Obama Fails at Home and Now Screws Up Abroad

NEW YORK (TheStreet) -- If, like me, you view the Republican candidates for 2012 as variations on the theme of "bad, worse, worser, worsest and worse-issimo," Barack Obama is less an incumbent president than he is a kind of leaky bus shelter where you find refuge on a lonely rural road during a hail storm.

Sure he's imperfect, but better than being pelted with ice. How else can you describe the man who fought to keep Tim Geithner as Treasury secretary even after he torpedoed Obama's plan to break up Citigroup?

But if you want to probe the depths of Obama's shortcomings -- why he may very well be a one-term president -- you have to wander away from domestic policy for a moment. You have to forget about the field of mice who are vying to run against him, and focus on what may be the biggest failing of the Obama presidency: his disastrous handling of the Israel-Palestine dispute.

What you see, when you examine the wreckage of the so-called peace process, is the same inescapable conclusion that you reach when you read Ron Suskind's terrific book "Confidence Men," cataloguing the failure of Obama's economic policies. Our president is simply not a very good manager, and a horror as a negotiator.

What I'm suggesting here may be the only mutually agreed-upon fact that can be found anywhere from the Nile to the Euphrates. Arabs and Israelis disagree about practically everything, from historical minutiae about the flight of refugees in 1948 to who is the proper custodian of that great Middle Eastern source of sustenance, falafel. But one thing that they agree upon is that Obama has been an absolute disaster as a peacemaker.

I know, one has to put scare quotes around "peace process." There just ain't anything like that taking place, as indicated by the resignation last week of Dennis Ross as the president's top Middle East advisor. Sure, the parties themselves get most of the blame for the fact that peacemaking has fizzled to a halt. But I think that much of the onus for that has to fall on Obama, personally, for breaking some fundamental -- not to mention common-sense -- rules of negotiation. At times, Obama has shown less negotiating savvy than that fat kid with the chin hair in Pawn Stars. It seems at times that he (Obama, that is) couldn't be trusted to negotiate for a gold chain.

The hassle over Jewish settlements in the occupied territories is probably the best example of Obama at his very worst as a manager and a negotiator. As we all know, Obama early in his presidency placed a strong emphasis on pressuring the Israelis to put a freeze on settlements as a way of coaxing the Palestinians into negotiations. Now let's look at this from the standpoint of both sides.

The Israelis argue that this stance actually made negotiations less likely. By making the freezing of settlements -- even Jerusalem neighborhoods and close-in neighborhoods likely to remain part of Israel -- a precondition for the first time in the peace process, the Israelis and their supporters argue, it gave the Palestinians an excuse not to negotiate. Indeed, they point out, the Palestinians did not commence negotiations until the last month of the settlement freeze.

Viewed from that perspective, Obama's managerial failing was fundamental. He had failed to think through the implications of his stance, and the likely actions of both sides -- Israelis, resentful at the precondition, testing its boundaries by approving new construction in East Jerusalem, and Palestinians using those actions as a reason to not negotiate. After all, Obama himself had raised the issue of settlements. They could hardly be expected to take less empathic of a stance on the subject than, say, Vice President Joe Biden, who issued a vitriolic condemnation of settlement plans when they were sprung on him during a trip to Israel in March 2010.

When that happened, you could see prospects for negotiations wilt like a daisy sprayed with gasoline. How did Obama expect the Palestinians to react to such a fiery assault on an ally? By running to the negotiating table? In fact, the opposite took place, and the public castigation of Israel was, predictably, subjected to fierce condemnation at home.

Obama, being a weak manager, backed off. The settlements were still being given excessive emphasis by the Obama administration, but to less of an extent than before. So now it was Obama's turn to tee off the Palestinians. It was Obama, after all, who had made a fuss over settlements, building up Palestinian expectations that, maybe, Obama was on their side on that issue. Then he just walked away from that stance.

Mahmoud Abbas, president of the Palestinian Authority, put his predicament well when he vented to Newsweek in April about his frustrations with Obama over the settlement freeze. "It was Obama who suggested a full settlement freeze," Abbas told the news magazine. "I said 'OK, I accept.' We both went up the tree. After that, he came down with a ladder and he removed the ladder and said to me, 'Jump.' Three times he did it."

So what had Obama accomplished apart from making everybody mad? Well, he had given the Republicans running for president ammunition to use against him, that's what he did. While it's very unlikely that Mitt Romney is going to keep any of the pro-Israel promises that he has made during the debates -- don't forget, this is a former CEO -- there is no question that he and his fellow GOP candidates are going to do their best to pander to the Jewish vote. And they may very well win it, because Obama's tilt away from Israel has been palpable, at least to the Palestinians, administration rhetoric notwithstanding.

Newsweek said Abbas was "struggling to understand what happened to the man who had seemed more sympathetic to the Palestinian cause than any of his predecessors. 'We knew him and he was very receptive.' " Whether Obama was really that sympathetic is debatable. What's plain is that he seemed that way, and then "pulled away the ladder."

The "he was very receptive" quote is what is known in politics as "grist for a Republican campaign commercial." Every candidate but the libertarian Ron Paul has made a point of jumping on Obama's distance from Israel, usually in exaggerated terms, but with more than a grain of truth to their attacks.

Indeed, the Israelis have a justifiable beef that Obama has undercut their negotiating stance every step of the way, not only by his settlement-freeze pressure but by his insistence that Israel deal with borders and security in the first phase of negotiations, and only later deal with refugees and other thorny issues. Israelis would like all these issues dealt with at once. While that is calculated to bring the parties to the negotiating table, so far it hasn't worked.

I know all the arguments that can be made that Obama isn't to blame for the failure of the Israelis and Palestinians to reach an agreement. One side points to Israel's intransigence, the other at the Palestinians' intransigence. So it is, and so it will always be. But that doesn't excuse the president of the United States from the blunders that he has made. If he's lucky, he'll have another four years to get it right. But his luck is running out.

Gary Weiss's forthcoming book, AYN RAND NATION: The Hidden Struggle for America's Soul, will be published by St. Martin's Press on Feb. 28.

Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, �The Mob on Wall Street,� which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at garyweiss.blogspot.com.

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