From Volume 8, Issue 5 of EIR Online, Published Feb. 3, 2009

United States News Digest

California Moves Toward Shutdown, Judge Backs Furloughs

Jan. 30 (EIRNS)—A judge in Sacramento ruled in favor of California Gov. Arnold Schwarzenegger's plan to cut wages and services, allowing him to furlough 235,000 state employees, without pay, two days a month. Schwarzenegger's proposal shuts down most state offices every other Friday, at a savings of $1.3 billion, while cutting wages to state employees by more than 9%. State Comptroller John Chiang had refused to enforce this, and several unions took Schwarzenegger to court to halt it. However, Judge Patrick Marlette ruled yesterday that the state's ongoing budget crisis and the lack of funds available to the state, constitute a real emergency, and the governor's order was reasonable and necessary under the circumstances. The first furlough day/unpaid day off will be Feb. 6.

Other measures which are in place to preserve funds include withholding state tax refunds; and beginning Feb. 1, the state will cease payments to a number of state programs, including supplemental aid programs for more than 1 million disabled, blind, elderly, and poor, and will halt grants for college students.

Bloomberg Lowers $1 Billion Budget Axe on New Yorkers

Jan. 30 (EIRNS)—New York City Mayor Michael "Benito" Bloomberg has joined fellow fascist Gov. Arnold Schwarzenegger, in calling for over $1 billion in services cuts to the city's budget. Bloomberg's next fiscal year budget plan, announced today, tries to plug a $4 billion revenue hole with nearly $2 billion worth of spending cuts and new sales taxes. These "spending fixes" come on top of $1 billion in cuts and $1.5 billion in tax hikes he made in this year's budget, the New York Daily News notes.

Lyndon LaRouche recently said that people are going to die as a result of politicians' refusal to adopt his bankruptcy reorganization plan, and the Bloomberg cuts show it. The Benito plan would cut 23,000 city jobs, including police, fire, and ambulance workers. Under the plan, 1,000 policemen, 1,440 school employees, 167 seasonal Parks Department aides, 549 child welfare workers, and more than 14,000 teachers and classroom employees, will be fired. In addition, 30 ambulance tours, one firefighter from each of 64 engine companies, and homeless prevention and child care programs are to be cut. Those lucky enough to keep their jobs will have to pay 10% more for health care.

"When you talk about reducing city expenditures, you are really talking about reducing headcount," Bloomberg said. "You can only get so much blood out of a stone." Indeed and he's going for every ounce.

LaRouche: Proposed Financial Markets Commission Is a Stalling Tactic

Jan. 27 (EIRNS)—Three U.S. Senators are moving to create a "9/11 Commission on the financial crisis," which would conduct a one-year investigation of who caused it and how, issuing reports to Congress and the President and referring criminal wrongdoing to U.S. Attorneys and state attorneys general as necessary. The legislation, S. 298, was introduced on Jan. 22, one month after Lyndon LaRouche's first public call for "a new Pecora Commission" modelled on the 1932-34 Senate Pecora hearings that exposed the scandals of Wall Street banks, triggering the Great Depression collapse.

Republican Sens. Johnny Isakson and Saxby Chambliss of Georgia and Democratic Sen. Kent Conrad of North Dakota are seeking more sponsors of the Financial Markets Commission Act of 2009, hoping to pass it "rapidly after the stimulus bill." It would set up a seven-member bipartisan commission with investigative staff and subpoena power to "examine all causes, domestic and global, of the current financial and economic crisis in the United States, including the collapse of major financial and commercial firms," including investigating the role of government regulatory agencies, and of the government bank bailouts themselves.

Under current circumstances, LaRouche characterized the proposal as "a stalling tactic, which would lose momentum." A new Pecora Commission must start up immediately, he said. Such hearings and exposures are "needed as leverage during the fight for bankruptcy reorganization."

Mortgage Bankers in Implausible Denial

Jan. 26 (EIRNS)—The president and CEO of the Mortgage Bankers Association contends he's never heard of the Homeowners and Bank Protection Act. In an MBA conference call with the media today "to discuss the state of the industry," John Courson not only denied knowing of the HBPA, but denounced a moratorium on home foreclosures as "water backing up against a dam."

Courson was asked by EIR: "As you may know, since 2007, city councils and state legislatures across the country have endorsed the Homeowners and Bank Protection Act, Federal legislation drafted by Lyndon LaRouche, and modelled on actions by FDR in the last depression. The HBPA would impose a moratorium on home foreclosures, and protection for the traditional activities—as opposed to speculation—of chartered state and Federal banks, and do this in the context of putting our bankrupt financial system through orderly bankruptcy proceedings, rather than attempting the impossible task of bailing out more than a quadrillion dollars in speculative debt. The representatives of the cities and states would certainly like your backing in this effort. Will you consider that?"

Despite Courson's waterlogged assessment of foreclosure moratoria, the Detroit Free Press reported today that Wayne County, Mich. Sheriff Warren Evans, who is running for Detroit mayor, has asked Gov. Jennifer Granholm to declare a six-month foreclosure moratorium in the county, and to declare a state of emergency there.

In the letter mailed Jan. 22, Evans wrote, "We are both familiar with the effect that our state's severe economic downturn has had and continues to have on Michigan's citizens, specifically those in Wayne County. These include, among others, record job losses, increasing reliance on food banks, and skyrocketing mortgage oreclosures."

Conflict of Interest Plagues Ross Nomination

Jan. 25 (EIRNS)—While Dennis Ross remains in contention for the critical post of the Obama Administration's special envoy to Iran, new evidence suggests that Ross is caught up in such a blatant conflict of interest that he should remove himself immediately from consideration. As initially reported on Col. Patrick Lang's authoritative website, Ross is the chairman of the Jewish People Policy Planning Institute, a think tank established in 2002 by the Jewish Agency. The organization is directed by a team of top Israeli military and diplomatic personnel, including at least one figure with ties to the Larry Franklin/AIPAC spy ring.

Prof. Uzi Arad, a director of the JPPPI, heads the Interdisciplinary Center at Herzliya, Israel, and is a former Mossad officer. Arad was deeply implicated in the Larry Franklin spy case, having brought Franklin to Herzliya conferences, and having met with him at the Pentagon on at least one occasion. U.S. intelligence sources told EIR at the time that the Franklin case first surfaced, that Arad was being positioned to be the "handler" of Franklin. The argument was that an "ex"-Mossad officer, working at a think tank could give Israeli intelligence plausible deniability of any role in the ongoing spying efforts, should Franklin be caught. Arad's name appeared in the Franklin indictment, and it is unclear what further details have emerged in the probe into the two AIPAC officials, still awaiting trial. Franklin pleaded guilty and agreed to cooperate with Federal prosecutors.

The fact that Ross is the chairman of an organization that is a virtual branch of the Israeli government, should be reason enough for his name to be removed from consideration for such a sensitive diplomatic assignment as special envoy to Iran. The Israeli government has made it clear that they have a very different policy towards Iran than the United States, as evidenced by the fact that Joint Chiefs of Staff chairman Adm. Michael Mullen and Defense Secretary Robert Gates made it clear, throughout 2008, that the United States was opposed to any Israeli preventive military strikes against Iran's nuclear facilities.

All rights reserved © 2009 EIRNS