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From Volume 38, Issue 27 of EIR Online, Published July 15, 2011

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Rescuing Civilization From the Brink
by Alexander Hartmann and Nancy Spannaus

July 8—The current crisis of the world financial system, and the worldwide economic and social crises which it has created, defined the themes of an extraordinary international conference held in Rüsselsheim, Germany July 2-3, by the Schiller Institute, the thinktank founded by Helga Zepp-LaRouche. Approximately 350 members and guests attended, coming mostly from Europe, although there were several guests from the United States.
The whole is more than the sum of its parts, and for that reason, it is impossible, in this article, to depict the arc of tension and total impact of this conference by describing the various presentations. It is as if you were trying to present the mental process of a several-part symphony by a mere description of each movement. This arc of tension, which brought together the presentations and united them in a grand thought-process, spanned the great crisis of the world financial system and the threatened destruction of the physical economic basis for mankind's existence, through the ``objective'' solutions available, such as Glass-Steagall and the great infrastructure projects for Africa; to the reconstruction of the real economy and the upcoming scientific revolutions which could help the human race to escape the extinction which has befallen almost all other known species; and finally, to the necessary creation of a culture which will again allow mankind to find creative solutions to the problems it faces...

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This Week's Cover

World News

The Past Week's News, at a Glance:

U.S. Economic/Financial News

HMO Murderers Are Now Buying Up the Doctors!

July 4 (EIRNS)—The major difference between Obama's T4 health genocide program, and that of its Hitler-Tony Blair model, is that the Obama system, to a large extent, turns the victims over to the "private sector," specifically, to the murderous, for-profit health maintenance organizations. The top five health insurers in the U.S. control the bulk of care provided in this way, starting with UnitedHealth Group (run by Blair sidekick Simon Stevens), followed by WellPoint, Aetna, Human, and CIGNA.

A July 3 article in the Washington Post, written by a competitor to these vultures, the Kaiser Family Foundation, exposes one of the next steps in the consolidation of the Obama Hitler health program. The article documents that UnitedHealth Care, and all the other companies but Aetna, are moving to buy up doctors' practices, in order to move the cost-cutting back up the line. Currently, doctors often fight with the insurance companies to get patients the care they need. Under this system, their boss will tell them not to offer that "unnecessary" care at all.

United has a special subsidiary, OptimumHealth, which is buying up doctors' groups, and fostering new partnerships of doctors, with the express aim of "modernizing" "the way medicine is practiced." What that means is cutting costs, and lives, al à Obama's Hitler Health plan.

Minnesota Government Shutdown Will Cost, Not Save, Money

July 4 (EIRNS)—The State of Minnesota will lose millions of dollars, and will face new costs, due to the state government shutdown that began on July 1, and continues, reports the Minneapolis Star-Tribune. Minnesota will lose millions in revenues, including from highway tolls, state park user fees, and lottery income. Among new expenses the state will face are unemployment benefits for 22,000 newly laid-off state employees, most of whom are entitled to 50% of their pay while not working; they will also continue to receive health insurance. Estimates are that it will cost the state $13 million a week just to keep all these workers idle. "We continue to believe a shutdown costs more than it saves," says an AFSCME spokesman. The state will also face significant costs due to disruption in highway construction, involving more than 100 road projects.

U.S. Employment Is Collapsing and Obama Is Channeling 'W' Bush

July 8 (EIRNS)—Asked by the Los Angeles Times to comment on the June U.S. "jobs" report, that only 18,000 new jobs were created last month, economist Heidi Schierholtz of the Economic Policy Institute said the employment news is so bad that she can't find any words to describe it.

Even through the fog of "adjustments," seasonal, virtual, and otherwise, applied by the Labor Department's Bureau of Labor Statistics (BLS) on behalf of a desperate White House, it is clear that employment is falling economy-wide, and that mass unemployment is shrinking the U.S. labor force faster and faster. What makes this the issue of the day, Lyndon LaRouche commented, is that every single economist outside of our organization was caught totally flat-footed by the news, since they were stupidly forecasting significant job creation for June—in the middle of a global depression!

The "headline" figure from the BLS's "Establishment Survey" for June, was a total "creation" of just 18,000 net new jobs, while the previous months of April and May were revised down well more than that, by -44,000. This apparent zero growth in employment was bad enough to cause freakouts among economists and at the Treasury and Fed; but this +18,000 figure is itself a mirage: It includes some 131,000 virtual jobs, imputed by the BLS's computers in a monthly "adjustment" procedure which has been shown for years to inflate job figures by at least 50-70,000 every month. This nonsense is supposed to capture hiring by new small businesses; a survey during June of more than 1,000 such businesses, taken by U.S. Bankcorp, showed that they are not hiring, period, and 80% of them have no plans to hire this year.

So, there was actually a net loss of jobs across the economy. Hourly and weekly average wages also fell, as did average weekly hours worked. The pace of elimination of government employees across the country accelerated; 39,000 were cut in June, including 14,000 Federal, 11,000 state, and 14,000 municipal jobs.

Global Economic News

UN Advisor: Greek Bailout Is a Violation of Human Rights

July 4 (EIRNS)—The official advisor to the United Nations on foreign debt and human rights, Cephas Lumina, warned that the brutal austerity measures being forced on Greece by the evil empire of the Troika—the European Commission, the European Central Bank, and the International Monetary Fund—is a violation of human rights. The Office of the High Commissioner for Human Rights (OHCHR) issued the following statement:

"The implementation of the second package of austerity measures and structural reforms, which includes a wholesale privatization of state-owned enterprises and assets, is likely to have a serious impact on basic social services and therefore the enjoyment of human rights by the Greek people, particularly the most vulnerable sectors of the population such as the poor, elderly, unemployed and persons with disabilities," said Lumina, who reports to the UN Human Rights Council in Geneva.

"The rights to food, water, adequate housing and work under fair and equitable conditions should not be compromised by the implementation of austerity measures," he said, urging the government to "strike a careful balance between austerity and the realization of human rights, taking into account the primacy of States human rights obligations."

Lumina also called on the Troika to remain aware of the human rights impact of the policies they design in attempting to resolve the sovereign debt crises in Greece and other countries. "There will be no lasting solution to the sovereign debt problem if the human rights of the people are not taken into account," said Lumina, who serves in an unpaid capacity.

Congress of Trade Unions Discusses Default on Irish Debt

July 5 (EIRNS)—Eight hundred delegates to the Irish Congress of Trade Unions (ICTU) today heard their president, Jack O'Connor, raise the question of whether the union federation should support a default on the Irish debt.

In his keynote address to the ICTU's biannual conference in Killarney, O'Connor said that the federation had not yet decided on a call for default, but added, "We may well come to do so, and we are conscious that resources are being run down as time passes." He noted the austerity packages being pushed by the governments of Germany's Angela Merkel and France's Nicolas Sarkozy, resulting in "a direct full-frontal assault on collective bargaining, pay, and pensions."

O'Connor said the ECB is "aggravating the problem rather than alleviating it.... They have reduced the once great institutions of the European project to mere debt collection agencies for the major banks, obstructing recovery and inflicting misery on the citizens of Europe."

The ICTU president said that the Eurozone is threatened by default of all of the stressed-out counties, which carry billions in liabilities, which could sink the global financial system beyond trace. "A Marshall aid-type strategy is required to rescue Europe both economically and politically," he said.

"However, those in charge have opted for the shock therapy of a reparations course instead, ignoring the lessons of history."

Hyperinflation, Thy Name Is Goldman Sachs

July 6 (EIRNS)—The so-called Fair Trading Office of the United Kingdom today refused a request from a British House of Commons committee, that it investigate an expanding global scandal about how metals prices are being driven skyward by Wall Street banks and London hedge funds. The FTO is supposed to oversee the London Metals Exchange (LME), on which the zooming metal commodity prices are being set by speculation.

The Science and Technology Committee of the House of Commons, reacting to metal user-companies' complaints, said, "The same [financial] firms that trade metals are able to hold large amounts of metal stored in warehouses monitored by the LME. There is evidence to suggest that trader-owned warehouses are favoring their own proprietary business over other users of the exchange."

These speculative "traders" are four banks and hedge funds, including Goldman Sachs and JP Morgan Chase. All have been using the Federal Reserve's "quantitative easing" money-printing to generate speculative funds, and all recently become the owners of networks of warehouses where up to 25% of world metals supplies have "gone in, and not come back out."

In the past 18 months, Goldman, JP Morgan Chase & Co., and trading firms Glencore International PLC and Trafigura Beheer BV have snapped up warehouse operators, all of them accredited to house metal traded through the LME. The four firms have become landlords to about two-thirds of the LME's entire metal stocks, from aluminum to copper to zinc. The warehouses are a profitable way to bet on commodities markets, over and above actual speculative trading.

In 2010, JP Morgan Chase acquired Henry Bath & Son as part of the New York bank's purchase of RBS Sempra Commodities. Goldman bought Metro International Trade Services LLC, a Romulus, Mich., warehousing company, for an undisclosed sum. Trafigura, the world's second-largest metal trader after Glencore, purchased U.K.-based NEMS Ltd. Glencore paid $209 million for Pacorini Metals, the metal-storage business of Pacorini Group, an Italian, family-run firm.

Goldman's operations in Detroit are at the center of the controversy, because aluminum prices are driving up the trading price in London. Warehouses like the one along the Detroit River hold about 1 million tons of aluminum, or almost 25% of the LME-traded stocks. Metal users such as beverage giant Coca-Cola Co. and can maker Novelis Inc. have expressed concern to the LME that the Detroit warehouses send out too little of the commodities they need.

United States News Digest

Obama: Cut Social Security, Medicare, Medicaid

July 11 (EIRNS)—President Barack Obama has insisted that slashing Medicare, Medicaid, and Social Security be placed front and center in the negotiations with Congressional Democrats and Republicans on raising the debt ceiling. Obama came into his July 7 meeting with eight Congressmen with three options: a small deal for $2 trillion in cuts over 10 years; a medium proposal for $3 trillion in cuts; and a big deal for $4 trillion in reductions, in exchange for increasing the debt ceiling past the November 2012 elections. The Wall Street Journal reports today that most of the Congressmen favored the big package, and as a result, Obama was gunning for "a blockbuster deficit reduction deal," but talks broke down yesterday.

Among the ruses under discussion to slash Social Security, is to replace the existing Consumer Price Index used to calculate annual inflation adjustment for Social Security payments, by the so-called "chained CPI," an artifice of the Simpson-Bowles "Catfood" Commission which significantly lowers the reported inflation rate by factoring in people switching to cheaper goods when prices rise. For example, if people switch from eating steak to catfood, because the price of steak rises, the "chained CPI" does not consider this to be inflation. The Congressional Budget Office calculated that this cheap accountant's trick would cut $112 billion from Social Security payments over a decade, raise taxes by $60 billion, and reduce veterans' payments by $24 billion.

Rep. Jan Schakowsky (D-Ill.), a Glass-Steagall signer, refers to this as the "chainsaw CPI," arguing that even the existing CPI actually understates real inflation for seniors, who spend relatively more on health care and medicine.

Transportation Bill Would Lead to Half-Million Layoffs

July 8 (EIRNS)—Open warfare has broken out on the House Transportation and Infrastructure Committee, which previously, under both Democratic and Republican chairmen, had been the most bipartisan committee in the House. What prompted the warfare is a draft proposal for a six-year transportation bill floated by Rep. John Mica (R-Fla.), the current chairman of the committee, that would restrict highway spending to the expected revenues into the highway trust fund of about $35 billion a year, or $210 billion over the six years of the bill. (This compares to $286 billion in the previous six-year bill, which expired in 2009.) Mica claims that through public-private partnerships, that amount can be leveraged up to $75 billion a year.

Committee Democrats went ballistic as soon as the GOP proposal was made public. Rep. Nick J. Rahall (D-W.Va.), the ranking Democrat on the committee, called the proposal the Republicans' "Road to Ruin" bill, because of the funding levels in it. "The dramatic, mindless cuts proposed to surface transportation programs will destroy nearly 500,000 American jobs next year alone, undermine our Nation's long-term economic competitiveness, and jeopardize our economic recovery." Rep. Pete DeFazio (D-Ore.) called Mica's theory about leveraging the $35 billion a fantasy. "We need $87 billion just to maintain the existing transit system, just to maintain the existing highways and bridges in this country," DeFazio said. "If you want to improve it, you're talking about $115 billion a year, more than three times what they're proposing."

"It is obvious that this woefully underfunded bill needs to be pronounced DOA—Dead on Arrival!" declared Rep. Corrinne Brown (D-Fla.). "Instead of creating good jobs, it increases our nation's unemployment rate, and rather than improve our infrastructure, brings about greater deterioration."

States Game Medicaid To Balance Budgets

July 8 (EIRNS)—Illinois Gov. Pat Quinn signed his state's budget the week before the July 1 deadline, but it was all smoke and mirrors, plus terrible cuts which are going to cost human lives. One of the accounting gimmicks surfaced this week: The state legislature had increased the length of time the state takes to pay Medicaid bills to 110 days. On June 30, Quinn ordered a $276 million reduction in Medicaid spending, which will increase that payment cycle to 162 days.

Most hospitals wouldn't comment to Illinois Statehouse News on what the longer payment cycle will mean for them, but Quinn's budget spokeswoman, Kelly Kraft, was quite candid. "The budget passed by the General Assembly will push $1.4 billion in Medicaid bills into next year," she said Kelly Kraft. This, in a state which is already $4 billion behind in paying its bills. A spokesman for the Illinois Hospital Association would only say that the hospitals accepted the longer payment cycle, as the alternative they were offered of lower reimbursement rates was unacceptable. In contrast, neighboring Iowa pays within 60 days and that state's reimbursement rate is about 26% higher than the Illinois rate.

Kentucky Gov. Steve Beshear is taking a different approach: shoving all the state's Medicaid recipients into HMOs. In making the announcement, yesterday, that Kentucky would be opening its Medicaid program to privatization, Beshear claimed that this would save the state $375 million over the next three years, and potentially $1.3 billion, numbers immediately disputed by the Republican State Senate President. Democrats, who once fiercely opposed the cost-cutting/profiteering approach of HMOs, endorsed Beshear's plan, which still needs to be approved by the Federal Department of Health and Human Services.

Wisconsin Turns to Slave Labor

July 8 (EIRNS)—The real agenda behind Wisconsin Gov. Scott Walker's anti-collective bargaining scheme, which ignited such an uproar in the state, became clearer this week when Racine County Executive Jim Ladwig told several media outlets that he is going to expand the work that prison inmates are allowed to do, to include work that had been previously done only by unionized county workers. The inmates don't get paid for that work—though they may win early release as a result. This is made possible by the Walker bill's shutdown of collective bargaining rights for the unions. Prior to the law's enactment, the unions were able to put prohibitions into their contracts to prevent the use of prison labor to do county work. Now, they can't.

It's the not-paid aspect that has bean counters and Republicans in and out of the state jumping for joy. "These reforms will ultimately help balance budgets, avoid layoffs, and at the same time improve services," Walker spokesman Cullen Werwie said. "In this case, [Racine] County employees can build a parking lot instead of just mow grass."

Obama Justice Department Endorses Torture

July 4 (EIRNS)—On June 30—to no one's surprise—the Department of Justice announced that its two-year review of Bush-Cheney-era torture has been completed, and that only two cases, out of 101 cases of abusive interrogations reviewed, will be referred for criminal investigation. Full responsibility for this travesty, or what Salon columnist and constitutional lawyer Glenn Greenwald calls "a total legal whitewash for the Bush torture regime," lies directly with President Barack Obama.

The cases referred for criminal proceedings involving the deaths of two prisoners—one at Iraq's Abu Ghraib prison, the other at Afghanistan's Bagram prison—are but two of at least 100 documented cases in which prisoners died in custody during the "war on terror," with at least 30 of these deaths officially classified as homicides.

But from the beginning, Obama let it be known that he wanted to shut down any investigation of the Bush-Cheney crimes. About ten days before his inauguration, Obama signalled that he was abandoning his campaign promises, and insisted on ABC's "This Week" that "we need to look forward as opposed to looking backwards." As Attorney General Eric Holder was planning to launch a full investigation, the White House viciously attacked him. "Didn't he get the memo that we're not relitigating the past?" Obama's chief of staff Rahm Emanuel once yelled. Emanuel insisted that the authors of the infamous "torture memos" should not be prosecuted. The pressure on Holder continued from Obama's press secretary Robert Gibbs, who declared, "Those that followed the legal advice and acted in good faith on that legal advice shouldn't be prosecuted."

This kind of political pressure on a law-enforcement officer is not only wrong, it is illegal. And indeed, as we have pointed out, the U.S. government had no choice: It is obligated, by law and by treaty, to investigate and prosecute war crimes and torture.

But when Holder announced the "review" of torture cases, he stated, when pressed, that three categories of those responsible for the torture policy would be given immunity from investigation and prosecution: 1) the top level officials who ordered the torture, such as Cheney and Rumsfeld; 2) the lawyers, such as John Yoo and Jay Bybee, who approved it; and 3) those who were acting within the confines of the guidelines issued by the military and the CIA. Who did this leave? Simply the lowest-level CIA interrogators and soldiers who were caught doing what they believed everyone all the way up the chain of command, to the Vice President and the President, wanted them to do.

Ibero-American News Digest

Argentine President Warns: Austerity Will 'Kill' Greece

July 7 (EIRNS)—When one sees the savage austerity now being imposed on Greece, "one doubts that economists are really so intelligent," said Argentine President Cristina Fernández de Kirchner in a July 1 speech in Buenos Aires.

Speaking from the Presidential Palace, Fernández said, "[When] I see a patient with the same symptoms and the same pathology" that Argentina suffered from in the 1990s, and see that [economists] want to apply the same medicine that killed the [Argentine] patient, it makes me question the so-called rationality of economists." For years, she added, the so-called experts imposed neoliberal policies on Argentina, wiping out jobs, deindustrializing the country, and creating a huge debt bubble that finally exploded with the 2001 default and subsequent restructuring.

It will take moving away from "traditional schemes" to resolve the current crisis, Fernández emphasized. Further delay in dealing with the real causes of the crisis afflicting Greece and other European countries will only make the consequences more terrible, as occurred in Argentina, she warned. Sooner or later, she added, there will be a restructuring of Greece's debt.

The Argentine leader pointed out that "all the remedies they want to apply ... are based on restricting consumption, which affects the most vulnerable sectors, and ultimately the entire economy." If you force people to stop eating, of course they will react.

Fernández explained that the 75% "haircut" that foreign bondholders had to accept in the 2005 Argentine debt restructuring, was necessary, because the priority for Argentina was to grow, reindustrialize, strengthen its internal market, and create jobs. The predatory vulture funds screamed that it was "unethical" not to pay the full amount owed, but Argentina responded that it was also unethical for financial speculators to charge usurious interest rates.

Chilean Students Escalate Protest

July 7 (EIRNS)—A desperate Chilean President Sebastián Piñera, whose approval rating has plummeted to 31%, went on national television July 5 to announce a Great National Education Agreement (GANE), which he claimed would improve the educational system and put an end to weeks of protest and strikes by students who are demanding an end to the for-profit system put in place by the late dictator Augusto Pinochet.

The package includes a $4 billion fund for scholarships and creation of the post of education superintendent, supposedly to provide oversight of for-profit universities. However, Piñera warned, students are making a "grave mistake" in insisting on a state-run educational system, as this would "harm the quality and freedom of education."

Camila Vallejo, head of the University of Chile's Student Federation (Fech), called the proposal "a huge deception" and "a step backward," reflecting the same old policy lines of the past 30 years. Injecting more money doesn't change anything, she said. The fact that the government intends to accept profit as the means to sustain an educational institution, "means that they will continue to see education as a business, and this will affect thousands of Chilean families."

Students took to the streets today to protest in front of the La Moneda Presidential palace and other government buildings, where they were met by police with teargas and water cannons. Vallejo announced that the students won't stop fighting, but will escalate their protest with another national strike on July 14. Meanwhile, members of Piñera's own party, National Renovation, are calling for immediate Cabinet changes. The head of Chile's Socialist Party, Osvaldo Andrade, observed, after noting the 31% approval rating, that "Pinochet was more popular than Piñera."

Argentina To Launch New Two-Stage Rocket

July 10 (EIRNS)—Tomorrow, Argentina is scheduled to launch a two-stage prototype rocket, the Gradicom II, from Chamical in the province of La Rioja. Designed entirely by Argentine scientists and engineers, the Gradicom II is expected to reach an altitude of 100 kilometers, and travel 120 kilometers.

In the early 1980s, then-U.S. Defense Secretary Dick Cheney forced Argentina to abandon the Condor II missile project and rocketry program. The December 2009 launch of the short-range Gradicom PCX signalled that the rocketry program was back on its feet again. Both President Cristina Fernández de Kirchner, and her predecessor and late husband Néstor Kirchner, fully supported the development of Argentina's scientific and technological capabilities.

The Defense Institute of Scientific and Technical Research (Citedef), an agency of the Argentine Defense Ministry, has overseen the Gradicom II's development. The rocket will have both military and civilian applications, among them, the ability to launch satellites.

Citedef director Eduardo Fabre announced earlier this year that his agency will launch a third, longer-range rocket by the end of this year or the beginning of 2012.

Satellite Technology Can Predict Cholera Outbreaks

July 9 (EIRNS)—Several scientists and medical researchers have found that satellite imaging technology developed by NASA has proven extremely useful in predicting cholera outbreaks weeks before they occur.

The world is in its 50th year of a global cholera pandemic which shows no sign of abating. Regular mutations of the cholera bacterium have produced a strain that is more toxic and tenacious than researchers say they have ever seen.

In the Americas, the cholera epidemic which hit Haiti in October 2010, moved into neighboring Dominican Republic a month later, and has so far killed 71 people. Now, the first case of cholera has been confirmed in Puerto Rico, in an elderly missionary who had just returned from a visit to the Dominican Republic. Several Mexican state governments are warning of the threat of epidemics, especially cholera, due to heavy rains from tropical storm Arlene.

Rita Colwell, professor at the University of Maryland and Johns Hopkins Bloomberg School of Public Health, found that measurable changes in the sea often will precede an epidemic by about six weeks. She told Scientific American that sensors on satellites "allow us to measure chlorophyll, sea surface temperature and sea surface height. These factors, it turns out, are very useful in predicting cholera epidemics."

A 2009 paper coauthored by Colwell, entitled "Using Satellite Technology To Model Prediction of Cholera Outbreaks," noted that because the satellite data are "becoming increasingly accurate through ground truthing (real-time collection of information on location), we believe that satellite imaging provides tremendous promise for prediction of cholera, weeks and even months in advance of an epidemic."

The paper goes on to warn, however, that in the United States, "we face a crisis in funding that not only affects basic and applied research in this field but also undermines our ability to deploy remote sensing technologies that provide the most promising means for monitoring our environment." Although remote-sensing technology "is currently still a research tool, the example of cholera prediction through its use provides a compelling argument to maintain and adequately fund our satellite programs; unless this is done, this extraordinary effort at disease prediction will fail."

Western European News Digest

EU Bailouts Are Suicidal

July 9 (EIRNS)—Latest available official statistics revealed a increase of an average of 7% in suicides in Western Europe since the economic crisis began in 2008. But in Greece and Ireland, where the population is suffering under the European Union's murderous bailouts, the figures are much higher.

"We can already see that the countries facing the most severe financial reversals of fortune, such as Greece and Ireland, had greater rises in suicides," said David Stuckler, a sociologist at Cambridge University, who worked on the analysis, published in the medical journal Lancet, according Athens News. Their study found that suicide rates were up 17% in Greece and 13% in Ireland.

Greek Crisis a Pretext for EU Empire

July 8 (EIRNS)—Peter Graf Kielmannsegg, a political scientist and professor emeritus of Mannheim University, has an essay in today's Frankfurter Allgemeine Zeitung, stating that the bailouts will not help the Greeks, nor the rest of the Eurozone, nor Europe as a whole. Therefore, why is this crisis constantly made worse by policymakers? Kielmannsegg's conclusion: Certain elites are pushing Europe deeper and deeper into the crisis, to create a pretext for establishing the super-state of Europe, as supposedly the only solution in this emergency.

U.K. Lib-Dems Reject 'Ring-Fencing'; Demand Full Bank Separation

July 3 (EIRNS)—The Guardian reports that senior members of the Liberal Democrats, who are in the coalition government with the Tories, are demanding that Lib-Dem chief Vince Cable reject Chancellor of the Exchequer George Osborne's phony "ring-fencing" of the commercial banking section of the big banks. Peers, MPs, and senior figures in the LDP, in a letter to the press, joined a list of about 50 politicians, academics, and economists who have demanded that the party honor its commitments to a full separation of commercial and investment banking.

The letter from the Lib-Dem leaders says: "Ringfencing retail and investment banking through 'chinese walls' in the manner suggested and endorsed by the chancellor, George Osborne, will not produce a banking system that is safe and fit-for-purpose. If companies can continue to move capital between retail and investment banking, the latter could still endanger the former. As a first step, full separation of banking functions is needed to better insulate the taxpayer against failure. Full separation would provide depositors with institutions they can trust."

Sinn Fein Denounces Payments on Irish Debt

July 5 (EIRNS)—The Sinn Fein party's warning that Ireland must burn the bondholders because the debt is unsustainable, is proving accurate. The quarterly Irish Treasury figures that were just released, show that one-fifth of Irish tax revenues goes to pay interest on Ireland's debt.

Commenting on this, Sinn Fein finance spokesperson Pearse Doherty declared, "While today's figures are broadly in line with government expectations, they nevertheless show the unsustainability of Ireland's debt. Today's figures reveal that 1 out of every 5 euros collected on taxes in this state is used to pay the interest on Ireland's growing debt.... It is clearly unsustainable that 1 out of every 5 euros collected would be used to service the interest on our national debt. This ratio is likely to rise in the coming years, given that just over a third of the money available from the EU/IMF program has been drawn down so far.

Assembly of Syntagma: 'We Will Overthrow This Government'

July 4 (EIRNS)—The Greek Assembly of Syntagma, which has been protesting the government's budget cuts, today issued a statement warning the so-called Troika (EU-ECB-IMF), banks, and investors, of their commitment to overthrow the Quisling government of Prime Minister George Papandreou.

The statement reads in part: "We inform those who look forward to an investment opportunity that we will, in a very short time, overthrow this government, and all responsible will answer for their crimes against the people and the country. Their bills and signatures are not valid. They have not been validated by the Greek people and they will not be recognized by the people...."

Madrid 'Indignados' To Take Up Glass-Steagall

July 7 (EIRNS)—In response to a written proposal from a member of the Valencia, Spain Indignados Economics Commission, the Madrid Indignados (the movement of protest against EU-dictated austerity) agreed to take up the issue of U.S. President Franklin Roosevelt's 1933 Glass-Steagall law, for adoption at their next assembly.

A June policy statement by the Valencia Commission had called for "the separation of productive and speculative banking activities," but had not mentioned Glass-Steagall by name and had some ambiguities in its formulation.

A member of the Madrid Economics Commission responded that, regardless of the fact that Glass-Steagall was a U.S. law: "I am going to propose that we take it up at the next Economy assembly."

Prince Charles' Pal To Run Greek Privatization

July 9 (EIRNS)—Greece is being forced to privatize between EU50 and EU300 billion of state assets as a precondition for receiving the so-called "bailout." According to the latest memorandum, Greece has to set up a privatization committee which will have "advisors" from the European Commission, the IMF, and the European Central Bank. Now it is announced that the head of the new agency will be Costas Mitropoulos, a top executive of Eurobank EFG, owned by the shipping family led by Spiros Latsis.

Latsis is the British Empire's top shipowner, shipping oil to the Anglo-Dutch spot market. The family is close to the British Royal family via Prince Philip, who is a former member of the royal house of Greece.

Brutal Austerity in Preparation for France 2012

July 6 (EIRNS)—We are already in a pre-fascist moment, a well-known French economist said to this news service. He referred to a recent conference organized in Paris by a publication, Le Guide du Pouvoir (The Guide to Power), with three speakers: Michel Sapin, former Socialist Party Finance Minister; Jerome Chartier, an elected official of President Nicolas Sarkozy's party, the UMP; and economist Christian de Saint Etienne. The two party officials are the spokesmen on fiscal policies for those parties.

The debate was on the "fiscal shock" to come in 2012, when the newly elected French President will take office, and have to deal with a whopping EU80 billion deficit. Whoever will be elected President, will have to finally adopt all the austerity measures that no one had the courage to adopt before. France's expenses are in the order of EU300 billion, of which EU150 billion are covered by tax revenues. Of the rest, EU80 billion will simply have to come from heavy austerity measures, including among, other things, privatization of the hospital sector.

The EU 'Teargas Bailout'

July 9 (EIRNS)—More details have been released of the brutal police repression operation of June 29, when the Greek Parliament passed the EU-ECB-IMF austerity plan. According to the Greek daily Katherimini, the police used 20 times more teargas and other chemical weapons than at any previous demonstration. The official figure is 2,860 chemical bombs, most of which were manufactured in Israel and the United States. The average number used during demonstrations in the past have been no more than 150.

Citizens' Protection Minister Christos Papoutsis has now been dubbed "Chemical Chris."

German Highway Bridges Crumbling

July 4 (EIRNS)—Over the July 2-3 weekend, police ordered a lengthy strip of the A45 highway northwest of Frankfurt to be taken out of service, after a steel bar of one of the highway bridges fell and crashed onto the railway tracks below. An immediate safety review concluded the bridge was not safe for truck transport, so it remains closed to for trucks and other vehicles over 7.5 tons in weight, until repair has been done. Since this particular highway is a key east-west connection in the middle section of western Germany, the ban seriously affects the transport of goods on this route.

Russia and the CIS News Digest

Putin: Russia Ready for Global Scientific Projects

July 5 (EIRNS)—Russian Prime Minister Vladimir Putin discussed the development of world-class scientific projects comparable to the mega-projects of its nuclear and space programs, in a meeting today of the Russian government's committee on high technology and innovation, in Dubna, outside Moscow. The time has come to start establishing global-scale scientific complexes, grading up to the Hadron Collider, he said. He argued that this will attract gifted young people seeking recognition in their homeland, which will automatically resolve the problem of the brain drain, according to The Voice of Russia's report.

Russia's Education and Science Ministry has drawn up a list of six potential projects, including construction of a thermonuclear research center and reactor.

Russian and Italian researchers met in June to discuss joint work on building an experimental Tokamak fusion reactor at Russia's Kurchatov institute, using an Italian design, dubbed the Ignitor project.

Southwest Asia News Digest

Saudi Role in 9/11 Cannot Be Hidden Any Longer

July 11 (EIRNS)—With the tenth anniversary of the 9/11 attacks just two months away, the Saudi role in the events of Sept. 11, 2001 are back in the headlines. This morning, former Sen. Bob Graham (D-Fla.), who co-chaired the Congressional probe of the 9/11 attacks, appeared on the MSNBC Morning Joe show and tore into the Saudis involvement, citing Prince Bandar and the BAE bribes, and the role of Saudi Royals in supporting the attacks. Graham has recently written a novel, Keys to the Kingdom, based on the 9/11 attacks.

In addition, the current newsstand issue of Vanity Fair magazine has a lengthy article, "The Kingdom and the Towers," by Anthony Summers and Lynne Swan, documenting the role of a number of members of the Saudi royal family in bankrolling al-Qaeda and the 9/11 hijackers. The article is based on a book by the husband and wife team that is scheduled to appear later this month in the United States, providing a comprehensive account of the 9/11 attacks, with heavy emphasis on the Saudi royal family complicity, and the Bush White House coverup.

Much of the material in the Vanity Fair article will be familiar to EIR readers, including the role of two Saudi intelligence officers, Basnan and al-Bayoumi, who facilitated two of the 9/11 hijackers' efforts from the moment they arrived in Los Angeles in 2000.

Millions Turn Out in Egypt To Demand Further Reforms

July 11 (EIRNS)—At least 750,000 demonstrators turned out in Tahrir Square in Cairo on Friday, July 8, and an even larger number turned out in Alexandria, to demand that the reform process and the prosecution of those who looted the country continue without compromise. According to one leading participant, the turnout was nationwide, with every city and large town in the country, including Mansour and Port Said, seeing unprecedented turnouts.

The Muslim Brotherhood boycotted the protests, although a large portion of the youth section of the MB has split from the organization over its alliance with the Army against the revolution. "The Army alliance with the Muslim Brotherhood is a mutual-survival deal with the devil, which is not succeeding in stifling the momentum of the secular protests. This was the message delivered on Friday," the source reported from the streets of Cairo.

Every night, an estimated 50,000 demonstrators are sleeping in Tahrir Square, to continue delivering the message that the protests have a strong base of support among the Egyptian people. Reportedly, Mohamed ElBaradei has issued a draft bill of rights, as part of his Presidential campaign, and one of the key demands is that the military tribunals be barred from trying civilian protesters, and that the military is subordinate to civilian rule.

British Wars Spread Hunger in Southwest Asia

July 10 (EIRNS)—Widespread hunger has emerged as one of the consequences of the British-led destabilizations of Libya, Yemen, and Syria. The conflicts in those countries, along with extreme weather and rising energy prices, have worsened already bad situations. On June 17, the World Food Program reported that it was in the process of distributing food to more than 500,000 people in Libya and expressed concern about the food situation inside the country, especially in the areas hardest hit by the fighting. "Libya is a food deficit country heavily reliant on imports with a public food distribution system under stress as food stocks in the country are being consumed without replenishment," the agency said.

Yemen is in even worse shape as 7 million people, or about one-third of the country's population, had, according to the British aid agency Oxfam, already reduced their meals from three a day, down to one, before the unrest began. Aziz Al-Athwari, Oxfam's Yemen country director, told The Media Line that "although we have no current statistics, that number has certainly increased since fighting began." The WFP recently launched an emergency operation to feed 1.7 million in Yemen, where access to food is being hindered by rising fuel prices. Al-Athwari added that since both food and water are shipped into many communities by truck, rising fuel prices have raised the prices of both food and water beyond the ability of many Yemenis to pay.

Syria's northeast has been plagued by drought since 2006, which had already resulted in mass migration from rural agricultural areas into the cities. The problem of less food in the markets was made worse when the Assad regime cut food subsidies and froze wages in 2004, although some of those measures were lifted in the weeks before the protests broke out in March 2011. Since the fighting broke out, government troops have blocked food supplies from reaching villages near the Turkish border, where thousands of refugees fled to escape the violence.

MEK Off Terror List in August Could Accelerate War Drive

July 12 (EIRNS)—Noted Iranian analyst Trita Parsi, head of the National Iranian American Council raised the alarm that the MEK (People's Mujaheddin of Iran), which is still a terrorist group, could be removed from the terrorist list this August. The propaganda in this direction was featured, for example, on July 7, when House Foreign Affairs held a hearing on the "Massacre at Camp Ashraf" which had MEK supporters and members testifying including former U.S. Attorney General Michael Mukasey.

Writing in the Huffington Post, Parsi said that the recently disclosed 2004 FBI report shows MEK is still a terrorist group, but they have had total access to Capitol Hill, fundraising, lobbying, etc. The very detailed FBI report concludes that the MEK is a joint effort of the French DST and German security agencies. Parsi notes that MEK openly advocates and admits to planning terrorist acts, but these are directed against Iranians, and therefore are condoned by factions in USA and Israel that want to have war and regime change in Iran, and even want to use MEK for covert action inside Iran (which some say already is going on). Some neo-cons are even pushing Maryam Rajavi, the MEK head, to become the real President of Iran, in a move reminiscent of the one they made on behalf of Ahmed Chalabi and the Iraqi National Congress.

The Green Movement in Iran is totally opposed to the MEK, and if they are delisted, they will do massive harm to the Green Movement inside Iran, which is extremely fragile because of the police state terror against them.

Among those who have supported the MEK through its front group, the National Council of Resistance in Iran, are, according to Muhammed Sahimi of antiwar.com: Howard Dean, former chairman of the Democratic National Committee; President Obama's former National Security Advisor Gen. James L. Jones; Bill Richardson, former energy secretary and U.S. Ambassador to the United Nations; Michael Mukasey, Attorney General under President George W. Bush; Tom Ridge, former Governor of Pennsylvania and Homeland Security Secretary under Bush; Gens. Peter Pace and Hugh Shelton, former vice chair and chairman, respectively, of the Joint Chiefs of Staff; Louis Freeh, former FBI director; Lee Hamilton, former Democratic Congressman; Michael Hayden, former Director of the CIA; Gen. Anthony Zinni, former Commander of Central Command; Frances Townsend, Homeland Security Advisor in the Bush White House; and Brad Sherman and Dana Rohrabacher of the House of Representatives.

Asia News Digest

Obama's Afghan War: Is It To Break Up Pakistan?

July 6 (EIRNS)—Islamabad is reporting increased attacks by the Afghan Pushtun insurgents inside Pakistan's territory, causing casualties to security personnel and civilians. Pakistan has complained that militants coming from Afghan bases have killed at least 55 members of the security forces and tribal police over the last month. Hundreds of insurgents have moved inside Pakistan's border, and the fighting is continuing. Many in Pakistan believe that these insurgents have moved in at the United States' behest.

What concerns Islamabad the most, are fears that Washington has adopted the London-directed policy articulated by Robert Blackwill, a Bush-era neo-con, under which Afghanistan would undergo a virtual partition. Foreign troops would move north, and hand over the Pushtun-dominated part of Afghanistan to the Washington- and London-chosen Pushtuns protected by the Afghan National Army.

This view is based upon the fact that a virtual peace treaty has been established between the foreign troops and the most militant Pushtuns in southern Afghanistan. On July 4, Gen. David Petraeus, commander of the International Security Assistance Force (ISAF), and of U.S. Forces Afghanistan (USFOR-A), who will be soon taking over as CIA Director, said the focus of the war will shift in upcoming months from Taliban strongholds in the South, to the porous eastern border with Pakistan, where al-Qaeda factions and others hold sway.

The Pakistan news daily The Nation, in its editorial, "Snake in the Grass," pointed out that these forays have been going on for quite some time, and from the manner in which they are launched, with militants having sophisticated weapons and plenty of ammunition, it is clear that they are being done at the behest of the U.S.

The editorial said: "It is time to part ways with the U.S., bring down all the intruding drones and refuse to take any aid largesse. And currently reports appearing in a section of press indicating that the government is launching an operation in Kurram Agency are quite worrisome. It seems that the government has again succumbed to the pressure of the US to go into tribal areas. Why are we not realizing that the US only wants to pit brother against brother in the country and create a civil-war-like situation? The days ahead are going to be crucial for us as a nation and we need to stay focused and avoid the pitfall the US is busy setting up."

What The Nation is referring to, is the concern that a situation is being created by the United States to combine the Pushtuns of Afghanistan with the Pushtuns of Pakistan. That would create the condition on the ground for breaking away the western part of Pakistan.

ASEAN Declares Victory in Thailand

July 6 (EIRNS)—The smashing election victory by Yingluck Shinawatra's Pheu Thai party in the July 3 national elections in Thailand is being correctly read across the Association of Southeast Asian Nations (ASEAN) and much of the world as a victory against the British effort to destroy the nations of ASEAN and their peaceful and productive relations with China and (to a lesser extent) India. Although this is not publicly reported as a victory against the British, it is well known that the royalist/military forces that controlled the now-defeated Democratic Party government of Prime Minister Abhisit Vijjijiva are assets of the British Crown and its fellow European monarchical families. Abhisit was born, bred, and educated in London, and carries a British passport.

The puppet government's efforts to start a war with Thailand's poor, weak neighbor Cambodia—a classic case of British imperial "divide and conquer" techniques—is now a dead letter. Indonesia, currently the chair of ASEAN, had been prepared to send peacekeepers into the disputed border region to stop further provocations from the Thai military, but the Thai military vetoed it. Now, this peacekeeping mission will certainly proceed, as Yingluck said that rebuilding relations with Thailand's neighbors was at the top of her agenda. Michael Tene, the spokesman for Indonesia's Foreign Ministry, congratulated Thailand on the election, and said that the new government could "make valuable contributions to the stability and prosperity of the region."

The capacity of the royalist/military forces to launch a coup or use the courts to depose the government—as they have done three times before, beginning with the military coup against Prime Minister Thaksin Shinawatra in 2006—is greatly reduced by at least three factors: the overwhelming election victory, despite vote-shaving in Bangkok; the overwhelming support of ASEAN for the new government; and public support from the U.S. for the new government. U.S. Ambassador Kristie Kenney held a meeting with Yingluck on July 4, and is reported to have assured the Thai Prime Minister-elect that the U.S. would not back a coup, and would end military support if one were carried out.

Already there are plans to jump-start China's offer to build a high-speed rail line running from the Laotian border in the northeast to the southern border with Malaysia, as part of the "Asian Railroad" from Kunming, China, to Singapore, as well as other power and infrastructure plans which were part of the Pheu Thai platform. The Kra Canal project, long championed by Lyndon LaRouche and his friends in Thailand (featured in two conferences co-sponsored by LaRouche in Bangkok in the early 1980s), is expected to be back on the table.

The top economic advisor to PM-elect Yingluck, Suchart Thadathamrongvej, said after the election victory, that Thailand may abandon the "free float" of its currency, the baht (the mechanism used by George Soros in 1997 to destroy Thailand and much of Asia) in favor of a "managed exchange system"—the first discussion of such a policy since Malaysia's then-Prime Minister Dr. Mahathir Mohamad imposed such currency controls in 1998 to stop Soros's assault. Suchart also challenged the sacrosanct "independence of the central bank," saying that "monetary policy should not be left to the Bank of Thailand."

Reopening of Japan's Nuclear Capacity Stymied by Prime Minister

July 8 (EIRNS)—Motion had been building in Japan to open the 31 undamaged nuclear plants that remain shut for maintenance or for other reasons. Industry Minister Banri Kaieda had obtained public approval from the mayor of the town of Genkai, which has two reactors, and was close to getting approval from Sago Prefecture's governor, when Prime Minister Naoto Kan threw a spanner into the works.

The Asahi Shimbun daily reports that it was on Kan's direct order that Kaieda announced on July 6 that the government would conduct additional safety evaluations, although the industry minister has repeatedly stressed that current safety measures are adequate.

Hideo Kishimoto, the mayor of Genkai, immediately withdrew his approval for the restart of the two Kyushu Electric Power reactors in his city. "Prime Minister Kan is saying the stress tests are a precondition for restarting reactors, so it's as though my decision was meaningless. I'm extremely angry," Kishimoto said. The prefecture's governor, Yasushi Furukawa, who had been about to approve the restarts, told reporters that the biggest problem is that there's no way of knowing the government's real intentions.

Chief Cabinet Secretary Yukio Edano said the government is rushing to finalize a policy on resuming operations at the power plants. In other words, the idea for "stress tests" was just an expedient to slow down, delay, and sabotage Japan's return to nuclear power. If the "no restart" policy is continued, there will not be a nuclear industry in Japan in less than a year, as reactors are shut for maintenance in normal rotation.

Kan earlier saved his job as Prime Minister by pre-announcing his resignation in the face of a no-confidence vote last month, but without a set date and with expanding conditions. Kaieda is said to be furious with Kan for the untenable position his boss put him in; he, too, will also resign "when the time comes."

Africa News Digest

Cheminade: 'Let's Stop the Military Flight Forward in Libya!'

July 7 (EIRNS)—French Presidential pre-candidate Jacques Cheminade, a longtime associate of Lyndon LaRouche, and leader of the Solidarity and Progress party, today made this policy statement on French President Sarkozy's military attack on Libya:

In conformity with the new Article 35 of our Constitution, the government has submitted to the Parliament a demand for "authorization" for the extension of our military intervention in Libya. The National Assembly, then the Senate, will vote on July 12, and a majority is expected between the Presidential majority and the Socialist Party.

We hesitate, between characterizing that agreement as a crime, an error, or a suicidal flight forward: an error, because we are already at the limit of our manpower, matériel, and even munitions; a crime, because numerous "mistakes" have led to the murder of civilians whom we were supposed to protect during bombardments; a flight forward, because the UN resolutions do not authorize either the delivery of weapons or the participation in a civil war, and that, however, our government has decided to do, going beyond that mandate.

Indeed, we have delivered light weapons purportedly aimed at "protecting populations placed in precarious predicament and savagely repressed." Further, according to various sources cited among others by Le Canard Enchainé, we have apparently delivered French Milan anti-tank missiles via Qatar. In so doing, we have become actively involved in participating in a land war, an act which assumes an even a bigger dimension when you consider that we have sent to Cyrenaica and beyond, intelligence experts and military instructors.

The lessons of Afghanistan and Iraq have not sufficed. A war without a clear mission, without an option for peace offered to the enemy, is never won; a war aimed at regime change inside a third country always leads to chaos. More fundamentally, since we are not supporting the republican and democratic revolutions occurring in Tunisia and in Egypt with economic development and other just measures, how can we pretend to conduct a "just war" in Libya? How can we pretend to be defending peace, while we are distributing, in the Sahara and its outskirts, weapons which will feed destabilizations?

It is said that Nicolas Sarkozy demanded from our Chief of Staff a victory in time for the 14th of July celebrations. If such an infantile fit against such a background is true, then Nicolas Sarkozy and his government are no different than Barack Obama, who is conducting "his" war without consulting the American Congress. We can ask the Socialist Party, what difference is there between consulting the elected officials of the people and consulting them while making sure in advance that they are already under control?

The voice of diplomacy must come forth, and that of cannons stopped. Above all, we must offer great projects of mutual development to the whole of Africa, in particular to the Maghreb and Mashreq regions, creating the conditions where they can ensure their food production and a life with dignity. This is the price we must pay for our credibility, not that of bombs.

Africans Resist Obama's Illegal War Against Libya

July 9 (EIRNS)—The destabilizing effects of the U.S./NATO war against Libya are causing African nations to speak out against it, and resist U.S. efforts to get dragged into it. The government of Kenya is being particularly defiant, despite U.S. pressure to break its links with the Libyan regime. Acting Foreign Minister George Saitoti yesterday accused the Western powers of using "violence against civilians" in Libya and announced that the Nairobi government would not freeze Libyan assets in Kenya. "Kenya has not acceded to pressure by third parties to sever diplomatic ties with Libya," he said and added that such calls were "contrary to Kenya's position of the best way" out of the Libyan crisis, and contrary to recent African Union resolutions calling for a negotiated settlement. According to Kenyan media, Libya has vast economic assets in Kenya, including a luxury hotel and an oil-marketing firm with more than 100 gasoline stations, making Kenya a target of Western efforts to isolate Libya.

Meanwhile, on the other side of the continent, concerns are being raised about arms trafficking out of Libya that is benefitting the terrorist group al-Qaeda in the Islamic Maghreb (AQIM), which is said to be responsible for a string of kidnappings and ambushes across the Sahel region. Last month, reported VOA yesterday, security forces in Niger recovered detonators, more than 600 kg of semtex explosives and $90,000 in cash, after a shootout with suspected terrorists. The Niger government said that the arms came from Libya and were destined for AQIM. In addition to Niger, Mali and Mauritania have expressed concern that insurgents in Libya are selling arms they capture from the Libyan government to the AQIM.

Algerian forces are increasing their presence along Algeria's 900-km border with Libya. According to Reuters, officials in Algiers are voicing concerns about the arms and explosives coming into the country from Libya, which are being looted from Libyan army depots.

Refugee flows are another destabilizing effect of Obama's war on Libya. Hundreds of thousands of foreign workers have fled back to their own countries, which are hardly able to absorb them into impoverished economies. President Mahamadou Issoufou of Niger said that Niger has lost billions of francs in taxes and trade, as well as remittances from 200,000 Nigerians who were working in Libya. It was reported that more than 1,000 Africans landed on the Italian island of Lampedusa overnight yesterday, bringing the total to more than 11,000 who have landed there trying to escape various wars in North Africa since the beginning of the year. According to the Italian Catholic organization Sant'Egidio, at least 1,820 migrants from North Africa have drowned in efforts to reach Europe.

Africa's IGAD Supports Sudan, Opposes Indictment of Bashir

July 10 (EIRNS)—The official communiqué from the 18th extraordinary session of the Intergovernmental Authority on Development (IGAD) meeting on July 4, unequivocally supported the government Sudan against attempts by the West to weaken the Presidency of Omar al-Bashir and the Khartoum government. The IGAD is a seven-country regional development organization in East Africa.

The communiqué stated that IGAD "calls upon the international community to keep its commitment to support the people of Sudan by granting debt relief, removal of Sudan from the list of states sponsors of terrorism, lifting of sanctions and deferral on the ICC [International Criminal Court] indictment in accordance with Article 16 of the Rome Statute."

In addition, the communique "congratulates President Omar al-Bashir and First Vice President Salva Kiir Mayardit for their exemplary leadership, courage, and commitment to peace...."

IGAD is the African institution which shepherded the Comprehensive Peace Agreement in Sudan from 2005 to the end of the post-referendum period, which terminated with the July 9 independence of South Sudan.

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