Thursday, January 22, 2009

Simple Tax Relief and a Capital Holiday

One hopes the January 27 Federal Budget will allow Canadians to keep more of their own money and invest it with confidence.

Cuts in personal and corporate taxes, as well as a holiday from the capital gains tax (which would be relatively painless, since not many Canadians are fretting about how to offset gains just now), would place billions of stimulus dollars in the hands of private citizens and go a long way toward helping our country through its economic troubles.

While theyʼre at it, letʼs hope the government extends the end date for income trusts past 2011. Setting aside the questionable wisdom of cancelling the trusts in the first place, our economy was rather different when that decision was made. The price of energy was heading for the stratosphere and markets were in reasonable shape. It may seem awkward for the Tories to change course on this issue yet again, having repeatedly promised to leave income trusts untouched before reversing themselves completely, but inconsistent wisdom is preferable to intransigent folly. To wit, flip-flops can be forgiven, so long as you land the right way up.

Finally, when it comes to letting Canadians keep their own money, donʼt gild the lily. Make a tax cut a tax cut, not a credit where a person has to reinvest in government-approved silly-bears then run to the Parliament Hill parking lot and touch the hood of Michael Ignatieffʼs Thunderbird before getting any benefit. For once, make Canadian tax relief comprehensive and simple.

Theo Caldwell, President of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.

Tuesday, January 20, 2009

Hope at High Noon

At noon today, Barack Obama becomes the 44th president of the United States. Here’s hoping that he is such a smashing success that he gets busted onto Mt. Rushmore and his face knocks Thomas Jefferson’s right off the nickel.

The presidency is always a heavy burden, but I have profound respect and compassion for anyone who would take on the leadership of the free world at this particular time. The economy is in ghastly shape and, around the globe, very bad men continue to plot the death of civilians in general and Americans in particular.

Here, one might cue the rubbish and rhubarb about how badly George W. Bush botched the last eight years, getting the nation into this fix. But many of these problems were decades in the making and are larger than one man. In any case, as the United States turns the page, one hopes the 16-year national pastime of hating the president (Bush Derangement Syndrome having been preceded by two terms of Clinton Hatred) is at an end.

Right now, America needs a president who has the endorsement of a majority of its citizens. Whatever your politics, Obama is that man today. The foreign and domestic problems facing the United States are such that a peaceful consensus is a necessary first step to solving them. Whether folks supported candidate Obama or not – and few commentators in Canada were as critical of him as I was – he is president now and we will all be better off if he does well.

I was wrong about Obama in many ways – not least, about his prospects for getting elected – and I hope I continue to be. To wit, he has shown signs of being a thoughtful pragmatist – advocating business investment tax cuts and retaining Robert Gates as Secretary of Defense, for example – rather than the left-wing ideologue he seemed to be during the primaries. Moreover, he has already made many of the right people mad. Rep. Barney Frank (D.-MA) is upset that Rev. Rick Warren is giving Obama’s inaugural invocation; Sen. John Kerry (D.-MA) is upset that he is not Secretary of State; Sen. Harry Reid (D.-NV) is upset about being Sen. Harry Reid (D.-NV). With these folks up in arms, Obama is off to a good start.

He has reached across the aisle, attempting to secure Republican support for his proposed stimulus package. To be sure, this is largely a political manoeuvre, to provide bipartisan cover for the 2010 midterm elections in case the legislation fails to right the economy, but it is a sensible approach. A week ago, Obama had a two-hour private dinner with conservative commentators at the home George F. Will. It was an informal, off-the-record meeting for the purpose of exchanging ideas. Such early-administration overtures have been tried before with middling success – recall Bush inviting Sen. Ted Kennedy to the White House for movie night in 2001 – but it is still the right thing to do.

Over the next four or eight years, there will doubtless be cause to criticize Obama, and I will likely sing a solo or two in that chorus. I prefer to think that such disagreement, whenever and for whatever reason it comes, will be based on legitimate policy, in contrast to partisans who refuse to give the man a chance. Step-on-a-crack silly-bears is no kind of loyal opposition. For example, to those conspiracy-minded stragglers who still obsess over whether Obama was born in Hawaii or a manger in Burkina Faso, I suggest moving on. The Constitution and people of the United States are satisfied that Obama is a natural-born citizen and anyway, what a man chooses to do with his life means more than how and where it began. Obama is a bona fide success story and his opponents would do well to recognize his qualities.

On his first day in office, there is such widespread adoration for the man that one wonders: Whither Obama’s admirers when it is revealed, inevitably, that he is less than perfect? No one can know for certain, but loyal Americans, and all those who hope for peace and freedom in the world, should wish this new president Godspeed.

Theo Caldwell, President of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.

Wednesday, January 14, 2009

“How do I raise my children not to hate?”

JERUSALEM -- “How do I raise my children not to hate?”

This was the question posed by a prominent Israeli journalist whose eldest son is now serving on the front lines in Gaza. In reflecting on bringing up his children amidst suicide bombings and rocket attacks, he was particularly concerned with their teen years: “As if it isn’t tough enough to raise teenagers.”

Faces here are filled with sorrow and resolve. Israelis know they are in the midst of a war they must win, waged by the most beloved among them – the young.

Quite reasonably, one might ask about the plight of Palestinian children, and it is a cruel irony that they are victims of the same violence. If only the grown-ups influencing them placed the same priority on barring hatred from their hearts. Instead, they are inculcated with perverse histories and vicious notions of murder and martyrdom from their earliest years.

World opinion has long since swayed in favour of creating a Palestinian state. The outgoing and incoming presidents of the United States, as well as leaders in Canada, Britain, and many citizens of Israel are on board with the concept, provided it can lead to some good end. No one needs another Syria – or worse – on Israel’s border, and it would be naïve to assume that simply conferring statehood on the current arrangement would quell the violence here. So to whom would the state be granted? To Hamas, the Palestinians’ elected leaders who have launched 3,000 rockets at Israel in the last year alone? How about no.

Indeed, one of the saddest aspects of the current conflict is the waste that the Palestinian leadership has made of the Gaza project. When Israelis withdrew completely from the territory in 2005, they left behind greenhouses, infrastructure and the makings of a community. Within days, however, Gaza became a staging ground for rocket attacks on southern Israel. The greenhouses are gone and the misery has returned. As much as many of us advocate the creation of a Palestinian state, we must recognize that no responsible Palestinian leadership exists to shoulder it.

The refusal of Palestinians and their leaders to move beyond grievances and make the most of their opportunities is a source of frustration to some Israelis, who recognize that their own country has managed to survive and thrive against towering odds. One Israeli privately remarked of the Palestinian failure to establish a place in the world: “If they spent time and energy building up their own state instead of trying to destroy mine, they might have something.”

A woman in Jerusalem echoed former Israeli Prime Minister Golda Meir in lamenting, “We can forgive the Arabs for killing our children. We cannot forgive them for forcing us to kill their children.” As Meir perhaps had done, the woman spoke the first of these sentences with sadness; the second, with a touch of anger.

Certainly, there are Palestinian moms and dads who care for their children, just as Israeli parents do. Trouble is, those decent folks have no voice in their leadership. In Israel, meanwhile, the armed defense of the nation touches parents deeply.

Military service is prevalent in this country, where young people perform a mandatory three years, and decades in the reserves often follow. All over Israel, families are fretting for loved ones in harm’s way, as active duty troops have been deployed and tens of thousands of reserves have been called up or notified to prepare.

With parents desperately worried, the Israel Defense Forces have taken the precautionary step of confiscating cell phones from troops. There are two principal reasons for this. First, it is a case of good old-fashioned, “Loose lips sink ships.” To wit, even the most innocent revelation of military locations can be overheard or intercepted and lead to lost lives. Second, there is no percentage in having panicked parents all across the country. Knowing that their grown children are without means to communicate, Israeli parents do not want their phones to ring, as they assume it can only be bad news.

Such is the reality for families here. Israelis accept it with courage and determination. Most important, even as they live in the shadow of death, they teach their children to love life.

Theo Caldwell, President of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.

Friday, January 9, 2009

Peace Through Victory

JERUSALEM -- Israel’s determination to continue its military campaign against Hamas terrorists in Gaza, despite tragic civilian losses, serves as a reminder that peace is the second-most important goal of geopolitics. Only freedom – which for Israelis means the elemental liberty to exist – matters more.

Ideally, of course, Israel would like to have both. Decent folks yearn for peace just as all people thirst for freedom, and it is truly tragic when leaders are forced to choose between them.

Over more than six decades of conflict with murderous neighbours, Israel has tried numerous tacks, from bursts of astounding force, to occupation, to land-for-peace, to humanitarian aid, to total withdrawal, in its quest for peace.

With this history in mind, observers may ask, isn’t this recent war in Gaza just another chapter in the apocryphal “cycle of violence”? What can Israel do differently? What is it about this conflict with this particular enemy that presents the potential for peace, at last?

For Israel, a prerequisite to peace is victory. And in achieving it, they must make an example of terrorist thugs who menace Jews and Muslims alike, including their own, long-suffering people.

In Canadian parlance, Israel must expose Hamas like a weak goaltender. Show them and their would-be recruits, as well as those of Hezbollah in the north, that the job satisfaction and benefits package for Iranian dupes are thin. Changing hearts isn't always about holding hands. Sometimes, it means extreme attitude realignment, accomplished with explosives. For Israel, this is such a time.

Set aside the notion that Hamas and its fellow-travelling radical Islamists have any claim to a divine cause. Hamas' strategy for attaining a ceasefire without offering concessions is to bring about enough casualties among Palestinian civilians, achieved by storing rockets and weapons caches under hospitals and schools, such that Israeli strikes will kill innocent people and sway world opinion. Any god who would be alright with that has no business being worshipped.

Dismiss, also, the popular idea that Hamas’ attacks are somehow about land. We are four years removed from Israel’s complete withdrawal from Gaza, yet Hamas has continued to lob rockets at Israeli towns – 3,000 of them in 2008 alone.

For Hamas, the bar for victory is relatively low. To win, they must accomplish two aims: survive, and attain some measure of international legitimacy. This second ambition may take the form of the opening of its waterways and crossings with Israel and Egypt, two countries with excellent reason not to trust Hamas. Egypt’s President Hosni Mubarak, now prominently involved in ceasefire discussions, well remembers that it was Muslim radicals who assassinated his predecessor, Anwar Sadat, in 1981, and Mubarak himself has been on the business end of several such attempts. Hamas and their ilk are demonstrably dangerous not only to Israelis, but to anyone of whom they disapprove.

An encouraging sign is that, for the moment, the Israeli people and leadership seem united in their resolve. Even prominent political figures who have embraced the land-for-peace experiment in the past, or the 2005 Israeli pullout from Gaza, such as President Shimon Peres and Foreign Minister Tzipi Livni, today speak matter-of-factly of their country’s intention to see this current campaign through to its end.

But to do so, Israel finds itself in a ghoulish race against time. To wit, they must accomplish their objectives before civilian casualties, largely engineered by Hamas, turn domestic and international opinion against the operation. Military experts here suggest that the aims of Israel’s ground offensive against terrorist leaders will require weeks. For the sake of the Palestinian people, and for the freedom of all nations that stand against tyranny, one hopes that Israel will have the time and will to win its peace.

Theo Caldwell, President of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.