Enjoy Halloween, as a newcomer to North America I still marvel at this pagan ritual, but somehow it is an enjoyable one and one that has the children more than a little bit of excited.

And although the kids are thrilled by it, what I personally hate, really hate, is the dressing up part and at our first Halloween Party a few years ago Irene and I decided we would just put on some evening clothes, she put on a fancy dress and I put on my tux. True, we stood apart in the group that among others counted a Hugh Hefner, a Fidel Castro and an Evita Peron, all of whom had put significant work into their costumes. But one of our friends walked up to us early in the evening and said, “What are you supposed to be, oh, now I can see it, you must be James Bond with the Bond Girl!” We had never even considered that possibility, but were relieved at this unique suggestion so for the rest of the evening we could confidently say what we were supposed to be dressed up as. And guess what, we’ll do exactly the same this Halloween, an old dress and an old tux will do the trick: Mr. Bond, your reputation precedes you!

A big thanks to all of you for dropping by and coming back. October has been the best month to date for Peaktalk in terms of visitors. Again, thanks.

I see this messages like this on various blogs and it can either be the result of readers visiting more and more blogs, or the blogging phenomenon is spreading and attracting new readers every month. I think it is the latter: the audience is growing and many are now using weblogs as their primary source of newsgathering. Encouraging to say the least, this new medium has only just taken off and I think it will gather momentum in the next few years.

Dutch Finance Minister Gerrit Zalm is not giving up, and he may be the lonely voice in Europe, pointing out that France and Germany flaunting the rules of the EU’s Stability Pact could lead to a serious crisis:

"This creates an overwhelming precedent, and I do not believe we could ever in all decency ask another country to observe budgetary discipline after what happened. The whole structure we had thought out, that we were prepared to set aside our national currencies for and rely on the European Central Bank (ECB), will come crashing down"

Again, thanks Gerrit for reiterating what is so obvious to many and what so few are willing to take a stance on. Zalm has even threatened to take the European Commission to court for not taking direct action against France. The reason that Zalm is so infuriated with what is now unfolding is that he was one of the finance ministers during the 1990s who did everything to meet the budgetary restrictions of the Stability Pact, so that the Dutch could abandon the Guilder and adopt the Euro. France’s actions do not only represent a complete disrespect for the agreements that govern the EU’s monetary set-up, they are also a personal affront to Zalm and his achievements as a finance minister. Not coincidentally it was under his watch that the Dutch economy boomed and outperformed all other European countries. As long as Zalm hangs in, this issue will haunt the French and rightly so.

Here’s some ammunition for the Bush campaign although it seems to me that the surge in US economic growth is driven primarily by consumer spending. A strong and sustained economic recovery requires not just consumer spending, it requires business spending as it is investment over a long period of time that will create new jobs and put the economy on a strong and solid footing.

North American missile defense continues to be a hotly debated topic and many, including myself, have pointed out that wayward nukes from North Korea can end up anywhere in North America which is why it is important that Canada works closely together with the US in developing such a defense shield. Canadian opponents point out that the technology is years away from being implemented, if ever, and of course vent their standard objections along the lines of “we do not want to militarize space”, whatever that means. I interpret the latter objection as: (a) it is an American thing let them figure it out, we do things our way; (b) even if we would participate we do not necessarily want to pay for it, it is preferable to spend our money on other things. There’s an English word for this and Lou Cuppens, a Canadian retired lieutenant-general and former deputy commander for the North American Aerospace Defence Command (NORAD) used it this week to express his anger over Canada’s position:

"As a retired military member, I know Canada can't stand around and be a defense freeloader forever … some countries view us as that. We don't do our share."

It is Canada’s interest as well as its moral obligation to review its position and come up with a comprehensive plan that will see to it that joint US-Canadian preparations for a missile defense shield start as early as possible. The ill-defined objections really do not cut it; I mean are technological barriers not there to be overcome? Even if any breakthroughs are years or decades away, does that mean we should just abandon the quest and forget about it? There lies the opportunity; Canada could help foster a process of innovation by supporting the research and development that will be required to build well-functioning missile defense shields. The country has a huge talent base to tap into and there are many government programs ranging from direct grants to tax-breaks to spur innovation. In doing so it would encourage phenomenal technological advances with likely various spin-offs that in turn can accelerate economic growth and further development in other areas. The payback in terms of job creation, exports and tax revenues could be substantial. At the same time it will have contributed in a significant way to a missile defense shield and be rightfully able to claim that it is no longer a freeloader, but a partner and contributor. Would that be good for the feeling of national pride or would the opponents rather continue on the journey to irrelevance with the inherent economic consequences? And last but not least, Canada will have contributed to the end of this situation:

Cuppens said that all Canadian and U.S. military leaders could do now in the event of a first strike would be to call the president and prime minister and tell them the missiles have been launched, what the likely targets are, and the time of impact. "That's all that can be done," he said. "What's defending North America? Nothing."

Time to get to work, on both sides of the border.

The left-of-center government has been in power for quite a while and has benefited royally from the fact that the conservative opposition has been hopelessly divided, a situation that is not expected to change anytime soon.

That is the usual line by which you introduce a discussion on Canadian politics. But it is equally true for the UK where Blair has had little worries about a potential threat to his rule at the ballot box, Britain’s Tories have been marginalized by their internal divisions as well as their inability - or maybe their dividedness contributed to just that - to pick a unifying leader. After William Hague it is now Iain Duncan-Smith’s turn to throw the towel in the ring and this hardly comes as a surprise. Political pundits where predicting a rough ride for the uncharismatic leader, knowing that Ken Clarke or Michael Portillo would have been better and workable alternatives with an ability to recapture the center. The first past-the-post system probably contributes to this self-destroying dynamic, centrists really have nowhere to go than to the party that reasonably represents that center and do not have the option to pick from a number of alternatives like you see in democracies governed by proportional representation. Note that Margaret Thatcher benefited equally from a directionless Labour Party under one of the most uncharismatic politicians Britain had ever seen, Neil Kinnock. Had it not been for his successor’s sudden death, Tony Blair might not have grabbed the leadership as early as he did and British politics might have looked distinctly different today.

Like Canada however I do not think that the Conservatives do not have a message that appeals to the British voters, they definitely have a message that can be spinned and adapted in order to attract the center. What they lack is unity and electoral charisma. Maybe they can resolve that with a new and energetic leader, a challenge that the conservatives in Canada are also struggling with at this very moment.

In case you have missed it, John Hawkins has an interview up with Andrew Sullivan which I highly recommend. As one might expect Sullivan has some interesting thoughts, but also recycles some of his ideas that regular visitors of the Daily Dish are well familiar with. The guy has a great ability to summarize political phenomena in a nutshell and this is my favorite part of the interview:

John Hawkins: Why do you think so many people on the left have had such a hard time dealing with the war on terrorism?

Andrew Sullivan: Because it requires seeing that the West is morally superior to its enemies. And they have spent a lifetime arguing that the West is morally inferior. So they will even find a way to justify or rationalize or overlook the evil and tyranny that lies behind radical political Islamism. They're trapped by their own past. Not all of them - but a resilient minority.

Invaluable. He has some great advice for bloggers too.

The Iraqi situation has been underreported on this site but given recent developments I will bring it back into the focus of attention. What prompted me today was this rather alarming piece of news from CalPundit which discusses a rumor that the administration may decide to pull out in March next year. The key rationale would be that it would take the wind out of Democratic sails during the campaign and help to repackage the Iraqi operation as a victory for the Bush administration with a limited amount of casualties. I do not believe in this scenario, but it is a scary one as it would hand the Baathist remnants, al-Qaeda operatives and all other loosely organized Islamist terror groups their greatest victory and it would undo all the progress that has been made to date. Although not strictly comparable, the lessons from Beirut and Mogadishu are still valid and it is crucial that we now honor our commitment to the Iraqi people and for their sake as well as our own the US and the world can not turn its back on Iraq in the face of a violent and evil minority that is desperate to turn back the clock. If domestic politics are going to dictate Iraqi policy to the extent that Bush is willing reverse everything that has been accomplished to date, we are in for some unstable and dangerous times. Let’s not forget that although Kevin Drum thinks Bush is a poll-driven man going for risk free policies, he is also a man of very strong convictions who has undertaken a lot of things during his tenure that were far from risk free. Iraq is a case in point and if Bush wants to avoid the harsh verdicts of history that have been meted out to both his father and Bill Clinton who both followed low risk strategies in the Middle East, then he will have to stay the course, no matter how rough it is going to be. And something tells me that both Bush and his pollsters are very capable of explaining that to the American people.

Having written about royal affairs only once I was in doubt whether I should write about the circus surrounding the launch of former Princess of Wales butler Paul Burrell’s book “A Royal Duty”. The usual arguments are tabled, money, media attention, Diana’s legacy, but it was not until I read about Burrell defending his book and wanting to meet with princes William and Harry to discuss it, that I sat down and crafted a post. Here we go:

"I want to go and sit with them and talk about this book, why I did it, why I feel so passionately about it, why I'm proud of it.

This immediately tells you something about Burrell. It’s about him, not about Diana, her boys or anything else; no it’s about Burrell, the former butler of a disgraced royal.

"And I would like to ask [the princes] a few questions too... I think I would like to give them a piece of my mind, and ask them why did they personally did not help me when I needed help, at the worst point of my life.

A piece of his mind? Does he have any perception of reality? He just put out some trashy gossip about their mother and the young princes will now have sit down and spent some time listening to a piece of Burrell’s mind? Note that the man was banned from royal circles years ago as he was correctly perceived to be a serious liability. But it goes on:

"If the Queen would like to be there then that's fine. The Queen has an opinion just the same as anybody else. If she aired that opinion I would air mine too.

The man has lost his wits. Completely. Burrell has violated two basic ground rules of engaging with royals. First, whatever you learn and whatever you know, you keep it to yourself and never disclose it to the outside world. Secondly, you can and will not be, ever, on a par with royals. Even blue blooded courtiers and millionaires curtsy to the queen and her family members, so what on earth does Burrell thinks he is doing when he suggests he can sit down with the princes in order to give them a piece of his mind? Oh and yes, if the queen wants to sit in on it, fine, let her chip in, she may also want to get a piece of Burrell’s mind. He is seriously deluded and he somehow established a third rule: if you cozy up to a royal, don’t pick the one that has fallen out of favor with the rest of the royal family, especially if that person is not exactly the role model of royal behaviour and - some say - mental stability. Do not get me wrong, I have always been sympathetic to the late princess; even enduring three hours of sweltering heat to sign her condolence register at the British consulate in Hong Kong, but let’s keep things in perspective. The princess breached royal tradition on an ongoing basis by indeed treating commoners on an equal footing. Wrong approach, even in today’s modern world, these things do not change, ever. By allowing Burrell into her life she set the stage for letting him believe he was of royal importance, and when she died he ended up in a void that needed to filled and that set him on his desperate journey for media attention. The money making is no doubt important but more than that he craves the attention. And he is not even clever about it, ignoring the travails of another commoner that got a little too close to the fire. He was burned down and had to leave the UK in search of a new life knowing that his book had ended up as a discounted sale item that would not even sell at rock bottom prices. Even I found five bucks somewhat much for James Hewitt’s Love and War.

In an interesting, and given who he is a remarkable move, one of Prince Charles’ former spin doctors is strongly arguing to reduce the size of the Royal Family:

“…that the Royal Family should be shrunk to its essentials: the Queen, the heir to the throne and his children. Privatize the rest. Let them live in decent obscurity”

In addition he suggests to abolish the system of royal households and courtiers, and create a publicly accountable department of royal affairs. Great ideas. In the Netherlands they have reduced the size of the royal family notably but that has not caused some decent obscure family members from creating major trouble, dragging various ministers into a difficult spot. Nor have the remaining members of the family been able to stay out of the limelight, the country is currently consumed by Mabelgate, where the second in line to the throne is about to marry someone who had very close ties to a former king of the Amsterdam underworld who in turn was executed gangland style in the 1990s. Whatever the size, royals will always be the subject of analysis, news and gossip but when these are disseminated by an unhinged attention craving butler you better wait until his ruminations are available at cut rate prices in case you're interested.

This week’s Carnival is up over at Who Censored Blogger Rabbit. Lots of great stuff, three more weeks and the Carnival will be hosted right here on Peaktalk.

Liquor distribution has been getting some coverage here recently, especially here and here, explaining the atrocious situation in British Columbia. In the US the circumstances vary by state and maybe Kate can elaborate on how things are organized in Hawaii. Not only is she familiar with the state and consuming healthy amounts of alcohol, she also highlights the fact that there’s an interesting association between bloggers and drinking. If that’s the case I am amazed at all those great writers that drink seriously, think Hitchens, as it appears alcohol does not have an impact on the quality of the stuff they write.

Update: Andres Gentry has some thoughts on this topic as well.

Unions continue to be a formidable force with a very strong ability to relegate great ideas and plans to the trashcan, if somehow these ideas threaten their interests. This happens not just in Canada, here’s a story from Detroit where the plans of a very wealthy and generous entrepreneur, Bob Thompson, to start a number of private schools in inner cities were nixed once the Detroit teachers union figured out that the plan to offer a road to college education for disadvantaged inner city kids might threaten their job stability. That union power goes a long way is proven by the point that even an initially excited mayor of Detroit withdrew his support from the plan once unions engaged in work stoppages. This is just too absurd for words all the more since Thompson’s generosity proves once more that the super-rich just do not sit on their assets but are more than willing to make them work in ways that governments very often can’t. Wealthy people, and I run into them regularly in the hi-tech and venture deal world, are often deeply aware of the fact that the society that has allowed them to become wealthy may need something in return and what better way to do that than to help other people fulfill their dreams. But in this case that does not exactly fit into the worldview of narrow-minded union-members who would be more than happy to preserve people’s deprived situation in order to maintain their outdated self-serving dream of stability without change, of stability without challenge.

If it is argued that Bush is stubborn, then I would argue he will absolutely stick with Rumsfeld despite the mounting criticism. The attention on Rummy following his leaked memo (this site got a lot of hits from people googling for Rumsfeld+memo, but ended up reading my take on a much older memo dealing with North Korea) has increased considerably, some media citing mounting criticism among senior Republicans as well as White House officials. The question though is whether the Rumster will hang on for another term if Bush is re-elected. If the Bush campaign is, as it should, centered around continuity then the president will have to ensure that progress in the War on Terror as well as progress in Iraq not only gets appropriate coverage in American media but also that the current Secretary of Defense has his name attached to it. Ditching Rumsfeld now implies admitting that Rumsfeld was a liability in executing the administration’s defense strategy and that would create far more damage than letting the Secretary serve out his term and let him exit gracefully after Bush’ re-election if there’s a need to do that at that point in time. If however Rumsfeld is able to validate the current strategy with continued success, then he may, despite being well over seventy, serve another term as part of Bush’ strong national defense team.

It seems that the limits of Dutch tolerance have been reached and a steady reversal has set in. For instance, sex on TV is gradually disappearing, and this article points out that a number of variables are influencing this trend. Competition from the internet, negative impact on raising advertising dollars but there also may have been some saturation, there’s only so much nudity and redlight district adventures that even the Dutch can bear. The problem is that until the early 90s Dutch TV was essentially public (and we already had a lot of sex in the public system before that) but once commercial TV made inroads the multitude of new networks had to compete for a limited amount of viewers in a small geographical area. And what is it that attracts people? Yep, anything considered to be edgy. The problem was of course that gratuitous sex in itself was not enough to keep the viewers engaged, there were a number of abysmal shows that just counted on nudity to be successful and few shows managed to combine edginess with some real viewer excitement. Believe it or not, a show targeting teenagers under the title “This is How You Screw” was a runaway hit. Combining trash with unique concepts resulted in noted hits such Big Brother and the Fear Factor, both Dutch creations that made it big in North America. Fierce competition for viewers pushed the creativity of production companies to its outer limits resulting in a lot of interesting reality-TV but it equally littered Dutch TV with absolute crap. So as a consequence the reversal is here, sex on TV is in decline.

And if you want further evidence that the open and liberal Dutch society is abandoning its much publicized tolerance, it was reported last week that even migrants were of the opinion that there are too many migrants living in the country:

Surprising statistics revealed that 48 percent of immigrants believe there are too many migrants living in the Netherlands, a stance backed by 65 percent of native Dutch.

Anyone who would have predicted that sex would disappear from Dutch TV and that migrants would assimilate to such an extent that they started to dislike immigrants would have been declared a fool not too long ago. If only Fortuyn would have been alive to witness it.

Arguing last week that the French might have known all along that they were breaching EU Stability pact rules I was pleasantly surprised to note that the Dutch Minister of Finance, Gerrit Zalm, had been undiplomatically clear in his assessment last week that the French had indeed been deliberate. Thanks Gerrit for being clear about that.

As I mentioned earlier, things are busy these days for me and the key reason is that one of my client companies is taking off. It involves the merger of three smaller software entities combined with a seed financing round, which means raising some money from friends and family as well as securing some government grants. We are formalizing the business plan, hiring a development team and I have to ensure that everything stays on track in the start-up phase and beyond. I can not tell you what a rush of energy this has given me and even the more boring stuff that falls into my lap as the CFO is pretty exciting. There’s really nothing like an energized team of people who are thrilled to take an idea or technology to the next level, especially when it is all done in harmony and good spirits. One of my other firms has a similar great concept/product but there the human aspect leaves a lot to be desired and the atmosphere and ability to be successful has suffered considerably just because of that. I will tell you more about my new venture once we formally launch the firm, there are a few minor legal issues that need to be cleared up and of course, selecting an appropriate and very cool new name (my insistence on URL availability for the name only has not exactly facilitated this process).

The reason I write about this today is that I discovered (thanks to the Seablogger) that there are a number of venture bloggers, notably the aptly named VentureBlog which is an informative blog with great links to other blogs and online sources that deal with technology and venture financing. The public at large may have turned its back on tech deals but my argument has always been that what is left standing after the meltdown is probably of good enough quality to survive and expand, and new deals need to be structured very well in order to attract financing. The deal that I am currently working on falls into the latter category and as I mentioned I will try and discuss some of the aspects of venture financing if and when I think there’s good reason to, life is of course not always about politics, markets are equally important (I used that line before, but it is good enough to recycle it from time to time).

John McCain has always fascinated me and his record as a Vietnam veteran no doubt contributed to that as did his vibrant campaign for the presidential nomination a few years back. Many on both the right and left liked him, yet it seems that he has drifted out of that orbit of fascination and Iain Murray tries to shed some light on why that’s happening. Iain’s arguments dealing with McCain dragging his feet over a lease deal that the Pentagon has negotiated with Boeing appear to be valid, but to write-off McCain just because of that is going a bit too far and I would be interested what else caused people to become so disenchanted with him. At least he has voted against a pay-rise for senators and his concerns over the way in which troops are deployed in Iraq bespeak reasonable analysis. Interestingly, there may be other reasons why some are becoming irritated with the Arizona Senator. Presidential candidate Lieberman’s comments that he will appoint McCain as Secretary of Defense if elected may have something to with that, McCain’s quasi-Democratic status does not sit well with the Republican base at large. But then neither does Lieberman’s status as pro-War Democrat with his potential electoral base. You see, even in the center life can be tough sometimes.

In my discussion on alcohol distribution I did what Irene often accuses me of: painting too rosy a picture of the US. I got an e-mail from Mitch Hagmaier today who points out that liquor laws in the US are byzantine at best:

You mean "in Oregon and Washington", not "in the US". Liquor laws in the states are highly variable on a state or even local level. Where I live, in the commonwealth of Pennsylvania, we have a complicated web of alcohol licenses and state stores. There are "dry" towns scattered here and there, my parents used to live outside of Mars, PA, which was a "dry" town, which I always thought was a great gag - "Mars is dry!" "Well, dur!" "Dry" counties or localities are much more common in the South.

Correct, in my enthusiasm following my trip to Oregon I forgot all about the "dry towns". David Janes weighs in on the topic as well.

As some of you may remember I hinted at doing a GWB on my 40th birthday, but the fact that I celebrated it in the US made that very difficult. Why? Because in the US, like in most free economies, liquor is available in supermarkets and other retail outlets at decent prices and I could not resist to celebrate the day in style with a very good Benziger cabernet. The bottle was thus reasonably priced but had I bought it at the government owned liquor stores here in British Columbia it would have cost me a small fortune. Plans of the BC government to put an end to the archaic monopoly of government retailing of alcohol have now been suspended as the government reached an agreement with the unions that staff the various outlets to extend their deal to 2006. This comes not only as a disappointment to many consumers, but also the pro-business lobby that helped the current government get elected in 2001, not to mention the various businesses that had planned to actually get into the business of selling liquor.

There are some signs of hope however as the government has scrapped many outdated laws relating to the consumption of alcohol and it does currently allow some privately owned outlets to sell beer and wine. More importantly, it would appear that by going slow on the unions the BC government has decided to take a gradual approach and will probably revisit the privatization issue after the next election in 2005. There’s only so much disruption from the unions they can handle and given the many other cutbacks and privatizations there must have been a train of thought in this right-of-center administration that the liquor franchise wasn’t worth the battle. A pity, especially since the one province in Canada that has privatized liquor distribution (not surprisingly in Alberta) has to date proven the merits of freely available liquor. Of course , the Alberta case tells us what many of us know already as the practice of putting the sale of alcohol in private hands is, well, fairly prevalent in the rest of the world.

The discussion on France and the EU continues with Chris Lawrence picking up on Dan Drezner’s question whether the EU should be seen as an international organization or a supranational authority. Drezner concludes that with France’s ability to flout the rules of the Stability Pact without any penalty, the EU pretty much remains an ordinary international organization. I would argue that he is probably right, but what is important to note is that the EU at its inception in 1951 was nothing more than a multilateral economic arrangement, the European Community for Coal and Steel which transformed itself in the European Economic Community (EEC) and in the late 1980s ended up being the European Union. And today we are talking about a European constitution and an elected EU executive. The journey from a small multilateral to a state-like entity is a steady but slow process that is unfolding over a number of decades. This has always been the fundamental criticism from the British who in Lady Thatcher’s words believed in a “loosely knitted patchwork of nation states”. When I left The Netherlands to work in the City of London I was always under some measure of verbal attack from my British colleagues who would question me about the how and when of the EEC’s sudden transformation into the EU.

The answer to that question is not entirely clear; to a large extent the direction depends on who is in the driver’s seat. I say that to dispel the notion that the EU is a concept forced down every European throat by a cabal of French and German statist elites who dream of achieving peacefully what they could not achieve by war. There’s an element of truth in that, but we should not forget that European (and British) business elites have equally promoted the free-trade zone and single currency concepts that are now a matter of fact. And to an extent, they were right, a free economic zone is a commendable vision but with it came the irresistible institutional need to structure and regulate what that market should look like. If it is going to be one, let’s make it look like one, was the argument. In a way both business and politicians, later supported by an unelected bureaucracy paved the way for the journey from a multilateral entity to a nation state. The speed at which that process unfolds depends on which politicians are in charge and to what extent they are influenced by other interest groups. And since the beginning of this year we know that the relationship with the US is an equally important determinant in shaping intra-European relations.

For now we are in the latter stages of the multilateral phase which is why it is so interesting to see if the next phase of a centralized union state is around the corner.

One thing occurred to me after having posted my thoughts on the UN vote on Israel. Europe is now voting as a block. That is one of the more serious consequences of European integration, going well beyond meeting Stability Pact requirements. Individual nations will loose their ability to put forward an independent voice and given the cultural and historical diversity of the EU’s members that is exactly what makes European integration such a frightening experiment.

When I was a child I dreamed of becoming a diplomat but the fact that you are restrained by the mores of diplomacy was a somewhat daunting prospect. That’s why I envy Israeli’s Ambassador to the UN, Dan Gillerman. He is the one diplomat for whom all the diplomatic finesses no longer apply for it does not matter what he says and does, the world is out to get his nation, no matter what. Anyone thinking the world would pause after last week’s anti-Semitic rants from the doctor, was proven wrong last night when the UN General Assembly voted 144-2 demanding that Israel stop the construction of its Security Wall as it was deemed to be in contravention of international law. Gillerman called the proceeding "a humiliating farce" and berated the European Union governments supporting a resolution that implies that Israel's security measures are far graver than the terror attacks perpetrated by Palestinian terrorist groups. Again Gillerman:

"As long as the majority in this assembly will pander and tolerate these rituals, no one should wonder why the victims of terrorism and those who hope for peace look elsewhere for guidance, protection and inspiration," Gillerman said.

This resolution reminds me of that other absurd UN resolution that qualified Zionism as racism. The latter was adopted in the 1970s and at that point the Europeans took a far milder stance with regards to Israel. The fact that they are now throwing their weight behind a questionable motion in an already highly charged environment is certainly not good news. Gillerman represents a nation that is slowly being isolated and, to make a 1980s analogy, being South Africanized. Get ready for economic sanctions. Thanks to a lack of analysis, fear and hard to follow positioning the net result is that Israel will have to undergo this humiliation and potential isolation for all the wrong reasons and for probably a long time to come.

The critics have a point when they argue that the wall allows Israel to add some territory to Israel proper. But if my neighbour enters my property on a regular basis to trash my house I will probably build a wall in a manner that does not interfere with the full and unfettered enjoyment of my property and yes, that would mean building it on his land, allowing him to do whatever he wants to do on his territory without violating my rights. That scenario would also prevent me from doing what I would like on his territory and the security wall may be a precursor to the isolation and potential end of Israeli settlements on Palestinian lands. Has the UN General Assembly taken that into consideration when it was doing its analysis?

The wall brings back memories of Eastern Germany’s infamous piece of work, but the two are hardly comparable. While walls separate and have a very negative connotation, Sharon is not exactly building it to prevent Israeli’s from leaving their native lands. Think about it, has anyone ever retroactively condemned the Chinese Wall? If there is one parallel with the Berlin Wall, it is that it will not be there forever. For now, it is a necessary measure.

It should not come as a complete surprise, yet it is still very irritating to learn that France has again been given respite by the European Union to bring its fiscal house in order. The French have thus avoided a penalty under the Stability Pact that governs the fiscal policies of those countries that have adopted the Euro. A number of smaller countries – The Netherlands being one of them – are annoyed and with very good reason:

They are upset that France, and also Germany, appear to be ignoring EU rules with impunity while they - the smaller nations - were obliged to introduce painful cuts in public spending in order to meet them.

France’s argument against making the necessary budgetary cuts earlier is centered around the notion that fiscal restraint would endanger economic growth. Well, the argument against that is that they should have thought about that earlier and something tells me that the French have known all along that they would be able to get away with skirting the rules. By avoiding the fiscal burdens that other countries did carry in order to be compliant with the terms of the Stability Pact, France has clearly indicated that it will selectively interpret multilateral agreements. That should be a warning for especially the smaller European countries before they commit to any further integration with bullies like France. Once you’re in it’s hard to get out.

For the first time in months I did not have the time to submit a piece for the Carnival, but that should not stop you from paying a visit to Eric Berlin who is hosting the event this week.

It seems this site as well as many others came under a denial-of-service attack, earlier today as well as yesterday, Den Beste explains:

It would appear that the denial-of-service attack against Hosting Matters has been renewed intermittently today. One of their many clients runs a pro-Israel web site, and they came under attack last weekend because of it. However, that also brings down all their other clients, including such sites as Instapundit, Little Green Footballs, and DailyPundit. I'm sure that the folks at Hosting Matters are trying to do what they can to solve the problem. The best thing everyone else can do is to be patient.

There’s a lot more on this topic over at Winds of Change, it looks like there will be more attacks in the near future. If this is a one-off thing we should not be too worried, in fact it could be seen as an honor that some people want to shut us down, but if a multiple of blogs and other sites come under pro-longed attack with the likelihood of data loss then even I will lose my sense of humor.

I am still trying to get back in the usual Peaktalk-mode, give me a few days. Not only do I have to get up to speed again with all the news, there are some major crises on the business side that need urgent attention.

First of all, I apologize for the interruption, not so much for the hiatus itself, but for the fact that it was unannounced, the reasons however were valid. And thanks to those readers who inquired by e-mail if everything was OK.

On October 13, I turned forty and instead of suffering surprise parties or other festivities I decided to do what I like most: take a break, drive around the US and discover new places. So on Friday a week ago we packed the car and took off with an ambitious plan to drive from here to Northern California, but we ended up spending nine days on the Oregon coast which was great, really. I will write about it later this week in more detail, it was both refreshing and rejuvenating and for the kids, three and one-and-a-half, it was beyond exciting. I planned to post the standard public announcement about a blogging break the night before we took off but internet connections were down, so instead I loaded the laptop in the car where it stayed untouched for almost ten days. Yes, it’s possible to disconnect from the computer, e-mail, the news and the world at large and I can recommend doing it from time to time.

As a result I missed out almost completely on the news. I bought the Oregonian once, not exactly a life changing event and switched on CNN last Thursday. The latter event informed me of the return of an old and familiar face in the news, the doctor, this time determined to end his political career with a bang and taking his controversial style into the area of one of the world’s most explosive conflicts. Sad, upsetting and to many people outright infuriating. Having just read Bernard Lewis during my holiday it reinforces the notion that there are many leaders in the Muslim world all too keen to pour oil on the fire without contemplating the long term effects. Or maybe they are well aware of the impact which is even more disconcerting.

On my return home the stack of papers revealed some truly and astonishing good news: the Canadian right has agreed to unite! It is too early to tell whether they will be able to decisively end the drift towards a one-party state, but the fact that they reached an agreement is very encouraging and I will be following this in the months to come.

Talking about single party rule yesterday it occurred to me that the particular way in which that came about in Canada is primarily through the dominant role in which the provinces of Ontario and Quebec determine the dynamics of Canadian politics. The bulk of the parliament seats come from eastern Canada (seats are allocated based on population) and so does the political elite that runs the Liberal Party and thus the country. It has lead to what is called Western Alienation, or the process by which the provinces of British Columbia and Alberta have become isolated from the decision making process in Eastern Canada’s centers of power: Ottawa, Montreal and Toronto. And although the idea of a French speaking Quebec seceding from the union is well-known, notions of a Western Republic are deeply ingrained but have never come to the surface and are thus not well documented in the international press. Not anymore. The premiers, say the governors, of Alberta and British Columbia have announced closer co-operation on a number of fronts yesterday and in doing so have made an implicit statement that a unified west is a force to be reckoned with in Canada.

The west is different. Alberta is the most American of all Canada’s provinces, is socially conservative and economically free-spirited, the Canadian Alliance, the federal conservative opposition party finds its origins here. The province’s oil-driven economy has been booming for years and the Albertans have tirelessly campaigned against the threat of the Kyoto accord to which the federal government committed Canada without meaningfully consulting with the provinces that are directly and most affected by it. British Columbia is somewhat different, it is more like California, both the social and economic conservatives can be found here, but equally the left is well represented through the green movement and the omnipresent unions and their political affiliates. Its economy is undergoing a huge shift from being resource based to knowledge based and the influx of immigrants from all over Asia have made its largest city, Vancouver, a pacific rim center for economic and cultural activity. During the 90s the province was nearly wrecked by the left-wing and union-linked New Democrats, but the province is now under right-of-center management and given the disasters of the recent past is likely to be so for the foreseeable future.

The two western provinces combine about a quarter of Canada’s population and yesterday’s agreement, while billed as economic co-operation is clearly meant to unite forces in dealing with the federal center. Premiers Klein and Campbell are sending a signal to the center, saying, if we stand together as a united western front we will try and influence, and to an extent resist, policies directed from the Liberal center. Many have commented on the likelihood of Canada disintegrating, a possibility that is not entirely unlikely given the lack of national cohesiveness, and, the lopsided way in which national politics are structured. Andres Gentry wrote about it a little while ago and so did Den Beste who clearly identified what any Canadian disintegration might look like:

So I think that formation of an independent confederation among the western provinces would be more likely. I think that if Canada ultimately succumbs to its internal paradox and lack of cohesiveness, what we'd see would be more like the breakup of Czechoslovakia.

He is looking in the right direction. Unless Canadian politics is somewhat reformed to give the alienated Westerners a bigger say in the political center, yesterday’s formal announcement may be the first step in the long road to some form of a Western republic. Whether they would join the US in the long-run is a completely different matter.

Roger Simon's reaction following the Schwarzenegger victory is that politics in America will never be the same and that it could be construed as a revolt of the pragmatic center, ending the two-party system as Americans know it. My initial reaction is, be careful what you wish for. In Canada the multi-party system has come to a virtual end as one party was able to capture the center and benefited handsomely from the fact that the far-left deconstructed itself with an outdated ideology and the right started to quarrel leaving a divided right. Recent elections, especially those at the federal level, have allowed for swift and huge victories at the polls for the Liberals in the center, and with no apparent restructure of fortunes on the right, it appears Canada has drifted to become a single party state. Single party rule with all its institutional implications is a dangerous and disturbing development for any society. Now, I am not saying that Simon advocates this particular scenario; it is just one that comes to mind when analyzing his predictions.

A similar unfolding of events in America is highly unlikely as it would mean that the Republican Party would have to move so far to the center that it can afford to loose its social conservative constituency and capture the bulk of Democrat voters. That may work in California but I would doubt that it can be replicated in the rest of the nation; however it could happen in the long run. The death of the tax-and-spend left, the growing consensus for a tough foreign policy following September 11 and the move towards adopting liberal values (accommodating gay marriage, less restrictions on drug use, flexibility on abortion) will eventually spawn a new political stream but I can not see that happen overnight. In Canada, that political stream came into being by a left-of-center party moving to the right combined with a self-destructing right. If Simon is right we would have to see a right-of-center party moving to the middle and a journey to irrelevance by the Democrats. It could happen, yes, but it will be a while before America at large follows the California template.

Digesting Schwarzenegger’s win I checked to see how some of the liberal European press was reacting and, interestingly, it was not dismissive at all. The Dutch NRC Handelsblad was realistic and even somewhat positive:

At first sight, it appears that a moviestar is probably not very well-suited for the role of politician, yet Schwarzenegger does not necessarily have to fail. He has been part of the Republican establishment for a while and will take over a large part of the former successful Governor Wilson’s staff. A moviestar should be able to convince the public at large that a price will have to be paid. Another Republican moviestar-governor , Ronald Reagan, was able to introduce two highly unpopular tax increases in the early 1970s.

This echoes Sullivan’s comments this morning. While some would argue that convergence of the left and the right on the issue of how to move forward in California may inaugurate the birth of a new era in politics, it would be wiser to qualify it simply as facing reality. Here’s the Guardian pointing out the tough challenges ahead:

Very sensibly, Warren Buffett, Mr. Schwarzenegger's much-hyped investment guru, suggested that the crazy cap on property taxes should be lifted. That idea, however, was promptly consigned to the dustbin … That leaves Mr. Schwarzenegger with few options, so do not be surprised if he ditches his campaign promise not to raise taxes. The fact of the matter is that his margin for manoeuvre is extremely limited.

The new governor has his work cut out for him and he will need all his persuasive powers to get California’s finances back on track. Yet, California is part of the larger US economy and even if Schwarzenegger is able to convince Californians to suffer some increased taxes and recalibrate the state’s finances, medium to long-term recovery is dependent on macro-economic developments in North America and the world. Even the most drastic application of fiscal prudence may not see any returns until well after the next gubernatorial election, which is about three years away.

This week's Carnival, number 55, is up over at Shanti's Dancing with Dogs. Be sure to check in.

Welcome to all those who came here via the Gut Rumbles link. No, I am not smoking anything, nor do I have any particular love for the 1970s, I just happen to like California and it looks like the results that are coming in prove my point, anything is possible in that state. Now, the hard work will start for Governor Schwarzenegger, and I really hope he succeeds. By the way, this must be quite a sobering setback for the Democrats; California is now reappearing on the Karl Rove 2004 worksheet.

The latest riots in Pakistan following the killing of a radical Sunni leader highlight that whatever the focus on Iran, Iraq, Syria and - Peaktalk being no exception – Saudi Arabia, we are painfully ignoring the real powder keg in the Muslim world, Pakistan. There’s a good reason for that, Pakistan is an ally of West, and is now personified by the likeable whiskey-drinking Pervez Musharraf who came to power after a military coup a few years ago. Pervez is our partner and so far he has, it appears, delivered in siding with the West in its war against terror. While many lamented the collapse of democracy I felt comfortable that a pro-Western military man had taken the reigns as the country was slowly sliding towards chaos. That threat has not dissipated, far from it, but at least for the time being, Musharraf has steered his country in the direction of being committed to defeat terror, despite the phenomenal domestic challenges he faces in doing that. Taking recent history into account, being Pakistan’s political leader is one of the most dangerous jobs in the world. Ali Bhutto life’s ended on the execution block, Zia ul-Haq lost his life when his jet was hit by a well-directed missile, and recent leaders such as Benazir Bhutto and Nawaz Sharif had to pack their bags before the formal end of their mandates, Mrs. Bhutto now living in exile. These drastic departures all took place well before September 11, so in a way it is mystifying to see how Musharraf is defying the odds on a daily basis while at the same time closely working with the US in fighting terror.

The grave danger in Pakistan is its nuclear arsenal. Long passed the development phase it is capable of launching missiles with a nuclear warhead and the sub-continent has already experienced a number of serious nuclear crises. If anything will escalate on the nuclear front under whatever Pakistani leadership, it will be India that will have to bear the initial brunt of it. At the same time rabid Muslim fundamentalists have a huge following in the country and for all we know Osama bin Laden is hiding out somewhere in the impenetrable northern mountainous areas of the country. These groups have different agendas, but none of them is too friendly toward the West and given the fact that terror is exported from Pakistan on a daily basis and nuclear secrets have freely flowed in a number of directions originating in Pakistan, one has to wonder what will happen to the country and regional stability if the pro-Westerners loose their grip and Pervez suffers the same fate as his recent predecessors.

In addition to the Carnival, here's another blogosphere tradition that gives you an interesting plethora of links to various blogs: Kate over at Electric Venom with her letter of the day. Today, coincidentally, it is the V, for victory or for vibrant California?

Today is recall day and apparently it will be a very close call. Many have weighed in with analysis, discussion and projecting possible outcomes and I have from time to time commented on the process. But today I decided to post something more generic about what I think makes California a unique place and why it is here that Schwarzenegger is able run for the office of Governor: My California, Our Optimism.

California conjures up different notions to each of us. This blogger for instance does not like the place at all, but what he dislikes about it comes very close to what I love about it and that is pushing the boundaries, the seemingly never ending triumph of man over nature, turning a desert into one of the largest economies in the world. That success combined with the sun, the beauty and the excesses of a Hollywood-driven glamour culture have made the place the envy of many. And many have turned their envy or jealousy into dislike, especially in Europe where the elevation of a former body-builder and moviestar to a fast moving political icon has reaped disapproval, disgust or other antipathy like feelings. It corroborated many pre-ordained notions about the place. I don’t have to travel very far to hear these, Irene my wife, has foiled many attempts from my side to position ourselves for a move south, and for now she has grudgingly settled for some distant, yet to be realized, part-time retirement arrangement in the Golden State. She just does not share with me the subliminal notions that have turned names like Palm Springs, Newport Beach and Sonoma into crucial missions that at one point deserve my residency.

The place has pushed the boundaries of what is humanly feasible, of what is deemed achievable. That’s why California is probably the only place in the US, or in the world, where Schwarzenegger can run for office. And as I have expressed