From Volume 8, Issue 29 of EIR Online, Published July 21, 2009

United States News Digest

Secretary Clinton Outlines Four-Power Thrust

July 15 (EIRNS)—In her presentation to the New York Council on Foreign Relations today, Secretary of State Hillary Clinton announced her upcoming schedule of visits, which reflects the importance she is placing on relations with the nations Lyndon LaRouche has identified as indispensable for a "Four-Power" agreement to create a new international credit system. After saying that she will be "encouraging major and emerging global powers — China, India, Russia, and Brazil, as well as Turkey, Indonesia, and South Africa," she laid out her itinerary.

"This week, I will travel to India, where External Affairs Minister Krishna and I will lay out a broad-based agenda that calls for a whole-of-government approach to our bilateral relationship. Later this month, Secretary Geithner and I will jointly lead our new strategic and economic dialogue with China. It will cover not just economic issues, but the range of strategic challenges we face together. In the fall, I will travel to Russia to advance the bi-national presidential commission that Foreign Minister Lavrov and I will co-chair.

"The fact of these and other meetings does not guarantee results, but they set in motion processes and relationships that will widen our avenues of cooperation and narrow the areas of disagreement without illusion. We know that progress will not likely come quickly, or without bumps in the road, but we are determined to begin and stay on this path."

'Focus on Hamilton, Not Smith and Ricardo'

July 17 (EIRNS)—"If today's leaders spent more time focussing on Hamilton, and less time on Smith and Ricardo, I don't think we'd be facing the prospect of a jobless recovery," said Scott Paul of the Alliance for American Manufacturing, implicitly drawing the contrast between the American and the British systems of political economy, the latter represented by free-trade ideologues Adam Smith and David Ricardo.

Paul made this refreshing statement while testifying at a Hearing of Senate Banking Committee's Subcommittee on Economic Policy, chaired by Sen. Sherrod Brown (D-Ohio); the topic of the hearing, was "What are the elements of a national manufacturing strategy?"

"We urgently need a national manufacturing strategy," Paul told the committee, noting that this is hardly a radical concept, since "Alexander Hamilton constructed America's first industrial policy in 1791."

The view that the loss of manufacturing jobs "isn't such a bad thing as we transition to a new economy," is "dangerous and misguided," Paul told the subcommittee.

Another witness, Leo Hindery of the New America Foundation, cited the "desperate need for an all-of-government national manufacturing and industrial strategy," emphasizing the "uncounted unemployed" in the United States, which, he said, are actually 800,000 more than the officially-counted unemployed. Hindery pointed out that real unemployment is actually about 19%, and he expects this to increase over the next 18 months. The economy is "hemorrhaging jobs in the very sector—manufacturing—that must grow in order for us to move permanently away from debt-financed consumption as the principal engine of economic growth," he stated.

Hindery attacked, without naming, those in the Obama Administration who "wrong-headedly believe that one job is as good as another, whether it is in manufacturing or service," and who also believe that jobs associated with exported services will make up for the loss of manufacturing jobs. (He cited an unnamed Administration official who stated that America's future resides in exporting "consulting and legal services, software, movies, and medicine.")

Hindery pointed out, reasonably, that California wouldn't be in the mess it is in, if it hadn't lost over 400,000 manufacturing jobs since the year 2000, which would have produced $300 billion in income-taxable wages.

Hindery called for the Administration to 1) "pick winners" in the economy and support them, as every other G-20 country does; 2) fund a ten-year program of public investment to upgrade and rebuild the nation's infrastructure; 3) adopt "Buy American" rules for Federal procurement; 4) carry out tax reform to create incentives for creating jobs here, and eliminate incentives for relocating jobs abroad.

Pelosi's Fake 'Pecora Commission' Panned

July 16 (EIRNS)—As House Speaker Nancy Pelosi prepares to name the members of the Financial Crisis Inquiry Commission (FCIC), which she falsely describes as being modeled on the Pecora Commission of the FDR years, the New York Observer's Joe Conason has exposed the lie, showing that the FCIC is a cover-up of the crimes of Wall Street, while the president of the Franklin and Eleanor Roosevelt Institute, Andrew Rich, described what a real Pecora Commission would be.

Conason described the original Pecora Commission, "armed with full subpoena power," dragging J.P. Morgan and all the other Wall Street crooks before the people, exposing their crimes, such that "the furious reaction of the public armed FDR with the political power to enforce reforms, despite the bitter opposition of the bankers."

But, Conason writes, "What Pelosi and her colleagues appear to be preparing, with the apparent assent of President Obama, is much weaker stuff." He ridicules the proposed team for the Commission, and charges that "the congressional Democrats are running away from the mission of change that they were elected to fulfill," by creating a "cowardly evasion and a mush-mouthed 'bipartisan' report."

Andrew Rich, who heads the Roosevelt Institute (tied to the Roosevelt Library at Hyde Park, and with a network of organizations on 70 campuses around the country), while ignoring the fact that the new FCIC is a transparent fraud, issued a pubic letter describing three guidelines:

1. Appoint a single investigator. This individual must have a proven record of exposing fraudulent elites and institutions, and must provide a professional, non-political spirit to the investigation.

2. Afford no special treatment. No one is off-limits or gets special protection in the investigation.

3. Provide the tools to do the job. The investigator must be given ample budget and time, full subpoena authority, and the ability to hire and fire staff.

True enough—but it won't happen under the nut case in the White House.

Obama and Congress Clash over Bush-Like 'Signing Statement'

July 15 (EIRNS)—Back in February, at the G20 meeting in London, President Barack Obama agreed with his British exemplars in Tony Blair's circle and the royal family, that he would build up the International Monetary Fund with $500 billion new capital, with the United States providing $108 billion. Obama and Treasury Secretary Tim Geithner slipped the loan to the IMF into a war appropriations bill, but neither house of Congress was intimidated by that ploy. Opposition was strong, and the White House made deal after promise after pledge, cutting down the IMF's authorities and prerogatives, to get votes.

Once the bill was finally passed, Obama disowned the deals with Congress, in the type of "signing statement" made infamous by President George W. Bush. He claimed that limiting the IMF's prerogatives, meant limiting his Presidential authority to conduct foreign policy. Even "Bailout Barney" Frank (D-Mass.) called the White House behavior "outrageous," and in a foreign policy appropriations bill passed on July 8, the House voted 429-2 to overrule everything in Obama's signing statement.

Today, the conflict began to escalate, with a letter delivered to Obama from Democratic Reps. David Obey (Wisc.), Barney Frank (Mass.), Nita Lowey (N.Y.), and Greg Meeks (Fla.). The four warn that if Obama attempts a signing statement defending the IMF on the foreign aid appropriations bill, they will cut off the IMF funds entirely. But Obama has his promises to the Queen, and to Blair and Gordon Brown, which to him outrank those he makes to Congressmen—so this fight may have interesting results.

Dems Challenge White House Over Jobs Creation

July 15 (EIRNS)—Obama Administration economic policymakers Larry Summers and Tim Geithner—with their lunatic line that the economy is "in recovery" and no further infrastructure investments are to be allowed—are driving Congressional Democrats who want to create public jobs, into opposition to the White House.

Today, House Democratic infrastructure leaders James Oberstar (Minn.) and Peter DeFazio (Ore.) joined with Republican Sen. George Voinovich of Ohio to announce that they were pushing forward a new six-year, $500 billion surface transportation (highway and rail) authorization bill "against strong White House opposition," as their press release said. Yesterday, in interviews with The Hill, Oberstar and DeFazio attacked the "theoretical economists at the White House"—Summers and Geithner, above all. These "theorists," they said, are focussed on bailing out Wall Street banks, and are trying to shut down all plans for more infrastructure public works even while Obama cheerfully predicts official unemployment rates of over 10% later this year. They also blamed Summers and Geithner for severely limiting the infrastructure spending that got into the "stimulus bill," the American Recovery and Reinvestment Act Obama signed in February.

DeFazio said Obama's advisors believe only in tax cuts and bailouts; their stimulus "wasn't productive activity, it didn't put any Americans back to work, it didn't rebuild our infrastructure, it didn't even fill in a single pothole."

All rights reserved © 2009 EIRNS