EclectEcon

Richard Posner deserves the next Nobel Prize in Economics
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Should I Be Grateful If a Thief Returns Half the Money S/He Stole?

Consider the following scenario:

A thief steals $2000 from me. I then spend $500 to retrieve the money from the thief, who also spends $500 trying to keep me from retrieving my money. In the end, I get $1500 back from the thief, for a net return (after my own expenses) of $1000.

I should be grateful and thank the thief? Lots of people seem to think so.

At least that's what this article in our local newspaper seemed to be saying.

Arena gets $2M boost

Central Huron benefits from Federal-Provincial grant

The Clinton arena is on the receiving end of $2 million in infrastructure grants for a $3-million renovation plan.

Local dignitaries, including Huron-Bruce MP Ben Lobb and Huron-Bruce MPP Carol Mitchell, were on hand at the official announcement of joint federal and provincial funding to improve community recreational infrastructure through the Recreational Infrastructure Canada program and Recreation Ontario.

“This is a great thing,” says Central Huron Reeve Bert Dykstra. “It helps communities to grow and foster recreation as a great part of that growth. It keeps people in the community and keeps people healthy.”...

The federal and provincial gubmnts tax us. And then we use tonnes of scarce resources that could have been used for something else to compete with people from other municipalities to try to get some of our (and their) tax dollars back.

It's a negative sum game and a classic example of the prisoners' dilemma: if we don't play it, we still have to pay our taxes but other municipalities will get the money. And if we all play the game, the size of the pie gets smaller because the gubmnts use some of our tax dollars to assess our rent-seeking applications for funding and because each municipality spends money on the rent-seeking funding applications.

 If we all kept our money, and if we refused to let federal and provincial gubmnts fund local projects, the municipalities would all have more money in total. And then the local gubmnt officials could make it clear what the local taxes might or might not be paying for. Getting the feds and province involved just increases the obfuscation of what is really going on.

Meanwhile, the federal and provincial politicians show up and take credit for this farce. What if, instead, they stood up and said,

We took your money in the form of taxes, and now after considering all the costs involved, we're giving half of it back to you. Aren't we great?

They'd be laughed out of town. And they should be.

Another Pilgrimage: Whitehaven Mansions

Perhaps this was an odd pilgrimage to make while I was in London last May:

Do you recognize the place? A clue is in the title of this posting.

The person who took the pictures with me in them had no idea why the building might be important for anyone. When I asked him, "You know why I want my picture taken here, don't you?" he replied, quite correctly, "because you're a tourist?"`

Answer below the fold.

Libertarian.NE.PalinDuh

I really find this summary from Today's Papers (Slate) hard to believe. Shows how out of touch I am with the real world.

[The USA Today] lead story is about how Sarah Palin's resignation actually "boosted her a bit among Republicans." A poll taken this week shows that Palin has become even more polarizing after her resignation as the vast majority of Republicans want her to become a national figure, and Democrats overwhelmingly want her to just go away. Fifty-five percent of independents agree with Democrats. Almost three-fourths of Republicans say they'd be likely to vote for Palin for president in 2012, while 51 percent of independents say they wouldn't. [emphasis added]

This is the social conservative wing of the Republican party, the wing that wants more gubmnt intervention in our lives. It is not the small-gubmnt libertarian wing which played such an important role in helping the US economy grow in the 1980s.

My prediction (possibly wishful thinking?) is that by 2011, Sarah Palin will have faded from the scene and will have zero real influence in the Republican party.

Predatory Pricing: A Real-World Example?Restaurant Competition in a Declining Market

The general view among economists is that only rarely would we expected to see real-world examples of predatory pricing, where a firm charges below-cost prices to drive others out of business so it can then raise its own prices after it obtains a monopoly. From Wikipaedia,

In essence, the predator undergoes short-term pain for long-term gain. Therefore, for the predator to succeed, it must have sufficient strength (financial reserves, guaranteed backing or other sources of offsetting revenue) to endure the initial lean period. There must be substantial barriers to entry for new competitors.

But the strategy may fail if competitors are stronger than expected, or are driven out but replaced by others. In either case, this forces the predator to prolong or abandon the price reductions. The strategy may thus fail if the predator cannot endure the short-term losses, either because of it requiring longer than expected or simply because it did not estimate the loss well.

So, understandably, I was surprised to hear of allegations of predatory pricing in the restaurant business in our area.

The story I was told goes as follows: one particular place is offering amazing specials that are clearly below-cost. In the process, it is sucking business away from the other places, some of which will likely not survive. These places feel as if they are being driven out of business by an aggressive outsider.

But is it predatory pricing? Probably not.

One essential element for predatory pricing must be the intent of raising prices after others are driven out of business. But the surviving firms will not be in an industry that has high barriers to entry. Sure, after some firms leave the industry it might take another 6 months or more before new competition can enter. And in this area, with the shutdown of a major manufacturer (Volvo-Champion Road Graders), it might take even longer for new competition to emerge in this upper-end segment of the market where the action is taking place. But if others can, and will, enter this segment of the restaurant market, it will be difficult for any place to maintain high prices for long. Customers will eventually drift away, toward restaurants that offer a better price-value-atmosphere-quality combination.

So why is this person engaging in such aggressive pricing? I can think of four possible explanations.

1. They really are practicing predatory pricing and are looking forward to recouping their losses within a one- to two-year period when there will be reduced competition.
2. With the overall downturn in the economy, this place is just being more aggressive than others in its attempts to retain customers and employees.
3. Their aggressive pricing is really just promotional pricing. They are  pricing some items below their variable costs to attract business, and they expect to more than make up the difference with high profit margins on other items, such as beverages (I was recently charged $13 for a one-ounce shot of scotch at one restaurant in London, ON), desserts, and other extras.
4. The new, aggressive manager is rewarded according to growth in revenue or some other measure of sales volume. The place where this is occurring has gone through several changes of ownership over the past 40 years but has always had a fairly good reputation despite its being a bit out of the way. He told one of his competitors that he has gone in and followed these aggressive tactics 36 times before and been successful in all but two of them.

But what is the measure of success? From an economics standpoint, success should be in terms of contributions to the net present value of the firm. But it looks to me as if his measure of success is more short-term and somewhat truncated. It sounds as if his measure of success is growth of the firm's business (measured by revenue) over a year or less. Once he leaves, then what happens? And why would the parent corporation hire him to pursue these strategies if they do not have longer term success (contribution to the net worth of the firm)?

At any rate, even if his policies have the effect of driving some firms out of business, I doubt if this is a real-world case of predatory pricing. It sounds to me more like a combination of promotional pricing, coupled with a principal-agent problem in designing managerial compensation schemes.

Restaurants of interest:

• Bailey's, on the square in Goderich.
• Ben Miller Inn
• The Little Inn in Bayfield
• The Red Pump, Bayfield
• Thyme on 21, Goderich

Meanwhile, the specials and the competition make sticking to one's diet very difficult.

Confusion: Honduras

It seems pretty clear that the ousted president was behaving illegally and unconstitutionally.

As the general elections scheduled for November began to creep up, Mr. Zelaya decided to hold a referendum with the ultimate aim of allowing him to seek re-election. The move violated articles of the Constitution that forbid changes to the presidential limit of one four-year term and establish the legal procedure for constitutional amendments. The electoral court, the Supreme Court, the attorney general, Congress and members of his own party declared Mr. Zelaya’s intention unlawful. Then, on Sunday, the military stepped in.

At the same time, there should be ways to head that off other than by military coup. This piece from the Independent Institute illustrates the problem. Here is their summary:

The crisis in Honduras is, in a word, complicated. Although deposed President Manuel Zelaya bears the brunt of the blame for his ouster, the military actions against him were ill advised and play into the hands of Zelaya's anti-democratic allies in the region, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

Zelaya acted unconstitutionally by taking steps to seek reelection, and he followed that misdeed with an even more brazen one: breaking into the location of the impounded election ballots in an effort to distribute them. Yet the response from the Organization of American States has been to ignore Zelaya's dictatorial conduct, just as it ignored similar violations by Chavez in Venezuela, Morales in Bolivia, Correa in Ecuador, and Ortega in Nicaragua. Supporters of the military action may come to regret Zelaya's propaganda victory in a conflict that bodes poorly for the rule of law.

As the Honduras imbroglio illustrates, the trick for Latin America is to avoid the extremes of the left and the right. Vargas Llosa concludes: "Honduras' crisis should bring to people's attention this truth about Latin America today: The gravest threat to liberty comes from elected populists who are seeking to subject the institutions of the law to their megalomaniac whims. Given that scenario, the hemisphere's response to Honduras' crisis has undermined those who are trying to prevent populism from taking the region back to the times when it was forced to choose between left-wing revolution and military dictatorships." [emphasis added]

Also see Llosa's piece in the NYTimes on why the primary winner in Honduras could well end up being Hugo Chavez.

Pilgrimages: The Great Bagel QuestCarmelli's and Brick Lane

For decades, my friend, BenS, has been telling me that most bagels we get in SW Ontario are "not authentic" in that they are steamed, not boiled, and are puffy, non-chewy, round-shaped white bread that is being passed off as bagels.

So in BenS's presence while attending a conference last spring, knowing that I would be going to England soon, I asked Lord (Parry) Mitchell where to get authentic bagels in London, England. He immediately recommended that I go to Golder's Green, a residential community NW of Hampstead Heath.

At the same time, I wrote to EclectEcon reader, MA, and asked for his recommendations. MA sent me reviews recommending Carmelli's in Golder's Green, and the Brick Lane Beigel Bake.

So early in May, as MA suggested, I took the tube to Hampstead Heath and walked on up through some parks to get to Golder's Green, where I located Carmelli's. I started with a plain bagel, filled with cream cheese [aka "one cheese" when placing the order]. These are prepared in advance and are in a case, cello-wrapped. I took it outside and sat on a bench to eat it.

I was absolutely blown away. 

After eating just half a bagel, I understood what BenS was talking about. It was a small bagel, compared with most supermarket bagels in North America, but it was dense and chewy. There was a hint of sweetness and softness to round things out, but it was unlike anything I had ever experienced previously.

I went back in and bought another "cheese" bagel, a half dozen plain bagels, and a half dozen onion bagels. I shared some of these bagels with colleagues back at the castle and carefully, slowly, allowed myself one or two per day over the next week or so.

- - - - - - - - - - - - - - - -

A couple of weeks later, I went to the Brick Lane Beigel Bake. I started the same way, buying "one cheese". It was okay, but the inside of the bagel was softer and less chewy. I also went next door and bought "one cheese" there as well. Same thing. They were good, but despite their reputations, they just didn't live up to the dense, chewy texture that I had enjoyed so much with the Carmelli bagels. I'm sure they were just as authentic as Carmelli's bagels, maybe even more so in some sense; but I didn't bother to buy a dozen. They were a bit of a let-down compared with the Carmelli bagels.

How much did I like Carmelli bagels? So much that before returning to Canada from London, I took an extra two hours to go out of my way, up to Golder's Green, where I bought two dozen more bagels to fit into our suitcases for the return trip. I also bought some cream bagels and some lox bagels for Ms. Eclectic and me to enjoy before leaving from Heathrow the next morning.

On the way home from the airport, we dropped off a half dozen with BenS and brought the rest home. We still have four in the freezer, but I fear they won't last much longer there.

After trying several different types of Carmelli bagels, I have concluded that the best ones are the smaller, plain ones. The onions in the onion bagels detract from the intensity and purity of the experience in eating the plain bagels; and the poppy seed and sesame seed bagels are less dense, less chewy.

Some additional notes:

• BenS agreed that these bagels are among the best he has ever tasted. He also says they are "authentic" --- chewy, boiled not steamed.
• Ms. Eclectic also thinks these are among the best bagels she has ever experienced.
• The cream cheese at all the places I tried bagels in London (including Upper Crust at Victoria Station) is a bit coarser and less plastic-like than typical Kraft Philly cream cheese. I absolutely prefer the plastic stuff, but at least the London cream cheese wasn't as dry and coarse as quark.
• BenS thinks the wikipaedia article on bagels has the descriptions backwards. He claims the NYC bagels are the chewier ones, and the Montreal bagels are softer inside.
• Service at these places is okay, despite what the reviews might say. You go in, you order, you pay. No frills and no place to sit to eat and relax. But the ten-star experience is strictly in enjoying the bagels, and there is little to detract from that.
• There are plenty of other options for buying prepared bagels: toasted with butter, prepackaged with lox or with tuna and sweet corn; I'm sure there are other options, too.
• If I return to England, the very first thing I will do right from the airport, suitcases and all, is go to Carmelli's for a coupla dozen plain bagels. In fact, I might consider going back to England just for those bagels, they were so good!
• The economic content of this posting should be clear: the expected incremental benefits of the bagel search outweighed the expected incremental costs of the search. And having made those searches, I acquired enough information about the benefits that I will gladly bear even higher costs to return for more bagels in the future.

Is Sarah Palin Really as Much of an Idiot as She Seems?

Kip Esquire thinks so:

Folks, stop imagining a mystery where none exists: She’s an idiot. A real-life Chauncey Gardner. That’s all there is to her resignation. There is no “crazy like a fox” aspect to her announcement — it’s strictly “stupid is as stupid does.”

One of my friends last year thought that naming Sarah Palin to the Republican ticket was a stroke of genius. I was so convinced he was wrong that I made 50 bucks betting against him on the election outcome.

I think Kip's analysis is closer to correct.

"An Academic Version of Durban"

Last month, Canada's York University was the site for a conference on the middle east. Given the organizers, most of us expected it to be a hate-Israel fest and decided not to attend it. Na'ama Carmi of Haifa University was an exception. Here, from the Toronto Star, is an excerpt of her experiences and impressions [h/t Dylan]:

Although the extreme manner in which they were presented was sometimes hard to hear, I was not surprised by the same Palestinian arguments that have been around for decades.

Thus, we heard that Israel is a racist, apartheid state; that the Palestinians are the "indigenous" and Zionists the colonials; that the only reason for the unwillingness of Jewish Israelis to give up a Jewish national state is their unwillingness to surrender power and privileges; and that Zionism has an inherent tendency toward war crimes.

Unfortunately, this was not accompanied with introspection or self-criticism by the Palestinians. Hamas was not mentioned at all. Apparently it does not exist in the virtual map of the Palestinian participants. Another "marginal" phenomenon that disappeared as if it did not exist is the lethal Palestinian terror against Israeli citizens.

But if all this was quite an expected scenario, not in my worst dreams did I imagine an atmosphere that was totally incompatible with academic discourse. The university rightly resisted outside pressures aimed at silencing the conference. But there were attempts at the conference itself to silence unpopular views.

A hostile atmosphere toward people with different views generally, and Jewish-Zionist Israelis in particular, was created. Anyone who challenged the Palestinian perspective was intimidated or even labelled a racist. The audience vocally applauded those whose views it approved. At times, those presenting a different view were subject to abuse and ridicule.

For me, this reached an extreme when one interlocutor, rather than debating the substantive arguments I presented, questioned my psychological state. And all of this without any apparent attempt by the organizers to stop it. Never before in my whole academic career have I encountered the rudeness that I experienced at this conference. ...

[W]hat happened at York University reflects a worrying, dangerous and, unfortunately, not uncommon pattern. Persons who demand the protection of human rights abandon them and display little tolerance for the views of others when they have the power to marginalize them. ...

This was not an academic conference, but an "academic" version of Durban.

Another Memo to Wimbledon

Is NOBODY televising the ladies doubles championship match? NBC appears to be carrying celebrity golf, and none of the dedicated sports channels is carrying it in our area either. At least we are unable to find any mention of it on our 600 or so channels.

Was no outlet willing to pay for these rights? I suspect that whoever did the media contract negotiating for Wimbledon will or should be looking for a new job soon.

Signs of the Times?

Ladbrokes betting parlour and a Northern Rock outlet, side-by-side on a London street. How appropriate!

Gubmnt Pensions and Catch-22:We Are All Yossarians Now

Just substitute the age at which you can expect to receive a gubmnt pension for "number of missions". From the classic novel by Joseph Heller [h/t to JB]:

"Daneeka was telling the truth," ex-P.F.C. Wintergreen admitted.

"Forty missions is all you have to fly as far as Twenty-seventh Air Force Headquarters is concerned."

Yossarian was jubilant. "Then I can go home right? I've got forty-eight."

"No, you can't go home," ex-P.F.C. Wintergreen corrected him. "Are you crazy of something?"

"Why not?"

"Catch-22."

"Catch-22?" Yoassarian was stunned. "What the hell has Catch-22 got to do with it?"

"Catch-22," Doc Daneeka answered patiently, when Hungry Joe had flown Yossarian back to Pianosa, "says you've always got to do what your commanding officer tells you to."

"But Twenty-seventh Air Force says I can go home with forty missions."

"But they don't say you have to go home. And regulations do say you have to obey every order. That's the catch. Even if the colonel were disobeying a Twenty-seventh Air Force order by making you fly more missions. you'd still have to fly them, or you'd be guilty of disobeying an order of his. And then Twenty-seventh Air Force Headquarters would really jump on you."

Yossarian slumped with disappointment. "Then I really do have to fly the fifty missions don't I?" he grieved.

"The fifty-five," Doc Daneeka correct him.

"What fifty-five?"

"The fifty-five the colonel wants all of you to fly."

I am getting my raft out now and setting out for Sweden like Orr did.

Note to Wimbledon and NBC

It sure is disappointing not to be able to watch some of the Wimbledon tennis matches live. I'm not nearly so interested in watching tape delays or reruns, and I'm especially not interested in watching them when I receive scoring updates, live, every thirty seconds or so on my iPhone. It was pretty silly today, especially, because the Williams-Safina match was nearly completed by the time NBC got around to showing any of it.

If I am like this, I wonder if many other sports fans have similar views. And if that is the case then surely there is some money being left on the table by the contractual combinations that have been negotiated  requiring ESPN not to show some matches (and not even mention the matches or their scores, if they are in progress).

Either NBC should alter its day-time programming so they can show those matches live, or Wimbledon should negotiate contracts that capture more of the surplus.

And note to advertisers: I don't watch as much or as intently if the tennis being shown is tape-delayed. I hope you are not paying as much for that ad time.

Will the Various US States Soon Issue Their Own Paper Currencies?

The question is not so far-fetched as one might think. With a number of states in the US unable to meet their financial obligations, what are they to do?

They cannot formally issue currency, but they are considering issuing IOUs [h/t to Jack]:

In most states, the debate centers around whether states should be raising taxes to bridge the budget gaps. California Gov. Arnold Schwarzenegger said he wouldn't sign anything that raised taxes or fees beyond what he has already proposed.

State Controller John Chiang has said he would have to start issuing the IOUs on Thursday unless lawmakers took steps to stem the state's red ink by then.

Roughly $3 billion worth of IOUs will be issued in July unless a compromise on closing the deficit is reached quickly. They will be sent to state contractors, college students, welfare recipients, low-income seniors, the disabled and others who depend on or deliver state services. Counties will not get paid for social programs they administer.

[Update: For more on California's IOUs, see this.]

Do you think there is a good chance such IOUs might circulate as currency (albeit at a discount)? I do. I can readily imagine that if I were paid in state-gubmnt IOUs [how about we coin the term "Schwarzen-dollars"?], I'd want to convert them into US legal tender pretty quickly. Would the state gubmnt require banks (or strongly encourage them) to accept Schwarzen-dollars for deposit?  If so, how much would the discount be for Schwarzen-dollars?

Would the US Fed and the US Congress balk if the state gubmnt tried to declare Schwarzen-dollars legal tender in the State of California?

More importantly, if they succeed in doing this, what is to stop or limit them and other state gubmnts from doing much more of this in the future?

Price Discrimination or Cost Differential?

A month or two ago, Marvel Comics raised the prices of its more popular comic books [h/t Brian Ferguson]:

During the presentation, Turitzin gave an overview of Marvel — a “cash machine,” he called it — and the various ways it makes money, from publishing and licensing to the more recently added Marvel Studios division. Like I said on Friday, one of the more interesting portions came when a comic fan in the audience asked about recent cost increases on some of Marvel’s more popular titles from $2.99 to $3.99.

“We’re always testing our pricing on our comic books to see to the extent to which it is inelastic, and we can increase our profit in that business,” Turitzin said. He added that different books have different price points, noting the most popular titles saw a price increase, while the lower-selling monthlies, as well as the comics aimed at kids, did not.

“We’re just looking to maximize our profits for that business while not alienating our own fan base by making them feel that they’re gouged, which I hope you don’t feel,” he told the fan.

That sounds as if it meets the general conditions required for price discrimination, doesn't it?

• Different market segments with different price elasticities of demand
• Costly or no opportunities for arbitrage (buying low and selling high) because you cannot easily buy one of the cheaper comic books and then resell it as one of the expensive ones.

But hold on.
Is it possible there are cost differences giving rise to the price differentials? What if, in order to keep the better talent working on the better comics, the company must pay more to the writers and illustrators who produce the ideas and artwork of the more popular comics? What if those people have higher opportunity costs in the video, computer graphics, and video game industries? If so, then maybe these price differentials are determined, at least in part, by cost differentials.

As quoted in the same item,

“Comics are a legit form of entertainment, and there are highly respected and well-paid individuals creating them,” he said. “People have an affinity for nickel and dime comics from the 1940s, but we’re competing with video games, film and television.” He added, “We need to keep the talent on the books to make them work.”

But we teach our students that profit-maximizing prices are determined by the intersection of marginal cost and marginal revenue. The price-discrimination argument (at least in its simplest form) assumes that the marginal costs and marginal revenues in the different segments are equivalent, and the only difference giving rise to the price differences is in the price elasticities of demand in the two different segments.

Are there really differences in long-run marginal costs in the different segments of the comic book industry? Doesn't it cost the same to produce an additional comic book regardless of its content?

Maybe the short-run marginal costs are the same for producing comic books. In fact, given the different lengths of the runs and the setup costs, maybe the costs of production are lower at the margin for the more popular comics.

At the same time, though, to keep the top talent producing those popular comics probably adds to the long-run marginal costs of producing them.

The upshot is twofold:

1. It is often not so easy to identify price discrimination in the real world. John Lott is an expert on the economics of price discrimination (see his comment here, for example); and
2. Price searchers don't have marginal cost and marginal revenue curves to work with. Price searching in the real world is usually a process of successive approximations and adjustments.

Back and Ready to Blog Again Soon

After more than a month away from blogging while I traveled and did other things, I'm home now. It will take some time before the blog posts come at a regular pace, but at least they will restart soon. Thanks to everyone for your patience.

Obama-man/Candyman

by Greg Morton, via BenS.

Taking a Break

With apologies to all and with thanks to the regular readers who have asked if I'm okay, the answer is that I'm fine. I'm just taking a break from blogging while I'm teaching in England. There is much to blog about, but I'm just not finding the time to do it while I'm here this time.

More Indications that Our Work Is Never Finished

The other day I was talking with some students here at Herstmonceux Castle about the various field trips that are planned for each of the courses. I was telling them that the economics course is going to visit Transport for London to talk with them about London's congestion charge, about how it is implemented, and about how effective it is or isn't.

[In economics, this charge is a classic example of a Pigouvian Tax]

One of the students reacted with horror about the congestion charge. I asked, "What's wrong?"

She replied, "Well, I just don't think people should have to pay to drive in the city. That doesn't seem right."

It is this belief that policy-makers must cater to and which encourages too much congestion, the under-pricing of water, and attitudes toward health care.

Fortunately she seemed to accept the idea of the tax when she realized that people had plenty of options -- taking the tube or the bus or walking or bicycling. But if these types of options were not available, I doubt if she would be willing to accept a straight-forward Pigouvian Tax on much of anything.

We have so much work to do....

Fighting Consumerism

I recently had lunch with some neo-puritans who asserted that we consume too much in the western world. My reaction: If so, then raise the value-added tax (VAT, which is similar to the Goods-and-Services Tax [GST] in Canada). Raising the net prices of goods and services will reduce the quantity demanded.

And if you want to keep it revenue-neutral, lower the income tax. Doing so will have the double benefit of (a) keeping the VAT increase revenue-neutral and thus inhibiting the growth of gubmnt, and (b) inducing people to work more [more shades of the protestant work ethic].

Furthermore, inducing people to work more and save more will promote economic growth, which will have the additional benefit of helping poor people more than any other anti-poverty scheme.

Sounds like a win-win-win proposal to me.

What Kind of Concession Is This?"We favour a two-state solution but we still want to annihilate Israel."

That is from Hamas, (from the NYTimes). I hope it doesn't deceive diplomats and mediots. Some pithy quotes:

His conciliation went only so far, however. He repeated that he would not recognize Israel, saying to fellow Arab leaders, “There is only one enemy in the region, and that is Israel.”

But he urged outsiders to ignore the Hamas charter, which calls for the obliteration of Israel through jihad and cites as fact the infamous anti-Semitic forgery, “The Protocols of the Elders of Zion.” Mr. Meshal did not offer to revoke the charter, but said it was 20 years old, adding, “We are shaped by our experiences.”

... On the two-state solution sought by the Americans, he said: “We are with a state on the 1967 borders, based on a long-term truce. This includes East Jerusalem, the dismantling of settlements and the right of return of the Palestinian refugees.” Asked what “long-term” meant, he said 10 years.

And what will happen during those ten years?  And after ten years?

Let me just add that for the most part, Palestinians had the right of return (emanating from the right not to leave in the first place!) back in 1948. Their departure, primarily at the urging of Arab leaders, signaled their abandonment of that right.