In this issue:

Two 'Vulcan Hitmen' Are Out at Treasury

Former Va. Governor: GOP Must Reject Segregationism—Or Sink into Oblivion

Media Push for War with North Korea

Bottom-Feeder Safire Pushes Escalation in Korea Crisis

A Defensive Wolfowitz Tries To Refute Claims of Military Opposition to War

Democratic Senators Demand Ashcroft Do More!

The Swindle Continues: DCHC Took the Money; Its Hospital Fails Inspection

From Volume 1, Issue Number 43 of Electronic Intelligence Weekly, Published Dec. 30, 2002

UNITED STATES NEWS DIGEST

Two 'Vulcan Hitmen' Are Out at Treasury

The number two man at Treasury, Deputy Secretary Kenneth W. Dam, and his subordinate, Undersecretary for International Affairs John B. Taylor, just followed their boss Paul O'Neill out the door. EIR had heard from Asian sources that these hard-line monetarists were on the chopping block, after the failure of Taylor's effort, with Trade Rep. Robert Zoellick, to strongarm Chile and Singapore to agree to unacceptable conditions (swearing never to use currency controls, even in an emergency) as part of proposed free-trade agreements. This effort came close to sabotaging the deals altogether, to the anger of U.S. business circles.

Dam, a close associate of George Shultz, served under Shultz both at OMB and the State Department, and co-authored a book with him, attacking the IMF for being too kind to third world countries. Shultz was the driving force behind the Vulcans, who helped shape the George W. Bush campaign in 2000, bringing together the chickenhawks and the extreme monetarists, including Larry Lindsay (now fired as Bush's economic advisor along with O'Neill) and Trade Rep Zoellick.

Taylor was an international hard-cop for radical free trade. Now he will presumably return to Stanford, where he taught whacko monetarist "economics." In 1998, Professor Taylor developed the thesis that the U.S. was in a 15-year "Long Boom" of prosperity. After eliminating the service economy, better inventory control, absence of external shocks, and fiscal policy, as causes for the "Long Boom," Taylor concluded, by elimination, that the cause must have been the Federal Reserve policies of Volcker and Greenspan.

Former Va. Governor: GOP Must Reject Segregationism—Or Sink into Oblivion

Former (1970-74) Virginia Governor Linwood Holton, a Republican, describes in a recent New York Times column the debate that was raging within the Republican Party 35 years ago: Whether the party should take advantage of Southern Democratic resentment against the civil rights movement to lure white racists into the party, or whether to do just the opposite and open up to African-American voters.

Holton notes that he was part of a group of moderates who urged the GOP to support civil rights and to welcome black voters. But, he says, "a more cynical vision prevailed among the party's national leaders," and he continues:

"With Nixon strategists leading the charge, these few (but prominent) Republicans opted for the so-called Southern strategy to lure white racists into a coalition with the party's traditional business constituency. The tactic was simple: Lace your speeches with coded appeals to racists in Southern states, dressing up policies in the language of fiscal conservatism." The code was understood by the racist voter, but gave the politician "plausible deniability" with non-racist voters.

It has become the conventional wisdom that the Southern strategy was a tremendous success, Holton notes, but this ignores the historic gains made in Virginia by rejecting the Southern strategy.

Holton relates how he put together a progressive coalition of business, labor, and black voters, and how he got nearly 40% of the black vote in the 1969 elections, and became the state's first Republican Governor since Reconstruction. (Holton's base was among progressive Republicans in the Shenandoah Valley, who still somewhat maintained the party's Lincoln tradition as against the racist Byrd machine which dominated most of the state through the Democratic Party. In his inaugural address, Holton quoted Lincoln—considered treason among the Byrd Confederates.)

But the national Republican Party rejected the lessons of Virginia and "was willing to accept the membership of Southern white supremacists as the price to pay for a hoped-for Senate majority."

Holton says that he and others argued that the Southern strategy was not only morally bankrupt, but also short-sighted, and that it would destroy the Republican Party in the long run.

Today, with the fall of Trent Lott, "the long run is upon us," Holton says, concluding that the Republican Party can go with President Bush and his rejection of segregation—or "we can hang onto the divisive politics of racism and sink gradually, but inevitably, into oblivion."

Media Push for War with North Korea

Reporters at the Pentagon last week badgered Secretary of Defense Donald Rumsfeld regarding the news that North Korea was removing the seals from nuclear reactor components that have been frozen since 1994. A number of reporters were baiting him as to whether the U.S. could fight wars against terrorism, in Iraq and in North Korea all at the same time. "The answer," he said, "is yes, we are perfectly capable of doing that which is necessary." At the same time, however, he emphasized that such a decision was not in his hands, and that the situation is being handled by the State Department. He said the subject of North Korea's nuclear program "has been under intensive discussion by the President of the United States with the People's Republic of China, with Russia, with Japan, and with South Korea. And those discussions are ongoing."

In response to further questions, he said, "The diplomacy that's under way there is in its early stages for the United States and the interested neighboring countries. It seems to me a perfectly rational way to be proceeding."

Meantime, another influential Republican, Sen. Richard Lugar of Indiana, the incoming chairman of the Senate Foreign Relations Committee, commented that any U.S. military action against North Korea would be "very inadvisable." Rebuffing the hysteria by the Chickenhawks and the press over North Korea's move to restart its nuclear facilities, after the U.S. and its allies had halted oil shipments, Lugar said that were the U.S. to take military action, Pyongyang most likely would retaliate against South Korea in a "devastating" confrontation. Instead, "our strategy now has to be one of multilateral engagement" with other nations, such as Japan, China, and Russia, as well as cementing ties with South Korea. (See ASIA DIGEST for more.)

Bottom-Feeder Safire Pushes Escalation in Korea Crisis

Under the title "North Korea: China's Child," bottom-feeder columnist William Safire, writing in the New York Times Dec. 26, calls for an escalation by the Bush Administration against North Korea. After swipes at Clinton for the 1994 deal with Pyongyang, and the South Koreans for electing the new Roh government, which will follow Kim Dae-Jung's Sunshine Policy vis-à-vis, Safire demands the Administration take two steps: First, begin withdrawing troops from South Korea, and second, make clear to China that they are responsible for restraining their "communist partner" in Korea.

Safire's rationale includes the fact that the U.S. would have "far greater freedom of action" (to kill Koreans, that is), if the U.S. withdrew troops from the Peninsula. Second, Safire blames the whole North Korean situation on the fact that China "saved it from defeat by U.S. forces" in the 1950s. He insists that the incoming Chinese leader, Hu Jintao, act now to "rein in the danger."

A Defensive Wolfowitz Tries To Refute Claims of Military Opposition to War

A defensive Deputy Defense Secretary Paul Wolfowitz wrote an op-ed in the Dec. 23 Washington Post, trying to refute a front-page story which appeared in the Post last week, citing Joint Chiefs of Staff opposition to the utopian war plans coming out of the office of the Secretary of Defense.

In a highly unusual move, two of the Chiefs, Army Gen. Eric Shinseki and Marine Corps Commandant Gen. James Jones, were cited by the Post as leading the opposition to the incompetent and dangerous flight-forward war plans of the Chickenhawks. In his Post op-ed, Wolfowitz tried to paper over the differences, claiming that everyone at the Pentagon—both the civilians and the uniformed military brass—are in full agreement about the Iraq contingencies.

Wolfowitz particularly objected to the fact that the Dec. 18 Post story, "Projection on Fall of Hussein Disputed," repeatedly referenced the "Wolfowitz School," and the "Wolfowitz view," that Saddam Hussein's government "will fall almost immediately upon being attacked." Wolfowitz denied that this was his view, and tried to portray the "intense discussions" between Defense Secretary Rumsfeld, himself, and the Joint Chiefs of Staff over the Iraq war plans, as proof that there were no differences.

He could not resist taking a swipe at those pushing inaction against Iraq, practically holding them accountable, in advance, for the next terror attack on the U.S.—as if there were evidence of Iraqi links to the 9/11 attack.

Democratic Senators Demand Ashcroft Do More!

Democratic Senators are demanding that Attorney General John Ashcroft carry out more, not less, surveillance and raids. Appearing on CNN's "Late Edition" on Dec. 22, Sen. Bob Graham (D-Fla), the top-ranking Democrat on the Senate Intelligence Committee, was asked if war with Iraq is inevitable. Graham answered that there is "a substantial likelihood that we will go to war with Iraq this winter," and he went on to say that what has gotten inadequate attention, is the intelligence community's warnings that, if the U.S. attacks Iraq, "there will be a wave of terrorist attacks against U.S. interests abroad and in the United States."

"I think it is critically important that in the weeks and days left between now and when a war might start," Graham said, "that we take every possible step within the United States, primarily through the FBI, to identify, arrest, deport, put under surveillance, those who might lead those terrorist attacks, and abroad, primary in the Middle East, we should be pounding at the headquarters and training camps of those international terrorist organizations," explaining that the U.S. has only been going after al-Qaeda. (In the past, Graham has called for U.S. strikes against organizations such as Hezbollah.)

Graham said that "we are lethargic on both fronts," and that the FBI is "way behind" what it ought to be doing.

Meanwhile, in the Washington Post the same day, Omar Ricci, chairman of the Muslim Public Affairs Council, said at the Council's convention in Long Beach, Calif., that the Patriot Act, passed in the wake of 9/11, "is the biggest attack on democracy in America right now." This follows the arrest and detention of hundreds of Middle Eastern men who voluntarily appeared at Immigration and Naturalization Service offices recently to register, as required under new Federal regulations affecting non-citizens from 12 mostly Arab and Muslim countries.

A coalition of Arab-American groups and some immigrants is suing Ashcroft and the INS for detaining the immigrant men

It has also been revealed that the FBI has written to American universities, asking them to secretly provide personal data on foreign students and teachers. Senators Pat Leahy (D-Vt) and Ted Kennedy (D-Mass) sent a letter to Attorney General John Ashcroft, questioning the legality of these requests.

The Swindle Continues: DCHC Took the Money; Its Hospital Fails Inspection

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has refused to restore Greater Southeast Community Hospital's full accreditation, leaving it in conditional status. "Conditional" accreditation means that "a health care organization fails to demonstrate compliance with the standards in multiple compliance areas," JCAHO says, adding that, except for the "special circumstances" of the hospital's bankruptcy filing last month, it would have refused to give Greater Southeast any status at all, because of the conditions found during a re-inspection last month.

As EIR has previously reported, an inspection last Spring found numerous safety and health violations. Problems found this time include: emergency room patients having to wait because of back-ups in the ER and intensive care; medical charts not being updated properly; lack of medical supplies; no effective infection-control program; the safety plan not updated; and preventive safety maintenance not being performed.

The Washington Times Dec. 24 quoted doctors at the hospital saying that the money given to the hospital from the city is not being put back into the hospital for supplies and support staff. ER doctors have complained that DCHC is not spending money on medicine and equipment. "I'm surprised they gave them the conditional accreditation at all," said one physician.

After the corrupt takeover of D.C. General last year by DCHC, staff at D.C. General complained that Greater Southeast was looting the public hospital of supplies and equipment. With the bankruptcies of DCHC and its financial partner National Century Financial Enterprises, it has been exposed that they were running a multibillion-dollar looting operation against hospitals and healthcare organizations nationwide.

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