From Volume 7, Issue 24 of EIR Online, Published June 10, 2008

U.S. Economic/Financial News

Poll: Financial Collapse Is No. 1 Issue on Voters' Minds

June 3 (EIRNS)—A USA Today/Gallop poll released today confirms what Lyndon LaRouche said two weeks ago: The main issue on voters' minds over the next few months will be the collapse of the economy. USA Today writes: "Americans are more downbeat about their personal financial situations now than they've been in decades..., an attitude likely to dominate this year's presidential and congressional elections."

The statistics are telling: 55% of families are worse off now than a year ago—the highest figure since Gallop began asking this question in 1976; and 11 percentage points higher than this past February. For the poor—those with incomes below $30,000—two-thirds are worse off. In age groups, two-thirds of Boomers in the 55-64-year-old category are worse off.

These figures also cohere with the groundswell of support for Hillary Clinton's campaign, especially in the last several months.

Hyperinflation Hits Auto, Airlines, Driving Management Mad

June 3 (EIRNS)—General Motors announced today that it would close four truck production plants, possibly even dump the entire line of Hummer SUVs, and shift its focus to small cars. Over 8,000 jobs will be lost, the majority in hourly workers, at plants in Oshawa, Ontario; Moraine, Ohio; Janesville, Wisconsin; and Toluca, Mexico. The cuts will reduce truck production by 700,000, and, although GM will increase car production, overall production will be cut by 500,000 annually. Cars will now account for 60% of GM's production, up from 50% in recent years. CEO Rick Waggoner rationalized the cuts to shareholders at their annual meeting by saying that $4/gallon gas represented a "structural change, and not just a "cyclical change."

Ford announced that sales for May had dropped by 16%, with sales of their (formerly) popular "F-series" pick-up trucks falling 31%, and sales of the massive Explorer SUVs falling 41%. This was the sixth straight monthly sales drop for Ford. So far, however, although they said the company will not meet its profit forecast, they have not announced any plant closings. Bloomberg News estimates that, industry-wide, sales have fallen by 10% this year.

Similarly hit are the airlines, where fuel costs have tripled since 2000, almost doubling in the last year alone. Desperate air carriers have taken measures such as charging extra fees for baggage, and eliminating even snacks from flights, in order to cut costs and reduce weight in flight. Now comes the idea that passengers might be charged by weight, i.e., as freight, forcing passengers like Al Gore to pay extra to fly.

Japan To Finance Nuclear Plants in the U.S.A.

June 7 (EIRNS)—Akira Amari, Japan's Economy, Trade and Industry Minister, and U.S. Secretary of Energy Samuel Bodman issued a joint declaration on June 7 in Aomori, Japan, on the sidelines of a meeting of energy ministers from the U.S., Japan, India, China, and South Korea. The agreement calls for Japan to co-finance construction of as many as 30 nuclear reactors in the United States, with funds from JBIC (Japan Bank for International Cooperation) and Nippon Export and Investment Insurance.

The Japan Broadcasting Corp also reported that "Japan and the United States, together with private companies, will develop small and medium-sized nuclear reactors with a view to having them used in developing countries."

The statement said: "We reaffirmed our commitment to promoting bilateral nuclear energy cooperation," and intend to "consult on potential financing support measures that would facilitate nuclear power plant construction in the United States."

Japan's Toshiba Corp. bought Westinghouse for more than $4 billion in 2006. Westinghouse announced in May it would build two nuclear power reactors in South Carolina.

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