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Biden’s failure to hold Netanyahu to account creates a moral hazard

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By Max Boot
August 16, 2024 at 11:59 a.m. EDT
In economics, “moral hazard” is a term for what happens when one party has an incentive to engage in risky behavior because some other actor will protect it from the consequences of its own actions. We are now seeing how moral hazard works in the Israel-U.S. alliance as the Middle East stands poised on the brink of a major conflict between Israel and Iran.


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The last time this occurred was in April after an Israeli airstrike targeted the Iranian consulate in Damascus, killing two senior Iranian commanders and other officers. Iran responded with its first-ever direct attack on Israel, sending 300 drones and missiles toward the Jewish state. The United States mobilized a stunningly successful air-defense coalition, utilizing its own military assets, along with those of Israel and friendly Arab states, to help defend Israel. Almost all of the Iranian drones and missiles were intercepted. Under heavy pressure from the Biden administration to limit its own response, Israel responded with a pinprick retaliation, and the matter was declared closed by both sides.
Clearly neither Iran nor Israel is eager for a full-blown war. Why is that possibility looming again? The latest fuse was lit when a Hezbollah rocket hit a soccer field in the Israeli-occupied Golan Heights on July 27, killing 12 children. Days later, on July 30, Israel responded with an airstrike killing Fuad Shukr, a senior Hezbollah military commander, in Beirut. The next day, Ismail Haniyeh, chief political leader of Hamas, was assassinated in the heart of Tehran while staying at an Islamic Revolutionary Guard Corps guesthouse. Iranian leaders blamed Israel for the killing and vowed vengeance.

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With the possibility of another war threatening to break out, President Joe Biden has scrambled the U.S. military to deter an Iranian attack and to defend Israel should it occur. The United States has deployed a formidable naval and air armada to the region, including an aircraft carrier strike group and an amphibious assault ship, along with multiple destroyers and at least one guided-missile submarine. The massive U.S. response has at least made the mullahs think hard about how they will respond to Israel’s assassinations to avoid a war with Washington.
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There is little doubt that Iran and its “axis of resistance” are primarily responsible for this conflict. A regional war would not be such a strong possibility if Hamas had not staged an unprovoked and barbaric attack on Israel on Oct. 7 and if Hezbollah had not launched at least 7,500 rockets, drones and missiles at Israel since then. But even if Israel had not asked for this conflict, its government has a responsibility to prevent the hostilities from spiraling out of control and potentially drawing in its U.S. allies.
Yet Prime Minister Benjamin Netanyahu seems to be acting recklessly in the knowledge that the U.S. military will step in to save Israel from the consequences of his own conduct, even though the United States and Israel do not have a mutual defense treaty. This is the “moral hazard” created by Biden’s unprecedented, if understandable, decision to use U.S. military forces for the first time to defend Israel.




 
There is no doubt that Israel was legally and morally justified in assassinating Haniyeh — which, according to the New York Times, it did by planting remote-controlled explosives in the Iranian guesthouse where he was staying. But was this a smart move to make now?
If a terrorist group can be said to have moderates, Haniyeh was considered to be a moderate within the Hamas leadership circle who was in favor of negotiating a cease-fire with Israel. He was replaced as head of the Hamas political bureau by Yehiya Sinwar, the architect of the Oct. 7 attack. It’s hard to see how this is a win for Israel. But then Israel has a long history of carrying out targeted killings that did not improve its security situation. Israel had repeatedly assassinated the leaders of Hamas and Hezbollah, only to see those groups continue to grow in strength. In light of that history, it’s hard to see why Netanyahu felt compelled to kill Haniyeh now.
Less mysterious — but even more frustrating — is Netanyahu’s ambivalent attitude toward cease-fire negotiations with Hamas. Israeli generals are demanding a pause in the fighting, which has exhausted their forces and is producing diminishing returns. A cease-fire in Gaza would also greatly diminish the risk of a regional conflagration. Both Hamas and Israel had tentatively agreed on a peace plan announced by Biden that would begin with a six-week cease-fire; the release of elderly, wounded and female Israeli hostages in Gaza; and an Israeli military withdrawal from populated areas of the Gaza Strip. But final agreement remains maddeningly elusive, and, according to Israeli documents leaked to the New York Times, part of the problem is that Netanyahu has revised Israel’s negotiating position, undoing concessions that he had seemingly agreed to in May.



Netanyahu’s latest demands — for Israel to control the border between Gaza and Egypt and to operate checkpoints to ensure that Palestinians returning from southern to northern Gaza are not carrying weapons — are reasonable, in principle. But the apparent change in the Israeli negotiating position raises further suspicions that he is not really interested in reaching a cease-fire that could lead far-right members of his government to bolt in protest. Netanyahu’s own defense minister, Yoav Gallant, reportedly blasted the prime minister’s decision-making in a closed-door meeting with Knesset members, describing Netanyahu’s promises of “absolute victory” over Hamas as “gibberish” and questioning Netanyahu’s courage to reach tough decisions such as a cease-fire.
The Biden administration is also said to be unhappy with the Israeli prime minister for dragging his feet on a cease-fire, assassinating Haniyeh and continuing to inflict heavy civilian casualties in Gaza. Yet Biden, who has spent a lifetime as a devoted supporter of Israel, doesn’t hold Netanyahu accountable. The administration just approved a $20 billion arms sale to Israel, which signals to Netanyahu that he can continue to ignore U.S. demands while receiving U.S. support.
Netanyahu should enjoy the free ride because it might not last long. While Vice President Kamala Harris has hewed to Biden’s foreign policy agenda, there are hints to suggest she is less reflexively pro-Israel than the president — and Harris is now leading in the polls. Donald Trump, while president , was even more willing than Biden to give Israel a blank check, but he has a volatile relationship with Netanyahu. Trump was furious at the Israeli prime minister for calling to congratulate Biden on his 2020 victory and has been critical of the optics of Israel’s war in Gaza. Who knows what Trump would do were he to return to office?


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One thing is certain: Whoever is president will be guided at least in part by public opinion. U.S. views of Israel are turning less positive: According to a recent Gallup poll, more Americans disapprove than approve of Israel’s military actions and of Netanyahu. (Support remains high among Republicans but is rock-bottom among Democrats.) It’s a safe bet that U.S. opinion toward Israel won’t improve if Netanyahu is blamed, rightly or wrongly, for dragging the United States into a war with Iran. Israel may come to rue the moral hazard that its prime minister is incurring.
 
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