This Is the End

RICK BOOKSTABER

Markets, Risk and Human Interaction

December 5, 2009

The Strategy of Conflict

To: Ismail Haniyeh, Hamas Prime Minister
Cc: Khaled Mashal, Chairman of the Hamas Political Bureau
Subject: Will you ever get Shalit off your hands?

I know you are frustrated with how slowly things are going with the Shalit prisoner swap negotiations. You must feel relieved that it is finally just around the corner. Well, it isn't. You are going to be waiting for a long time yet to come. Do you really think Israel will trade hundreds of convicted murderers for one soldier? Have you ever thought there might be something more going on?

You are being played. One tip-off is Israel’s bare-knuckled bargaining posture, which basically is, “Please, please give him back. We will do whatever you want.”

Doesn't this seem odd to you? I mean, put yourself in their shoes. If that sort of deal really goes through, what do you tell the next victims of violence perpetrated by those released in the swap? What do you tell the parents of Israeli soldiers killed in the process of capturing the terrorists who are released, not to mention the relatives of those who were killed in the terrorist attacks? And what about its effect on the incentives (a big topic of discussion in the U.S. right now, though in a slightly different context) for future acts of kidnapping.

I don't know if it translates, but in the U.S. we have a saying: If it sounds too good to be true, it probably is.

Here is what is really going on. Israel is having a lot of fun at your expense. They can use the hostage situation as a backdrop to lay siege to Gaza, make incursions with all kinds of cool military hardware, imprison various Hamas leaders as a tit for tat. They can hold off peace talks while expanding settlements. And meanwhile what can you do? Take all of this while sitting through endless negotiations.

This is why Israel is acting like the return of Shalit is the most important thing since 1948. Putting so much focus on him provides Israel a justification for all of this. It is like, well, people spending generations in refugee camps to provide a pretext for terrorism. If the Israelis had said something along the lines of, “Crap, you got one of our guys. Who do you want in exchange,” it would be hard to bring it to the scale of three years of harsh, but you have to admit, from Israel's perspective sort of appealing, measures.

Anyway, I am sure the big question, now that you see what is going on, is how you get yourself out of this mess without becoming a laughingstock. One way is to reduce the number of people you demand in exchange. But you can't do that; it would be politically disastrous. And in any case, if you do go down that path you will discover the negotiations will continue to lurch from one snag to another even when it gets whittled down to a one for one exchange. Maybe you can let him escape. Or ask the Israelis to mount a daring raid, with plenty of bystanders killed in the process – they're not going to do that, but you can – so that more attention is put on their apparent overreaction than your military failure. (You already know how well that works).

But it won't be that easy. You aren't going to be able to get rid of Shalit unless you are willing to give them something big in return.

There was a general expectation you would have figured all of this out about two years ago. By this point everyone is tired of waiting. Any gag can only go on for so long. Of course, Israel cannot be the one to let you in on it, so I am the guy who has ended up with that job.

Now that I've let the cat out of the bag, I am going back to writing about finance.