From Volume 7, Issue 46 of EIR Online, Published Nov. 11, 2008

United States News Digest

Barney Frank Pushes Soros's Drug Decrim

Nov. 7 (EIRNS)—As Barney's Bailout Circus was moving into high gear after the collapse of Bear Stearns, Fannie Mae, Freddie Mac, and IndyMac in July 2008, Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee, was calling for the "repeal of Federal criminal statutes dealing with personal possession of marijuana," at a press conference with Rob Kampia, the head of the Marijuana Policy Project. The MPP financed and/or organized the ballot initiatives for drug decrim in California, Michigan, and Massachusetts this year. (About ten other House Democrats have signed on to the bill). H.R. 5843, introduced on April 17, is known as the "Personal Use of Marijuana by Responsible Adults Act of 2008," and was referred to the House Subcommittee on Crime, Terrorism and Homeland Security.

A note on Frank and Nazi-collaborator George Soros: On Sept. 7, 2004, when somebody dared to suggest that Soros's offshore money centers could be linked to "drug cartels" (in this case, Chris Wallace of Fox-TV asking a question to Rep. Dennis Hastert (R-Ill.), Frank rushed to Soros's defense, and organized a letter from 11 House members inviting Soros to come to Congress to talk about "important public policy issues," as part of their attempt to "apologize for the defamatory innuendo aimed at you by others."

Who Is Rahm Emanuel?

Nov. 7 (EIRNS)—President-elect Obama's close friend, soon to become White House Chief of Staff, Rahm Emanuel, is a backer of the Zionist Lobby, the hedge fund "industry," and globalization. Elected to Congress in 2002, in four years he became the fourth most powerful Democrat in the House.

Both his father and brother were members of the Israeli Irgun, the group that bombed the King David Hotel in Jerusalem to win independence for Israel. In 1991, Rahm Emanuel volunteered to serve as a civilian advisor to the Israeli Defense Forces during Operation Desert Storm, to protect Israel from the Iraqi scud missiles. Rahm, like his father, has dual American-Israeli citizenship. One source quoted Rahm's father on his new job: "Of course he's going to defend Israel. After all, he's not an Arab."

Emanuel's mother calls him "Rahmbo." Said the Democratic Congressional Campaign Committee's John Lapp, "The genius about the pick is this 'good cop' you will have in President Obama, and the absolute enforcer you will have in Rahm. He knows where the bodies are buried, and what people's wants, desires, needs and vulnerabilities are. He does not tolerate mistakes. He does not tolerate human error."

Emanuel was a top fundraiser for Bill Clinton, and stayed on as advisor until 1998. From 1999 until 2002, he worked for the investment bank Dresdner Kleinwort Wasserstein, where he earned $18 million. Wasserstein moved to Lazard Frères in 2000. Congressional disclosure forms in 2003 showed Emanuel earned $16.2 million as an investment banker. Wasserstein was one of Clinton's most active fundraisers in the financial community. There, his client base included many of the Democratic Party's major contributors. Emanuel's two biggest deals involved politically connected utilities: one representing Commonwealth Edison's corporate parent in a merger, and the other representing a buyer of a home security business from Telecom giant SBC Communications. Soon afterward, SBC hired William Daley, Clinton's Commerce Secretary and the brother of Chicago's mayor.

Emanuel was the top recipient of donations from hedge funds, private equity firms, and the securities/investment sector in the 2007-08 election cycle, according to Since being elected to Congress in 2002, Emanuel has received more money from individuals and PACs in the securities and investment business than any other "industry," according to

Emanuel was a Clinton appointee to the Board of Freddie Mac, at a time when an Administration ruling allowed Freddie and Fannie to satisfy their affordable housing obligations by purchasing subprime mortgages; these were ultimately used to add a trillion dollars in junk loans to the Freddie balance sheet, and develop a market in worthless securities.

Emanuel held a meeting with Clinton campaign advisors following Clinton's 1992 victory. The group discussed who had opposed them. The New York Times' Elizabeth Bumiller reports: "Suddenly, Emanuel grabbed his steak knife, and as those who were there remember it, shouted out the name of another enemy, lifted the knife, then brought it down with full force into the table. 'Dead!' he screamed.... And so went the knife, and the chant 'Dead!' through a litany of 'enemy' names."

In 2006, Speaker of the House Nancy Pelosi tapped Emanuel to be head of the Democratic Congressional Campaign. Emanuel, a Democratic Leadership Council Democrat, selected and funded Democratic candidates who supported the Iraq War, where he could. Many of those elected joined the "Blue Dog Caucus" balanced-budget ranks.

Many in the Congressional Black Caucus have well-founded grievances against Emanuel, and it is widely suspected that he is a force behind moves to force Rep. Charles Rangel (D-N.Y.) out as chair of the powerful House Ways and Means Committee. Obama's first appointment is thus seen as a slap in the face to the CBC.

Schwarzenegger, California Melting Down

SACRAMENTO, Nov. 7 (EIRNS)—As California's financial circumstances plummet, the erratic and dangerous Gov. Arnold Schwarzenegger continues to demonstrate that he has no idea what to do, except to slash living standards. On Nov. 5, he called a special lame duck session of the legislature, to address the latest set of devastating figures. Due to the collapse of revenues, the deficit for FY 2008-09 is now $11.2 billion. The budget for the coming year, which was completed nearly three months late, must be re-done, as the so-called balanced budget deal has unraveled. In all, it appears that the deficit from the original budget's spending plan presented last January by Schwarzenegger—which was an austerity plan to begin with—is now verging on $30 billion!

This deficit has been growing at the rate of more than $1 billion per week! This shows that 1) the figures used by Arnie in crafting his bogus budget were fraudulent; and 2) that the state's economy is in a free fall.

It is now up to Schwarzenegger to deliver on his promise that he will "fix the broken budget system." The fix Arnie is pushing, is fascist austerity. After a brief meeting yesterday with legislative leaders, he sent the legislature home. Schwarzenegger has proposed a 1.5% increase in the state sales tax, and a non-paid day off per month for state workers. One Democratic insider reported that, since this will do little to reduce the deficit, the governor's planned "savings" will include massive cuts in an already gouged public health sector, and deep slashes in the safety net for poor, elderly, and disabled Californians. Expect further cuts in the state's antiquated and inadequate infrastructure, as well.

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