The Noble Pundit

No Posting Tonight

I'm in the middle of a weekend brain baking in our biannual, once a quarter tent sale at work. One of these days my boss might figure out why I keep volunteering for the tent duty, despite the heat, the thunderstorms, the possibility of some nutty driver running through the tent and killing me. But I kind of doubt that she'll ever think that there's a reason.

I am taking advantage of some of the free time out there to work on a long, surprise post. Hopefully, I'll have it done in time to post tomorrow night.

Until then...

Why Did We Go To War In Iraq?

Today, I got on a mailing list. This is funny for me, as me and mailing lists don't go together too well. I am on about 7 other lists, most of which I never even look at. I even run a mailing list of my own, although I haven't mailed anything in, oh, about a year and a half.

But this one showed promise on the very first email I received. It pointed me towards an article I never would have read otherwise. It was an article by Ben Domench in which he makes the argument that the war in Iraq was justified on moral grounds. This is, of course, the same reason I supported the war.

I made the argument verbally here, here, and here. I made the argument in via images here and here.

No matter what ever comes from the WMD hunt, whether they're found or not, it is nearly impossible to argue with the humanitarian basis for the war. How many more Iraqis would have died had Saddam still been in power? How many more would have been tortured? How many more would be living under absolute oppression and tyranny?

I spend a lot of my time during the day, arguing many of these points with a knee-jerk Bush hater at work. I always love when he says, "But think about how many Americans have died over there!"

He is also a moral relavist. According to him, no one nationality or group should be accorded more respect or consideration than another. Yet he values American lives more than Iraqi when it's convenient and equally when it's not.

This is, I think, why it is so easy to refute the argument that there was no humanitarian justification for going into Iraq. It is inconsistent with the general position of the anti-Bush liberal crowd.

Bush has gone on the offensive to remind people that we went into Iraq for more reasons than WMDs. Condi has also begun reminding people that it was the threat of WMDs, not their actual existence, that was another reason.

This is going to be a key topic in the upcoming election. Don't forget the real reasons why the war was justified and keep reminding those who do.

Why The Bush Tax Cuts Weren't Enough

Last night I mentioned how the Bush tax cuts were almost certainly not the cause of the current bull market in stocks. In fact, the Bush tax cuts, while a nice and kind gesture, won't have their effects felt for years, possibly even well into the next decade. So if they weren't enough to have a real lasting effect on the stock market, what good were they and what would be needed to create that kind of effect?

What good were the tax cuts? Well, they were certainly better than a swift poke in the eye. And they did provide a short-term boost to the economy, in the form of the rebate checks, at a time when it was really on the verge of a demand collapse. In that sense, they were good and well-timed, plus anything that reduces the government's confiscation of resources is good in and of itself.

The biggest problem with the Bush tax cuts is that they were too little, too targeted, and too phased. In short, they were a half measure compromise.

In order to effect a real and lasting economic boost, there needs to be a fundamental and profound structural change in the tax system. The marginal rates need to be reduced across the board, and it needs to be a real and significant reduction, not just a token cut here or there. The long term capital gains rate needs to be significantly reduced. I don't agree with eliminating it completely, but for long term gains it should be small, on the order of 5 or 10%, not the current 20%. The tax on dividends needs to be eliminated, or if that is politically unpalatable, reduced to the long term capital gains rate.

Before I go further on some of the fundamental changes that need to be made, I want to explain the dividend rate cut in a little more depth. I had a long discussion with my father about this last night and I think that there were a number of important points as to why it would be wise to cut the dividend tax rate.

The theory of financial rationality tells us that a company should always look for the most efficient use of capital in order to maximize the return to the shareholders. Some years the company may have investment opportunities that would lead to them retaining more earnings than in other years, all depending on the expected rate of return for those retained earnings. If the expected internal rate of return is less than what the investor could expect to earn on their money in another investment, then the company should pay a dividend. If the expected rate of return is greater than what an investor could expect to earn in another investment then the company should retain those earnings, invest the money, and maximize the return to the shareholder through capital gains. In an efficient market, where companies are driven by strict financial rationality, dividend payments would fluctuate wildly from year to year or even quarter to quarter.

Obviously we don't function in a world driven by financial rationality. There are companies, like Coca-Cola, GE, GM, and Kellogg that like to maintain a constant, stable dividend payout as a shareholder service. They have made a conscious decision that stability is more important than absolute financial rationality - and this is not to be unexpected in a market where there is such stiff competition for investing dollars.

But the current tax system, which taxes dividends as ordinary income, adds a third level of complexity to the decision. Now companies no longer just take into account their financial needs when making their dividend/retained earnings decisions, they now also try to balance the tax burden that they are imposing on their shareholders.

Eventually, this leads to a situation like you currently have with Microsoft. Microsoft is no longer a growth company. It has become a mature, stable company, not unlike a GE or a Boeing. It has grown to a size where the internal rate of return on retained earnings is no longer significantly greater than what investors would earn in other investments. It has grown to a size where the law of large numbers indicates that the growth rate has to slow down. Even in the annual report the company is indicating that it is having trouble finding adequate investment opportunities for the cash on hand. This is why it is now hold cash measured in tens of billions of dollars.

Financial rationality says it is time for Microsoft to start paying a dividend. The structure of the tax system, and the burden a dividend would levy on the shareholders, says not to pay it (there is also the desire to maintain the perception of Microsoft as a growth company that is almost certainly playing into the decision also).

When the company sits on large piles of cash like that, it reduces the overall return on assets for the company. That in turn allows more suspect and questionable projects to proceed, as they appear to exceed the corporate return on assets. Over time, this would serve to further drag down to corporate return on assets, until a point is reached, where the expected return is essentially the same as the return the company can receive on cash. This appears to be where Microsoft is now.

Cutting the dividend tax rate would make companies much more likely to return some of the excess capital to the shareholders in the form of dividends. The money could then be reinvested more wisely and more efficiently, with the end effect of improving the state of the economy.

The other big tax that needs to be eliminated is the estate tax. All that it is is a tax on success. The elimination of the death tax, as the estate tax is often called, would obviate the current need for tax havens and tax dodges. The amount of wealth lost every year to this sort of legal tax evasion is staggering. And every bit of that money is wasted, not going back into productive use in the economy, which helps to hold us back. Bush realized this with his tax cut proposal, but it only eliminates the death tax in the tenth year of the plan - the final year unless Congress chooses to make the cuts permanent.

My purpose with this post isn't to denigrate what Bush has tried to do with his tax cuts. The idea and the reasoning for the plan was sound, it is only in the implementation that it loses effectiveness, and the implementation was watered down into little half-measures through politics and compromise.

As a result, the cuts had a temporary effect on the economy - which likely kept us from falling into to a depression induced by a drop in demand. Over the long term though, they will be of minimal consequence as they do little to nothing to change the structural disincentives of the existing tax structure. Only a true overhaul, no half measures, no compromise solutions, will truly create a tax system that works for us, instead of against us. And that in turn is why I personally favor (somewhat lukewarmly, granted) a move to a National Sales Tax.

The Bull Is Loose Again

While reading Michael Williams site Master of None, I came across this article from the Atlanta Constitution Journal celebrating the Bush Bull Market's first birthday.

It all sounds great and wonderful, right? Just one problem. Many of the historical comparisons are flat out false.

And if you've been out of the market over the last year -- tough. Consider what you missed:

As of Friday's close, the Dow Jones industrial average has risen 31.4 percent since Oct. 9, 2002.

The Standard & Poor's 500 index is up 32.6 percent.

And the technology-loaded Nasdaq composite index is up a stunning 68.8 percent.

Those gains rival historical norms (emphasis mine), including the robust annual growth rates of the 1990s market boom.

This is absolute, pure unadulterated bullshit. Those are not historical norms, they are a return to the unsustainable returns of the 1990s.

What are the normal numbers? Try this one for size:

Since the end of 1930 (we think it is appropriate to leave out 1929 and 1930), overall stock appreciation has averaged 8.8% a year. Total returns (appreciation plus dividends) have compounded at a rate of 11.5% (emphasis mine again) from 1931 to 1999.

Source: Financial Advisor Magazine

11.5%. That number jives pretty well with what is generally considered to be an aggressive equity based portfolio. In house research I've seen at now three different firms (two of them household names), plus research I personally did for one of my finance classes in college, indicate that the historical return for small cap stocks runs about 15%, for large cap stocks it's about 12%, so 11.5% isn't that far off from the numbers I'm accustomed to seeing. 30%+, that's not normal. That's a historical aberration.

For those who follow historical patterns, it's worth noting that the market started low and ended high in every decade (emphasis mine)since the 1930s.

Guess why they are using the decade time frame? Because that does not hold true over a five year span. But regardless, how relevant is it?

Again from Financial Advisor Magazine:

The very worst decade for total stock returns since 1930 was 1965-1974. The average annual total return for that awful period was 2.4%.

2.4%. Inflation generally runs higher than that. So while yes, the absolute dollar value of your investments would have risen over that decade time frame, the relative value would have declined. For perspective, according to the Department of Labor, Bureau of Labor Statistics, the cost of a $100 item in 1965 would have risen to $167.97 by the end of 1974, a 67.97% increase. By contrast, your $100 in an investment account would have gone from $100 in 1965 to $126.77 in 1974. In other words, your account went up, but you lost purchasing power. Ah the joys of inflation.

And here, I believe, is the truest reason for the bull market:

Still, after more than three brutal years, investors are more than a little gun-shy going into the final quarter of 2003.

This uncertainty is reflected in the decline in trading volume this year, even in the rally since March. Third-quarter New York Stock Exchange trading volume was about 12 percent less than the year-ago level, and was generally flat for the Nasdaq market.

This is also the most worrisome aspect of this bull market. A key that market technicians look for as an indicator of weakness is a rise on declining volume. Often times, it is the signal heralding a reversal in the general price trend. Without volume, this becomes a speculative bull market, not one based on investing, which points to it being short in duration and wild in the ride.

I'm glad to see the market performing somewhat better than it has over the last three years. Bush certainly didn't do anything (or fail to do something) to create the economic situation we're in now, this is the Clinton economic legacy. Bush's tax cuts probably helped some, but they were certainly not enough to have created a true long term bull market - that would require a fundamental and immediate change in the tax structure, not a phased in grouping of watered down half-measures (not all Bush's fault and still better than no tax cuts). This is probably more a case of the market reverting towards the mean. Let me explain.

Most market watchers use moving averages to smooth out the ups and downs of the market to get a general feel for the trend in a particular stock or index. Well the moving average also works like a magnet for the security being measured. If the security diverges too far from the moving average, it will attempt to revert to the mean.

In the late 90s, we diverged too far to the upside, and the market reverted back towards the mean in the form of a vicious bear market. Now as the market is wont to do, it overreacted. So now we're seeing a positive reversion to the mean. Same concept, different side of the curve.

Here is the biggest problem I see with this bull market: 36.79.

That's the current price to earnings ratio of the S&P 500. Again, for perspective, that number generally runs from somewhere around 16-20. Which in turn would point to the market being overvalued still by a factor of 1.75 to 2.25. Now I don't see the market dropping much more from here due to psychological factors, but I can see it remaining stagnant for a few more years as the fundamentals catch up to the price levels.

Like I said, it's good to see a Bush Bull Market and I hope that it gives him a boost politically, but this is a case where you have to keep your politics from blinding you from your investment goals. This market has a number of areas for concern. Invest as wisely as you politick.

Quick Links

One Californian's View: Gray Davis Tactics Mirror Hitler's Public Speaking Methods - Not that it really matters any more, but the California recall election does seem to have revolved more around Adolf than Arnold or Gray or Cruz or anyone else actually running.

Ancient Tombs Reveal Bronze Age Civilization - I love little ancient civilization articles like this.

Iraqi leader attacks US over plan to use Turkish troops - This is a case where I don't agree with the Iraqi position. The Kurds and the Turks need to learn how to at least tolerate each other a little better.

Mass demonstrations of teachers in Iran - Little by little the pressure mounts. The eventual explosion is coming. You can't oppress a people for this long, this harshly, without consequence. The thugocracy's Day of Reckoning is drawing near.

World Day Against The Death Penalty

The EU certainly does have some lofty utopian goals. In their latest attempt at spreading their own brand of culture, they will be organizing the first ever "World day against the death penalty."

This is the equivalent of the ever feared EU scowl of disapproval. Do they really think that a day that will undoubtedly turn into an anti-American propagandafest is going to influence any American but the weakest of character?

If the Eurocrats don't want capital punishment in their confederation, that's fine. That's their business, their country.

We've decided that we do accept the idea. They need to learn to live with it. If they want to hold a "day" to promote their agenda, that's ok by me - just don't expect us to really care.

Carnival Of The Capitalists

It's time!

Rob over Business Pundit is accepting entries for the first ever Carnival of the Capitalists.

If you have a business related post that you think deserves more exposure, send it over to Rob-at-businesspundit.com and get it in to the Carnival!

10 Overblown Reasons

MSN should have named this 10 overblown reasons why you shouldn't get investment advice from the mainstream media.

At some point or another during my stockbrokering days, I have worked with just about every 401K administrator out there. Some were more responsive than others. Some were more forthcoming than others. Some were easier to work with than others. But in no case did I ever see an administrator who was flat out dishonest.

Look at the ten warning signs here (which were apparently provided by the Department of Labor):

1. Statement is consistently late or comes at irregular intervals. Could be a problem, sure, but the problem is more likely with either the post office or with the company stuffing the envelopes for the administrator.

2. Your balance doesn't look accurate. Might it just be bad investment choices? I've seen quite a few mutual funds that have lost significant amounts in a very short time.

3. Your employer didn't send your contribution to the plan in a timely manner. For the employer this is a very bad choice. For the employee, if you see this happening, first check to see if it's a clerical error. If not, start looking for a new job. Your one contribution is the least of your worries at this point.

4. Your balance has dropped significantly and can't be explained by market ups and downs. This almost assumes some sort of illegality on the part of your employer. See #3 for how to handle it. And, for what it's worth, 99.999% of the time, even extreme drops can be explained by market movement. Deal with it.

5. Your statement shows that the contribution from your paycheck was never made. Go back to #3 again. Common sense should tell you to question it the first time the contribution is missed. If you miss both April and November (7 months apart), you earned one of the losses through neglect. This is supposed to be your money. You need to be watching it.

6. Investments listed on your statement aren't the ones you authorized. Realize that in most cases, the administrator will be able to pull some kind of phone record or computer log showing that you, in fact, made the change - probably without realizing it.

7. Former employees are having trouble getting their benefits paid on time or in the correct amounts. I found two words to rectify this problem: fiduciary responsibility. Firms don't like to lose the assets under management, but they want even less to pay for a loss incurred due to their foot dragging.

8. There are unusual transactions listed, such as a loan to your employer, a corporate officer or one of the plan trustees. This one, especially with their example, just really doesn't make sense. It almost sounds as if they're hinting at illegality, only to turn around and say, but it might be ok. Companies get creative in their executive compensation plans nowadays. Some of the things look shady and some of them probably are shady, but without a fair amount of deeper research, you're in no position to know simply from a line item on a report.

9. There are frequent and unexplained changes in investment managers or consultants. Managers and consultants move on all the time. The different administrators are constantly working to improve the quality of the offering. Chances are, if your employer is changing administrators, they're probably trying to improve the plan.

10. Your employer has experienced severe financial difficulty. If your employer has experienced a financial difficulty severe enough to warrant tapping retirement contributions for operating funds, then you should have been looking for another job for a while anyways. Putting food on the table should be more important than retirement, and the food on the table routine is at risk.

The biggest thing with all this is to simply pay attention. Your retirement funding is your retirement. Not your employer's. Not the administrator's. Not your stockbroker's. None of them have a vested interest in making sure that you succeed. Only you do.

Keep an eye out on your investments. No one else will do it for you.

All 10 of these warning signs are way overblown. In the entire time I was a broker, I only ever dealt with one, #7 and that was very infrequently. If you want to be successful, spend more time researching your investment choices and less scouring the Summary Annual Report.

Quick Links

NAACP Up in Arms Over Student's Proposed "Caucasian Club" - So the NAACP is not bigoted, but a Caucasian Club by definition must be? Something doesn't smell quite right, here.

We report, you get it wrong - An unfair and unbalanced look at FOXNews.

Some Dealers Experiment With Eight-Year Auto Loan - This is just brilliant. Let's give people an opportunity to own a worthless, run down piece of junk that they still owe thousands on. Such a deal.

Removing Arafat = Terrorism?

Hosni Mubarak has come out and declared that the removal of Arafat would be a "terrorist act."

I fail to see the equivalency between a bombing that kills 19 and the exile of an ancient terrorist. Are we to believe that Arafat should be allowed to live in relative comfort in his Ramallah safehouse, while "his people" continue to murder and maim the Israelis? Is it as evil to force Arafat to sleep on another cot, while Israelis suffer sleeplessly from the pain of the shrapnel of the nail-filled terrorist bombs? Should we really feel sorry for him? Should we feel empathy for his "failure" to control his people?

Absolutely not. Arafat has failed completely in his responsibilities as a national leader. He made certain commitments to the roadmap, which he has failed to uphold. He has lost any protections afforded by his status as a leader, as he has failed to lead.

I'm sorry, but exiling Arafat is not terrorism. It is an exercise of common sense and safety. If Hosni is so concerned about Yasser's well-being, perhaps he'd be willing to put Arafat up in Egypt.

But somehow, I don't see that happening.

Arnie And Adolf

There has been much made lately of Arnold Schwarzenegger's supposed admiration of Adolf Hitler. I've kind of stayed away from the issue because I thought it was nothing more than a diversionary tactic being used by the anti-recall camp to deflect attention from the fact that they were losing. But now I've found two articles that make me want to post a little quick something on the matter.

First off, reading the original comments by Arnie, it would appear that he has a view of Hitler that is not too far out of line with that of most normal people who know anything about the history of the Third Reich: Hitler was an absolute monster - as close to pure evil as you could come, but he did achieve some good, like the autobahn or the Volkswagen. It is also fascinating to study how he figured out how to manipulate the German people through extremely charismatic public speaking and a great deal of pomp and circumstance. It is entirely possible to be fascinated with the man while still being revolted by his actions.

But even so, look at the reaction of the Jews in Arnie's hometown of Graz. They knew him during his formative years. They knew him before he ever would have really cared about his public persona. If he was at all a Hitlerite, the Jews of Graz would know. Yet they are dismissing the whole Hitler affair as "election propaganda."

And what of that Democratic demi-god Bill Clinton? He, too"...had a deep fascination for Adolf Hitler and his book 'Mein Kampf'..." Does this mean that Clinton, too, was an anti-Semite? Is in interest in how Hitler came to power an indication of Jew-hatred? Not in and of itself.

Arnold is handling himself pretty well throughout the campaign. He has managed to stay focused, even as others tried to degenerate the contest into a bout of ad hominem attacks. Arnie seems to be concentrating on what is best for the state of California and is not involving himself in national or foreign policy matters whenever he can avoid them (much to the chagrin of CAIR, who is upset because he won't talk to them).

Tomorrow is the day of decision. Here's hoping Schwazenegger does well.

From Each According To His Ability (To Pay)

The University of California Board of Regents is proving itself once again to be a bastion of Marxism.

In their latest brilliant move, they are considering a plan under which rich kids, those defined as have familial incomes of more than $90,000, will pay up to $3,000 a year more in tuition that a kid whose family income is less than $90,000. The reasoning is pure Marxist - the rich kid is able to pay more, so they should have to.

The University of California is a state supported institution. The folks paying this surcharge have already paid taxes. Why is California going to charge one taxpayer more than another for the same basic service?

Should rich folks pay a higher sales tax? They could afford it. Should they pay more to register their car? They could afford that too. Wealthy people can afford to pay more than poor folks for everything. Is that a justification for deliberately charging them more? No.

I'm sure that somewhere, the University of California has some declaration that they don't discriminate based on, among other things, income level. Chances are, this was put in as a justification for some special tuition assistance program for "underprivileged" people. Well, it cuts both ways. If you can discriminate against poor people based on their wealth, you can't discriminate against rich people based on theirs. Fair is fair is fair.

It's truly a shame to see how bad a mess the state of California has gotten itself into. The bills for all the years of fiscal irresponsibility are now coming due.

Quick Links

Even if ousted, Davis wouldn't go immediately - There doesn't seem to be anything normal or easy about the recall, even getting rid of Gray if its successful.

Flying Into Hypocrisy - A fairly harsh condemnation of the double standard in the Israeli-Palestinian conflict, focused primarily around the 27 pilot's refusal to fly missions in the territories.

Confounded by Chads? Don't Vote! - Dennis Miller invokes the concept of common sense as a needed virtue in the voting process. He not only does so in a funny way, but for once he does so in plain English! A great read.

Old Florida Attractions

Today, I went to the girlfriend's company picnic at Rock Springs State Park over in Apopka. This was kind of cool for me, as when I was in Scouts, we used to go camping at Rock Springs every once in a while, so I had gotten to know the park pretty well. Today, I got to take the littlest one for a hike through the scrub forest around the long way from the picnic area to the spring. We then spent time standing on the rocks just downstream from the spring talking about nature.

It was really an enjoyable afternoon, even though I missed the Miami Dolphins game.

But it also reminded me of the post I was intending to write the last time I found out that I had been locked out of the site.

At the time, I had been intending to write on the fight to save Weeki Wachee Springs over near Tampa. It had been just about ready to close due to a lack of funds and there was a great campaign on to save it (which was successful for the time being).

For those of you who have never been to Florida, or who have only come to visit Disney or Universal or Sea World, you've really missed the true flavor of Central Florida.

When I was a little kid, some of my stronger memories are of looking through the brochure stands in the service plazas on the Florida Turnpike. They had brochures for everything from alligator wrestling and airboat rides to all the major tourist attractions in the state. But there were always a few brochures that seemed to stand out a little more than others (at least to a little kid).

Weeki Wachee Springs with its "live mermaids" was one the most memorable. I always wanted to make a trip over there, just to see the show and to see if it was really as good as the brochure made it seem to be.

There was also Silver Springs with their glass bottom boats, St. Augustine with its old city and fort, Cypress Gardens with its water-skiers, Bok Tower, Citrus Tower, Marineland and Gatorland. The list just seemed to go on and on and on. They were almost all old time Florida roadside attractions. They were almost never close to an interstate, but they were almost all right off one of the US highways crossing the state.

They are the attractions that the original tourists to Florida saw. They are not the anti-septic, always the same attractions like Disney and its ilk. Instead they were a reflection of the uniqueness and eccentricity of the state.

But they have been slowly dying off. As I said before, Weeki Wachee was just saved from being shut down. Cypress Gardens did shut down, although as the above link for it indicates, it was recently purchased by a conservation organization that wants to keep it in its current state. Outside of Gatorland, I'm guessing that the vast majority of my non-Floridian readers have probably never heard of Bok Tower or the Citrus Tower. Most people are probably aware of St. Augustine, but maybe not of the history in the city (among other things, it's been under five flags in its days). Most people are probably familiar with Marineland, but they most likely think of Marineland Miami, not the St. Augustine one.

As me and the little one were walking through the scrub, I pointed out to him that that was what Florida is really like. Not the Disney, not the Universal, not the city of Orlando or South Beach in Miami. The true Florida is different, it isn't of pavement, glamour, and glitz. It's spider webs, artesian springs, pine trees, and palm bushes. The old Florida has a beauty all of its own.

I've never been to Weeki Wachee Springs, the most memorable of the memorable brochures from my childhood. One day, sooner rather than later, I'm going to make a point of taking the kids over so that we can all experience it together. It may be corny, but I don't care. These places are disappearing and they're a part of my childhood, a curiosity, which I need to experience before it is no more.

I remember on April 14th, when Cypress Gardens closed, feeling terrible that I had never made a point of taking the kids down to see it. I went there on field trips from school as a kid, but the schools stopped taking kids that far anymore - not for nature stuff. From where we are, 10 miles north of Orlando, the schools won't even take the kids to Leu Gardens, even though it is just around the corner from the Orlando Science Center - a place where my kids have already gone to several times each on field trips.

Maybe these places aren't as exciting as the Science Center, but they are an important part of the history in the state. They help to show that eccentricity among native Floridians is not a new phenomenon. They are a physical link back to the Old Florida in both a historical sense and a natural one.

Want to know what Florida is really like? Avoid Disney and search out some of the older attractions that are based around the natural beauty of the state.

It was an exhausting afternoon as I swam the 3/4 of a mile river twice while the kids tubed down it, but it was worth every bit of it.

For those few hours, I got to bring the littlest one into a part of my childhood and he loved it. That is one of the best feelings I have ever had.

Jails, Cell Phones, & Safety

This is rich. First, the Palestinians are protesting the fact that the Israelis are using panes of glass instead of intertwined wire grids to separate prisoners from the their visitors. Apparently, this is some sort of violation of their basic human rights. They should probably hope that they never end up in an American prison - we have been using those glass panes for years.

Now why would the Israelis start doing more to separate the terrorists from the general population? Do the Palestinians believe that these prisoners pose no public safety risk (well, at least to the Israelis)?

Look at this other piece from the same site: Palestinian Prisoner Gets Doctorate On "Tolerance" By Phone.

The new Doctor earned his degree via a cell phone. He dictated the paper to his wife on it. He presented it to the University of Nablus via cell phone.

His wife bought him copies of the thesis, while he was in detention.

Think there isn't a public safety issue here? IMRA points out:

Israeli observers have wondered for years how long it would take prison officials to finally take measures to prevent visiting families from passing on cellular telephones and other contraband to Palestinians being held in jail. The lack of a glass partition all these years has created a situation that terrorists held by Israel were able to continue to maintain essentially constant contact with the outside world - giving orders and even participating in interviews broadcast on Arab radio stations.

The whole point of involuntary confinement is to separate public safety threats from general society. If the smuggling of cell phones allows them to stay in contact with the broader world and allows them to continue to influence events, that is a safety concern.

Israel has every right, actually every responsibility, to install the glass panes. It is a matter of safety for both the public and for the prisoners. The public issue is pretty clear cut, but image what would happen to the prisoners should a weapon or explosive be smuggled in. As long as the prisoners are under Israeli control, Israel has a moral responsibility to show concern for their well-being - no matter how vile the criminals are. If they believe that installing the glass panes furthers that goal, then they need to be installed. There really is no question about it.

And if the Palestinians don't like the glass panes, there is always another option, one that most people choose.

Stay out of trouble.