Electronic Intelligence Weekly
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From Volume 3, Issue Number 23 of Electronic Intelligence Weekly, Published June 8, 2004
This Week You Need To Know
In a declaration of war against the speculators who had pushed the price of crude oil above $42 a barrel, and are launching it towards $50-60, Democratic Presidential candidate Lyndon LaRouche called on May 28 for the price of oil to be set at a target price of $25-26 per barrel, by nation-to-nation contracts, in order to bankrupt and take away the power of the speculators, and restore order to the oil market. LaRouche has emphasized that the high oil price is not a product of a shortage of oil production, of OPEC cutting oil supplies, or other cover stories, but arises from speculation by the big oil companies, investment banks, hedge funds, and other financial players, who are using the extra "take" to try to hold the financial system together.
However, some in the circle of Vice President Dick Cheney favor a currently ongoing destabilization of the entire Southwest Asia and contiguous region: from the disaster in Iraq; to the recent terrorist assault in Al-Khobar, Saudi Arabia, against a complex housing foreign oil workers, which killed two dozen people; to the violence in Pakistan; which would create chaos in the region. This plan, sanctioned by certain financial players who think the financial system can't be held together, would trigger a conflagration in Southwest Asia, and send the oil price to unprecedented heights.
Already in a Sept. 19, 2000 memorandum, entitled, "Bring Oil Inflation Under Control," LaRouche had asserted that governments must declare a general strategic emergency, and "establish contracts, directly between and among governments, of not less than 12 months' government scheduled deliveries of petroleum from exporting to consuming nations"; at the same time, defining "reasonable prices for these contracts." Based on these principles, the plan would "bring a most critical segment of this speculative inflation under control," and also "set standards of cooperation now urgently needed, for dealing with the general international banking and related crises" (see page 10). Put into practice today, this urgent solution would bring the price of oil to the $25 range.
Some fools will insist on buying the Brooklyn Bridge, no matter how many times you tell them it's already been sold. The same is true with the story that there is an oil shortage. The truth: No oil shortage exists. Figures from the Paris-based International Energy Agency (IEA), the central collection point for world oil information, show that for the first quarter of 2004, world oil supplies were in the range of 82.3 million barrels a day (mbd), with consumption lower, in the range of 80.5 mbd to as high as 81.5 mbd. Thus, the world was in surplus during the first 90 days of the year, during the very period that world oil prices leapt by $7 per barrel.
Furthermore, there is no relationship between the price of oil and the amount of oil being produced. Over the past several decades, oil production has increased slowly and predictably. Figure 1 shows that, since 1992, production has grown by approximately 15% Though not shown, world oil consumption has also grown gradually and predictably. Only if production had dropped significantly, or consumption risen steeply, should the world oil price have jumped up. Neither of these two changes has happened. How, then, should one explain the activity of the past dozen years, in which the oil price swung wildly up and down, regardless of rising production levels? Figure 1 shows the price gyrated wildly, first downward, then upward, then down again, and then up; today, the oil price is more than 50% above its 1992 level.
The key to the ability of the financiers behind the oil cartel to manipulate prices in the oil market, is the shift which occurred during the oil crises of 1974 and 1979, in which long-term contractsfrequently for 24 or 36 monthsat stable prices were replaced with the spot market and then the futures markets.
The oil spot market was created in 1969 by the Lazard/Rothschild-allied Philipp Brothers, then the world's largest metals trader. Philipp Brothers, largely in the person of their top trader Marc Rich, began by selling small quantities of Iranian crude oil to independent refiners. The oil shocks of 1973 and 1979, which were orchestrated by the financier oligarchy under the cover of the OPEC oil embargo and the fall of the Shah in Iran, resulted in a shift in oil pricing away from long-term contracts toward the Rotterdam-based spot market. By "spot" is meant, that one buys the oil at a market only 24-48 hours before one takes physical (spot) delivery, as opposed to buying it 12 or more months in advance. In effect, the spot market inserted a financial middleman into the oilpatch income stream in much the same way that deregulation would later do for electricity.
Today, the oil price is largely set in the futures markets. The two principal locales which dominate oil futures trading are the London-based International Petroleum Exchange (IPE), established in 1980, and the New York Mercantile Exchange (NYMEX), which is more than a century old, but also first started trading oil futures in 1983. Traders call futures contracts "paper oil": the contracts are a paper claim against oil, which is far in excess of the volume of oil produced and actually delivered at oil terminals on behalf of those contracts.
The traders transact a large volume of derivatives bets. Speculators purchase on the IPE and NYMEX exchanges, futures contracts; each single contract is a bet on 1,000 barrels of oil. More than 100 million of these oil derivatives contracts were traded on these exchanges in 2003, representing 100 billion barrels of oil. In a year 2000 study, EIR showed that on the IPE, for every 570 "paper barrels of oil"that is futures derivatives covering 570 barrelstraded each year, there was only one underlying physical barrel of oil. The 570 paper oil contracts pull the price of the underlying barrel of oil, manipulating the oil price. If the speculators bet longthat the price will risethe mountain of bets pulls up the underlying price.
But worse, there is a second layer of leverage. At the London IPE, the speculator can buy a futures contract on a margin of 3.8%. That is, were the speculator to buy a single futures contract, representing 1,000 barrels of oil at, say, an oil price of $40 per barrel, then the contract represents $40,000. However, the speculator pays only $1,520 for the premium of the contractor 3.8% of the $40,000which gives him control over the contract. Through an investment of $1,520, the speculator controls 1,000 barrels of oil. A small group of speculators, through leverage, control the world oil price.
A NYMEX document, "How the Exchange Works," boasts that it has nothing to do with oil production. "Yet the buying and selling on the Exchange occurs amid the winding streets of the oldest section of New York, with nary an oil well or copper mine in sight. In fact, many thousands of transactions conducted on the Exchange each day are accomplished without the participants ever seeing a gallon of heating oil."
As for London's (IPE), it has reported that its trade with Brent Crude oil contracts reached 375 million barrels in open-interest contracts on May 14, the highest level ever. This is about five times the total daily production of all sorts of oil worldwide. The daily turnover of Brent Crude future contracts at the IPE now approximates twice the global daily production of oil. But physical deliveries of Brent Crude, produced in 19 North Sea oil fields, are imploding. During the early 1990s, daily production of Brent Crude was about 700,000 barrels per day (bpd), but it fell to 570,000 bpd in 1999; 385,000 bpd in 2002, 327,000 bpd in 2003. According to the energy research firm Platts, it will sink further to 277,000 bpd this year. The outstanding amount of speculative Brent Crude futures on May 14 surpassed the daily physical production by a factor of 1,250.
In spite of the fact that Brent Crude now represents less than 0.4% of worldwide production, its "spot" price determines the price of 60% of global oil production.
But the IPE and the NYMEX, where nary a barrel of oil is to be seen, are the in-house tools of the House of Windsor Raw Materials Cartel, and its allies in the banking world.
Consider the IPE, which was created in 1980. Today, the IPE is run by a Knight of the British Empire and former Royal Dutch/Shell official, Sir Robert Reid, and has a board which includes Lord Fraser of Carmyllie, representatives of Goldman Sachs, Morgan Stanley, BNP Paribas, Credit Lyonnais, and French oil giant Total. In 2001, the Atlanta, Georgia-based Intercontinental Exchange purchased the IPE. The Intercontinental Exchange's board includes the retired CEO of Royal Dutch/Shell's trading arm Coral Energy, the Chicago Board of Trade's Richard Sandor (himself a former banker with Banque Indosuez and Drexel Burnham Lambert), and one Jean-Marc Forneri, a banker who from 1994-96, was a partner at Demachy Worms & Cie., where he ran the investment-banking activities of Group Worms. World War II U.S. Intelligence services identified Banque Worms as the central powerhouse of the Synarchist fascist movement in Vichy, France.
The biggest oil derivatives traders which run trading on the IPE include Barclays Capital, Bear Stearns International, J.P. Morgan Securities, Deutsche Futures London, BP Oil International, Shell International Trading and so forththe key components of the British oligarchy's world oil cartel.
The NYMEX's pedigree is the same as the IPE's.
It is lawful that the same Intercontinental Exchange which purchased and owns the IPE, was leading the speculation that drove up U.S. electricity prices during the manipulation of 2001-02, which featured other players such as Enron.
In an attempt to break the oil price spiral, this past week Saudia Arabia has committed to producing 2 million additional barrels of oil per day. However, as of June 2, speculators had taken out 77,000 oil futures at the NYMEX taking a "long" position; i.e., betting that the oil price would rise. Through such bets, they act to make the price go up, and cover their own bets. Because each contract represents 1,000 barrels, the "longs' " contracts constitute the equivalent of three-quarters of a billion barrels of oil, a far larger sumwhich the speculators would use to overwhelm the Saudi's production increase of 2 million barrels per day. This is part of the warfare now ongoing.
The Oil Cartel is employing two other tactics to push up the oil price. Figure 2 shows that the oil cartel has reduced U.S. oil refining capacity to below the level of 1980. The U.S. knew perfectly well that the demand for refined oil products, such as gasoline and jet fuel, would rise during the 1990s and the first decade of the 21st Century. It was criminal to reduce capacity, but reduced capacity pushes up the price. EIR has learned that during the past few years, the Saudis offered to invest in constructing new oil refining capacity in America, but the offer was rebuffed.
The June 1 Financial Times reports that because of restricted capacity, the largest U.S. oil refinery companiesValero, Premcor, Tesoro, and Ashlandare making more than $10 for each barrel of oil that they refine. It should be stressed that the oil majors make one-third of their revenues from refining and marketing.
The oil companies' have plunged into a predatory gobbling up of each other, which has also caused the oil price to rise. Figure 3 shows a striking relationship between oil prices and major oil company mergers. In August 1998, with oil hovering in the $12 a barrel range, British Petroleum bought Amoco, one of the top U.S oil companies, with large holdings of domestic oil and natural gas. In late November 1998, two more giant mergers were announced: Exxon bought Mobil, and France's Total bought Petrofina. These three mergers, along with the October 2000 takeover by Chevron of Texaco, significantly consolidated the oil cartel. The Seven Sisters have been reduced to five: Royal Dutch/Shell, BP (née British Petroleum), ExxonMobil, ChevronTexaco and Total (which also gobbled up Elf Aquataine). During this crisis, the stocks of major oil companies have jumped up.
The massive oil futures speculation, buttressed by the deliberate reduction in U.S. oil-refining capacity, and the long-term effect of merging of the oil companies, pushed the price of U.S. light crude oil for July delivery to a record closing price of $42.33 on the NYMEX June 2, before the price fell back somewhat. By this process, the wealthy oligarchical families that own the oil cartel, and related banking houses, have tightened their grip on world energy supplies, and realized enormous profits, some of which loot has been deployed to prop up the bankrupt world financial system.
This process has intersected and led the global inflationary process triggered by insane money-printing policies of Alan Greenspan's Federal Reserve Board, in an attempt to hold up the $400 trillion in bloated speculative financial aggregates with a "wall of money." This two processes feed a Weimar-style hyperinflationary shock wave that would rip apart the global economy.
It is precisely at this point that the onrushing global economic breakdown intertwines with the worsening strategic crisis. One threatened possibility is major oil supply disruptions due to terrorist attacks. Already Saudi Arabia, the world's largest oil producer at 8.5 mbd, has been the recipient of three terrorist attacks within the past six weeks, including a penetration of that country's security screen.
This directly threatens the world financial system. All major nations are vulnerable to an oil import cut-off. This is particularly true of the United States, as shown by examination of its physical import flows. Table 1 shows that between 1971-72 and 2004, the level of U.S. oil importsprincipally crude oil but also some other petroleum productshas tripled. To see the evolution of U.S. oil import dependency: In 1971-72, oil imports accounted for 29% of U.S. oil consumption; today, oil imports account for 61% of consumption.
However, over the last five years, for geopolitical reasons, U.S. oil imports have been shifted away from the Persian Gulf. The order of the nations from which the United States imported oil during the first quarter of 2004 was: 1. Canada (2.12 mbd); 2. Mexico (1.60 mbd); 3. Venezuela (1.54 mbd); and 4. Saudi Arabia (1.46 mbd). The alleged stranglehold that the "Arabs" have over U.S. oil supplies, does not exist.
Second, the United States has positioned itself so that, should the Synarchists behind Cheney blow up the Middle East, U.S. oil exposure is significant but much less than before. Table 2 shows that today, America receives less than one-fifth of its imported oil from the Persian Gulf, while by contrast, it gets more than half of its imports from four countries: Canada, Venezuela, Mexico in the Western Hemisphere, and Nigeria.
LaRouche judges that a powerful faction of financiers, knowing that the financial system is doomed and postponement of its crash can't continue, will take the initiative to trigger a crash now, unleashing a strategic chaos operation throughout Southwest Asia. Oil fields might be damaged or destroyed. LaRouche pointed to the build up of stored oil in the U.S. Strategic Petroleum Reserve (SPR), a series of Gulf Coast salt-dome caverns, which would be used to survive an oil cut-off (see page 6). This destabilization is showing its traces in Iraq, Saudi Arabia, Afghanistan, and Pakistan.
On June 3, the senior Democratic members of six committees of the House of Representatives sent an open letter to President George Bush, demanding his cooperation in getting information to hold a public House investigation of the Abu Ghraib torture scandal. They said: If the House Republican leadership continues to block such hearings, the Democrats were determined to carry out an investigation themselves.
Lyndon LaRouche immediately announced support for the House Democrats' move: "I demand that John Kerry support that complaint, openly. He must stop being wishy-washy. I challenge Kerry to have the guts to support these House Democrats."
LaRouche warned that the continued stonewalling by the Republican House leadership is a campaign issue for this Fall's general election. "If the Republicans continue to Stonewall on this investigation, the elimination of certain relevant Republicans in the coming election campaign, is going to be a big issue. This is Watergate stuff.
"No one is fit to run for Democratic nominee for President, unless he or she is willing to take leadership on this issue. This is a real, live issue, not a maybe-it-depends-on-how-you-interpret-it issue. We should not choose a new Presidential candidate until this is cleared up. The Republicans responsible for this, should be out of office! This should be a leading campaign issue for any candidate qualified to run for President."
The ranking Democrats who issued the open letter to President Bush sit on six House committees which should be carrying out oversight over the abuses at Abu Ghraib, and elsewhere. They reported that they each contacted the chairs of their committees, to request committee hearings and investigations. The Democratic leader, and Democratic Whip, and the Democratic Caucus are reported to have made the same request to the House Speaker.
The Democrats who signed the letter are: Henry A. Waxman, ranking minority member, Committee on Government Reform; David R. Obey, ranking minority member, Committee on Appropriations; Tom Lantos, ranking minority member, Committee on International Relations; John Conyers, Jr., ranking minority member, Committee on the Judiciary; Ike Skelton, ranking minority member, Committee on Armed Services; and Jane Harman, ranking minority member, Permanent Select Committee on Intelligence.
The Republicans who have obstructed the necessary investigation of the Abu Ghraib scandal are: House Speaker Dennis Hastert of Illinois, and Majority Leader Tom DeLay of Texas; Duncan Hunter of California, head of the Armed Services Committee; James Sensenbrenner of Wisconsin, head of the Judiciary Committee; Porter Goss of Florida, head of the Intelligence Committee; Bill Young of Florida, head of the Appropriations Committee; and Henry Hyde of Illinois, head of the International Relations Committee.
If these Republicans cannot be forced politically, to stop the coverup, they should be out of office this year.
The letter from the six Democratic Committee ranking members is tough and to the point. In summary, they report:
* It is a "dereliction of Congress's oversight responsibility" not to have a formal public investigation.
* "Members cannot adequately assess the deteriorating situation in Iraq or the prospects for the future of our endeavors there without a thorough understanding of the nature, extent, and ramifications of the prisoner abuse."
* "In order to reestablish U.S. credibility in the eyes of the world, Congress must conduct a full and transparent investigation.... A thorough and open investigation is also critical for the emergence of a stable and secure Iraq."
They conclude:
"To address these needs, we intend to investigate the prison abuses at Abu Ghraib and the allegations of prison abuses at other locations in Iraq and in Afghanistan and Guantanamo Bay.
"While we would prefer to participate in committee investigations with our respective chairs, we cannot allow the refusal of the Republican leadership and committee chairs to pursue these matters to obstruct Congress' access to essential information."
After listing 35 categories of documents required, the Congressmen ask that they be delivered on or before June 17, 2004.
The ball is now in the President's courtbut not only his. The challenge has also been put before the Democratic Party, and its would-be standard bearer. Presumptive Democratic nominee John Kerry is now on the spot to support the House Democrats' demand.
LaRouche, who is the only Democratic Presidential candidate who has so far shown himself qualified to end the war and deal with the depression, sends a challenge to Senator Kerry. Does Kerry have the courage guts to support the House Democrats, without hiding behind any slippery spin, on this "Watergate-like" issue?
*Paid for by LaRouche in 2004.
This morning's press brought me stunning news: the death of U.S. President Ronald Reagan. Although we actually met on but one occasion, at Concord, New Hampshire, for a candidates' night, in January 1980, that meeting between us changed world history in ironical ways which are reverberating still today.
The continuing significance of that encounter is that it led to meetings with the incoming Reagan Presidential team, in Washington, D.C., later that year, and new meetings with key representatives of the new Presidency over the interval into 1984. The most important product of those meetings was my 1982-83 role in conducting back-channel talks with the Soviet government, on behalf of that Presidency. The leading topic of those talks, coordinated through the National Security Council, was my proposal for what President Reagan was to name his "Strategic Defense Initiative" (SDI). That proposal changed the world.
In reflection on that and related experience, over the following years, I was often bemused in reflecting on the paradoxical features of that relationship to the President during that period. In part, the affirmative aspects of the relationship were rooted in our sharing the experience of our generation, despite the decade's difference in our age: the common experience of President Franklin Roosevelt's leadership of the U.S. economic recovery and the defeat of fascism. In all my dealings with the Reagan Administration during that time, this area of agreement was clearly, repeatedly demonstrated, whereas, on economic policy otherwise, such as the subject of Professor Milton Friedman, we were almost at opposite poles.
One point about those matters needs to be cleared up; and it is my special, personal obligation to do so. While it is true that Soviet General Secretaries Andropov's and Gorbachev's repeatedly hysterical rejection of President Reagan's offer of March 23, 1983, and not military threats from the U.S.A. and its allies, led to the fall of the Soviet system six years later, it was the folly of the Soviet government, not threats by the administration of President Reagan, which led to the end of the Soviet system in the way that occurred. On March 23, 1983, the President had made a public offer, which he renewed later, to find a way to escape the system of "revenge weapons." It was the Soviet rejection of the President's offer which brought down the Soviet economy and the break-up of the Soviet Union. Had the President's offer been accepted then, during the years which followed, the history of the world would have made a better turn than it did then, better for both the U.S.A. and Russia, a better way toward a better world today.
Had we reacted to the break-up of the Comecon/Warsaw Pact bloc as I proposed publicly in October 1988, the worst of the miseries experienced during the 1989-2004 interval to date, on all sides, would have been avoided. Those 1989-2004 failures of U.S. and European policies on this latter account, do not detract from the indelible achievement of President Reagan's most stunning intervention in history, as first announced on March 23, 1983. Such is his enduring personal landmark in all truthful future accounts of U.S.A. and world history. Ironically, the U.S. Democratic Party's leadership never understood any of this, to the present day; that makes it all the more important that President Reagan's achievement on this account be commonly acknowledged by his survivors, Republican, Democratic, and others, today.
Such is the nature of the institution of the U.S. Presidency. That is not past history. It is a lesson in statecraft which the new generations of this world must still learn today.
Links to articles from Executive Intelligence Review*.LaRouche: Bankrupt Speculators With $25 Per Barrel Oil
by Richard Freeman and John Hoefle
In a declaration of war against the speculators who had pushed the price of crude oil above $42 a barrel, and are launching it towards $50-60, 2004 Presidential candidate Lyndon LaRouche called on May 28 for the price of oil to be set at a target price of $25-26 per barrel, by nation-to-nation contracts, in order to bankrupt and take away the power of the speculators, and restore order to the oil market.
LaRouche in Abu Dhabi:
The Middle East as A Strategic Crossroad
by Lyndon H. LaRouche, Jr.
May 26, 2002
The world has come to a crossroads in modern history. If the world were to continue along the pathway currently chosen by my government and some others, civilization will be plunged, for as long as a generation or more, into a global dark age comparable to that which struck Europe about seven-hundred-fifty years ago. We must not pretend that danger does not exist; but, also, we must commit ourselves to the hopeful alternative which wise governments will prefer. Therefore, I shall speak frankly, but also optimistically, of a second crossroads: the Middle East.
LaRouche: Bring Oil Inflation Under Control
This memorandum was originally issued by Lyndon H. LaRouche, Jr. on Sept. 19, 2000, embodying the same proposed policy-change LaRouche is proposing in the current oil hyperinflation crisis.
"The following statement constitutes a preliminary statement of policy: 'On the Subject of Emergency Action by Governments to Bring the Present Petroleum-Price Inflation Under Control.'"
Saudi Paper: Land-Bridge Associated with LaRouche
The Saudi weekly magazine Al-Jazira, published by Saudi Al- Jazira Publishing House, which produces Al-Jazira daily, one of that nation's leading publications, published a beautiful and lengthy report by Dr. Atef Mutamid Abdulhamid, professor of Geography at the University of Cairo, on the history and revival of the Silk Road. The article was published in the May 25-June 1 issue, and titled, 'Life Returns to the Old Artery: The New Silk Road, a Cultural and Economic Bond.'
Brazil-China Relations A Cooperative 'Paradigm'
by Gretchen Small
'The time has come to consolidate the union between [Brazil and China]. This alliance will serve as a paradigm for cooperation between nations.Two giants without divergences are free to think of the future and grow in diverse areas,' Brazilian President Lula da Silva stated in closing the seminar on 'Brazil-China: Trade and Investments. Perspectives for the 21st Century,' held in Beijing on May 25, in which more than 700 Brazilian and Chinese businessmen participated.
Italian Senators Demand Lift 9/11 Secrecy
by Paolo Raimondi
On May 19, Italian Senator Oskar Peterlini and 16 other Senators signed a Parliamentary Inquiry (Interrogazione Parlamentare) addressed to Prime Minister Silvio Berlusconi, demanding that he inform the Parliament and the Italian nation on the content of the Bush-Cheney memorandum containing the 'evidence' on who committed the 9/11 terrorist operation and why, which was used to convince nations such as Italy to participate in the war in Iraq.
In Bremer's Iraq, Democracy Is Hatched In A Coup
by Muriel Mirak-Weissbach
If, as President George W. Bush has always maintained, the introduction of democracy in post-Saddam Iraq is the harbinger of sweeping democratic reforms throughout the region, then, the message sent out to leaders of neighboring countries is loud and clear: Beware! You may be the next to go!
Transcaucasus: Keeping 'the Gun On the Wall'
by Roman Bessonov
...The playwright Anton Chekhov taught that if a gun is hanging on the wall in the first act of a play, by the last act it will have been fired.
'Southwest Asia is to be recognized as bounded by four principal states, whose appropriate cooperation is indispensable for creating a zone of stability among the nations and peoples of the region as a whole...."
Lyndon LaRouche
How London, Wall Street Backed Japan's War Against China and Sun Yat Sen
by Mike Billington
During the same period that Mussolini and his Fascists were brought to power in Italythe first of a series of synarchist regimes which took power across much of Europe in the 1920s and 30sthe British imperial architects of this process were also at work in Asia. The bankers controlling the Versailles Conference of 1919, rather than establishing peace after World War I, imposed a regime of financial looting across Europe and Asia, which rapidly created conditions conducive to the emergence of Bonapartist tyrannies backed by those same bankers, and thus set in motion the horrors of 20th Century fascism and the conflicts which became World War II.
Administration Coming Unstuck, Cheney's in Worst Shape of All
by EIR Staff
It's going to be a long, hot Summer for the band of neo-cons that control the Bush Administrationabove all, the Vice President, drowning in scandals which, to a great extent, trace their origins to expose´s published, and documentation provided, by this news service and other publications connected to Lyndon LaRouche.
Justice Dept. Convicts Padilla in the Press
By Edward Spannaus
Since he was whisked out of the Federal court system into a military prison two years ago, Jose´ Padillaa U.S. citizen arrested on U.S. soilhas languished without any prospect of due process, much less a trial. Until recently, he was held incommunicado, with no access to his lawyer, and he still has no access to the courts.
War Crime Prosecutions: What White House Fears
by Edward Spannaus
When White House Counsel Alberto Gonzales warned President Bush in a Jan. 25, 2002 memo, that the President and other members of his Administration might be liable to prosecution for war crimes as a consequence of U.S. treatment of detainees in Afghanistan, he had good reason to do so.
Beware of 'Credible Intelligence'
By Ray McGovern
McGovern was a CIA analyst for 27 years under Administrations from John F. Kennedy to George H. W. Bush. He is a member of the Steering Group of Veteran Intelligence Professionals for Sanity. This article was initially posted on TomPaine.com.
Kerry Is a Loser Unless Dems Open Convention
by Nancy Spannaus
Speaking to the Newark Star Ledger on June 3, Democratic Presidential pre-candidate Lyndon LaRouche pressed the theme which he has been striking in radio ads and appearances over the last days: either the Democratic Party opens up the Boston Convention for discussion of the real policy issues facing the nation, or Senator John Kerry will lead the party headlong into defeat.
'With Our Constitution, We As A Nation Have a Special Mission'
Presidential candidate Lyndon LaRouche spoke to supporters in Teaneck, New Jersey on May 22, 2004. After his opening remarks, LaRouche and his constituents continued their dialogue for another hour and a half.
"So, we'll warm things up a bit. The issues that face the United States today, are three: First of all, we have a terrible financial-monetary crisis. The monetary-financial system is in the process of collapsing. It's only a matter of how soon. It could collapse tomorrow; it could collapse next month, could collapse sometime in the Summertime. But, it is inevitably on the road to a collapse far worse than 1929-1933...."
U.S. Economic/Financial News
The Fed's slow-motion rate-hike plan could backfire if the bond market gets nervous. Desperate to avoid a replay of 1994"the worst year of losses ever," for bond investors, when hedge funds went belly-up, and Orange County was forced into bankruptcy by a sharp increase the price of interest-rate derivativesthe Fed is making it clear that it will raise interest rates gradually, but that plan could backfire, says James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "If I am a bondholder, I want a massively aggressive, inflation-fighting Fed," says Paulsen. "The last thing I want is a Fed that is timid, touchy-feely, slow, and communicative. The Fed has said that we're going to be slow in our response so we don't scare anybody. but I think that approach is exactly what is going to scare everybody."
When bondholders are afraid, they sell bonds, Morgenson says, and that pushes up interest rates no matter what the Fed says or does.
"It seems as though Mr. Greenspan thinks there is nothing printing money won't solve," said Northern Trust director of economic research Paul Kasriel. "If printing money created real wealth, then Zimbabwe would be one of the richest countries on the face of the earth."
This title of a column by Daniel Akst in the New York Times May 30, pretty much says it all. EIR could quibble with the "ahead" part, but we otherwise couldn't agree more.
Two "prestigious" institutions released opposite reports today on the jobs market. Challenger, Gray & Christmas, which monitors job cuts nationally, reported that "job cuts planned by U.S. employers rose for the second straight month in May," with a total of 73,000 jobs to be eliminated, an increase of 1.6% over April, and up 6.9% from last May.
At the same time, the Institute for Supply Management (ISM) announced that its index for national factory activity for May rose slightly, despite expectations of a decline, "as increased demand prompted more factories to hire than at any time in 31 years," according to Bloomberg, June 1.
While the Bush White House pays lip service to deficit reduction, promising to cut the budget in half in five years, the budget put together by the loyalist leadership in the House "is a document that makes ordinary Washington budgetary 'smoke and mirrors' look good," David Broder wrote in the Washington Post May 30. The bill, strong-armed by Speaker Dennis Hastert and Majority Leader Tom DeLay, "uses real numbers only for the first year, and then plugs in arbitrary figures for the next four yearsfigures that conveniently show the deficit shrinking." The bill was introduced at 6:20 am on May 19, cleared by the Rules Committee at 7:15, and taken up by the House at 11 am, after a short recess which was deemed to have satisfied the requirement that all legislation lay over a day so that members can examine it.
In a sign of the mounting economic desperation in the U.S. workforce, striking members of the International Union of Electrical Workers/Communications Workers of America Local 907 are battling hired security guards outside a Visteon Corp. auto parts plant in Bedford, Ind. The union members are trying desperately to keep out "replacement workers," i.e., scabs, being bussed in by the company, an AP wire reported June 2. Visteon Corp. announced in April it would end production of fuel delivery modules, eliminating 600 of the 1,150 jobs at the plant.
Twelve strikers sought hospital treatment for injuries suffered on May 30 in confrontations with the hired guards. Two cars were flipped June 1, as strikers tried to stop four buses carrying replacement workers. State and city police in riot gear were at the plant, pushing protesting workers aside to clear the way for the buses. Bedford is 25 miles south of Bloomington.
Americans spent $9.5 billion at movie theaters in 2003, out of a worldwide box office gross of $20.4 billion, according to the Motion Picture Association. The average admission price in the U.S. rose from $2.69 in 1980, to $6.03 in 2003, a year in which 1.6 billion tickets were reportedly sold. The number of movie screens in the U.S. rose from 17,590 in 1980 to 35,786 in 2003, even though the number of theaters declined due to the growth of multi-screen theaters. The average indoor theater now has six screens. There were 593 theatrical films produced in 2003, of which 473 were released. The average new-release film earned $20.7 million in theaters in 2003, while the average film released by the Motion Picture Association (the larger studios) pulled in $41.6 million.
Movies continue to pull in the cash even after they leave the theater, thanks to the home rental and purchase market. DVDs are rapidly replacing VCRs; there were 29,000 film and music video titles on the market in 2003, and 33.7 million DVD players were sold to watch them. Americans spent an average of $126.86 on home video rentals and purchases in 2003, up from $95.17 in 1999.
World Economic News
British household debt grew by 11.1 billion pounds in April, taking total outstanding debt to 983 billion pounds. The debt should hit the 1 trillion pounds ($1.835 trillion) level later this month, according to the Bank of England.
A trillion pounds debt is equal to Britain's annual output, or the external debt of sub-Saharan Africa, Ibero-America, and Asia combined, noted the Financial Times June 2.
Household debt, which has doubled in 10 years in Britain, mostly under the New Labour operation, is at a record level in proportion to income. It is now at 120% of disposable income, up from 100% during the 1980s "boom." In France, household debt is 58.7% of disposable income.
The key "asset" on which this British debt rests, is housingan enormous financial bubble. Just over 50% of British families have "unsecured" debt of 6,500 pounds ($12,000) and two-fifths of families have "secured" debt 70,000 pounds ($130,000).
A leading City of London financial analyst told EIR June 2 that "every lever will be used to postpone the big crisis until after the U.S. elections. However, this might well not work," the analyst said. "You have various factors which could throw the whole calculation off course."
"You have the Middle East, which is an enormous mess," the analyst said. There is the housing bubble; the carry trade could unwind. And there is one other factor which has to be taken into account: If the market players knew that after November, the situation will get a lot worse, they could start acting now in a way that would upset the whole system. And that could turn off all the calculations."
The analyst noted that right now, "people are concentrating their attention on the oil situation. But it is not the only thing that could trigger things to fall apart."
United States News Digest
In an interview with WAPT-TV in Jackson, Miss., Sen. Trent Lott (R-Miss), asked about the prisoner abuse at Iraq's Abu Ghraib prison, said that, "some of the prisoners should not have been prisoners ... [they] probably should have been killed," the Washington Post reported June 3. Lott went further to say, "Hey, nothing wrong with holding a dog up there, unless the dog ate him."
In response to a question about the death of a prisoner apparently after a beating, commented that "this is not Sunday school; this is interrogation; this is rough stuff." This is not the first time that Lott's remarks have gotten him in trouble. Lott was forced to step down as Senate Majority Leader after making what many viewed as racist comments in December 2002. Lott said that the country would have been better off had former Sen. Strom Thurmond, who ran as a segregationist, had won his race for the Presidency in 1948.
Syndicated columnist Robert Novak reported, in his June 3 column in the Washington Post, that conservative Republican Congressmen want Bush to stop talking about his programs on education and on prescription drugs, because it just angers their constituents. When Bush meet with GOP members of Congress in May, he got a very cold response on these issues. While they were home during the recent recess, many Congressmen were asked by their constituents if they, the voters, wouldn't be better off with John Kerry as President, and a Republican majority in Congress opposing him.
If Bush is defeated, Novak forecasts, there will be an enormous internal explosion within the GOP between those diverse forces which are now temporarily held together, by the effort to get Bush reelected. And many Republicans fear that if Bush loses, they may also lose control of the Senate, and perhaps even the House, this fall.
The narrow victory in South Dakota by Democrat Stephanie Herseth, in the special election to fill the House seat vacated by Bill Janklow, who resigned after being convicted and jailed for a fatal automobile-motorcycle accident, is raising hopes that Democrats could retake the majority in the House of Representatives this fall. The Republicans had sent in their big guns, including Vice President Dick Cheney, First Lady Laura Bush, and House Speaker Dennis Hastert, to campaign for the Republican candidate. The Democrats would have to gain a net 11-12 seats to control the House.
Lyndon LaRouche noted that, whether or not the Democrats are able to accomplish this, and to capitalize on Bush's weaknesses, depends on what happens at the Democratic Convention in July. The only way to revitalize the Party, is for Kerry's advisers and the DNC to permit an open convention, in which LaRouche is a full participant, and in which there is a full policy debate.
Congressional Republicans are considering not passing a budget at all this year. Some in the GOP would rather not deal with a budget that would force them to specify how the tax cuts that President Bush wants to make permanent, would be paid for. There are four Republican hold-outs, joined by most Democrats, who are demanding rules to force Congress to include in the budget, either spending cuts or tax increases in other areas, to offset the cost of any new tax cuts.
An editorial in the New York Times June 3, entitled "Fiscal Shenanigans," says that the voters have the right to know what Federal programs will be sacrificed to pay for Bush's tax cuts. The article, which cites a Tax Policy Center report, also says that the voters have a right to see the whole picture, including the downside. Chances are they won't like the view.
According to the editorial, the programs that would be cut, to offset the tax cut, are Head Start and college financial aid, mainly Pell Grants. Other possible cuts include veterans' medical care, which could be cut by $1.5 billion.
A study put by the Center on Budget and Policy Priorities shows that the bottom four-fifths of households (with income below about $76,400) would lose more than they gain. The study shows that it is the top 20% of households that would reap the benefit of the tax cuts.
The Army announced June 2, that, as a matter of policy, that all soldiers in units slated to deploy to Iraq or Afghanistan will be required to remain in the Army beginning 90 days before their units deploy, until 90 days after their units return. No soldiers who would be otherwise scheduled to separate or retire will be allowed to leave the Army during that time. The Army said in a statement, as did Lt. Gen. Buster Hagenbeck, the Army's director of personnel, that such a policy is needed to maintain the cohesiveness of deploying units. An Army division typically sees about 4,000 soldiers rotate through, during an 18-month period, about one-third of its strength.
While this so-called stop-loss policy has been in use selectively since 9/11, this is the first time it's been made Army-wide policy, and it comes as the Army is struggling to maintain troop levels in Iraq and Afghanistan. The Army is also activating members of the individual ready reserve, as well, which is made up of those who have left the service and no longer participate in any kind of training. Critics of these actions call it tantamount to a draft, and proof that the Army is too small carry the load that's being put on it. Loren Thompson, of the Lexington Institute, told the New York Times, "The Army is running out of creative ideas for coping with the level of commitment that Iraq requires. It's clear there was a fundamental miscalculation about how protracted and how intense the ground commitment in Iraq would be."
Former Army captain Andrew Exum, in an op-ed published in the Times June 3, blasted the new policy, writing that "Secretary of Defense Donald Rumsfeld continues to claim that the military, as now structured, can meet the needs of the wars in Iraq and Afghanistan. He is simply wrong, as the Pentagon's actions make clear."
Senate Appropriations Committee chairman Ted Stevens (R-Alaska) slammed the door shut on the Bush Administration's desire for "complete flexibility" on the $25 billion in supplemental money it is asking for the wars in Iraq and Afghanistan. The original request, sent up on May 12, asked for discretionary authority for the Pentagon to spend that $25 billion as it sees fitalthough it says that the money "may" be spent on various items including operations and maintenance expenses incurred by the military services. During a June 2 hearing of the Senate Defense Appropriations subcommittee, Stevens expressed the fear that the Democrats would look at the request and label it a "blank check." He told the Bush Administration witnesses that "I don't like the word 'may.' I'm going to change it to 'shall' use these funds for the designated purposes...." to which Sen. Robert Byrd (D-WVa) expressed enthusiastic support. Lawrence Lanzilotta, the Pentagon's acting comptroller, when pressed by both Stevens and Byrd, expressed no opposition to the change in wording.
Within hours of Stevens' rewording of the request, the Senate unanimously attached authorization language to the fiscal year 2005 defense authorization bill designating how the $25 billion is to be spent.
Perhaps because of the embarrassing division within the Bush Administration over Attorney General John Ashcroft's warning last week that a terrorist attack on the U.S. was highly likely before the November elections, Vice President Dick Cheney did not repeat his own prediction to that effect, when he spoke in Kansas City, Mo., to promote the Patriot Act, on June 1.
Cheney boasted that 9/11 created "an entirely new era," and claimed the U.S. had gone on the offense and overthrown regimes in Afghanistan and Iraq. And, showing his beast-man face, Cheney declared: "This nation will never go back to the false comforts of the world before 9/11."
The primary theme of his speech was to defend the Patriot Act and to demand its renewal, as well as throwing in some attacks against John Kerry for his supposed opposition to the act, after having voted for it.
Cheney bragged that "we have dismantled terrorist cells in Oregon, New York, North Carolina, and Virginia"although, as EIR (March 26) has shown, none of these cases involved any acts of terrorism against the United States. Cheney also blustered that, "we have charged over 300 people in terrorism-related investigations," and that "more than half of those charged have been convicted or pled guilty." But the truth is that most of these "terrorism-related" cases involved petty, non-terrorism offenses," with the average sentence being 14 days.
"Every morning in our briefings, the President and I are reminded that the terrorists are still with us, still active, still out there, the threat is still very real," Cheney ranted. "The Patriot Act has been used effectively and responsibly. And it must be renewed in full."
Perhaps knowing the extent of the bipartisan opposition, Cheney did not even mention the various "Patriot II" provisions that are quietly making their way through Congress at this moment.
Moneybags and drug-promoter George Soros told the June 1 USA Today: "I don't have a vendetta [against President Bush]. He's a figurehead and was elected as a public face. He fills a role. It's the forces behind him that I consider to be sinister," including Vice President Cheney and Defense Secretary Donald Rumsfeld.
But, Soros admits that his spending has become a liability. By rousing conservative GOP donors to the challenge, he admits: "I probably raised more money for Bush than against him." He didn't comment on how his corruption of the Kerry campaign contributes to a Bush reelection.
Soros further discloses that in Summer 2003, he invited some leaders of several liberal groups to his Long Island estate to outline plans for the Presidential election. Since then he has given or pledged $10 million to America Coming Together (ACT), $2.6 million to the MoveOn.0rg Voter Fund, and $3 million to the Center for American Progress (CAP), a think tank founded by former Clinton Chief of Staff John Podesta. All of which work against Bush, but not directly with the Democratic Party.
Ibero-American News Digest
Argentine Economics Minister Roberto Lavagna presented the government's final offer for restructuring $81 billion worth of defaulted bonds, at a June 1 press conference in Buenos Aires. However, the offer was not to the liking of the vulture funds, which immediately demanded more blood. Hans Humes, president of the Global Committee of Argentine Bondholders, which speaks for the vulture funds, and represents about a third of the total bondholders, said they were "extremely disappointed" with the Lavagna presentation, and announced they would lobby the Group of Seven nations to reject it. Whether the vultures will prevail, remains to be seen. The IMF and the Group of 7 nations have yet to respond. The lawyer for the Italian bondholders, Mauro Sandri, called the offer "a good sign," although he said the fine print had yet to be studied.
The government maintained its initial proposal that 75% of the nominal value of the debt is to be written off. The government offers to exchange the remaining 25%, for three different types of new 30-40-year bonds. Two concessions to the creditors were made:
(1) The government agreed to include the interest accumulated on the $81 billion between the December 2001 default and December 2003, as part of the total debt to be paid off over the next 30-40 years (i.e., to capitalize it), a sum estimated at $18.2 billion. Initially, the government had said that the interest would be written off, too. Should 70% or more of the bondholders accept the government's offer, the government will also capitalize the interest accumulated from December 2003 until the end of June 2004, bringing the total interest capitalized up to around $22.5 billion.
(2) All the bonds offered will include a GNP-escalator clause, under which bondholders will be paid more, when and if Argentina's GNP increases by more than 3% a year.
The Argentine daily Clarin, which defended the government decision to make some concessions, reported on June 2 that most representative forces in the country agree that they would back the government's negotiation strategy, in order to not weaken the government's domestic front. The only exceptions were Ricardo Lopez Murphya Mont Pelerinite banker and former Presidential candidate who is a real killer, and the head of Elisa Carrio's ARI party's Congressional delegation, Eduardo Macaluse, who issued a communique denouncing the government for "capitulating" to foreign creditors.
EIR suggests that those charging "capitulation" be told: "You don't like the deal? Blame Brazilian President Lula da Silva, for not supporting Argentine President Kirchner." Whatever the particulars of the Argentine offerwhich, in any event, will be blown apart by the coming global crash, along with everything elsethe Kirchner government has stuck to its guns on the principle that the people and the nation are a higher priority than the debt, despite being internationally isolated, outside of the aggressive support for the cause of justice for Argentina, provided by U.S. Presidential candidate Lyndon LaRouche and his international movement.
The Kirchner government's selection of the highly respected Argentine company INVAP to oversee the completion of the Atucha II nuclear plant, has generated excitement among the country's scientific community.
Invap, a company owned by the province of Rio Negro in the Patagonia, has a history of extraordinary scientific achievements, starting with its construction in 1982 of the first reactor designed and built in the country, and continuing with its building and export of research reactors to several countries, the building of multipurpose reactors for production of radioisotopes for basic and applied research, and the development of technology for uranium enrichment. It is recognized internationally as one of the leading companies in the production of research reactors and radioisotopes, and has made crucial contributions in the fields of medicinein cancer treatment in particularand is the only Argentine company recognized by NASA as qualified to participate in space-technology projects.
Under contract to the National Atomic Energy Commission (CNEA), Invap began the CAREM project to design small (under 300 MW), modular, commercial nuclear-power plants, and produce them for export to developing nations. It is currently trying to secure financing for the construction of the first prototype, that would allow it to export several of these abroad. This type of reactor would provide developing nations an opportunity to employ nuclear energy, at a lower cost.
The estimated time frame for the completion of Atucha II is 52 months, during which time 5,500 high-skill jobs are expected to be generated; work at the Sierra Pintada uranium mine in Mendoza province, and the Cerro Solo uranium mine in Chubut province, will also be restarted.
The Lula government achieved another record primary government surplusmoney extracted from the economy to pay debtin April, totalling over US$3.8 billion in one month. Finance Minister Antonio Palocci, speaking to investors in Japan on May 28, however, worried that politicians do not realize that this level of "fiscal adjustment" will have to continue for another 10-12 years.
Primary budget surplus (PBS)total government revenues minus all expenditures except debt paymentsis the principal IMF conditionality ensuring Brazil places debt payment before all else. In April, the public sectorFederal, state, and municipal governments, plus the state-sector companiesran a PBS of 11.91 billion reals, the highest monthly amount since such calculations began in 1991, surpassing March's record R$10.3 billion.
As Folha de Sao Paulo explained to its readers on May 28: "Despite being a good fiscal indicator, and news to be celebrated by the financial market, the record primary surplus... announced today, contributed to keeping the economy stagnant.... [T]he money collected in taxes which was saved for the payment of interest, is not being invested in public works or social projects, which could help reactivate the economy or generate employment."
Brazil's public debt has grown steadily this year, despite the government having paid 8.08% of GNPover US$13.7 billionin interest payments in the first four months of the year. Central Bank officials warn that the 5% further devaluation of the real in the month of May, will increase the debt even further.
Although to EIR's knowledge there has been no foreign coverage, outside of this news service's publications, of the discussion of FDR-style economic recovery policies, now taking place in Brazil (see last week's InDepth), the City of London is clearly getting nervous that Brazil could decide to change its current, suicidal course. Media attacks are raining down on the Lula government, led off by a June 1 warning by the Financial Times, that Brazil must "push ahead" on economic reforms, because "signs of backsliding are likely to be punished."
The government faces opposition to more economic reforms, but it must prevail, the FT wrote. "Defeats would be costly, not just financially, but to the government's wider credibility.... The external environment is becoming harsher ... [which] merely underlines the necessity of having a fiscally disciplined, reforming government. Times remain hard. They will continue to do so. The government must, accordingly, persevere."
Business Week chimed in, with a piece in its June 7 edition, lying that the financial turmoil which hit Brazil in April and May, was all a result of Lula's failure to push through IMF reforms. Two government reforms were defeated last month in Congress; should more defeats come, it "would be nothing short of a fiscal disaster." Business Week names three reforms which the financiers view as "must do": Congress cannot raise the minimum wage above the miserable R$260 a month announced by the government; the government cannot yield to pressure from the unions and its own party to raise income tax exemptions by more than a minimal amount; and the Supreme Court must not rule the taxes imposed on pensions last year, unconstitutional.
The civil conflict in Venezuela, a nation which supplies some 15% of U.S. oil, entered a new phase, with the conclusion of the so-called "repair" of the petitioning for a recall referendum on whether President Hugo "I Speak for God" Chavez should finish his term. Forces on both sides are preparing for civil war, should the referendum option stall.
The Chavez-dominated Venezuelan Electoral Council was forced to announce June 4 that more than 2.4 million signatures favoring a recall referendum against Chavez were verified, and that the referendum will be held, probably on Aug. 8. If the referendum is held before Aug. 19, and Chavez loses, new elections will be called. If the referendum is held after Aug. 19, half-way through Chavez's term, were Chavez's opponents to win the referendum, no new elections would be called, and Vice President Jose Vicente Rangel would finish out Chavez's term. For Chavez to lose, more voters would have to vote him out, than the 3.76 million who re-elected him to a six-year term in 2000.
The announcement by the Electoral Council came after hours of violence from pro-Chavez thugs, who beat up the former head of the opposition AD party, sending him to the hospital with a concussion and a blood clot in his brain; crashed a truck into an opposition television station, shot up the offices of El Nacional newspaper, burned cars and buses in central Caracas, and attacked the offices of Caracas mayor and opposition figure Alfredo Pena with automatic weapons.
While there is some debate over whether Chavez could win the referendum, there is little question that he will not go easily. Chavez gave a televised speech hours after the figures were released, to announce: "I accept the challenge. We're ready for the Presidential referendum. The battle has just begun. The game starts now." Chavez said he was certain to win the referendum, and added that he hoped the past weekend's show of democracy would deter the U.S. from any attempt to overthrow him.
It still remains unclear whether Chavez will actually permit the referendum to go forward at all. The June 4 Financial Times warned that a Chavista grouping within the military, including Army battalion commanders, "is virulently opposed to the idea of a referendum.... 'This group is willing to effectively kick over the table to ensure there is no referendum,'" one Venezuelan army colonel is quoted. Even if the referendum proceeds, the disunited oppositionranging from Synarchist-backed right-wing forces, to naive nationalists, old guard corrupt politicians, and everything in-betweenhas no competent leaders able to pick up the reins of power, nor a program for rebuilding the nation, whose economic crisislike the rest of the continentlies at the root of the problem.
Wall Street's favored vehicle to break up Mexico's remaining institutions before the 2006 election, Presidential hopeful Jorge Castaneda, declared in late May that his opponent, Andres Manuel Lopez Obrador, had to be defeated, "to keep him from continuing to offer a populist platform." Castaneda specified: "I think he must be beaten, by all means fair or foul, by all means available."
To Castaneda, "populist" means opposing Wall Street's economic "reforms." Lopez Obrador is the Mayor of Mexico City, and a leader of the leftist PRD party. Because he talks a good talk (just as Lula da Silva did, before he won the election), he currently leads in polls for a Presidential election that is still two years away.
Castaneda has every right to oppose his opponent's "populist platform," but to speak of eliminating an opponent with "whatever it takes," opens the door to anything, including assassination, Proceso magazine responded May 27. We must ensure that political confrontations in Mexico do not again lead to bloodshed, as occurred a decade ago with the assassinations of Luis Donaldo Colosio and Jose Francisco Ruiz Massieu, Proceso warned.
Western European News Digest
In an interview with European CNN on May 31, Gen. Anthony Zinni said, "I am a Republican, however, if those civilians in the Pentagon who are [responsible for the Iraq debacle] don't resign, I am not going to vote for U.S. President George W. Bush."
There is also a background article in the Frankfurter Allgemeine Zeitung under the headline: "Nobody had a clue. How the only superpower of the world won the Iraq warbut had no idea for the post-war era." It focusses on Zinni's latest book, Battle Ready, written together with novelist Tom Clancy. Zinni describes military planning maneuvers which were conducted before the Iraq war, saying that those maneuvers, however, had no planning for the aftermath of the war. "There was no interest in Washington to think about that question further. Post-Saddam Iraq was too far away, so no [department] had interest in this question.
On June 1, the Italian daily Il Campanile," of the Alleanza Popolare party, reported the statement of LaRouche associate Paolo Raimondi on Lyndon LaRouche's request to the U.S. Congress that it call Attorney General John Ashcroft to testify on his warnings of imminent biochemical terrorist acts against America.
A second statement, related to the speculative operations behind the dramatic increase of oil prices, included LaRouche's proposal to fix the price at $25 dollars a barrel, has been reported by the Rome-based press agency Osservatore Politico Internazionale, and by the internet press agency Iniziativa Meridionale, which covers mainly economic developments related to the South of Italy.
Agenparl, the press agency of the Italian Parliament, state, and government institutions, carried a release on May 31 from LaRouche associate Paolo Raimondi, which detailed doubts about U.S. Attorney General John Ashcroft's remarks about terrorist "warnings," and quoted Lyndon LaRouche's call to the U.S. Congress to call Ashcroft to testify on his knowledge about his warnings of imminent biochemical terrorist attacks against the United States. The note also underlined the importance for Italy to publicly clarify the content of the 9/11 memorandum sent by President Bush to Rome.
Circulation of the Agenparl newsletter is intersecting a big debate in Italy over security questions, in view of the visit of President Bush to Rome on June 6 for the 60th anniversary of the liberation of Rome from Nazi fascism.
A delegation from Germany's Free Democrat Party (FPD), recently returned from a trip to the United States, where they met with members of the U.S. Administration, Congress, and think tanks, and came away with a "rather mixed impression," as EIW learned from discussions with some in the delegation.
On the one hand, mounting international pressure and domestic criticism have forced the Bush Administration to "rediscover the existence of the United Nations," but the resolution they have presented there, reflects both disinterest and lack of concepts, on the American side.
"There is an incredible degree of disorientation, as far as the situation and the future of Iraq and the entire region are concerned," one of the FDP politicians said. "That this is the case with the Administration, is not a surprise to us, but that the critics lack ideas as well, is a real shock. The Americans have not made one step forward, in the one year that has passed since we were last in the States, it seems."
The difficulty of achieving any stability in Iraq and the region, is that any combination of peacekeeping forces runs the risk of being seen as occupiers, and the bad reputation of the Americans is affecting everyone else as well. If the U.S. insists on an American command for any future peacekeeping force, it will fail. If one brings in Iraq's neighbors, the fact is, they also have interests which do not always run congruent with those of the Iraqi people.
A NATO mandate can be ruled out from the start. The position that the governments of Germany and France have, is arguably the best among those available, but whether they will achieve something at the UN, is uncertain.
The worst thing is that the Americans have marched into this adventure without knowing what they were getting into, and how to get out again. There is no feasible idea, not even among the U.S. think tanks, what to do in post-war Iraq. Meanwhile, the entire region is affected by the instability in Iraq.
Britain's Ambassador to Saudi Arabia Sherard Cowper-Coles, warned May 30 that "continuing information" shows that terrorists could be in the final stages of preparing another attack in Saudi Arabia. He did not elaborate, but The Scotsman reported May 31 that intelligence agencies are said to believe the al-Qaeda-linked terrorists, who stepped forward to claim credit for the kidnappings and murders of foreign workers in Khobar this May 31-June 1, are nearly ready to stage a "spectacular attack" with devastating loss of life. Plans are said to include an attack on a key oil installation or the causeway linking Saudi Arabia to Bahrain, The Scotsman said.
The British Foreign Office, meanwhile, posted a warning on its website, stating that, "we continue to believe that terrorists remain determined to carry out further attacks in Saudi Arabia, and that these may be in the final stages of preparation. The threat includes, but is not limited to, residential compounds and diplomatic and other official premises."
A leading City of London financial analyst, who is acquainted with Presidential candidate Lyndon LaRouche's policies, told EIR June 2 that it is "perfectly plausible that there is a powerful faction going for chaos."
The tip-off to him, is that whenever you see a move made by "al-Qaeda," it is very suspicious. "The question is," he said, "who really controls al-Qaeda?"
In the context of the evaluation of global chaos, "watch the Fabians," the source said. They are very dangerous people, because they persuade people that they are harmless, when they really are not. Their aim is global government, with themselves as the governors." Baroness Symons of the Foreign Office Mideast division, he noted, is a "Blair stooge. But keep in mind that Blair himself is getting into big trouble."
"In the coming June 10 elections [European Parliament and local British elections], Blair will do very poorly. Blair was also hurt by the Hutton Report [inquiry into the death of Dr. David Kelly]. The Hutton Report itself helped Blair, but, paradoxically, the actual evidence presented in the report, was very damaging to Blairand this evidence is available to the public!"
"America, Britain, the Middle East, and the and the wider world would be vastly better off in terms of peace and stability, if Saddam Hussein were still gripping Iraq, and we were still gripping Saddam, as we had been from 1991 to 2003," wrote British military historian Corelli Barnett in a letter to the editor of the June 2 Daily Telegraph. Barnett was responding to a commentary by Sir John Keegan, another British military historian who has allied himself with the neo-cons.
Barnett wrote that the situation in Iraq with Saddam in power was "of no relevance to foreigners"; and that "Saddam had presented no international danger, since he was soundly beaten in the 1991 Gulf War." He had no weapons of mass destruction, and some people, Barnett noted, had never fallen for all the "dodgy dossiers" on WMDs. Saddam would have prevented the current "widespread disorder," and actually "had provided a highly competent ally, if a tacit one, in the so-called 'war against global terror.'" And, of course, "there would be no steadily rising tally of British or American casualties," Barnett wrote.
In conversation with EIR on June 2, Prominent British historian Corelli Barnett pointed out that one key parallel between Barbarosa, when Nazi Germany invaded the Soviet Union in June 1941, and Iraq, is taking on a "project which is too much for you." You cannot cope, and you end up as Hitler did in Stalingrad. "It is bloody stupidity," he said. But involved in this bloody stupidity in Iraq, "is an enormous intellectual and political project," Barnett said. "People like Tony Blair are absolutely self-righteous. They will not be convinced by contrary arguments. Only a reality shock, like what happened in Abu Ghraib, has an effect on him."
However, even when Blair and Co. get in real trouble, they do not change course, since they are men who believe they are right.
Blair represents the tradition of Ramsey MacDonald, the Prime Minister of a national unity government in the crisis-ridden late 1920s-early 1930s, "liberal internationalism." Blair was deeply influenced by his guru Robert Cooper, the guru of "neo-imperialism," Barnett said. This involves invading countries which are called "failed states." Cooper, he noted, is now adviser to Javier Solana, who is chief foreign policy coordinator for the EU.
On John Kerry, Barnett said that he appears to be saying nothing, to deliberately allow George Bush to "unravel." Barnett was interested to hear LaRouche's critique of the dangers of what Kerry is doing. Kerry is "in the same position as Tory leader Michael Howard in Britain," Barnett said. Howard also supported the Iraq war. The only solution for Kerry and Howard, Barnett said, is to get out and say in public: "We were conned!"
Russia and the CIS News Digest
Russian President Vladimir Putin met June 3 with V. Kostunica, the President of Serbia. Putin supported Kostunica's policies towards calming ethnic conflicts, which have flared again in Kosova. RTR TV reported. But Putin's most striking comment came during a press conference after their talks. Talking about the reconstruction of Serbia after the fighting, including the NATO bombing of Belgrade starting in the spring of 1999, prior to the ouster of Slobodan Milosevic, Putin said, "I personally think that the restoration of Serbia's economy should be funded by those who destroyed the infrastructure of Serbia and Montenegro." He then added: "As for our attitude to the policy of shifting the domestic political situation in various countries using force, our approach is well knownwe categorically oppose this sort of policy.... Furthermore, I am deeply convinced that if the international community had had the courage and strength to prevent the bombing of Belgrade, there would not be such a difficult situation in the Iraq crisis today. It would have been of an entirely different nature."
Russian and Egyptian Presidents Vladimir Putin and Hosni Mubarak met at the Kremlin on May 28, with only aides and translators present, to begin talks on a Middle East settlementwith consideration for a "weighty and invariably active role of Egypt in Middle East affairs," as a Kremlin spokesman put itas well as the situation around Iraq, cooperation between Russia and the Organization of the Islamic Conference (OIC), the dialogue of civilizations, and political settlement of international and regional problems. Russia is interested in becoming an observer at the OIC.
"Egypt is a country with which Russia has many-year, very close relations, and we consider Egypt as a privileged partner, especially in Middle East and African affairs," Putin told Mubarak. "We consider you personally as a close friend of Russia, who has special relations with our country, including the years spent here."
Near the conclusion of his three-day visit to Moscow, Mubarak said he favored admitting Russia to the OIC. "Such a step would refute the clash of civilizations theory. Some contemporary forces are using this concept in a very dangerous way that disunites peoples and creates instability in the world," Mubarak told a ceremony at the Moscow State University of International Relations on May 29. "I was the first Arab leader to welcome Russia's desire to join the OIC. Russia has 20 million Muslims who live in peace with the Christians," the Egyptian President stressed.
Commenting on prospects for the Middle East settlement, Mubarak said that Palestinian-Israeli peace would stimulate reforms in Arab countries. "Russia and Egypt share similar views not only on methods of solving the Middle East conflict. They have the same vision of reforms in the Arab world," Mubarak stressed. He said that the "specific features of the national development of each particular country should be taken into account if it wants to launch a modernization process.... We are convinced that the Arab League is the only organization that can initiate reforms in Arab countries on condition of the earliest solution of the Iraqi problem and the Middle East crisis."
On relations with Russia, Mubarak said, "Egypt consistently supports the development and strengthening of cooperation with Russia. Russia used to render enormous assistance to us in various stages of our historyin the supply of arms, the solution of economic tasks and in industrial development."
Following talks with visiting Egyptian President Mubarak, President Putin said May 28 that the current situation in Iraq must be of concern to the international community. "It worries everybody, including Russia," he said. After the wide-ranging talks with Mubarak, including on boosting the role of the international community and the United Nations in resolving the Iraqi problem, Putin stated: "To reach these objectives, we regard it as expedient to call an international conference. Its participants should be representatives of the Iraqi people, neighboring countries, the UN Security Council and other states."
At his May 30 press conference after the talks, Putin said he had just spoken by telephone with President Bush on how to restore Iraq's sovereignty. Putin said that the expected U.S.-submitted UN resolution on Iraq will not be effective or tangible on the ground, unless it included the mechanism that would guarantee sovereignty of the Iraqi people.
The Shanghai Cooperation Organization's regional anti-terror center will be officially opened at the upcoming SCO summit in Tashkent, capital of Uzbekistan. The SCO nationsChina, Russia, Kazakstan, Uzbekistan, Kyrgystan, and Tajikistanagreed in 2002 to create the center. All the SCO member-nations' Presidents will attend the June 16-17 summit, as well as representatives from the UN, EU, CIS, and OECD. The anti-terror center will be the second permanent office of the SCO, which opened its secretariat in Beijing in January. The summit will discuss a new document on foreign relations for the SCO.
A conference on "NATO and RussiaCooperation in the Barents Sea and Arctic Region" was held June 1 in Murmansk. It featured an endorsement by U.S. Ambassador to Russia Alexander Vershbow, of the pipeline project from the northwestern Siberian oil fields to the port of Murmansk. From there, the oil would be shipped across the northern Atlantic to the United States. This is the scheme on which the four biggest Russian oil firmsLukoil, Yukos (now near bankruptcy), Sibneft, and TNK (now in merger with BP)signed a memorandum of understanding with U.S. interests in 2002, to build it as a private pipeline; the question of private ownership and public operation (by the state pipeline company Transneft) continues to be hotly debated in Russia. The idea was launched around the time of the first "U.S.-Russian Commercial Energy Dialogue" summit in Houston, on Russia's potential to become a major petroleum supplier to the United States.
An alternate pipeline project would go to Inaga on the shore of the Barents Sea, where a special oil terminal would be constructed, according to Semyon Veinshtok, the chairman of Transneft. He met with visiting U.S. Energy Secretary Spencer Abraham in Moscow a few days earlier, to discuss that project. The U.S. has signalled its interest, but has not committed more than $1 million, so far, for a feasibility study. The Russians say at least $100 million would be required. The pipeline and related issues will also be on the agenda of talks between Russia and the United States on the assistant energy minister level, June 7.
In meetings in Moscow June 2, Russian Energy Minister Viktor Khristenko and the European Union's Director-General for Transport and Energy, Francois Lamoureux, agreed to speed up negotiations on the envisaged power alliance between Russia and the EU, to establish it in 2005, two years ahead of schedule.
The Russian Atomic Energy Ministry has recently raised once again the development of fast-breeder nuclear technology, as an important joint EU-Russian project, in addition to projects discussed for the oil and gas sectors. Russia would supply Europe with power from fast breeders at affordable prices; within Western Europe, France is the only major country pushing for new nuclear projects to be built at home.
Tension has escalated between Georgia and Russia, around the Georgian province of South Ossetia. That region and Abkhazia, both bordering on Russia, have been quasi-independent since repudiating Tbilisi's authority 12 years ago, though they are officially part of Georgia. Having ousted Aslan Abashidze as leader of Ajaria (another autonomous region, on the Turkish border, but it had not broken away to the extent the others did), Georgian President Michael Saakashvili has vowed to reunify all of Georgia. Saakashvili's George Soros-funded movement came to power in a coup at the end of last year.
The South Ossetia border with the rest of Georgia is patrolled by peacekeepers from Georgia, Russia and South Ossetia itself, under agreements reached in 1992. On May 31, Tbilisi sent reinforcements into the 10-km buffer zone, allegedly to fight smuggling. A furious exchange of denunciations followed, including three official statements from the Russian Foreign Ministry, which called on Tbilisi to "realize the danger of provocations" and warned that the Georgians were violating international agreements and fanning tensions. Georgian Prime Minister Zurab Zhvania rejoined, "Neither the U.S.A., nor Russia can dictate how we are going to use our military forces, which have been trained under the Georgian-American program"one more indication of the ever-present element of foreign meddling, as a factor in these Transcaucasus crises, cited by Lyndon LaRouche as a strategic danger, in his "Southwest Asia: the LaRouche Doctrine."
As of June 3, Georgia and South Ossetia were supposed to have calmed the flare-up, in talks with Russian mediation, but it was later reported that Georgia has sent heavily armed forces, including tanks, into Gori near the South Ossetian border. This evening's Russian TV broadcasts carried emotional denunciations of these actions, by people in South Ossetia.
That Moscow's relations with the Saakashvili regime in Tbilisi are more complex than meets the eye, is indicated by the June 1 appointment of Kakha Bendukidze to be Georgia's Minister of Economics. The Tbilisi born, ethnic Georgian Bendukidze has made his career in Russia, as one of the whiz kids who seized the chance to become an industrial magnate, one of Russia's top "oligarchs," during the 1990s. Bendukidze owns an industrial conglomerate called United Motor Works, which includes Uralmash, formerly the Soviet Union's premier machine-tool plant.
Though his holdings are in the real sector, Bendukidze is going to economically flattened Georgia, with its deeply impoverished population, mouthing Mont Pelerinite nonsense. According to Russian wires, he said June 1 that he advocates radical economic deregulation and shifting the tax burden as much as possible from businesses onto individual taxpayers.
Saakashvili has gone abroad, both to the east and to the west, to recruit members of his government, who have no visible ties to officials in previous regimes. Georgia's current foreign minister is Salome Zourabichvili, a career diplomat from France, whose family emigrated from Georgia in 1921, and who was French Ambassador to Georgia until this spring.
Southwest Asia News Digest
On June 3, the ranking Democratic members of six committees of the House of Representatives sent an open letter to President Bush, stating that they were determined that the "Abu Ghraib" scandal must be investigated by the House, and they would investigate it themselves, if the House Republican leadership continues to refuse to allow hearings to be held.
Lyndon LaRouche, candidate for the Democratic Party Presidential nomination in 2004 immediately supported this move, and demanded that "Kerry show the guts" to come out and demand such investigations in the same tough terms. "Because, if the Republicans continue to stonewall on this investigation, the elimination of certain relevant Republicans, on this issue, in the coming Presidential campaign period, is going to be a big issue in the House. That's my policy," said LaRouche.
Here are excerpts from the June 3 letter:
"Dear Mr. President:
"We are writing to inform you of our determination to investigate the prison abuses at Abu Ghraib and elsewhere and to request your assistance in obtaining key documents.
Over the past few weeks, we have each contacted our committee chairs to request committee hearings and investigations into the prison abuses. The Democratic Leader, the Democratic Whip, and the Democratic Caucus Chair have made a similar request to the House Speaker, expressing their grave concern over the lack of investigations by House committees.
"Unfortunately, with the exception of the closed sessions of the Intelligence Committee and a single Armed Services Committee hearing, these requests have been rebuffed. Despite the magnitude of the Abu Ghraib and other detainee abuses and their enormous ramifications for our effort in Iraq and U.S. foreign policy, no House committees are currently undertaking a formal public investigation. This is a dereliction of Congress' oversight responsibility that ill serves our nation and our troops.
"There are multiple reasons why a formal public investigation is essential. Members cannot adequately assess the deteriorating situation in Iraq or the prospects for the future of our endeavors there without a thorough understanding of the nature, extent, and ramifications of the prisoner abuse. Nor can members address our constituents' many concerns about these mattersand the progress of our efforts to combat terrorismwithout more information.
"Moreover, in order to reestablish U.S. credibility in the eyes of the world, Congress must conduct a full and transparent investigation. Such an investigation would demonstrate our commitment to accountability and to ensuring that these abuses cannot recur.... It is hard to see how we can win the hearts and minds of the Iraqi people if we neglect our constitutional oversight responsibilities.
"To address these needs, we intend to investigate the prison abuses at Abu Ghraib and the allegations of prison abuses at other locations in Iraq and in Afghanistan and Guantanamo Bay.
"While we would prefer to participate in committee investigations with our respective chairs, we cannot allow the refusal of the Republican leadership and committee chairs to pursue these matters to obstruct Congress's access to essential information. [emphasis added]
"We request your assistance in obtaining key documents. With few exceptions, the documents we seek are not currently available to members of the House, despite the documents' obvious significance....
"Specifically, we request copies of....
"1. All International Committee of the Red Cross (ICRC) memoranda or reports submitted to the Administration regarding detention facilities in Iraq, Afghanistan, and Guantanamo Bay;
"2. All formal responses by the Administration to ICRC memoranda or reports, including but not limited to Brigadier General Janice Karpinski's December 24, 2003, response;
"3. All contracts, subcontracts, and task orders for interrogation or translation work in Iraq, Afghanistan, and Guantanamo Bay, including but not limited to those of CACI International and Titan Corp.;
"4. All reports or assessments of contractor performance for the contractors and subcontractors involved in interrogation or translation work in Iraq, Afghanistan, or Guantanamo Bay, including but not limited to any documents or other materials related to the decision to allow employees of contractors without security clearances to participate in interrogations or other sensitive activities;
"5. The Department of Defense interrogation guidelines approved by Secretary of Defense Donald Rumsfeld in April 2003;
"6. The CIA rules for interrogation of high-level Al-Qaeda prisoners in Iraq, Guantanamo Bay, and Afghanistan;
"7. The October 12, 2003, directive of Lieutenant General Ricardo Sanchez entitled 'Interrogation and Counter-Resistance Policy';
"8. All written approvals for the use of specific interrogation techniques issued by General Sanchez pursuant to the October 12, 2003, directive;
"9. All written statements of detainees, military personnel, or civilian contractors regarding the abuse of prisoners in Iraq, Afghanistan, and Guantanamo Bay;
"10. All interrogation reports from Abu Ghraib and other detention facilities in Iraq from May 2003 through December 2003;
"11. All Justice Department memoranda authored since September 11, 2001, regarding the classification of detainees or the applicability of the Geneva Conventions to detainees, including but not limited to a January 9, 2002, memo from John Yoo and Robert Delahunty to Department of Defense General Counsel William Haynes entitled, 'Application of treaties and laws to al-Qa'ida and Taliban detainees';
"12. The January 25, 2002, memo from White House Counsel Alberto Gonzales to you regarding the application of the Geneva Conventions to the conflict with al-Qaeda and the Taliban;
"13. All State Department memoranda authored since September 11, 2001, regarding the classification of detainees or the applicability of the Geneva Conventions to detainees, including but not limited to Secretary of State Colin Powell's January 26, 2002, memo to White House Counsel Alberto Gonzales regarding the applicability of the Geneva Conventions in Afghanistan;
"14. The February 5, 2003, three-page memo from senior military attorneys regarding interrogation techniques at Guantanamo Bay;
"15. The October 2003 report of Major General Geoffrey Miller regarding intelligence, interrogation operations, and detention operations;
"16. The November 2003 report of Major General Donald Ryder regarding the detention and corrections system in Iraq;
"17. The November 19, 2003, order by Lieutenant General Sanchez transferring tactical control of the military police at Abu Ghraib to Colonel Thomas Pappas, commander of the 205th Military Intelligence Brigade;
"18. The March 2004 report of Major General Antonio Taguba regarding the treatment of detainees at Abu Ghraib, including the complete annex;
"19. Any interrogation or detainee treatment guidelines posted or distributed at Abu Ghraib, including the 'interrogation rules of engagement' posted by Captain Carolyn A. Wood in August 2003;
"20. The Standard Operating Procedures for Guantanamo Bay;
"21. All summaries of relevant investigations currently pending or already closed that have been prepared by military investigative services, including but not limited to the May 5, 2004, synopsis prepared by the Criminal Investigation Command;
"22. All reports of autopsies related to detainee deaths in Iraq, Afghanistan, or Guantanamo Bay, and any documents that are related to the cases of detainee deaths where no autopsy was performed, including but not limited to any document that explains the reasons for not performing autopsies;
"23. All FBI reports of potentially improper conduct in prison interrogations overseen by the CIA or military in Iraq, Afghanistan, or Guantanamo Bay;
"24. Any written documentation of FBI objections to interrogation techniques being used in Iraq, Afghanistan, or Guantanamo Bay;
"25. Any FBI directives prohibiting FBI agents from participating in aggressive interrogations in Iraq, Afghanistan, or Guantanamo Bay, or removing agents from such interrogations;
"26. The October or November 2003 memo from the CIA general counsel regarding the CIA presence at Abu Ghraib;
"27. Any visitor logs for blocks 1-A and 1-B of the Abu Ghraib Prison from October 2003 through December 2003;
"28. All prisoner intake documents for Abu Ghraib Prison and other detention facilities located in Iraq since May 1, 2003, including but not limited to a breakdown of the numbers and types of prisoners in the prison population;
"29. Any documentation of the training received in the areas of detention operations and the prisoner treatment by the 800 MP Brigade and its component battalions and companies since January 1, 2002;
"30. Any approval documents for special-access programs regarding the interrogation of detainees in Iraq, Afghanistan, or Guantanamo Bay;
"31. All records of meetings held between May 1, 2003, and December 31, 2003, involving Defense Department, State Department, or CIA officials regarding the treatment of prisoners in Iraq;
"32. The memorandum signed by Colonel Thomas Pappas and 'James Bond' on or about January 12, 2004, regarding the practice of keeping some Abu Ghraib detainees off the official roster;
"33. The January 12, 2004, memorandum for the record signed by Major Matt Price regarding detainees at Abu Ghraib;
"34. A list of all ongoing investigations by the Defense Department, State Department, Justice Department, CIA, or their inspectors general into the abuse or killing of detainees in Iraq, Afghanistan, and Guantanamo Bay, indicating those cases that are being considered for prosecution by the Defense Department or Justice Department; and,
"35. A list of all investigations completed by the Defense Department, State Department, Justice Department, CIA, or their inspectors general into the abuse or killing of detainees in Iraq, Afghanistan, and Guantanamo Bay, along with any written reports produced by investigators.
We recognize that a number of the documents we are requesting may be classified or may be relevant to potential criminal prosecutions. We are committed to handling any such sensitive material appropriately and are available to work with Administration officials to ensure their proper handling. We would like to receive these materials on or before June 17."
The letter is signed by:
Henry A. Waxman Ranking Minority Member, Cttee. on Government Reform
John Conyers, Jr., Ranking Minority Member, Cttee. on the Judiciary
David R. Obey, Ranking Minority Member, Cttee. on Appropriations
Ike Skelton, Ranking Minority Member, Cttee. on Armed Services
Tom Lantos, Ranking Minority Member, Cttee. on Int'l Relations
Jane Harman, Ranking Minority Member, Permanent Select Cttee. on Intelligence
Copies were sent to: Donald Rumsfeld; Colin Powell; John Ashcroft; George Tenet
Attorney Rose Mary Zapor, who represents U.S. Army Pfc. Lynndie England, the woman pictured in many of the Abu Ghraib prison-abuse photos, told a news conference in Denver, Colo. June 4 that Vice President Dick Cheney and Defense Secretary Donald Rumsfeld are on her list of people whom the defense wants to call as witnesses. England is scheduled to appear for a preliminary hearing in her court martial at Ft. Bragg, N.C., in the near future.
Zapor said England's defense that she was following orders, could be bolstered by evidence from Cheney and Rumsfeld. The Vice President would have knowledge of "intelligence tactics," due to his service as Secretary of Defense when George H.W. Bush was President.
Ariel Sharon, the fascist Prime Minister of Israel has fired two of his cabinet ministersBenny Elon and Avigdor Liebermanboth from the fascist National Union Party. The move is a desperate attempt by Sharon to get his Gaza Strip "disengagement" plan passed at the upcoming cabinet meeting on June 6. These ministers would have voted against Sharon. Last week, Sharon cancelled the vote when he knew that it would be defeated in a vote of 12 to 11. Without Elon and Lieberman, Sharon's vote may "squeak through."
Now Sharon's majority in the Knesset is even more narrow, and if the National Religious Party were to walk out of the coalition government "as they have threatened, this could be the end of the Sharon coalition. The options then would be: a new coalition, probably involving the Labor Party; new elections called by Sharon; or a new Prime Minister in the unlikely event of Sharon resigning.
Asia News Digest
Pakistan tested two nuclear-capable missilesone on May 29 and the other on June 3. Pakistan's military spokesman Maj. Gen. Shaukat Sultan told reporters in Islamabad on May 29 the test was aimed at improving the technical parameters of the missile and all neighboring nations were informed prior to the test. Following the June 3 test, Pakistani President Pervez Musharraf, assuring neighboring nations, said the missile test was not meant for outside nations, but to "prove to the Pakistani people" the military preparedness of the nation.
Maj. Gen. Shaukat Sultan also told reporters that the launch of the "indigenously-developed" 1,500 km-range Hatf-V (Ghauri) missile was "successful." India's newly appointed Defense Minister Pranab Mukherjee, insisting not to react immediately, said India would look at the military ramifications of the tests.
It is not clear what ramification the tests would have on the ongoing bilateral talks to work out a format to resolve all bilateral disputes, including the five-decades-old Kashmir conflict that has created an instability in the region as a whole, between India and Pakistan.
Observers, however, noted the sharp response May 27 on Pakistani TV, by President Pervez Musharraf, to the Indian External Affairs Minister K. Natwar Singh's proposal that the 1972 Shimla talks between India and Pakistan form the "bedrock" of their relations. Expressing his views on Kashmir on television, Musharraf reiterated that equitable dialogue was the only route to its solution, and it was imperative for India, Pakistan, and the Kashmiris to agree on an acceptable solution.
Myanmar Prime Minister Gen. Khin Nyunt arrived in Malaysia on June 1 for a 24-hour stay to hold talks with his counterpart, Abdullah Ahmed Badawi, and the UN Special Envoy Razali Ismail. His arrival was marred by the arrest of an activist linked to Myanmar's opposition National League for Democracy, at the Kuala Lumpur airport.
Malaysia has taken a leading role in integrating Myanmar into the 10-country ASEAN grouping. The meeting in Kuala Lumpur was followed by Prime Minister Khin Nyunt's visit to Bangkok, Thailand, where he held talks with the Prime Minister Thaksin Shinawatra on Khin Nyunt's "road map to democracy." It is significant to note that these meetings took place during a constitutional convention, minus the participation of Aung San Suu Kyi's National League for Democracy, which chose to boycott the convention, protesting the continuing house arrest of their leader, Suu Kyi.
Sri Lankan Foreign Minister Lakshnam Kadirgama, a key aide to President Chandrika Kumaratunga and arguably the best friend India has got in Sri Lanka, met with India's new External Affairs Minister K. Natwar Singh on June 1 and said his government is exploring the possibility of India playing a more direct role in the peace process between the secessionist Tamil Tigers and Colombo. Kadirgamar also met India's Premier Dr. Manmohan Singh.
Kadirgam's visit is very important for Indo-Sri Lanka relations. The previous government of Prime Minister Atal Behari Vajpayee, had been considering Colombo's request to supply military equipment and train Sri Lankan military personnel. The proposal came under intense verbal attack from the Tamil Tiger rebels. India had taken a hands-off approach since 1990, when it pulled out troops from Sri Lanka after a futile three-year deployment to disarm the rebels.
Another worry of Colombo is that the present Indian government has as its ally the Tamil Nadu-based DMK. DMK had been in the forefront of training the Tigers in the 1980s, providing the Sri Lankan rebels with arms, reports indicated. DMK has not yet been cleared of suspicion that it played a role in the assassination of former Indian Prime Minister Rajiv Gandhi, carried out by the Tamil Tigers' suicide squad in Tamil Nadu in 1991.
While speaking at the official release of China's Foreign Ministry Annual Year Book June 1, Chinese Foreign Minister Li Zhaoxing invited India's External Affairs Minister to attend the Asia Cooperation Dialogue in Qingdao, Shandong province on June 21-22.
"We will work together to further enhance our bilateral friendship and cooperation, "Li said of China-India relations. Li said he and Natwar Singh "are very good friends and we agreed upon every topic of interest," during their first telephone discussion on May 26.
The Year Book shows Sikkim as part of India. China had promised the visiting Indian Prime Minister Atal Behari Vajpayee last June that Beijing recognized that Sikkim as a part of India, and not an independent nation.
The Year Book also states that the two sides (China and India) are making "progress" in dealing with "problems left over from history," and that the visit of Vajpayee was a "major event" in Sino-India relations. "The visit went a long way towards improving China-India relations and opened a new page in the all-round cooperation between the two countries," it said.
The Year Book also noted cooperation with Russia, and close cooperation with India, at the WTO meeting in Cancun to defend the interests of the developing nations.
China, one of the five nuclear-weapons states, chose to keep mum on New Delhi's absurd call for a "common" nuclear doctrine for India, China, and Pakistan. "China always stands for complete prohibition and thorough destruction of nuclear weapons," the Chinese Foreign Ministry spokesman said in a statement to the Press Trust of India, in Beijing, on June 2.
India's External Affairs Minister K. Natwar Singh said on June 2 that India and Pakistan "are now nuclear powers, and so is China." "The three countries should get together and work out a common nuclear doctrine at the highest level," Singh said.
The proposal is not only absurd, it borders on incoherence. China is a recognized nuclear-weapons state, while India and Pakistan are not. There is no indication whatsoever that a matter of such great import, and a great deal of secrecy, had been discussed ever before. The most important issue before India and Pakistan is to improve their economic, political, and security relations. The same holds true for improving India-China relations.
An Afghan man and his two children died of AIDS in Kabul last month, Naqibullah Safi, head of the Afghan Health Ministry's HIV department, told AFP June 2. "These are the first recorded HIV deaths in Afghanistan." The report does not say how the family got infected. Naqibullah Safi reported that between 200-300 Afghans are now HIV-positive.
The disease remained virtually unknown in Afghanistan. where the literacy level is abysmally low. There exists a genuine fear that if AIDS starts spreading in this country, it could lead to an epidemic. After decades of war, Afghanistan has almost zero resources to fight the disease.
The infection is spreading primarily through intravenous drug use by opium addicts. Rising opium production in the country has fueled drug addition among the Afghans, as well as in central Asia and Russia over the last decade.
This Week in History
In mid-June 1933, President Franklin Roosevelt completed the first session of Congress under his Presidency, having accomplished the so-called "100 Days" legislative program that pulled the nation back from the edge of the abyss. The measures that were taken in that period of national emergency actually embody many of the reversals in policy and axiomatic thinking which FDR had to accomplish in order to save the nationreversals that are equally urgent today. Hence, a review of these measures may provide precisely the kind of economic review which is necessary to awaken, and educate, our citizens for dealing with the economic emergency ahead.
How did FDR get us out of the Depression, you might ask? While it certainly took much longer than 100 days, the decisive first steps in the area of financial, economic, and social policy were all taken in that period.
When FDR took office in March 1933, he inherited a financial and political system which had been dominated from the time of his (distant) cousin, President Theodore Roosevelt (1901-1908), by British economics. The axioms were those of British free enterprise, and the enforcer of the free-market system, which had sacrificed the lives of millions of Americans by putting banking interests first, was the banking system, which was dominated by the Morgan-Mellon-du Pont interests.
The primus inter pares among the bankers was J.P. Morgan, a leading financial ally of the British banking system. The Morgan interests' control of credit gave them life-or-death control over the physical economy, and they were determined to use it to prevent implementation of policies they didn't like, and to otherwise loot the economy and the population. Farms had been shut down en masse, while speculative schemes had flourished. Political favorites had gotten credit, whereas many productive enterprises received none.
More importantly, these banking consortia worked in such a way as to deprive the United States of its sovereignty, through the enforcement of the British gold system. The creation of credit was limited by the amount of gold held by the banks. Therefore, if the major banking interests decided to sell off their gold to buyers overseas, this resulted in a contraction of credit in the U.S. If the gold supply were controlled from overseas, as it effectively was through the close-knit British-American banking establishment, then, the U.S. actually lacked sovereign control over its own currency and credit.
President Franklin Roosevelt moved immediately to remedy this situation when he took office. At the same time that he declared the famous bank holiday, he suspended all transactions in gold, and gave authority over any such matters to the Secretary of the Treasury. This is the basis on which the Federal government got the authority to regulate the price of gold, rather than let that money-linked commodity be controlled by private interests.
On April 5, FDR went further, issuing an Executive Order against hoarding of gold. Historian Arthur Schlesinger correctly described the significance of these moves as follows:
"It meant that American monetary policy was no longer to be the quasi-automatic function of an international gold standard; that it was to become instead the instrument of conscious national purpose."
After removing gold as a weapon that could be used by institutions hostile to the purposes of the Federal government, either foreign or domestic, FDR had still to create the basis for a national credit system that would serve the interests of the nation. This was accomplished through his various pieces of banking legislation, and the banking regulation measures which aimed at preventing the banks from being used to loot the general population, and productive enterprises.
The first point that had to be recognized was clear: the banking system was bankrupt. By calling the bank holiday on March 5, Roosevelt dramatized this reality by ordering them all closed.
But then, he had to put the system back together again, which he did through the provisions of the Emergency Banking Act. This Act, which was rushed through Congress in time to reopen the banks (most of them) on March 13, had various provisions for sorting the banks into three classifications: those that were sound, those that needed a capital infusion, and those which a conservator would liquidate. It also permitted utilizing Federal government instruments, like the Reconstruction Finance Corporation and the Federal Reserve System, to ensure liquidity be provided for those banks which were basically sound, but needed it.
When March 13 arrived, the day after an estimated 60 million Americans had heard President Roosevelt address them on how they had "nothing to fear by fear itself," a large majority of the nearly 19,000 nationally chartered banks opened their doors, providing the basis for issuing payrolls, maintaining government and other necessary social functions. Sufficient confidence had been restored, that the same citizens who had been carrying out runs on the banks, now put more money into the banking system in this period, than they took out.
There were, of course, vociferous objections to FDR's banking measures in this period, on the basis of the "principle" that "private enterprise"not governmentshould run the economy. This was shoved aside in the course of the emergency, but the reason for FDR's success was not just pragmatic. It was based on the constitutional principle of national sovereignty, which principle FDR was fully aware of and committed to.
There is no question, from reading the U.S. Constitution, that control over the currency of the United States, is a power that resides in the Federal government, specifically the U.S. Congress. Article I, Section 8 makes that clear. And when this principle was challenged in the early days of the republic, the founding genius of the American System of Economics, Alexander Hamilton, came forward to argue the case explicitly.
That argument appears succinctly in Hamilton's "Opinion on the Constitutionality of the Bank," a paper he wrote for President George Washington, in defense of his proposal for a National Bank of the United States. Secretary of State Thomas Jefferson and Attorney General Edmund Randolph had vigorously opposed the National Bank, claiming that it gave the Federal government too much power. (In fact, without the bank, power over the nation's finances would have been ceded to private, foreign interests.)
Hamilton's argument concentrated on the question of sovereignty: that the power of the government," as to the objects intrusted to its management, is in its nature sovereign," and that the right of erecting corporations (in this case, the Bank of the United States, but the argument is more generally applicable) "is one, inherent in and inseparable from the idea of sovereign power."
FDR had not only studied Hamilton, but located his identity in the tradition which began with his great-great grandfather Isaac Roosevelt, who had fought alongside Hamilton to get the U.S. Constitution ratified in New York, and later collaborated with Hamilton in forming the Bank of New York.
Although FDR's banking measures never went so far as to restore the National Bank, the President found a way to exercise this sovereign power by other means. He blasted his opponents as "economic royalists," who claimed to believe in political freedom, but "have maintained that economic slavery was nobody's business." "What they really complain of is that we seek to take away their power," he said.
National sovereignty, however, as FDR understood, is not just a question of power, but the use of that power for the common goodwhat the Preamble to the Constitution calls the "general welfare." It was on this basis, that the President justified his far-flung initiatives for creating jobs, saving the farm sector, and establishing a safety net for those who had suffered from the "dog-eat-dog" economy which had predominated under the Tory ideas of Andrew Mellon, Calvin Coolidge, J.P. Morgan, and the like.
The most famous of FDR's measures for relieving the suffering of the poor came in what is called the second phase of the New Deal, in 1935, when he moved with Democratic supporters in Congress to push through both the Social Security Act and unemployment insurance. These measures, which immediately came under attack by the Morgan-led banking interests, eventually survived a challenge on the level of the U.S. Supreme Court, which ruled that they were consistent with the general welfare clause of the U.S. Constitution.
But Roosevelt, from the very beginning, understood that his government had to "drive from the temple of our ancient faith those who had profaned it"the "moneychangers in the temple"and provide the basis for a government which would guarantee the security and peace necessary to the "pursuit of happiness." In reviewing the work of his first term, during his Second Inaugural Address, the President put it this way:
"We of the Republic sensed the truth that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable. We would not admit that we could not find a way to master economic epidemics just as, after centuries of fatalistic suffering, we had found a way to master epidemics of disease. We refused to leave the problems of our common welfare to be solved by the winds of chance and the hurricanes of disaster.
"In this we Americans were discovering no wholly new truth; we were writing a new chapter in our book of self-government.
"This year marks the one hundred and fiftieth anniversary of the Constitutional Convention which made us a nation. At that Convention our forefathers found the way out of the chaos which followed the Revolutionary War; they created a strong government with powers of united action sufficient then and now to solve problems utterly beyond individual or local solution. A century and a half ago they established the Federal Government in order to promote the general welfare and secure the blessings of liberty to the American people.
Today we invoke those same powers of government to achieve the same objectives."
While many Americans don't realize it today, the measures which FDR took in these first hundred days, and later, were literally matters of saving lives. Starvation faced millions of Americans who had been thrown off their land, out of their homes, or out of their jobs. People could not afford doctors, or food, or, in many cases, roofs over their heads. The private sector, and bankrupt local governments, were either throwing up their hands, or turning their backs. It was left to the Federal government to come to the rescue.
FDR's Administration did not wait long in implementing this philosophy. The first measure he took was the creation of the Civilian Conservation Corps, a government-administered program to create jobs, especially for unemployed youth. Over the course of its history, the CCC created millions of jobs, which permitted young men to support their families, and regain their health and morale, while doing something useful for the natural resources of the country.
This jobs program was followed later with the creation of public-works programs, that provided millions more with useful work, particularly in the repair and construction of infrastructure, such as waterworks, roads, and schools. Roosevelt's appointee Harry Hopkins personally embodied the spirit of these jobs programs, as non-bureaucratic responses to the need for public improvements, as well as incomes.
In addition to providing jobs, Roosevelt set up a national relief program, better known today as "welfare," by which the Federal government shared the cost of supporting those families who could not have a breadwinner. In establishing this program, FDR explicitly rejected the idea that unemployment was the "fault" of the individual, and acknowledged that it was toleration of rapacious system of cartels and economic royalists, which created the hardships. Society had a responsibility, therefore, to care for the "least of these."
Other immediate measures for saving lives involved ending evictions of people from their homes or farms. Millions found themselves without the ability to pay their mortgages, and to get credit to refinance. FDR recognized this as a national emergency, and intervened to provide the means for refinancing for those who were in desperate need.
While his opponents screamed about "socialism," FDR could confidently scoff at them. He knew that his programs were providing the basis for putting the nation back to work, and restoring the tax base. Every Federal works program created many corresponding jobs in the private sector which had to provide the materials. Every infrastructure improvement increased the potential for a productive, skilled workforce. While helping the poor, these programs demonstrably lifted the conditions of life for the entire nationi.e., served the general welfare.
The third major principle of our constitutional commitment is the requirement that our governance provide for the welfare of future generations. FDR immediately began to put our government behind this principle, by launching major infrastructure projects in water management, power generation and production, and transportation, all of which would shape and improve the conditions of life for decades to come. The epitome of this aspect of his program was the Tennessee Valley Authority, a project long on the drawing boards, which FDR pushed through in May of 1933.
Major infrastructure projects, such as the Bonneville hydroelectric dam, and the TVA, were conceived by Roosevelt not just as jobs programs, but as means of permanently upgrading the productivity of the economy and the productive powers of labor. Such projects introduced the era of cheap electricity, and in many cases, provided the basis for conquering disease and the devastation of periodic floods. FDR knew that they would not pay for themselves in the short term, but only over the long-term, and that not just in terms of dollars and cents, but, most importantly, in terms of the standard of living of the entire nation.
Over the course of his 12 years in office, FDR launched over 45,000 projects in the five basic categories of infrastructure: water, power, transportation, health, and education. Many of the structures his programs builtfrom parks, to sewage systems, to dams and hospitalsare still being used throughout the nation, some 70 years later.
In this era of Baby-Boomerism, there is perhaps no more crucial lesson for our citizens to learn than this principle of our Constitution, as laid out in the Preamble: of providing for our posterity. The commitment to improve nature, and society, for the benefit of future generations has become increasingly foreign to our national philosophy, since the 1960's launching of the counterculture and the "me" generation. There used to be a joke in the 1970s, that whereas the Japanese businessman planned for six years ahead, the U.S. businessman planned for six minutes, this being the amount of time that it could take for stocks to be traded on the relevant gambling exchanges. In today's computer age, the attention span has dwindled further, to perhaps six seconds.
There are many who would say that we can't return to FDR's way, and who are even committed to ripping up the physical improvements which his Administrations built. They are wrong in principle, as well as in practice. They should study the history of how FDR brought us out of the Great Depression, before our sinking into a worse one (which has already begun) becomes irreversible.
Just as the crisis of 1929-33 led Americans to demand a leader who would reassert the principles of the U.S. Constitution over the economic predators who had brought the nation to its knees, so today, American citizens must turn to the one leader who embodies FDR's approach, and demonstrates an even more competent understanding of our Constitution's principles: Lyndon LaRouche.
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