Listen to the full episode, here.
John Norris (00:30):
Well, hello again everybody. This is John Norris at Trading Perspectives. As always, we have a good friend, Sam Clement. Sam, say hello.
Sam Clement (00:36):
Hey John.
John Norris (00:36):
I’m doing beautifully here today. It’s a bright sunny day in central Alabama. However, I know that there are dark clouds on the horizon over in the Middle East as Israeli operatives, airstrikes, whatever you want to call them, have taken out both a senior level Hezbollah officer as well as another senior level Hamas operative. And that just kind of begs the question or remains to be seen exactly what is Iran going to do in retaliation?
Sam Clement (01:03):
Yeah, Iran, the proxies, the client states all the terminology for all the countries.
John Norris (01:09):
And then there’s other people that just want to get in on the action.
Sam Clement (01:12):
Lots of people, lots of groups that want to get in on the action. And you’re right, tensions are boiling. They’re always simmering,
John Norris (01:18):
Always simmering…
Sam Clement (01:19):
And they are full on boiling now and the timing of it. Iran just had a new president and the timing of that and these groups were in Tehran. And to see that it seems intentional, the timing of it, of course, it very much is boiling, I think to put it lightly.
John Norris (01:38):
So with temperatures boiling over there as they, I guess literally, literally and figuratively very warm this time of year, as they have been literally for thousands of years, is there any hope for peace in your estimation here with the way things are now with the Netanyahu government in Jerusalem with the governments in Tehran and just really with everything that’s going on there, is there ever going to be a return to at least the negotiating table about a two state option? Or can the Israelis and Hezbollah and Hamas ever hope to at least get back to status antebellum , if you will?
Sam Clement (02:26):
I don’t feel good about that, and I think I feel less good about it now than I did probably, I mean, even last night. I mean, waking up and seeing a lot of this news that has come out, things aren’t moving in a positive direction, quite the opposite. We haven’t had much in the way of agreements to further these possible negotiations. They’re far apart. Hamas and Israel are far apart, and just the Middle East as a whole is getting further apart it seems and more fractured.
John Norris (02:59):
So what happens here, I mean here I am Gen X, you’re Gen Z, I suppose, what happens here in the court of public opinion of the United States, when it seems as though every time I turn on my computer, I would say pick up the newspaper, but no one does such things any longer. So every time I turn on a news media site, there seemed to be yet again another anti-Israel protest, pro Hamas, whatever you want to call it… Does Israel have the support enough of Washington and the United States as a whole to continue to fight protracted now two front wars, one in Northern Israel against Hezbollah and South Lebanon, then another one in South Israel and Gaza. And what happens if all of a sudden Iran starts getting a little bit more bellicose? How long will the Israelis be able to hold out if, well, Washington doesn’t come to its aid?
Sam Clement (03:58):
I think Israel can hold out for a while. Where I think the question is – is from the US perspective of things, one, we’re sending a lot of money to Ukraine right now.
John Norris (04:10):
Yes.
Sam Clement (04:11):
We’re sending a lot of money to a lot of places. We fought in the Middle East for well over two decades – had boots on the ground. I think the US population and a lot of it for good reason is tired of fighting other battles in the Middle East and the war on terror or what have you. There’s parts of it that are probably justified, but I think there’s just this, it’s gone on for so long. If it starts boiling over again and we’re not directly impacted by it, I think there’s going to be a lot more pushback on, I’m not even saying boots on the ground, but just getting involved again, more so than we already are.
John Norris (04:50):
Well, we already are. Maybe not as much as we were when we were physically occupying a huge swaths of land over there. And that remains to be seen. I mean, that’s a great question. I do think the United States as a whole is tired of occupying these countries well over on the other side of the world for which there does not seem to be a true objective or some sort of end game for the United States, which has a positive outcome other than sort of being esoteric. It’s a peace in the Middle East democracy for Iraq. That’s great. It feels good. It doesn’t feel good when people come back in body bags. So I think you’re absolutely right that Americans probably are a little bit tired of this. However, here we have the state of Israel, which, hey, listen, I can understand why people might not love what Israel’s doing right now, but as far from the outside looking in, and by most every account, it is the truest democracy in that section of the world and the most westward thinking country in that section of the world. What were to happen to the overall balance of power in the Middle East? What would happen to the Middle East if all of a sudden, well, largely the United States abandons Israel leaves it to its own devices and it gets overrun by its enemies once and for all…. Will there truly be peace in the Middle East? And this is a question I’m asking for you as someone much younger than I’m, what do you think? And then also maybe not just you, what do you think your generation thinks?
Sam Clement (06:27):
Well, speaking for myself, I don’t envision a case, a scenario where full peace ever happens in the Middle East. I mean, you have people so opposed to each other on their most fundamental beliefs. I think the only way it happens is if you could vacuum the religion out of the region.
John Norris (06:50):
Do you think that’s going to happen?
Sam Clement (06:52):
No. And not for the foreseeable future. And so you have groups so opposed to each other. To me, it’s hard to envision. And I think as a whole people are, I say my generation are largely in agreement. I think the one thing that has changed for a lot of people, not so me or
John Norris (07:17):
“People not so me,” do you mind if I borrow that ?
Sam Clement (07:21):
Is the pushback on Israel in the Middle East. I think there’s been more and more pushback on Israel as a whole, and it seems like that has bubbled up more so than normal in the last couple of years.
John Norris (07:35):
What do you think the cause of that is?
Sam Clement (07:38):
That’s a tough question.
John Norris (07:43):
I mean, it is a tough question because for a Gen X-er, like myself and maybe even people older than I am, we are certainly old enough to remember when, “hey, we’re going to defend Israel no matter what. “They were our buddies. They were the good guys in the Middle East. And while I’m not old enough to remember the Seven Day War were really the Yom Kippur War, any of the ones that really kind of defined Israel in the 20th century and don’t really remember them, where they were still larger in the public psyche than they do now when Israel is now viewed as really almost a western state in the Middle East, viewed as a western power, an occupier and what have you. Whereas it’s been within my lifetime when they were considered the victim, now they are the victor and the court of public opinion, at least in a lot of the United States, has swung pretty mightily against them. And is that the reason why? Why do you think so many young people are against Israel – because they are no longer the true victim of enemies on all sides? That they are viewed as the victor because they’ve been so successful, not just in previous wars, but then also in their economy. And dare I say, they’re a society.
Sam Clement (09:02):
To me, it’s undoubtedly a large part of it. I mean, I think there’s probably other things, and it gets bubbled up more when they probably do some things that they shouldn’t do or some people would argue they shouldn’t do. But that’s what happens when you are viewed, I’m not saying they are, when you’re viewed as the victor or the oppressor or at times that your margin for error becomes basically zero in the public opinion
John Norris (09:31):
Now, and you mentioned being the victor relative to the victim. I mentioned it as well, and this is where I do think there is some sea change between the generations in that the victor, when I was a kid, that’s what you wanted to be. You wanted to be the winner, you wanted to be the champion, you wanted to be on the winning side. And now, however, it’s almost seemed as a black mark, if you are on the winning side, the champion, the country that’s got the biggest guns and the most toys and what have you, that is almost the bad thing. When did the shift mega come about and why does it seem to be such an issue for your generation? Victims versus the victor or the conquerors versus the vanquished when it hadn’t been that long ago when the people who were the conquerors were viewed as the heroes as opposed to the heels, if you will.
Sam Clement (10:31):
And the old saying about the victor is who writes history.
John Norris (10:38):
That seems to be changing, I think.
Sam Clement (10:39):
It seems to be changing. I don’t have a good answer for it, but it seems like that has been in line with other kind of shifts societally that, I mean, there’s no better way to put it – the powers are viewed negatively and the weaker countries are viewed more positively it seems like.
John Norris (11:02):
And yet, would you say it’s fair to say that the reason why countries are more powerful and wealthy has to do more with the inclusivity of their institutions and their economy as opposed to those countries which are more poor? So wouldn’t you be able to make the argument, this is speaking from a capitalist old Gen Xer, that the reason why countries are powerful, the reason why they are conquerors, the reason why the United States is the world’s hegemon has more to do with their society as a whole, being more free, more egalitarian, open to more opportunity as compared to a lot of the poorer countries around the world. So, couldn’t I make the point to someone of your generation, well, the reason why Israel is as successful as it is, is because its society is so much more fair and inclusive compared to the countries around it and compared to their neighbors, these people. So why are you backing the people who have more exclusive societies where people aren’t treated equally, where women are treated poorly, where not everyone gets a chance to vote, where they don’t educate their citizens and the list goes on and on. How is it that the Israelis are the bad guys in that scenario? And that’s something I just simply can’t answer as my generation. I’m not sure you can either. But I’m looking at you kind of going, you’re a younger guy, maybe you’re in touch with the vibe, little bit better than I.
Sam Clement (12:39):
We’ve talked about it, the things you need for a successful country. You need strong individual property rights, the development of human capital. And that the rule of law is applied equally. And we could probably dive deeper into that, but I think those three kind of cover a large majority of it. If you have those three, you’re probably doing pretty good. To me. It’s not like Israel got a big headstart. They’ve been a country for less than a century. So it’s another example. And I think it’s been proven time and time again. We’ve talked about China and the issues going on with China, how some of these things are not applied. We’ve talked about it with different countries and different issues. They are one of the most technologically advanced countries on earth. And it’s a reason that a country the size they are surrounded by such massive countries
John Norris (13:38):
And without a ton of natural resources of its own…
Sam Clement (13:40):
No, has been able to defend itself against, largely, countries all around it that want it eradicated.
John Norris (13:47):
I would agree with you wholeheartedly. So, when I see Israel, Mossad, or the IDF or what have you, whatever group of their defense forces, take out these bad guys, these people that…Well, I mean pretty targeted. The leaders of these groups, which the US State Department has named terrorist groups. When I see the Israelis do that in a country that has been labeled a terrorist regime, I as an American, am going, Hey, that’s one for the good guys. And yet we see in Columbus Square and whatnot outside of Union Station here, just today, we have protestors in the United States mostly apparently middle class and upper middle class white kids, out there protesting against Israel and spray painting defacing American monuments. And I just kind of wonder what’s going on here? I mean, I don’t get it, and yet it continues to happen. And it kind of makes me wonder, is there something that I am missing when the people who have been the good guys, in a lot of ways, are taking out the bad guys, and yet people are upset about that. Help me understand that.
Sam Clement (15:08):
It’s unique. And again, going back, if protests around Israel were just around maybe where they crossed lines, I’m not going to get into all that, I don’t think now’s the time for that. I think that would be one thing if we were like, we want them to do this in the right way.
John Norris (15:27):
Is there any right way in these instances?
Sam Clement (15:29):
First off, war is a bloody awful, cruel, evil idea in the first place. Of course, there’s no great way to go about it.
John Norris (15:41):
Man’s favorite pastime.
Sam Clement (15:42):
Yeah, I’m sure there is lines crossed and what have you, but that’s not the root of it and was not the root of it. There was pushback against wanting Israel to respond the day after the sixth. Which that’s where it’s kind of like, if your first reaction is, oh, well no, you can’t go do anything. Fact that seems like you already have opinions set out .
John Norris (16:06):
For a second there. I thought you were going to go back to Abraham, Sarah, and Hagar, and I was going, please don’t do that. But I’m glad that you didn’t do that. And there might be some people that would take issue with the fact that I’ve called Israel the good guys a number of different times and point out that here they are occupying swabs land and moving settlers into this, that and the other thing. And I get it, it’s not a lot of fun if you’re in that territory of disputed land and you have Israelis coming in and they certainly don’t seem like the good guys to you. And I get that, and I understand why. I mean, certain elements over there are very anti-Israel. I get that. However, from the Western world’s viewpoint. And that’s where I have my opinion, based on my opinion, on a beautiful day in central Alabama, far away from the fighting, what I see is a democracy, the best democracy in the Middle East.
(16:57):
The fairest, maybe not completely fair, but the fairest society in the Middle East, by a long shot, being attacked by people who were significantly less so on both of those. And I hope it works out well for the Israelis and I think the United States need to come in and help them out as opposed to give them a whole bunch of lip. And that’s what I certainly don’t understand. With that being said, no one wants this to turn into World War III in the Middle East, which it could have the potential of happening, if Iran decides to go great gangbusters. And you know what? I don’t know how long it would take, and I don’t know what form it would take. I do know that it would be ugly at the end of it and no one wants it.
Sam Clement (17:53):
Yeah. Was it Einstein who said he didn’t know what the third World War would be fought with, but the fourth will be sticks and stones?
John Norris (18:00):
Yes, he did. Or someone, I mean, I know the quote I, maybe it’s Einstein,.
Sam Clement (18:05):
Whoever. I think the point of it, we’ve gone a lot further along technologically, and I do think this is not crossing a line, but maybe to Tehran feels like this next level, where previously there was the retaliatory missiles launched from Iran that were well planned out, and it was kind of to save face, it seemed like, I feel like this is going to pull a stronger response from Tehran.
John Norris (18:37):
Well, I think Israel’s last response and Tehran’s response and all this that and the other thing, I think that was maybe all of it was a little bit orchestrated or at least felt that way: sat on by the United States largely, and maybe some other powers. This one feels a little different, at least from the newspaper articles or in the news media outlet articles, which I have read. And I would be surprised if Iran’s response is as muted this go around. I think the population will demand more. And if it is as muted as the last time, maybe we have vastly overrated Iran’s true military capabilities.
Sam Clement (19:17):
Yeah, I think we’ll see. I think it’s going to be a couple weeks. These are not things that are typically responded to hastily, so I think we’ll see. But I do think something like this that seems more of a surprise shocks the system of Tehran, of Iran as a whole, the Ayatollah, everybody. I think it is a more shocking thing. So the response I think is going to be different and probably stronger. And so I don’t think it’s going to be this, check-it-off-the-list-that-we-responded-kind-of-thing that it felt like last time.
John Norris (19:55):
Alright, now since we do have the potential, very real possibility for escalation in the Middle East, which might swallow up the United States’ participation somehow, envelop us in some form or fashion. I’d say that’s a greater threat than the United States finally getting called into Eastern Europe. I just don’t see a bunch of boots on the ground and frontline American troops against the Russians. I don’t think we want to get there, but I think we could get swallowed up in that mess a lot quicker over there. So I’m going to ask you another generational question, now. You got a sweet little baby now and a wife, say you would not be one of the first ones called up, but your generation would be the first ones called up. How do you feel about your generation’s willingness to eventually, perhaps be conscripted or otherwise drafted to go fight in a war in the Middle East, which frankly, we don’t have a lot at stake in terms of sovereignty at all.
Sam Clement (20:51):
Zero appetite and I think this last 20 years, I think I’m on the young end of being able to, I could have – if I enlisted when I was 18, gone over I’m sure. But the tail end, the younger part of my generation is not really having had the opportunities to almost have that different perspective that I think you see from a lot of these people that were 30 and 40 and politicians now, some of which I think more the ones you hear from, soured on the purpose of it. They saw awful things. They came back without limbs, they saw …
John Norris (21:29):
The futility of it all, the no objective, going over there and you leave Afghanistan, a bunch of dead bodies. And what did we get for 20 years?
Sam Clement (21:37):
Yeah, the next week it’s back to the Taliban. But the futility of it, I think is a good way to put it that I don’t think we will have the same appetite for it. I think politicians in their fifties and sixties and seventies,
John Norris (21:53):
Hey! In their sixties and seventies, come on.
Sam Clement (21:54):
In their sixties and seventies and eighties.
John Norris (21:56):
Come on buddy. Come on.
Sam Clement (21:57):
But you get my
John Norris (21:58):
On a second while we have an impromptu review…
Sam Clement (22:00):
You get my point though.
John Norris (22:03):
Unfortunately I do.
Sam Clement (22:03):
The people who have, were the boots on the ground serving, have different viewpoints of it than the people who told them to go serve.
John Norris (22:11):
Basically what you’re saying is young men get to fight old men’s wars.
Sam Clement (22:14):
That’s a great way to put it.
John Norris (22:16):
And so I think you’re absolutely right on that. I think that there is a complete erosion of trust in all kinds of institutions. The US military, they’re not immune, not immune for that at all. I think trust in the US militaries is at a low point since the Vietnam War, if not even lower than that, trust in our nation’s institutions is at a nadir, as well. And so when I take a look at all these things, I think Washington better be pretty careful with this foreign policy – understanding that the population as a whole, especially those people who are going to be asked to bear weapons, really don’t have a lot of faith in what’s going on right now. And to ask people who don’t have a lot of faith in what you’re doing to ask them to go risk their lives for a section of the world, which they don’t really care that much about, over issues that predated them and there was no clear cut solution there. That’s going to be a real tough call for people of your organization regardless of how Iran plays this out. And I’m not sure right now if the US military has the capability in order to fight all of these wars around the country and could end up being a three and four front situation, we’re already having trouble recruiting people. How do we recruit people if all of a sudden we’re involved in a bunch of firefights?
Sam Clement (23:45):
It’s hard. And so I think it’s something that’s going to continue for decades, frankly.
John Norris (23:51):
One last question regarding all this in the Middle East: do you think it would be in, whoever’s the next administration, do you think it would be in their best interest to sit there and say, this is how it is and be forthright. This is our position, it is black and white. Whether they say – pro Israel or anti Israel – this is our stance… would your generation buy into that a lot more or at least respect that a lot more than sort of the, talking out of both sides of the mouth bubblegum and the marbles in the mouth, that we have had for generations regarding a whole bunch of our foreign policy? If you just felt as though someone were telling you the truth,
Sam Clement (24:40):
It could not hurt. But I think a lot of the damage is done and I think it will take a while to repair that. And it would take a while of that truth, black and white to repair that.
John Norris (24:52):
And until such time, I guess we have to sit around and wait and worry about how countries like Iran are going to respond to the killing of a couple of high ranking terrorists or leaders of terrorist organizations in their country. And there doesn’t seem to be an end to the conflict.
Sam Clement (25:10):
There doesn’t.
John Norris (25:11):
Alright guys. Kind of a pressing topic here today, but one that’s certainly hitting the headlines here today. But despite that, we always love to hear from you all. So if you have any comments or questions, please by all means, let us know. You can always reach us along by sending us an email at where you can leave us a review on the podcast outlet of your choice. Of course, if you’re interested in reading more or hearing more of what we have to say or how we think, you can go to oakworth.com, O-A-K-W-O-R-T h.com, take a look underneath the Thought Leadership tab and then find links to all kinds of exciting information, including previous Trading Perspectives Podcasts, links to our newsletter/ blog Common Cents, as well as links to our quarterly economics piece and now market analysis piece called Macro and Market. And all of that is brand new and waiting to be read out there on our website right now. Alright, with that being said, Sam, I’m going to give you one last chance to say something meaty on this topic and another chance to defend your generation.
Sam Clement (26:10):
That’s all I’ve got.
John Norris (26:11):
Alright. That’s all I’ve got today too. Y’all take care.
Transcript by Rev.com