Israel's previous victories have boomeranged!

Just returned from grandson's graduation from high school and leaving again this Friday so this may be the last memo until I return this Sunday.

Michael Beschloss has written a new book entitled: "Presidential Courage." It resembles Jack Kennedy's earlier "Profiles in Courage." In his new book, Beschloss goes into some detail on Truman's decision regarding his decision to support the establishment of The State of Israel. Michael Oren cited Truman's decision, in less detail,in his own recent book which I briefly reviewed several memos ago.

In contrast, I listened to some of the comments about the Democrat candidates debate tonight. What a pathetic state of affairs and about as false as a movie set. All up front, nothing in the rear. They apparently fell all over each other trying to outdo the other in ending the war but not one comment about the consequences of their actions; as if ending the war has no subsequent cost financial or otherwise. What a sad pandering to the left of their party and when the campaign begins the nominee will retreat from the limb he/she has placed themself on and, no doubt, "Boobus Americanus" will give them a pass along with our left leaning media who want nothing better than for us to lose because it accords with their contempt for our nation and belief we are the aggressor.

A fellow Aranui passenger has written his views of the trip. (See 1 below.)

Back to the future. A long but interesting observation. (See 2 below.)

Lebanon continues to explode as a second refugee camp erupts in fighting. (See 3 below.)

Olmert is coming to discuss the Middle East with GW in mid June unless plans change.
Olmert's standings with the Israeli public is lower than GW's with his own constituency and there are rumors GW might be on the verge of making an important, last ditch type speech as his own term in office nears an end. (See 4 below.)

Meanwhile there are those who believe Assad is going to make some last ditch effort of his own and launch an attack against Israel to deflect attention from the Hariri trial. (See 5 below.)

Jonathan Tobin writes about something I have said for years. Israeli victories has made it a villain in the eyes of the world. It is one thig to be an underdog but it is another to be a winning underdog. (See 6 below.)

A dour analysis by Reva Bhalla,predicts a rough road ahead. (see 7 below.)

Dick






1) OUR SOUTH PACIFIC VOYAGE TO POLYNESIAN PARADISE ABOARD THE ARANUI-3

Tahiti is the jumping off point for the 2,000 mile r/t, two week cargo ship voyage through the remote, sparsely populated Marquesas Islands



“Some Enchanted Evening” has haunted wife Jeanne since childhood. With a very important birthday approaching, I asked her where in the world she would wish to go. “Tahiti,” was the answer. Tahiti for sure, and why not a voyage into archipelagos far, remote and so swallowed up in the great Pacific as to be the land specs furthest removed from the continents of the globe? Into the Polynesian Triangle, bound by Hawaii in the north, Easter Island in the east and New Zealand in the west, we went for an adventuresome voyage on a cargo/passenger ship which serves as the lifeline to the six inhabited islands of the Marquesas archipelago.



I wrote an essay a day of our adventures, sometimes two. On our website, www.cruisin-thru-100.com, are our tales of the South Pacific, photos illustrating the words and a separate photo gallery of 145 images of the adventure. As Jeanne exclaimed more than once during our journey aboard the Aranui-3: “We probably won’t be this way again.”

Perhaps you will never set foot on Hiva Oa and visit Calvary Cemetery, high above the bay waters that wash the beach sands of Atuona, where post-impressionist French painter Paul Gauguin lived out his last years. The vista down to the azure sea, through the tropical greenery, from Gauguin’s burial site in the Calvary Cemetery is magnificent. Jeanne and I have been there and done the lava specs of the Marquesas. All you have to do to vicariously live our South Pacific adventure is bring up www.cruisin-thru-100.com. We hope you’ll enjoy our words and images. If you do, we urge you to introduce your friends and family to www.cruisin-thru-100.com. Enjoy. Gary

2)Where the future is taking us ....... while we continue "to fiddle"....
>
>>> > A GLOBAL INTELLIGENCE BRIEFING


>>> > Originally written for CEOs. WORTH TEN MINUTES TO READ: This is for
>>> > your personal evaluation. Herb Meyer served during the Reagan
>>> > administration as special assistant to the Director of Central
>>> > Intelligence and Vice Chairman of the CIA's National Intelligence
>>> > Council. In these positions, he managed production of the U.S.
>>> > National Intelligence Estimates and other top-secret projections
>>> > for the President and his national security advisers. Meyer is
>>> > widely credited with being the first senior U.S. Government
>>> > official to forecast the Soviet Union's collapse, for which he
>>> > later was awarded the U.S. National Intelligence Distinguished
>>> > Service Medal, the intelligence community's highest honor.
>>> > Formerly an associate editor of FORTUNE, he is also the author of
>>> > several books.

>>> > HERBERT MEYER: FOUR MAJOR TRANSFORMATIONS

>>> > Currently, there are four major transformations that are shaping
>>> > political, economic and world events. These transformations have
>>> > profound implications for American business owners, our culture and
>>> > our way of life.

1. The War in Iraq There are three major monotheistic religions in
>>> > the world: Christianity, Judaism and Islam. In the 16th century,
>>> > Judaism and Christianity reconciled with the modern world. The
>>> > rabbis, priests and scholars found a way to settle up and pave the
>>> > way forward. Religion remained at the center of life, church and
>>> > state became separate. Rule of law, idea of economic liberty,
>>> > individual rights, and human Rights-all these are defining points
>>> > of modern Western civilization. These concepts started with the
>>> > Greeks but didn't take off until the
>>> > 15th and 16th century when Judaism and Christianity found a way to
>>> > reconcile with the modern world. When that happened, it unleashed
>>> > the scientific revolution and the greatest outpouring of art,
>>> > literature and music the world has ever known.
>>> > Islam, which developed in the 7th century, counts millions of
>>> > Moslems around the world who are normal people. However, there is
>>> > a radical streak within Islam. When the radicals are in charge,
>>> > Islam attacks Western civilization. Islam first attacked Western
>>> > civilization in the 7th century, and later in the 16th and 17th centuries. By 1683,
>>> > the Moslems (Turks from the Ottoman Empire) were literally at the
>>> > gates of Vienna . It was in Vienna that the climatic battle between
>>> > Islam and Western civilization took place.


>>> > The West won and went forward. Islam lost and went backward.
>>> > Interestingly, the date of that battle was September 11. Since
>>> > then, Islam has not found a way to reconcile with the modern world.
>>> > Today, terrorism is the third attack on Western civilization by
>>> > radical Islam. To deal with terrorism, the U.S. is doing two
>>> > things. First, units of our armed forces are in 30 countries
>>> > around the world hunting down terrorist groups and dealing with
>>> > them. This gets very little publicity.


>>> > Second we are taking military action inAfghanistan and Iraq . These
>>> > are covered relentlessly by the media. People can argue about
>>> > whether the war inIraq is right or wrong. However, the underlying
>>> > strategy behind the war is to use our military to remove the
>>> > radicals from power and give the moderates a chance. Our hope is
>>> > that, over time, the moderates will find a way to bring Islam
>>> > forward into the 21st century. That's what our involvement in Iraq
>>> > and Afghanistan is all about.


>>> > The lesson of 9/11 is that we live in a world where a small number
>>> > of people can kill a large number of people very quickly. They can
>>> > use airplanes, bombs, anthrax, chemical weapons or dirty bombs.
>>> > Even with a first-rate intelligence service (which the U.S. does
>>> > not have), you can't stop every attack. That means our tolerance
>>> > for political horseplay has dropped to zero. No longer will we
>>> > play games with terrorists or weapons of mass destructions.
>>> > Most of the instability and horseplay is coming from the Middle
>>> > East. That's why we have thought that if we could knock out the
>>> > radicals and give the moderates a chance to hold power, they might
>>> > find a way to reconcile Islam with the modern world. So when
>>> > looking at Afghanistan or Iraq , it's important to look for any
>>> > signs that they are modernizing. For example, women being brought
>>> > into the workforce and colleges inAfghanistan is good. The Iraqis
>>> > stumbling toward a constitution is good. People can argue about
>>> > what the U.S.is doing and how we're doing it, but anything that
>>> > suggests Islam is finding its way forward is good.


>>> > 2. The Emergence of China In the last 20 years, China has moved
>>> > 250 million people from the farms and villages into the cities.
>>> > Their plan is to move another 300 million in the next 20 years.
>>> > When you put that many people into the cities, you have to find
>>> > work for them. That's why China is addicted to manufacturing; they
>>> > have to put all the relocated people to work. When we decide to
>>> > manufacture something in the U.S. , it's based on market needs and
>>> > the opportunity to make a profit. In China , they make the decision
>>> > because they want the jobs, which is a very different calculation.
>>> > While China is addicted to manufacturing, Americans are addicted to
>>> > low prices. As a result, a unique kind of economic codependency
>>> > has developed between the two countries. If we ever stop buying
>>> > from China , they will explode politically. If China stops selling
>>> > to us, our economy will take a huge hit because prices will jump.
>>> > We are subsidizing their economic development; they are subsidizing
>>> > our economic growth.


>>> > Because of their huge growth in manufacturing, China is hungry for
>>> > raw materials, which drives prices up worldwide. China is also
>>> > thirsty for oil, which is one reason oil is now at $60 a barrel.
>>> > By 2020, China will produce more cars than the U.S. China is also
>>> > buying its way into the oil infrastructure around the world. They
>>> > are doing it in the open market and paying fair market prices, but
>>> > millions of barrels of oil that would have gone to the U.S. are
>>> > now going to China . China 's quest to assure it has the oil it
>>> > needs to fuel its economy is a major factor in world politics and
>>> > economics. We have our Navy fleets protecting the sea lines,
>>> > specifically the ability to get the tankers through. It won't be
>>> > long before the Chinese have an aircraft carrier sitting in
>>> > thePersian Gulf as well. The question is, will their aircraft
>>> > carrier be pointing in the same direction as ours or against us?


>>> > 3. Shifting Demographics of Western Civilization Most countries in
>>> > the Western world have stopped breeding. For a civilization
>>> > obsessed with sex, this is remarkable. Maintaining a steady
>>> > population requires a birth rate of 2.1. In Western Europe , the
>>> > birth rate currently stands at 1.5, or 30 percent below
>>> > replacement. In 30 years there will be 70 to 80 million fewer
>>> > Europeans than there are today. The current birth rate in Germany
>>> > is 1.3. Italy and Spain are even lower at
>>> > 1.2. At that rate, the working age population declines by 30
>>> > percent in 20 years, which has a huge impact on the economy.


>>> > When you don't have young workers to replace the older ones, you
>>> > have to import them. The European countries are currently
>>> > importing Moslems. Today, the Moslems comprise 10 percent of
>>> > France and Germany , and the percentage is rising rapidly because
>>> > they have higher birthrates. However, the Moslem populations are
>>> > not being integrated into the cultures of their host countries,
>>> > which is a political catastrophe. One reasonGermany and France
>>> > don't support the Iraq war is they fear their Moslem populations
>>> > will explode on them. By 2020, more than half of all births in the
>>> > Netherlands will be non-European.
>>> > The huge design flaw in the post-modern secular state is that you
>>> > need a traditional religious society birth rate to sustain it. The
>>> > Europeans simply don't wish to have children, so they are dying.
>>> > In Japan , the birthrate is 1.3. As a result, Japan will lose up to
>>> > 60 million people over the next 30 years. Because Japan has a very
>>> > different society than Europe , they refuse to import workers.
>>> > Instead, they are just shutting down. Japan has already closed
>>> > 2000 schools, and is closing them down at the rate of 300 per
>>> > year.Japan is also aging very rapidly. By
>>> > 2020, one out of every five Japanese will be at least 70 years old.
>>> > Nobody has any idea about how to run an economy with those
>>> > demographics.


>>> > Europe and Japan , which comprise two of the world's major economic
>>> > engines, aren't merely in recession, they're shutting down. This
>>> > will have a huge impact on the world economy, and it is already
>>> > beginning to happen. Why are the birthrates so low? There is a
>>> > direct correlation between abandonment of traditional religious
>>> > society and a drop in birth rate, and Christianity in Europe is
>>> > becoming irrelevant. The second reason is economic. When the
>>> > birth rate drops below replacement, the population ages. With
>>> > fewer working people to support more retired people, it puts a
>>> > crushing tax burden on the smaller group of working age people. As
>>> > a result, young people delay marriage and having a family. Once
>>> > this trend starts, the downward spiral only gets worse. These
>>> > countries have abandoned all the traditions they formerly held in
>>> > regards to having families and raising children.


>>> > The U.S. birth rate is 2.0, just below replacement. We have an
>>> > increase in population because of immigration. When broken down by
>>> > ethnicity, the Anglo birth rate is 1.6 (same as France ) while the
>>> > Hispanic birth rate is 2.7. In the U.S. , the baby boomers are starting to retire in
>>> > massive numbers. This will push the elder dependency ratio from 19
>>> > to 38 over the next 10 to 15 years. This is not as bad as Europe ,
>>> > but still represents the same kind of trend.


>>> > Western civilization seems to have forgotten what every primitive
>>> > society understands-you need kids to have a healthy society.
>>> > Children are huge consumers. Then they grow up to become
>>> > taxpayers. That's how a society works, but the post-modern secular
>>> > state seems to have forgotten that. If U.S. birth rates of the
>>> > past 20 to 30 years had been the same as post-World War II, there
>>> > would be no Social Security or Medicare problems.


>>> > The world's most effective birth control device is money. As
>>> > society creates a middle class and women move into the workforce,
>>> > birth rates drop. Having large families is incompatible with
>>> > middle class living. The quickest way to drop the birth rate is
>>> > through rapid economic development. After World War II, the U.S.
>>> > instituted a $600 tax credit per child. The idea was to enable mom
>>> > and dad to have four children without being troubled by taxes.
>>> > This led to a baby boom of 22 million kids, which was a huge
>>> > consumer market that turned into a huge tax base. However, to
>>> > match that incentive in today's dollars would cost$12,000 per
> child.


>>> > China and India do not have declining populations. However, in
>>> > both countries, there is a preference for boys over girls, and we
>>> > now have the technology to know which is which before they are
>>> > born. In China and India , many families are aborting the girls.
>>> > As a result, in each of these countries there are 70 million boys
>>> > growing up who will never find wives. When left alone, nature
>>> > produces 103 boys for every 100 girls. In some provinces, however,
>>> > the ratio is 128 boys to every 100 girls.
>>> > The birth rate in Russia is so low that by 2050 their population
>>> > will be smaller than that of Yemen . Russia has one-sixth of the
>>> > earth's land surface and much of its oil. You can't control that
>>> > much area with such a small population. Immediately to the south,
>>> > you have China with 70 million unmarried men are a real potential
>>> > nightmare scenario for Russia .


>>> > 4. Restructuring of American Business The fourth major
>>> > transformation involves a fundamental restructuring of American!
>>> > business. Today's business environment is very complex and
>>> > competitive. To succeed, you have to be the best, which means
>>> > having the highest quality and lowest cost. Whatever your price
>>> > point, you must have the best quality and lowest price. To be the
>>> > best, you have to concentrate on one thing. You can't be all
>>> > things to all people and be the best.


>>> > A generation ago, IBM used to make every part of their computer.
>>> > Now Intel makes the chips, Microsoft makes the software, and
>>> > someone else makes the modems, hard drives, monitors, etc. IBM
>>> > even out sources their call center. Because IBM has all these
>>> > companies supplying goods and services cheaper and better than they
>>> > could do it themselves, they can make a better computer at a lower
>>> > cost. This is called a fracturing of business. When one company
>>> > can make a better product by relying on others to perform functions
>>> > the business used to do itself, it creates a complex pyramid of
>>> > companies that serve and support each other.


>>> > This fracturing of American business is now in its second
>>> > generation. The companies who supply IBM are now doing the same
>>> > thing-outsourcing many of their core services and production
>>> > process. As a result, they can make cheaper, better products.
>>> > Over time, this pyramid continues to get bigger and bigger. Just
>>> > when you think it can't fracture again, it does. Even very small
>>> > businesses can have a large pyramid of corporate entities that
>>> > perform many of its important functions. One aspect of this trend
>>> > is that companies end up with fewer employees and more independent
>>> > contractors.


>>> > This trend has also created two new words in business: integrator
>>> > and complementor. At the top of the pyramid, IBM is the
>>> > integrator. As you go down the pyramid, Microsoft, Intel and the
>>> > other companies that support IBM are the complementors. However,
>>> > each of the complementors is itself an integrator for the
>>> > complementors underneath it. This has several implications, the
>>> > first of which is that we are now getting false readings on the
>>> > economy. People who used to be employees are now independent
>>> > contractors launching their own businesses. There are many people
>>> > working whose work is not listed as a job. As a result, the
>>> > economy is perking along better than the numbers are telling us.


>>> > Outsourcing also confused the numbers. Suppose a company like
>>> > General Motors decides to outsource all its employee cafeteria
>>> > functions to Marriott (which it did). It lays off hundreds of
>>> > cafeteria workers, who then get hired right back by Marriott. The
>>> > only thing that has changed is that these people work for Marriott
>>> > rather than GM. Yet, the headlines will scream thatAmerica has
>>> > lost more manufacturing jobs. All that really happened is that
>>> > these workers are now reclassified as service workers. So the old
>>> > way of counting jobs contributes to false economic readings. As
>>> > yet, we haven't figured out how to make the numbers catch up with
>>> > the changing realities of the business world.


>>> > Another implication of this massive restructuring is that because
>>> > companies are getting rid of units and people that used to work for
>>> > them, the entity is smaller. As the companies get smaller and more
>>> > efficient, revenues are going down but profits are going up. As a
>>> > result, the old notion that revenues are up and we're doing great
>>> > isn't always the case anymore. Companies are getting smaller but
>>> > are becoming more efficient and profitable in the process.


>>> > IMPLICATIONS OF THE FOUR TRANSFORMATIONS


>>> > 1. The War in Iraq In some ways, the war is going well.
>>> > Afghanistan and Iraq have the beginnings of a modern government,
>>> > which is a huge step forward. The Saudis are starting to talk
>>> > about some good things, whileEgypt and Lebanon are beginning to
>>> > move in a good direction.
>>> > A series of revolutions have taken place in countries like Ukraine
>>> > and Georgia . There will be more of these revolutions for an
>>> > interesting reason. In every revolution, there comes a point where
>>> > the dictator turns to the general and says, "Fire into the crowd."
>>> > If the general fires into the crowd, it stops the revolution. If
>>> > the general says No, the revolution continues. Increasingly, the
>>> > generals are saying No because their kids are in the crowd.


>>> > Thanks to TV and the Internet, the average 18-year old outside the
>>> > U.S. is very savvy about what is going on in the world, especially
>>> > in terms of popular culture. There is a huge global consciousness,
>>> > and young people around the world want to be a part of it. It is
>>> > increasingly apparent to them that the miserable government where
>>> > they live is the only thing standing in their way. More and more,
>>> > it is the well-educated kids, the children of the generals and the
>>> > elite, who are leading the revolutions.


>>> > At the same time, not all is well with the war. The level of
>>> > violence in Iraq is much worse and doesn't appear to be improving.
>>> > It's possible that we're asking too much of Islam all at one time.
>>> > We're trying to jolt them from the 7th century to the 21st century
>>> > all at once, which may be further than they can go. They might
>>> > make it and they might not. Nobody knows for sure. The point is,
>>> > we don't know how the war will turn out. Anyone who says they know
>>> > is just guessing.


>>> > The real place to watch is Iran . If they actually obtain nuclear
>>> > weapons it will be a terrible situation. There are two ways to
>>> > deal with it. The first is a military strike, which will be very
>>> > difficult. The Iranians have dispersed their nuclear development
>>> > facilities and put them underground. The U.S. has nuclear weapons
>>> > that can go under the earth and take out those facilities, but we
>>> > don't want to do that. The other way is to separate the radical
>>> > mullahs from the government, which is the most likely course of
>>> > action.


>>> > Seventy percent of the Iranian population is under 30. They are
>>> > Moslem but not Arab. They are mostly pro-Western. Many experts
>>> > think the U.S. should have dealt with Iran before going to war
>>> > with Iraq . The problem isn't so much the weapons; it's the people
>>> > who control them. If Iran has a moderate government, the weapons
>>> > become less of a concern.


>>> > We don't know if we will win the war in Iraq . What we're looking
>>> > for is any indicator that Islam is moving into the 21st century and
>>> > stabilizing.



>>> > 2. China It may be that pushing 500 million people from farms and
>>> > villages into cities is too much too soon. Although it gets almost
>>> > no publicity, China is experiencing hundreds of demonstrations
>>> > around the country, which is
>>> > unprecedented. These are not students in Tiananmen Square . These
>>> > are average citizens who are angry with the government for building
>>> > chemical plants and polluting the water they drink and the air they breathe.
>>> > The Chinese are a smart and industrious people. They may be able
>>> > to pull it off and become a very successful economic and military
>>> > superpower. If so, we will have to learn to live with it. If they
>>> > want to share the responsibility of keeping the world's oil lanes
>>> > open, that's a good thing. They currently have eight new nuclear
>>> > electric power generators under way and 45 on the books to build.
>>> > Soon, they will leave the U.S. way behind in their ability to
>>> > generate nuclear power.


>>> > What can go wrong with China ? For one, you can't move 500 million
>>> > people into the cities without major problems. Two , China really
>>> > wants Taiwan , not so much for economic reasons, they just want it.
>>> > The Chinese know that their system of communism can't survive much
>>> > longer in the 21st century. The last thing they want to do before
>>> > they morph into some sort of more capitalistic government is to
>>> > take over Taiwan .


>>> > We may wake up one morning and find they have launched an attack on
>>> > Taiwan . If so, it will be a mess, both economically and
>>> > militarily. The U.S. has committed to the military defense of
>>> > Taiwan . If China attacksTaiwan, ill we really go to war against
>>> > them? If the Chinese generals believe the answer is no, they may
>>> > attack. If we don't defend Taiwan , every treaty the U.S. has will
>>> > be worthless. Hopefully, China won't do anything stupid.


>>> > 3. Demographics Europe and Japan are dying because their
>>> > populations are aging and shrinking. These trends can be reversed
>>> > if the young people start breeding. However, the birth rates in
>>> > these areas are so low it will take two generations to turn things
>>> > around. No economic model exists that permits 50 years to turn
>>> > things around. Some countries are beginning to offer incentives
>>> > for people to have bigger families. For example, Italy is offering
>>> > tax breaks for having children. However, it's a lifestyle issue
>>> > versus a tiny amount of money. Europeans aren't willing to give up
>>> > their comfortable lifestyles in order to have more children.
>>> > In general, everyone in Europe just wants it to last a while
>>> > longer. Europeans have a real talent for living. They don't want
>>> > to work very hard. The average European worker gets 400 more hours
>>> > of vacation time per year than Americans. They don't want to work
>>> > and they don't want to make any of the changes needed to revive
>>> > their economies.


>>> > The summer after 9/11, France lost 15,000 people in a heat wave.
>>> > In August, the country basically shuts down when everyone goes on
>>> > vacation. That year, a severe heat wave struck and 15,000 elderly
>>> > people living in nursing homes and hospitals died. Their children
>>> > didn't even leave the beaches to come back and take care of the
>>> > bodies. Institutions had to scramble to find enough refrigeration
>>> > units to hold the bodies until people came to claim them.
>>> > This loss of life was five times bigger than 9/11 in America , yet
>>> > it didn't trigger any change in French society. When birth rates
>>> > are so low, it creates a tremendous tax burden on the young. Under
>>> > those circumstances, keeping mom and dad alive is not an attractive
>>> > option. That's why euthanasia is becoming so popular in most
>>> > European countries. The only country that doesn't permit (and even
>>> > encourage) euthanasia is Germany , because of all the baggage from
>>> > World War II.


>>> > The European economy is beginning to fracture. Countries like
>>> > Italy are starting to talk about pulling out of the European Union
>>> > because it is killing them. When things get bad economically in
>>> > Europe , they tend to get very nasty politically. The canary in the
>>> > mine is anti-Semitism. When it goes up, it means trouble is
>>> > coming. Current levels of anti-Semitism are higher than ever.
>>> > Germany won't launch another war, but Europe will likely get
>>> > shabbier, more dangerous and less pleasant to live in.
>>> > Japan has a birth rate of 1.3 and has no intention of bringing in
>>> > immigrants. By 2020, one out of every five Japanese will be 70
>>> > years old. Property values in Japan have dropped every year for
>>> > the past 14 years. The country is simply shutting down.
>>> > In the U.S. we also have an aging population. Boomers are
>>> > starting to retire at a massive rate. These retirements will have
>>> > several major impacts:


>>> > A possible massive sell-off of large four-bedroom houses and a
>>> > movement to condos.


>>> > An enormous drain on the treasury. Boomers vote, and they want
>>> > their benefits, even if it means putting a crushing tax burden on
>>> > their kids to get them. Social Security will be a huge problem.
>>> > As this generation ages, it will start to drain the system. We are
>>> > the only country in the world where there are no age limits on
>>> > medical procedures.



An enormous drain on the health care system.
>>> > This will also increase the tax burden on the young, which will
>>> > cause them to delay marriage and having families, which will drive
>>> > down the birth rate even further.


>>> > Although scary, these demographics also present enormous
>>> > opportunities for products and services tailored to aging
>>> > populations. There will be tremendous demand for caring for older
>>> > people, especially those who don't need nursing homes but need some
>>> > level of care. Some people will have a business where they take
>>> > care of three or four people in their homes. The demand for that
>>> > type of service and for products to physically care for aging
>>> > people will be huge.


>>> > Make sure the demographics of your business are attuned to where
>>> > the action is. For example, you don't want to be a baby food
>>> > company in Europe or Japan . Demographics are much underrated as an
>>> > indicator of where the opportunities are. Businesses need
>>> > customers. Go where the customers are.


>>> > 4. Restructuring of American Business The restructuring of
>>> > American business means we are coming to the end of the age of the
>>> > mostly employer and employee. With all this fracturing of
>>> > businesses into different and smaller units, employers can't
>>> > guarantee jobs anymore because they don't know what their companies
>>> > will look like next year. Many are on their way to becoming
>>> > independent contractors. The new workforce contract will be, a
>>> > "Show up at the my office five days a week and do what I want you
>>> > to do, but you handle your own insurance, benefits, health care and
>>> > everything else."


>>> > Husbands and wives are becoming economic units. They take
>>> > different jobs and work different shifts depending on where they
>>> > are in their careers and families. They make tradeoffs to put
>>> > together a compensation package to take care of the family. This
>>> > used to happen only with highly educated professionals with high
>>> > incomes. Now it is happening at the level of the factory floor
>>> > worker. Couples at all levels are designing their compensation
>>> > packages based on their individual needs. The only way this can
>>> > work is if everything is portable and flexible, which requires a
>>> > huge shift in t he American economy.


>>> > The U.S. is in the process of building the world's first 21st
>>> > century model economy. The only other countries doing this are
>>> > U.K. and Australia . The model is fast, flexible, highly
>>> > productive and unstable in that it is always fracturing and re-
>>> > fracturing. This will increase the economic gap between the U.S.
>>> > and everybody else, especially Europe and Japan .


>>> > At the same time, the military gap is increasing. Other than
>>> > China , we are the only country that is continuing to put money into
>>> > their military. Plus, we are the only military getting on-the-
>>> > ground military experience through our war in Iraq . We know which
>>> > high- tech weapons are working and which ones aren't. There is
>>> > almost no one who can take us on economically or militarily. There
>>> > has never been a superpower in this position before.


>>> > On the one hand, this makes the U.S. a magnet for bright and
>>> > ambitious people. It also makes us a target. We are becoming one
>>> > of the last holdouts of the traditional Judeo-Christian culture.
>>> > There is no better place in the world to be in business and raise
>>> > children. The U.S. is by far the best place to have an idea, form
>>> > a business and put it into the marketplace. We take it for
>>> > granted, but it isn't as available in other countries of the world.


>>> > Ultimately, it's an issue of culture. The only people who can hurt
>>> > us are ourselves, by losing our culture. If we give up our Judeo-
>>> > Christian culture, we become just like the Europeans. The culture
>>> > war is the whole ballgame. If we lose it, there isn't another
>>> > America to pull us out.

3) Second Palestinian refugee camp in Lebanon, Ain Hilwa in the south, explodes in violence Sunday. UNIFIL contingents in South in peril


Fighting broke out in the southern Ain Hilwa camp June 3 between pro-Syrian groups close to al Qaeda and Lebanese forces. Sources report the Islamist Jund al Sham (Army of the Levant) prepared its offensive by building fortifications and evacuating Palestinian families from battle arenas.

The Lebanese army has been meeting stiff resistance in the northern camp of Nahar al-Bared near Tripoli for more than two weeks from Fatah al Islam boosted by pro-Syrian groups, such as Ahmed Jibril’ PFLP-General Command.

Spearheaded by two commando units, Lebanese troops have inched forward 400m into the camp, to a loss of some 50 men. Saturday, backed by heavy fire from tanks, artillery, helicopter and gunboats, they seized and destroyed several Fatah al-Islam positions on the camp’s outskirts

The spread of anti-government, Damascus-fomented clashes to the southern Lebanese Palestinian camp is a very serious development. It places the Palestinian refugee camps of the capital, Beirut, next in the line of fire – likewise the United Nations contingents policing the Lebanese-Israeli border.

Al Qaeda elements among the Palestinians have repeatedly threatened the international force with attack.

In the southern Ain Hilwa camp, our military sources report Lebanese troops must take on a coalition of radical Palestinian groups linked to al Qaeda and pro-Syrian terrorist factions, copiously armed with weapons and ammo from Damascus and its Lebanese supporters, including Hizballah.

Military sources report Syria has lined up an anti-Lebanese government front of Palestinian and Islamic radicals for an orchestrated campaign of violence to derail the UN Security Council resolution establishing an international tribunal for prosecuting the suspected murderers of former Lebanese prime minister Rafiq Hariri. They are under orders to sow mayhem across the country against the pro-Western Fouad Siniora in Beirut and mark down UNIFIL and northern Israel as additional targets.

4) Bush planning new speech on Middle East peace process
By Aluf Benn and Shmuel Rosner

U.S. President George W. Bush is considering making an important
diplomatic speech on the Middle East, according to reports received in
Jerusalem. Sources in Washington say Prime Minister Ehud Olmert's meeting with Bush later this month "could have a decisive effect on the contents of Bush's speech."

June 24 will mark the fifth anniversary of Bush's historic speech on the
Middle East in which he unveiled his "two-state vision" for resolving the
conflict between Israel and the Palestinians. His new speech is intended to survey the achievements secured since then and to delineate a diplomatic course of action for the year and half that remains of his term in office.

Olmert is slated to meet with Bush in the White House on June 19. Officials in Washington told Haaretz that what Olmert will tell Bush could be critical in terms of might have a "decisive effect" on what Bush will say in his address the following week.

The officials added that it was unclear whether Bush will indeed make the
planned speech. They nonetheless confirmed that the possibility was being
discussed in the top echelons of Bush's administration.

Olmert's chief of staff, Yoram Turbowicz, and the prime minister's diplomatic adviser, Shalom Turgeman, who visited Washington last week in preparation for Olmert's visit, heard no word on the planned speech during their visit. The issue received no mention in the schedule for the meeting between Olmert and Bush.

Before Olmert leaves for Washington, Israel is expected to give its official response to the benchmarks plan, detailing actions for Israel and the Palestinian Authority to implement in the coming months. The document calls on Israel to remove many West Bank roadblocks and improve operations at Gaza's border crossings. The Palestinians were asked to halt rocket fire from Gaza and weapons smuggling into the Gaza Strip.

Israel's response includes a suggestion to extend the schedule for the plan, which was determined by U.S. security coordinator Major General Keith Dayton.

The response also maintains that the lifting of roadblocks be subject to Israel's security considerations.

"We agree that we have not lifted enough roadblocks," a diplomatic official told Haaretz Sunday, "but the American schedule would spell security abandon, which the Americans themselves prefer to avoid."

The Israeli response divides the American demands into three categories:

1. Steps that Israel is prepared to take and is taking, including the
crossings issue.

2. Steps that will be examined according to the security conditions, such as allowing Palestinians convoys to travel from the West Bank to Gaza.

3. Steps Israel will not take until the situation radically improves, such as lifting the Hawara checkpoint at the entrance to Nablus.

"Lifting Hawara would mean that a suicide bomber could get from Nablus to
Jerusalem undisturbed," diplomatic sources explained.

Olmert is expected to meet Palestinian Authority Chairman Mahmoud Abbas
Thursday in Jericho. The diplomatic sources believe that the American
administration is frustrated with the situation in the West Bank.

According to the sources, Vice President Dick Cheney is skeptical about the extent of control that Abbas wields in the territories. U.S. Secretary of State Condoleezza Rice, by contrast, regards Abbas as a viable partner for negotiations.

Diplomatic sources in Jerusalem pointed to the fact that Olmert had been
invited to meet Bush before the second round of Labor's primaries as proof that the White House was confident that Olmert and his cabinet would not be replaced in the near future.

5) Assad advocates diplomatic talks, yet evidence shows he is preparing for war
Another Yom Kippur?
by Guy Bechor

The UN Security Council's decision to establish an international court to
try Basher Assad and his relatives for the murder of former Lebanese Prime
Minister Rafik Hariri has made the Syrian government frantic.

This development may come at Israel's expense, as within the battle for his
survival Assad may embark on a war against Israel sooner than expected.

It's difficult not to notice that the Syrians are heading for war since they
are convinced that Israel has lost its former "killer instinct" and fears a
conflict. The Syrians followed the suicidal attitude that prevailed here
following the Second Lebanon War with gaping mouths. They view the public
criticism prevalent in the Israeli press and culture, as well as the
Winograd's Commission's testimonies, as their strategic assets.

As a result of the last war they understood that there is no need for a
large ground force, but rather, missiles aimed at dense Israeli population
centers. For the past two years the Syrians have been engaged in massive
acquisitions from Russia. In the past they owed some $11 billion to the
Russians, yet in 2005 the Russians erased part of the debt and the rest was
covered by the Iranians.

Syria began equipping itself with advanced anti-aircraft missiles in order
to crush our Air Force, anti-tank missiles - as the last war demonstrated
that our armored corps weren't prepared - and cruise missiles against our
Navy.

The Saudi London-based daily al-Sharq al-Awsat reported that Syria has
completed the deployment of Chinese C-802 cruise missiles, which it acquired
from Iran, and that the deployment of its Air Force has also been completed.
Russia has expressed its willingness to also sell the Syrians its most
advanced 280 kilometers (174 miles) range Iskander missile, more than enough
to strike at any destination in Israel. Each such missile features an
optical GPS navigational system that allows operators to guide missiles to
their targets.

Wide-scale exercises

Two additional developments of concern occurred recently: Al-Sharq al-Awsat
reported that as of May the Syrian army has been engaged in a series of
wide-scale military exercises. In 1973, as it may be recalled, these
exercises turned out to be a de facto attack. Even the Israeli ambassador to
the US, Salai Meridor, has officially confirmed that Syria has significantly
boosted its military presence on the border with Israel. "Since the Yom
Kippur War Syria hasn't deployed such a significant number of forces on the
border," he said.

What can Israel do in face of these alarming developments? As the IDF has
lost its power of deterrence, it must be reinstated, post haste. Israel must
make it clear that if Syria launches a surprise assault, it may signify the
end of Assad's regime. These moves must be coordinated with the US in order
to place the option of an American-Israeli alliance on the table. As it may
be recalled, large American forces are stationed on the Syria-Iraq border.

In addition, the positive relations between Israel and the Turkish army
should be taken advantage of so that Assad will understand that in the event
of a surprise assault he would have to confront forces on the Turkish border
as well.

And finally, we should explain to the world that this is how Assad is
fooling Israel and the world: He advocates diplomatic talks, yet evidence
shows he is preparing for war.

6) The Heavy Burden of Victory
By Jonathan Tobin



Lamenting the 'occupation' won't make the facts that led to '67 conflict go away


French writer Alexandre Dumas the elder wrote in 1854 that "nothing succeeds like success." But when it comes to the State of Israel, it appears that nothing seems to fail as abysmally as victory.


As the world notes the 40th anniversary of the Six-Day War this coming week, much of the coverage and commentaries about the topic seem to center on the same theme: How Israel's historic triumph has become an intolerable burden that is itself the primary "obstacle" to peace.


Once upon a time, the great victory of 1967 that was achieved against great odds and at a moment in history — when much of the world expected that Israel was about to suffer a catastrophic defeat — was emblematic of Jewish pride. Yet that event is now increasingly seen as emblematic of unhappiness with the Jewish state.

40 YEARS OF … 'OPPRESSION'?
After all, the critics note, the anniversary's not so much of battles fought and won against great odds, but of 40 years of Israeli "oppression" of Arabs in Jerusalem, the West Bank and Gaza, the territories "conquered" in 1967.


The toll exacted by Israel's presence in the territories is seen as being responsible for the country losing its soul. Settlements and checkpoints have become deeply negative symbols of the country. In the Diaspora, it is the villainous Israel of "occupation" that has become the pariah despised by intellectuals and academics, and increasingly shunned by Jews who are not eager to identify with an oppressor.


Among those who do still embrace Israel, the war's anniversary inspires nostalgia for the state that existed before the unification of Jerusalem, and access to places where our history began to topple the existing Israeli political applecart. It was, as the Israel Policy Forum's M.J. Rosenberg, recently wrote, the Israel of the book and film "Exodus," a place he asserts, that could be admired without apology.


The war set in motion a series of events that led inevitably not just to settlements, but to the end of Labor Party domination of Israeli politics and the mainstreaming of forces such as the nationalist right, religious and Sephardi Jews, who had hitherto been marginalized by the Ashkenazi elite.


The Israeli right has had its failures, but the idea that the country was better off under the rule of the paternalistic Labor-dominated government of Israel's pre-war era is more myth than fact. The socialism embraced by that governing elite didn't merely retard the nation's economic progress. An era in which the government prevented the development of local television — to cite just one example of the excesses of this time — is nothing about which we should wax nostalgic.


Yet Rosenberg is right when he says that a more powerful Israel than the idealized early pioneer state "is a hard sell to those under 50, and particularly to young Jews of college age." But the problem is that those, like Rosenberg, whose main agenda is "to end the nightmare" of the occupation, seem to forget what the alternative to the actual outcome of the Six-Day-War was.


That is the crux of much of the teeth-gnashing about Israel's 40 years of post-1967 sin. The main point of contention between Israel and the Palestinians, and their supporters, is the same as it was 40 years ago: the existence of a Jewish state within any borders.


What then was the alternative to victory and "occupation?"


The answer is simple. Had Israel been defeated, then the oft-repeated threats of extermination of both the State and her people by Arab leaders such as Egyptian President Gamal Abdul Nasser and Palestinian leader Ahmed Shukairy, might well have been fulfilled.


We are told, ad nauseum, that the "occupation" is the reason for the ongoing conflict. Yet in 1967, Israel's dominion was limited to the exact boundaries that we are told are the only solution to the conflict. The world of June 3, 1967, was one in which not a single Jew lived in Judea and Samaria, nor in the eastern part of Jerusalem. No Jew prayed at the Western Wall, or could even visit any Jewish historic or religious site in the West Bank.


The war's anniversary ought to bring to mind the fact that the issue then is largely the same as it is today. There is not a shekel's worth of difference between the rhetoric and the goals of Hamas, Al Qaeda, or that of the leadership of Iran and that of the pre-'67 war Arab and Muslim world.


Compare the Jews of Sederot, who are subjected to missile attacks from Gaza today, and those slain by cross-border terror attacks that emanated from the same area prior to June 1967. The only difference is that prior to the Oslo peace accords and Israel's complete withdrawal from the territory in August 2005, we could still harbor illusions about the willingness of the Palestinians to embrace a chance for peace.

LONGING FOR DEFEAT?
All the introspection about 1967 ought to lead us to wonder why so many of us here are so uncomfortable with an Israel that is identified with power rather than weakness. Was the Israel that so many believed to be fated for imminent extinction in May 1967 more virtuous than the contemporary Jewish state? No. The "occupation" that fuels Arab and Muslim fury refers to every inch of the country. Israel's victory did not create Islamist extremism, it's just another excuse for a hatred that already existed.


Conversely, the joy with which the Jewish world greeted the events of June 1967 stemmed not only from being reunited with places like the Kotel, as identification with a proud, successful Jewish people. Like the creation of the state in 1948, the Six-Day War changed the lives of every Jew. For centuries, Jewish identity was bound up with homelessness and powerlessness. These victories allowed Jews to hold their heads up higher not only here in the United States, but even in the Soviet Union, where a movement for emigration to Israel was launched in its aftermath.


The Israel that emerged from that war has made its share of mistakes — though some of those errors were rooted more in a naive belief in the possibility of peace than triumphalism. But what the war demonstrated to the world was that the Jewish re-entry into history that Zionism represented was not to be erased after a mere 19 years.


That is a verdict some would like still to reverse. Yet the "occupation" so many lament was created by Arab aggression, and is rooted in the alienable right of the Jewish people to their own country rather than in some aberrant variant of Zionist imperialism. More territorial compromise will come when Israel's enemies give up their war to destroy it. Sadly, as recent events have again proved, that moment is nowhere in sight.


Until it does, those supporters of Israel here who spend so much time apologizing for it would do better to apply themselves to the task of asserting the justice of Israel's right to self-defense. Success in war has its drawbacks, but the alternative in 1967, as well as today, remains unthinkable.

7) Iran, the United States and Potential Iraq Deal-Spoilers
By Reva Bhalla

After 27 years of frozen relations, the United States and Iran held their first high-level direct talks in Baghdad on May 28 to negotiate a plan on how to stabilize Iraq. U.S. Ambassador to Iraq Ryan Crocker and his Iranian counterpart, Hassan Kazemi-Qomi, traded accusations about who was the bigger destabilizing force in Iraq. But by the end of the four-hour meeting, both described the negotiations as a positive first step in bringing the two sides together to stabilize Iraq. Kazemi-Qomi even said there probably would be a follow-up meeting within a month if he gets the OK from Tehran.

Iran and the United States evidently have come a long way since the spring of 2003, when Washington double-crossed Tehran on the two countries' original understanding that a pro-Iranian, Shiite-dominated Iraq would be allowed to emerge in exchange for Iran's help in effecting regime change in Baghdad. When the United States removed two hostile Sunni regimes from Iran's border -- the Taliban in Afghanistan and Saddam Hussein in Iraq -- the Iranians knew they had to check the United States on the regional chessboard so Washington understood any U.S. exit strategy from Iraq would have to come through Tehran. Only then, Tehran reasoned, could Iran use Iraq as a launchpad to extend Iranian influence in the Arab world.

Feeling a deep sense of betrayal, the Iranian government carried out a variety of deadly maneuvers that ultimately convinced Washington that neither the Iranians nor the Americans were going to succeed in gluing Iraq back together on their own. The negotiations are still marred by mutual distrust, but after four years of explosive negotiating tactics, Iran and the United States have reached a point at which both sides have acknowledged they cannot afford to avoid each other if they want to avoid their worst-case scenarios in Iraq.

As the negotiations grow in intensity, so does the noise. The lead-up to the May 28 talks was punctuated by a series of interesting jabs as each side sought leverage against the other. While the United States sent nine warships with 17,000 troops into the Persian Gulf (which the U.S. military deliberately referred to as the Arabian Gulf in the official press release on the naval exercises) and stepped up threats of broadening sanctions against Tehran due to the latter's nuclear activities, Iran continued broadcasting its atomic advances and announced it had uncovered Western-run spy rings inside the Islamic republic. The United States is still holding onto five Iranian officials arrested in the northern Iraqi city of Arbil in January as bargaining chips in talks with Iran. Iran has responded with a series of arrests of Iranian-Americans affiliated with think tanks on allegations they are dissidents working to topple the clerical regime. These belligerent tactics are all part of the game, and will flare up even further as the negotiations grow more serious.

The Meat of the Matter

It now becomes all the more critical to cut to the meat of these talks: the negotiating terms put forth by Washington and Tehran over how each plans to fix Iraq.

Iran handed over a proposal to Crocker during a brief encounter at the May 5-6 Sharm el-Sheikh summit in Egypt, but also chose to unofficially publicize its terms for Iraq through the Saudi-owned, British-based daily Al Hayat. The Iranian Foreign Ministry likely chose Al Hayat, a major Arab news outlet, to make a back-channel broadcast of what concessions it is prepared to make to allay Sunni concerns in the region.

In sum, this Iranian proposal called for a non-rushed withdrawal and relocation of U.S. troops to bases inside Iraq, a rejection of all attempts to partition Iraq, a commitment by the Sunni bloc to root out the jihadists and acknowledgement by Washington that the Iranian nuclear file cannot be uncoupled from the Iraq negotiations. In return, Iran would rein in the armed Shiite militias, revise the de-Baathification law and Iraqi Constitution to double Sunni political representation, create a policy to allow for the fair distribution of oil revenues (particularly to the Sunnis) and use its regional influence to quell crises in areas such as Lebanon, Syria and the Palestinian territories.

The terms put forth by the Iranians are so close to the U.S. position on Iraq that, with little exception, they could have been printed on State Department stationary and no one would have noticed the difference. If these are the terms Washington and Tehran are in fact discussing, then we are witnessing an extraordinary turn in the Iraq war in which the U.S. and Iranian blueprints for Iraq are finally aligning. It does not surprise us, then, that Crocker said after his meeting in Baghdad that the Iranian position "was very close to our own" at the level of policy and principle.

The Spoilers

The prospect of Washington and Tehran warming up to each other, and of the United States potentially regaining its military bandwidth in the not-too-distant future, is enough to put a number of serious actors into a frenzy. With the exception of the jihadists, most of the actors in question see an Iranian-U.S. accommodation over Iraq as inevitable, and have little choice but to strive to shape what would otherwise be an imposed reality in the coming months -- leaving substantial room for error in these negotiations. The Iraqi Sunnis and Arab states, in particular, will not necessarily sabotage the talks, but they will be working to secure Sunni interests and contain the extent to which Iran emerges as the primary beneficiary of any deal it works out with the United States over Iraq.

Jihadists

Within Iraq, the transnational jihadists have the most immediate concerns. A political settlement in Baghdad inevitably would involve a concerted effort by Iraq's Shia and mainstream Sunnis to uproot the jihadists and deprive them of the chaotic security conditions needed for their operations. The apex leadership of al Qaeda hiding out along the Pakistan-Afghanistan border is also betting on continued bedlam in Iraq to keep the transnational jihadist movement alive, and will not be happy to see U.S. forces beefed up in the South Asia theater once a deal is sealed in Iraq. Violence aimed at heightening sectarian tensions to derail the negotiations -- particularly attacks aimed at inflaming the Shia -- will escalate substantially over the next few weeks and months in Iraq. High-value political targets also likely will be targeted for assassination in an effort to disrupt the leadership structure of the respective factions.

Iraqi Shia

The Iranians face a daunting task in whipping Iraq's Shiite bloc into shape to follow through with Tehran's commitment to quell sectarian attacks and consolidate Shiite political power in Iraq for the first time in the country's history. Factionalism is already hardwired into the structure of the Iraqi Shiite community, whose loyalties are spread among the three largest political groups -- the (newly named) Iraqi Islamic Supreme Council, Hizb al-Dawah and the al-Sadrite bloc, as well as a number of smaller Shiite groups in southern Iraq, such as the Fadhila party. The intra-Shiite rivalries within and between these groups are enough to give anyone a headache, but Iran is well aware that violence and a good deal of oil money will be needed to bring the Iraqi Shia in line and make these negotiations work. Though the main political groups are more comfortable with the idea of working with Iran, Tehran has to play its cards carefully to ensure it does not trigger nationalist Arab sentiment among the Shiite actors, who already are deeply suspicious of Iran's intentions and have the arms and access to Iraq's southern oil fields to use as tools for stirring up trouble.

Iraqi Sunnis

Though not nearly as fractured as the Iraqi Shia, the Sunni landscape in Iraq has plenty of cracks of its own to make these negotiations troublesome. The Sunni factions in play include:



* The existing political blocs, divided between the Islamist Iraqi Accord Front and the secular-leaning Iraqi National Dialogue Front;


* The tribal groups, such as Anbar Salvation Council, that are actively fighting transnational jihadists to get a seat at the negotiating table;


* The Sunni religious establishment, led by the hard-line Association of Muslim Scholars of Iraq that has close links with the insurgent groups and has become increasingly anti-Iranian in recent weeks;


* The Sunni nationalist insurgents, who are looking for an acceptable opening into the political process, but remain distrustful of Shiite intentions.



The Iraqi Sunnis know they have to drive a hard bargain in these talks to ensure that Iraq's Sunnis are well-integrated in the state political and security apparatus to counter the Shiite majority. And they will continue to rely on explosives during the talks to make sure their demands are heard. Competing factions within the Sunni bloc and resistance from their former jihadist allies will only further complicate these negotiations, but unlike the jihadists, these Sunni groups are not opposed in principle to a deal that includes the Iranians -- they actually want negotiations.

Iraqi Kurds

By the looks of the Iranian proposal, the Kurds have plenty to worry about. Expanding Sunni political representation and changing the constitution to allow for a more "fair" distribution of oil resources leaves the Kurdish bloc in an all-too-familiar scenario in which Kurdish interests will be sacrificed by the United States to protect the interests of Iraq's neighbors.

Thus far, the Kurds have used the distraction of Sunni-Shiite bloodletting farther south to consolidate power between the two main rival Kurdish blocs (an extremely rare occurrence) and push forward with Kurdish autonomous demands to open Iraq's northern oil fields to foreign business. Once Iraq's Shiite and Sunni blocs reach some level of a political understanding in Baghdad, their attention will soon turn to their common adversary in the north, leaving the Kurds to face familiar moves by the Iraqi government to suppress Kurdish autonomy. The Kurds will need to drive a hard bargain by pushing through a Kirkuk referendum by year's end and resisting radical changes to the constitution and pending hydrocarbons legislation that threaten to put Iraq's undeveloped fields in the north under state control. The biggest threats the Kurds could make to a U.S.-Iranian deal over Iraq would involve withdrawing Kurdish support for U.S. forces or threatening to pull out of the government. But in the end, a compromise looks inevitable simply because the Kurds have nowhere else to turn.

Ultraconservatives in Washington and Tehran

There are ultraconservative factions in both Tehran and Washington that are not nearly as enthused about a U.S.-Iran rapprochement, and could use their influence to complicate the negotiations. Rumor has it that in Iran there are major disagreements brewing between the president and other senior Iranian officials, particularly on foreign policy matters. There are also growing indications that the apex of the clerical establishment is making moves to sideline Iranian President Mahmoud Ahmadinejad and weaken the influence of his ultraconservative faction as a preventative measure to ensure progress in these talks. Though Iranian Supreme Leader Ayatollah Ali Khamenei has thus far managed the deep divisions within the Iranian establishment between the ultraconservative and pragmatic conservative factions, his ability to contain these divisions is held hostage by his failing health.

Meanwhile, hard-line elements in Washington are actively spreading information in an allegedly covert campaign signed off on by U.S. President George W. Bush to topple the clerical regime. These actors are more interested in effecting a policy of regime change rather than in a rapprochement with Iran, and they view the negotiations as little more than a smoke screen for a covert campaign to rid the Islamic republic of its ruling ayatollahs. These rumors threaten to fuel even more distrust between the two sides while the negotiations are in full swing, especially as Iran's greatest fear is that it will end up being backstabbed all over again once Washington recovers from Iraq and has enough bandwidth to entertain military options.

Sunni Regional Powers

Saudi Arabia and the Gulf Arab states are extraordinarily nervous about the idea of having the United States and Iran conduct exclusive meetings over a matter that directly concerns their national security interests. As the leader of the Sunni Arabs, the Saudis believe they have every right to be part of the formal negotiating process, but they also see the inevitability of the United States and Iran working toward an Iraq settlement. With the most at stake, the Saudi government normally would be screeching in protest during these U.S.-Iranian bilateral meetings, but instead it is keeping quiet. For now, the Saudis have to rely on the United States to ensure their demands for Sunni representation and Iranian containment are heard.

Meanwhile, the Iranians evidently are working to allay Sunni Arab fears by publicizing Tehran's Iraq proposal (with considerable concessions to Iraq's Sunnis) in the mainstream Arab press and stepping up diplomatic engagements with Iran's Sunni neighbors in the Gulf. But the more the Iranians speak of arming and training the Iraqi army, the more the Saudis have to worry about. The House of Saud does not want to be looking at a scenario down the road in which U.S. troops have withdrawn from Iraq while Iran uses its militant proxies there to create an excuse to intervene militarily, putting Iranian troops within sight of Saudi Arabia's oil- and Shiite-rich Eastern province. The Saudis are also not looking forward to the day when war-hardened Saudi jihadist veterans in Iraq return home to wage attacks in the kingdom. Though the Saudis might see an Iran-U.S. deal as inevitable, they will keep their ties to the full spectrum of Sunni militants to use as their main deal-breaker should an Iraq settlement fail to address their interests.

Syria

Syrian President Bashar al Assad also probably is lying awake at night over these U.S.-Iran talks. The Alawite-Baathist regime in Syria loved the idea of its allies in Tehran expanding Shiite influence while the United States remained far too militarily occupied in Iraq to bother with Syria. The insurgency in Iraq also provided Syria with a vital pressure release valve for Sunni militants in the country. Like Riyadh, the regime in Damascus does not want to see jihadists returning home from Iraq to carry out attacks on native soil.

Despite these concerns, the Syrians are hoping their alliance with Tehran will pay off and result in serious recognition and security assurances from the United States. For this to happen, Syria has to prove it is an integral piece of this Iraq deal by showing it possesses the ability to clamp down on insurgent traffic (by funneling jihadists into Lebanon for now). While Syria offers limited cooperation over Iraq to show its powers, the al Assad regime will become further emboldened to secure its interests in Lebanon, where Syria's priorities are rooted.

Russia

But the player with perhaps the most to lose is not even located in the Middle East. That player is Russia. At first glance, Russia is an odd party to even be involved in the Iraqi imbroglio. It has no troops in country and, no matter what happens to Iraq in the long run, Baghdad has no impact on anything Russian. Certainly Moscow was friendly with the previous government, but not to the degree that Saddam Hussein's fall appreciably impacted Russian political or economic interests.

Russia does, however, have two horses in this race.

The first relates to the Iranian nuclear program, which lists the Russian-built Bushehr power plant as its crown jewel. Despite Iranian protestations to the contrary, Tehran's nuclear program is largely a result of Russian technology sharing. And, should the Russians walk away, the Iranian program will have suffered a monumental setback. Similarly, so long as Russia has not finished the reactor at Bushehr, the West cannot ignore Moscow's ability to function as an interlocutor in Tehran. So long as the facility is "under construction," Russia has leverage over both parties. As soon as Russia's technicians finish, however, that leverage evaporates.

Second, and far more important: So long as the bulk of the United States' and Iran's political and military attention is absorbed in Iraq, neither has any bandwidth to deal with other issues. Iran has deep and lasting interests in Azerbaijan and Turkmenistan -- states of critical interest to Moscow -- yet Iran's preoccupation with Iraq has prevented Tehran from capitalizing on recent opportunities. Similarly, the United States has faced no foe more challenging than the Soviet Union and its Russian successor. In that vein, there is no country more desirous of challenging Russia's ongoing efforts to rewire European security arrangements in its own favor than the United States. But that requires a Washington not consumed by the black hole Iraq has become.

A Rough Road Ahead

It took four years of heavy-handed negotiating tactics to bring U.S.-Iranian dealings over Iraq out of the back channels and into the public view.

That was half the battle.

The aligning of the U.S. and Iranian proposals for Iraq marks a significant inflection point in the war, but we still question whether the three big players negotiating this deal -- Washington, Tehran and Riyadh -- can trust each other enough and carry enough sway among Iraq's state actors to get them to cooperate and actually produce results on the ground. Once you throw the spoilers into this equation, along with a centuries-old Arab-Persian rivalry centered on containing the very rise that Iran is anticipating this deal will yield, the prospect of a U.S.-Iranian accommodation over Iraq coming to fruition does not look so good. Our hopes are not completely dashed, but we do see a bumpy road ahead.