Israel Is Caught in a Strategic Trap

Israel must destroy Hamas. It also must normalize relations with Saudi Arabia. That’s why the 10/7 attacks happened in the first place.

Israeli Prime Minister Benjamin Netanyahu (Photo by ABIR SULTAN / POOL / AFP) (Photo by ABIR SULTAN/POOL/AFP via Getty Images)

1. Israel

I’m not sure that we in the West have an appreciation for the strategic challenges facing Israel.

Israel has two overriding strategic goals, one from before 10/7 and one from after.

#1 The pre-10/7 objective: To strike deals normalizing its relations with certain Middle Eastern neighbors, which would (1) legitimize Israel’s place in the region while also (2) isolating Iran. Israel was getting close to such a deal with Saudi Arabia, which would have been the cornerstone of Israeli foreign policy going forward and would have created a strategic crisis for the Iranian regime.

In the long run, this pre-10/7 objective is still paramount. It is the only way to create a stable framework for Israel’s place in the region.

#2 The post-10/7 objective: To eliminate Hamas within the Gaza territory. No liberal society can function—and remain liberal—if it lives with a knife pointed at its heart. Israel simply cannot function—socially, militarily, economically—if Hamas has the ability to hop a fence and murder thousands of Israeli citizens at any moment.

Which, by the way, is explicitly what Hamas says it intends to do:

“We will repeat the October 7th massacre again and again until Israel is destroyed. . . . We are a nation of martyrs and are proud of it. We’ll sacrifice as many Palestinian lives as it takes.”

Israel’s challenge is that achieving #2 makes #1 harder.

Surely, Hamas—which is an Iranian cat’s paw—understands this. I suspect that it was a large part of the impetus for the 10/7 attack: To push Israel into a strategic trap. Cui bono? Iran.

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The challenge is one of sequencing. It would be easier for Israel to normalize relations with Saudi Arabia and the UAE and then turn to destroying Hamas. But that’s a political decision and it probably isn’t politically possible at the moment.

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There is impatience building, especially on the progressive left, for the Israeli-Hamas war to finish. On the one hand this is understandable. The loss of innocent life is a tragedy.

But “concluding” a war without reaching Israel’s strategic objectives will only postpone the bloodletting. Hamas has literally said this, out loud.

Has Israel conducted warfare in the most scrupulous manner possible? Probably not. But as Gabe Schoenfeld points out, by historical standards Israel has made nontrivial efforts to avoid civilian deaths.

Here it’s important to be crystal clear: The reason we have so many civilian deaths in Gaza is because Hamas is not just a terrorist organization. It is also a death cult. And no ceasefire will change this central fact. So long as Hamas exists, innocent Israelis and innocent Palestinians will be killed. Because that is what Hamas wants.

Please read Ghazi Hamad’s words again:

“We will repeat the October 7th massacre again and again until Israel is destroyed. . . . We are a nation of martyrs and are proud of it. We’ll sacrifice as many Palestinian lives as it takes.”

Instead of being impatient for Israel to move on from its offensive, we ought to have some empathy for the position they are in.

Israeli leadership should have known that every step it took toward normalization with Saudi Arabia increased the chance of an attack by Hamas precisely because such an attack would create a strategic trap. So 10/7 was either a failure of execution or a failure of imagination on the part of the Israeli government.

But at this point, that no longer matters. What matters is that everything Israel—and America—does at this point should be viewed through the lens of helping to achieve both of Israel’s strategic objectives. Because without them, civilians on all sides will continue to die.

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Look: This stuff is complicated. But we embrace the complex here. Because flattening out complicated dynamics is one of the ways people make suboptimal decisions.

And I know that our community can think about this stuff in three dimensions. That’s one of the reasons I love you guys.

If you aren’t a member of Bulwark+, I hope you’ll consider joining us and continuing the conversation.

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One more thing: Matt Levine likes to say that “everything is securities fraud.” So here is a question: Is it insider trading if you’re a terrorist group and you’re about to launch a massive surprise attack, and in the days leading up to the attack you have intermediaries short a bunch of companies in the target country?

Because that is what it looks like Hamas did:

[W]e document a significant spike in short selling in the principal Israeli-company ETF days before the October 7 Hamas attack. The short selling that day far exceeded the short selling that occurred during numerous other periods of crisis . . . Similarly, we identify increases in short selling before the attack in dozens of Israeli companies traded in Tel Aviv. . . . [W]e do identify a sharp and unusual increase, just before the attacks, in trading in risky short-dated options on these companies expiring just after the attacks. . . . Our findings suggest that traders informed about the coming attacks profited from these tragic events.

I hope Matt writes about this today because the question of criminal culpability is interesting. Traditionally, the “victim” in securities fraud is thought to be the party which rightfully holds the information.

So if I work for XYZ Corp. and I learn that we’re about to release poor earnings and I short XYZ, the victim is XYZ Corp—because the information about their earnings report belongs to them, and not me.

How does this all shake out when the owner of the information is a terrorist organization?

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2. The Yutes

Another fantastic episode of The Focus Group this week. Peter Hamby was Sarah’s guest and they talked about the youth vote. You should listen to it or watch it.

But what I wanted to talk with you about is memory.

One of the things Hamby and Sarah talk about is how Gen Z’s coming-of-age political memories are pretty negative: Trump, school shootings, the war in Afghanistan, the looming threat of political violence. This is in contrast to Millennials, who had the Great Recession, but also had Obama and a sense of neoliberal optimism.

I want to ask you: What are your formative political memories—what I mean by this is: What are the earliest political events you remember? And how do you think they influenced your worldview then, and now?

I’ll go first.

My first memory of something happening in the wider world was the 1980 election, in which I was assured that (1) If Ronald Reagan was elected there would be nuclear war and (2) Jimmy Carter would 100 percent win.

My next set of memories comes a year later: the assassination of Anwar Sadat and the attempted assassinations of both Reagan and Pope John Paul II. I have vague memories of airline hijackings as a common occurrence. This is not my mind playing tricks on me. I wonder what people today, who talk about terrible crime rates and awful economic conditions, would have made of the late ’70s and early ’80s.

As for how this environment influenced my outlook: It’s not too much to say that it completely defines my general conservatism.

I have always believed that civilization is fragile, that moving too quickly carries unseen risks, and that no matter how bad things are today, they can always get worse.

Tell me about your earliest public memories and how they influenced you?

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3. EV Revolution

I have been bearish on EVs for a very long time—both back when it was cool and long after it stopped being cool. It seems obvious that EVs are very well suited for a number of use cases, but very poorly suited to another set of use cases.

For instance: EVs are superior to traditional internal combustion cars for urban environments with a lot of stopping and idling. For long-haul freight transport, which requires sustained driving and an enormous energy output, internal combustion engines are going to be superior. (Funnily enough, the use cases for autonomous driving are exactly the opposite: It’s very hard to see how autonomous vehicles can work at scale in urban and suburban environments, but could work well as freight haulers along highways.)

Anyway, Ed Niedermeyer has a long piece walking through the reasons why we should expect the internal combustion engine to hang around a lot longer than some people expect:

[T]here are too many premium EVs chasing too few buyers, and all the classic signs of oversupply are building up. Higher inventories and incentives, lower transaction prices, and even more red ink in a segment where anything else was already a rare exception. If this were happening in trucks and SUVs (as it has in the past) the media would have no problem calling it what it is, although even then at least trucks and SUVs have profit margins to give. . . .

Be that as it may, I am firmly committed to the principle that you should learn something from every crisis, and I’ve been thinking a lot about The EV Transition lately. . . .

The theory starts with the problem the US EV market currently faces: the oversupply of premium market EVs. Actually that’s only half the problem, the other half of which is the undersupply of affordable EVs. People blame the failure of every affordable EV from the original Nissan Leaf on down on execution, but the reality is that the demand curve for EVs in this country makes them look more like Veblen goods than more typical products. . . .

[T]he issue is that the US market for EVs has a capability floor, a minimum viable product line, below which an EV simply won’t sell. The simplest metric for this capability is miles of range, although the charging network is a fuzzier factor as well, and it appears to be somewhere around 250 miles. This minimum level of capability demands a large battery pack, which increases cost, which is why everybody is competing in the premium segment and there is no real competition in low cost EVs.

The problem of the affordable EV is where Transitionheads fall back on a surprising level of faith in technological innovation and efficiencies of scale, which tends to kill off actual discussion. But even if we can drive down the cost of batteries to the point where a 250 mile minimum viable EV is genuinely affordable on a sustainable positive margin basis, there will be weird factors in that market that nobody seems to be even considering. That’s because the entire EV Transition narrative is built on a false equivalency between gas and battery electric cars that no amount of wishing will magic away.

If you strip the two technologies down to first principles, the differences between the two start to become more obvious. The difference between a cheap gas car and an expensive gas car boils down to two factors: creature comforts and power. Things like the size of the gas tank and the refueling experience are utterly commodified, being no different if your car costs $30k or $100k. In stark contrast, performance is more or less commodified in EVs but the size of the battery and the quality of the charging network are central to the difference between a cheap EV and an expensive one.

Read the whole thing.