THE ISRAELI HAMAS CONFLICT IS SOLVABLE

I wish this were not a myth and am unsure whether it is or is not.  I'm not optimistic because this has been going on my entire life.  And I'm no kid.  As a financial planner, why am I commenting at all about the situation?  Because our firm works extremely hard to appropriately intervene in our clients lives (at their request, of course!) to not only keep them from making serious mistakes but to also enhance the successes they've enjoyed.  Maybe it's this quote from John Stuart Mill (interpreting Psalm 94:1-3)

“The only thing necessary for the triumph of evil is for good men to do nothing.”

Or, Korach, Numbers 16:1-18:32:

"Evil flourishes when good people do nothing"

I could keep going.

Unfortunately, this  good-guy/bad-guy ethic is often seized upon by people to justify terrible behavior.  The quote is a nice idea but life rarely delivers us neat and convenient dichotomies, does it?  Simply shifting from "nothing" to doing "something" regardless of what "something" may be is lazy, intellectually, morally and ethically.  Whatever "something" we choose should come after careful analysis, self-assessment and consultation with others.  Yes yes, now the dichotomists will counter, "Well what if your child is drowning.  Are you going to wait around for advice?" Of course not.  Great example of an exception, which all rules of thumb have.  Fortunately most of the key decisions we face as global citizens do not require instantaneous action.

So, to keep my biases out of it, I thought it would be interesting to ask ChatGPT, "What's the smartest way to respond to the Israeli Hamas conflict."  Note I didn't ask ".. if you're Israeli" or "if you're Palestinian"  Here's the result.  And I'm really curious what you think.

The Israeli-Hamas conflict is a complex and deeply rooted geopolitical issue, and there is no one-size-fits-all solution. However, several key principles and strategies have been suggested by experts and policymakers for addressing the conflict in a constructive and intelligent manner:

1. 1. Promote Diplomacy and Dialogue: Encourage both sides to engage in direct negotiations and dialogue to find a peaceful, mutually acceptable solution. International mediation and diplomacy should play a central role in facilitating these talks.

2. 2. Respect International Law: Ensure that all parties involved in the conflict adhere to international law and uphold the principles of human rights. The United Nations and other international bodies can help monitor and enforce these principles.

3. 3. Address Root Causes: Recognize that the conflict has deep-rooted historical, political, and socio-economic causes. Efforts to address issues like land disputes, refugees, and economic development can help reduce tensions.

4. 4. Humanitarian Aid: Provide humanitarian assistance to those affected by the conflict, particularly in Gaza. This includes food, medical supplies, and support for reconstruction efforts.

5. 5. Support a Two-State Solution: Many international leaders and organizations advocate for a two-state solution, in which Israel and Palestine coexist as independent states. This solution aims to address the legitimate aspirations of both Israelis and Palestinians.

6. 6. Avoid Escalation: Encourage restraint on both sides to prevent further escalation of violence, which can exacerbate the situation and make a peaceful resolution more difficult.

7. 7. Engage Regional Stakeholders: Involve regional players, such as Egypt and Jordan, in diplomatic efforts to help broker peace and regional stability.

8. 8. Encourage Grassroots Initiatives: Support people-to-people initiatives, dialogue programs, and joint economic ventures that can foster mutual understanding and cooperation between Israelis and Palestinians. [e.g. https://www.jewishvoiceforpeace.org/]

9. 9. Empower Moderate Voices: Encourage moderate voices on both sides and promote leaders and movements that prioritize peaceful solutions over violence.

10. 10. Stay Informed: Stay informed about the situation through reliable news sources and expert analysis to better understand the nuances of the conflict.

It's important to note that the Israeli-Hamas conflict is a highly sensitive and complex issue, and there is no quick or easy solution. Any approach should prioritize the reduction of violence, protection of human rights, and the pursuit of a lasting and just resolution. International cooperation and diplomacy are essential for making progress toward peace in the region.

Your Constructive Comments are Welcome!

GUEST POST: Wage Increases Cause Inflation- No. They Don't.

Today's post is from one of my favorite columnists, Peter Coy.  The upshot of the evidence he gathers is that, at worst, wage increases are a lagging indicator of inflation, they happen after an inflationary period.  There's little evidence that wage increases cause inflation.

There’s not much evidence to support the wage-price spiral phenomenon

By Peter Coy Opinion Writer

As the United Auto Workers strike against General Motors, Ford Motor and Stellantis expands and the union continues to hold out for big wage increases, some analysts are worrying that higher pay will be inflationary. The nightmare scenario is that wages drive up prices, which cause workers to demand even more money, and so on, in a ruinous upward spiral. Geoff Yu, a senior market strategist at BNY Mellon, said on Bloomberg Television last month that the unions are “making the gamble or the determination” to ask for more money in a way that could trigger a wage-price spiral.

In reality, a wage-price spiral triggered by union demands is pretty unlikely. In fact, wage-price spirals of any origin are uncommon. And there are signs that workers are lowering their expectations for higher pay as inflation ebbs.

On Thursday, Goldman Sachs issued a report saying that wage hikes for unionized workers are a “lagging indicator — the final echo of last year’s inflation surge.” Its author, economist Ronnie Walker, wrote that unionized workers, whose contracts last three years on average, are just now getting a chance to catch up to the kinds of pay raises received in the past couple of years by people who don’t work under multiyear contracts.

“The two pressures that raised wage growth sharply this cycle, a very tight labor market and high inflation, have both diminished substantially,” Walker wrote.

At the moment, wages are rising faster than inflation, which means that “real,” or inflation-adjusted wages, are rising. But that comes after almost two years in which wages and salaries as measured by the Employment Cost Index rose more slowly than inflation. The current uptick in wage growth “can be given an optimistic interpretation, as a sign of real wages going back to trend, and not necessarily as a concern of an ongoing spiral,” the economists Guido Lorenzoni of the University of Chicago Booth School of Business and Iván Werning of the Massachusetts Institute of Technology wrote in a paper prepared for the fall session of Brookings Papers on Economic Activity last Friday.

“Where is this wage-price spiral?” David Rosenberg, president of Toronto-based Rosenberg Research & Associates, wrote to clients last week. People are not expecting big raises, he said. He pointed to the Conference Board’s consumer confidence survey, which found that in September the share of people expecting higher income in six months fell to a six-month low, while the share expecting lower income in six months rose to a nine-month high.

“There is almost no evidence” that wage increases lead to inflation, Rosenberg wrote. His firm conducted a statistical test (called Granger causality) that found inflation causes wage increases, but not the other way around. He predicted that rather than passing along higher wage costs to customers, companies would be forced to swallow them and accept lower profits.

One last fact: The Hiring Lab at Indeed.com, the big online job site, said that in August, posted wages for job listings for production and manufacturing workers were up 4.2 percent from a year earlier, down from 11 percent annual growth in December 2021. Indeed’s wage tracker is more sensitive to current economic conditions than Bureau of Labor Statistics wage data, because it captures only new listings, not what everyone is getting paid.

Employers are resisting raising pay, even though they’re still having a hard time filling jobs, because they don’t want to be stuck with a big wage bill as inflation recedes, Cory Stahle, an economist at Indeed, told me. “When you lock in an employee at a higher wage rate, it’s kind of hard to say, ‘Hey, inflation has come back down so we’re going to bring that wage back down,’” Stahle said.

Outlook: Ben Engen

The U.S. economy probably gained about 140,000 nonfarm payroll jobs in September, and the unemployment rate probably edged down to 3.7 percent, the economist Ben Engen of Action Economics in Boulder, Colo., wrote on their website last week. For comparison, in August the economy added 187,000 jobs and the unemployment rate was 3.8 percent. The economists are expecting the Bureau of Labor Statistics to report that aggregate weekly hours worked were flat in September after a 0.4 percent gain in August. The bureau’s report is slated for release on Friday.

Quote of the Day

“Why the brinksmanship? Why the theater? Why to the last minute?”

— Shalanda Young, director of the Office of Management and Budget, discussing passage of a stopgap spending bill, on “This Week with George Stephanopoulos” (Oct. 1, 2023)

Your Constructive Comments are Welcome!