Larouche Online Almanac

Published: Tuesday, Aug. 26, 2003

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Volume 2, Issue Number 34
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Need to Know This Week

'Mr. Sharon, You Are in Purdah...'

At the Schiller Institute's Summer Academy in Frankfurt on Aug. 17, a Lebanese youth posed this question to EIR founding editor Lyndon H. LaRouche, Jr., a candidate for the 2004 Democratic Presidential nomination: How would you, as President, achieve peace in the Mideast?

"If I were President of the United States now," LaRouche said, "or can exert the influence I wish to exert now, the President of the United States—even this dummy that we've got in there, now—will step on the Sharon problem, and say, 'No more.' And the minute Sharon says, 'No'; 'Okay buddy, your water's shut off. You're shut down. You're on your own. No more U.S. backing. You're in purdah.' We can have no peace in the Middle East, unless the President of the United States has the courage to step on Sharon."

Israel was "artificially created into a nuclear power, not for the benefit of Israel, but it was created as part of the process of bringing the right wing to power in Israel, around the Likud," LaRouche explained. "Now, that doesn't mean that Benny Begin, the son of Menachem Begin, is the same thing as Sharon," LaRouche said. "But, within this, people like Sharon, or Benjamin Netanyahu, or Shamir—these people are monsters; they are not real. They are monsters, like Hitler.
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LaRouche Youth Movement

LaRouche Youth Sets Out To Smash Terminator, Save Gray Davis

Schiller vs "Living Stage Fright": LYM Goes to Congress
by Nick Feden, LaRouche Youth Movement

Mexican Youth Are Campaigning For Their Country's Future

Economic reports

U.S. Economic News

World Economic News

World and Nation-state

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Ibero-America

Europe

Russia and Eurasia

Middle-East

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this week in history

Aug. 25-Aug. 31, 1935

To those who know the minds of the financial oligarchy, it should be no surprise to realize that, just at the time that deregulation is provably destroying the flow of electric power to the nation, the leading political mouthpieces of the Republican Party are demanding the removal of the last regulatory safeguards which are still in place. Specifically, the new Bush Administration energy bill, passed by both Houses of Congress, and shaped by Vice President Dick Cheney's task force, calls for the repeal of the Public Utilities Holding Company Act (PUHCA), an Act which played an indispensable role in ensuring the provision of cheap electricity throughout the United States from 1935 on.

The PUHCA was signed into law on Aug. 26, 1935. It was supplemented by the Federal Power Act of 1935, which enhanced the regulatory powers of the Federal Power Commission (which is today called the Federal Energy Regulatory Commission.) - The Background -

In the 1930s, President Franklin D. Roosevelt faced a situation that in contour and geometry is similar to today's. The largest financial houses of Wall Street, in particular JP Morgan, working through two of its large holding companies, the United Corp. and General Electric Corp., bought up, through a large number of mergers, most of the nation's electric power-generating and transmission-line capacity. One holding company would buy anywhere from 50 to 300 operating companies. Then, upon this one holding company, a second, new holding company would be piggybacked, and then a third holding company would be piggybacked upon that one, taking ownership of the second holding company, and so forth.

A huge financial bubble was built up, and the income stream was looted upward from the electric-power generating companies, up through the layers of holding companies, each of which extracted additional wealth, up finally to the small group of Wall Street families that controlled the process (the particular method by which the looting was done was different than today's, where the holding company is not used in the same way as the 1930s—but the principle is the same). This pillaged existing physical plant and equipment, as there was no money left, after paying the profiteers, for physical investment. The holding companies also charged customers higher prices. Regulation of a serious type was not permitted.

Writing about the Act, Roosevelt said, "Through the device of these pyramided holding companies, small groups of men with a disproportionately small investment were able to dominate and to manage solely in their own interest tremendous capital investment of other people's money." Elsewhere, he accused them of "looting." - The PUHCA Provisions -

The PUHCA provided some powerful provisions. Within Title I, it stipulated for the utility industry that the Securities and Exchange Commission should: regulate securities issues and intercompany transactions; lay down the principle that a holding company should not benefit from financial dealings with its own subsidiaries; and demand uniform systems of reporting and accounting (this could be adapted to the conditions of today).

Title II of PUHCA authorized the Federal Power Commission to integrate the utility operating companies into regional systems on the basis of technical efficiency, not of speculative manipulation. Thus, there might exist, for example, a holding company based in Pennsylvania that owned operating companies in Pennsylvania, Texas, and California. This practice was stopped and the holding company was restricted to owning only operating companies based within its region. A good number of holding companies which were speculative and could show "no useful economic function," were forced to dissolve, upon penalty of otherwise being dissolved by the U.S. government.

Supplementing the PUHCA, Roosevelt pushed through Congress the Federal Power Act (FPA) of 1935. The FPA expanded the powers of the Federal Power Commission to "regulate electric utilities' wholesale rates and transactions." Thus, the Federal Power Commission "establishes just and reasonable rates for the transmission and sales of wholesale electric power in interstate commerce. It also regulates permanent interconnections of electric utilities and promotes the adequacy of interstate electric power service."

The Federal Power Commission, which was later transformed into the Federal Energy Regulatory Commission and stripped of many of its powers, could set "rate-making." This is not setting a cap on prices. Rather, the Commission could set prices on the following basis: The electric utility, which had to open its books publicly, could charge a price that enabled it to cover its operating costs, plus a margin of surplus for investment in new and modernized plant and equipment. That's it—nothing more could be charged. Thus, Roosevelt and his allies established a "parity price" which functioned efficiently and well in the electric-generating and transmission industry (on the state level, this mechanism was applied for retail sales of electricity). For the next 60 years, this regulated system produced cheap and abundant energy for America's factories, farms, hospitals, schools, homes, etc.

This extensive power exists in the still-extant Public Utility Holding Company Act. No wonder the privateers want to get rid of it.

In Depth Coverage From Executive Intelligence Review
Links to articles from Executive Intelligence Review*.
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Feature:

RE-CREATING THE REPUBLIC
How Abraham Lincoln Organized Victory For the Union
by H. Graham Lowry
Historian Graham Lowry, a longtime associate of Lyndon LaRouche, and author of How the Nation Was Won: America's Untold Story, Volume I, 1630-1754, died on July 28. During the past year, despite worsening illness, he gave several classes to regional offices of the LaRouche movement, on his ongoing research on Abraham Lincoln. He was particularly eager to impart to the burgeoning LaRouche Youth Movement, the real history of their nation—the history that they are not taught in schools, where they learn that the Founding Fathers were slaveholders, and Lincoln was a racist who only wanted to save the Union and didn't really care about abolishing slavery.

  • Lincoln on Slavery: The Dred Scott Decision
    In 1857, the U.S. Supreme Court passed its infamous Dred Scott decision, allowing a slaveholder to cross state lines, into a free state, to reclaim his 'property'— a former slave who had gained his freedom. Chief Jus- tice Roger Taney wrote in his opinion on the case, that the Declaration of Independence did not apply to the Negroes, who 'had no rights that the white man was bound to respect.' Lincoln, in a speech in Springfield, Illinois, on June 26, 1857, had this to say on the matter...

Graham Lowry, A Life in History
by Pamela Lowry

One of the things that most delighted Graham in his youth, was to stretch himself back into history to see how far he could reach. As a child, he had met his great-aunt Iowa Lowry, who, when she herself was a child, had stumped for Abraham Lincoln's election as President. Whom might she have known, he wondered, some superannuated relative perhaps, whose memory went back to the American Revolution, or at least to George Washington's Presidency? It was a wonderful thought.

  • Graham Won Our Hearts For All Our Nations
    Victor Foloyan, of the LaRouche Youth Movement in Baltimore, wrote this eulogy for a memorial service for Graham Lowry, held on July 31 in Purcellville, Virginia, where Lowry lived.

Economics:

Parasitical U.S. Economy Reaching End of Bailout Road
by John Hoefle

You almost have to feel sorry for poor Federal Reserve Chairman Alan Greenspan, the man who was knighted by the Queen of England for service to the British Empire, and who was declared by no less an authority than the blowhard former Senator from Enron Phil Gramm, to be the greatest central banker in the history of the world.

Blackout Means: Rebuild The Transmission Grid
by Marsha Freeman
The Great Blackout of 2003 has finally made many millions aware of what had been known by the electric utility industry, regulators, and other professionals for more than a decade: That underinvestment in the nation's transmission infrastructure, while stress on the system was rising, due to 'electricity deregulation' policies, has dramatically increased the risk of catastrophic failures...

Mexico's Fox Sends College Grads Out To Sell Tacos on the Street
by Ronald Moncayo Paz
On the evening of July 2, 2003, the night of Vicente Fox's Presidential victory in Mexico, the youth who were said to have been the deciding factor in the vote, shouted excitedly to the President-elect, 'Don't fail us! Don't fail us!' Theirs were false hopes, however, as the Fox government's economic policies proved to be an aggressive continuation of the anti-national, and even fascist, policies of the three previous administrations, which EIR has been warning against ever since the signing of the North American Free Trade Agreement in 1994.

Demand To 'Float' China's Yuan Could Crash Dollar
by Mary Burdman
The second-biggest question in all the recent months' hoopla, over the United States' demand that China drastically revalue its currency upward against the bankrupt dollar, is whether U.S. Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow, are really such fools as to think that all their bloviations before the U.S. Congress will have any effect where it matters, in Beijing.

Iran, Russia, and India Build N-S Rail Corridor
by Muriel Mirak-Weissbach
While the attention of the world press has been rivetted on accusations that Iran is developing nuclear weapons, the Islamic Republic has actually been busily developing capabilities of a more important sort, contributing to establishing regional peace. Continuing its policy introduced in 1991, Iran has been concentrating on expanding its railway connections to the newly opened, former Soviet territories of Central Asia and the Caucasus, and thence, to Asia, along the new Silk Road.

Ingersoll Bankruptcy: Are U.S. Machine Tools Becoming Extinct?
by Richard Freeman
With the decline of the U.S. machine-tool design sector, which is gathering force, the United States economy does not stand a chance of survival. The truth of this was brought home by the April 22 bankruptcy filing by Ingersoll Milling Machine Co., of Rockford, Illinois, the machine-tool design company which has a highly developed capability possessed by only a few others in the world.

International:

The 'British Watergate' Can Bring Down Blair and Cheney
by Mark Burdman

Very damaging inside testimony by British Prime Minister Tony Blair's own chief of staff on Aug. 18, signalled that Britain's establishment has made the decision to axe Blair, precisely over the corrupt efforts he made to falsify intelligence to justify U.S. Vice President Dick Cheney's 'preventive war' doctrine being applied to Iraq.

Bombing of UN, Shows The U.S. Must Withdraw
by Muriel Mirak-Weissbach
If there is any clear message in the bombing of the United Nations headquarters in Baghdad on Aug. 19, it is that the United States occupying power has lost all control over the situation, and must get out as soon as possible. The United States and its pro-consul Paul Bremer must leave, and the UN must be authorized fully to take charge of rebuilding the nation, in order to attempt to prevent the worst from happening.

Bombings Pave Sharon's Way To Another War
by Dean Andromidas
Hours after a Palestinian suicide bomber with over 100 kilos of explosives blew apart a Jerusalem bus filled with ultra- Orthodox Jewish families on Aug. 19, killing 20 people and wounding scores, Israeli Prime Minister Ariel Sharon and his generals launched 'Operation Defensive Shield 2.' Israeli troops were sent into Nablus, Jenin, and other West Bank cities and towns, with orders to 'resume' targetted assassinations, which had never really ceased.

National:

Ashcroft Terror Links Expose 'Patriot Act' Hoax
by Michele Steinberg
Attorney General John Ashcroft was 'visibly angered,' reported Reuters on Aug. 21, when a supporter of Democratic Party Presidential pre-candidate Lyndon LaRouche in Detroit, Michigan exposed Ashcroft's collusion with Vice President Dick Cheney in orchestrating a 'new 9/11' terrorist atrocity to justify ramming through further police state measures known as the the 'Patriot II' and 'VICTORY' Acts.

'Beltway Snipers' Trained on Video Games
by Don Phau

Evidence now points to the fact that the accused 'Washington Beltway snipers,' 18-year-old Lee Malvo and 42-year-old Army veteran John Muhammed, were motivated and trained on popular 'point-and-shoot' video games. The two are now being held in Virginia, awaiting trial there and in other states, in the murder last year of 13 people.

Cheney-acs Scheme for Nuclear War In Secret Gathering at Stratcom HQ
by Jeffrey Steinberg
Approximately 150 White House, Defense and Energy Department officials, weapons laboratory scientists, and private contractors met behind closed doors at the Offutt Air Force Base headquarters of the U.S. Strategic Command near Omaha, Nebraska on Aug. 7, to accelerate plans for a new generation of American nuclear weapons to be integrated into the U.S. offensive arsenal.

California: Davis Comes Out Fighting, Arnie Morphs Into 'Insider' Puppet
by Harley Schlanger
With the national political spotlight focused on California, Gov. Gray Davis came out swinging in a speech at the University of California at Los Angeles (UCLA) Aug. 19, fighting to defeat the efforts of neo-conservatives and anti-government fanatics to throw him out, via a recall election. Given up for dead by analysts and activists alike since Arnold 'The Terminator' Schwarzenegger tossed his helmet into the ring, Davis offered a strong defense of his nearly five years in office.

Ashcroft Hits the Road To Save Patriot Act
by Edward Spannaus
With the USA/Patriot 'anti-terrorist' Act under growing attack from all sides, Attorney General John Ashcroft has begun a nationwide speaking tour to selected audiences ('no questions, please'), as part of a frantic mobilization to save this gestapo-like law, and to lobby for still more police-state powers.

Christian Zionists 'Amen' Forcing Palestinians Out
by Edward Spannaus
It ought to be a scandal of major proportions, that an Israeli government official who advocates the forcible transfer to Jordan and Egypt of the Palestinians in the the West Bank and Gaza, has just toured the United States, welcomed by leaders of the Christian Zionists, who mislabel themselves 'Evangelicals.'

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