – 75.5 percent of the population. While DellaPergola says that Jews are already a minority between the River and the Sea, some critics charge that figures for the number of Palestinians living in the West Bank are exaggerated by hundreds of thousands due to double counting of the population of east Jerusalem, who appear in both the Israeli and the Palestinian census, and by including people living abroad who possess local identification cards. On Tuesday, DellaPergola released a report conducted on behalf of the North American Jewish Data Bank in collaboration with the Jewish Federations of North America. He estimated the number of Jews around the world at 13,428,300. More than 80% of Jews live in two countries: Israel and the US. The Jewish state has an estimated 5,703,700 of them, whereas about 5,275,000 are in America. DellaPergola said he had used a social categorization to estimate the number of Jews.  “I didn’t go by the Halacha,” he explained. “Instead, I used a social definition to determine the core population: Someone who identifies as Jewish and those with Jewish parents who have no other religion.” Using a broader, ethnic definition, DellaPergola believes there may be as many as 14 million people with Jewish ancestry outside of Israel who could make aliya under the Law of Return.

Colombo wants affection in the world (and Tel Aviv is keen to make love) Posted: 25 Nov 2010 05:20 PM PST While Sri Lanka continues to descend into a brutal police state and minority Tamils are discriminated against and shunned, of course Israel is more than happy to help a fellow country killing and repressing others: Sri Lanka’s navy is acquiring more fast attack craft as its role shifts to protecting the island’s exclusive economic zone following the end of a war, navy commander Vice Admiral Thisara Samarasinghe said. “We are acquiring six fast attack craft,” he told a news conference held to announce the navy’s plans to celebrate its 60th anniversary. “Four craft have already been delivered and we’re getting the other two in January.” Samarasinghe told LBO the latest vessels were acquired from Israel and were bigger than previous craft and capable of going further out to sea as the navy focuses on protecting its exclusive economic zone. Israel has been one of the key suppliers of arms, technology and expertise to Sri Lanka in its war against the Tamil Tiger separatists. Fast attack craft supplied by Israel in the early years of the 30-year ethnic war, which ended in May 2009, helped the navy fight the ‘Sea Tiger’ naval wing of the Tamil separatists and prevent arms smuggling. “We now need bigger vessels as our focus shifts to protecting the country’s economic wealth in the oceans,” Samarasinghe said. Elaborate plans to mark the navy’s diamond jubilee on December 09 include a naval exhibition, an international symposium and a sail-past that includes vessels from foreign navies, including the USA, UK, Russia, China, India and Iran. Samarasinghe said the navy is the first line of defence for the island nation and would increase vigilance of the seas and coastline to ensure terrorism does not recur.

Real reporters in war aren’t looking to paint troops in a lovely, glowing light 25 Nov 2010 General Leahy heads the National Security Institute at the University of Canberra and has a rather curious view of the media: General Leahy says the Defence Force sees some journalists as ignorant sensationalists with no interest in good news stories, and divides them into two camps: those it can trust and those to be shunned. Any serious journalist who embraces war blindly isn’t a journalist; they’re a propagandist.