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From Volume 38, Issue 33 of EIR Online, Published August 26, 2011

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LPAC-TV Interview: The LaRouche Candidates;
An Instantaneous Shift to Science-Driven Development

Four of the six LaRouche Democratic Congressional candidates—Dave Christie, from the Seattle area in Washington; Diane Sare, from northern New Jersey; Bill Roberts, from the Detroit area of Michigan; and Summer Shields from the San Francisco Bay Area in California—were interviewed on LPAC-TV on Aug. 18 by Sky Shields of the LaRouche Basement Project....
Sky Shields: To give all of you a picture of what will turn out to be a lesson in physical economics, in the face of where we stand right now, what most of the world's population and U.S. population are seeing around them—the insane measures that are being taken in the name of economics: We're watching our President in a state of collapse, and in his dying throes. He's pushing a series of policies which, if enacted, will represent the destruction of not just the U.S., but most of the trans-Atlantic system, and the global economic system, and which will tear down the living standards and result in the loss of life for much of the world's population. In the face of that, I think it's worth discussing what the alternative is on the table right now, something that's been put forth by Lyndon LaRouche, but which all of you as candidates are representing in a very intensive, real way, on the ground. To give a sense, what will serve for most people, as not simply as a lesson in physical economics, not simply in matters of production, not simply in how you would reorganize a financial system in order to attain certain physical goals, but really, in a study of what we represent, what we mean when we say that ``mankind is an immortal species.'' ...

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Executive Intelligence Review
Vol. 38, No. 33

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This Week's Cover


  • The Really Fearful Crisis:
    Labor To Rebuild the World Is Thrown on Global Scrapheap

    Driving this worst of all crises, is the shutdown for a generation—across the transAtlantic world—of investment in new infrastructure platforms envisaged since the 1960s, e.g., transcontinental rail corridor projects; land-bridge crossings; nuclear and other power projects; the grand terraforming projects like NAWAPA; and the exploration and colonization of space. An estimated 60 million of the most skilled and productive jobs have disappeared worldwide; the most skilled and productive workforces are being decimated.
  • On Oligarchical Food Cartels, and the Threat of Famine
    Along with the current decline in worldwide food output, wild speculation, and food price hyperinflation, there is a rampage underway of buyouts and consolidation of control of the world food chain by a select few commodities cartels— Cargill, ADM, Bunge, Dreyfus, et al.—from farm inputs, to storage, processing, transport, distribution, and even land and water.
  • Deregulation Ruined European Agriculture
    Erwin Schöpges, a Belgian dairy farmer and farm leader, addressed the Schiller Institute's conference in Rüsselsheim, Germany, on July 2.


  • Zepp-LaRouche Interview:
    Paris Summit Failure—We've Reached the Point of Decision

    Helga Zepp-LaRouche was interviewed on LPAC-TV, following the failed Aug. 16 'summit' on the European financial-economic crisis in Paris, between German Chancellor Merkel and French President Sarkozy, which was supposed to calm the markets. Of course, it did no such thing. Only by reawakening the Classical tradition in Germany, and the Revolutionary principles of America, will humanity solve the crisis.



This Week's News

U.S. Economic/Financial News

TVA Will Build Another Nuclear Plant

Aug. 18 (EIRNS)—In a unanimous vote this afternoon, the Board of Directors of the Tennessee Valley Authority approved the building of its third nuclear plant in the past ten years. The Browns Ferry plant went on line in 2007, and the Watts Bar nuclear plant will start operations in 2013. It was decided today that construction at the Bellefonte site will begin when Watts Bar is completed, and it is projected to start producing power between 2018-2020.

In a region where labor unions, local businesses, churches, and civic organizations overwhelmingly support nuclear power, TVA nonetheless found itself up against a well-organized, well-financed opposition to completing the Bellefonte plant. The anti-human foot soldiers of the Southern Alliance for Clean Energy have protested at TVA offices, released a bogus report on supposed technical problems at the Bellefonte site, and then tried to disrupt today's Board meeting. Local police kept them out. Standard & Poor's-downgraded TVA's credit ten days ago. TVA directors mounted a counter-offensive, holding press briefings, giving a tour of Bellefonte to elected officials last week, and writing op-eds in papers, including the New York Times.

When construction on the Bellefonte plant was stopped in the 1980s, it was more than 80% complete. Some of the hardware that is at the plant will be replaced to ensure Bellefonte is outfitted with the latest technology, so about 50% of what is currently there will be used. The existing site contains nearly $2 billion worth of in-place infrastructure, which, as was pointed out, ratepayers have already paid for. TVA estimates it will take close to $5 billion more to bring Bellefonte in to operation.

Obama's Green Jobs Program Is a Bust

Aug. 17 (EIRNS)—While Obama will reportedly announce a jobs program after returning from his vacation in September, the following two stories are indicative of what Obama can be expected to deliver.

Last year, Seattle Mayor Mike McGinn announced that the city had won a $20 million Federal grant to invest in weatherization. The goals were to create 2,000 living-wage jobs in the city, and to retrofit 2,000 homes in poorer neighborhoods.

But more than a year later, as of last week, only three homes had been retrofitted, and just 14 new jobs created by the program. And a number of the 14 jobs are administrative. Of the 337 homeowners who had applied for the program, only 14 had gotten a loan, or were in the process of getting one.

This week, Evergreen Solar Inc., once a darling of the U.S. solar power industry, filed for bankruptcy protection. The average price of solar modules has fallen 30% this year, after declining steeply last year. Earlier this year, Evergreen closed its Massachusetts factory, a $450 million facility that opened in 2007 with support from state and local subsidies and employed about 800 workers. What happened?

Evergreen began to manufacture panels in Wuhan, China last year. Other U.S.-based solar companies have already moved their production overseas: Sun Power Corp. to the Philippines; First Solar Inc. to Malaysia. In its Chapter 11 filing, Evergreen cited the difficulty in competing against Chinese solar companies and blamed reductions in European subsidies for solar installations.

The company plans to close its facility in Midland, Mich., in the near future. It also plans to lay off 83 workers in Massachusetts and Michigan, retaining 50 employees to help with the bankruptcy and reorganization. The company plans to reorganize operations with an emphasis on building up its China-based manufacturing facility.

Said one wag, globalization fosters sunshine patriots.

Localities Told To Raise User-Rates To Protect Credit Ratings

Aug. 16 (EIRNS)—Thousands of U.S. localities, utilities, teaching, medical, recreation, transportation and all kinds of entities are under acute pressure from credit "watches" and worse, to make them impose exhorbitant user-fees and service unpayable, unworthy debts, on threat of losing their credit ratings. The case of Birmingham, Ala. provides an example.

In Birmingham (Jefferson County), monthly sewer rates, which have tripled in 10 years, are now under debate to be raised yet more, in order to pay JP Morgan Chase's demands. Morgan Chase is the principal bondholder of some $3.1 billion in debt, associated with a sewer treatment system upgrade, for which JP Morgan ensnared Jefferson County in wrongful, complex interest rate "management" debt deals (swaps, credit default insurance, etc.). JP Morgan, which has paid fines and forfeitures for wrongdoing—though not admitting culpability—amounting to close to $700 million, still is insisting on extracting more money from 126,000 residents, in order to settle past debt.

Last week, Birmingham demonstrators held signs: Send JP Morgan Down the Sewer, Not the People!

The median income in Birmingham is $31,704, a third less than similar-sized cities. The average sewer (not water, which is separate) bill is over $37 a month. The debt-mongers want an 8% a year increase in a householder's sewer bill for the next three years, and continued increases thereafter.

Gov. Robert Bentley has intervened to further delay a decision on Jefferson County's sewer debt situation, until September. More and more County Commissioners want to declare Chapter 9 government bankruptcy, and tell the banks to go to hell.

Global Economic News

Bankrupt Britain Has Put Up Its Defense Hardware in a Fire Sale

Aug. 15 (EIRNS)—Make no mistake about it: Britain is bankrupt. Last February, in an interview with the BBC, IMF chief economist Simon Johnson said: "Put the U.K. on the list" of coming sovereign debt downgrades and defaults. The European countries on "that list" are facing sovereign debt crisis and default because of the huge layouts they made in ultimately futile actions to bail out their big international banks. £144,600,000 is the interest the government has to pay each day on the U.K. net debt of £2276 billion (which includes financial interventions). This is estimated to rise to £182 million a day in 2015-16.

Facing this crisis, what has the Cameron government chosen to do? They put Britain's defense hardware up for sale. To plug a gaping £36 billion hole in the Ministry of Defense's budget, the aircraft carrier HMS Ark Royal, built at a cost of £200 million, has been put up for sale for a ridiculous price of £3.5 million on an eBay-style website.

Also on offer at almost throwaway prices are Type 22 frigates costing £400 million each at £300,000, destroyers at just £1 million, writes the Daily Mail, quoting senior officials.

It is not only the naval weaponry that is up for grabs, but also the 13 Gazelle helicopters which cost almost £5 million to build apiece are being sold at just £100,000.

For car lovers, the armored version of the Jaguars are going for just £12,000—cut from £200,000—and snatch Land Rovers at just £2,000, down from their retail price of £65,000.

British Unemployment, Especially Among Youth, Increases Sharply

Aug. 18 (EIRNS)—In the three months ending in June, unemployment has increased by 38,000 to 2.49 million (from 7.7 to 7.9%), while a record 1.26 million were working part-time because they have been unable to find full-time work. The Trade Union Congress points out that recent riots have occurred in areas where unemployment is highest. Of the 38,000 increase in unemployed, 21,000 were women.

Youth unemployment among 16-24-year-olds is now at 20.2%, the highest since the 1980s, and among the highest in the European Union. The Daily Telegraph puts youth unemployment even higher, at 24%. It currently stands at 949,000, an increase of 15,000 in the last three months. While there was a record number of students reaching "A" levels when graduating secondary school, there are only 40,000 university positions open to over 250,000 who will be applying. This will only add to the unemployment rolls.

Fears of Major European Bank Failure Choke Up Interbank Lending

Aug. 19 (EIRNS)—European banks are increasingly refusing to lend to one another, for fear that the borrower-bank will go bust before repaying. In an interview with Handelsblatt on Aug. 19, European Central Bank chief economist Jürgen Stark said the bank is taking the problem "seriously," citing the fact that certain Eurozone banks were depositing surplus cash with the ECB rather than lending it to other banks. Eurozone banks parked EU90.5 billion (about $130 billion) overnight with the ECB from Thursday, Aug. 18, to Friday, an increase from the previous day, and the highest level since Aug. 8, when it was EU145.2 billion, Agence France Presse reported. One unidentified Eurozone bank borrowed $500 million for seven days from the U.S. Federal Reserve's swap lines via the ECB this week, at a relatively high rate of interest, as we reported previously.

Marketmoves.com reported today that, "Overnight, fear and indiscriminate selling reached new levels of hysteria, as news broke that a European bank had sought funding from the ECB because it couldn't get it elsewhere."

A front-page article in the Aug. 18 Wall Street Journal pointed a finger at the Federal Reserve's funding of European banks via their New York branches and otherwise, also effectively making the point that the European end of the breakdown can't be separated from the U.S. end. The Journal noted that much of Bernanke's QE2 money-printing had landed in European banks, and said that the Fed is getting near-daily updates on the cash positions of the New York branches of the European banks. Their total reserves on deposit at the Fed jumped from about $419 billion in July 2010, to $900 billion July 13 this year. Was this Fed money?

Then they dropped down to $758 billion by Aug. 3. Were the European home offices vacuuming in the cash to try to stay afloat?

United States News Digest

Revolt Against Obama Spreads Among Democratic Party Core Constituencies

Aug. 21 (EIRNS)—Rep. Maxine Waters's explosive dialogue with a Detroit town hall meeting on Aug. 16, on the subject of the black population's outrage at Obama's policies, is spreading like wildfire across the Internet in video form.

Waters tells the crowd, "Y'all love the President" ("Brutus is an honorable man."), which meets a cacophony of hoots. Then she says that "the reality of politics of what's going on" is that the Congressional Black Caucus (CBC) is responding to what their base says about Obama. So far they have given Obama every chance. But "when you tell us it's all right..."—at which point a single, loud woman's voice hollers "It's all right." Waters then smiles broadly, and looks around at her colleagues on the podium, and says "We're ready to have this conversation. We're getting tired, y'all. Our people are hurting. The unemployment is unconscionable." She ends: "When you let us know it's time to let go, we'll let go."

A similar "we've had it" point is being reached in the trade union movement, as reflected in two AFL-CIO unions' refusal to attend the national Democratic Party Convention in North Carolina, and of course, in the AFL-CIO's support for Glass-Steagall. And in the Hispanic community as well, a week of street protests and statements by Hispanic politicians against Obama's horrendous policy of mass deportations—Obama set a record of 392,000 deportations in the year ending Sept. 30, 2010, far more than anything Bush did—has forced the White House to announce that they are postponing further deportations for the moment, subject to review.

This mass ferment is bringing a new layer into motion in the mass-strike process underway in the U.S. since the August 2009 revolt against Obama's health-care policy. This can be seen in the mass turnouts to the national "For the People Jobs Tour" by the CBC; town hall meetings such as the Aug. 18 Rep. Jim Langevin event in Rhode Island, chronicled on LPAC-TV's Aug. 20 "The World in Review"; and so on.

Grassley Demands SEC Come Clean on Destroyed Files

Aug. 19 (EIRNS)—Sen. Charles Grassley (R-Iowa), ranking member of the Senate Judiciary Committee, sent a letter to the Securities and Exchange Commission (SEC) on Aug. 17, demanding an answer to charges that the agency has destroyed files and documents related to thousands of preliminary investigations into financial wrongdoing by major banks.

Among the cases Grassley asked about, were those related to Bernard Madoff, Goldman Sachs, Wells Fargo, Bank of America, Deutsche Bank, Lehman Brothers, and SAC Capital.

Grassley based his inquiry on charges he received from SEC whistleblower Darcy Flynn, a 13-year veteran of the Commission. Flynn alleged that over 9,000 files had been destroyed, including in cases related to "Goldman Sachs trading in AIG credit default swaps in 2009, financial fraud at Wells Fargo and Bank of America in 2007 and 2008, and insider trading investigations at Deutsche Bank, Lehman Brothers, and SAC Capital."

Grassley is seeking a response from SEC chairwoman Mary Schapiro by Aug. 31 on a variety of issues related to the allegations, including their accuracy, the ability to retrieve the documents, the current policy, and the SEC's view of its legal obligations.

Thousands Line Up for Congressional Black Caucus Job Fairs

Aug. 19 (EIRNS)—Some 5,000 to 6,000 unemployed people stood in line in Atlanta on Aug. 18 for the Job Fair sponsored by the Congressional Black Caucus, the third such event in a planned series of five, which are combined with town meetings. Many of those waited overnight, camping out in their business suits and high heels; 20 people were treated for heat exhaustion. Rep. John Lewis (D-Ga.) was shocked by the turnout; he had expected 500 people to attend.

The first CBC Job Fair was held in Cleveland on Aug. 8. Press reports said there were 4,000 unemployed there, but CBC officials said 7,000. Rep. Marcia Fudge, who hosted the Cleveland event, said the turnout shows the gravity of the problem; she said employers who participated had to commit to a certain number of jobs; they had more than 2,500 jobs on the table. Initially, the CBC said they hoped to successfully connect 10,000 job-seekers with employers; in Cleveland, Fudge said that the job fairs might get 15,000 people hired. Compared with 15 million unemployed, Fudge acknowledged that this may not seem like much, but she said it's important to those people who get jobs. The second event was in Detroit on Aug. 16; at least 5,000 people waited in line there, for about 1,000 available jobs.

The final two CBC events will be held in Miami on Aug. 22-23, and in Los Angeles on Aug. 30-31.

Salt Lake Tribune Calls for Glass-Steagall

Aug. 17—(EIRNS)—In a strong, unsigned editorial today, the Salt Lake Tribune, the oldest and largest newspaper in Salt Lake City, Utah, has called on Congress to restore the Glass-Steagall Act. The city is well supplied with LaRouche movement organizing activity, including public meetings, and radio appearances, as well as meetings with other leading individuals and elected officials.

"Today," writes the Tribune, "in the anxious pall of the Great Recession ignited by subprime mortgages and the exotic financial products derived from them, Congress should rebuild the wall that Glass-Steagall created and the Clinton administration tore down. The object of such a reform would be to deny reckless speculators the implicit guarantee that the U.S. Treasury will bail them out when their bets go south.

"A corollary of this regulation is that there would be far less chance that a few huge, integrated banks would be judged too big to allow to fail because otherwise they would take the entire financial system down with them."

The editorial cites Kansas City Federal Reserve Bank president Thomas Hoenig, and then concludes:

"The Great Recession has been compared to the Great Depression ad nauseam. The analogy breaks down, however, because after the Great Recession the president and Congress, unlike FDR and Congress in the 1930s, have failed to eliminate the causes of the meltdown. Unless they do, another speculative bubble, followed by another financial collapse and bailout, is certain."

The Wall Street Super-Congress

Aug. 17 (EIRNS)—The same Wall Street investment firms and funds that have started the wheels in motion for "$1 billion for President Obama/2012," are also targeting control of the other 12 members of the unconstitutional coup-committee which Obama calls the "Super-Congress."

Obama's launch-dinner for his intended $1 billion campaign was hosted by Goldman Sachs, the world's most-sued investment bank. In an ominous sign, a $1,500/plate fundraiser has been quickly organized for "Super-Congress" appointee Rep. Xavier Becerra, by the 75-year-old, Morgan-founded investment banking lobby known as the Investment Company Institute (ICI). "We will host an event for Congressman Xavier Becerra," announced the ICI on Aug. 11, "not only Vice Chairman of the Democratic Caucus but also who has just been named to the new deficit reduction commission. This will be Mr. Becerra's first event since being named to the commission and may be one of the first for any of the twelve members of the group. This event could give all attendees a glimpse into what will most assuredly be the primary topic of discussion between now and the end of the year."

Opposition Builds Against Obama's Hitler-Health Plan

Aug. 15 (EIRNS)—Last week, a provider group, the Coalition to Protect Patients Rights, began a $1.4 million nationwide TV ad campaign denouncing ObamaCare's T-4 provision, the Independent Payment Advisory Board. On Aug. 12, a three-judge panel for the 11th Circuit Court of Appeals in Atlanta ruled that the individual mandate in the Federal health reform law is unconstitutional, the first time a Federal appellate court has ruled against any part of the law. Today, the New York Post gave over op-ed space to former New York Lt. Gov. Betsy McCaughey for a piece entitled "BamCare's Rising Legal Woes."

The Coalition's spot likens IPAB to a Medicare IRS with the power to cut payments to doctors and deny care to seniors. A statement on the group's website says, "IPAB's role in the United States would be eerily reminiscent of the National Institute for Clinical Excellences (NICE) role in Great Britain, where NICE makes recommendations to Britain's National Health Service (NHS) on what they should and shouldn't cover. NHS then rations care accordingly. Unsurprisingly, the system has turned substandard health care into a way of life for millions of patients in Great Britain, causing some to travel to the United States to get the care they need."

In her column, McCaughey, the author of The Obama Health Law: What It Says and How To Overturn It, notes that the court said that the Nero Regime arguments for the law's "individual mandate" are a "convenient sleight of hand." The judges, she said, concluded that the law would force people to subsidize insurance companies, which the law makes into private tax collectors. True enough.

Ibero-American News Digest

Blame Obama: Desperate Haiti on the Verge of Famine

Aug. 17 (EIRNS)—Haiti will cease to exist unless NerObama is removed from office.

According to the Haiti-based National Food Security Coordinator (CNSA), this devastated country, still suffering from the aftermath of the 2010 earthquake and subsequent cholera epidemic, is now "one step away" from "extreme famine." Blame Nero's criminal negligence for this.

According to CNSA spokesperson Gary Mathien, last March's drought—rains came only later, in April—damaged the agricultural production expected for August and September, which will result in a reduced food supply. Normally, production from the Spring harvest provides 60% of annual agricultural production, but this will now be below average, the Famine Early Warning System warns.

It will take very little to push Haiti over the edge into outright famine. CNSA adds that any one of a number of "political, social and natural factors," could, in just the space of a few months, lead to even worse food shortages. Add to this the fact that the inflation rate that has climbed continuously since October of 2010 has caused a 9.5% increase in food prices with the exception of rice. This has forced hungry families to reduce the number of daily meals, as well as portion sizes and dietary diversity.

The English-language Dominican Today, based in the neighboring Dominican Republic on the island of Hispaniola, published an alarmed report on this famine threat on Aug. 16, expressing fear that a famine next door would drive larger numbers of Haitians across the border and spread the cholera epidemic which hit that country last November.

Chileans Target Free-Market Model

Aug. 22 (EIRNS)—The student movement that has shaken up Chile in mass protest over the past three months, and unnerved right-wing President Sebastián Pin@aaera, will join forces with the CUT trade-union federation this week in a two-day general strike on Aug. 24 and 25. As a prelude to that, over a million parents, students, and teachers marched peacefully in Santiago on Aug. 21 in a "Family Sunday for Education."

The CUT has always backed protesting high-school and university students in their demand for a return to the free, state-run educational system that was largely dismantled by the 1973-90 Pinochet dictatorship, and replaced with a privatized "market-friendly" system. But the public alliance of students and workers in this week's strike provides a sharper focus, zeroing in on the utter failure of the neoliberal "Chicago Boys" model, imposed by Pinochet, to meet the most basic needs of the majority of Chile's population.

In an Aug. 20 public declaration, the Chilean Student Federation (Confech) rejected proposals from Education Minister Felipe Bulnes, charging that they still fail to address the demand for a complete overhaul of the educational system. The bottom line, said Confech spokeswoman Camila Vallejo, is that Bulnes is simply "reaffirming the neoliberal, free-market model, and therefore [his proposals] don't represent a solution to this problem." Confech called on all of Chile's workers and students to mobilize "with greater force and commitment" Aug. 24 and 25, given that the government has shown "no real willingness" to bring the two sides together and resolve the conflict.

CUT secretary general Arturo Martínez stated Aug. 20 that the strike reflects "those discontented with the existing [economic] model." Aside from students, the municipal health-care workers' confederation, National Teachers' Association, National Taxi drivers Confederation, public sector workers, transportation and subway workers, copper miners and port workers, and members of opposition political parties will all be joining the strike.

The CUT is calling for quality public education, a state-run social security system—Pinochet privatized the social security system in 1981—a new labor and tax code, and an entirely new Constitution. Pinochet's 1980 Constitution, whose architect was Jaime Guzmán, follower of Nazi jurist Carl Schmitt, still remains in force today.

Argentina Clamps Down on Rating Agencies

Aug. 14 (EIRNS)—Argentina's National Securities Commission (CNV) is ordering foreign rating agencies to make public the methodology they use to evaluate a country's negotiable securities, and post to their internet sites the manuals explaining that methodology. This, said CNV head Alejandro Vanoli, will allow for greater transparency and avoid "speculation by the big financial actors."

Vanoli charged Aug. 10 that Standard & Poor's, Moody's and Fitch constitute a "notable oligopoly" in Argentina. He said that as of Sept. 1, the CNV will demand that the rating agencies methodology must be registered at, and authorized by, the CNV and be accessible to the public. He noted the unfairness of the B+ rating given to Argentina, which has substantially reduced its debt and maintained stable economic growth, as opposed to the much higher rating given to developed countries that have a debt equal to 100% of GDP, or more. There appears to be no objective criteria in the rating agencies' methodology, he argued.

Western European News Digest

Second Greek Bailout Already Collapsing

Aug. 19 (EIRNS)—The second Greek bailout is well on its way to collapsing before it has even been ratified. Between the collapsing of the Greek economy and resistance by various Euroland countries to contribute, the whole idea is doomed.

Meanwhile, the Greek economy is collapsing so quickly, that it will be impossible for it to sustain its obligations under the memorandum of the Troika—the European Commission, European Central Bank, and the International Monetary Fund.

Greek Finance Minister Evangelos Venizelos announced that the economy will contract by at least another 4.5%, making it impossible for Greece to reach the target of cutting its deficit to 7.6% of GDP. The Greeks believe that since the Troika was responsible for the latest plan being implemented by the government, and is responsible for the failed forecast, it is not going to ask for new interventions in order for the deficit to go down.

Venizelos also admitted that the bailout will not be finalized until mid-October at the earliest.

Hankel: The Euro Will Lead to Social Explosions

Aug. 20 (EIRNS)—In an article published in the weekly Junge Freiheit, Prof. Wilhelm Hankel warns that euro bailout policies will lead to London-like social explosions in Germany, too.

"With the transfer union (in which Europe definitely enters with the eurobonds), not only will the favored child of all German politicians—the euro—be killed, but also, Europe opens the door to social unrest and youth revolts as in London, Athens, or Madrid. Which is more to be feared in this kind of Euro-bailout: the threatened loss of creditworthiness a la U.S.A., or the transfer of social conflict to the still calm capitals of the Eurozone, such as Berlin? Both! Europe must decide whether it will plunge into the dual danger of unstable money and unstable [social] assets with incompetent politicians—or whether it will seek politicians who will prevent both; who avoid those dangers through stable money."

Guarino Blasts the 'Ventennio' EU Policies

Aug. 17 (EIRNS)—Prof. Giuseppe Guarino was prominently interviewed on his new anti-EU essay by Massimo Mucchetti in Corriere della Sera on Aug. 15. Guarino's main point, that the current EU policy is the origin of the crisis, is clear. He cunningly refers to the 20-year period since the introduction of the Maastricht criteria in a way that evokes the "Ventennio," the word used in Italy to refer to Mussolini's 20-year dictatorship.

On the current austerity program, "I read with great pain about unrealistic programs. We are aiming at eliminating the deficit as indicated by the 1997 regulations, violating the Treaties which allow us a 3% deficit, ignoring recession dangers."

Ungovernability and Destabilization in Germany

Aug. 16 (EIRNS)—Aware that the main resistance in the German parliament against the super-bailout comes from inside the governing coalition of Merkel herself, from Christian Democrats and Free Democrats, the Empire is looking for regime-change in Germany: Indeed, if Merkel fails to pass the bailout law with a majority of her own when the vote takes place at the end of September, depending on votes from the opposition Social Democrats and Greens, her days are numbered. The SPD and Greens have already signalled that they will vote for the bailout, but also said that if Merkel does not have a majority of her own, she cannot remain Chancellor.

Cameron Sought Martial Law as Precedent for U.S.

Aug. 15 (EIRNS)—British Prime Minister David Cameron tried to deploy the British Army onto the streets of London in response to rioters, but was blocked by other government officials. This report, from the Independent newspaper Aug. 13, was corroborated by U.S. government officials, who said that Cameron sided with hardline Tory factions, that wanted to brand the looters as terrorists and fully militarize the U.K., in a dress rehearsal for the coup d'état that the City desperado faction has in mind for the United States.

The Independent reported that a recent meeting of the highest-level national security inner cabinet, the COBRA Committee, erupted into a political brawl between the hardline group, represented by Cameron, and others who argued that the police should be beefed up to handle the week of youth rioting. Ultimately 10,000 additional English police were dispatched in London to quell the looting and violence.

Europeans Call for Glass-Steagall

Aug. 15 (EIRNS)—In an op-ed in the Gothenburg newspaper Goteborgsposten Aug. 10, two Swedish MPs, Ulla Andersson and Jonas Sjoestedt of the Left party, come out clearly for bank separation. Under the headline "Stop Subsidizing Speculation by the Banks," they write, "Banks should be forced to separate the banking activities from other financial activities. And the public should only guarantee the pure banking activity." The article includes a list of regulatory measures including 1) stopping the "too big to fail policy," allowing all banks to fail, 2) stopping proprietary trading, 3) a Tobin tax, 4) fully banning certain types of speculation such as naked short selling, and 5) a bank-funded rescue fund for the banks.

In Germany, economist Rudolf Hickel, wrote in the Aug. 13-14 weekend edition of Frankfurter Rundschau: "One lesson is to be drawn from the memory of the market crash which after 1929 led to the world economic crisis: Only intense regulation of the financial markets helps against dangerous speculation. The market watchdog and the separation of commercial from investment banks were created."

EU Free Trade Creating Drug Shortages in France

Aug. 15 (EIRNS)—For several months now, there are regular shortages of between 160 and 370 types of prescription medications, out of the 5,300 types sold in French pharmacies. Medications have become increasingly unavailable. Since March, pharmacies declared 1,200 medications unavailable in 300 different specialties.

This folly resulted from the so-called "short-liners" in distribution, whose profit margin comes essentially from buying medications cheap in one country and then legally selling them at a high markup in the Eurozone countries.

Helene Pollard of the medical watchdog association TRT-5 charged that "they are taking advantage of free trade inside the Eurozone to sell parts of their inventory, since these medications go for a higher price in other countries."

Russia and the CIS News Digest

Bering Strait Tunnel Covered in British Press

Aug. 20 (EIRNS)—The Times and The Sun of London, today both reported on the Russian conference in Yakutsk, eastern Siberia, Aug. 17-19, which discussed the Bering Strait tunnel project.

The conference was hosted by the government of the Sakha Republic/Yakutia, with sponsorship by Russia's Council for the Study of Productive Forces (SOPS) and Chamber of Commerce and Industry. The SOPS, a joint organization of the Russian Academy of Sciences and the country's Ministry of Economics, has its roots in Academician Vladimir Vernadsky's KEPS organization of 1915-1930. The SOPS was formerly headed by the late Academician Alexander Granberg, a specialist in regional development projects who vigorously advocated building a tunnel across the Bering Strait, until his death last year (see EIR, Sept. 3, 2010), and was an endorser of the November 2009 call to "Put the LaRouche Plan To Save the World Economy on the International Agenda."

The Times headline reads: "Report: Tunnel linking US to Russia gains support. 'The greatest railway project of all time' would enable trains to travel from NYC to London, England." The Times report, which is available only to subscribers, was also covered by MSNBC and The Voice of Russia Today.

Senior Russian officials reportedly backed a plan to build a 65-mile tunnel between North America and Asia, MSNBC quoted the Times. This would make a 5,000-mile train trip from London to New York City possible. The $60 billion tunnel got the backing of some of Russian President Dmitri Medvedev's top officials. The tunnel would mean Russian territory would meet U.S. jurisdiction underneath the islands of Big Diomede, which is Russian, and Little Diomede, which is American.

One of the officials supporting the plan is Aleksandr Levinthal, the deputy federal representative for the Russian Far East. The Times described the history dating back to the reign of Nicholas II, whose government twice approved the tunnel, but World War I, and then the Russian revolution intervened. Supporters think it would be a cheaper, faster, and safer way to move goods around the world than container ships, estimating it could carry about 3% of global freight and make about $7 billion a year.

Levinthal and several other Moscow officials took part in a conference in Yakutsk in eastern Russia that discussed how to improve infrastructure in the region, the Times said. A 500-mile rail line linking Yakutsk to the Trans-Siberian railway is currently being built, and Russia plans to lay more track to connect mineral-rich areas to freight lines. "We should see advanced development of road and rail infrastructure here [in the Russian Far East] and improvement in the investment climate in Russia as a key aim," Levinthal said, according to the Times. The tunnel would be the first dry connection between the two continents since a land-bridge 21,000 years ago.

Stephen Dalziel, head of the Russo-British Chamber of Commerce, sounded a note of caution, suggesting that U.K. investors, at least, were unlikely to put money into the tunnel project until it actually began. "It would be a great idea, if it worked," he said. The idea was discussed in 2007 at a conference in Moscow called "Megaprojects of Russia's East."

The London Times did not note it, but Lyndon LaRouche was an invited presenter at that 2007 conference, and wrote an article that was read for him at the opening session, under the title, "The World's Map Changes; Mendeleyev Would Have Agreed."

George Koumal, president of the Inter-Hemispheric Bering Strait Tunnel and Railroad Group, called on governments to back the tunnel at the just-concluded meeting. He suggested that it would bring the two peoples closer together, noting the current lack of links. "There are very few [Russian] people who have stood on the beach in Alaska," he said. "Seemingly you can stretch out your hand and touch Mother Russia."

Southwest Asia News Digest

London's Global Asymmetrical War Ignites Again in Southwest Asia

Aug. 19 (EIRNS)—The British empire and its global financial system are bankrupt, and in order to maintain control, longtime assets of the British empire are in full asymmetrical warfare deployment across Southwest Asia. This pattern of chaos and destabilization changes the subject from the only significant question of today: how can citizens of sovereign nation states bury the already dead British financial system, and put in its place the Glass Steagall banking regulations of 1933, and the science-driven infrastructure projects that are desperately needed for humankind?

In short, the British empire is unleashing terrorism and more wars to block the solutions put forward by American economist Lyndon LaRouche. Unless the British empire and its accomplice, British puppet Barack Obama, are stopped, no country of Southwest Asia or North Africa—the playground of the World War I-era Sykes Picot imperial deal—is safe from hell. In just three days this week, low-intensity wars have escalated across the Sykes-Picot area.

* In Turkey, on Aug. 17, the narco-terrorist Kurdish Workers Party (PKK) attacked a military convoy at Cukurca, a town in the southeastern province of Hakkari, killing 8 Turkish soldiers and 1 village guard, and wounding another 15 soldiers. Prime Minister Recep Tayyip Erdogan and President Abdullah Gul immediately announced retaliatory strikes, and Turkish warplanes hit 28 PKK targets, most of them across the border in Northern Iraq, killing 4-5 PKK rebels. Until the June 2011 elections, there had been negotiations with PKK leader Ocalan to stop the PKK attacks, but those talks have broken down.

* The Aug. 18 attacks on the Israeli town of Eilat that killed 8 Israelis and wounded 40 others, are suspected to be coming from al-Qaeda or Saudi-backed neo-Salafi operatives, based in the Sinai Desert in Egypt—not Palestinians. Deutsche Welle reports that a group calling itself al-Qaeda in the Egyptian Sinai, has become active in the Sinai, and that this grouping had recently attacked an Egyptian gas pipeline that delivers liquefied natural gas to Israel and Jordan. After attacks on the pipeline, Egypt—with permission from Israel—deployed 10,000 additional crack troops into Sinai to wipe out the terrorists. The deployment exceeded the number of troops allowed under the original Camp David Accords, which is why the Israelis had to be consulted. It is not to be excluded that Israel could move to reoccupy parts of the Egyptian Sinai at some point, as a security measure, which would be tantamount to a new state of war.

* On Aug. 18, President Obama, reportedly over objections from Secretary of State Hillary Clinton, openly called for Syrian President Bashar Assad to step down, prompting questions about whether the United States was prepared to take military action against the Syrian regime. This move by Obama came less than a week after the United Nations publicly released the indictments against several Hezbollah members for the assassination of former Lebanese Prime Minister Rafik Hariri. The news media have jumped on the released indictment to point a finger at both Syria and Iran, for ordering the Hariri assassination—another possible trigger for deeper destabilization of the region.

Is Netanyahu Provoking an New Arab-Israeli War?

Aug. 20 (EIRNS)—Is Israeli Prime Minister Benjamin Netanyahu provoking a new Arab-Israeli War? This is the question that must be asked now that the Egyptian government has officially withdrawn its Ambassador to Israel. The Egyptian move follows the killing of five Egyptian border guards when Israeli soldiers crossed into Egyptian territory in pursuit of Palestinian militants who had launched attacks inside Israel.

The killing of the Egyptian guards happened on Aug. 18. Citing "unnamed" military sources, the Israeli government first tried to claim that a suicide bomber who blew himself up amidst the Egyptian soldiers and killed them. Then they tried to claim the guards were caught in cross-fire. Then it was revealed that the Israelis had in fact crossed into Egypt in pursuit of Palestinian militants. It is also reported that the Egyptians themselves were conducting security operations on their side of the border, to prevent militants, smugglers, and illegal immigrants from crossing into Israel, especially, saboteurs who have been targeting the gas pipeline that runs between Egypt and Israel.

When Israeli Defense Minister Ehud Barak then issued a statement that the border incident "reflects the weakening of Egypt's hold in the Sinai and the broadening of activities by terror elements," it was a slap in the face to the Egyptians.

The reality is that the Israeli-Egyptian border is highly regulated, because it's at the center of the Egyptian-Israeli peace treaty, and therefore the Israeli crossing into Egypt could not have been decided by a local commander, but only under rules of engagement that could be issued solely by the highest levels of the Israeli government.

Egypt's withdrawal of its ambassador followed Cairo's formal protest refuting Barak's statement, and demanding an apology, while calling for Israel to conduct an official investigation, and accusing Israel of violating the 1979 peace treaty.

Egyptian Presidential candidate and former secretary general of the Arab League, Amr Moussa, denounced the Israelis, declaring, "Israel must realize that the day when Egypt's sons are killed without an appropriate and strong response are over." Another Presidential candidate, Hamdeen Sabbahi, called for a deterrent response.

Netanyahu's intentions are clear. First, he is acting as a provocateur on behalf of British financial interests who would like to start a new Middle East war. Second, he is facing a mass strike at home that could neutralize the right-wing Zionist ideology he has used to control the Israel population, which requires him to recreate the threat that the Arabs want to "throw the Jews into the sea."

Israelis Warned that Netanyahu Was Planning a Security Crisis and War

Aug. 18 (EIRNS)—After a series of escalating protests against high rents and cost of living had brought more than 300,000 Israelis into the streets on Aug. 6—equivalent to a mass protest of an incredible 12.5 million Americans—it was widely anticipated that Netanyahu would unleash warfare, even war with Iran, to try to shut them down.

On Aug. 8, for example, +972 magazine journalist Rechavia (Rick) Berman published an article titled "Netanyahu Must Go," saying that Bibi "spat in the eye" of the social protesters, ignoring their demands and imposing even more austerity. Berman also warned that to stop the protests, "Netanyahu is quietly trying to bring about a security crisis. The Israeli Air Force bombed Gaza a couple of times until the desired couple of flying pipe bombs flew out, but Hamas itself cracked down on the launchers. In the West Bank, the IDF is arresting people and carrying out raids deep in Area A. This weekend, an actor from the Freedom Theater in Jenin was arrested, and several hours later the theater itself was raided, as were villages in the Hebron area."

Then, on Aug. 17, squads of gunmen killed seven Israelis in a series of assaults outside the resort town of Eilat near the Egyptian border. In the past, such terrorist attacks have often occurred out of the blue when they were convenient for Israeli governments. After the attacks, Israeli jets struck the Gaza Strip, and a rocket fired from Gaza later hit near the southern Israeli city of Ashkelon, the army said. No injuries were reported. Defense Minister Barak said that "if there is a need, the operations will be expanded."

A major military operation in Gaza "could bring about an escalation that could spiral out of control as Israel heads towards the difficult period in September," said Yoram Meital, chairman of Ben Gurion University's Herzog Center for Middle East Studies in Beersheva. "Hamas is not interested right now in an escalation," he told Bloomberg News today.

Asia News Digest

Chatham House Attacks Sonia Gandhi; Aims for Instability in India

Aug. 15 (EIRNS)—Britain's Chatham House associate fellow Cleo Paskal, in a Huffington Post article yesterday, has charged Sonia Gandhi, president of the Indian Congress Party, with high-level financial corruption, and made the most serious threat to Gandhi—and, as she is at the apex of the Congress Party—to the party itself. The accusation is now sitting on the desk of Prime Minister Manmohan Singh.

Asking rhetorically, will Sonia Gandhi fall, Paskal said, she "is not just an individual. She is the steely core of a pillar of Indian politics. If she crumbles, it will shake the foundations of the venerable Congress Party, and possibly leave a gaping hole in the political scene. Meanwhile, a range of polarizing and regional parties are ready to rush in and stake their claim."

Chatham House, the Royal Institute of International Affairs (RIIA), represents the British Empire, and this raises a question why this attack was launched. To begin with, the Singh government has been rattled by a number of corruption charges against Cabinet ministers. Singh, whose personal financial integrity has never been questioned, is under pressure to act. One outcome of this mess could be the departure of Singh from the scene. Under such circumstances, as of now, the most likely candidate for prime minister will be Rahul Gandhi, the son of Sonia and the late Rajiv Gandhi. On the other hand, if Sonia Gandhi is vilified, it would be almost impossible for Rahul Gandhi to be selected for the job.

Sonia Gandhi underwent a surgery in New York recently and is not expected to be back on her party post for at least two to three months. The publication of this article, while she is convalescing, means she would not be able to refute the charges made in this Chatham House article.

There are two likely British objectives behind this attack. Sonia Gandhi is widely recognized for her pro-China sentiments, and Beijing acknowledges that as well. Secondly, she has a personal rapport with the Bangladeshi Prime Minister Sheikh Hasina Wazed. Gandhi visited Bangladesh just before she came to New York for her surgery.

Sheikh Hasina had been under physical attack from the so-called Islami jihadis who are run top-down from London and Riyadh. She has survived six assassination attempts and EIR has earlier covered the fact that she has been targetted by Britain and Saudi Arabia. Since she came back to power in 2009, Hasina had eradicated large jihadi networks and begun implementing infrastructure projects with India. Prime Minister Singh is scheduled to visit Bangladesh in September to further ties between the two countries.

Russia Moves Toward 'Peace Through Development' in the Koreas

Aug. 18 (EIRNS)—After several years of tension in the Korean Peninsula—tension fanned by the British geopoliticians—both Russia and the U.S. (under Secretary of State Hillary Clinton's direction) have intervened to cool the situation. Most importantly, Russia's Foreign Minister Sergei Lavrov, told South Korean Foreign Minister Kim Sung-hwab that Russia's Gazprom had gained an agreement from North Korea to proceed with planning for the construction of a gas pipeline through North Korea, to deliver Russian gas to energy-hungry South Korea.

Lyndon LaRouche has emphasized for many years that peace negotiations in regions subject to British Imperial "divide-and-conquer" conflict can only be successful if regional cooperation on physical development projects provides the bedrock of the agreements. Or, as Pope Paul VI famously said in the 1967 encyclical Populorum Progressio, "The new name for peace is development."

Gazprom and South Korea's Korea Gas will begin consultations this month on the pipeline project through North Korea. The plan was originally proposed in 2008 during South Korean President Lee Myung-bak's visit to Moscow, but has not been acted on until now, due to tensions between Seoul and Pyongyang.

Sources in South Korea told EIR that the interests of Russia and South Korea have come together at this time, with the stabilization and development of the Koreas, and the Russian policy of developing the Russian Far East intersecting North Korea's need for economic assistance.

The sources also said that the recent revival of talks between the U.S. and North Korea, with South Korea's support for those talks, indicates that the moves toward cooling out the region are being coordinated between Russia and the U.S. State Department, with China always being consulted as well.

A South Korean spokesman told the press that as yet there were no plans for a trilateral meeting between Seoul, Pyongyang, and Moscow.

Economically, Foreign Minister Kim said the project "will be a win-win deal for both Koreas, providing a considerable cash revenue on one hand for North Korea, through which the pipeline will run, and large amounts of natural gas for us, which will help bring down the price of imported natural gas on the other." The deal calls for Gazprom to sell 10 billion cubic meters of natural gas a year to Korea Gas for 30 years, beginning in 2015.

Nothing has been said at this point about reviving the long-stalled plan to build rail lines through North Korea to connect South Korea to Russia and China, thus completing the Eurasian Landbridge connection from Amsterdam to Pusan.

Good Riddance to Japan's Prime Minister

Aug. 21 (EIRNS)—Japanese Finance Minister Yoshihiko Noda, now the leading contender to replace lame-duck Prime Minister Naoto Kan, has called for a national unity government between his Democratic Party of Japan (DJP), the Liberal Democratic Party (LDP), which had ruled Japan for almost the entire post-war era, until the DJP election victory in 2009, and the smaller New Komeito Party. Kan, who took over as prime minister in June 2010, had responded to the tsunami disaster in March by adopting an extreme anti-nuclear stance, proposing to phase it out domestically, and end Japan's crucial role in providing nuclear power plants and parts to the world.

But, as Lyndon LaRouche has always emphasized, there are two Japans—that of the British-manipulated monetarists and imperialists, and that of the Meiji Restoration heritage, influenced by the American System of directed credit and scientific advancement. The anti-science posture of the Kan government could not long survive against Japan's strong scientific tradition.

Kan himself, with poll ratings approaching single digits, had been stalling over fulfilling his pledge to resign, but then switched in early August and unambiguously confirmed his near-term departure. Since then, there has been a swell of activity to ensure a new, functioning government is in place before the end of August and the current Diet session. Demands that he step down also came from his own advisors and party officials, since his anti-nuclear ravings, which pandered to the fear factor after the Fukushima nuclear plant crisis caused by the tsunami, were taken without consulting them.

In a televised talk show on Aug. 13, Noda, who is expected to win the vote to head the DJP, stated he would rather form a "national salvation government," and added: "The baseline is for the ruling and opposition parties to open a frank dialogue and discussion about reconstruction, nuclear power plants, and the fiscal issues." Given the LDP's historic support for Japan's nuclear program, a coalition would further ensure a sane nuclear policy for a new government.

A de facto JDP-LDP alliance is already in effect to some degree, taking steps to counter Kan's impact. Among the results of this alliance was an agreement on amending an earlier bill which mandated that utility companies purchase "renewable energy" with fixed, exorbitant prices set for solar and wind power. Those prices will now be left open, which should lead to the downgrading of such ineffective low-energy-dense sources, in favor of a full scale return to Japan's leadership in nuclear power.

Africa News Digest

NATO'S Post-Westphalia Overthrow of Qaddafi

Aug. 22 (EIRNS)—NATO carefully prepared conditions beforehand for the much publicized rebel "march into Tripoli" that was staged yesterday. As part of a massive NATO assault, before dawn, Royal Air Force Tornado and Typhoon aircraft mounted a precision strike on the military intelligence operations room in Tripoli, according to Maj. Gen. Nick Pope, spokesman for Britain's Chief of Defence Staff. He specified that "Nine Paveway guided bombs were delivered with great accuracy on the target."

Later, he said, "an armed reconnaissance patrol identified and destroyed one of Gaddafi's main battle tanks positioned on the outskirts of the city." The British actions complemented other NATO actions against the Libyan government defensive positions designed to deny rebel access to the city.

The facility the U.K. hit yesterday was close to the Baroni intelligence facility which the RAF had successfully bombed 24 hours previously.

Confirming these developments, U.S. intelligence sources have provided a picture of the heavy role of U.S. and other NATO forces in the so-called "rebel" move into the Libyan capital of Tripoli over the past 72 hours. On the morning of the rebel forces' move into the city, the NATO aerial bombardment included British fighter planes which bombed critical Libyan military positions, using targeting intelligence provided by NATO and U.S. AWACS. The key, according to one senior U.S. intelligence source, was that NATO and U.S. "assets on the ground" negotiated the defection or stand-down of crucial Qaddafi loyalist military units inside the capital city, so that when the rebels entered the city, they were able to move to surround the Qaddafi command compound, before sustaining any serious resistance.

A second senior U.S. military source confirmed the account, adding that it was primarily French Special Operations Brigade and U.S. Special Forces troops from the 5th Special Forces Group who were on the ground in Tripoli, neutralizing the pro-Qaddafi resistance forces in advance of the rebel moves. Staging out of Tunisia in the west, the largely French commando teams also provided key military support to Berber tribes in the mountain areas south of the coastal region. British operations were largely centered to the east of Tripoli.

While the final outcome is still not settled—and Qaddafi's whereabouts were still unknown as of the close of the day on Aug. 21, what is absolutely clear, is that the operation was militarily dominated by NATO and the United States, in violation of both the U.S. Constitution and the United Nations Security Council resolution, which did not authorize regime change. The Libya "success," assuming the final collapse of the Qaddafi government, will be heralded as a precedent for the post-Westphalia doctrine of "R2P" ("Responsibility to Protect"), which overturns the entire Westphalian system of sovereignty.

As of this moment, the anticipated head of the National Transitional Council will be Mustafa Abdul Jalil, who was Qaddafi's Justice Minister until his defection in February 2011. A rift has already developed between Britain and France over the Libyan spoils. French President Nicolas Sarkozy announced a special meeting on Libya's future in France for later this week—without first conferring with British Prime Minister Cameron.

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