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From Volume 36, Issue 40 of EIR Online, Published Oct. 16, 2009

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`The LaRouche Plan':
Rescuing the World's Economy
by Lyndon H. LaRouche, Jr.

September 30, 2009— During June 1987, I had repeatedly forecast, publicly, that unless certain remedial actions were taken during the Summer of that year, the first weeks of that October would see a stock-exchange crisis comparable to 1929. It happened exactly as, and when I had forecast such an event to occur.
Now, with the advent of this month of October, the entirety of the planet Earth will have entered the ``count-down'' phase of what has been pending as a far greater threat of an international economic breakdown-crisis, than even that of Europe's Fourteenth-century ``New Dark Age.'' This would come to be, unless prevented now, a general breakdown-crisis of the entire planet, a period of deadly crisis, which would be fairly estimated to be continued over a span of two or more generations to come. The current process leading from the development of October 1987 back then, to this now immediate, far greater danger, was set into motion, back then, during the October 1987 crisis more than twenty years ago...

In-Depth articles from EIR, Vol. 36, No. 40
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This Week's Cover




The LaRouche Show

  • The Unified Field Theory:
    A Biological Perspective

    Peter Martinson and Sky Shields, leaders of the scientific team of the LaRouche Youth Movement, discuss the prerequisites for a manned space program, including industrialization of the Moon, colonization of Mars, and exploration of the Solar System beyond Mars.

This Week's News

U.S. Economic/Financial News

Golden Hastens Small Business Lender's Bankruptcy

Oct. 5 (EIRNS)—A year ago, Goldman Sachs investment bank notoriously siphoned $12-14 billion out of the Federal Treasury's TARP bailout facility, as a result of the credit default derivatives (CDS) contracts it had made with AIG insurance company. This "Goldman Sucks" case was one of the clearest proofs, to sane people outside Wall Street and the City of London, that financial derivatives should be outlawed from a new international credit system.

Now Goldman is sucking on billions in CDS derivatives once again, in the case of CIT Small Business Lending Corp., and may be helping drive the century-old CIT, the largest U.S. lender to small businesses, into bankruptcy. Hundreds of thousands of small retail businesses, already suffering a severe credit cutoff, would be hit harder if CIT goes under, worsening the economic collapse and intersecting the ongoing blowout of commercial real estate.

Put simply, Goldman, which is CIT's advisor and most recent lender (with a $3 billion credit line in January), has a large, CDS-based interest in a potential CIT bankruptcy. Not only would a bankrupt CIT have to pay Goldman $1 billion as "present value of the lifetime return" on the $3 billion loan; a CIT bankruptcy would also make Goldman Sachs' credit default derivatives pay off to a tune of, perhaps, as much as $3 billion more.

Latest reports are that a bankruptcy may be being "prepackaged" by banks organized by Goldman, with the loan doubling to $6 billion, and becoming debtor-in-possession financing.

A CIT bankruptcy would be a double bonanza for Goldman—just as AIG's effective bankruptcy was—while cutting off many thousands more retail businesses from credit. CIT, while in severe financial trouble, has continued lending, though it is losing money on its $30 billion credit outstanding to small businesses. The bankruptcy would also wipe out Treasury's bailout equity in CIT, a $2.3 billion loss for the TARP.

Austerity To Be Imposed on Wars, Too?

Oct. 7 (EIRNS)—Since the Obama Administration took office, Secretary of Defense Robert Gates has been warning the military services to no longer expect the high growth rate in the defense budget that has characterized the last few years. What this means for the Army was spelled out by Maj. Gen. Robert Lennox, the director of the Army's Quadrennial Defense Review Office, who is slated to become the next Deputy Chief of Staff for Resources; he spoke during a panel discussion on Army modernization at the annual conference of the Association of the U.S. Army on Oct. 5. After describing the pressures on the Army budget, he stated that "declining resources mean we may have to deal with a decade of austerity, or find smarter ways of doing business." This, despite the fact that the Army is maintaining a large chunk of its forces in combat and trying to modernize its combat brigades when they rotate home.

When Lennox was asked at what point the austerity becomes more than can be overcome with "smarter ways of doing business," he replied: "That's probably a question for the Department of Defense, Congress and the American people to address."

Nursing Homes on the Verge of Financial Collapse

Oct. 5 (EIRNS)—The entire national system of 16,000 nursing homes, which house close to 1.9 million people, is on the edge of collapse. The immediate trigger is cutbacks in reimbursements from Medicare and Medicaid—even before President Obama's proposed (Nazi-modeled) Independent Medicare Advisory Council (IMAC) is implemented.

Last week, the Centers for Medicare and Medicaid Services (CMS) enacted a Medicare rate adjustment that cuts an estimated $16 billion in nursing home funding over the next ten years, on top of state-level cuts from Medicaid. In 2008, Medicaid payments by states to nursing homes already fell short by $12 per patient per day—nearly $4.2 billion in unreimbursed costs for Medicaid-allowed expenses, according to the American Health Care Association.

"We're really teetering on the edge of what we see as the collapse of the long-term care system," Deborah Chernoff, spokeswoman for District 1199 of the New England Health Care Employees Union in Connecticut, told AP. Eli Feldman, CEO of the Metropolitan Jewish Health System in New York City, reported that his company had to lay off about 200 of its 1,000 employees at three nursing homes in Brooklyn, because the state cut Medicaid funding by 10-14%. Said Feldman: "We understand there's a recession/depression, but this is not health reform ... and the victims are basically the people who live in the facilities. The Legislature basically says, 'Too sick, too old, too bad."

Global Economic News

Iceland's Prime Minister Slams IMF and the Anglo-Dutch

Oct. 6 (EIRNS)—Icelandic Prime Minister Johanna Sigurdardottir told the Financial Times that it was "not acceptable" for the International Monetary fund to insist that Iceland agree to the demands of the British and Dutch governments, for the Icelandic government to take responsibility for reimbursing British and Dutch depositors who lost their money when the Icelandic banks collapsed. In written answers to Financial Times questions, she also slammed Britain for using anti-terror laws to freeze assets of the Icelandic banks. She said that British and Dutch authorities "cannot wash their hands" of regulatory responsibility for the failures of the Icelandic banks that operated in their countries.

She attacked British Prime Minister Gordon Brown for demanding that Reykjavik take responsibility for the actions of the banks. She said that while Brown says publicly that "it's not the general public that should suffer from the wrongdoings of the banks ... obviously he does not count the Icelandic public in that." She put the blame on "uncontrolled capitalism and greed and the megalomania ... and cross ownership of a few players."

She added that Iceland was thrown "into an abyss of turbo-capitalism and mounting inequalities which proved fatal especially for a small nation." She vowed to return Iceland to the path of "equality and fairness."

Turkey: IMF Proposal Not 'Realistic'

Oct. 5 (EIRNS)—It seems the International Monetary Fund needs Turkey more than Turkey needs the IMF. Even at the IMF annual conference now taking place in Istanbul, Turkey continues to resist pressure to come to a new stand-by agreement. Turkish Economics Minister Ali Babacan said that Turkey has not accepted the IMF proposal, because it did not find it "realistic." He said it could be better for the country to implement its own policy, without the IMF, than accede to the Fund's demands.

"We have been continuing on our way without a standby deal since May 2008," he said. "Some are asking why this is the case. The answer is simple: We do not believe the IMF's offered solution will benefit Turkey's economy. And that is why we have announced our own economic program. The government has told the IMF that the future relationship—including a possible stand-by deal—should be in accordance with Turkey's medium-term plan." He said that the government's plan does not need IMF financing.

United States News Digest

Obama-Baucus Deal Exempts Big Pharma from IMAC Diktat

Oct. 11 (EIRNS)—The American Medical Association has written a letter to Senate Finance Committee chairman Max Baucus (D-Mont.), in response to the disclosure that the White House and Baucus have made deals to exempt drug companies and hospitals from decisions to be made by the proposed Independent Medicare Advisory Council (IMAC), aka, "death panels," included in the Baucus bill and demanded by the Obama Administration. The letter complains that it is unfair to protect the drug companies and hospitals from the commission and not others. The AMA writes: "This presents a serious inequity." The AMA and others also complain that the Council could cut only provider payments, without authority over benefits or premiums.

Baucus's agreement with the drug industry for its companies to contribute a total of $80 billion over ten years excludes price negotiations. The drug lobbyists are pushing to be sure that IMAC could not force negotiations either.

In a parallel deal, Baucus and the White House agreed to limit the hospitals' payment reduction to $155 billion over ten years, and in this case, they added a guarantee to the hospitals that for that ten-year period, the proposed Medicare Council would not extract any more.

The Oct. 11 Sunday New York Times reports that Rep. Jim Cooper (D-Tenn.) now predicts the end of IMAC: "This will start a race for the exits. Every other provider group will say, why are you letting these guys out? Why should we have to participate?" When House Energy and Commerce Committee chairman Henry Waxman (D-Calif.) heard last week about the hospital exemption, he said, "It amazed me. If they think Congress is too political to be involved in Medicare cuts, it seems rather political to have exempted the hospitals."

Unfortunately, none of these moves addresses the real issue, which is that the IMAC proposal is a Hitlerian T-4 mechanism to cut costs by killing people. The entire proposal must be scrapped.

Wall Street Going for Broke Against Rangel

Oct. 9 (EIRNS)—The New York Times today ran yet another editorial attack on Rep. Charles Rangel (D-N.Y.), demanding his removal as chairman of the powerful House Ways and Means Committee. Citing the usual litany of petty allegations of tax misreporting, and so-called abuse of his Congressional franking (postage) privileges, the Times expanded its targeting to House Speaker Nancy Pelosi (D-Calif.), accusing her of refusing to cave in to Wall Street's demand for Rangel's ouster, and jeopardizing her own reputation (!) as a Speaker committed to battling Congressional corruption. When the Republicans tried again, this week, to ram through a resolution to remove Rangel as committee chairman, until the expanded Ethics Committee probe is completed, two Democrats voted with the GOP, but it was still far short of the needed votes.

Rangel, one of the last remaining FDR Democrats in Congress, has been one of the most adamant members in demanding taxes against the rich to cover costs of expanded health care, and insisting on a genuine public option, and has endorsed Rep. John Conyers' (D-Mich.) bill calling for a single-payer insurance system, extending Medicare to all.

If Nancy Pelosi Wants A VAT, Throw Her in It

Oct. 7 (EIRNS)—When the American people and U.S. economy desperately need a large-scale infrastructure "blue-collar jobs" program to reverse mass unemployment and impoverishment, Speaker Nancy Pelosi is suddenly calling, instead, for a regressive value-added tax (VAT) to produce—more impoverishment.

Pelosi added her call for VAT today, to a growing number which have sprouted up over the past two weeks, since VAT was proposed by former Federal Reserve chairman Paul Volcker, who is reviewing the tax code on White House assignment. Those supporting the idea include, among others, John Podesta, head of the "Progressive Democratic" Committee on American Progress; Roger Altman, former Deputy Treasury Secretary under Bill Clinton and Robert Rubin; Urban Institute head Robert Reischauer and his deputy Rudolph Penner; Norman Ornstein of the neo-conservative American Enterprise Institute; and Michael Mussa of the top "deficit hawk" think-tank, the Peterson Institute for International Economics.

The "progressive" New America Foundation and Urban Institute have each just held "exploding debt, sky is falling, out-of-control deficits" forums at which VAT was pushed or called "the inevitable solution."

The European-style VAT "tax on everything" would be paid both by producers and distributors of goods at every stage and ultimately by consumers of goods. The right-wing Heritage Foundation, which supports a VAT tax, estimates it would cost the average American family $500/year for each 1% of a VAT tax.

Thus it would be not only a regressive tax on households, but also a self-defeating one in raising revenue, during a collapse of economic activity which it would intensify, and mass unemployment and impoverishment of households which it would worsen.

States Seek $50 Billion for High-Speed Rail Projects

Oct. 7 (EIRNS)—The head of the Federal Railroad Administration said yesterday that the agency has received applications from 24 states, seeking $50 billion for high-speed rail projects—six times the amount allocated in the "stimulus" program. The Obama Administration's "America Recovery and Reinvestment Act," passed by Congress early this year, allocated only $8 billion for high-speed rail. In fact, the only basis for carrying out such a program is through the LaRouche Plan, with bankruptcy reorganization followed by Federal credit for the projects.

"Interest in winning a share of the rail funds has been intense, not only by states, but by domestic and foreign rail, engineering and construction companies that want to build and operate the systems," AP reports.

Among the projects for which states have submitted proposals are:

* A California bullet-train line that would eventually run from Sacramento to San Diego;

* A maglev train from downtown Pittsburgh to the airport;

* A Southeast Corridor line between Charlotte, N.C. and Richmond, Va.;

* An Ohio project to link Cleveland, Columbus, Dayton, and Cincinnati;

* An Oklahoma line between Tulsa and Oklahoma City;

* A Florida high-speed line between Tampa and Orlando; and

* A number of Midwest projects linking to a regional system centered in Chicago.

Heroin, Real Cheap, Is Being Dumped on U.S. Streets

Oct. 7 (EIRNS)—Anecdotal media stories from Anchorage, Ala. to Atlanta, Ga., and Long Island, N.Y., report an upsurge of heroin being dumped on U.S. streets, real cheap. The worst-hit population reported in each case: American youth.

This is not some "market" effect, but a flank of Britain's opium war against the United States. Until now, the vast majority of heroin in the U.S. has come from Mexico and Colombia, but over the last couple of years, there has been a huge increase in Afghan opiates flooding the world market. That no action is being taken, is yet another reflection of the general breakdown in government functioning.

Yesterday, the executive director of the Atlanta Recovery Center, Mary Rieser, warned that the center is seeing "an alarming number of new students coming in addicted to heroin. The drug has grown in popularity amongst today's youth," such that heroin has become the most common addiction among those arriving for treatment and rehabilitation.

Anchorage drug rehab programs also report a surge in heroin available in south-central Alaska. "It's in such abundance, and it's so cheap out there that everything else is secondary," one program director said. "We don't even have a close second running drug of choice on this program. Right now, it is heroin and has been for the past three years."

A Sept. 25 New York Times article, titled "Young and Suburban, and Falling for Heroin," profiled the heroin epidemic among upper-middle-class youth in Suffolk County, Long Island. The New York City area is being inundated with cheap, plentiful heroin. Recent raids on "heroin mills" are picking up hundreds of thousands of bags this year, as opposed to several bags a year ago. Experts trace the spike in heroin use by younger and younger kids, to its widespread availability and low cost. A bag of heroin can sell for $5 to $25 for a 6-8 hour high. By comparison: a cocaine dose for a 30-minute high costs $40-60; and prescription painkillers (Vicodin, OxyContin, etc.) sell for $40 and up on street.

Ibero-American News Digest

Mexico Struggles To Keep Up with Spread of A/H1N1 Flu

Oct. 9 (EIRNS)—In statements to the news media Oct. 8, Mexican Health Secretary José Angel Cordova offered alarming details on the spread of the A/H1N1 virus, and the deficit in health-care infrastructure that is hindering the country's ability to deal with the pandemic. Never was it more urgent to launch a crash program to mobilize resources and secure international cooperation.

Cordova's remarks contrasted sharply with those of President Felipe Calderon, who stated on Oct. 7 that Mexico's greatest health challenge is not the A/H1N1 virus, but rather illnesses seen most frequently in the advanced sector—diabetes, cardiovascular disease, and obesity. Despite the fact that a large number of Mexicans are starving, President Calderón recommended that people "change their eating habits, "and think about wellness and exercise!

Here's the stark reality: The campaign to vaccinate people against the seasonal flu this past week was chaotic; there was not enough vaccine, and distribution was disorganized. On top of that, about 500 new diagnosed cases of the A/H1N1 flu are appearing daily, and on some days 600, in contrast to 350-400 in April/May.

Mexico has been negotiating with foreign pharmaceutical labs to purchase 30 million doses of A/H1N1 vaccine, and hoped to receive a first batch by the end of this month. But due to global demand, now only 5 million have been promised by the end of December, and 5 million for each of the following three months. That's not enough.

The country isn't considered poor enough to receive vaccine from developed countries. Cordova said efforts are underway to secure more vaccine from the United States. In the meantime, he warned, there may not be enough hospital beds, doctors, or respirators to meet demand, as the infection rate accelerates. Already, bed capacity at the National Institute of Respiratory Diseases and the National Institute of Medical and Nutritional Science is "saturated," he said.

Mexican Press Picks Up on 'Obamastache' and LaRouche Plan

Oct. 9 (EIRNS)—Various Mexican press had a field day with the intervention by the LaRouche Youth Movement (LYM) in Mexico against President Barack Obama's Hitlerian health-care reform policies, on the very day the Nobel Committee announced the U.S. President had been awarded its Peace Prize.

LYM organizers intervened today at the UN-sponsored Second World Forum on Renewable Energy, held in Leon, Guanajuato, with a large Obama mustache poster and the latest "LaRouche Plan" leaflet. The story filed by national daily El Universal, along with its prominent photo of the Obama mustache poster, under the headline: "Youths Protest Against Nobel for Obama," was picked up by various regional papers, while the newswire of Proceso magazine and Correo de Guanajuato, a daily which circulates throughout Mexico's central valley, ran their own stories.

The El Universal story quoted LYM organizer Carlos Jonas Velasco: " 'Obama has promoted Nazi policies to keep reducing the population, and he has supported George W. Bush and all those who support green policies, with the idea of going towards absolutely backward sources of energy." LYM organizer Ingrid Torres is also quoted, explaining that "Al Gore, Prince Philip, and former Prime Minister Tony Blair have said that their goal is to reduce the world population to one third of the current population, i.e., 2 billion human beings."

Correo de Guanajuato wrote of the LYM: "They propose to go to Mars and industrialize the Moon; they don't believe scientists nor in global warming"; nor in adopting Hitlerite anti-industrial green policies and Obama's health reforms. Correo ran the photo of the Obamastache poster, with organizers holding a big banner under it, reading "He Also Liked Green Policies."

The article stated: "During the closing ceremony of the Global Forum on Renewable Energy, six members of the LaRouche Youth Movement demonstrated, to state that it is urgent to change the current economic model, and that the goal of the ideology that promotes the drive for renewable energy, is to avoid the industrialization of countries and entire continents, like Africa....

"When the first speaker, Ged Davis, copresident of the Global Energy Assessment Council, opened the floor for participants who wished to express concerns or observations, Carlos Jonas Velasco, who seemed to head the group, asked to speak and characterized Obama's health-care policy as genocidal, accusing him of giving priority to financial bailouts in the middle of an international financial crisis.

"They tried unsuccessfully to take the microphone from him, and he didn't release it until he had stated that the economist Lyndon LaRouche is calling for a national credit system, under which necessary infrastructure projects could be carried out so that each nation could provide its population with what they need....

"However, as the [Guanajuato] governor was announcing that the Forum had concluded, the 'LaRouche' youth stood up and began to sing, as a chorus, a composition which says that the ideology that promotes the drive for renewable energy 'doesn't have anything to do with pollution, but with the agenda of depopulation.'

"...One of the LaRouche youth, Laura Flores, stated that 'there is no scientific evidence at all' that demonstrates a relationship between carbon dioxide and a rise in temperature. She challenged the efficiency of alternative energy sources which, she said, do not produce enough energy for necessary hospitals, schools and industries.

"'We see that the intention is the same as that of free trade ... with the financial bailouts, which is to impoverish the population and put a brake on technology,' said the youth.

"Another youth, Ingrid Torres, stated that the financial oligarchy punishes countries that want to become developed and use advanced technologies. 'They want the population to accept its own suicide with a green ideology—which has no scientific basis—as a pretext to avoid the industrialization of entire continents such as Africa, in order to continue the policy of looting their raw materials, while providing them technologies which promote renewable energy, which is not sufficient to industrialize a country.'

"A green ideology which, she said, also lets them divert attention 'away from the worst collapse of the world economy, making climate change their main concern, and not malnutrition and hunger,' she said.

"Carlos Jonas commented that the UN, instead of talking about global warming and promoting carbon swaps, should not permit the financial sector to loot entire nations," Correo concluded.

Western European News Digest

Illegalities Behind the Lisbon Vote in Ireland

Oct. 8 (EIRNS)—The Irish people were subjected to a massive and illegal campaign of intimidation to achieve a "yes" vote in last week's referendum on the European Union's Lisbon Treaty, reports Anthony Coughlan of The National Platform EU Research and Information Centre, covered by the UK Column. The referendum supported the Treaty, reversing the voters' decision of June 2008.

Coughlan notes that the "yes" side outspent the "no" side ten to one, and lists several illegal actions used to coerce voters. "The intervention of the European Commission, entailing massive expenditure of money to influence Irish opinion towards a Yes, the running of a website and the issuing of statements that sought to counter No-side arguments, and the advocacy of a Yes vote by Commission President Barroso and other Commissioners and their staffs during visits to Ireland, [were] unlawful under European law, as the Commission has no function in relation to the ratification of new Treaties, something that is exclusively a matter for the Member States under their own constitutional procedures."

Czech President Places Conditions on Signing of Lisbon Treaty

Oct. 9 (EIRNS)—Czech President Vaclav Klaus has called the acting chairman of the EU Council, Swedish Prime Minister Fredrik Reinfeldt, and told him that he will sign the European Union's Lisbon Treaty only if a note is added to it. Klaus did not specify what the note should say, but, "as far as I understood, it has to do with the EU Charter on Human Rights," Reinfeldt told Reuters. "He demanded that this addition be approved by the Council. I told him that this is the wrong message in the wrong moment and what we need now is his signature. I do not want this demand now involving a further delay in the Treaty ratification." Klaus is the only head of state who has not signed the Treaty, which will strip European member nations of most of whatever sovereignty they still retain.

EU Acts as if Lisbon Treaty Were Already in Effect

Oct. 5 (EIRNS)—The EU institutions have already begun to carry out aspects of the new superstructure envisaged in the Lisbon Treaty, although the latter is not in effect yet: EU Commission President José Manuel Barroso approved a program months ago for training the personnel of the desired common EU diplomatic service, and has also okayed the preparation of a common security ministry, through a standing Committee on Internal Security (COSI). Both programs, it is said, are based in London. This is illegal, under existing EU laws.

LaRouche's Proposals Are Before Irish Parliament Committee

Oct. 6 (EIRNS)—The Irish Parliament's Joint Committee on European Affairs was presented on Sept. 28 with material concerning Lyndon LaRouche's call for a new Pecora Commission to investigate the financial malfeasance that triggered the financial-economic crisis, and his call for a bankruptcy reorganization of national banking systems. On Sept. 30, the clerk of the Joint Committee on European Affairs returned an official letter confirming that the material had been brought to the attention of each member of the committee.

Two Million Frenchmen Vote To Defend Public Postal System

Oct. 5 (EIRNS)—At least 2 million Frenchmen voted in a citizen-organized, unofficial referendum to oppose privatization of the postal system as demanded by the European Union. Trade unions and associations collaborated in a hasty effort to organize the vote, while police and local administrations harassed the initiative.

In rural areas, where access to the post office is a lifeline, and where privatization equals closing the post office branches, voter turnout was far higher than in the last European elections, and three to four times higher than expected.

France's King Louis XI (1423-83), who set up the first French postal system as a means of keeping his citizens informed about their government's actions, as a crucial part of creating a nation-state, must be smiling from his place in the simultaneity of eternity.

French Agriculture Minister Flees Farmers

PARIS, Oct. 8 (EIRNS)—Hundreds of angry farmers forced French Agriculture Minister Bruno Le Maire to leave the annual Summit of Cattle Breeders outside Clermont-Ferrand, as they shouted "Get out!"; many wore red T-shirts emblazoned with, "Cattle Growers Enraged." The "summit" had 1,000 exhibitors and was attended by 75,000 visitors. Le Maire first met with the heads of the trade unions, with no major incidents. But, as he entered the fair's exhibition hall, hundreds gathered, booing and heckling him, and Le Maire suddenly decided to leave, despite a heavy presence of riot police to protect him. The "outburst" was organized by the National Bovine Federation, whose president warned politicians that "a conference on income will have to be organized, and if we are not heard, you will have to expect more such demonstrations."

BAE Accused of Bugging Fraud Office Investigators

Oct. 5 (EIRNS)—The British empire's dirty-tricks funder, BAE Systems, stands accused of bugging the Serious Fraud Office (SFO) and British politicians who have had the temerity to investigate the company's corrupt practices.

Liberal-Democratic Member of Parliament Norman Lamb revealed that BAE is suspected of bugging both SFO investigators and politicians. Lamb, who has himself investigated allegations of BAE bribery in Tanzania, is quoted in today's Daily Telegraph, saying that when he was contacted by SFO detectives, they refused to meet in his office, insisting on an open space, because they feared that BAE had bugged his office. Lamb said, "They explained that a lot of what they had established in the investigation, seemed to get back to the company." They were also concerned that they were not getting sufficient cooperation from government departments. "I have not raised this until now, as I did not want to do anything to undermine the discussions," he said.

250,000 Blue-Collar Strikers March in Italy

Oct. 10—A general strike of metal workers called by Italy's leftist CGIL-FIOM trade union brought a quarter-million blue-collar workers into the street yesterday, according to the organizers. The number of participants in five major Italian cities were: 100,000 in Milan, 60,000 in Florence, 50,000 in Naples, 30,000 in Rome, and 10,000 in Palermo. The overall strike participation (i.e., workers who either the strike, the demonstrations, or both) is 70%, according to the organizers, and 20% according to the industry association. CGIL-FIOM has broken with the two other trade unions, CISL and UIL, which are negotiating a new national contract with the producers association. While CGIL-FIOM has strong support from workers, it have no solution to the crisis. At a national conference to discuss industrial policies yesterday in Milan, CGIL national secretary Guglielmo Epifani called for a "green economy" and rejected nuclear power.

Swedish EU President Ridiculed

Oct. 9—The LaRouche Movement in Sweden was first to ridicule Swedish Prime Minister Fredrick Reinfeldt on June 1, the day he assumed the rotating presidency of the European Union, for his King Canute-like megalomania, proclaiming that his two missions in the six months of his term would be: 1) solving the financial crisis; 2) reducing the temperature on planet Earth.

Now the established media are trying to catch up: Sweden's Aftonbladet ran a scathingly satirical attack on Reinfeldt on Oct. 8. His "solution" for the financial crisis was hijacked by the G20 summit, the paper said, to which he was not even invited! (Aftonbladet neglects to mention that the G20 also failed to address the crisis). And the UN Climate Conference in Copenhagen is in jeopardy, because developing nations are not getting in line with the demands being put on them by (so-called) industrial nations. Adding insult to injury, the Lisbon Treaty is being delayed by Czech President Vaclav Klaus, who refused even to answer repeated phone calls from Reinfeldt.

Russia and the CIS News Digest

Russia and U.S. To Increase Cooperation To Fight Opium Scourge

Oct. 8 (EIRNS)—The Russian Federal Service for Narcotics Control is going to provide the United States with intelligence on Afghan drugs, and expects the United States to reciprocate, Service head Victor Ivanov said at a Novosti press conference in Moscow today. "Cooperation between the United States and Russia is on the rise," he said. Ivanov reiterated Russia's view of the importance of eradication of opium poppies, referring to the success of eradication operations in Colombia. In a recent New York Times interview and his speech at the Nixon Center during his working visit to Washington on Sept. 24, Ivanov had cited the very effective aerial spraying of hundreds of hectares of coca plants with defoliants in Colombia in 2008.

Yesterday, Ivanov told AP in an interview that he hoped that the "open-minded dialogue will encourage the U.S. to take more adequate measures" on drug control. He said he had met with Gil Kerlikowske, director of the U.S. Office of National Drug Control Policy; David Johnson, U.S. Assistant Secretary of State for International Narcotics and Law Enforcement Affairs (INL); and Paul Jones, U.S. Office of the Special Representative for Afghanistan in Washington. Both sides agreed to increased cooperation, Ivanov said, and with Kerlikowske they agreed to continue discussions on aerial spraying.

The "scourge of Afghan opium production" is a worldwide problem, Ivanov had said in Washington during his visit. "The transnational nature of Afghan heroin trafficking makes it impossible for any state to take refuge from its calamitous impact. The Afghan heroin market is situated mainly outside and away from Afghanistan, and is based on a sophisticated global sales infrastructure."

In Moscow, Ivanov reported on intelligence cooperation. "We will transfer to the Americans 175 brands of drugs made in Afghanistan. In exchange, we expect to receive from our U.S. partners data on 50 Afghan druglords. Over the past eight years, 44,200 metric tons of opiates have been produced in Afghanistan, to say nothing of the record volume of marijuana and hashish."

Crop substitution alone will not work in the current war, he said. "As long as the situation remains tense and the confrontation continues, no one will engage in agriculture," he told AP. "They won't be able to cultivate grain even if they want to." Russia Today quoted Ivanov emphasizing the need to eliminate drug production. "The longstanding confrontation makes it impossible for the population to live off the land, which forces peasants to grow the unpretentious poppy, which is in demand by international criminal groups. Therefore, Russian and foreign analysts agree that liquidation of the drug economy in Afghanistan is possible only if peasants start growing useful crops, which require peace, unlike the poppy," Ivanov said.

Russia has long-term experience in dealing with narco-funded terror operations, he said. "It has been repeatedly demonstrated that the drug business provides the financial basis for terrorism and is one of its main factors for its upsurge. It was Osama bin Laden who, in the middle 1990s, created heroin supply chains to Russia's Chechnya in order to fund Chechen terrorists."

"For Russia, the task of eradicating Afghan opium production is an unrivaled priority," he said. "More than 90% of drug addicts in our country are consumers of opiates from Afghanistan. Up to 30,000 people die of heroin-related illnesses annually." There are 2.5 million Russian addicts, he said, most between 18-39 years old.

Hillary Clinton To Visit Moscow

Oct. 8 (EIRNS)—U.S. Secretary of State Hillary Clinton will go to Moscow Oct. 12-14, the Russian foreign ministry confirmed today. Clinton will meet Russian Foreign Minister Sergei Lavrov to discuss a new strategic arms reduction treaty, Afghanistan, Iran, North Korea, and the Middle East, Itar-Tass reported, quoting foreign ministry spokesman Andrei Nesterenko. Clinton's visit "will be an important step towards promoting Russian-American interaction in the context of the tasks formulated by the presidents of the two countries during their July summit in Moscow," Nesterenko said. In addition to the new strategic arms reduction treaty, the two "are planning to discuss an international dossier, including stabilization in Afghanistan, Iran's nuclear problem and the Middle East peace process."

Clinton's delegation will include Missile Defense Agency director Gen. Patrick O'Reilly, who will focus on ABM matters, Undersecretary of State for Arms Control Hellen Tosher told the Atlantic Council yesterday. She said that the U.S. seeks to develop real cooperation with Russia in this field.

The Clinton visit will be the first session of the Bilateral Commission set up by Russian President Dmitri Medvedev and U.S. President Barack Obama in July. Commission working groups will consider nuclear power engineering and nuclear security, weapons control and international security, anti-terrorism measures, anti-drug trafficking cooperation, economic and trade relations, and economic and scientific matters.

Southwest Asia News Digest

Suppression of Goldstone Report Backfires—PLO Wants Rapid Followup

Oct. 8 (EIRNS)—Two top members of the Palestine Liberation Organization—Fatah official Jibril Rajub and PLO executive member Yasser Abed Rabbo—have come out in support of the Goldstone report on Gaza, which accused the Israelis of committing war crimes (see "Israel Accused of War Crimes in Gaza," EIR, Oct. 9). On Oct. 2, under British and Israeli pressure, the U.S. helped to engineer a delay in the vote to accept the report by the UN Human Rights Council (HRC).

Now, top officials in the camp of Palestinian Authority President Mahmoud Abbas (Abu Mazen) are putting out statements that the Goldstone report must be adopted immediately. On Oct. 8, Rabbo told Palestinian radio that the Palestinian Authority was mistaken in its previous rejection of the report. "We have the courage to admit our mistake, and this mistake can be amended," he said.

On Oct. 8, Agence France Presse reported that Jibril Rajub told reporters that "the Fatah leadership has decided to invite the Hamas movement as well as all other Palestinian factions to form a joint Palestinian committee ... to take action on the regional and international levels in order to relaunch the Goldstone report." Rajub said that Fatah is checking the reasons that led to the delay in the HRC's acceptance of the Goldstone report, but it is widely reported that Abbas made the decision to oppose it at Washington's request.

The best option would be if the U.S. would also, as Rabbo said, "have the courage to admit our mistake." Over the last week, demonstrations in the West Bank have criticized Abbas, with protesters throwing shoes at his picture—one of the greatest insults in Arab culture.

Has the World Had Enough Yet of Netanyahu?

Oct. 9 (EIRNS)—A high-level Israeli visitor to Washington, D.C., with access to the White House and senior members of Congress, returned to Israel last week with the message that "he was stunned by the level of anger there [in the U.S.] over attempts to portray Obama to the American public as an enemy of Israel because of his efforts to restart peace talks and freeze settlement construction." The quotes are from an article by Ha'aretz strategic reporter Akiva Elder, who notes that the White House believes that Prime Minister Benjamin Netanyahu has personally been involved in spreading this line. The source told Ha'aretz, "There are people here [in Israel] who are playing with fire by damaging our relationship with the U.S."

The article appeared just after U.S. special envoy George Mitchell arrived in Israel for meetings with Defense Minister Ehud Barak, President Shimon Peres, Foreign Minister Avigdor Lieberman, and Netanyahu. Mitchell also met Palestinian Authority President Mahmoud Abbas and Prime Minister Salem Fayyad in Ramallah. But Israeli intransigence on expanding settlements continued, and no progress was reported on resuming peace talks.

After the rejection of the Goldstone report by the Israelis, world leaders may be getting tired of Netanyahu—but will they do anything potent? A senior American official, apparently travelling with Mitchell, told Israeli reporters that Obama is getting "impatient" over the lack of progress "by both sides" in starting peace talks.

Jordan's King Abdullah warned Washington recently that "Israel's settlement policy in East Jerusalem is undermining the stability of Israeli-Jordanian relations," according to Ha'aretz on Oct. 9. King Abdullah also ordered the Jordanian Embassy in Israel to submit an official protest to the Israeli Foreign Ministry over a plan to build a new Jewish neighborhood on lands belonging to the East Jerusalem village of Walaja.

Turkey Bars Israel from NATO Exercise

Oct. 12 (EIRNS)—Israel was unceremoniously dumped from a NATO air force exercise that was to take place in Turkey. The move was said to be on the initiative of Turkish Prime Minister Recep Tayyip Erdogan, because of concern that the Israeli aircraft that would be sent, had participated in the attacks on the Gaza Strip during the war earlier this year. The U.S. and Italy dropped out of the exercise in reaction, according to the Jerusalem Post. Israel is not a NATO member.

The Post article quoted Ephraim Inbar of the right-wing BESA Center for Strategic Studies, that Israel should retaliate for Turkey's "misbehavior," say, by cutting arms sales to Turkey. This would be like Israel cutting off its nose to spite its face.

Ha'aretz points out that Turkey's move was an understandable reaction to Turkish public opinion against Israel's attacks on Gaza, and that the Turkish military obviously backed the government decision.

Israeli Deputy Foreign Minister Daniel Ayalon said, "Our interest is not to reach a point of friction or crisis with Turkey. We consider Turkey an important strategic partner of Israel's and an anchor of stability."

The main point with this move, is that Israel's refusal to move on the peace process has a cost, and that even those with which it has diplomatic relations will take measures. It was reported today in al-Quds al-Arabi that Jordan was threatening to expel the Israeli ambassador, unless Israel cooled down the provocations that Prime Minister Benjamin Netanyahu has been engineering in Israeli-occupied East Jerusalem, especially on the al-Haram al-Sharif/Temple Mount. Jordan, which holds responsibility for the al-Haram al-Sharif's religious sites, feared Israel would allow Jewish extremists onto the site and damage or destroy the mosques and other shrines.

Blair Has 'Blood on His Hands' from Iraq War

Oct. 10 (EIRNS)—Former British Prime Minister Tony Blair was accused of being a "war criminal" with "blood on his hands," by a bereaved father during a commemoration for the 178 British soldiers who died in the Iraq War.

The ceremony was held in St. Paul's Cathedral, one of the symbols of the British Empire so beloved of Blair, where the Empire's heroes are interred, including the Duke of Wellington, Lord Kitchener, and Winston Churchill. Uniformed enlisted ranks and officers from the Army, Navy, and Air Force attended a somber ceremony for those who gave their lives. The ceremony was attended by the Queen and senior members of the royal family, as well as Prime Minister Gordon Brown.

At the reception afterward, Peter Brierley, whose son Lance Cpl. Shaun Brierley died in Iraq in 2003, delivered a rebuke to Blair; as Blair offered his hand, Brierley declared, "I'm not shaking your hand, you've got blood on it." Blair was quickly ushered away.

According to The Scotsman, Brierley later said, "I understand soldiers go to war and die, but they have to go to war for a good reason and be properly equipped to fight. I believe Tony Blair is a war criminal. I can't bear to be in the same room as him.... I believe he's got the blood of my son and all of the other men and women who died out there on his hands." Brierley has been campaigning for an official inquiry into the war.

During the ceremony, Archbishop of Canterbury Rowan Williams also made comments that put Blair, who was not more than a few meters from the pulpit, in the uncomfortable position he so well deserves. "Many people of my generation and younger grew up doubting we should ever see another straightforward international conflict, fought by a standing army with conventional weapons," Williams said. "We had begun to forget the realities of cost. And when such conflict appeared on the horizon, there were those among both policymakers and commentators who were able to talk about it without really measuring the price, the cost of justice." Williams criticized the "invisible enemies—letting ends justify means, letting others rather than oneself carry the cost, denying the difficulties or the failures, so as to present a good public face...." Williams has previously leveled criticism at the decision to go to war in Iraq.

Brits Continue BAE Cover-up; U.S. Pursues Saudi Bribery

Oct. 4 (EIRNS)—The British defense cartel, BAE Systems, is in even deeper trouble than before with the U.S. Department of Justice (DoJ), following the announcement last week by Britain's Serious Fraud Office (SFO), that it intends to prosecute BAE on bribery charges, involving defense contracts with Tanzania, Romania, the Czech Republic and South Africa. While the SFO continues to cover up the BAE role in the mega-slush fund scheme with Saudi Arabia—the so-called al-Yamamah program—the fact that they do intend to prosecute other bribery cases has spilled over into the U.S.A., where prosecutors have been probing the alleged $2 billion in al-Yamamah bribes that BAE paid to former Saudi Ambassador to Washington, Prince Bandar bin-Sultan, through U.S. banks.

The DoJ has now asked the SFO to turn over documentation of the other BAE bribes, to consider whether American laws were violated in those deals. As the result, all efforts by BAE to shut down the U.S. investigation by reaching an out-of-court settlement, are at least temporarily off the table.

As EIR exclusively has reported, beneath the surface of the BAE bribery scandal is the much more significant Anglo-Saudi secret intelligence program, funded through the al-Yamamah oil-for-weapons slush fund. And, should the DoJ extend the BAE probe to include money laundering, it could open up a real can of worms: the role of the Saudis in the 9/11 attacks.

Asia News Digest

More Idiots Oppose U.S. Withdrawal from Afghanistan

Oct. 6 (EIRNS)—Ignoring realities on the ground in Afghanistan, and counting on fear to drive the American people, today, former National Security Advisor Brent Scowcroft, and the lead editorial of the Washington Post, both concluded that withdrawal from Afghanistan could be catastrophic for the United States. Both claim that if U.S. troops withdraw, al-Qaeda and Taliban will take control of the country, endangering Pakistan and eventually grabbing its nuclear weapons to threaten the world.

The arguments are false: When the United States withdraws from Afghanistan, the forces that would take over would be decidedly anti-U.S., but not necessarily the Taliban. Less than 5% of Pushtuns (Afghanistan's largest ethnic group) have embraced Taliban ideology and almost none among the Tajiks, Hazaras, and Uzbeks. The Taliban was created in the 1990s by the Saudis and the British, and trained by the Pakistani military, while Washington watched and encouraged.

Both Scowcroft and the Washington Post display gross ignorance about Pakistan. The Pakistani military, dominated by Punjabis, is power-hungry and very well trained. If that military feels threatened on its own turf, it has the ability and willingness to wipe out al-Qaeda and the Taliban. That they are not doing that now, is because they do not want the United States and NATO to feel comfortable in Afghanistan.

Fissures Widen in Pakistan Between Military and Islamabad

Oct. 7 (EIRNS)—As President Obama and 15 administration officials were planning to meet at the National Security Council on Oct. 7 to discuss the Afghan war strategy, with special emphasis on Pakistan's stability, the Kerry-Lugar bill to enhance financial support to Pakistan ran into rough weather there.

The bill, which calls for providing Pakistan with a $1.5 billion annual aid for the next five years, was passed by Congress last week, but has clearly upset Pakistan's powerful military. The military claims the bill places too many conditions on the aid, including an attempt to curtail the nation's nuclear program, and puts too much pressure on Pakistan alone to battle the militants. In addition, one the bill requires the U.S. to assess the extent of control that the government has over the military, including its budgets, the chain of command, and top promotions. In a country that has spent about half its 62-year existence under military rule, such language does not go down well with the Army.

The bill is now being debated in Pakistan's parliament, where the opposition is accusing President Zardari of humiliating the country by accepting these conditions. "The bill has put Pakistan and its people in the dock," said Mushahid Hussain, secretary general of the Pakistan Muslim League-Q, the political party aligned with the former military ruler, Pervez Musharraf.

Pakistan's Chief of the Armed Services (COAS), Gen. Ashfaq Kiyani, met with the Army commanders, and expounded upon various issues related to national security and impending challenges faced by the country. He reiterated that Pakistan is a sovereign state, and has the right to analyze and respond to threats in accordance with its national interests. The Kerry-Lugar bill was discussed during the meeting. The forum expressed serious concern regarding clauses impacting on national security.

China Engages North Korea

Oct. 6 (EIRNS)—Following the visit of Bill Clinton to North Korea in August, and the U.S. agreement to North Korea's request to a bilateral meeting outside of the Six-Party framework, Chinese Premier Wen Jiabao has completed a three-day visit to Pyongyang, both to strengthen bilateral ties and to encourage North Korea to return to the Six-Party format. North Korea had declared that the Six-Party talks were a dead issue, due to the sanctions imposed by the UN after North Korea attempted to launch a satellite (which was within its rights under international law).

But Pyongyang leaders told the Chinese Premier this week that they would consider returning to the Six-Party forum, depending on the results of the bilateral meetings with the United States. China was the primary sponsor of the Six-Party format. Only because the U.S. has finally taken tentative steps to reverse the confrontational policies of the Bush Administration towards North Korea, can China now intervene to ease tensions and get back to cooperation.

The official North Korean press reported that supreme leader Kim Jong-il told Wen that denuclearization of the entire Korean peninsula was still the ultimate goal, and that relations with the U.S. "should be converted into peaceful ties through bilateral talks without fail."

China and North Korea also signed a number of investment and trade agreements, including the construction of a bridge over the Yalu River separating the two nations.

Huge Tunnel Project Could Create $240 Billion in Benefits

Oct. 9 (EIRNS)—An enormous tunnel, over 125 miles long, could be built under the Yellow Sea between the west coast of Korea and the Shangdong region of China, bringing huge benefits to the countries in the region. A study by the Gyeonggi Research Institute (GRI), under the sponsorship of China's Shandong Academy of Social Sciences, identifies potential benefits of about $240 billion.

The primary benefit would come from linking express railways in the two countries. The tunnel would shorten travel from Seoul to Shanghai to 5 hours and 31 minutes, and to Beijing to 4 hours and 26 minutes, he said. This could result in creating a huge economic sphere, linking about 24 million people in the Seoul area with some 272.1 million in the Beijing and Shanghai regions.

GRI vice president Cho Eung-rae said that if the tunnel is built, it will produce economic benefits worth $99 billion for Korea, $134 billion for China, and $7 billion for Japan.

Xu Yunfei, a senior engineer with the Shandong Research Institute of Communications and a participant in the study, said, "If a Korea-China tunnel turns out to be a success, the construction of a Korea-Japan tunnel could also be pushed. If these tunnels link overland railways in Central Asia afterwards, it could create a modern version of the Silk Road."

The benefits of a China-Korea tunnel were calculated without including the vast synergetic effects of extending the link east to Japan and west to Europe. Were such a route to utilize maglev technology rather than standard high-speed rail, the benefits to the region would be multiplied many times over.

Africa News Digest

U.S. Envoy Organizes Darfur Groups for Peace

Oct. 8 (EIRNS)—Three militant opposition groups from Darfur met in Cairo Oct. 3-7 under U.S. special envoy to Sudan Gen. Scott Gration's (ret.) supervision and signed an agreement committing themselves to a peaceful solution in Darfur as the "best of all choices."

While the effort is important, there still are numerous groups that have not yet joined. The three groups which have—the Democratic Justice and Equality Movement (a splinter group from the main JEM group), the United Front of Revolutionary Forces, and the United Front of Resistance—agreed to convene a conference in Darfur on Oct. 22, under American auspices and protection, to unify the positions of the different militant factions concerning the Addis Abeba agreement signed earlier. They also called for expanding the circle of participation to include all the Darfur groups.

Any effort to unify the disparate anti-government groups in Darfur, is a positive step. A spokesman for one of the groups said, in answering a question from al-Jazeera TV, on what these groups' position would be if the well-funded and best-organized group, the JEM, maintains its refusal to attend the talks: "If all the different factions agreed upon negotiating with the government and Khalil Ibrahim's JEM insists on its exclusionary position to marginalize the other groups, then we will go on the peace path and we will not allow him to block the way to the peaceful solution." This would expose the JEM as a spoiler to the Darfur peace process.

Meanwhile, a spokesman for the JEM itself, Sharif-eddin Mahmoud called on the government to come to "real negotiations and offer real concessions" to make the negotiations a success. However he maintained that his group would respect the outcome of the assembly of the different factions later this month under American sponsorship.

Al-Jazeera claims that the Darfur groups, now numbering 24, according to the government, are coming under pressure, because their base of operations in Chad is being threatened by efforts to bring the governments of Sudan and Chad closer together, after many years of rivalry. Chad is being used by British-NATO forces as a logistical base for the Darfur rebels. Al-Jazeera does not identify the U.S. as being the broker of this rapprochement.

The British operation against Sudan in Darfur is facing the potential for failure, as reported by Lawrence Freeman in the Oct. 2 EIR. If the United States reverts to its original American anti-imperialist principles, every other nation in the region, and on the planet, would benefit from that, by preserving their national sovereignty, and the demise of the British empire could be successfully completed.

Will the British Trigger New Ethnic Violence in Kenya?

Oct. 10 (EIRNS)—The BBC and Kenyan press report that ethnic groups are rearming, and that more violence is on the horizon. While the government—with Prime Minister Raila Odinga, a British agent, in the lead—is declaring its readiness to hand over high-level officials accused of involvement in the 2007-08 post-election violence, to the British-established International Criminal Court (ICC), there is talk of possible inter-ethnic violence if the government hands the suspects over to ICC chief prosecutor Luis Moreno Ocampo, according to an article today in The Nation, a Kenyan daily.

Odinga said today that he and President Mwai Kibaki, in recent meetings with mediator Kofi Annan, had agreed to cooperate fully with the ICC by ensuring the arrest of the suspects it names. The suspects could include a half dozen cabinet members. Annan, ever under the influence of Britain's Lord Mark Malloch-Brown, has kept up pressure on the Kenyan leadership to submit to the ICC and fulfill the "international" agenda for Kenyan government reforms; he finished his most recent, four-day visit on October 8.

Meanwhile, Kikuyu and Kalenjin ethnic groups in the Rift Valley are rearming, according to reports. Weapons are flowing in from the D.R. Congo and Uganda across Lake Victoria, and in the East from Somalia. And they are cheap, at US$400 for an AK-47.

The Nation Oct. 7 quoted a man from the Rift Valley who said the talk of ICC trials was poisoning ethnic relations: "I fear this may create violence." Annan acknowledged this fear, according to the same article, in saying Oct. 7 that, "There should be no bad attitude between communities living in the Rift Valley. A local tribunal or Hague will not in any way try communities but individuals."

BBC News first broke the story of rearming in Kenya on Oct. 6, claiming violence could result, in the run up to the 2012 elections.

Observers note that the British are well aware that the ICC intervention into the existing combustible conditions in the ethnically divided, hungry, and drought-parched population of Kenya today, could very likely set off violence, worse than what occurred in early 2008. Look at the region of the Greater Horn of Africa/East Africa, and contemplate the results of an explosion in Kenya on Somalia, Ethiopia, and the fragile CPA (North-South agreement) in Sudan. Who benefits? Will justice really be served, or will there be genocide throughout the region as a result of the ICC intervention? Is the British-ICC intervention intended to trigger the latter?

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