From Volume 5, Issue Number 39 of EIR Online, Published Sept. 26, 2006

U.S. Economic/Financial News

Soaring Use of Food Relief in Nation's Richest County

Loudoun County, Virginia is the richest county in the United States according to recent government statistics. But, in the fiscal year ending June 30, the Loudoun Interfaith Relief provided free groceries to 9,339 households, serving nearly 35,000 people (bigger in itself, than the population of the county seat, Leesburg, where the food pantry is located). According to the Washington Post, in August, 3,300 persons came for food. The figures would be higher, but the relief center, which demands no proof of need, just proof of Loudoun residence, allows only two visits a month. Two-thirds of the user households have one working adult in the home, many with two or more jobs, but they can't afford their living expenses. Many are recently unemployed, from job cuts at United Airlines (Dulles Airport), Sprint and other big name employers, or just stuck in underpaid jobs. United will eliminate 500 workers when it shuts its reservation center Oct. 4; in the meantime, workers still there don't have the hours needed for livable take-home pay. Many food-relief clients are well-dressed, drive SUVs, and nevertheless desperate. Loudoun's median county income is over $98,000 according to recent government census statistics. "I don't believe the census," said one user of the Loudoun Interfaith Food Relief, a unionized worker at Safeway.

'Black Friday' for Auto Industry

The entire U.S. auto industry is collapsing, as Lyndon LaRouche warned it would, in February 2005. Yet, the U.S. Congress has continued to drag its heels on passing the emergency legislation, formulated by LaRouche, which would save the vital machine-tool capability embodied in that auto industry, through an FDR-style retooling initiative.

On Sept. 16, updates on the crisis hit the front pages of U.S. newspapers—with a spin that serves the financier oligarchy behind the destruction of U.S. industry: promotion of non-union wages, globalization, and outsourcing.

* The Wall Street Journal's lead story was headlined, "Black Friday" for Detroit, as Ford and Chrysler admitted their strategies have hit the wall, and both are slashing production. The notion of the "Big Three" is now obsolete, gloats the Journal. Toyota—the sub-union wage employer—is outselling both Chrysler and Ford in the U.S. Ford will burn through $8.5 billion in cash this year. But Toyota, according to the Journal, "represents the other American auto industry—non-union, expanding, profitable, and foreign-owned."

On the markets, Ford shares fell 12%; DaimlerChrysler 6.7% (5.6% in Germany); GM fell 4%. Ford bonds fell 2%, and the cost of credit derivative for protection against a Ford default on $10 million worth of bonds rose from $625,000 to $685,000.

* The Financial Times lead story was "Crisis at Ford deepens with its new restructuring plan." Merrill Lynch downgraded Ford from "neutral" to "sell." And, it added, turmoil in the auto industry also hit DaimlerChrysler.

FT Lex column: "It was certainly a grim day for the automotive industry.... The silver lining may be that Ford, along with Daimler and General Motors, is at last waking up to the size of its problems." Chrysler's woes may scare unions into making similar concessions to those secured by Ford and GM.

* The New York Times front-page story said that Detroit is reeling, running low on optimism, flailing; Ford job cuts and plant closings; Chrysler will report 3Q loss of $1.5 billion; GM cutting 30,000 jobs and closing nearly a dozen plants. All the auto companies are putting themselves on chopping block.

* The Richmond (Va.) Times-Dispatch front-page announced that "Ford moves up closure of Norfolk plant." The ripple effect will mean loss of about 4,000 other jobs in Virginia, in addition to the 2,400 jobs at the Norfolk Ford plant.

Food Cartels: Rapid Transmission Belt for Killer Diseases

As of Sept. 16, one death and more than 100 victims, of E. coli-infected spinach, had been tracked in 21 states, by U.S. health agencies, from one cartelized producer in Salinas Valley, California. The spinach is contaminated with a potentially lethal form of E. coli, strain O157:H7. Given that for every reported case of illness, some 20 more people developed the same sickness, but didn't see a doctor or have the stool culture done, the affected people so far is in the range of 2000.

As of Sept. 16, some 52 were hospitalized, and 16 had hemolytic uremic syndrome—a type of kidney failure. A Wisconsin woman, one of 33 so far infected in that state, died of kidney failure from the infection. The Wisconsin cluster, reported to the Center for Disease Control on Sept. 8, raised the red flag, and a Food and Drug Administration (FDA) warning was put out Sept. 14.

The source for the contamination has been traced to one mega-corporation planting in the Salinas Valley, Natural Selection Foods. The spinach goes to many processors, where it is bagged and distributed under various company labels throughout the nation. Investigators are unsure of whether the bacterium was introduced during growing, or during processing. The strain is typically spread through animal fecal material.

This is not the first time E. coli has struck in fresh salad greens. Just last month, the FDA and California agriculture and health experts met in Salinas with California salad growers to discuss how to prevent such outbreaks. And on Nov. 4, 2005, the FDA sent a letter to all California companies in the fresh produce business, warning them of the problem, and referring them to the accepted standards for preventing such contaminations.

But while they talk about handling and washing techniques, the underlying problem remains unmentioned: cartelization of agriculture. When a few corporations in a small valley in California control the salad industry throughout the nation, a few mistakes can cause a national crisis, as we are witnessing today. Eight of the past 19 E. coli outbreaks since 1995 have originated in Salinas Valley produce farms. Monterrey County, which encompasses the Salinas Valley, produces 60% of all California produce, and 75% of U.S. produce comes from California.

States affected so far: California, Connecticut, Illinois Idaho, Indiana, Kentucky, Maine, Michigan, Minnesota, Nebraska, Nevada, New Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Virginia, Washington, Wisconsin, and Wyoming.

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