Electronic Intelligence Weekly
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Volume 1, number 26
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September 3, 2002

THIS WEEK YOU NEED TO KNOW

The World Will Never Seem the Same

by Lyndon H. LaRouche, Jr.

LaRouche gave this keynote speech at the ICLC/Schiller Institute Labor Day conference in Northern Virginia on Aug. 31.

Those of you, who are present here, and those who you, who are listening, and many others, are frightened. You're either frightened, in the sense that you admit you're frightened; or you're so frightened, that you can't face it, and try to deny the reality of what you are now experiencing, in the United States, and in the world at large.

So, my first job is to point you to the way to find your courage, to deal with something which has not been seen in European civilization in a long time. Something which has not been seen in European civilization, since the 14th-Century New Dark Age, where a third of the population of Europe was wiped out, in a few decades, by bankers who insisted on collecting the full value of their debt, which was a swindle, at the expense of the lives of the people.

We are in a situation now, in which the government of the United States, the financial powers of the United States, the leadership of the two major parties, are presently committed to repeat, now, in the immediate future, what the Lombard bankers, and their political backers, did to Europe, in unleashing the New Dark Age of the mid-14th Century. You're living in a time, where you face the fact (if you are conscious of the fact), that every nation on this planet, could be swept away, almost as if it had never existed, within a few years from now. Not merely because of the aftermath of an unthinkable, foolish war, which a stupid President is impelled to launch against Iraq. Not merely because of a depression. Because of something much worse, as I shall indicate.

But, how do we address such situations as this, where the very existence of humanity is in peril? In Christianity, in particular, you have the St. Matthew Passion and the St. John Passion of Bach. Now, when these are performed with a congregation, as Bach had intended they be performed, where the congregation is responsive, the soloists, the musicians, the instrumentalists, the choruses, are responsive to their parts, the participants in the event, re-live, as if they were there, the Passion and Crucifixion of Christ. And the question, so posed, is: When contemplating the death of Christ, in that way—and the Passion of Christ—what does it mean?

Now, there's a dear friend of mine, who is not theologically too sound, but he's a minister nonetheless—which is a usual combination these days—who says to me, repeatedly, and to others, that, Jesus died because He made a mistake. And some people say, that Martin Luther King died because he made a mistake. Both are mistaken. Both died, as Christ said, and as Martin said, in his Mountaintop address: They died for humanity. For future humanity.

And, what this signifies is, that life, by its nature, is mortal. We're reminded of that, of course, emphatically today, by the passing of William Warfield. Life is mortal. It comes to an end. So, that there's nothing you can achieve in life, which, in and of itself, gives any durable value to your existence. Then, what gives value to your existence? That in the course of time, you come and you pass. And if you have done something which was needed, in honor of past mankind, and for the sake of the future of mankind, then you never die, because you are an efficient part of humanity. It is from this assurance of one's sense of such an identity, that people find the courage to overcome their fears, not to push them aside, to deny them, but to overcome them, as one imagines a soldier must, in battle. Why would a soldier risk their life, in battle, except for some higher purpose which lives beyond them? Why should anyone live a life, except in service of some higher purpose, which gives a special meaning to the mortal existence of the person? And it's only when you think about the essential immortality of the individual personality, an immortality of that particular implication, that you can find the strength, not to waver, not to turn coward, not to blind yourself to reality in face of terrible times, such as those which now prevail.

The Courage To See Reality

Now, my job is, since this point is clear to me, and has been clear for a long time—and if it hadn't been clear to me, my enemies have, from time to time, reminded me of it—a certain enthusiasm for getting rid of me. And the only constraint they seem to respect, is the fear that my martyrdom might be more dangerous to them, than my living person. They would hope that I might disgrace myself, in some way, and thus relieve themselves of the danger of my martyrdom. But, therefore, I am confident in this, and I would hope that I can impart to you a sense of the reality of my reasons for confidence. And, that you who are here, or who hear me now, will find in that a source of your own personal strength: First of all, the courage to see reality for what it is, and not to pretend it's something different than what it is. And secondly, the courage to find your suitable role, in response to this challenge presented to all humanity. That you might stand upright and proud, as a human being, who is making a mark, for the future betterment of mankind. That even if we were defeated, we shall give such a lesson to humanity, that future humanity will benefit from it. But we do not intend, to be defeated. We will resort to everything needed, to win.

What we've entered in, is not a Great Depression. Let's see the first one, the Dow Jones Industrial Average comparison (Figure 1). All right. Now, this is just a comparison of two depressions—the most recent one, now ongoing; and the preceding one of 1929-33. There was also one before that, in 1922. But, the difference is, this depression could be the final one.

Now, Nancy [Spannaus] spoke of Hitler, the danger of Hitler. The danger is not Hitler. There is no Hitler on this planet now—no Hitler danger. The planet, if it chooses the pathway of Hitler, will not make it to a Hitler. It will destroy itself, before it gets to that point.

Some people have set out—as in the United States, as around George Bush, the people who control him—to establish a new English-speaking Roman Empire. But they made a mistake. They didn't study history: The Romans started their empire at the height of the power of Rome. Poor George Bush is trying to create a Roman Empire, at the death of Rome! We've used up those sources of power, on which the power of the United States had been based, coming out of World War II as the only world power. We are now a junk heap, ready for the scrap-yard.

So, that is not the true picture. But it does give you an indication, of the fact that we are in a depression; that the President of the United States is denying it; that people have been denying it for a long time. Now, look again—look what we have as a figure on this depression. When did it start? It didn't start this year! Look back a few years, look back to 1996 and beyond (Figure 2): The U.S. Economy Collapse Function. All right. You see, here, that in relative terms, in 1996, this depression was already in full swing. Manufacturing employment was down; debt was climbing, about the year 1999-2000; the rate of monetary aggregate accumulation, that is, monetary inflation, exceeded the rate of growth of financial values on markets. That is a hyperinflationary function. In other words, what you're looking at there, is a depression, already in progress by 1996, which entered a couple years later into a hyperinflationary function, akin to that which destroyed the German reichsmark, between June and November of 1923.

That's where we are. So, we're not in a simple depression. We're in something much more serious. We're in what is called "a general breakdown crisis."

Now, look at the question of the mass-layoff announcements—just see where we are (Figure 3). The significance is, that from 2000 to 2001, that George Bush was greeted, at his inauguration, with an acceleration, a hyperinflationary acceleration, of the rate of collapse in the depression. Then, think on that. Remember that all the years, that people were voting for Clinton, or thinking about voting for Gore, or some other foolish thing, or voting for Bush; other such foolish things; talking about prosperity. Do you remember that Gore and Bush, on a national television debate—so-called "debate": It was sort of a vacation, of two vacant chairs debating each other? Each was asked the same question by one of the questioning reporters, "What would you do, in case of an economic crisis?" They said, "We would follow the advice of Alan Greenspan." They did! And, that's what happened.

So, we're in a case, in which, not only are we in a depression, but we are in a very serious collapse phase of the depression.

Now, look at the next [slide] (Figure 4), the question of flow of foreign assets into the United States. The United States has not been prosperous. We could bring on some other charts, but it's not necessary; you've got them from other sources with us, earlier sources, anyway. But just to make this point: The United States has not been prosperous. Since 1977, when acting President Zbigniew Brzezinski dragged in Jimmy Carter from Georgia, and said, "You're President—"What do I have to do?" Brzezinski said, "Whatever I tell you to do." But, the United States has been in an accelerating process of depression, for a long time. The Carter Administration was part of it. What Carter did to destroy, to tear down infrastructure, transportation, power, agriculture, and so forth, was the start of the real collapse of the U.S. economy.

The collapse of international economy had begun, by August 1971, when a perfectly workable fixed-exchange-rate monetary system, was swapped, for a floating-exchange-rate system, which was the beginning of economic Hell, on this planet.

So, during this period, the United States was able to appear prosperous, to fools, who didn't pay attention to what would happen to the lower 80% of family-income brackets, to cities, and so forth; to education, to health care, whatnot. They weren't paying attention to that, but they were looking at the stock-market values, or the so-called "official figures," while the people were getting poorer and poorer. The health care was getting less and less. The farmers were being destroyed. The industries were being destroyed. "But we were prosperous." We weren't prosperous! But, the people who control the United States, were amassing financial assets, and thought they were prosperous, because they had financial assets.

How did they have financial assets? Well, the United States had become a kind of Roman Empire. Particularly with the collapse of the Soviet system, the United States—with its Australia, New Zealand, United Kingdom, and Canada, which were really part of the British Empire—these groups felt they could establish a world empire, an English-speaking world empire of financier interests, speculators.

So, they took the occasion, to begin the process of "globalization": NAFTA in the United States, a project to make all of the Americas, together with England, an extended version of NAFTA—a slave system! Nineteen eight-two: All of Central and South America began to be destroyed, in a process of destruction, which has not abated since. Now it's at the end. Virtually every country in South America is extinct, or is about to become extinct, including Argentina, Mexico, Uruguay, Paraguay, Bolivia, Peru, Ecuador, Venezuela, Colombia, Central American countries; Mexico is threatened. There's no part of Central and South America, which is not now in danger of extinction in the foreseeable near future, as a result of this process.

Why? Because we looted them! Africa is near extinction. Why? Because we looted it! We killed the people, and went in to grab the gold, the other mineral assets—petroleum and whatnot—the water, everything in sight. We did that. We looted Europe, our so-called "European ally"—we looted it. We looted everything else we could loot. From 1989 on, 1991, they looted the Soviet Union. They looted Southern Europe. They looted Eastern Europe.

Living on Stolen Wealth

So, the American empire, like Rome, following the Second Punic War, expressed its power, by ceasing to be a productive economy, shutting down our industries and things like that, and deriving our wealth by stealing it, by force, from other countries: South America, Central America, Africa, Europe, Asia, as much as they could; the former Soviet Union. We stole it!

And we lived upon the stolen wealth. We shut down the factories, and took the people who had been skilled operatives in these plants, and we put them into dead-end jobs. We destroyed communities; we destroyed families; we destroyed schools; we destroyed universities. Today, the price of tuition at a university is at inverse proportion to the value of the education delivered! A university is a place where a person gets no knowledge, but a lot of social status. You pay for the social status—because you surely don't get education!

They also propped it up, by imposing upon the world, our current-account deficit. We not only stole from other countries, but we bought from other countries, and didn't pay them: It's called the "current-account deficit." On top of that, our stock markets were collapsing, but we fixed that: We looted other countries of their financial assets. We induced them, under pressure, and inducements, to send their money into New York, into the New York financial system; so they built up the system. We forced Japan to print worthless money. The worthless money, printed by Japan on U.S. orders, was then sold overnight, for dollars, or deutschemarks. These went into the European markets, a little bit, but primarily into the U.S. markets. So, the Japanese yen was strangling and bankrupting itself, by propping up the New York financial markets—and other financial markets inside the U.S.

And that's what that is about. The foreign assets, flowing into the United States, have enabled those who had power, to believe they were rich, because they, as a shrinking minority of our total population, was enjoying wealth. For example, let's take how they survived in this area, here. We're about to have, probably, something in the order of a 30% collapse in mortgages in the area of Greater Washington, Northern Virginia, and so forth. This will be a reflection in part, of the dot.com collapse. People who are without skills of any merit, but who had inflated salaries, are now becoming unemployed—no place to go. They bought into plastic-coated, tarpaper shacks, with mortgage values assessed at between $500,000 and $1 million, or something of that sort. And, now they're bankrupt. The mortgages are hanging out there, bundled up and propped up by Fannie Mae and Freddie Mac and the Federal Reserve System. And the mortgages are now becoming uncollectible. People in these areas, as long as the mortgages were increasing in valuation, were able to go to the bank, to refinance their account, and get some cash to spend on things like food and credit-card debt. And, therefore, the purchasing power in this area was sustained by borrowed money, generated, in large degree, from this swindle! The Fannie Mae-Freddie Mac bundled-mortgage, Federal Reserve System swindle.

A similar condition exists in California. Similar conditions exist in other pockets in the United States. It's coming down. The same thing is about to happen in the United Kingdom, where you have a similar real-estate bubble.

So therefore, what you see as a result of this, is, you see, that what was the apparent prosperity, or the rumored prosperity, which was reported to you by a press, a major news media which was owned by the people, who were putting the swindle. Take American Online. Take your major press—who? For example, take Citicorp. Who's the swindler at Citicorp? Sandy Weill. The same crowd, the Lazard Freres crowd, that owns the Washington Post. Enough said. You believe the Washington Post? Do you believe any—look at the television media, the so-called news media, the entertainment media. What news do you get on these things? Nothing! You get propaganda. You've got a President, who's not quotable—but that's good, because he doesn't say much. They have governments that don't state facts. They state conclusions, without attached facts, and no facts in sight.

So, this was the illusion of prosperity, over the period since the middle 1960s, when the United States was already going into a depression. It was a papier mache illusion, that there was not a depression. An illusion based on the perceived power—political, military, and other power of the United States, and of the English-speaking financier community.

Now, as of the year 2000, the whole thing began to collapse. As I said at the beginning of 2001, "This thing is gone." It's gone.

So, what has happened at this point, accelerated by crazy George's idea about a war with Iraq, by George's support for Sharon (who he may hate, for all I know—probably should hate, may hate), that this is driving a wedge between the United States, Asia, Africa, and the Americas. The countries of Europe want no part of George Bush's war. Russia wants no part of George Bush's war. Asia generally wants no part of George Bush's war. The only government that seems to support George Bush, around the world, is really the Australian government—almost no other. They hate it. They're expressing their hatred of the United States, of this policy, their distrust of the United States, and also what they think is their own vital interests, by withdrawing their flow of money, from the United States, into Europe and other locations, repatriating their assets.

So, this is bringing the whole system down, and the month of September is going to be hellish, for those interests.

Now, take another factor here; take this next thing on the rail industry tonnage (Figure 5): Again, 1970 to the year 2000: What you see, into the early 1980s, is a rapid collapse, especially under the impact of the Nixon Administration program. A rapid collapse under Nixon and Carter—or which is better said, "under Kissinger and Brzezinski," of non-coal tonnage. It's the transformation of the United States, from the world's leading productive economy, to a post-productive consumer society. Like Rome, in its decadence, we stopped producing wealth with our own people at home, and relied upon stealing from foreign countries. So, this is what that reflects. We get into long-term collapse of the entire system. You see the same thing reflected on this domestic, inter-city freight traffic—the same tendency, the same problem in terms of transport.

Now, before coming to more on transport, which is the main topic on which I want to focus in conclusion, let's look at some of the factors here: Why did we let them do this to us?

Why You Should Love Your Government

Now, the principle is this: The American populist will tell you, that the problem is "the guv'mint." Some will be "the politicians." Now, a politician is a prostitute, who walks the street of elections, and does what he believes his customers will find pleasurable. Now, who's the boss? Who's running the country? Is it Madame Government? Or maybe Hollywood Madame Government: That the orchestration of popular opinion and popular taste spreads corruption into the people first, and the politicians second. The politicians are the victims of the populace!

Americans are very funny people: They hate politicians, therefore they elect them! They hate the government, therefore they elect bad politicians, so they can hate the government more sincerely! The typical American populist has lost his sense of patriotism a long time ago. He wouldn't fight for anything; he would only fight to kill somebody! Typical of this kind of personality, the dual personality. The American is not a patriot. He does not see the United States and its Constitution, as the Founders of the nation did: To create an instrument on this continent, to establish a form of republic, which would be, as Lafayette later called it, "a beacon of hope and a temple of liberty for all mankind." This country was founded by Europeans, by the very best Europeans, who devoted their efforts to support the cause, the American cause of freedom, in the hope that by giving the United States, at some distance from old Europe, a free republic—the only place in the world it could be done at that time—was in English-speaking North America. And to give, thus, a republic here, which, as Lafayette said, would be "a beacon of hope and temple of liberty for all mankind."

Thus, we knew that we needed this government. We needed this constitutional government, to protect us, and to enable use to bequeath something to our successors. And to do a great deed for all mankind, by creating that beacon of hope, which would cause mankind to rally to the same cause. To create a new order on this planet, which was called by Plato, and by the Christian Apostles, John and Paul, a nation or a state of affairs based on agapé, which we otherwise call the "general welfare," or the "common good." The idea was to create a republic, and a system of republics, which would guarantee to humanity, at last, freedom of most people from the status of human cattle. Because, in all known society, prior to the American Revolution, and prior to the great 15th-Century Renaissance, which established the pathway to this revolution, most of mankind was either hunted—as wild cattle are hunted—or herded, bred, and culled, as herded cattle are kept as cattle.

To free man from his cattle-like, bestial status, to free the slave-holder and the slave alike, from that system, we needed a new form of society, a republic in which no one could be human cattle. And therefore, this republic was created on this continent for that mission, for all mankind: a unique mission, assigned to these people, in this place, at this time—a "chosen people" if you please, and a chosen republic. That republic, that form of republic has served us well, when we have served it well, by putting, not prostitutes, but representatives into government. And thus, the aspiration of an honest citizen, is to free himself from being a species of cattle, known as a populist—a bipolar cow—whose attitudes and sex are undetermined.

The point is, we must be citizens, and think of ourselves individually, as representatives of the rulers of this planet—not each as a ruler of this planet, but we are responsible for this planet. We are probably also responsible for this universe—that we will have to settle, we'll discover that, or not. But we know, that we are responsible for this planet. That means we are citizens. That means, while we live, we do things which are in honor and respect for our predecessors—their sufferings and their achievements—and in our obligations to our posterity. That we are concerned with the welfare and development of all humanity, in every part of humanity. We desire no empire, but rather an order among nations, of republics, of sovereign republics, who share a community of principle, a principle of dedication to this purpose, that no men shall be human cattle.

And therefore, we, as citizens, represent the highest rank of living being on this planet. And having that rank, entails responsibilities. We are responsible for mankind: We must create, and renew, a form of government, which fulfills that mission, that intention, that purpose. And therefore, we should love our government, and make it good, because we have, under our Constitution, the authority, and the obligation, to make it good. If your politician stinks, it's your responsibility! If the laws are bad, you must cause them to be changed. If injustice is perpetrated, you must cause it to be corrected. You are the one to whom someone turns; you are like the case of the Good Samaritan: You are the Good Samaritan. You are the person to whom society must turn, for succor, when man is jeopardy—when anyone is in jeopardy. If you can't do it yourself, organize somebody else to help you get the job done. That's government.

Basic Economic Infrastructure

Now, also, there's another aspect of this thing, which is extremely important; which you have to understand, before you come to the subject of understanding what's called "basic economic infrastructure." And that is: What is it, that defines a human, as better than an animal? What's the difference between Al Gore and a baboon? When he gets down on all fours and walks, you may have trouble finding the difference—but, nonetheless, he is, all things considered, technically human. And what should he have been, having been born human—what should he have become, rather than, perhaps, what he became?

What is there about man, the individual person, that is special? If man were an animal, say, a baboon, or something like that—a higher ape—under the conditions, which we know from the past 2 million years, of the known Ice Age developments, the human population of this planet could never have exceeded several million living individuals. Then, why do we have going on 6 billion individuals, living on this planet now? No animal could do that! What is it about man, that qualifies man to increase man's power, per capita, in and over the universe, as no other species can do? Every other species is condemned, to an apparent genetic determination of their potential to adapt to an environment. Only man can willfully overcome that limitation. And has.

What is it? Well, Plato described that in the collected Dialogues: the principle of Socratic discovery, of Socratic hypothesis. When we face an error, or simply ignorance, as a contradiction or paradox, the human individual mind is capable, as Plato demonstrates in the Socratic dialogues, of seeing the fallacy, in prevailing opinion up to then, and discovering an hypothesis, which will solve that paradox, enable man to conquer that paradox, provided that man is able to demonstrate that the hypothesis is true. Sometimes we call these discoveries "universal physical principles"; and they come in many forms: They in the form of what we call "physics," physical science; they come in the form also, of social relations. Because, to organize society, you have to look at, not only what man is capable of doing as an individual; you have to see how these ideas, on which the increase of the power of man in the universe, is increased. You have to see these powers, and see how the fruits of these powers are transmitted from previous generations to the present.

For example: How can a child, living today, reexperience the act of discovery, performed by Archimedes, prior to 212 B.C.? This is true of all we know: We are dependent upon our predecessors—which are many; we come from many parts of the world, for our ideas—and the cultural transmission of discoveries of principle, like hypotheses, like universal physical principles, from one generation to the next, the development of forms of cooperation by which these ideas are discovered, transmitted, and applied—this is humanity!

So therefore, through this quality, that makes us special, we are able to master the universe, increasingly, as no other species can. And it is these processes, it is the exchanges of these kinds of ideas, through which man increases his power over the universe, and preserves that knowledge from one generation to the next, that we are human. And those qualities of social relations, which depend upon that, are precious: the things that make us different than the beasts.

And we see ourselves, then, in the likeness of the Creator. We see that we are endowed with that kind of creative power, we recognize, through the discovery, for example, of universal physical laws. These are the laws of the universe. They are universal! They are universal, throughout the universe! We know these laws in a certain way, by a process of discovery; a Socratic process of discovery. Therefore we know these laws, not because somebody sold them to us—or described, "Oh, we looked it up on the Internet"; we know these laws, because we have reenacted the discovery of that knowledge. Therefore, we understand that as knowledge, and we understand that as the knowledge shared with the Creator. And thus, we find ourselves in the image of the Creator. And we have a moral sense, of the obligation of what our morality must be, because of that connection.

So therefore, a society which is soundly organized, includes a society of entrepreneurs. Not joint stock-corporations—they're detestable things that have to be managed. They're like wild beasts—you must fence them in, and herd them, and watch them; or they tear down the fences and eat all the crops, and everything else. Terrible things: stock corporations! You may need them, but you've got to watch them, and you've got to manage them tightly—a cattle prod or two may help! As recent experience may have suggested to you.

But, the entrepreneur is a different creature. The joint-stock corporate leader tends to be a parasite. They're out there for what they can get, and not for what they can give. An entrepreneur, as I've known them, are really not greedy fellows. They may have some tendency in that direction; maybe their wife nags too much, or something of that sort—but they're generally not greedy fellows. A true entrepreneur who's successful, first of all, is embodied with a certain kind of creativity. They intend to do something; they intend to achieve something; they're frustrated: They don't want to just sit back, and just get money as an employee! They want to do something in society! They have a dedication, a mission, they enjoy it.

Now, what they have to do—the problem is, they want to do their mission; they have to survive while doing it. And, being human, they would like to transmit this thing, that they're contributing, to society afterward. Especially, hopefully, to members of their immediate family, who will take over the enterprise from them, or something of that sort. Or, adopt some young guy, who is promising; the kids don't want the job, they don't want the business: Give to him. Keep the thing going; make a contribution to society. Like the farmer, the independent farmer, who improves production, who improves the quality of the crop. Who will sweat all kinds of hours, to save a crop, because of a seasonal disturbance: Get the hay in, before the rain comes! Things of that sort. Entrepreneurs. People who express the truly human quality of creativity, and apply it, energetically, to do some good; and demand only, "let us make a little money, to keep the show going, and to expand it, in the meantime."

This has always been the gut of the American System. This is what the socialists never quite understood: the entrepreneur; the creative individual, who is motivated to do good, to serve the common good; who wants to accomplish something good; who has chosen a career to do good: to make a better machine, to apply the profession with greater skill, to conquer a disease; or to do something of that sort. A sense of mission: "I am a body in trajectory on a mission. I have an intention. And let me keep going and do my mission. And when I pass on, let somebody else continue that mission, which I've embarked upon."

Building A Continent

That's the gut of the American System. However, this is more or less an individual, or narrow social activity. It is not the whole society. In order to conduct these kinds of activities, you must create the environment, which is needed for such activities. For example: From the beginning of the Americas, as a colonization process, the constant process was to try to build a continent—to build a continent. To reach from the Massachusetts Bay Colony, from Penn's colony, and so forth, and to reach westward, through natural routes of progress—waterways, and so forth. So, in the early part of the 18th Century, the great development in the United States, or what became the United States, was the development of the highways and waterways, ocean coastal waterways, inland waterways and so forth. In the course of time, then the railroad into process. Now we can move from—dependent upon waterways, across land mass-transit by the railroad system. And the railroad is not simply a system of communication: The railroad is an avenue of development, on both sides of the railroad, which connect interior parts of the country to the coastal areas. You now have towns springing up, farms springing up, other things springing up around the railroad, which this system of communication and transportation makes possible.

You have large-scale water systems, as we took the southern part of the Mississippi River, and the Ohio River Valley, and things like that. And these things create conditions for the improvement of the quality of production: an increase of the productive powers of labor.

The development of new energy resources, going from water power, coal-burning in England earlier on, in the 16th Century; continuing into the 19th Century, we went into improved forms of use of heat power—started largely with Leibniz, and Leibniz's promotion of the development of heat power, as a notion of power to increase the productive powers of labor. That spread over the course of the 18th Century. The development of the followers of Leibniz, such as James Watt, who was sent down to France to work with Lavoisier, to develop the Watt steam engine. Then you had the process of the improvements of reduction. Also Lavoisier was important in that.

So, then, in the course of the 19th Century, there's a rapid development of technology. At this point, you now get to new, more powerful sources of heat power. In the latter part of the century, we develop electrical power on a large scale. Largely due to the initiatives of Gauss, and people around him—his collaborators.

In the beginning of the 20th Century, we suddenly had a revolution in productivity, as we went from factories which were driven by steam engines, with belted pulley systems to power the machines, to individually electrically powered, motor-powered machines. And this introduction of the electrically powered machinery in plants, was one of the great revolutions, in the process of technology.

The Development of Population

So, all of these things involved the development of very large-scale transformations of land-areas, water-areas, transportation, and so forth. It also required something else: It required the development of the population. Now, the development of the population, meant, again, something beyond the scope of the individual entrepreneur. Just as large-scale railroad systems are beyond the scope of the individual, private entrepreneur; as large-scale water-management systems are beyond that; as land-management system as beyond that, so you have general education. We have to have a level of education consistent with the needs of the population as a whole, as a functioning population. Consistent with transmitting the knowledge from previous generations to the present, needed to keep the society on keel, and going ahead.

This can not be the function of private entrepreneurship. It's the function of government. And, in the United States' system, government means, Federal government; it means state government; it means municipal government; it means other institutions. And these agencies are responsible to create, to regulate essential forms of basic economic infrastructure, which provide the tilled field, in which the crop of entrepreneurship can be planted. It means health-care systems. It means a lot more DDT, right now! It means going back to Hill-Burton, and the end of HMO. It means those kinds of things.

So therefore, there's a relationship between what we call "hard infrastructure," such as transportation systems, especially things like rail, magnetic levitation, water systems, air systems, and so forth; and the "soft" ones, which are general systems of education, and of health care, which must be developed according to the needs of the population, and its development. To overcome existing problems, and also to clear the way to be able to conquer new ones.

So this is the responsibility of government. And government must regulate this infrastructure. It must also regulate other things, that I've just indicated. But, it must regulate infrastructure, and it must, in many case, undertake the construction or development of infrastructure. It may, also, farm out infrastructure, in the form of utilities—either Federal utilities, state-franchise utilities, state-regulated utilities, county utilities, municipal utilities: that government assumes its responsibility for the infrastructure, or part of the infrastructure of an area, and may take care of the job itself, or may do it jointly through regulation, with a partly or entirely privately owned public utility. That's infrastructure.

There's another aspect of infrastructure, which is the monetary-financial system. Now, money is evil. It's not the root of all evil: It is evil. Because, when money puts a value on itself, it becomes evil, because a piece of paper, or a statistic suddenly says, "I'm the boss! You human beings are my slaves. You work for me! Money makes money!" I don't know whether it's breeding in the back room, or something—but anyway, money makes money! Money is actually just a medium of exchange; that's all it ever should be. And, under our system, the American System, as defined, for example, by Alexander Hamilton, the American System: Money is created by the Federal government, according to the Constitution—by law!—and no currency may be issued, except by the Federal government, by law.

So, money comes from the government. The control of money must be by national banking, not private banking. And money must be regulated; its circulation must be regulated.

So, money is an instrument of government, which is controlled—created and controlled—for the benefit of the nation, and for the people who live in it. Because, if it's allowed to run out, on its own, as in usury, or, as we've seen in recent periods, since Nixon, it's a menace. So we have to control it. We have to manage the money, in a sensible way; which means you need a good money system, carefully regulated and supervised. You can not let the accountants run the system. You must have the system run the accountants.

On this thing: Why shouldn't you trust an accountant? Never trust an accountant to do anything, except what he's supposed to do. Because the accountant will tell you, particularly the most idiotic ones (they're the highest paid, usually; because they have no conscience—that's a luxury item; they get paid more for that). The accountant says, "The key to accounting is the bottom line." Well, the bottom line is nothing; the bottom line doesn't mean anything. If you reduce the expenditure for necessary costs, and thus generate a profit on the bottom line, what have you done? You stole it. You've done nothing. The accountant assumes, that by connecting the dots among financial figures, that you can derive an explanation of why the result occurred. But it's not. It's just simply a way of accounting for the flow of money. It may reflect something, but the rules by which money is accounted for, the rules for accounting must be set as a standard, by government. Otherwise, you have the wrong kind of system.

The Uniqueness of the United States

For example, the problem we face, concretely, is this: the United States' uniqueness, as an economic system, the American System of political economy, is a result of something which is an historical accident, but not exactly an accident. Over 1,000 years ago, with the decline and disintegration of the Byzantine Empire, Venice emerged as an imperial maritime, throughout Europe and the Mediterranean region. Venice was controlled by a financier oligarchy. Venice ran all of the Crusades. Venice ran all of the wars, in conjunction with Venice's partners, the Normans, Plantagenets, and Anjou, and so forth—all the Crusades, all the wars were run, by Venice. And Venice used these wars to prevent the rise of nation-states, which was already a tendency, since Charlemagne. Charlemagne's empire actually set into motion, the impulse to develop nation-states. Venice moved to destroy that, to frustrate that.

And, from that point on, there was a conflict, between the so-called German emperors and monarchs, and this force around Venice. The tendency was—as with famously, the case of Frederick II Hohenstauffen and Italy, Alfonso Sabio in Spain—the tendency was to develop nation-states, under which the general welfare of the people was the accountability of a monarch. And therefore, the monarchical government would make law, in the interest of the general welfare. That was the impulse, which eventually led to the formation of the first modern nation-state in Louis XI's France, and later in England, under Henry VII.

So, Venice was always opposed to this. And it used the so-called "ultramontane" issue, of having a super-government—they would sometimes try to use the Papacy as a super-government—to eliminate all possibility of national government from existing in Europe.

So, when the Venetian system collapsed, and it collapsed, finally, after 1648; Venice organized religious conflict, religious wars in Europe from 1511 approximately, to 1648, to attempt to destroy the emergence of the nation-state, which had occurred in the previous 15th Century. But after that, the Treaty of Westphalia, which was organized, largely, by Jules Cardinal Mazarin, who had been the diplomat for Pope Urban III, and broke the power of Venice. And led to the emergence of nation-states, beginning with France under Colbert. Colbert's effort was later destroyed by Louis XIV, but nonetheless the effort was. And this was the context under which modern European civilization emerged out of the Treaty of Westphalia, out of the so-called Thirty Years War.

But, in that period, as Venice declined, about 1670 or so forth it began to fall apart, the Venetians were succeeded by an Anglo-Dutch oligarchy, which was guided by Venice in its creation, and which was an imitation of Venice. So, this oligarchy, which was consolidated under William of Orange—the tyrant who later took over England and Scotland and Wales and so forth—this became, also, the British East India Company. So, the Dutch and British East India Companies became the dominant forces in so-called Protestant Europe. Outside of Europe, the dominant forces outside France, in particular, were the feudalistic governments of the Hapsburgs and people like that. So, Europe was divided between this.

Now, in this process, what has emerged as the modern nation-state, in Europe, is not a republic like the United States, in no sense, constitutionally. It is actually a result, an outcome of a Venetian model of imperial maritime power, based on a financier-oligarchical interest. The central institution of that oligarchical power, in the continent of Europe, is the central banking system. The central banking system is an aggregation of private banks, or private banking and financial interests, which have forced upon governments a concession, that the so-called "political" government, will be submitted to the supervision and control of a central banking system. Which is what happened in the unconstitutional creating of the Federal Reserve System in the United States.

The Federal Reserve System in the United States, was created by King Edward VII of England. King Edward II of England had a banker. The banker had an agent in New York: Jacob Schiff. The New York banker, together with the Teddy Roosevelt crowd, designed the Federal Reserve System. The Federal Reserve System was put into power illegally, by a Bull Moose campaign, by Teddy Roosevelt, such that the Wilson Administration, and a Ku Klux Klan fanatic—Wilson—put through, or presided over putting through, the Federal Reserve System; and, also, the income tax, among other things (the populists like to complain about that).

So that, since that time, the United States itself has been controlled and corrupted, by a Federal Reserve System, which is an echo of the Venetian model of central banking system, which dominates Western Europe. So therefore, the United States Constitution is violated, not only in technicality, but in principle, by the existence of a central banking system, or the equivalent in this form.

During [Franklin] Roosevelt's tenure, elected for four terms, Roosevelt, by leading the United States out of the Great Depression, accumulated such political power with the population, that he was able to resist, and provide a check on the power of the Federal Reserve System, and the people behind it. The minute that Roosevelt was dead—or within an hour or two of his death, when the news reached Washington—Roosevelt's successors, who hated him, moved to try to destroy his system. And, thus, we had, immediately, in the 1940s, we had this process: They couldn't get rid of what Roosevelt had done, immediately—it took them another 20 years to get to that point, with the beginning of the Indochina War. But, they began to tear it down.

The Venetian Model

And so, our problem in the United States, has been, that we do not, today, know our own history. We do not know the nature of our republic. We do not understand the nature of the opponents of our republic—that is, the Venetian model, which still dominates Europe, and corrupts the minds of Europeans. We don't understand economics, because we try to say that the United States is a form of capitalism, like England. But it isn't! The United States is not a capitalist economy. The United States' economy, the American System of political economy, as defined by Hamilton and others, is not British capitalism: Quite the opposite. It is a form of national economy, as the famous Friedrich List described it: the "national system of political economy." The difference is, the so- called "capitalist system," as the British case defines it—as poor Marx defined it—is based on the assumption, that the central banking interest must remain independent! And that the government must be responsive, to the control, by the central banking interest.

The United States' system, the American System of political economy, in all its manifestations, except for outright traitors and fools, has always depended on the assumption, that the people, the sovereign people of the United States, are the controllers of the credit, and currency of the United States. And regulate the currency, and regulate the economy, according to laws, which are designed to cause the functioning of the economy to flow into channels which are consistent with the intent of the Constitution: the promotion of the general welfare and progress. Which means the promotion of the nature of man, as an individual made in the image of the Creator. That's the law, specified in the Preamble: sovereignty. The United States government is absolutely sovereign in all matters in its territory. That government: And it's our government—"We the People"—it's our government, not somebody else's.

Second: The United States and all aspects of its law and Constitution, are subject to the principle of the general welfare, otherwise known in ancient Greek as agape@am. Otherwise known as "general welfare." Otherwise known as "common good"; sometimes called "commonwealth."

Thirdly, and this is qualified by the fact that we are as accountable to our posterity, as we are to our contemporaries: You can do nothing, which is bad for your grandchildren.

We are supposed to be a people, which is sufficiently conscious of these considerations: That we as a people, fussing and arguing with one another, through channels which we develop as institutions, will deliberate, with these principles in mind, and will try to come to an honest conclusion, about what best serves that constitutional purpose. This is our government! It is our friend. Sometimes, you have to get the rats and mice out of the house, but it's our friend, otherwise.

Our Purpose Is To Do Good

So therefore, we have this relationship: We have the relationship between entrepreneurship, which is only a typical aspect of economy, of private economy; the action of the voluntary individual, using the creative powers of reason and assimilating the transmission of knowledge from previous generations, can do some good. The general idea is, we promote the doing of good: It's what Benjamin Franklin based the design of the republic on, like Cotton Mather before him: to do good! The purpose of mankind and the purpose of the nation is to do good, in the sense of agape@am. So, we deliberate on that. And we decide, what is right. If we made a mistake, we correct it. That's our government; that's our friend. That's the best we can do. Man can not better. We can not absolutely eliminate error: But, we can be accountable, for trying to do good, for all mankind, as well as ourselves.

Therefore, we must, first of all, through government, focus upon the general, basic economic infrastructure: which includes, transportation; which includes, not only transportation, water as transportation, but water for other purposes. It means, also, the provision of power. It means ports. It means health care. It means education. These are matters of basic economic infrastructure, for which the government must be responsible. Because it is something which concerns all of the land-area, and all of the people, and all of the activities of the nation.

We, then, providing this field—this tilled and fertilized field, of infrastructure—we then say to the people, "Go out, and do some good. And if you need help, we might help you. We'll pass laws, to help you succeed—to regulate things, so that you have a chance to succeed. Go out and do good: You're the entrepreneurs.

"We'll allow joint stock operations, even though we don't trust them. We know they're inherently bad. But, if they're needed, we'll regulate them, and hope that, somehow, the spirit of entrepreneurship might infect them."

We promote discovery. We promote new ideas, especially scientific and related cultural ideas. We promote that which is beautiful, in the sense that it captures the essence of humanity. For example: We mentioned the Passion of St. John and the Passion of St. Matthew. These are objects of beauty. Why? Because the despondent person, coming into a performance of the St. Matthew Passion, when it's properly done, is going to experience the Passion and Crucifixion of Christ. And, unlike my erring friend, the pastor, he will not think that Christ made a mistake. He will think that Christ was doing something for all mankind, and exemplifying what every one of us must aspire to do for mankind, in our own lives, in our own way.

Life is our coin. Model life is our coin: Spend it wisely. Spend it for the good. Look ahead to coming generations, and think what you wish you had spent it for.

When that experience, of discovery of an idea, lifting oneself out of the muck of despair and frustration, into a sense of the nobility of mankind, as the St. Matthew Passion does this, is beauty. It is true beauty. And the sense of beauty, is, in the final analysis, the most powerful force in humanity: the sense of the beautiful. Beauty will motivate you, as nothing else can do. A sense of beauty in that sense—that kind of beauty. Not the tangible beauty, because, for example: The beautiful thing about a great, Classical Greek sculpture, is not the physical object. The beauty, say, in a great carving in the Classical Greek sculptors, is a paradox. What you see, is a still body—a carved, still figure. What you think, is not a still body, but a body in mid-motion, an instant of mid-motion. That sense of capturing something in mid-motion, which seems to be still, that seeing beyond the limitations of perception, is the key to the idea of beauty.

It is also the idea of truth. There's a famous poet, John Keats, in his "Ode to a Grecian Urn": "Truth is Beauty, and Beauty is Truth." Truth and Beauty are linked, in a Socratic-Platonic sense. And that's our essential motivation—or should be our essential motivation. But, in order to fulfill that, we do physical, practical work.

We've Got To Save the United States

Now, therefore, look at problem of the United States, today. We've got to save the United States—and a lot of other things, as well. If we save the United States, a lot of other parts of the world are going to be happy. There are parts of the world that are very unhappy, right now, with what the United States is doing to itself and others. We don't want the war. "We don't want the depression. We don't want the brutality. Please take it away!" Okay, if we do the right thing in the United States, that problem can be taken away. That's our job.

Now, let's look at George Bush, sitting down there in Crawfish, Texas—Crawford, pardon me—sitting right next to the unsettled spirit of deceased David Koresh, down there in Waco. They had this silly conference, down there—with a real carnival side-show, probably with belly-dancers. (It's a wonder, that Sharon wasn't there!) But, here he was confronted with something, and he had these clowns, down there. And his attention span is not the greatest. He's great on running. He's like some diseases: He's great on running, but not much on thinking. But, he's down there, he could have done a little bit of thinking—I mean, we can, rightly, demand of a President of the United States, a small amount of thinking; perhaps not too much—we don't want to strain that brain of his. But, he's faced with this terrible depression, which is crushing us, and about to crush us. And he's faced with a couple of problems. The immediate problem is transportation: The railway system of the United States is crashing.

Now, let's look a bit at this, in this picture of the Land-Bridge system crossing over into Eurasia from the United States (Figure 6). What you see there, is connectedness. We now have the ability to move freight, as well as passengers, by existing, known modes, at speeds of about 300 miles per hour. We can move them quietly, with magnetic levitation. We can also do a pretty good job even with friction-rail systems—not so good, but we can do it.

That means, that we have reversed, potentially, have reversed the great problem of humanity: For as long as we know, ancient mankind, especially under conditions of repeated glaciation of the Northern Hemisphere, mankind's development was restricted to water. That is, movement, civilization, depended upon movement by water. Water? Because water is necessary for life—fresh water, for example. Water because the sea is a great source of food. You try to build populations under primitive conditions, you would rely largely upon water—fish, things of that sort. And transportation by water. It's obvious, from what we know of the great ancient traces of calendars, that the earlier civilization, prior to, say, 10,000 B.C., that period, the earlier civilizations were largely riparian civilizations; trans-oceanic and riparian civilizations. That people travelled long distance. Some of the characteristics of these ancient astronomical charts tell us that—hymns, for example: Vedic hymns. They indicate that mankind had knowledge of things, which mankind would not have thought to have knowledge of, unless it was an ocean-going culture. Navigation: very precise. The first physical science that we know of, with any coherence, came from ancient calendars. As very late in the game, you have the Great Pyramids at Giza, in Egypt, which are an expression of this long process, of tens of thousands of years earlier.

So, man moved by water. Civilizations went by water. When the Northern Hemisphere was largely covered, where was civilization? It was largely in such places as the Indian Ocean. The seas were about 300-400 feet below what they are today, the ocean levels, and people travelled by water. And you had ancient cultures, from the Subcontinent, which were all over the area, travelling by water. There were trans-oceanic cultures, which existed at some earlier point. Man did not discover the New World, suddenly, the in 15th Century. Man had been travelling back and forth across the Atlantic for a long period of time. The route that Columbus took is a route, which was feasible for a sailing craft, such as of the Viking type, much earlier. The route is the same. Once you knew the trick of the game, you could do it, if you were a good sailor. Maybe at some risk, but you could do it.

So then, we moved to inland cultures, and we saw this in the history of modern European and other civilization: movement up river cultures—large rivers, as in the case of Mesopotamia, which was a barren area, until it was colonized from the Subcontinent. And the Subcontinental culture of Sumer, moved up. The Semitic population, which were largely sheep-herders, or something, became assimilated through this Sumerian smart culture, moving up the Tigris and Euphrates. The Nile is another example of this; the rivers in China—the same kind of thing. Man began to move inland, from the seas, by water. Then, we began to develop inland systems—canals, and so forth; not quite so efficient, but they worked.

Now, if you look at Asia, this map again: The central part, the north part and central part of Asia, is an area which is not very habitable. Part of it is Arctic tundra. Much of it is semi-desert, or desert. It is thinly populated. But underneath the soil, are large amounts of natural mineral resources, one of the greatest—probably the greatest concentration on this planet. Other concentrations are the South African Shield, and also South America, are great concentrations of mineral wealth, for all humanity.

You have, then, on the coasts of China, and India, and inland, you have populations, which need these resources. They don't have enough in their own territory, for their present and future needs. Therefore, they need development of these resources in the northern part and the central part of Asia.

Now, how can you develop resources? You must build a logistical system, which can support the development of these resources. This is in the middle of a land-area. Well, how do you do it? Well, by developing, not only merely rail connections across Asia, efficient rail connections, but also by developing corridors of development the way our transcontinental railway system developed the states of the West, through large agriculture and other developments on either side of the railroad of the transcontinental system. So the same kind of thing there, but in a more modern way.

We have now, the possibility, going from places like Pusan, at the tip of Korea, all the way to Rotterdam, and other places in Europe, of a continuous route, whereby the ocean travel, as a method of moving high-grade freight from one part of the world to the other, is out of date. We can move the freight more cheaply, more quickly, by land, than we can by sea, in terms of total economic cost. This means a transformation in the relationship of man's relationship to the planet: Suddenly, the inland areas, like the interior of China, Central Asia, North Asia, the Sahara Desert, and other parts of this planet, which were previously inaccessible to mankind for significant exploitation, are now opening up to us, through large-scale infrastructure.

What Should George Have Done?

All right. Now, that being the case, what should George have done? The rail transit system in the United States is collapsing. If we allow George to sit back and let the collapse of the national rail system continue, and don't save the possibility of recovery of the railway tracks that we formerly had, say 30-40 years ago; if we don't do that, the United States will cease to exist as an integrally functioning national economy. And, we're at the point of no-return, now.

Similarly, we have a crashing of the airline system. Not the planes, but the system. (Hopefully, not the planes: I travel on a few of them—and I'm not ready for that, yet. I have a mission to do.)

All right, so therefore, what are we going to do? Because, if we lose a functioning airline system; and if we lose the rail system; if we lose the integrity of the U.S., as a potential economy, an integrated economy: We're finished, for a generation, or more to come, to rebuild. Therefore, George Bush, sitting on his something-or-other out there, in Crayfish, Texas, should have said, "Well, there are consequences! We must do something about this, or there will be consequences!" And, what he should do—is, what we are going to have to get him, or the government to do, at least by November election time, we're going to have to burn the tail of the people and politicians of the United States: To make sure that we have, in the immediate future, an emergency commitment, to federalize, in terms of support, as an infrastructure project, the entire existing and potential rail and air-traffic system of the United States. That's a first step. It's not the only step, and it's not last step—it's a first step.

The first step has the significance of this sort: First, we must show that we mean business. We must show that we mean business, by taking an example of unquestionable urgency—the saving of the national transport system, as a way of saving the integrity of the U.S. as a functioning national economy. We take those issues, not as exclusive issues, but as leading issues, of rebuilding an efficient rail system, and saving the air-traffic system and rationalizing it, as a first step.

That means, that we will reduce the dependency, in a fairly short period of time, on short-haul air travel. Because, among the main trunk routes of the United States, we can move passengers more efficiently, from downtown to downtown, by using of rail transport—high-speed passenger rail transport—than we can by air. The time it takes for you to get out of the house in the morning, to get to the airport, to line up to get searched, and researched, and researched at the airport, before boarding the plane, and whether the plane takes off or not, whether it's cancelled, you have to wait for the next one, and getting back to the next airport, getting off that, and finding a taxi, and a taxicab driver who doesn't rob you, and—. This is no way to run a railroad!

So therefore, that's a first step: to rationalize, to take the problem of rail and air traffic, as one problem: mass transit, mass traffic. And say, "we must integrate these two functions, of air and rail, so we have a rational system, from the standpoint of the citizen and the standpoint of the economy." We want people to be able to move economically and efficiently, from one place, where they live or something, to the place they want to do business. We want them to get there safely. And we don't want to have them sitting around, waiting to see if the bus failed, or if the road got torn up, or whatnot; or if cars don't work any more. So we want that kind of system, which is economical, convenient, comfortable, and gives the nation a sense: "We can get from one part of this nation to any other significant part, in fairly good time." We can get to almost any part of our nation, as fast as you can get from one part of Europe to another. We can do it.

And that kind of objective, the assurance that we have economic security for freight, as well as people, that our economy is integrated, then we take areas, that are dead areas: areas like Buffalo, New York, which is dead; areas like Michigan, which are dying; areas of Pittsburgh are dead! Dead, dead, dead! All the places that used to be the most productive centers, industrial centers in the United States, are dead. This Red Line thing in Los Angeles: They bought it up and shut it down. And now, you have to build six more lanes of highway to get from one part of Los Angeles to the other, because that Red Line system went down.

So, rebuild these things, which were characteristic of what were formerly the most productive industrial centers of the United States. And also, agricultural centers, because agriculture and industry were developed, together, in the United States, at least in large degree: Develop that; rebuild it. Rebuild the economy. Get back to business. Stop being a consumer society. Go back to being a producer society. And the first step is that.

Now, there's one other thing, which is crucial—beyond that. Beyond the transportation project, which should be the primary concern for all of us, during the period up till the November elections. We want to turn the country upside-down politically, on the issue of this particular question, as a positive measure, as a Sublime action. Something good, to do good for the people of the United States. And get these Congressmen convinced, they better do it, or else.

So, we will be doing things: We'll have an EIR special report, which will contain a lot of information on this subject, which will be a resource for anybody who wants to study the question. That's in process now, and it will be produced very soon. We will have a pamphlet out, soon, by my campaign, which will take some of the highlights of this proposal, and put the in pamphlet form, again, for mass distribution. We will put out a series of leaflets, between now and November election time. The leaflets will change some of their content, appropriately, as time goes on, but they will all be on the same theme: Essentially, focused on this question of, rebuild the infrastructure and the rail and air-transport question as the leading issues. Those things we will do.

Developing the Great American Desert

But, beyond that, we've got to look at this water question. And, again, let's go to this North American Water and Power Alliance—just for a moment (Figure 7). Did you ever fly over the United States? Did you ever get from the 20-inch-rainfall line, as it's called, in the Midwest, to the West Coast. What are you flying over, largely? The Great American Desert. For now, nigh on 90 years or more, there has been no significant development—not counting Las Vegas, which I don't consider development: That's sort of Hollywood madam government territory. There's been no development of the Great American Desert. There's all that land-area. There are very significant mineral resources out there. There is, actually, under controlled conditions, agricultural potential. There is potential for new cities, new industries, in that area. The problem is, we don't have water, and power, in there. The Parsons company, and others, developed, some years ago, what was called the North American Water and Power Alliance [NAWAPA].

Now, water and power, apart from transportation, are the leading issues of infrastructure, on hard infrastructure, in the United States, today. There will be bills put through by some of our friends in California, to try to go back to an integrated system of regulated, utility, production and distribution of electrical energy, according to needs; and toward a policy of developing electrical resources, not based on price alone, but based on national strategic needs—as we used to do it.

This should be coupled with water management. And the movement of the water from Alaska and northern Canada, presently going into the Arctic Ocean, moving much of that water down, through a system which has been well-designed, into not only this great area of the Great American Desert, but to link that to the other water systems we have, such as the tributaries of the Mississippi system: We can link the entire nation, from coast to coast, and North to South; we can link it efficiently, with inland water transport, which is not only a means of controlling the water distribution of the planet and our country, but also, is a means of internal transportation of the kind of bulk freight, which is best transported by water. For example, grain is a low-value-per-ton bulk freight, which is conventionally shipped by barge, down the Mississippi and other routes. Why? Because grain is something that comes to harvest at certain points. Therefore, you have a peak supply of harvested grain at those points. So, therefore, you don't care (as long as the stuff is preserved), if it's in motion, down river systems, rather than being parked in a warehouse someplace, so the lost time in moving the freight from part to another is not a loss; because you're not going to consume it all at once. So you're going to spread out the consumption of the grain in the whole cycle.

So therefore, such as coal, and other low-value-per-ton freight, which are of that character, you can move it more easily by inland waterways. Inland waterways, if you take, for example, in the case of a state like Alabama or Mississippi and so forth, the inland waterway system can be a boon, opening up areas which have not yet been quite civilized, into healthy, functioning parts of society. So therefore, that's part of it.

We Can Change Things

So, that, in general, is what I'm up to. As I say, the key thing that's posed here—there're a lot of technical questions: I've touched on a few of them, which I've thought are most important. But, the key thing here, is to get a sense of courage, of true courage. And the sense of true courage comes from recognizing what it is to be human: that we are not like an animal, whose life begins at birth, and ends with death. But, because we're human, because we're creatures of ideas, not simply animal behavior, we transmit culture from one generation to the next. We influence the way in which culture evolves, through our participation in it. We do things which help steer that process—some at the cost or risk to their life. But if we do that properly, we have a sense of a certain immortality, in us; that we're not creatures, which are born and die. We have a mortal coil. We live within that mortal coil. But, as individual human beings, as creatures of spirit, as creatures of mind, our span goes back to very ancient times, to the birth of the languages we speak; to the first ideas, scientific ideas, which we share today, from ancient times.

And we're linked, also, to the future bequeath to those who come after us. If we have a sense of immortality, a sense of a person and of a nation on a mission, then we will find, from that, we have a potentially infinite source of courage.

And, contrary to the pessimists, who say, "you can't change things," "you can't change things," we say, "you don't understand man. You don't understand God. We can change things."

In Memoriam

William Warfield; Now, and Always, a Beautiful Soul in Communion With God

by Dennis Speed

William Warfield died early in the morning of Aug. 26, 2002. "Weep not; he's not dead; he's resting in the bosom of Jesus," wrote James Weldon Johnson, in "Go Down, Death!", a favorite poem recited—that is, sung—by Warfield, and introduced by him to his friends at the Schiller Institute. For the last several years, Warfield had demonstrated the art of poetry/music at the twice-yearly Schiller Institute conferences, usually prior to panels addressed by keynote speakers Helga LaRouche, the Institute's founder, and statesman and economist Lyndon LaRouche, a fierce proponent of the idea of the Classical method in poetic recitation.

LaRouche has often remarked, to the anger and dismay of many, that there is virtually no one in the United States that is actually capable of reciting poetry from a Classical perspective. Any confusion about what LaRouche meant, was eradicated by listening to a Warfield performance of Schubert's "Erlkoenig," or of a Paul Laurence Dunbar poem, such as "When Melindy Sings." What did Warfield know, that very few performers, composers, politicians, and clergy, know today? He knew Beauty, and his soul abided in Beauty.

For Warfield, Beauty was not a goal, but a place where he resided. In a Fidelio magazine interview, fall 1995, he stated, "Dr. Thurman once said, 'God created man in his own image, so that in the dead center of God's brain, there is this image of what man is; and at a point at which man reaches the full development of that image, then he will be on a par with the angels.' So that's what evolution is about! Man finally coming into the image of what man is to be. All of us are endowed with that basic thing, and music is it. That's why we can communicate." Beauty was an Idea, that Warfield could communicate to everyone else, because he recognized that all other human beings that he addressed with his art, had the same Idea of Beauty in them, as he, without realizing it. The job of the Artist, like that of the stateman, is to make the people see that "the kingdom of God is within them" in the form of this natural response of the human soul, to Beauty. - Educating the Emotions -

William Warfield specialized in educating the emotions of his audience, not playing "upon" or "to" their emotions. He was once asked by young participants in one of his many seminars conducted on the West Coast with the Schiller Institute, "How are you able to move us to tears, and yet not cry yourself?" "I do cry," Warfield replied. "I cry alone, as I work through the song, or the poem. Then, and only then, do I know how far I can go in the performance." Warfield knew that, in relation to a work of art, either his own or that of another, no artist can guide an audience through an epiphany that he has not himself attained.

Warfield was not only an artist but a soldier, having served, because of his extraordinary command of the German language from his teens, as an Army Intelligence officer in the Second World War. "There never has been a time like Dec. 7, 1941, in the history of our country—there certainly has never been anything like it since. In a space of an hour on that Sunday afternoon, an entire nation of millions of Americans were united in a single purpose. And it was a unity of purpose that was sustained over the next three and a half years. Families were broken up, educations were interrupted, hundreds of thousands of people left home, many of them never to return. But somehow the personal problems all merged into a larger mission, with a feeling for God, flag, and country that is probably beyond the ken of people who weren't there. If it can't be comprehended emotionally, it can't be comprehended at all," Warfield wrote in his autobiography. - A Singular Unity of Idea -

The subordination of artistic craft, and of his own physical infirmities, to the purpose of creating a singular, unforgettable unity of Idea in the mind of his audience—that Warfield did. You always knew exactly "what he was talking about," even if you were not very familiar with German, or Italian, or with the Classical repertoire. This dedication to Truth-telling was exactly the effect that Warfield sought to deliver in his art, and in his teaching, which was also for him a practice of art. He was a fierce combatant for the truth, a soldier who refused to slow down, who was always on the move, always on the offensive, finding something New to say every time he sang and recited, or told one of the hundreds of jokes and stories that gave him a way of practicing his craft every hour of the day.

LaRouche, of the same World War II generation as Warfield, has often spoken to his younger colleagues, and to the generation of youth now in motion around his campaign, of the "Pearl Harbor effect," of a sudden, complete change of outlook and behavior, of a "revolutionization" that can happen in a moment. Many other veterans of that conflict, share the same quality, though perhaps not the same depth of commitment to action based on it, as LaRouche and Warfield. The willed success to achieve a noble mission, was what makes Warfield, and LaRouche, great warriors on behalf of the dignity of man, and was the quality that caused them to join together on the board of the Schiller Institute.

When, in 1988, LaRouche and his associates began a campaign to lower the absurdly high, and distorted, concert hall and operatic stage singing pitch, from A = 440 and higher, to the original "Verdi tuning" at A = 430 (middle C = 256), Warfield was one of only three artists to answer the call for the campaign. "I mailed letters to several dozen leading American singers, offering to send a copy of the Schiller Institute's just-published Manual On The Elements of Tuning And Registration, to endorsers of LaRouche's C = 256 petition campaign," writes Manual co-author Kathy Wolfe. "Dr. Warfield was one of only three people who took the trouble to write back. Bill's enthusiastic letter, which Marianna Wertz may still have ... said how important he thought it was, for the future of young musicians, to prevent the pitch from rising further. It is also important to note that Bill Warfield's work first came to the ICLC's attention in the early 1980s, due entirely to LaRouche's urging that we study multiple settings of Lieder (German poems), by many Classical composers, inclusively those by 'lesser' composers such as Karl Loewe. A 1983 search for recordings of Loewe songs, turned up an old LP by William Warfield, and little else. Bill was thus distinguished as one of America's most scholarly Lieder singers."

Warfield was central to the work of the Schiller Institute in founding the National Conservatory of Music Movement, started in 1993 in memory of singer Marian Anderson, who died that year. From that time, increasingly, Warfield had identified himself with the Institute's work, and had also endorsed his friend Lyndon LaRouche in his campaigns for the Presidency of the United States. - Immortal Discoveries -

LaRouche and Warfield had been scheduled to work together with a group of students in California during mid-August. These were not simply "music students," but recruits that are working on the LaRouche Presidential campaign's mission to reverse the descent into Hell of the U.S. and of the rest of the world. LaRouche wrote:

"You and I, like Amelia Boynton Robinson, refuse to be retiring people. Let us speak of such matters as musicians who teach their instruments to sing, rather than merely being played. Let us speak of that art which never says, 'look at me on stage,' but, instead, creates a living idea and drama within the imagination of its audiences.

"We must make such matters clearer to those who, being of the post-war generation, who, because of the circumstances in which they lived until now, tend to be foolish. For their sake, let us, according to our mission in life, turn our attention to Brahms' Vier Ernste Gesaenge, which has been, for me, during most of the past half-century, as, I believe, for you, his virtual last will and testament. When properly done, Brahms' living soul so occupies our imagination, that we are astonished, after that, to see a singer and accompanist standing on stage.

"Those discoveries of universal principle which uplift the human condition, are immortal, since the original act of discovery lives afresh in the imagination of each person who recreates that act of discovery in his, or her own, sovereign creative powers of mind. By bringing the greatest discoveries of science and art to life today, we hear the joy expressed by those long past, whose immortal dreams reach us, and move us today.

"We must persuade those assembled on this occasion, and others as far as we can reach, to learn this lesson. It is important to master the art, but it is sublime to inform and enlighten the soul."

U. S. Economic News

Wall Street Police Blotter: WorldCom on the Hot Seat

This week's installment in our Wall Street crime report finds some of the nation's biggest corporate crooks about to face the music. Swept up by the lunatic policies of Alan Greenspan's Federal Reserve, and the worship of "shareholder value" by members of Congress who pushed deregulation, privatization, etc., these are the high-flying execs taking the fall this week—but there are plenty more to follow.

*WorldCom Inc.'s former chief financial officer Scott Sullivan was indicted on fraud charges Aug. 28 in connection with the $7.68-billion accounting scandal that forced the telecommunications giant into the world's largest bankruptcy. Sullivan now faces a trial in Manhattan Federal court. The grand jury also indicted WorldCom's former director of general accounting, Buford Yates, for his role in the alleged scheme aimed at artificially inflating WorldCom's earnings by hiding expenses.

*AOL is under investigation by the Securities and Exchange Commission, for pumping up its share prices with optimistic forecasts, while its executives were selling stocks. Fifteen senior executives and directors of AOL made almost $500 million in profits, by selling shares between February and June 2001, while the company insisted it would meet earnings targets set after the AOL-Time Warner merger was announced in January 2000.

*Citigroup's lucrative financing deal with AT&T: New York State Attorney General Eliot Spitzer has widened his probe of Salomon Smith Barney to see whether Citigroup CEO Sandy Weill pressured Jack Grubman, then a Salomon telecom analyst, to raise his rating on AT&T in order to win a spot in underwriting a large stock offering of AT&T's wireless business. Citigroup's brokerage unit joined Merrill Lynch and Goldman Sachs in pocketing $45 million each in fees for the $10.62-billion stock offering in April 2000.

*The Justice Department got its first Enron scalp Aug. 21 when former executive Michael Kopper pleaded guilty to fraud and money-laundering, agreeing to pay $12 million in restitution and cooperate with authorities. Kopper worked for Chief Financial Officer Andy Fastow and was heavily involved in the off-balance-sheet partnerships that have been the subject of the various Enron investigations. Under Federal sentencing guidelines, according to Bloomberg news wire, Kopper faces up to 10 years in jail, but no doubt has been promised a significantly reduced sentence if he helps the Feds nail Fastow. He also faces civil suits.

With Kopper turning state's evidence, the next target is clearly Andy Fastow. If Fastow is indicted, he in turn will likely be provided the opportunity to rat out former chief executive Jeffrey Skilling.

* And now, for a laugh: Richard Grasso—who, in his capacity as chairman of the New York Stock Exchange, helps make rules for U.S. companies—failed to meet disclosure requirements for five years straight, in his capacity as board member of Computer Associates International.

According to the Aug. 27 Washington Post, Grasso (also known for his embraces with FARC narcoterrorists in the Colombian jungles, and for his Nazi-chic shaved head), apparently did not include information on stock compensation in year-end reports required by the SEC. Neither did his fellow board member, former New York Senator Alfonse D'Amato.

Then Computer Associates identified Grasso, D'Amato et al. as delinquent filers in a proxy filing to shareholders. Grasso's spokesman declined to comment on the proxy disclosure.

Fortune 500 Company Pension Funds Come Up Short

The pension funds of the majority of Fortune 500 companies in the United States are underfunded, as a result of stock-market and other losses during the course of 2001, warned John Crudele in his column in the New York Post Aug. 22. Crudele cited a memo by Merrill Lynch analysts, which reported that the pension funds of 346 of the Fortune 500 companies suffered severe losses during 2001, and are now in deep trouble. At the end of 2000, these pension funds had $215 billion in overfunding. A year later, at the end of 2001, the overfunds had shrunk to a total of just $1.1 billion! The report added that, if the costs of health-care benefits for the retirees are factored in, the 346 firms' pension funds were actually underfunded by $245 billion by the end of 2001!

And if the losses of pension funds were factored into the companies' overall profits, real earnings would have been reduced by 6.1%! Among the companies with the biggest pension fund holes: GM, Ford, ExxonMobil, Delphi, DuPont, SBC, Boeing, IBM, Philip Morris, and AMR (holding company of American Airlines).

FDA Inspections Trimmed To Fit Budget Cuts

For the first time in 25 years, the U.S. Food and Drug Administration, the Federal agency charged with oversight and safety of pharmaceutical and human biological drug products distributed in the United States, has revamped its rules for inspecting drug manufacturing plants for lack of adequate funding.

Congress has repeatedly failed to provide sufficient funds to the FDA, and the number of inspections of drug-manufacturing plants fell from 4,300 in 1980, to 1,600 in 2001, according to FDA's Janet Woodcock—even as the number of new drug products vastly increased annually.

Magellan Health Needs Financial Transfusion

Magellan Health Services, the largest U.S. manager of mental-health care, is in deep trouble, with $1 billion in debt—more than five times its earnings—and expects to fall out of compliance with its bank agreements by the end of September, amid rising costs and declining membership. The company, if unable to restructure its debt, may not survive. "We would have a liquidity issue. It would be difficult to meet our obligations," said Melissa Rose, Magellan's vice president of investor relations.

Magellan's costs are rising 6-8% per year, but it cannot raise prices fast enough to keep up, since only a third of its contracts are renewed annually. And it risks losing future business as health plans, such as Aetna and TennCare, which make up 32% of its revenue, are struggling. Since January 2002, Magellan has lost about 1.75 million members from Aetna—and expects to lose an additional 300,000 by the end of the year.

Medicare Elderly, Disabled: More Are Going Without Medications, Doctors

According to the National Conference of State Legislatures, between 500 and 600 bills have been proposed in the states to address the high cost of prescription drugs, and access on the part of America's poor to medications. Because states are mistakenly—and murderously—trying to balance their budgets by cutting critical services, some 200 of these bills deal with restricting prescription drug coverage or increasing costs for medications for those in the Medicaid program, the Federal-state health-care plan for the poor, including the elderly and disabled.

Proposals such as the new requirement in some states that forces the poor to pay deductibles and co-payments for their medication (as much as $10 for each prescription), create life-and-death situations for those with low incomes, putting medications out of reach of many. The crisis is vastly worse for older and disabled Americans in Medicare, the Federal health insurance program that does not cover prescription drugs.

According to a recent Kaiser Family Foundation and Commonwealth Fund eight-state survey, 22%, or nearly one in four seniors with drug coverage, skipped doses of needed medications or did not buy medications they needed in 2001 because of high costs.

For seniors without prescription drug coverage, the situation was worse—the percentage who skipped doses or did not purchase medication was higher, about 35%. Seniors with severe and chronic conditions, like heart disease or diabetes, also skipped medications or did not fill their prescriptions due to costs. This survey took place before most state actions increased the costs of medications to those with low incomes. - Most Vulnerable Go Without -

A December 2001 study of a large, nationally representative sample of older Americans found that among Americans 70 or older, even one of the risk factors—ethnicity, income, or out-of-pocket drug costs of more than $100 a month—made it significantly more likely that people without drug coverage would be forced to restrict their use of medication due to costs. The authors noted that "policies designed to limit medication use may have serious consequences for patients' health."

A November 2001 Harris poll found that because of high costs, 39-40% of low-income people took medication in smaller doses than prescribed by their doctor; 21-30% took medication less frequently than prescribed. Some 35% of people with disabilities did not fill prescription for needed medicines; 27% of them took medications in smaller dose than prescribed; and 28% took medication less frequently than prescribed.

The high costs of medication also hit the elderly in managed-care plans, like HMOs (health maintenance organizations) that either drop Medicare patients or cut payments for prescription drugs from what they promised.

The elderly, poor, and disabled face another crisis: access to pharmacies that will take Medicaid prescriptions, after states cut Medicaid reimbursments to pharmacies to below the stores' costs of filling the prescriptions. Large chain pharmacies, such as Walgreens, CVS Corp., Brooks Pharmacy, which together filled 60% of Massachusetts' Medicaid prescriptions, now refuse to take them, after the state cut payment rates by 11%. Pharmacies in Washington State are doing likewise.

The states have started down a road that murders the most vulnerable. It's now up to Americans to give their legislators the political gumption to deprioritize Federal and state debt issues, and prioritize a plan to build this country's critical infrastructure, as Lyndon LaRouche has urged, taking us—and other nations—out of the present global depression.

Lack of Nurses Equals Tens of Thousands of Deaths

The critical shortage of registered nurses in the United States (a subject EIR and New Federalist have reported on many times in the past) contributes to "tens of thousands of preventable patient deaths due to hospital errors, such as patient falls and hospital-acquired infections, according to a study by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

JACHO, a not-for-profit body that inspects and accredits hospitals and nursing homes, said the report may actually "understate the impact of the shortage.

The study found that there are currently 126,000 vacant nursing positions in hospitals nationwide. This will grow to 400,000 by 2020. They studied 1,609 adverse events that hospital officials voluntarily reported between January 1996 and March 2002, and found that 24% were related to an "insufficient number of registered nurses on the job. Clearly, this number would be much, much higher if all adverse incidents were reported—especially those seen by nurses themselves. This study is just the latest of many that should prove, even to those with the thickest of blinders on, the magnitude of the crisis. - Study After Study -

In April 2001, the U.S. Health Resources and Services Administration found that having too few registered hospital nurses available, proved dangerous to patients. A higher number of registered nurses, and a higher ratio of nurses to patients, are strongly linked to lower mortality rates from pneumonia, sepsis (infection), shock, upper gastrointestinal bleeding, and urinary tract infections among medical and major surgery patients. The study analyzed 1997 data from more than 5 million patient discharges from 799 hospitals in 11 states.

A December 1998 study by the U.S. Agency for Health Care Policy and Research also found that patients who had surgery in hospitals with fewer RNs per patient than the norm, ran a higher risk of developing avoidable complications like those listed above, plus formation of blood clots and pulmonary congestion, following surgery.

The report, like many before it, is a glaring demonstration that the post-industrial policy of "managed health care (like HMOs); the murderous Balanced Budget Act of 1997, which slashed billions of Federal dollars to hospitals; and the international economic collapse, are taking down the nation's capability to deliver health care. Like so many groups studying the problem, this committee's proposals to reduce the shortage are useful but limited—they fail to address the driving forces behind the problem.

Thus, the present study calls for more magnet hospitals to attract and retain nurses with improved training, decent staffing levels, a policy of no abuse against nurses, and increased government funding for nurses' education (the Bush Administration just passed a nurse loan repayment program, but didn't allocate funding for it).

The recommendations of this study are like trying to fix a leak in a pipe that's spewing out tons of water hourly! Their fix won't work without a major national economic change—and a major paradigm shift to policies that support the general welfare, as detailed by Presidential candidate Lyndon LaRouche.

This means that every community must have the hospitals, physicians, nurses, and public health infrastructure essential to support the high standard of living necessary for advancing a productive society in this generation and the next. Within that context, nursing would be a desirable vocation—not a field people are leaving in droves, due to double shifts, dangerous overwork, and insufficient hospital staff.

A primary problem is that the youth of today see society as dying. Hospitals like the University of California-Irvine Medical Center are ending treatment for some indigent patients. A major Denver hospital recently did the same. Public hospitals are in financial jeopardy; clinics and mental health programs are closing. Without LaRouche's program to reverse the crisis, why would youth choose to serve in hospitals, when state and Federal governments, balancing their budgets through bloodletting, are closing them down?

World Economic News

Chinese Experts Analyze the Dollar Crisis

"Dissecting the U.S. Crisis" is the title of a signal article published in China's Financial Securities Daily Aug. 27, by Yan Yaling, a researcher at the Financial Research Center of the Bank of China. The article departs from the usual cautiousness and reserve on the part of China's leading financial institutions, in publicly discussing the situation of the U.S. financial system and dollar. Here are some excerpts, in rough translation:

The U.S. financial and economic system is now facing six major, simultaneous crises, the author writes: "The post-Sept 11 political crisis; the crisis of confidence in financial reporting of companies; the financial deficit crisis; the investment crisis connected with the fall of the U.S. dollar; the structural trade deficit crisis; and the crisis of ineffectualness of lowered interest rates. Add to this: the instability of the dollar vis-à-vis the increase of oil and gold prices; the weakening of the U.S. economy and lack of perspective for recovery; the lack of continuity in the economic policy of the U.S. government; the imprecise and provisional character of its responses to the present challenges, resulting in a collapse of confidence in the U.S. economy, an attitude of passivity and ineffectiveness—it goes without saying, that all this is having an effect on the reputation of the dollar, and since the negative influences on the U.S. economy have increased in number, one cannot underestimate the potential for a drastic worsening of the situation."

The author elaborates on the political aspect, saying: Given the inadequate and mismatched economic policies of the U.S., the internal institutional contradictions have been clearly revealed; and with the mid-term elections, the U.S. political crisis is showing more and more sharply. There are two main aspects of this: First, the psychological state of latent panic and anxiety is a major factor affecting the economy and contracting credit operations. But even more important is that judgments concerning the economic performance of the present government will have a major effect on the coming mid-term elections, exposing the government to potentially severe attacks and challenges. From the foreign policy standpoint, the tense atmosphere connected with military conflicts in Afghanistan, Middle East and other areas, the complex shifts in international relations, especially the element of instability connected with political upheavals in Latin America, and so on, have multiplied the attacks and criticisms of the U.S., which is beset with difficulties both at home and abroad.

Speaking of the crisis of confidence in business, aggravated by the endless series of scandals and massive losses on the stock markets, the author points to a chain reaction which is casting doubt on the whole U.S. market system.... Given the scale of U.S. companies and the effects of globalization, the author says, this affects not only the internal U.S. situation, but also the effectiveness of the multinational corporate and financial groups, causing an obvious tendency for collapse of stock markets around the world, affecting Europe, Latin America, and Asia to varying degrees, and leading to a general crisis of business confidence.

Inside the U.S., the interconnection and exacerbation of many contradictions has made it difficult for the Bush Administration to master and coordinate the situation; there are more and more indications of a policy crisis. Particularly grave is the investment crisis connected with the depreciation of the dollar. The United States is the greatest debtor country in the world.... In this period of economic contraction and depression, the risks, hazards and anxiety connected with the dollar have become obvious. Everybody knows that the dollar is seriously overvalued, by 20% or even 30%; and this is the general view in the international markets. The mismatch between the real strength of the economy and the level of the dollar ... has been aggravated by a vague and contradictory policy of the government. Both investment and speculation are tending to drive the dollar down, seriously undermining confidence in dollar-denominated capital.... Under conditions of a reversal in the exuberance of the stock markets, consumers and investors, this cannot but affect the direction of flow of international capital ... creating the environment for capital funds to choose to attack the dollar.

The U.S. trade deficit is another key problem. Latest trade figures ... indicate the deficit this year will reach over $400 billion, and according to pessimistic predictions, it could reach $600 billion next year.... The continued increase in the trade deficit over years in a row not only means the U.S. is paying for foreign goods at the expense of domestic goods, but ... represents a hidden risk and danger to the whole structure of the economy. At the same time, the global dependence on U.S. trade aggravates the distortion of the U.S. economic structure.... In the face of shrinkage of the domestic economy, with its obvious impact on the consumers, the long-term imbalance in trade structure is negatively impacting on economic confidence, causing the latent crisis of confidence and the latent panic to turn into a real explosion....

The Federal Reserve's reduction of interest rates has not had the anticipated effect ... there has been an obvious change in the reaction of the markets. In addition, since dollar interest rates have already reached a 41-year low, the room for further maneuver has greatly narrowed.... The interest rate was lowered 11 times during 2001 without having any real, fundamental effect on the economy, which finally slid into recession, while the interest rates themselves have become trapped in a narrow base line, aggravating the factors leading to a drop in the dollar. At the same time there are rather large fluctuations and instabilities in the U.S. economy....

Summarizing the dilemma of the U.S. financial system today, the author notes that the main cause of the dollar weakness, is the contradiction between U.S. economic policy and reality.... Every day, the U.S. needs more than $1 billion from abroad to compensate for the current account deficit, but now the inflow of capital has shrunk.... Judging from the real data, there is at present no recovery in consumption and investment. Especially fixed capital investment has gone down.... Added to that there is the drastic fall in stock prices and in company profits, the aggravation of structural contradictions in the economy and so on. All of this means one must take into account the fictitious appearance of U.S. economic statistics.

The author concludes that the situation of the U.S. dollar will depend on both domestic and international factors, but: the degree of risk and the multiplicity of crises is growing, and more shocks are coming.

In the context of the fact that the Chinese are among the largest holders of dollar reserves in the world, and have wanted to believe in the prospects of a U.S. recovery, this article is extremely significant.

United States News Digest

Ashcroft Must Go! Attorney General Tears Up Constitution, But Covers Up Israeli Spy Scandal

Almost daily, new evidence emerges demonstrating anew that Attorney General John Ashcroft is unfit for his office, and is a threat to the United States Constitution and the Republic which it established.

In addition to Ashcroft's continuing efforts to deny Constitutional rights and due process to anyone caught up in the Administration's "war on terrorism," another charge must be levelled against the Attorney General: that he has refused to launch any serious investigation of the suspected Israeli spy apparatus inside the United States.

The revelations about the Israeli "art students" which surfaced after the Sept. 11 attacks have never been officially thoroughly investigated—and many intelligence and law enforcement sources point to Ashcroft as the key point of this obstruction of justice.

As Lyndon LaRouche has demanded, with reports and rumors of a new "Sept. 11" terrorist atrocity circulating widely, it is critical that this Israeli spy apparatus be investigated and dismantled—to determine, among other things, what if any role these networks may have played relative to 9/11. For example, a number of reports have placed teams of these so-called "art students" in close proximity to the alleged 9/11 hijackers prior to Sept. 11. - Detention Camps Planned -

Earlier this month, it was reported that Ashcroft and the Bush Administration are preparing to expand their policy of military detentions, which has so far been applied to two U.S. citizens being held incommunicado in military jails—without any charges being filed or access to lawyers. The Administration was reported to be considering creating a high-level committee which would determine who should be labelled as an "enemy combatant" and detained by the military authorities.

Even without the "enemy combatant" designation, hundreds of Arabs and Muslims who were rounded up in dragnets after Sept. 11 were also held incommunicado, without access to family or lawyers, and many were then deported in secret hearings.

As detailed in an article in the Aug. 23 issue of Executive Intelligence Review, the implication of the expanded detention policy is that the Administration is moving to re-establish the notorious detention camp policy used against Japanese-Americans during World War II, a policy which then held camps in readiness for the potential roundup of "national security risks" for three decades, starting in the late 1940s.

Congress has been slow to exercise its oversight powers over Ashcroft's Justice Department—although a confrontation is now building between the Justice Department and the Senate and House Judiciary Committees, over Committee demands for information relating to the DOJ's implementation of its new anti-terrorism powers.

But two court rulings, disclosed over the past week, show that the courts themselves are alarmed by Ashcroft's effort to seize expanded powers for the FBI and DOJ. - Courts Slam Ashcroft's DOJ -

First, in an extraordinary and unprecedented action, the secret court which was created by the 1978 Foreign Intelligence Surveillance Act (FISA), released an opinion which sharply rebuked the DOJ. The opinion, written in May by the then-Chief Judge of the FISA court, Royce Lamberth, was made public by the Senate Judiciary Committee on Aug. 22.

In the ruling, the FISA Court rebuked efforts by Ashcroft's Justice Department to expand the ability of prosecutors in criminal cases, to use information obtained under national-security wiretaps; the court said the Ashcroft measures would give prosecutors too much control over counterintelligence investigations, supposed to be conducted separately.

The FISA Court's opinion reported that, in September 2000, the Justice Department "came forward to confess error in some 75 FISA applications related to major terrorists attacks directed against the United States." The errors related to "misstatements and omissions of material facts." The court held a special meeting in November 2000 to consider what it called "the troubling number of inaccurate FBI affidavits in so many FISA applications." Among the steps taken, was an action to ban one FBI agent who had been handling major anti-terrorism cases, from ever appearing before the FISA court.

The legal principle underlying the FISA law is that, whereas prosecutors must show "probable cause" to obtain a wiretap in a criminal case, the standard for obtaining a wiretap (or approval for a break-in) is lower in a foreign-intelligence or national security case. However, because of the lower standard, evidence obtained under national-security wiretaps is not supposed to be made available to prosecutors in criminal cases (a prohibition more honored in the breach than the observance, as EIRNS has been told since the time of the "LaRouche Case" in the 1980s).

The so-called "USA-Patriot Act," passed last fall after 9/11, eased the standards for obtaining counterintelligence warrants, and for information-sharing. The FISA ruling did not directly deal with the new law, but it was triggered by new regulations proposed by Ashcroft in March, which the court said would have allowed the Justice Department to misuse intelligence information. - Secret Hearings Blasted -

Second, the U.S. Court of Appeals for the Sixth Circuit in Cincinnati, ruled on Aug. 26 that the Bush Administration's policy of closing all immigration hearings related to Sept. 11, is unconstitutional. The Sixth Circuit's ruling upheld an earlier ruling by a Federal district judge in Detroit, who had said that the government could not block the public and the news media from such hearings. This was the first such ruling by a Federal appeals court.

"The executive branch seeks to uproot people's lives, outside the public eye, and behind a closed door. Democracies die behind closed doors," wrote Judge Damon Keith for a three-judge panel. (Notably, Judge Keith wrote a famous 1971 wiretap ruling against the Nixon Administration, which was claiming the power to conduct warrantless wiretaps in national-security cases.)

"When government begins closing doors, it selectively controls information rightfully belonging to the people," the ruling stated. "Selective information is misinformation"—a characterization which, in fact, applies much more broadly to Ashcroft's Justice Department.

In early 2001, Lyndon LaRouche warned that John Ashcroft as Attorney General spelled police state. LaRouche led the fight to defeat Ashcroft's confirmation, but too few people listened at that time. Now, we're reaping the results.

End the Ban on DDT: Kill Mosquitoes, Not People

The chief weapons against insect-borne killer diseases are insecticides, but since the politically motivated U.S. ban on DDT in 1972, insecticides have become perceived as toxic threats, instead of life-savers.

As a result of the DDT hoax launched by Rachel Carson's book Silent Spring, 60 million people have died needlessly of malaria, and hundreds of millions more have suffered from this debilitating disease. Today, in the United States, people have begun to die of West Nile virus, another mosquito-borne disease, which would not be spreading if the United States had not dismantled its aggressive mosquito control programs over the past 30 years.

In fact, the original campaign against DDT was based on lies: As the Environmental Protection Agency's hearing examiner ruled, after seven months of hearings in 1972, "DDT is not carcinogenic, mutagenic, or teratogenic to man [and] these uses of DDT do not have a deleterious effect on fish, birds, wildlife, or estuarine organisms."

Now, as a first step to reversing this crisis, in which DDT is banned and insect-borne diseases are flourishing, Democratic Presidential pre-candidate Lyndon H. LaRouche, Jr. recently called for "the President of the United States to take necessary measures to overturn the banning of DDT, taking into account the fact that the argument for banning it was always fraudulent. We cannot kill people for the sake of condoning a fraud—as we should have learned from the Enron case."

Although insecticides other than DDT will be the first line of attack against West Nile, the use of all insecticides has been made more difficult by the hysteria created by the DDT scare. West Nile virus has struck the United States in 37 states and the District of Columbia (480 cases and 24 dead in 2002). - Mosquitoes Love Greens -

By 1970, mosquito control campaigns, in particular, the use of DDT, had reduced mosquito populations—the main carriers of malaria, dengue, and yellow fever—to a few small pockets worldwide. But within a short time, aided by a combination of pesticide bans, so-called wildlife protection, and public health budget cuts, mosquito populations again grew, and vector-borne diseases were on the upswing around the globe.

West Nile, a flavivirus with flu-like symptoms which can also cause encephalitis in human beings and horses, was first isolated in Uganda in 1937, in the West Nile region. Since then, there have been several outbreaks in the Old World, where West Nile is now endemic—Israel, South Africa, Russia, Romania, to name a few. There was no West Nile virus recognized in the Western Hemisphere before its 1999 introduction in New York State, by as yet undetermined means.

The technology to stop the spread of West Nile and other insect-borne diseases is well known. Aerial and on-ground surveillance, including remote sensing of mosquito breeding conditions and mosquito traps to ascertain the size of infestation; the use of insecticides to kill mosquito eggs and, if necessary, the adult mosquito populations; vigilant public health programs to monitor and eliminate standing water in urban and rural areas; and animal surveillance. - Killing Mosquito Carriers -

The most effective form of control is to kill mosquitoes in the larval stage, before they become adults. This requires surveillance, to know when and where mosquitoes are breeding, and the use of insecticides appropriate for the job. If the problem is severe, as it was in New York in 1999, aerial spraying to kill the adult mosquitoes is also required. There are several ultra-low-volume insecticides appropriate for this purpose.

States that are unprepared to fight mosquitoes, because of budget cuts and anti-pesticide campaigns, will be least able to stop the rapid spread of an insect-borne disease like West Nile. California, for example, where the already insufficiently funded mosquito abatement program was slashed this year by 50% in the Sacramento area (to take one example), will be in big trouble next year, when it is likely that the West Nile virus will reach the West Coast. As a further mosquito-friendly measure, the Ninth Circuit Court in San Francisco recently ruled that larvicides applied to U.S. waters are "pollutants," requiring a permit to use, plus monitoring of water quality before during and after use.

And as bad as the West Nile situation is in the wet state of Louisiana this year (which has the largest number of West Nile cases and deaths), it could have been worse. Medical entomologist Joe Conlon, of the American Mosquito Control Association, told this author: "If Louisiana had not had such a superbly organized and effective mosquito abatement program in place, the situation would have been far worse."

Bringing back DDT will have a dramatic effect worldwide in preventing millions of cases of the killer malaria. It will also help eradicate the lies and scare stories that have allowed mosquitoes to breed freely at the expense of America's victims, and potential victims, of West Nile virus.

Gentry: 'Now It's Time for the Big Battle'

LaRouche Democrat George Gentry told a group of 25 supporters in Chouteau Aug. 27 that his campaign for U.S. Senate in Oklahoma was just the beginning of the 2004 Presidential election campaign.

"We gave Democrats in Oklahoma a chance to face the crisis of war and depression. Too many of them chose to cling to their illusions this time, to 'go along to get along.' But these illusions won't last. This campaign was part of a bigger battle, to get Lyndon LaRouche elected President in 2004. I think we can win it."

Gentry received almost 23,000 votes in the Democratic primary on Aug. 27, for 7% of the total votes cast, despite a nearly complete blackout in the media. He told his backers that the task they now have is to activate those 23,000 voters, whom he characterized as "hard-core LaRouche supporters."

His campaign focussed on LaRouche's leadership, in particular on the mass leafleting initiated by LaRouche in 2004, to expose the central roles of Senators John McCain and Joe Lieberman as thugs operating on behalf of the drive for war, and in defense of the now-bankrupt "New Economy." In the last week of the campaign, Gentry released LaRouche's emergency national security infrastructure plan, as well as a statement from LaRouche which endorsed Gentry as one who "is very capable of conveying to voters what I have proposed." Both were posted on Democratic Internet sites. - Gentry Challenges Democrats -

In the last three weeks, Gentry addressed more than 20 campaign events. Typical of these were speeches he gave in Stillwell on Sunday, before 600 people, and before 200 in Durant on Monday, where a majority gave him enthusiastic ovations.

Gentry described the infrastructure plan released by LaRouche in Los Angeles on Aug. 18, and concluded, "Our biggest national security threat is not Saddam Hussein, but the collapse of our basic infrastructure. We need a revolution in this country, to get us out of this mess. I need your support now, and your continued support, to put Lyndon LaRouche in the White House."

Some Democrats backed Gentry, based on their recognition that LaRouche has been right. For example, at a union hall in Oklahoma City, there hangs a large poster which says, "LAROUCHE WARNED YOU, NOW IT IS HERE." A union official, who represents workers at a "high-tech" firm which just announced 50% layoffs, told Gentry, "You are right on time" with your message. A union president in Stillwell told him, "As soon as I heard you say LaRouche, I knew I had to support you. I've been following LaRouche."

However, many impotent Democrats meekly told George that, while they agree with what he is saying, they must go along with the unions, or the party, and vote for David Walters, the former Governor, who received 49% of the vote in the primary, and is now in a runoff. But, the changing mood of at least some Democrats was reflected in the only serious press coverage of Gentry's campaign, in an article appearing on Aug. 21 in Tulsa Today. After accurately describing Gentry as an "FDR Democrat" who is a supporter of LaRouche's economic policies, the article ended with a quote which it attributed to an anonymous Democrat: "The primary will illustrate if the Democratic Party has evolved into a sincere group of intellectuals. If we do not vote for George Gentry, our party will have the disgrace of knowing we can't be given the responsibility to elect solid candidates. George is the only one that should be on the ballot in the first place."

Ibero-American News Digest

Argentina: How the IMF Killed a Nation

It used to be the case that mention of the South American nation of Argentina would evoke images of abundant food, a place where cattle and wheat covered the vast pampas (plains) as far as the eye could see, and where no one—not even the poor—went hungry. This was the "breadbasket" of South America, which by the early 1960s had attained levels of development comparable to those of Japan. With impressive scientific and technological achievements, a skilled and educated workforce, and adequate basic infrastructure, Argentines looked to the future with optimism.

No more—unless 2004 Democratic Presidential pre-candidate Lyndon LaRouche's proposals for a New Bretton Woods system are implemented very quickly. Today, with 53% of its 36 million people officially categorized as "poor," scenes of starving children fainting at school are now commonplace, as are stories of mobs of poor stealing and slaughtering cows, even sick cows unsuitable for human consumption. Rates of malnutrition among infants and children are soaring, as are cases of low birthweights among newborns, on a scale seen only in very poor countries.

Typifying the horror in Argentina today, is the painful report given by retired Army Major Adrian Romero Mundani, during the Aug. 22-23 "Mexico-Brazil-Argentina: Hour of Integration" conference held in Guadalajara, Mexico. "Mama, will there be food in heaven?" were the words of a child to her mother, as she lay dying of starvation. This crisis "cries out to heaven," the Argentine patriot said. "People may starve when there is no food, but it is inadmissible that children starve when there is a surplus of food, because my country ... can feed the hungry world."

- Deliberate Genocide -

Nothing about this devastation is accidental, despite the Wall Street Journal and IMF line that "it's their own fault." During the 1990s, Argentina was the international poster-boy for the IMF's free-market "adjustment" model, and imposed every single austerity dictate demanded of it, with the promise that this would bring the country into "the First World." Instead, parts of Argentina today resemble Africa.

The IMF's insistence that the government impose murderous austerity to service an unpayable $220 billion in foreign debt literally killed Argentina, just as Lyndon LaRouche warned it would, in several public statements earlier this year. The IMF's "fiscal responsibility" policies have ripped the physical economy to shreds, producing an official unemployment rate of 21.5%, the highest in Argentina's history, but also greatly understated.

Driven into homelessness or the slums by job loss, former members of the middle class, including teachers and state-sector workers, now pick through the garbage each night in cities, looking for food, or items they can sell.

Some desperate older and retired women have become prostitutes, because, as film maker Rolando Grana told BBC news service, "They are women who have lost everything, who have no pension, and the only thing they can think of doing is overcoming embarrassment and prostituting themselves." According to Bloomberg news agency, other Argentine families sell their hair to wig factories to earn $25.

A 33% inflation rate—inflation has soared since the January devaluation of the peso—places food and medicine out of the reach of the poor and unemployed. In the first quarter of this year, the price of the monthly market basket of essential food items increased by 42.4%, while real wages declined by 25.5% between January and May.

- Children Hit the Hardest -

The government statistical agency, INDEC, calculates that 16,856 people per day enter the ranks of the poor, which over the past year, translates into 6.2 million more poor people. Of these, the majority are "indigent"—the poorest of the poor.

"Poor" means that people lack the income to purchase a basic market basket of goods and services. The 9 million indigent among this group cannot even purchase enough food to satisfy minimum caloric requirements. In the past 12 months, the indigence rate has doubled—adding 4.5 million people, at the rate of 12,300 per day.

Children are especially vulnerable. Seven of every 10 children under the age of 14 are classified as poor, which means that 4 million out of 5.7 million children have absolutely no access to the minimum market basket of goods and services. Undernourished and indigent children now number 2.1 million.

Impoverished children depend on subsidized food programs in the public schools, where at least one meal is guaranteed, sometimes two. Some of the highest levels of malnutrition are therefore now seen among preschool children, who don't get enough food—if any—at home. Malnutrition is increasingly seen among newborns, because their mothers don't eat. In one working-class Buenos Aires neighborhood, 26.6% of newborns were malnourished.

What was once Ibero-America's premier health-care system, to which students from around the hemisphere flocked to study medicine, is in shambles. Where health insurance used to be almost universal through trade-union-run programs, today 18 million people are without health insurance, and depend on public hospitals which are collapsing due to budget cuts.

Since last January's peso devaluation, the cost of medicine, components of which are imported, has increased almost 200%. Official government expenditures on the health sector will drop by 15% this year. Also since January, per-capita health expenditures have dropped from $650 to $184, plunging the country that once had Ibero-America's highest per-capita investment in medical care, into last place on the continent.

According to former Health Minister Aldo Neri, "increasingly efficient medical tools are meaningless in the face of ever-increasing poverty and misery." A study done by the government of Buenos Aires province for the year 2000, the last year for which statistics are available, showed a "notable increase" in tuberculosis among youth and people 65 or older, particularly in the middle of the 1990s, the heyday of free-market lunacy.

Colombia's FARC Threatens U.S. Citizens

[The following short appeared in the New Federalist of Sept. 2, 2002]

The Colombian police recently intercepted a phone call between the military commander of the FARC, Jorge Briceno, and other terrorists, declaring that U.S. citizens in Colombia are to be considered military targets by the FARC. According to the transcript, which has yet to be verified, but which is being taken seriously by U.S. authorities, Briceno declared, "We must find where the 'gringos' are, because they have all declared war on us. You are obligated to fight them as well."

Wall Street Journal columnist Mary Anastasia O'Grady posed the right question when she asked, in light of this new revelation of the FARC's bloody intent against American citizens, why did 45 U.S. Congressmen send a letter to Secretary of State Colin Powell in July, protesting use of U.S. aid to boost the Colombian military?

Western European News Digest

Zepp LaRouche Calls For Lautenbach Plan To Fight Flood Catastrophe

In the wake of massive flooding in eastern Germany, which has dislocated at least 100,000 people and left tens of billions of dollars of damage in its wake, German Chancellor candidate Helga Zepp LaRouche issued a statement Aug. 15, calling for immediate abandonment of the budget criteria imposed on European Union member-states by the Maastricht Treaty, and, in place of that budget austerity, massive reconstruction efforts. (Zepp LaRouche's full statement was printed in the EIW Editorial in our Aug. 19 issue.)

In the two weeks since her statement, German Chancellor Gerhard Schroeder, and the opposition Christian Democrats, have taken certain measures to provide monies for reconstruction, and to relieve small firms of their debt burdens, if necessary, due to the flood damage.

However, the German government held back from directly challenging the European Union measures which have prevented major infrastructure investment. Schroeder has made statements asserting the priority of the social obligations of the Federal government, but rather than challenge Maastricht, he has simply cancelled some tax cuts, and postponed other expenditures, in order to provide funds for the emergency. This means that the efforts undertaken will be woefully inadequate to repair the damage or to put the already devastated German economy (with more than 10% unemployment) back on track.

A meeting of neighboring countries called by Schroeder and EU President Romano Prodi, came up with no significant initiatives. Yet farther south, in Italy, government ministers continue to insist that necessary capital investment in infrastructure occur outside the Maastricht criteria—just as Zepp LaRouche herself proposed.

Italy Minister: Change Policy To Allow Infrastructure Investment

Italian Deputy Finance Minister Vito Tanzi called for deficit financing for public investments in infrastructure. Tanzi said, in an interview with Bloomberg news wire Aug. 23, that Finance Minister Giulio Tremonti is holding informal talks with other ministers and the European Commission in order "to get people to accept more flexibility."

'The idea," Tanzi said, "is not to count as deficit spending investments on infrastructure that have clearly passed a test of profitability." Italian Prime Minister Silvio Berlusconi also "wants to free up money to spend on infrastructure projects such as a bridge connecting Sicily to the mainland."

"Union leaders in Italy have supported the idea," Bloomberg notes, along with "many members of Italy's government.

Russia and Central Asia News Digest

Russian Parliamentarian Warns U.S. Attack On Iraq Could Be Soon

In interviews yesterday Mikhail Margelov, chairman of the International Affairs Committee of Russia's Federation Council (upper house of Parliament), said he believed the United States might launch a military action against Iraq on Sept. 11. According to RIA-Novosti, Margelov said that timing the attack on this anniversary would create pressure for the allies of the U.S. to back it.

In his interview to Itar-TASS, Margelov stressed the non-support of such an attack, on the part of European Union countries and the Arab world, and the lack of any "national consensus" on it inside the United States. He said that Iraqi Foreign Minister Naji Sabri will make a working visit to Moscow in early September, and that Russia will continue to push for solving Iraq-related problems through dialogue under the aegis of the United Nations Security Council.

Margelov's statement was prominently featured and discussed on Russian TV broadcasts. Talking head Vyacheslav Nikonov (Molotov's grandson) of the Politika Foundation, for example, opined on an RTR program that the attack will happen sooner or later, though not as soon as Sept. 11.

Russian-Georgian Accusations Fly

Accusations about the Aug. 23 high-altitude bombing of Pankisi Gorge in the Republic of Georgia, which killed two and injured seven civilians, have been flying all week between Moscow and Tbilisi, along with threats of diplomatic and/or military escalation. As reported in a White House news conference transcript of Aug. 25, White House spokesman Ari Fleischer condemned Russia for these air raids, saying the U.S. "deplores the violation of Georgia's sovereignty." Warhawk Senator John McCain had just visited Tbilisi. In combination with developments around Iraq, the U.S. criticism of Russia on this count—Pankisi Gorge being a base for Chechen guerrillas, as well as other Afghansi, who are supposed to be targets of the "anti-terrorist coalition"—spawned a rush of articles in the U.S. and international press, about a breakdown-in-process of the post-Sept. 11 U.S.-Russia relationship.

Here are the main developments around Georgia this week, including an Israeli angle, brought out for the first time:

Aug. 23: Georgian officials report the bombing, which took place at 5:00 a.m. in an area where a Georgian TV station had said the Chechen band of Ruslan Gelayev was operating (a report denied by Georgia's National Security Council secretary). Georgia's Foreign Ministry says that two group squadrons of Russian planes crossed into Georgian air space. The Russian Air Forces states no orders for such operations had been given.

Aug. 23: OSCE observers announce that they, too, detected unmarked aircraft flying at a high altitude, which bombed Georgian territory for 40 minutes that morning. Fleischer issues his statement of "deep concern" over "credible" reports of a Russian raid. Russian Defense Minister Sergei Ivanov denies the involvement of Russian planes in such a bombing. The Georgian Foreign Ministry officially protests to the Russian Ambassador, while Foreign Minister Irakli Menagharishvili blames "aggressive" factions within Russia.

Aug. 24: The Russian Foreign Ministry demands decisive action by Georgia to "block, disarm, and extradite terrorists" operating in Pankisi, rather than push them into Russia, and reiterates Russia's proposal to do it jointly. The Georgian Parliament's Speaker Nino Burdjanadze calls to shoot down any planes that violate Georgian air space, but Defense Minister Tevzadze says Georgia lacks weapons to down planes from 8,000 meters.

Aug. 24: Eight Russian border guards are found shot dead from close range, on the Georgia-Ingushetia (Russia) border. Though two fellow soldiers are later charged with their murder, the incident is folded into news reports for several days.

Aug. 25: The Georgian Foreign Ministry calls the Russian note "inadequate." Georgian National Security officials announce their own operation in Pankisi Gorge, with 1,000 Interior and National Security troops.

Aug. 27: Georgian President Eduard Shevardnadze visits Pankisi Gorge to review these operations.

Aug. 27: The Russian Foreign Ministry says it is studying a Georgian proposal to jointly investigate the Aug. 23 raid. Tbilisi, however, calls for an OSCE investigation instead.

Aug. 28: Addressing special forces troops in eastern Siberia, Russian President Putin says that without Russia's active involvement, Georgia "will just move terrorists from one corner to another."

Aug. 28: The Russian government newspaper Rossiyskaya Gazeta writes a big article on the Aug. 23 incident, asserting that Russian planes based in the area lack the equipment for bombing in the dark, but that the Georgian Air Force has one Su-25 fighter-bomber, which according to Russian military sources was retrofitted by the Israeli company Elbit Maarachot with radio-navigation equipment for night raids. (Elbit's delivery of an Su-25M to Georgia was also reported by Jane's Defence Weekly in April 2001.) Rossiyskaya Gazeta quotes an "informed Defense Ministry source," who claims the Georgian Air Force carried out the raid on orders from the highest political authorities.

Aug. 29: Speaking at a ceremony for the next phase of the U.S. "Train and Equip" program for the Georgian military, Shevardnadze again says Georgia will not agree to a joint operation with Russia in Pankisi. "We have to take care of our own problems by ourselves," he said. At the same event, Defense Minister Tevzadze objected to the Russian proposals: "Putin is not offering help, he's offering to send more Russian soldiers to Georgia, and we have enough of them already."

Mideast News Digest

Al-Watan Daily Prints Part II of LaRouche Interview

On Aug. 26, the Arabic-language Saudi Arabian daily Al-Watan published the second installment of three parts, by Dr. Ahmed Al-Kedidi, under the title "Lyndon LaRouche Analyzes the Secrets of the Doves and Hawks in Dealing with a Potential War."

Dr. Kedidi paraphrases LaRouche's statements from their recent meeting in Germany, where LaRouche dealt with the current danger of war and the background of the utopian military faction in the United States. "The same utopian theories that cost the American people so much in the past decades, are being revived now to launch a war against Iraq, and permit Sharon to have a free hand to take what is left of the land of Palestine," says LaRouche, according to Kedidi.

In contrast, says Kedidi, LaRouche's idea is to go against this imperialist fantasy, to rebuild real and effective solidarity among free and independent nation-states for the sake of progress and peace. Such ideas include the rebuilding of the Silk Road which had connected the continents of Asia, Europe, and Africa. Real solidarity goes through a dialogue among cultures.

Kedidi also describes LaRouche's previous warning against the AIDS catastrophe in the 1980s, and how the lack of solidarity has affected all nations of the world through the spread of this disease. LaRouche said that he proposed developmental and industrial solutions for these crises over the years, while his enemies proposed genocidal policies.

LaRouche says he is optimistic that a change is still possible, despite the intense danger of war, and that American public opinion is changing. LaRouche further emphasizes that the nations of the world, from Europe to Asia and the Middle East, are opposed to the war policy. He says that Saudi Arabia and Egypt have led the way in this as moderate and major powers in the Islamic world. That is why these nations are being attacked by the neo-conservative war party.

Kedidi concludes with a quote from LaRouche: "I believe that armies should serve the purpose of establishing peace, not fighting wars for the sake of wars. Nobody knows what the Middle East, the world, and the U.S. would gain from a war which has no convincing reason, no strategic plan, and of course—as President Bush knows, has no allies." [The article's url is http://www.alwatan.com.sa/daily/2002-08-26/writers/writers06.htm]

Murawiec Exposed: Saudi Daily Al-Watan Highlights EIR Dossier

On Aug. 27, the Saudi daily Al-Watan published EIR's exposé of Richard Perle's "French expert," putting the story in the context of the breakout of LaRouche's influence in the world today. Al-Watan's lengthy article contained the translation of around 70% of the original EIR/EIW exposé of Laurent Murawiec. The exposé is introduced after a long introduction, placing the attack on Saudi Arabia and the July 10 Pentagon briefing in the context of the current factional war and opposition to the war policy inside the United States. This fight is spearheaded by LaRouche's major campaign against the war hawks and the two favorite candidates of the Zionist Mafia and organized crime, Senators Joe Lieberman and John McCain, reports the prestigious Saudi newspaper. The report occupies one full page in the printed version, and was placed on the front page of Al-Watan's website.

The headline says: "Al-Watan publishes revelations and facts about the anti-Saudi speaker in the Defense Policy Board in the Pentagon." The next headline states: "American Politician Lyndon LaRoche: Perle is an Israeli agent who wants to draw America into wars against the Muslims." The article describes Perle as a war-loving creature of Greater Israel and the Anglo-American Empire faction, and explains the context of the July 10 briefing as an event which has brought to the surface a fierce internal fight in and around the Administration on the issue of going to war against Iraq, and the obvious opposition shown by Army generals in the United States. In this context, the introduction to the exposé says, "Perle introduced Laurent Murawiec, whose previous betrayal of American political leader Lyndon LaRouche is well known, to speak about 'occupying Saudi oilfields.' This was akin to committing suicide inside one of the most important American institutions, the Defense Department."

Then the introduction continues:

"What is interesting in the story is that Lyndon LaRouche himself is waging a ferocious campaign against the war hawks faction and the Zionist lobby that is calling for war, with Perle on top of it. LaRouche's Presidential campaign has started a campaign of printing and distributing 5 million copies of leaflets exposing this faction's intentions. Another 20-page study revealed the relationship between the Jewish mafia and the organized crime with their favorite candidates, Joe Lieberman and John McCain, who have been blackmailing President Bush into bombing Iraq and destroying the Palestinian leadership." The article also mentions the Time magazine story, which cited LaRouche on Perle.

The article and the exposé appeared the same day, Aug. 27, as the Saudi Ambassador to the U.S., Prince Bandar, was going to meet President Bush at his ranch. The article will be published in other Arabic newspapers and magazines, and is available in full on LaRouche's Arabic website, www.nysol.se/arabic. [The url to Al-Watan story is: http://www.alwatan.com.sa/daily/2002-08-27/affair.htm]

Middle East Envoy General Anthony Zinni: 'War with Iraq Is Unwise'

Speaking to the Economics Club of Florida in Tallahassee on Aug. 23, Gen. Anthony Zinni (USMC-ret) assailed those pushing a war against Iraq in strong language. He said the U.S. should concentrate instead on bring peace between Israel and the Palestinians, eliminate the Taliban threat in Afghanistan, and rout the al-Qaeda. Zinni focussed on the need to take advantage of the opportunity for a peaceful transition in Iran, which he described as a more dangerous situation than Iraq. "We need to quit making enemies that we don't need to make enemies out of," he warned. Zinni then went into a direct assault on the chickenhawks, noting, "It's pretty interesting that all the generals see it the same way, and all the others who have never fired a shot and are hot to go to war see it another way."

Zinni is otherwise well-known for his comments about the Iraqi National Congress, one of the Bush Administration's favorite Iraqi opposition groups, which he said was so amateurish as to threaten a "Bay of Goats"-style action against Saddam Hussein. Zinni, who has been outspoken in criticizing Senators and other warmongers who push a "Clash of Civilizations" against Islam, is still President Bush's Mideast envoy to the Israeli-Palestinian negotiations, chosen for the post last November by Secretary of State Colin Powell. However, the Administration refuses to answer questions about when Zinni will be returning to the region.

Israelis Caught in Arms Shipments to Iran

The German Customs Authority, following a tip, seized a cargo of Israeli military equipment that was headed for Iran, reported the Jerusalem Post and Ha'aretz on Aug. 29. The cargo included 3,000 Israeli-made rubber treads for armored personnel carriers. The cargo was on an Israeli ship, Zim Antwerp I, and the company that was shipping the equipment was the Israeli firm PAD, owned by one Avihai Weinstein. The shipment was to be transferred to a Malaysian ship and had documentation saying it was destined for Thailand. But because the Germans got information from unnamed sources, they were able to seize the goods.

Although Weinstein denies the allegations, this is not the first time he has been accused of selling equipment to Iran. Weinstein's relative and business partner is one Eli Cohen, who is very well known for such trade. In the 1990s he was accused of selling tank engines to Iran. In 1995 Cohen was accused of giving false information to U.S. export licensing authorities when he exported an infrared camera to the Israeli company Elbit, a well-known Israeli military equipment maker. Elbit then illegally sold the camera to another company. It is not known whether the company sold it to Iran or not; nonetheless, according to Ha'aretz, Elbit had sold equipment to Iran at least up until 1989 with the permission of the Israeli Defense Ministry.

The Iranian government denied any connection to the shipment. An Iranian Foreign Ministry spokesman said, "We have no ties—diplomatic and certainly not military—with Israel, a regime that we do not recognize." The spokesman said that the story linking Iran to the Israeli arms shipment is intended to harm Iran, and is similar to what he claimed are false stories that say that Iran is giving shelter to al-Qaeda members.

Britain's Chief Rabbi Critical of Iraq War and Israeli Attacks

Great Britain's chief Rabbi, Jonathan Sacks, in an Aug. 27 interview with the London Guardian, expressed very strong views on Israel's continuing occupation of the West Bank and Gaza and urged caution on going to war against Iraq. These statements were uncharacteristic of his public profile and should be seen in the context of the ongoing debate on whether Britain should go to war. Shortly before the interview, Sacks had met with not only Prime Minister Tony Blair, but with Chancellor Gordon Brown, with whom he says he has one of his "loveliest friendships." Brown is said to be against the Iraq war.

On Israel Sacks said, "You cannot ignore a command that is repeated 36 times in the Mosaic books: 'You were exiled in order to know what it feels like to be an exile.' I regard that as one of the core projects of a state that is true to Judaic principle. And therefore I regard the current situation as nothing less than tragic, because it is forcing Israel into postures that are incompatible in the long run with our deepest ideals."

After expressing strong criticism of Palestinian use of terrorism, he added, "There are things that happen on a daily basis which make me feel very uncomfortable as a Jew." He said he was "profoundly shocked" by reports of smiling soldiers posing for a photograph with a corpse of a slain Palestinian. "There is no question that this kind of prolonged conflict, together with the absence of hope, generates hatreds and insensitivities that in the long run are corrupting to culture." These statements are expected to kick up a firestorm among the right wing.

On Iraq he said he would support a war only under three conditions: if there were a clear objective and endgame, a broad coalition of support, and very strict safeguards against civilian casualties. When asked whether he thought it were proper for the Archbishop of Canterbury to speak up against the war, he replied, "That's what is called the dignity of difference."

The interview was played up on the front page of the Guardian, as well as in the Israeli daily Ha'aretz.

Asia News Digest

Bush's New Headache in Pakistan

The Bush Administration is in a fix. It cannot repair things in Afghanistan, or in Pakistan. While Afghan Transitional President Karzai is not blamed for the seemingly insoluble problems in his country, there are many in Washington who are ready to go after another ally, President Pervez Musharraf of Pakistan.

Musharraf is a staunch ally of the United States. He has stuck his vulnerable neck out to go after the al-Qaeda, Taliban, Jaish-e-Mohammad, Lashkar-e-Taiba, Harkatul Mujahideen and many other fundamentalist groupings whom, in his earlier days, he nurtured and made grow. He shifted his stance because, after Sept. 11, and the Bush Administration's decision to eradicate the Islamic fundamentalists in Afghanistan under al-Qaeda and the Taliban, he was simply asked to collaborate. It is likely that he never asked what would happen if he did not. Thereafter, he banned the fundamentalists, but allowed them to function. In other words, he never resisted Washington—but neither did he endanger his own life too much.

In fact, Musharraf's pledging of allegiance to Washington goes back to Oct. 12, 1999, when he took control of Pakistan by ousting the duly elected—but highly incompetent and corrupt—Prime Minister Nawaz Sharif. At the time, Musharraf assured Washington that he would reciprocate favors. How this all worked out is not for us to know. But remember the old adage: There cannot be a coup in the United States, because there is no U.S. embassy there.

Simply put, Musharraf does not want to antagonize Washington, and has burdened himself with immense trouble to please the Bush Administration. But in 1999, he promised President Clinton that Pakistan would go for general elections in October 2002 and bring back parliamentary democracy.... - The Murky Election Scene -

Between October 1999 and today, a lot of water has flowed under the bridge. Musharraf has allowed the U.S. bases in Pakistan, allowed the FBI to set up a large number of offices in Pakistan, and deployed Pakistani soldiers to hunt down his former beneficiaries—al-Qaeda and the Taliban. All this did please Washington. But it did not please many inside Pakistan, particularly the fundamentalists and the outright terrorists, who had been getting the direct help of the Army—which Gen. Musharraf headed, and still heads.

In order to "save" Pakistan from the marauding terrorists and "corrupt" political leaders, Musharraf has made clear that he needs more power than the 1973 Constitution offers. He set up a National Reconstruction Board (NRB) to amend the Constitution. Acting on the "advice" of the NRB, Musharraf has now made himself President and chief of the armed services till 2007; has acquired the power to dismiss an elected Parliament, and to appoint and sack heads of important Constitutional offices—powers previously vested in an elected Prime Minister.

Earlier, Musharraf had seen to it that Nawaz Sharif, now in forced exile in Riyadh, Saudi Arabia, was convicted of corruption; that Mrs. Benazir Bhutto, the former Prime Minister self-exiled in Dubai, was convicted of corruption and embezzlement; and that Altaf Hussain, head of the Muttahida Qaumi Movement (MQM), self-exiled in London, was convicted of criminal activities. While Bhutto and Nawaz Sharif head the two most powerful political parties, the PPP and PML(N), respectively, the MQM may sweep the polls in Karachi, Hyderabad, Sukkur and some other cities of Sindh. Musharraf has said all three leaders will be thrown in dungeons if they ever show up in the country.

- The Threat -

President Musharraf would have been on a strong footing if the people of Pakistan had rejected not only these leaders, but also the parties. But it happens that private polls show the PPP would sweep the elections in October. That has emboldened Mrs. Bhutto and Nawaz Sharif, and they have formed an alliance to fight the elections together. Even more threatening, Mrs. Bhutto, Nawaz Sharif, and his exiled brother, Shahbaz Sharif, have filed their nomination papers from abroad. All are making pronouncements that they will return to Pakistan, no matter what Musharraf does to them. What is evident is that a showdown is in the offing.

So Musharraf, beside strengthening his hand, has helped to float a political party, the Pakistan Muslim League (Quaid-e-Azam), or PML(Q), whose objective is to inveigle and bring aboard the leaders of the PPP and the PML(N), and emerge as top party in the October vote. However, PML(Q), known widely as the "King's Party," is trailing badly in private polls. Musharraf is reportedly shaken up and has met quietly with some of the leaders of the "banned" fundamentalist groups, urging them to get support of all the orthodox Islamic groups on behalf of the King's Party.

This may work, or not. If it does not work, which means the PPP, or the PPP-PML(N) combine, comes in with a heavy majority, Musharraf has no choice but to exercise his new powers and sack the whole kit and caboodle.

Herein lies Washington's headache. There are many things Washington can ignore, but it cannot ignore the trashing of democracy. Washington remained silent watching Musharraf set up the chessboard, but it gets awfully uneasy to see the game played wholly unfairly. Hence, Washington is pressing Musharraf to hold a fair vote—and Musharraf does not see how he can do so, if the end result leads to all-out conflict with the United States.

In Asia, Proliferation of Rights Tribunals No Guarantee of Justice or Truth

Since the 1990s establishment by the United Nations of the International Criminal Tribunals for the Former Yugoslavia and for Rwanda, human rights tribunals have been negotiated for a trial of former leaders—of the Khmer Rouge in Cambodia, of Sierra Leone, and, most recently, of newly independent East Timor, formerly part of Indonesia.

The East Timor case suggests that while enormous media attention went into reporting the atrocities committed in those nations, the same intensity of focus is distinctly lacking when it comes to following ensuring the "international standards" so nauseatingly cited by NGOs, when it comes to the prosecution and defense of those who stand accused.

Outgoing UN Human Rights Chief Mary Robinson recently visited East Timor and Indonesia, harshly criticizing the initial results from the ad hoc tribunal Indonesia created in Jakarta to try 18 military officers, officials, and civilians, including militia members charged with crimes committed after the August 1999 referendum vote in East Timor, which paved the way for the province to become an independent state.

Robinson declared the initial results of those trials "not satisfying" because six officers, including former Regional Police Commander Brig. Gen. Timbul Silaen, were acquitted, and Indonesia's former governor in East Timor, Abilio Soares, received only a three-year sentence, rather than the 10 years-plus sought by the Indonesian judges.

The East Timor case makes clear that "international standards," in the eyes of the human rights mafia, mean convictions, not necessarily truth and justice.

The UN has its own tribunal in East Timor, set up under the UN Transitional Authority for East Timor, which was the de facto government from the August 1999 referendum until East Timor became independent in May 2002. Under the UN "Serious Crimes Panel," which is staffed by East Timor and international judges, some 50 militia members are awaiting trial.

A report prepared by Prof. David Cohen for the East West Center in Hawaii makes clear that convictions, especially of "top-level" officials, more especially Indonesian military officers, is an unstated priority—i.e., an assault on Indonesia's sovereignty.

Professor Cohen reports that the UN's East Timor tribunal has been funded to the tune of approximately $6,300,000, compared to the annual budgets for the Yugoslavia and Rwanda tribunals of $100,000,000 each, and $20,000,000 for Sierra Leone. Of the East Timor funds, $6 million is allocated to the prosecution and $300,000 to the tribunal itself, which Cohen explains means the salaries of the international judges. There are no law clerks, research assistants, secretaries, administrators, court reporters, or facilities for research, and scarcely room for judges and staff.

The Timorese judges have no prior judicial experience of any kind; there have not been enough judges to hear cases and appeals for 18 months.

The best that can be said of the defense is it's almost nonexistent. Cohen reported that no one in the Public Defender's office or the UN administration in East Timor even knew if any budget exists for the defense. Timorese in the Public Defenders' office have no trial experience, little if any familiarity with criminal law, and no background in humanitarian law.

Furthermore, without a budget, the defense is unable to bring witnesses, such that not a single witness was called in any of the first 14 trials. The absence of funding means there are no transcripts from any of the trials so far completed—key for any appeals. The problem is compounded by the use of five languages in the proceedings.

Contrary to Mary Robinson and the lynch-mob impetus, East Timor's President Xanana Gusmao has repeatedly appealed for reconciliation among the Timorese themselves, and between East Timor and Indonesia. The judge overseeing the trials in Indonesia told the press the reduced sentence of three years imposed on the former Governor had been based on "justice, not revenge," and that President Gusmao had personally written to the justices urging them not to hold the Governor responsible for the violence, and calling for reconciliation.

Russians Pursue Economic Development Ties for Korean Peninsula, Mideast

The recent visit of North Korean leader Kim Jong-Il to eastern Russia represented another significant step forward, toward building the ties for new economic infrastructure projects in the area. Russia's Vladimir Putin and the North Korean leader met for three hours in Vladivostok, focussing, according to Putin, on economic development, and in particular the rail link between South Korea and the Trans-Siberian Railway through North Korea.

Russian refining of oil in North Korea, transport of cargo via North Korean ports, agriculture and forestry projects, and possible cooperation on electricity, are said to be under discussion. Kim was accompanied by his Army Chief of General Staff Kim Yong Chung, First Vice Minister of Foreign Affairs Kang Sok Ju, and Minister of Railways Kim Yong Sam.

The rail links between North Korea and South Korea, and between North Korea and Russia, are crucial to the global development project called the Eurasian Land-Bridge, which has been identified by Lyndon LaRouche as key to peace and prosperity for the world economy. South Korea has been avid for the project, which President Kim Dae Jung calls the "Iron Silk Road."

Given its status as the Eurasian nation, Russia has a crucial role to play in this, but has played it only intermittently under President Putin.

But Moscow has moved to deepen economic ties with all its neighbors, including those to the south and west. Recently, Russia made headlines by announcing the impending conclusion of a $40-billion deal with Iraq. The five-year agreement focusses on cooperation in oil, electrical energy, chemical products, irrigation, railroad construction, and transport.

In July, Russia also announced it plans to build five new nuclear power plants in Iran—despite the fact that the Bush Administration is demanding it cancel the Bushehr power plant project on which it is currently working.

And Russia is working on expanding ties to China. Russian Prime Minister Kasyanov met Aug. 21 in Shanghai with his Chinese counterpart, Zhu Rongji. He announced that each Prime Minister will take charge of the most important Chinese-Russian economic projects, including the "strategic oil pipeline" from Siberia to China. When operational, that pipeline will carry between 20 and 30 million tons of oil from Russia to China each year.

Interviewed for the Aug. 20 People's Daily, Kasyanov said the two countries' bilateral trade would exceed last year's record of $10.7 billion, but Russia anticipates tripling trade to $35 billion per year by 2006. Arms sales will continue to be the biggest component, but the share of energy cooperation will rise dramatically.

Efforts Underway To Restart Rail Construction Between the Koreas

The discussions with Russia reported above follow a series of developments between North and South Korea. "Seoul Offers Military Talks To Restart Rail Construction" was the headline in the Korea Times newspaper Aug. 12. The Aug. 12-14 summit in Seoul of the Unification Ministers between North and South Korea began well, with South Korea proposing minister-level military talks this month, in order to begin physical reconnection of rails and roads between the Southern capital of Seoul, and the Northern capital of Pyongyang, next month. "We stressed the importance of re-linking the Seoul-Shinuiju Railway within the year," a Seoul Unification Ministry spokesman told the press after the meeting.

South Korea urged the North to speed up work on its part of the rail link, he said, and again proposed to provide the North with equipment for mine clearing and rail ties. "Therefore, we offered the early opening of working-level military talks. Such talks could also produce confidence-building measures between the two Koreas to prevent a repeat of the recent deadly naval clash," he said.

A recent report by the Russian government on existing North Korean rail segments stressed that the country's rail line will require thorough overhaul to be used for transit between South Korea, North Korea, and Russia, and also offered to help rebuild the entire line.

The North's delegation has been unusually upbeat, and it is expected that South and North will be able to resume Economic Ministers' cooperation talks Aug. 26-31, officials said. "Let's rack our brains to come up with solutions, rather than presenting new problems," Seoul Unification Minister Jeong Se-hyun told his North Korean counterpart Kim Ryong-song on arrival. "I bring a lot of gifts, and am willing to present them. Please help us a lot this time, so I can part with a lot of these gifts!" Kim replied. "Let's do our best to arrive at conclusions as soon as possible."

The last minister-level talks in November ended in sharp disagreement over South Korea's security alert after the Sept. 11 attacks on the U.S., which made it impossible for Northern Chairman Kim Jong-il to visit Seoul as planned. Seoul lifted the alert in December in a goodwill gesture. Now both are trying to beat the "impossible deadline" of South Korea's Presidential election Dec. 19, which could bring in the "utopian" war candidate Lee Hoi-Chang. President Kim Dae-jung's party lost heavily again in the Aug. 8 by-elections.

Progress on China's Shanghai Maglev Train

China took delivery from Germany of the first section of its magnetic-levitation (maglev) train Aug. 9, for the 66-km Shanghai maglev project. China has so far bought three trains from the German ThyssenKrupp, Siemens, and government consortia.

The maiden voyage of the maglev is planned for New Year's Day 2003. The train will open to the public later next year. The Chinese side still has to complete two more kilometers of track, before the first train can run.

Taiwan President Continues Anti-China Provocations

President Chen Shui-Bian appeared at a political rally with his predecessor, separatist and "democrat" Lee Teng-hui, in Taipei Aug. 11, and, although he did not repeat his Aug. 3 call for a referendum on the future of Taiwan, he blustered to the pro-independence Taiwan Solidarity Union (TSU), "We will not be intimidated."

Lee, who founded the TSU, repeatedly made the provocative statement that Taiwan and China have a "state-to-state relationship." Lee also wants to call Taiwan the Republic of Taiwan.

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