Hello All.

We’re seeing a resurgence of terrorism, particularly in Europe.  I’m choosing my words generously, since most reading this will feel that it never dissipated.  Fair enough.  I’ve seen over the years increased efforts to have surveillance, security checks, improved metal detectors, greater airline scrutiny, and greater regulations in crowd control and airline travel.  The problem is that law enforcement has to do its job right every time to prevent terrorist acts, while a terrorist only needs to do his (mostly his) job only once.

Logically this is a problem since as the amount of surveillance and defense increases, life becomes more and more uncomfortable for civilians, while terrorists only need to go to where the surveillance is the weakest.  And in a world with 7 billion people, it’s not hard to find such a spot.

REASONS FOR TERRORISM

The solution, I feel, lies in identifying the reasons terrorists are incentivized to join terrorist groups, namely ISIS, and then countering those reasons.  I won’t go into the reasons in depth, but from what I’ve read it’s related to the promise of a better economic life, drugs, self-empowerment, and personal support.

SOLUTIONS TO TERRORISM

Countering those motivating factors might entail a foreign policy that helps further the economies not providing satisfaction to its civilians.  Anything beyond that is beyond my expertise, though a sense a good foreign policy committee could come up with some great ideas.

GLOBAL COOPERATION

Terrorism is global.  So any solutions should be made in concert with other countries, primarily those with a mindset similar to the United States.

Why two question marks in the title?  Because the quick answer is “damned if I know”.  I do have a few semi-formed conclusions, however, see if you agree with them:

• Their leader isn’t rational.  So the fact that the flea is waging an attack on the big dog, while illogical, makes sense to you-know-who.

• Thus, when you are dealing with an illogical person, don’t expect logical negotiation to work.  Indeed, we’ve tried to, and to apparently no avail.  We don’t think so, anyway.

• This is a high-stakes game of poker.  Whether either side is bluffing or not is insignificant when you consider the consequences at stake.

So, here’s my recommendation.  When you are dealing with a 3 year old and they throw the toy you tell them not to.  When the 3 year old then throws it again you tell him that he’s going to be punished if he throws it again.  When he throws it the 3rd time, you pick him up off his feet, put him in bed, and despite all the whining, wailing and complaining, that’s it.  That’s what you do.

In other words, we say that we won’t tolerate nuclear missile tests.  Done.  Did that.  Next we draw the line…or more exactly the president and his staff draw the line on what constitutes over-the-line.  An attack on a US possession, plan or ship would probably be considered over the line.  Then, you let the generals recommend a course of action for taking military action.  What is best I leave to them, not me.  But at that point they’ve been forewarned, the world agrees something must be done (whether they say so publicly or not), and we do it.

Yes?  No?

Michael Emerald, CFA

Owner and Wall Street Analyst

Performance Business Design