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Departments Strategic Studies Economics 17 Science Policy 50 Terrorist upsurge 4 Regulators pay homage to Europe takes a step toward the threatens entire Western Babylon's Whore in Moon. Hemisphere London Although the explosion of terrorism Bankers gathered in London for the 20 Australia Dossier is a national security threat to the 300th birthday of the Old Lady of British funds pour into Australia. United States,among other Threadneedle Street vowed to do countries,the U.S. State nothing to bring derivatives under 21 On the Green Front Department is backing revolts and control. A "wilderness" for drug pushers? insurrections in lbero-America. 6 Balsam failure brings 47 Andean Report 52 Will the Zapatistas go international financial Open skies for cocaine. Mexico-wide? collapse one step closer

67 Letters to the Editor 54 A volcano of political 8 Ghouls testify at U.N. Don't be defensive about violence is set to erupt in hearings Rostenkowski. Brazil 9 Currency Rates 72 Editorial 56 British are caught running Out of the morass. terrorism 10 China turns away from shock therapy, as threat of 58 Left-right pincer is forcing mass unrest grows Photo and graphic credits: Cover, Venezuela into civil war National Archives. Pages 7,55,63, 12 P.R.C. never stopped 64, EIRNS/Stuart Lewis. Page 25, EIRNS. Page 28,EIRNS/Carlos de 59 Hugo Chavez's pseudo­ looting its peasants Hoyos. Page 44, EIRNSI Zamora Christopher Lewis. Page 53, 14 China and Russia promote EIRNS/John Sigerson. Eurasian high-speed rail and bridge projects

18 'Malthusian International' proposes global environmental law court

22 Business Briefs Volume21, Number26, June 24, 1994

Feature International National

38 Calls grow to boot out 62 North candidacy is a test IAEA and develop Korea for the natien Direct U.S. talks with North Korea Can a proven drug-runner make it are crowding out the one-worldist into the U.S. senate by warmongers who wield the masquerading as a conservative International Atomic Energy family man? Agency. 64 ARGUS head Bryant faces 40 Haiti invasion means charges A scene of panic on Wall Street in 1933, as depositors disaster for Clinton Another member of the "Get queue up to withdraw their money from the banks. LaRouche" task force bites the 41 Opposition wants IMF dust. 24 The coming disintegration program for Nigeria of financial markets 6S Single-payer. health care Lyndon LaRouche urges plan is no stlution to responsible governments to put to 42 European Parliament the "sanity test" all incumbent and elections show impact of medical crisis The Canadian-style program would prospective economics and central economic crisis replace the hea th insurance banking officials: "Prove l industry with the federal conclusively that the near-term 44 Germany: Zepp-LaRouche government as the sole provider of disintegration of the presently brings reality to election health insurance for Americans. bloating global financial and The problem is. it does nothing to monetary bubble is unstoppable by 4S France: An Italian-style expand the tax base, and hence any means alternative to shakeup of the system means less health care all around. governments acting to place the relevant institutions into bankruptcy reorganization. " 46 What is the UNDP doing in 68 Congressioaal Closeup your country? 26 Bank of England replies, 70 National News defends derivatives 48 International Intelligence �TIillEconolllics

Regulators pay homage to Babylon's Whore in London

by Anthony K. Wikrent

The heads of the 103 largest banks in the world gathered in bank dealing in derivatives is insolvent or not. London at the beginning of June, for the annual meeting of The problem, Padoa-Schioppa explained, is that "we cen­ the International Monetary Conference (IMC), and to cele­ tral bankers are still lacking a reliable set of analytical propo­ brate the tercentenary of the "Old Lady of Threadneedle sitions on which to draw in formulating our policy methods Street," as the Bank of England is known in the high circles in a derivatives-influencedfin ancial environment." of internationalbanking and finance. The meeting was espe­ Thus, it is not surprising that the measures advocated in cially noteworthy for the gaggle of financial regulators from the BIS's annual report-issued just days after the bankers' around the world, who, except for some very rare birds from revelry in London-downplayed the danger of derivatives, continental Europe, came to prostrate themselves, and assure focusing instead on a need for "better monitoring." The BIS the bankers that the regulators had no desire to burden or hin­ report asserted that "the ongoing debate about the potential der the bankers' derivatives markets with more regulation. risks posed by derivatives markets has accentuated the need to The tone was set by the chairman of the U.S. Federal develop more appropriate measures for the exposures which Reserve, Alan Greenspan, who told the bankers on June 8 derivatives actually entail," and concluded, "It would be a that the derivatives markets will have to be increasingly "self­ mistake to assume that policymaking would be made easier regulated, largely because government regulators cannot do if financial instruments could be limited or capital movements that job." The best line of defense against a bank collapsing controlled. Global markets are now so highly integrated that because oflosses in derivatives, Greenspan said, is that "indi­ suppressing the symptoms of investor preferences in one mar­ vidual institutions, in their self-interest, become extraordi­ ket would simply lead to their manifestation elsewhere." narily knowledgeable about the counterparties with whom they are dealing." The British call the shots Tommaso Padoa-Schioppa, a deputy director general of The BIS annual report reflects the significant shift that the Bank of Italy who also chairs the Basel Committee of the has occurred under its new general manager, Andrew Crock­ Bank for International Settlements, told the bankers that the ett, who was a senior officialof the Bank of England before BIS will recommend that banking regulators in various coun­ moving to the BIS. The previous general manager, Alexan­ tries use the internalrisk-management models developed by dre Lamfalussy, had been quite outspoken about the growing the derivatives dealers themselves, as the basis for regulating danger of banks' off-balance-sheet derivatives risks. Lamfa­ derivatives. Over the past year, the Basel Committee has lussy's appointment to head the new transitional European been considering whether or not derivatives dealers should Monetary Institute, the core of a future European Central be forced to meet capital adequacy requirements. Now, ap­ Bank under the Maastricht Treaty, was probably engineered parently, rather than formulating one standard against which in order to silence a voice that no doubt was irritating the all financial institutions can be measured, the committee is international bankers--espec ially in the City of London, basically telling the bankers that the bankers themselves can where one-half of the world's $1 trillion a day of foreign set the standards by which it is to be determined whether a exchange trading takes place. London, in fact, trades more

4 Economics EIR June 24, 1994 dollars or deutschemarks than are traded in the United States elsewhere ...then I will,' " warnedAn thony Belchambers, or Germany. executive director of the Lo ndon-based Futures and Options The line taken by Greenspan, like the new direction of Association, the day after Bunsdesb,nk director Meister's the BIS under Crockett, slavishly follows the dictates of comments. Threadneedle Street's Old Lady herself. The London Inde­ Rolf Willi, secretary general of· the Internatio nal Ex­ pendent had reported on May 16: "Washington is preparing change Association (ACI), the internftional organization of to propose new regulations on the burgeoning trade in deriva­ 51 national foreign exchange clubs-w hich just happened to tives, perhaps as early as this week. This is in direct opposi­ be gathering in London the same time as the IMC-told tion to U.K. authorities, led by the Bank of England, which repo rters on June 3, "We are concern�d that one day we will believe that existing regulatory structures can handle the in­ be over-regulated." ACI President David Clark was even dustry. . . . [The Bank of England] does not want to launch more emphatic: "The worst thing th at could happen. . . any new structures to deal directly with the derivatives mar­ is that someone comes along and reg ulates the derivatives kets ....The Bank is skeptical of suggestions that deriva­ market." And just in case anyone missed the point,Her Maj­ tives should only be traded on recognized markets." esty's Minister for Trade and Industry , Michael Heseltine, That Crockett had the fix inplace at the BIS, was indi­ observed, "In contrast to some other marketplaces, the regu­ cated by the lead editorial of London's Financial Times on latory system in the U.K. has allowed these new products to May 19. "Anything other than a global approach to regulation be developed ....We in the U.K. dQ no t impose a mass of will be less than fully effective," it read. "The thrust of burdensome procedural regulations on markets. " supervision [over financial derivatives] should thus continue To drive the point home, a song wa s specially composed to be chiefly throughthe Basel-based Bank for International and performed by a choral group for' the IMC's festivities, Settlements. " which went as follows: "Glory be to the deutschemark, and The next day, Canadian regulator s obediently fell into to the yen, but mostly to the holy pO und. As it was in th e line. "In the absence of evidence of a problem, I do n't think beginning, before all this talk of a single European currency, it's time for someone to say the sky is falling," proclaimed is now, and ever sh all be,Amen ." Richard Gresser, senior policy analyst at Canada's federal Office of the Superintendent of Financial Institutions. "I do The collapse has begun not have evidence that would indicate there is a trend devel­ The bankers will soonhave their co meuppance, however. oping toward increasing trading losses." Speaking at a conference of the Inter-Action Council in Dres­ Later that week, Greenspan gave a preview of the propiti­ den on June 7, former West German Chancellor Helmut ation he would offer in London, in testimony before the U. S. Schmidt warnedof an imminent major financial crisis, most House Finance Subcommittee hearings on derivatives on likely "triggered by a collapse in the offshore banks," cre at­ May 26: "There is nothing involved in federal regulation per ing a danger in 1994-95 similar to the danger created by the se which makes it superior to market regulation .. ..Today 's collapse of the Vienna Kreditanstalt Bank in 1929, which markets and firms, especially those firmsthat deal in deriva­ initiated an international banking panic that opened the way tives, are heavily regulated by private counterparties who for to World War II. self-protection insist that dealers maintain adequate capital Actually the collapse has already begun, in a fo rm Ameri­ and liquidity. " can System economist Lyndon LaRou che describes as "the But on the continent, the governmentsof France , Germa­ great mudslide." The most recent eve nt in the process oc­ ny, Italy, Spain, and Belgium-shocked by the derivatives­ curred in Venezuela, at 2:00 a.m. Qn June 14, when the related collapses of Feruzzi, Banesto, Metallgesellshchaft, government put the eight largest banks into receivership­ Cre dit Lyonnais, Balsam, and other large companies-were after having used 70% of the national budget to try to keep leaning toward the view that controls on derivatives should them afloatsince this spring. be tightened. In a speech before the Frankfurt Economic Ah, rich irony! One of the major sc> cial events at the IMC Editors' Club on May 21, Edgar Meister, a director of the meeting was a private performance Of Walton's "Belshaz­ German Bundesbank, said that derivatives were increasing zar's Feast, the biblical story of the king of Babylon, who the "systemic risks for the financial sector as a whole," and throws a feast during which the word!! "Mene, Mene, Tekel, recommended that all derivatives deals be registered at the Up harsin" mysteriously appear on the wall. When his wise­ credit supervisory board, and that all deals involving more men cannot not decipher the words,! Belshazzar summons than DM 3 million be made subject to minimum reserve Daniel, who tells the king that the wo rds foretell the fall of requirements. Babylon, as punishment fo r the king's lifting himself up The response from the nabobs of London can be fairly against the Lord of heaven, and praising the gods of gold and described as a shriek. "Any form of heavy-handed regula­ silver. How fitting that the last grand :orgy of the masters of tion, when applied to very fluid cross-border business, will money was held in London, feting t1;. e slavish Babylonian! make those doing the business say, 'If I can do the business Venetian whore of Threadneedle Stre�t!

EIR June 24, 1994 Economics 5 Balsam failure brings international financial collapse one step closer

by William Engdahl

On June 10, German flooringmanufacturer Balsam AG was to the efforts of the creditor banks to close out the huge put into bankruptcy, and four members of its board of direc­ derivatives positions of Balsam and Procedo. tors were imprisoned for financial crimes. One week later, a The dramatic fall in market after market since early last Wiesbaden-based factoring firm linked closely to Balsam, January, is manifestly not calming down. Estimates of inter­ Procedo, also went into bankruptcy when the group of insur­ national bond analysts are that "paper losses" (most bond­ ance companies behind it refused to assume the fraudulent holders, including huge pension funds and private savers, debt obligations of at least DM 2.1 billion ($1.3 billion) have continued to hold onto their securities rather than try to linked to its dealings with Balsam. sell) since January in governmentbonds of inajor industrial In an unusual public comment, former German Bundes­ nations could easily total more than $500 billion. bank President Karl-Otto Poehl, now chairman of the Co­ While the average citizen has little idea of the esoteric logne private bank Sal Oppenheim & Cie., told the press, world of bonds, these bonds form the very core of the global "The intensity of criminal energy present in the Balsam affair monetary and financial system, considered to be the "safest" is likely far worse than in the Schneider bankruptcy." The investment. Governmentdebt in the OECD countries has ex­ latter reference is to the large German construction firm ploded since the oil and other shocks of the early 1970s, while Schneider AG , whose owner fledthe country earlier this year investment in infrastructure has contracted to postwar lows. le aving behind billions in bank debts and tens of thousands The underlying structures of financial obligations are be­ of jobs threatened. Poehl's statement rang alarm bells in the coming fundamentally more unstable with each added shock. alrea dy nervous Frankfurt financialcommunity . What is under way is without precedent in the history of Well they might. Though details are not yet public, there international finance, as Am erican economist Lyndon are reportsof feverish activity by some 50 internationalcredi­ LaRouche has stressed in recent commentary . tor banks to Balsam to audit the real situation of the firm, Since the 1979 "Thatcher Revolution," every single gov­ whose management is believed to have covered up its bank­ ernment in the nations of the Organization for Economic ruptcy for almost eight years by speculating massively in for­ Cooperation and Development has deregulated, removed its eign exchange and other forms of high-risk derivatives trade. national currency controls, opened the doors wide to global According to a report published in the June 11 Die Welt, financial flows, in effect becoming hostage to whims of huge Balsam management left behind a staggering DM 10 billion speculative markets. This has been combined with the "Mo­ worth of currency derivatives obligations, so-called "dollar lotov cocktail" of financial derivatives. Beginning in New options" contracts, most of which run until December. This York and London, banks, financial firms, and even industrial means that the creditor banks, primarily Deutsche Bank and companies have gone pell-mell into the largest speculative Dresdner Bank but including Poehl's Oppenheim, must as­ binge in history, borrowing to speculate on the future value su me the risk ofth ose DM 10 billion in derivatives from Bal­ of a given currency, interest rate, or stock or bond price, at the sam. Should the fluctuations in the value of the dollar go same time as the intensity of basic industrial and economic against the bet ofth e Balsam management between now and infrastructure investment throughout the OECD countries is December, the banks stand to lose sums in the hundreds of generally at 20-year lows. millions. A simple test for the reader: Compare the geometrical increase in per capita public debt carried by citizens of every A mudslide that just won't stop major OECD country over the past 25 years, with the de­ The Balsam affair is the latest in what appears to be an crease in absolute numbers of manufacturing employees in unending series of financial shocks of titanic dimensions in those same countries. Or, do the same comparison this time re cent months. Some traders in the European banking com­ with the decline in per capita new public infrastr ucture invest­ munit y believe that the surprising weakness of the U. S. dollar ment for the period. In each case, the public debt has ex­ against the deutschemark, as well as the heavy, continued ploded exponentially, whereas the real economic wealth­ se lloff in German bond futures in rece nt days, could be tied creating resources of the national economy in question have

6 Economics EIR June 24, 1994 contracted dramatically. This is the backdrop of the process now unfolding.

How the bubble was inflated On July 20 , 1993, u.s. Federal Reserve Chairman Alan Greenspan signalled to the House Banking Committee that the Fed wOlild raise short-term interest rates for the firsttime since 1989. Five years of interest rate reductions by the Feder­ al Reserve were made in order to prevent a systemic insolven­ cy crisis in the entire American banking system. By lowering rates and injecting large new reserves into the banking system, Greenspan allowed banks a "breathing space" of fiveyears in order to earnrisk-free profits speculating on U.S. government bonds. But, in the course of maintaining such historically low interest rates for so long, the Fed created a new Frankenstein monster, an "asset bubble" of grotesque dimension, as banks and financialfirms speculated in stock and bond markets rath­ er than risk new industrial loans. u.s. Federal Reserve Board Chairman Alan Greenspan, who helped create the gigantic speculative bubble in derivatives The end-phase of that asset bubble, which began in U. S. instruments. His Feb. 4 decision to raise interest rates triggered stock and bond markets, was a record capital outflow from the greatest instability in world financial history. the United States, mainly by unregulated mutual funds, which hold some $1.8 trillion in assets, into financialmarkets across the globe. The "glamor" area of investment by U.S. mutual to meet losses in the Japanese market. Despite repeated sub­ funds and others was high-risk "emerging markets" such as sequent moves by the Bundesbank and other European cen­ Mexico, Turkey, and Malaysia, which offered 70- 100% tral banks afterFebruary to lower key interest rates and other­ profits to speculators, leveraged by various derivatives. wise attempt to stabilize German and other bond markets, This speculative U.S. capital outflow reached the huge the selling continues. U.K. bond values have dropped some sum of $120 billion in 1993, more than double what it was in 20% in four months, U.S. values by 15%, and Germanvalues 1992. With it, the "asset bubble" expanded in ways never by 12%, falls of a magnitude not seen in so brief a time since before seen. The same U.S. investment funds poured huge World War II. sums into the German and other European bond markets, This process quickly spilled into liquidation of holdings creating bubbles in European and other financial markets in in major "emerging markets," starting with Mexico. Insur­ the final months of 1993 as well. rection in Chiapas, political instability, and the assassination All these money-hungry speculators gambled that inter­ of the leading PRI presidential candidate created such a panic est rates would continue to go down or, at worst, would outflow of dollars from Mexico that the Federal Reservewas not go up. But in September 1993, Federal Reserve Board forced to step in with emergency funds to prop up the peso. members David Mullins and Lawrence Lindsay started to Turkey, Malaysia, Poland, and other speculative markets of warn openly of the danger of creating a "Japan-style asset the past several years saw similar selling and capital flight. bubble" in the U. S. bond and stock markets. The inflation Despite dramatic coordinated measures by the Group of Sev­ danger in U.S. financial markets was not the cost of living, en central banks to attempt to stabilize the dollar, yen, and but the soaring prices of stocks and bonds and financial other key currencies, and with it the markets, huge panic assets. In testimony before the Senate Banking Committee selling resumed again the week of May 23 on the British on May 27, Greenspan admitted that the Feb. 4 decision to and German bond markets, as a major U.S. "hedge fund," raise fed funds rates by one-quarter percent to 3.25% was believed to be Steinhardt Partners, reportedly continued to directed, not at consumer or industrial price inflation, but at liquidate its huge bond position, which had been bought with halting the "sharp rise in financial asset prices." That shift money borrowed from major banks. detonated the greatest instability in world financial history. Recent statements by the normally conservative Bank When the Federal Reserve acted on Feb. 4, it confirmed for International Settlements in its June 13 annual report that the "one-way" bet on interest rates was over, and bond underscored how terrified the major central banks are of the prices fell. But, curiously, European bond prices, especially situation. Andrew Crockett, former Bank of England officer in U.K. "Gilts" and German "Bunds," fell far more. The and the new general manager of the Swiss-based BIS, stated, intense European market fall beginning February was trig­ "It would be a mistake to assume that policymaking would gered by "one major U.S. institution" doing panic selling of be made easier if financial instruments could be limited or European bond futures, or derivative positions to raise cash capital movements controlled."

EIR June 24, 1994 Economics 7 being discussed was not advanced port facilities, railways, or nuclear power plants, but rather the need to hook up more satellite television and related forms of mass brainwashing. The fourth day heard speakers calling for "a new partner­ ship for global development," by which they meant, for example, "debt-for-nature swaps" such as those which cer­ Ghouls testify tain multinationals are proposing for the Amazon so that they can grab that area's natural resources. at U.N. hearings The final day focused on the changes necessary in the U.N. bureaucracy in order to implement this agenda, espe­ by Joseph Brewda cially the creation of an economic security council endowed with the power to militarily enforce its ukases on population control, the environment, and so forth. Such enforcement Twenty ghoulish experts on ridding the world of its "surplus" mechanisms are to be the main topic at the Copenhagen non-white population gathered at United Nations headquar­ summit. Professor Kennedy, it was announced, has just been ters in New York on June 6-10 to testify before "world appointed Boutros-Ghali 's adviser on reorganizing the U. N . hearings" on U.N. Secretary General Boutros Boutros­ bureaucracy in preparation for such requirements. Ghali's latest report, "An Agenda for Development." The report is aimed at shaping the run-up to a World Summit Imposing technological apartheid on Development to be held in Copenhagen in March 1995 . Prince Alfred von Liechtenstein's efforts to enforce con­ That summit is supposed to assemble the machinery for tinuing backwardness within the former colonial sector typify enforcing the anticipated results of the International Confer­ the real agenda behind hypocritical U.N. concernswith "de­ ence on Population and Development, set for September velopment." The prince argued that westerncivili zation and 1994 in Cairo. the American and European way of life are simply not "sus­ Most of the testimony revolved around the usual array tainable," and that therefore the global expansion of such a of fraudulent buzzwords such as "overpopulation ," "sustain­ civilization and way of life could not occur without severely able development," "putting people first," and other issues damaging or even destroying the ecological basis of life. which are being used nowadays to justify the elimination The prince argued that "worldwide cultural uniformity" of the planet's "useless eaters." There was no talk here of is also undesirable, since it would lead to massive cultural actual industrialization and infrastructure development. impoverishment. The preservation of "cultural diversity," he Among the more prominent figures present were Prof. argued, represents a "rich legacy of mankind," and is as Paul Kennedy, author of the popular book The Rise and important as the preservation of "bio-diversity." (In U.N. Fall of the Great Powers; Nobel Prize winner and voodoo newspeak, bio-diversity means balancing the needs of man­ economist Lawrence Klein; former Nigerian head of state kind and crocodiles; cultural diversity means denying scien­ Gen. Olusegun Obasanjo, currently an important tool in tificeducation to non-white popUlations.) British effortsto recolonize westernAfri ca; Frances Stewart, In order to block technological and cultural transfers, the director of the Institute of Commonwealth Studies at Oxford prince proposed the creation of national councils of sustain­ University, a British intelligence soft-cop; and Prince Alfred able development to replace existing national security coun­ von Liechtenstein of the Vienna Academy for the Study of cils. Security will have to be redefinedto encompass social, the Future, possibly the most deranged of the whole lot. economic, and ecological security, and existing security The first day's testimony focused on "development, forces and institutions redefined and restructured to become peace, and security." The audience was informed that the "green helmets," i.e., eco-police. gravest threat to world peace today was the "perceived need for military power" among Third World states. The solution If this is 'development' •.. for dealing with the uppity natives: Demilitarize the Third Gen. Olusegun Obasanjo, the type of black face often put World, and form an advanced-sector weapons cartel. forward at such gatherings to justify imperial designs, also The second day was devoted to "putting people first," emphasized the need for enforcement. He said it is desirable a term which, translated from U.N. newspeak, means that that the United Nations form an "effective body" which governments which resist the U.N.'s brand of "develop­ would "manage" the interdependence of the world as mani­ ment" must bend to the "people's needs"-needs which, of fested in challenges to the environment, and in population course, are dictated by the U.N. itself. growth. The new body, an economic security council, would The third day dealt with "globalization." Speakers com­ set effective norms and rules for equitable and sustainable plained that "many developing countries have been excluded world development, and would monitor compliance with from the high-technology trail." But the "high technology" such rules, he said. Such a body would have to act preemp-

8 Economics ElK June 24, 1994 tively when necessary. Obasanjo was asked by Sir David Hannay, the British urr ambassador to the U.N ., about what could be done about the C ency Rates "fact" that while the military expenditures of the industrial­ ized nations were dropping, those of the developing sector The dollar in deutschemarks, were increasing, despite the "fact" that the external threat to New York lateafternoon fI� such former colonies has decreased. Such funds used for the military would be better spent on "development," Hannay 1.80 said, perhaps thinking of Iraq, whose starvation he continues 1.70 to supervise. J ...... ,� Obasanjo replied that various steps could be taken to deal 1.60 with Third World militarization. For one, the fivepermanent members of the U.N. Security Council should control, 1.SO among themselves, the movement of weapons. Second, re­ cords should be kept by appropriate U.N. and related agen­ 1.40 : cies on the transfer and purchase of weapons to Third World 4/r1 5/4 SIll 5/18 5Il5' 6115 states, as well as on the movement of troops. Third, countries The dollar in yen that insist on building up their militaries should receive a less N ew \'ior Ia k te aftemoon fix! sympathetic hearing at the World Bank and related lending 1l1li agencies. 140 In another discussion, the Dutch ambassador, Nicolaas Biegman, blustered about "democracy" (newspeak for 130 ! "whatever suits the international banking community"). De­ velopment without democracy could cause harm, including 120 in the environment, he said; and in today' s interdependent world, non-intervention is not an option in dealing with the 110 lack of democracy and environmental abuse. The main threat 100 to today's interdependent world, he said, was "unchecked 4127 5/4 5111 5118 5125 6/11 6115 population growth," which, he claimed (falsely, as it turns out), was the root of such conflicts as that now engulfing The British pound in dollars Rwanda. New York lateafternoon flxIna

Margaret Cadey-Carlson, president of the Population ! Council, expanded on the "overpopulation threat." De­ 1.80 pending on what happens in the next ten years, she ranted, . 1.70 the population will continue to grow to 8.5 billion, or in a

"worst-case scenario," 15 billion. Food could not be pro­ I 1.60 duced for that number without severe environmental implica­ tions, she lied, since "every human being accounts for a I.SO - stress on the environment." One partial solution, she said, is globalized communication-television in every home­ 1.40 i which would lead to rapidly declining population rates by 4127 5/4 SIll SIl8 512!1 6/11 6115 shiftingviewers toward modem westerncultural norms (such The dollar in Swiss francs as acceptance of homosexuality). New York lateafternoon flxIna Frances Stewart, director of the Institute of Common­ wealth Studies at Oxford, emphasized the need for the U.N. 1.60 to create an economic security council. Stewart shed a couple I of crocodile tears over Third World debt burdens, but said 1.50 such problems could be solved by creating a "safety net" for .- those who are marginalized. But one man's safety net is 1.40 '" another man's prison: The net would be provided by creating an economic security council which would govern the work 1.30 of the World Bank and International Monetary Fund, and i 1.20 would impose an international tax on common resources to 4127 5/4 SIll SIl8 6/11 6115 fund it. �

EIR June 24, 1994 Economics 9 China turns away from shock therapy, as threat of mass unrest grows by Michael O. Billington

Two major "China Summit" conferences were held in Beijing gathered in Hongkong, the following measures have been during the week of May 11-15, featuring the top leadership adopted: of the Anglo-American financial structure to plan the next • strict controls on oil imports and distribution, which stage oftheir intended control ofthe Chinese economy. How­ essentially reconstitute control over the oil market by the ever, the conferences took place in the midst of a significant national oil monopoly; tum away from the free market reform process by a Beijing • a freeze on trading in selected commodities and com­ government faced with the mounting danger of mass un rest modity futures, including oil, sugar, coal, food oils, and among the impoverished ruralpopulation and growin g resis­ certain steel products; tance to foreign efforts to dismantle the state sector in dus­ • controls on the sale of state-owned assets by loc al tries. governments without Beijing's approval; The conferences-- one sponsored by the International • postponement of plans to sever all government con­ Herald Tribune (published overseas by the Washington Post trols over businesses in the Shenzhen Special Economic and the New York Times) and the Chinese State commission Zone, including state-owned firms; for Restructuring the Economic System, and the other spon­ • limits on profit margins permitted to foreign invest­ sored by the Ministry of Foreign Trade and Economic Coop­ ments in power plants, set at a maximum of 12%, far below eration (Moftec)-were treated to lectures from Henry Kis­ the average rate in previous deals; singer, deemed the Tai-pan of the new British colonial • other measures similar to the 16-point "austerity poli­ operations in China; Peter Sutherland, the director of the cy" implemented last June by economic czar Zhu Rongji, General Agreement on Tariffs and Trade (GAIT); Ernest intended to slow down the speculative binge in real estate and Stem, managing director of the World Bank; and executives light industry. Those measures were essentially rescinded a of a variety of the multinationals which are sucking every­ few mon ths later when Deng Xiaoping called for faster thing they can from the 200-million-strong unemployed be­ growth regardless of the consequences. ing recycled through the trade zones in China. The confer­ The Asian Wall Street Journal. in a story headlined "Mar­ ences served as a public show of force to President Clinton, ket Lockup," complains that the new oil regulations "mark a demanding that he renew Most Favored Nation status for sharp reversal from a two-year trend toward freer competi­ China without conditions-which in fact Clinton did the fol­ tion." Such protection of China's national industries is anath­ lowing week. Also, all participants, including the faction ema to the free-traders at the Journal. "Unlike pric e controls of the Chinese leadership which attended the conferences, imposed recently on sectors such as steel, coal, and grain agreed that China must rapidly push through the free trade products, intended to help consumers and state- run enter­ reforms required to achieve membership in GAIT before the prises cope with inflation, the oil price controls appear to founding of the World Trade Organization (WTO) next year, have one main beneficiary: the oil monopoly." Beijing both so that China can be a founding member of this new U.N. banned imports and raised the price on the oil produced do­ free trade police force. mestically. Cheap imports had left the crucial domestic oil But the kind of shock therapy required to meet the wishes industry unable to sustain its operations, which also endan­ of these world financial leaders, who see China as the last gered a significant source of governmentreve nue. source ofloot for the cancerous growth of the fin ancial bubble Although these measures represent a necessary tum away in the westernbanking system, is causing such severe internal from the worst of the free trade reforms, they will not solve hem orrhaging within China that Beijing is trying to apply the fundamental problems facing China's state sector indus­ emergency tourniquets to stop the bleeding. To the growing tries. Antiquated machinery and desperately inadequate in­ consternation of the London and New York China players frastructure underlie the inefficiency of these state sec tor

10 Economics EIR June 24, 1994 giants. The oil refineries,for instance, which are primarily in back up Zhu's orders to support agriculture and the state the north, have large stockpiles of oil, but the transportation sector industries. Over the past ye�s, peasant income has bottlenecks in the country made it cheaper to import oil in been squeezed by the rising cost of t)um inputs and general the south than to use domestic sources from the north! inflation,coupled with stagnant farmiincome. Peasants have often been paid in scrip due to the la4 of cash in government Two other, very different conferences coffers, which, together with the m.ss unemployment (ap­ Kissinger's friends at the World Bank have used the fact proximately 200million) in the coun4ryside, has led to thou­ of this inefficiency to demand the implementation of the sands of local demonstrations and �ots across the country "shock therapy" methods used in eastern Europe-simply (see accompanying article). A similar increase in labor ac­ shutting down much of the state sector entirely. There is tions in industry, protesting the layof& and industry closings, resistance to this in Beijing, which is not blind to the un­ has Beijing even more worried. Theithreat of a Polish-style folding disaster in Russia, Poland, the Balkans, etc., caused Solidarnoscmovement is one that det1plyhaunts the Commu­ by shock therapy imposed by the International Monetary nist Party,as evidenced by the continuing ruthless repression Fund (IMF). Vice Premier Zhu Rongji, who has been put in of every new occurrence of independent labor organizing, charge of the economy and was made acting prime minister despite the internationalpressure aro\lndhuman rights viola­ during Li Peng's recent trip to Central Asia, was notably tions. The government announced on May 5 a group of new absent from the two "China Summit" conferences. Zhu was "offenses against Public Order" which include penalties for instead addressing two very different conferences held in membership in "unregistered organi�ations" or secret socie­ Wuhan, the capital of Hubei Province, and Zhengzhou, the ties, and "distorting facts, spreading rumors, or otherwise capital of Henan Province, both in central China. His mes­ disrupting public order." Besides s*h outright repression, sage, as reported by the official China Daily. was that "re­ however, the current economic policy tum indicates an effort forming farm policies and efficiently running state enter­ to at least slow down the deadly bloodletting against the prises are the keys to developing a good economy and population. stabilizing society." He directed "officials at all levels" to "emphasize their economic work on agriculture and running 'Development Banks' state enterprises. This is the key to handling the relations Another step in the same directi�n was the launching of between reform, development, and stability." the State Development Bank (SDB) �n mid-April. The SDB In a similar vein, Qiao Shi, the ex-chief of security who is one of three "development" bankS!announced in January, now heads the National People's Congress, called for a mobi­ although the other two (an agricultural bank and an export­ lization of the surplus rural labor to build roads and water import bank) are yet to be establishe�. These banks, modeled conservancy facilities. He also said the key to improving the on the Japanese Ministry of InternatipnalTrade and Industry state sector industries lies in the application of "sophisticated (MITI), are intended to funnel statelrevenues into targeted technologies. " development projects in state sector ipdustry and agriCUlture, Such emphasis on governmentsupport for industry, agri­ while the commercial banks are allowed to function with less culture, and large-scale public works projects in infrastruc­ state regulation. The SDB is raisingJ another $7.5 billion in ture is far from the free market prescriptions of the Kissinger domestic bond sales, which, like t� $11.5 Treasury bills, gang. have been assigned to banks around tltecountry under a quota In keeping with this tum in policy, the government has system set by the People's Bank of qhina (the central bank). carried out an aggressive domestic bond sale program this Besides garnering the funds desper4tely needed in Beijing, year, the firstin several years except for a small offeringlast the two massive bond sales are inten41edto dampen the virtu­ year. A record $11.5 billion in state bonds have been assigned ally uncontrolled speculative binge I in real estate and low­ to local banks across the country. This fund is intended to skilled process industries in the prov1nces. fill the growing federal deficit which has reached drastic There are signs that the massiv� foreign investment of proportions due primarily to losses accrued by over one-third the past three years may be drying ulP. The "rush is over" for of the state sector industries and resistance to central taxes in Taiwan investment in the mainlandi according to the Asian the provinces, which would rather spend the money in the Wall Street Journal, partially due tP the fact that much of speculative markets locally. Guangdong Province, the center Taiwan's low-skilled process industties have already moved of the China bubble in the south, has failed to meet the to the mainland, and Taiwan will hot allow the more ad­ schedule on the state bonds, bringing stem orders from vanced industries to follow suit, due to political concerns. Beijing to restrict "indiscriminate fundraising" for local in­ But it is also due to the fear of a bre�down and social chaos vestment schemes, in order to "ensure the fulfillment of the in the mainland, and the potential b*sting of the speculative task of issuing treasury bonds as scheduled across the bubble. province." The latter is definitely the cause pf the dramatic declines The additional funds in Beijing are crucial if Beijing is to in the Hongkong stock market since �anuary-a fall of 25%,

EIR June 24, 1994 Economics 11 almost entirely due to China-based stock issues-as well as the collapse of the new domestic stock markets in Shanghai and Shenzhen. Several major private in vestors, notably Hongkong builder Gordon Wu, have cut back drastically on their plans for major power an d transportation projects in P.R.C. never stopped the mainland. The World Bank and the Asian Development Bank, in the meantime, have both announced a cutback looting its peasants in infrastructure loans, claiming that the private sector is providing adequate financial support for in frastructure. by Michael O. Billington Ironically, the largest slice of the projected foreign in­ vestment in infrastructure is coming from the world's leading derivatives speculator, George Soros, who has set up funds Faced with a severe agricultural crisis, including thousands with both GE Capital and the Hongkong-based Peregrine of peasant demonstrations and riots across the country as well Investments totalling $3.5 billion, according to the Financial as mounting production problems, the People's Republic of Times, with China the primary target. As the global deriva­ China (P. R. c.) Ministry of Agriculture Rural Economic Re­ tives bubble collapses over the coming period-perhaps in search Center released in January a stark analysis of the the coming months-these sources will disappear. causes behind the crisis. (A translation of the report was published in the May 13 Foreign Broadcast Intelligence Ser­ Opportunity awaits vice of the U. S. State Department.) The report is as notable The battle for power in China after the death of Deng (an for its honest admission of the systematic looting of the ag­ occurrence which must be considered just as inevitable as ricultural sector since the early days of Maoist rule through the crash of the global derivatives bubble), or perhaps even to today, as it is for a lack of any competent conception of before Deng's death, will provide an opportun ity for a dra­ how to solve the problem. In particular, there is absolutely matic transformation of the past 45 years of recurring eco­ no mention of the question of the mechanization of agricul­ nomic disasters under Communist Party rule-provided ture, nor of the horrible state of water and transportation there are those with the commitment and basic economic infrastructure. intelligence to meet that challenge. The publication in Strate­ The report lists the problems affecting peasant income as gy and Management, the journal of the Chinese Academy of follows: "the continuous deterioration of trading conditions Social Sciences, of the proposal by EIR founder Lyndon for agriculture, the issue of IOUs for the purchase of farm LaRouche and his associate Dr. Jon athan Tennenbaum, dem­ products, the outflow of agricultural funds [the diversion onstrates the existence of at least some motion in that direc­ of agriCUlture funds to speculation in real estate, etc.], the tion. The LaRouche program, featured in EIR on Feb. 11, holding up of farmlands by development zones, and the 1994, is based on the construction of 1,000 new nuclear­ added burden on peasants [extra taxes, levies, etc. by local powered cities over the next century, built along a series of government]. " The result is that a rapid deterioration of farm "development corridors" cutting into the interior and con­ income has reduced the ratio between the peasantry's per necting with severalne w "Silk Routes" to Central Asia, Afri­ capita income and that of urban residents back to the pre­ ca, and Europe. This approach would allow the use of the reform level of 1978, following the dark days of the Cultural high concentration of people an d land use to increase per Revolution. capita and per kilometer use of en ergy, water, transportation Production growth, which fell significantly in the mid- facilities, etc., and build the in frastructure necessary for 1980s, recovered somewhat between 1989 and 1992, but these cities and for modern agriculture. only enough to sustain zero-growth in output per capita. The Along similar lines, an in terview gran ted to EIR by Hui report provides the data shown in Table 1, which show the Yongzhen, vice minister of the State Science an d Technology dramatic growth in farm output and income between 1979 Commission of China (see EIR , May 27, 1994), expresses a and 1984, when the commune system was abolished and serious approach to the necessity of developing the entire agricultural investments increased rapidly. However, in Eurasian landmass as the minimum approach to assure peace 1984, as the free trade reform policies were first being imple­ and development. It is these tendencies which must over­ mented as part of the deal with the British over the eventual come the still-dormant view of the Chinese leadership that return of Hongkong, the government intentionally cut ag­ the capital needed for development must be extracted from ricultural investments, de-emphasized tractor production, coolie labor in primitive agriculture an d low-skilled sweat­ and began to look the other way when peasants broke the shops. residency laws, eventually flooding into the coastal cities in If this latter policy is contin ued much longer, yet another search of work in the export zones. The report points out that holocaust awaits China's 1.2 billion people. peasant income growth did not fall further than 5% in this

12 Economics EIR June 24, 1994 1985-88 period due to the establishment of thousands of "town en terprises" (a combin ation oflow-skill process in dus­ TABLE 1 tries) such that peasant in come was supplemen ted by part­ Growth in income for Chinese time work in these local in dustries. peasants plummeted However, the report notes, such town ship in dustries are extremely scattered, "n ot in step with urbanization ," an d thus Agriculture Peasant the benefits due to in frastructure con cen tration in cities are Year production growth Income growth not available. The resulting in efficiency of production an d 1978-84 6.5% 15.1% distribution dramatically limited the poten tial of such primi­ 1985-88 4.1% 5.0% tive "industry." Thus, although agricultural production rose 1989-92 5.1% 2.0%· slightly after the "retren chment" of 1988 an d Tiananmen ·Other estimates show a negative growth. even ts of 1989, peasant in come growth fell nearly to zero, while the number of un employed peasants swelled to nearly 200 million . The Min istry of Agriculture offiCials do not mention, Primitive accumulation however, the most severe form of "primitiveaccumulation" The min istry report acknowledges that the People's Re­ which has been in troduced again st tbe peasantry under the public followed Stalin ist economic policy after the 1949 sei­ reform, which is the creation of the 150-200 million-strong zure of power by Mao's Communist Party. This was based "blind flow" of un employed or "redundant" rural labor. Only on the Marxist notion (foun d as well in the Adam Smith! a small portion of this truly massive flood of humanity find David Ricardo free trade model) that capital accumulation employment in the trade zones. Those who do, usually work can on ly occur by takin g it from someplace, assumingcapital for on ly a few mon ths in the sweatshpps, un der horrendous to be an excretion of physical labor. Ign ored here is the 19th-century conditions, then returnto their home provinces, science of physical economy discovered by Leibn iz (see Fea­ leavin g their jobs to an other "lucky" migrant. This rec yc ling ture) an d implemen ted by the youn g Un ited States un der of labor is a form of short-term accumUlation again st the very the leadership of Treasury Secretary Alexander Hamilton , bodies of an impoverished population , which is only one whereby wealth is created by increases in the productivity of step removed fromthe con cen tration damp industriesof Nazi labor, gen erated by advances in the technological tran sfor­ Germany, where the fin al stop was th¢ gas chambers. This is mation of nature an d by scientific discovery. In stead, the the "primitive accumulation " which iSi so admired by the IMF Marxists implemented "primitive accumulation" again st an d the British speculators cen tered in Hon gkong. agriCUlture, in tention ally divertin g all agricultural surplus in to support for heavy in dustry. As the min istry reports: "Un ­ Non-solutions der this system, we lowered the cost of in dustrial raw materi­ This recycling of labor is not men tion ed in the report, als an d wage costs through the monopoly purchase of farm perhaps because the authors purpose expanding suc h mass products at low prices, an d acquired an excess profitthrough migration as a solution. They do stron gly advoc ate a pric e raising the prices of in dustrial man ufactured goods .... protection policy for major farm pr�ucts, a useful first step From 1952 to 1978, owing to the exchange of in dustrial an d toward a parity price policy necessary for produc tive and agricultural products at un equal prices, the fun ds flowing secure agricultural production . However, this is perceived from agriculture to in dustry amoun ted to 391.7 billion yuan" by the min istry officials as merely a stop-gap measure to (or $223.8 billion in 1978 dollars). This process required pacify the peasantry, while further "market mechanisms" are the total monopoly of the state over grain procurement an d implemen ted, aimed at "thoroughly �smashing the planned distribution , as well as strict laws preventin g peasants from purchase an d marketin g system an d the city-countrysideseg­ leavin g their assigned rural residencies. regation system." These are "magic of the marketplace" pan­ The brutal con trol over every aspect of life of the peasants aceas which, lackin g policies to actually build up the physic al has been somewhat relaxed durin g the reform period. How­ economy will do more harm than good. Allowingfree move­ ever, the report admits, "To date, the pattern of supportin g ment, for in stance, is obviously a fundamen tal right, but in in dustry with agriculture accumulation s has not been radical­ the context of the recycling of labor tlDmughthe sweatshops, ly reversed." Without needing to remin d its readers of the such "rights" simply assure an even greater flow of desperate mass genocide by starvation aft er the Great Leap Forward un employed in to the trade zones to be chewed up an d spit fiasco in the late 1950s, nor the chaos of the Cultural Revolu­ out. The report virtually cries out fQr a true solution, such tion , the report warns that there must be some protection of as that published in EIR's Feb. 11,' 1994 issue. Any less the agricultural work force, "otherwise, history will repeat comprehen sive approach, and in decl:l, "history will repeat itself. " itself. "

EIR June 24, 1994 Economics 13 China and Russia promote Eurasian high-speed rail and bridge projects by Mary Burdman

Leaders of the People's Republic of China and Russia are Strategically vital projects expressing their support for the development of a Eurasian On May 29, the final communique of the Beijing meet­ rail network, the "Great Project" vital for the economic de­ ings of visiting Russian Prime Minister Viktor Chernomyrdin velopment of the Asian-European landmass. and Chinese President Jiang Zemin and Prime Minister Li On June 15, China revealed plans to upgrade its high­ Peng, specifiedboth nations' support for Eurasian rail devel­ speed train capacity, to develop networks for trains that can opment. China and Russia "agreed to participate in bilateral go at least 250 kilometers an hour. Such an intention was put and multilateral projects, including a 'continental bridge' forward by the chief engineer of China's Railway Ministry , linking Europe and Asia," the China Daily reported on May at a conference in China sponsored by the Japanese Railway 30. Two days before the communique was issued, Li Peng Ministry. According to BBC, the Japanese are eager to win had proposed making full use of the continental bridge to the Chinese over to Japan's own "bullet train" model of high­ improve Russian-Chinese ties, during his discussions with speed rail. Most of China's rail plans concernlines in coastal Chernomyrdin. While the current Eurasian land bridge con­ areas, including one line, soon to be finished, connecting nects far western China with Kazakhstan, Li Peng called Canton to Shenzhen. But the "big potato," for which the for linking the railway lines in the eastern parts of the two Japanese and others are bidding, is the planned $8 billion countries. He said that it is necessary to increase border project for a Beijing-to-Shanghai line, to cut that journey trade between the two countries, and that they must improve down from 17 to 7 hours, and to triple the number of passen­ transport facilities in border regions. Seven cooperative gers who can take the line. pacts, including for cooperation in border control, trade, As BBC points out, transport is China's most serious science, technology, and sea transport, were also signed. bottleneck. The capacity is strained so much by transporting Chinese President Jiang had said to Chernomyrdin that such items as coke and coal, that even when industrial output Sino-Russian relations should be handled with a strategic was reported up by 20%, there was no capacity for the rails view to the future. to take more freight. China has also announced plans for a 57-kilometer In our May 27 issue, EIR published an exclusive inter­ bridge-tunnel complex which would cross the strait between view with Vice Minister Hui Y ongzhen of the Chinese State the Bohai Sea and the Yellow Sea, to link the Shandong and Science and Technology Commission on the Eurasian Conti­ Liandong peninsulas in China's northeast. In May, the China nental Bridge-the rail network, finallycompleted in 1992, Daily Business Weekly announced efforts to improvethe eco­ that links Lianyungang on the Yellow Sea, ultimately to nomic integration of the rim of the Bohai Sea, which has long Rotterdam, Holland, on the North Sea. Here we publish been the center of China's heavy industry. While the region tables, supplied by the Chinese State Science and Technolo­ includes over 11 cities with over 1 million population each, gy Commission, which were not able to appear with Mr. including Beijing and Tianjin, China's enormous transport Hui's interview due to technical problems. and communications bottlenecks are choking development. A key aspect of Vice Minister Hui's proposal for the New This project has only progressed to feasibility studies, but Asia and EuropeContinental Bridge is the idea of the "economic Shandong and Liaoning provinces are already planning a corridor"along therailroad itself. One-fourth of China's popula­ train-ferry to connect Dalian, the main port in Liaoning, and tion lives in this corridor, and, especially in the east, it contains Yantai in Shandong, both important rail heads to the interior, much of China's industry. However, as Tables la, Ib, 2a, and to be operational by 1998. 2b show, the internal (western) regions, including Ningxia, In an interview on June 8, EIR founder Lyndon LaRouche Shaanxi, Gansu, and Qinghai, are far less developed. One of said of Yeltsin's proposal: "We need the project full scale. the purposesof building this "economic corridor," is to develop This is not a white elephant ....This is rails! And rails are these interior regions. Table 3 shows the shorterdistance of the the arteries of commerce and production. The great problem, New Asia and Europe Continental Bridge, as compared to the in Europe and Eurasia, is the lack of an efficientrail system Trans-Siberian railroad. covering the Eurasian continent; and thus whole areas of

14 Economics EIR June 24, 1994 TABLE la Economic and population situation in the regions along the New Asia and Europe Continental Bridge (1992)*

Total National social Social Income product Population laborers Land sres GNP (NI) (TSP) Growth rate G(OWth rate Growth rate (million (million (million (million (million (million of GNP of NI ofTSP Region persons) persons) mu) yuan) yuan) yuan) (OA.) I (OA.) (%)

Beijing 11.02 6.686 3.7818 70,900 50,720 148,100 11.6 15.8 16.5 Tianjin 9.20 4.721 2.5436 41 ,120 34,430 133,280 11.7 13.2 20.1 Hebei 62.75 31 .793 209.379 115,610 94,980 257,880 13.9 12.1 17.1 Shandong 86. 10 44.051 229.203 198,000 168,560 514,120 19.5 i 18.2 25.5

Jiangsu 69.1 1 37.294 182.588 197,790 169,700 606,970 26.5 ! 28.2 41 .4 Anhui 58.34 29.827 213.664 72,490 66,540 170,350 17.4 24 23.9 Henan 88.61 43.866 256.397 121 ,320 101 ,730 266,nO 13.7 14.2 18.7 Shanxi 29.79 4.027 240.588 51 ,820 40,610 110,040 12.8 12.1 14.1 Neimeng 22.07 9.794 247.50 37,840 30,650 74,420 11 9.4 12.7 Ningxia 4.87 2.244 454.522 7,860 6,040 15,870 7.5 6.9 9.9 Shaanxi 34.05 16.991 291 .36 49,450 39,890 10,001 8.7 1 0.8 11.2 Gansu 23.14 11.127 571.066 30,190 26,580 65,330 9.7 10 12.8 Qinghai 4.61 2.16 1,091 .629 8,430 6,240 14,190 7.4 7.1 10.4 Xinjiang 15.81 6.357 2,462.963 38,230 29,210 69,540 13.1 9.8 13.9

Total 519.47 260.943 6,459.6368 1,041 ,050 865,880 2,546,870 13.2 13.7 17.7 China l,n1 .71 594.315 14,400.00 2,403,600 1,984,500 6,584,200 13 14.4 21 .8 Percent of country 44% 43.9% 44.90/0 43.3% 43.6% 45.6% 101.4 95.1 81 .3

* Including Tianjin City and Beijing-Baoto railway

TABLE lb Economic and population situation In the regions along the New Asia and Europe Continental Bridge (1992)**

Total National social Social Income product Population laborers Land ares GNP (NI) (TSP) Growth rate Gtowthrate Growth rate (million (million (million (million (million (million of GNP 'ofNl ofTSP Region persons) persons) mu) yuan) yuan) yuan) (OA.) (%) (%)

Shandong 86. 10 44.051 229.203 198,000 168,560 514,120 19.5 18.2 25.5 Jiangsu 69.11 37.294 182.588 197,790 169,700 606,970 26.5 28.2 41 .4 Anhui 58.34 29.827 213.664 72,490 66,540 170,350 17.4 24 23.9 Henan 88.61 43.865 256.397 121 ,320 101 ,730 266.nO 13.7 14.2 18.7 Shanxi 29.79 14.027 240.588 51 ,820 40,610 110,040 12.8 12.1 14.1 Ningxia 4.87 2.244 454.522 7,860 6,040 15,870 7.5 6.9 9.9 Shaanxi 34.05 16.991 291 .36 49,450 39,890 100,010 8.7 10.8 11.2 Gansu 23. 14 11.127 sn.1l66 -ao,'t90 26,580 65,330 9.7 1 0 12.8 Qinghai 4.61 2.16 1,091 .620 8,430 6,240 14,190 7.4 7.1 10.4 Xinjiang 15.81 6.357 2,462.963 38,230 29,210 69,540 13.1 9.8 13.9

Total 414.43 207.94 5,993.970 n5,580 665,100 1,933,190 13.6 14.1 18.2 China l,nl .71 594.315 14,400.00 2,403,600 1,984,500 5,581 ,200 13 14.4 21 .8 Percent of country 35.4% 35% 41 .6% 32.3% 33% 34.6% 104.8 98.1 83.4

** Not including Tianjin City and Beijing-Baoto railway

EIR June 24, 1994 Economics 15 TABLE 2a TABLE 3 Telecommunication situation in the regions Distances from Lianyungang and Vladivostok along the New Asia and Europe Continental to main cities of Asia and Europe Bridge (1 992)* Distance From Direct From shorterfrom Lianyungang Vladivostok International Urban Rural Lianyungang country City (km) (km) Region Fax Telephones telephones switchboards switchboards (km)

Russia Moscow 8,366 9,284 918 Beijing 248 1,236,868 61 ,043 803,000 27,766 Ukraine Odessa 9,433 10,810 1,377 Tianjin 33 428,608 6,493 349,900 47,694 Russia Kuibyshev 7,326 8,746 1,420 Hebei 267 790,694 133,053 559,672 224,829 Russia SI. Petersburg 8,792 9,710 918 Shandong 880 1,036,41 1 10,706 708,851 503,602 Poland Warsaw 9,683 10,601 91 8 Jiangsu 829 1,504,899 58,214 938,786 505,686 Germany Berlin 10,255 11,173 918 312 456,665 13,392 326,786 144,056 Anhui Germany Hamburg 10,721 11,639 918 122 639,550 18,281 474,496 185,880 Henan Netherlands Rotterdam 10,962 11,880 91 8 Shanxi 35 425,916 1,347 360,902 115,064 England London 11,294 12,21 2 918 Neimeng 147 363,537 2,675 288,610 85,3903 Belgium Brussels 11,070 11,988 918 Ningxin 5 70,352 279 43,562 6, 122 France Paris 11,335 12,253 918 Shaanxi 168 400,779 3,878 226,210 83,376 Hungary Budapest 10,476 11,394 918 10,426 11,344 918 Gansu 223 263,182 1,676 164,144 37,459 Czech Republic Prague Austria Vienna 10,714 11,632 918 Qinghai 54 71 ,921 104 43,650 4,057 Finland Helsinki 9,235 10,153 918 Xinjiang 140 244,942 4,853 161,234 34,613 Sweden Stockholm 11,266 12,184 918 Total 3,463 7,934,324 31 5,994 5,449,302 2,006,397 Norway Oslo 11,323 12,241 918

China 9,410 18,888,188 2,120,643 13,554,970 5,595,581 Denmark Copenhagen 10,727 11,645 918 10,703 11,647 944 Percent 01 Serbia Belgrade country 36.8% 42% 14.9% 40.2% 35.9% Bulgaria Solia 10,890 11,834 944 Bulgaria Varna 10,580 11,524 944 • Including Tianjin City and Beijing-Baoto railway Romania Bucharest 10,345 11,289 944 Italy Rome 11,846 12,790 944 Italy Venice 11,260 12,204 944 Switzerland Berne 11,248 12,192 944 Greece Athens 11,833 12,777 944 Iran Teheran 9,977 13,322 3,345 TABLE 2b Turkey Ankara 10,798 13,120 2,372 Telecommunication situation in the regions Turkey Istanbul 11,376 12,592 1,216 along the New Asia and Europe Continental Notes: Lianyungang is located in Jiangsu Province 01 China. Vladivostok is lo­ Bridge (1992)** cated in the Far East 01 Russia.

Direct Source: Government 01 the People's Republic 01 China. international Urban Rural Region Fax Telephones telephones switchboards switchboards

Shandong 880 1,036,41 1 10,706 708,851 503,602 the continent are left in the backwater of non-productivity Jiangsu 829 1,504,899 58,214 938,786 506,586 because they do not have efficienttransport of goods .... Anhui 312 456,665 13,392 326,786 144,056 "There is in Russia, and in China and elsewhere, a perco­ Henan 122 639,550 18,281 474,495 185,880 lating view which is significantly influenced by our work in 35 425,916 1,347 360,902 115,064 Shanxi this field. 5 70,352 279 43,562 6, 122 Ningxia "This kind of infrastructure emphasis is very much the Shaanxi 168 400,779 3,878 226,210 83,376 emphasis in China. There was recently a decree issued which Gansu 223 263,182 1,676 164, 144 37,459 said that there are no longer any incentives and concessions Qinghai 54 71 ,921 104 43,650 4,057 being given for these enterprise zone operations, but the Xinjiang 140 244,942 4,853 161,234 34,613 concessions and incentives will now go into these infrastruc­ Total 2,768 5,1 15,61 7 112,730 3,448,620 1,620,806 ture projects. That is the direction of things. It's a good train 5,595,581 China 9,41 0 18,888, 188 2,120,643 13,554,970 for us to board, at least in tenns of policy. I don't know how Percent 01 much money the United States has to throw into these things, country 29.4% 27. 1% 5.3% 25.4% 29% but we should at least commit our policy support to it, and

•• Not including Tianjin City and Beijing-Baoto railway hope for the best."

16 Economics EIR June 24, 1994 One of the two workshop participants from the U.S. Na­ Science Policy tional Aeronautics and Space Ad�inistration (NASA) re­ ports that while he thought the declairation was an important first step toward discussing a returnto the Moon, there were some from ESA who, like himself, were disappointed in the

results of the deliberations. i The day before the workshop began, Director of Science Europe takes a step Roger Bonnet had made a presentation in Paris at ESA head­ quarters at a breakfast for the press, and stated that the lunar toward the Moon program under consideration would "culminate in the estab­ lishment of a manned Moon base." Bonnet and ESA astrono­ my coordinator Sergio Volonte ex�lained that the manned by Marsha Freeman lunar base would include a research laboratory, perform geo­ logical investigations, and develop the technology to produce The European Space Agency (ESA) released a declaration lunar oxygen. The lunar initiative "can serve as a forerunner on June 6 which, while leaving open the question of manned for a later mission to Mars," theyi stated. The consensus lunar missions, does put on the agenda international discus­ document that was agreed upon fell short of their expecta­ sions of missions to the Moon. The statement followed an tions. International Lunar Workshop in Beatenberg, Switzerland from May 31-June 3. While it included participation from A message to Washington the United States, Japan, and Russia, its purpose was to help Europe is sending a twofold message to the United States. ESA establish a policy for European lunar missions. First, that it is time to put lunar explorationback on the space The declaration states that the "meeting was enthusiastic agenda. This is well-timed, because/the 25th anniversary of about the rich opportunities offered by the exploration and the first manned landing on the Moon will be celebrated on utilization of the Moon." It continues that the workshop parti­ July 20. This would be the perfect opportunity for President cipants agreed that the first in a series of "evolutionary Clinton to present new initiatives in $pace policy. phases" would focus on lunar orbiters, and that a later phase So far, his administration has focused almost exclusively would include robotic lunar landers and roving vehicles on on the international space station, �hich this year, like the the lunar surface. While these activities could be precursors past five,will face a tough fight for �ts existence in the Con­ to manned missions, there was no consensus that this was gress. The President has brought the; Russian Space Agency necessary or inevitable. into the program as a major player. 'This has concerned the The declaration states: "The phased approach allows the Europeans, who have been partioipants since President differences of opinion over the role of humans in space and Reagan announced the station in 19$4 and have spent more the economic utilization of the Moon to be assessed later in than $1 billion on their Columbus ! laboratory and related the light of results of earlier phases." Bowing to the pressure equipment. from pro-austerity policymakers in the ESA nations, and Second, the Europeans are sending a warning. Until now, ignoring the fact that there has been an Apollo program, the most of the European solar system sClentificexploration pro­ declaration timidly states: "As the program progresses, it is grams have been joint efforts with t�e United States. Their possible that the attractions and benefits of human presence entire manned space program is derJendent upon American on the Moon will become clearly apparent. " or Russian launch vehicles-the Space Shuttle and the Soy­ According to those on the scene in the European space uz. But if the United States terminate� the internationalspace program, manned space flight has always received less em­ station, which will have dire cons�quences for the Space phasis and support there than in the United States. The aca­ Shuttle, there are hints that this ne� lunar project may be demic community of scientists is a stronger and more vocal considered as an alternativeto it. constituency in space policy than in the United States, and Indicating that Europe is no 10(lger willing to depend strained budgets have made it even more difficult for advo­ entirely on the space superpowers, S�rgio Volonte stated on cates of manned missions to prevail. In the past few years, May 30 in Paris, "If ESA wants to giive a push forward to an cuts in ESA's budget have halted the Sanger project and the internationalMoon initiative, it must be able to propose a first Hermes space plane. step which can be developed both technically and financially To the credit of those promoting an aggressive manned with purely European means." I space effort, the document does include the formulation: "It Next year, the ESA Council will consider proposals for is evident, however, that the Moon would represent the next the phased evolutionary lunar prog�am of the declaration, logical step and a testbed in any plans of human expansion and in 1996 there will be a second InternationalLunar Work­ into the solar system." shop to review the progress.

EIR June 24, 1994 Economics 17 'Malthusian International' proposes global environmental law court by Claudio Celani

Judge Antonio Di Pietro is the most popular man in Italy. esty is not a quality demanded of environmental prosecutors. He is, in the eyes of the Italians, the prosecutor who has In any case, as our conversation started, Postiglione ex­ successfully fought "political corruption" and swept away plained that their present work is concentrating on defining political institutions that had dominated 50 years of Italian the concept of "environmental crime," as well as the jurisdic­ life. In reality, far from eliminating corruption, Di Pietro has tion of the court, which will lift the sovereignty over ecologi­ removed obstacles to the complete takeover by forces that cal matters from nation-states. "There are now 180 states in are far more corrupt than the old political parties-forces the world," he said, "which are assuming the exclusive right which believe in the dogma of free-market economy and over environmental protection, which is wrong. Environ­ are prone to manipulation by Anglo-Venetian geopolitical ment has no borders, cannot be under the rule of government, games. because it does not belong to them, it does not give a s-t Now, if the plans pushed by the Malthusian International about governments." Therefore, governmentsthat "irrepara­ go through, soon we will have a corps of internationalprose­ bly damage the environment" or neglect to quickly issue cutors like Di Pietro, to fighta peculiar form of "corruption," adequate information about environmental disasters, such which is, in fact, the national right to economic development. as Chernobyl or Bophal, have to be punished. Economic That was the initiative discussed at the meeting on "World sanctions would be used as a weapon against governments, Governingof the Environment," which took place in Venice along with criminal prosecution of individuals (officials or June 2-5. The meeting was hosted by the Cini Foundation, even heads of governments). It is not clear what would hap­ which was built by Vittorio Cini, a member of the Venetian pen if a governmentrefused to comply, even under economic trio of families-the Cini, Volpi, and Gaggia-who were sanctions, whether a war against that government would be key to promoting Mussolini's Fascism in the 1920s. This declared, because that would tum the "environmental police" time, the Venetian oligarchy can be proud of promoting fas­ into an army. cism on a much broader and more criminal scale. Since he has to keep a "moderate" profile, in order to push The man who initiated the movement for an International through his project internationally, Postiglione specified: "I Court of the Environment is an Italian magistrate, Amedeo am not saying that we should eliminate sovereignty. I am Postiglione, who was born in Abruzzi but lives in Rome, not a radical, you know. But we must build an 'integrated where he sits on the bench at the Italian Supreme Court. The system.' " He explained that what he has in mind is similar 200 participants from throughout the world came to agree to the European Commission presently led by Jacques De­ with Postiglione that such an environment court should be lors, i.e., a supranational body composed of non-elected established in Venice, and they called upon the Italian gov­ officials (technocrats), but who do not have to get final ap­ ernment to officially promote the initiative. Postiglione proval from national governments. claims that he already has the support of the Argentine, Aus­ "In its first phase, from 1975 on, the EC directives con­ trian, and Japanese governments. He is also being supported cerned primarily environmental rules, and that is obvious. by Venice Mayer Massimo Cacciari, the emerging figure in All countries had to harmonize their legislation. The business the "left" version of Venetian totalitarism (see EIR, Feb. 25, world adapted to it. Today, environmental regulations ap­ 1994). According to Postiglione, Cacciari will be the man to plied by an international court would be welcome by a part put pressure on the Italian governmentto promote the idea of of the economy, the most progressive one, which has made the environment court in Venice. long-term investments in environment-compatible techno­ logies. The others, who make short-term profitsby dumping 'I'll talk, if you write good stuff' waste would be forced to adapt." What Postiglione calls Postiglione quickly returned our call to request an inter­ "progressive business" is in reality international cartels, or view. And almost from the beginning, he told us, "If you the eco-mafia, which use environmental legislation to push write good stuff, I will give more information"-strange small and medium-sized industries out of the market. behavior for a sitting Supreme Court judge. Evidently, hon- For "moderate" environmentalist Postiglione, even the

18 Economics EIR June 24, 1994 United Nations is too conservative. "A new world order of fact that both he and Kissinger are active, in the Inter-Action nature is indispensable," he explained, "and we do not want Council, an internationalorganization wthch, in a meeting at the United Nations. The guy who signs the contracts cannot The Hague on May 7-8, discussed exactly that question of enforce them." handing over to the International Court supranational juris­ But the best part came when we asked Postiglione about diction in environmental questions. The Inter-Action Coun­ his personal beliefs, and whether population control was a cil report said, "The suggestion has been' made that it WDuid topic of discussion at the Venice meeting. "Yes, they did in be desirable to have in this area a bo�y as powerful and one panel, but I was not there," he answered. "You see, I am efficient as the [U.N.] Security Council :is in its field." The a Christian believer, but at the same time I am deeply laico document recalled that an agreement has been reached among [which means "liberal" in Italian]. The overpopulation prob­ 24 nations to establish a "High Authodty" which "should lem exists, one cannot ignore it; therefore, policies to solve be accorded regulatory and enforcemen� powers, subject to the problem are necessary." Pressed a bit more, he revealed: control by the International Court of Justice." "Ihave not matured a precise idea on population control. . . . On the other hand, it is true that man occupies everywhere, creating problems for birds, plants, animals, grass, etc. I have not matured a position, I let others do it, who are more expert"-and, I suggested, who do not have problems with What hath their conscience. Postiglione did not respond. Malthuswrought ? The green man from Oxford " If Postiglione can still sell to a corrupt public opinion the Italy's "demographic revolution" is an unprecedented striking contradiction between his professed faith and his phenomenon in the history of humanity," according to practical respect for evil using his moderate image, things a government report prepared for the tJ.N. popUlation became a little bit clearer when we spoke with another partici­ conference, Cairo '94. The report, pr�pared by a team pant at the Venice conference, the British expert Norman led by Prof. Antonio Golini and recently issued by the Myers, who works at the Green Center of Oxford University. Italian Ministry for Social Affairs, clI-lls fordomestic Myers is an active organizer for the U.N. population confer­ population growth, but unfortunatel), supports U.N. ence in September in Cairo, and adviser to many U.S. gov­ guidelines for population reductiOIl in developing ernment institutionson demographic policy. countries. "Of course there is the need for some international body In 1992 the average number ofchildren per woman to enforce environmental policies," Myers told us, and the in Italy was 1.25-1.26, which the repbrt characterizes best institution to do that could be the United Nations. How­ as "the lowest value in the world, and thaybethe lowest ever, the U.N. hasn't succeeded in enforcing anything, and ever recorded in the history of humimity for a large therefore some other solution has to be found, such as an population. " international court or, in absence of that, investing the pres­ If fertility continues to decrease, and mortality ent International Court at The Hague with regulatory and rates continue a minor decrease, the report projects enforcement powers in environmental policy. that in the year 2021, Italy would �eed "an annual Myers is apparently no Christian, and therefore can freely immigration flow ofup to 300,000"iq order to balance state that "population control and environment issues are the popUlation pyramid. Another chapter of the report intimately connected; however, the issue is too sensitive" for states: "The fact that the present structure per age has demographic policies to be enforced by a court. "The optimal been so deformed that it will involve a more or less level of the world population should be about one-third, as intense population decline in any ca'(ieover the next my friends Pimentel and Ehrlich found out." Myers then 30-50 years, no matter what the fertility rate is (unless pointed to the Italian case as a successful model for popula­ a very improbable upswing takes place) is ...not well tion control. Italy has attained zero population growth, with perceived or well known ....The conclusion is that, the lowest rate of births per woman in the world (see box). for Italian demographic trends, there! has been and is Myers discarded as "mistaken" present concernsfor negative no specificpoli cy. Only some intervebtion can be sig­ effects of population decline in Italy, explaining that "all nalled, by 'green' politicians who stre�s, from an envi­ developed countries have to reduce their population." ronmental standpoint, that in a densely populated coun­ Well, that is the real story behind those who follow the try such as Italy, the announced pop,,"lation decline is example of Prosecutor Di Pietro in the internationalecologi­ not only to be faced, but rather sho�ld be supported cal world order. We can end it, by asking an apparently in order to decrease the demographid pressure on the unrelated question: What does Henry Kissinger have to do environment. " with it? Myers could not answer that question, despite the

EIR June 24, 1994 Economics 19 by Bruce Jacobs

British funds pour into Australia March 1993 to an astounding $4.3 bil­ The British are buying up their fo rmer colony on the cheap, and lion one, year later. British investment in Australia in gaining a beachhead into Asian markets. 1993 was $25 billion, having in­ creased �vefold in a decade. Some 7% of Britain's total foreign investment is now in Australia, much of it to pur­ Investment and trade ties between exander, chairman of National West­ chase r�cently privatized infrastruc­ Australia and Britain are expanding, minster Bank; Sir Ralph Robins, ture. Sirlcethe Hawke-Keating Labor and Britain is now Australia's biggest chairman of Rolls Royce; Robert Ay­ governmentcame to power in 1983, it overall direct investment partner. ling, managing director of British Air­ has slashed tariffs , deregulated bank­ However, funds are not being invest­ ways; Frank Swan of Cadbury­ ing, and sold off key assets such as ed into new plant and equipment, but Schweppes; a Rothschild representa­ government banks, airlines, research rather to purchase privatized assets tive; and almost 100 other business bodies, and public utilities. sold by federal and state governments, leaders. Commenting on why the Partner­ or for reinvestment elsewhere in Asia. British companies now using Aus­ ship 2� conference was held, one At a recent conference, Partner­ tralia as a regional base to gain access journali$treport ed: "British business­ ship 2000, which hosted the biggest to Asian markets include United Bis­ es have ,been encouraged by the sug­ ever British trade delegation to Aus­ cuits, Vodaphone, Cadbury, gestions that privatization and deregu­ tralia, Australian Prime Minister Paul Maunsells, Chubb, GEC, Unilever, lation have been gathering pace Keating said, "Australia is an ideal Glaxo, Pilkington, Downard Pick­ particul.rly in electricity, gas, water beachhead [for British investment] for fords, AMEC, ICI, ICL, and Davey and avidtion." In the most prominent the most dynamic economies in the John Brown. British firms such as privatization deal, British Airways world, the Asia-Pacific." A report Cadburys and banks such as Barclays bought 25% of the previously govern­ commissioned especially for the con­ and Hambros are pouring funds into ment-owned Qantas airways, and now ference stated: "British businesses are mainland China from Australia. As British Airways is buying into the increasingly using their Australian one commentator recently concluded, soon-toibe-privatized airports of Aus­ subsidiaries to gain access to Asian by using Australia as a forward base, tralia's 'State capitals. State govern­ markets." the traditional hostility toward Britain ments are also airing plans to privatize British Foreign Minister Douglas from nations such as Malaysia can be water, energy supplies, gambling out­ Hurd, on a visit preparatory to the circumvented. lets, an4 roads. Partnership 2000 conference, cheered Two-way trade between Australia Despite, and in part because of, all this process, stating that a new basis and the U.K. is now in excess of $5 the mo�ey moving around, Austra­ for "an intimate and modem relation­ billion, while Britain is increasingly lia's underlying physical economy is ship with Australia" had developed investing in Australia and Australian collapsiJlg. Unemployment stands at and that Britain shared mutual free­ funds are moving to Britain. Austra­ 11%, the Gross Domestic Product trade goals with Australia, having lian investment into the U.K. is now share of manufacturing has declined worked "long and hard" and "often in about $15 billion, having more than from 18% to 15% since Labor came close collaboration" for a successful quadrupled over the last five years. in, pubUc and private investment have outcome to the General Agreement on There has also been a surge in lending collaps�d by 22% in the last four Tariffs and Trade (GAIT) talks. In by Australian corporations to offshore years, a,nd thousands of farmers have line with GAIT's slave-labor orienta­ subsidiaries-for example, the insur­ been dqven from the land. tion, Keating boasted about how he ance company AMP invests in the What is left of the real economy had forced wages down in the past ten U.K. through Pearl Assurance group, is increasingly owned by foreigners. years and that total operating costs in and the National Australia Bank in­ Australia's foreign debt at Aus $220 Australia were significantly lower vests Australian funds through the billion ($154 billion) is, with only 17 than in the notoriously low-wage Sin­ Clydesdale Bank, the Northern Bank, million people, the largest per capita gapore or Hongkong. and the Yorkshire Bank. Gross lend­ foreign debt in the world, while direct Present at the conference were ing by Australian trading enterprises foreign investment in the country now such British heavyweights as Lord AI- overseas rose from $679 million in totals $145 billion.

20 Economics ElK June 24, 1994 On theGr een Front by Rogelio A. Maduro

A 'wilderness' for drug pushers? Mexico." Prestonjexplained that drug Some congressmen want a huge "wilderness area" in shipments "are flown into remote de­ sert landing strip� or air dropped to California , off limits to law enforcement. waiting ground c*ews in isolated de­ sert areas." In addition, "crude labora­ tories for the manUfacture of synthetic drugs are often situated in secluded In a few weeks, Congress may pass dor between Tijuana and San Diego, areas with limited I access." a law that will create an enormous where about 50% of all the dope and In addition, �eston said that this "wilderness" area in southernCalifor­ illegal alien smuggling nationwide is an issue that has "life and death con­ ' nia. Supposed to protect 8 million takes place. Since we have done that, sequences." Man illegal aliens try to acres of land from human intrusion, they have started to flank that opera­ enter the United S�ates through the de­ what the bill would actually do is cre­ tion by going out in the California de­ sertand most Bor er Patrol reconnais­ ate a vast corridor and safe haven for sert. We now have seen the figures, sance missions turn out to be rescue drug smugglers and other criminals. the drug seizures go up from about mISSIons. He not�d that "due to the The act, promoted by Bruce Ven­ $113 million a year, two years ago, to harsh climate and �errainand the poor to (D-Minn.) in the House and Dianne almost $600 million, four times that, level of preparedn�ss of the aliens, ev­ Feinstein (D-Calif.) and Barbara in just one year." ery chase is a pottntial lifesaving ef­ Boxer (D-Calif.) in the Senate, pro­ Hunter stated that the wilderness fort . Aliens who ibail out from cars hibits any permanent human presence mandate means that "a smuggler, who carry no water wit\hthem and walkers or motorized vehicles from entering cuts across the border in a vehicle . . . frequently undere�timate desert tem­ the wilderness. It prohibits law en­ goes into this refuge that has been cre­ peratures and di�tances. Over the forcement agents from penetrating the ated, [and which] will operate for his years, dozens of �liens have perished wilderness, either in hot pursuit of benefit ... [and] law enforcement in the desert and �undreds more have criminals or for reconnaissance mis­ agents cannot follow." It also means been saved by agents engaged in rou­ sions. The prohibition extends to air­ that "law enforcement agents, wheth­ tine Border Patrol :operations. " craft operations over its entire 8 mil­ er they are driving four-wheel drive Hunter has sUCICeeded in adding an lion acres. vehicles or flying aircraft, cannot run amendment to th¢ act which allows Fortunately, the act has encoun­ reconnaissance over this particular law enforcement iofficials to pursue tered opposition . Rep. Duncan Hunter piece of land," he added. drug dealers into he wilderness. But (R-Calif.) is leading the fight against The act is being denounced by top this may tum out t be a pyrrhic victo­ it. In a speech on May 17, Hunter law enforcement officials. Border Pa­ ry, because the acf will drive econom­ warned that Congress is "creating a trol officials have written Congress ic activity and, ultimately, all human haven, thoroughfares or smuggling warningof the consequences of creat­ beings from this \rrea. The isolation corridors for smugglers." Hunter ing areas that are off-limits to law en­ will all�w dru� s1mgglers to act with warned that this wilderness, a large forcement personnel. greater Impumty .. portion of which borders with Mexi­ In a May 16 letter, Chief Patrol This bill has !ken defeated three co, will create a smuggling haven for Agent Wayne L. Preston said that the times in the past i 10 years. But this drug traffickers. He noted that "crime act will create a drug sanctuary and time the suppo� of Boxer and control is a major defect in this partic­ also cost the lives of many illegal Feinstein enabled tt to pass in the Sen­ ular bill. We have massive smuggling aliens. Preston noted, "Recently, the ate. In the past fer-v years the United taking place, of both illegal aliens and interdiction of large loads of con­ States has becom4 one of the largest illicit narcotics, heavy on the cocaine, trolled substances has been a common drug-producing \:ountries in the coming across the Mexican-Califor­ occurrence for Border Patrol agents." world. These dru�s, mostly marijua­ nia border." Preston stated that "large loads have na, are predomin4ntly grown in Na­ Discussing "how creative, flexi­ been seized in the vicinity of check­ tional Parks, Fore$ts, and Wilderness ble and responsive these smugglers points attempting to bypass those areas. Which rais the question: Why are," Hunter noted that "we have built checkpoints on back roads. Many are the greenies rl ally adding tens of this border fence and put more border loads have been intercepted coming millions of acres 0 land to wilderness patrol on the 14-mile smuggler corri- across the unfenced land border with areas?

EIR June 24, 1994 Economics 21 BusinessBrief s

Labor could mean the end of the offshoremarket here had no choice but to deal with the mafia. He as well," World Bank official Eeva Leskinen then made what he called a joke: "Given the Employers scrambling told Reuters. rapprochement betweengangs in Russia, Hun­ IMF representative Esther Suss claimed , gary, etc. , we are all wrong to befighting this. to find engineers "Not all the money in the banks [under the cur­ We must support these mafiosi, with their rent arrangements] is offshore. Some comes well-organized prostitution and blackmail u.s. employers , especially auto makers , are from Latvian firms and Latvian capital flight rings, because they are the only organization in a mad scramble because of the dwindling [that] has beenrepatriated. " operating betweenthese various countries that number of engineers. Chrysler, Ford, and The World Bank is only telling the Latvi­ is functioning!" In his view, this underscored General Motors are looking to hiremore engi­ ans how they can successfully convert them­ how far relationsamong nations within the for­ neers after yearsof cutbacks, but have runinto selves into such an offshore banking center, a mer communist sector, and between those na­ a shortageof trained and qualified people, the spokesman for the bank told EIR . "We arenot tions and western Europe, have deteriorated. June 7 Wall Street Journal reported. necessarily recommending it, and we didn 't Anotherrnajorproblem, Hungarians at the The Journal attributes the primary cause think of it-the idea did not come frominterna­ conference pointed out, is that the country can­ for this shortage to the current "boom" in the tional authorities. " not cope with the massive influxof imrnigrants auto industry , but also mentions that "as public from neighboring countries , particularlyfrom schoolinghas becomeless rigorous . . . fewer former Yugoslavia and the Third World. students are willing to take the math and sci­ ence courses required for an engineering de­ Hungary gree. 'It's importantto get young peopleaware and interested in engineering at an early age,' Corporate Strategy says David Schwartz, spokesmanforthe Soci­ Economic decline is ety of Automotive Engineers .•As childrenget fueling communist gains older, they feel engineering is something Layoffs fall to produce they're not capable of doing. ' " The decline of the Hungarian economy over anticipated gains the past four to five years has been severe , and is in partresponsible for the electoral successes American corporations that embarked upon a of the former communists , according to re­ strategy of job layoffs to increase productivity Finance portspresented at a conferenceentitled "Politi­ and improve theirmarket position have gener­ cal Integration in Europe"at the LoccumEvan­ ally failed to meet their objectives, according IMF, World Bankpush gelical Academy in Lower Saxony, Germany to a study by the Center for Economic Study on May 28-29. In the second and finalelectoral of the Bureau of the Census, the June 7 Wall Latvia as hot-money center roundon May 29, the Hungarian Socialist Par­ Street Journal reported. ty (former communists) received 54% of the The study showed that 55% of productivi­ The World Bank and the International Mone­ seats in Parliament after getting 32% of the ty gains during 1977-87 carnefrom companies tary Fund (IMF) areholding extended discus­ vote. that had "downsized," i.e. , cut their work forc­ sions with Latvian authorities over creating a Perhaps the most shocking fact laid out by es , while 45% came from companies that had permanent offshore banking center in the Bal­ one senior Hungarian strategist is that life ex­ hired more workers. But the companies that tic republic , a World Bankofficialin Washing­ pectancy has droppedfrom 72 to 64in less than dismissed workers became less important, in ton confirmed. The "Latvian capital, Riga, a decade . This is , in part, because people are that they accounted for only 37% of the manu­ once a Soviet industrial powerhouse , is pon­ driven to work 12-14-hour days, often at 3-4 facturing output of the 140,000factories (em­ dering a future as an offshore banking center different jobs, just to make ends meet. This ploying about 12.7 million people) included bridging East and West," Reuters reported on includesnot just "average" people,but educat­ in the study at the end of the period, compared June 6. Although Reuters mentions "financing ed professionals. to 41 % at the beginning. Companies that in­ trade" between the former Soviet Union and The Gross Domestic Product has fallen by creased productivity while at the same time the West, it is hot money deposits, not com­ 35-40% in the last four years alone. Exports hiring more workers more than doubled their modities trade , that these bank strategists have toformer members of the Council for Mutual importance, accounting for 43% of manufac­ in mind. Economic Assistance , or Comecon , have col­ turing output at the end of the decade studied, Riga's banks are also relatively safe ha­ lapsed, and the Russians are often behind in compared to 20% at the beginning. vens for Russian money fleeing political risk payments. Management professor Eric Flarnholtz at and high inflation at home. "This could be a Crime is exploding, with the international the University of California at Los Angeles temporary phenomenon. When the situation mafia taking over many of the chokepoints of commented on the study, "This is kind of a in Russia becomes more stable, some of these the economy. One Hungarian entrepreneur closet issue right now; no one wants to talk tradingopportunities might fade away, so that said that, in order to acquire some timber, he about it."

22 Economics EIR June 24, 1994 Brilifly

• SPAIN has written off five par­ Peter Scott-Morgan, associate director of Delors, president of the EuropeanCoun cil, it tially constructed nuclear power the management consulting finnArthur D. Lit­ was proposedthat the ministers handle the en­ plants at a cost of $5 .3 billion, the tle, agreed that "most major corporate down­ tirepro ject. Delors rej ected the proposal, say­ June 7 London Financial Times re­ sizings have failed to produce what was ex­ ing that it "would be the bestway to bury the ported. Construction was halted by pected." He added that there is "a conspiracy projects"! In order to avoid sabotage by the the Socialist government 10 years of silence" to avoid talking about these failed ministers, the heads of government thencreat­ ago, as partof a nuclear moratorium. objectives. Little has just concluded a study ed an "ad hoc group" to supervise the projects which found that two-thirds of companies that composedof the "personal"representatives of • FOOD PRODUCTION drops downsizedin the United States and Europeran the heads of states. are leading to growing hunger in east­ into unanticipated woes,such as ademoralized The groupof ministers is not like any other ern Europe, Food and Agriculture work force. Scott-Morgan added, "In the fu­ group, says Riche. They are part of a "world Organization Director Abdou Diouf ture, the degree of failure will become even caste" which includes the governorsof central warned in Killarney, Irelandon June more extreme, because current cuts are be­ banks and the Treasury directors. "Not only 6. "The transition to the market econ­ coming broader in scope." does the caste stop any attempts of European omy has jeopardized the living stan­ politicians"to tackle the unemployment prob­ dard of the population to such an ex­ lem, but it increasingly "controls the reins of tent ... that the national and currency." regional supply of food has been put Europe. in danger."

Fund set up to finance • THE U.S. COMMERCE De­ Real Estate partment will cease publishing its an­ infrastructure projects nual U.S. Industrial Outlook. Com­ Soros a big player merce Secretary Ronald Brown has The EuropeanUnion financeministers created decided that it will be replaced by a "European Investment Fund" (ElF) to pro­ in Argentine market "quarterly examinations of one or vide state-guaranteed credits for infrastructure more industrial or service sectors at a development, at theirJune 6 meeting in Lux­ Internationalfinancier George Sorosis calling time, and an 'Annual Report on the embourg . With the sole exception ofthe Swiss the shots in the Argentine real estate market, Outlook for U.S. Trade,' " the June daily Neue Zurcher Zeitung, the media in Eu­ according to the June 14BuenosAires newspa­ 10 Washington Post reported. rope haveso far not covered this decision. perClar(n . The daily cites Luis Donaldson, a The ElF will be capitalized with 2 billion representative of Britain's Richard Ellis con­ • A HIGHWAY linking the Jorda­ European Currency Units (ECUs), and will sulting finn, who explains that "the goal is to nian Red Sea port of Aqaba with Is­ coordinate the flow of capital, both frompri­ transfonn Buenos Aires into a city in which rael's port of Eilat and the Sinai, has vate and public sector sources, for big transport largeinstitutional investments occur,to create been proposed by Israel in tripartite infrastructurepro jects. Backed by the EU gov­ a marketin which money flowsinto high-profit talks on economic cooperation proj ­ ernments, the ElF will give long-tenn invest­ properties . " ects with Jordan and the United ment guarantees to private investors, and ex­ The large real estate finn Coindu has al­ States, in Washington on June 6. pectsto generate a combined fundof ECU 15 ready made contacts with the British finn billion for the financingof these projects. Smith New Court (belonging to the Roth­ • GERMANY'S population is What is new in the ElF structure is that schilds), Smith Barney, and Banque Paribas, aging. The latest statistical report only 30% of its capital will beprovided by 55 in order to jump into this field. shows that there are now 16 million private sector banks, while 70% will be pro­ Soros is "carrying the ball," Clarin says. citizens (one-fifth of the entire na­ vided by public sector sources-30% by the He is the biggest shareholderin the IRSA real tion) over 60 years of age and only EU Commission, and 40% by the European estate holding company , whose portfolio is 13.6 million under 20 years of age . Investment Bank. $115 million. Real estate vultures aredrooling The decision came as EU economic and over the fact that the yieldson real estateinvest­ • RUSSIA has experienced a 26% financeministers wereattacked as a "mom�tary ment in Argentina are in the range of 12-17%, drop in industrial production in the caste" responsiblefor sabotagingEU efforts to higher than in the United States or Europe. first five months of this year and one­ relaunch the economy around infrastructural They are eyeing a number of large projects, half of the population is now living projects, in an article by Pascal Riche in the but the "trigger for this business will beBuenos below the poverty line , PresidentBo­ French daily Liberation on June 7. Aires's gradual incorporationinto internation­ ris Yeltsin acknowledged during a According to Riche, when the EU decided al financialstandar ds, with lower rates, longer Moscow press conference on June last December to relaunch discussions on the payment periods, and a higher percentage of 10. infrastructure projects proposed by Jacques financing," according to the newspaperreport.

EIR June 24, 1994 Economics 23 TIillFeature

The coming disintegmtion of financial markets by Lyndon H. LaRouche, Jr.

It comes as no surprise that the name of the Bank of England's Eddie George is added to the list of which it must be said that "whom the gods would destroy, they first make mad." During the course of the current London meeting of the International Monetary Conference, Eddie joined the ranks of those greed-mad­ dened public fools of finance who insist that the danger from the now meta&tatically cancerous financial bubble in derivatives speculation is being exaggerated by some critics. It is a matter of some urgency that responsible governments subject all incum­ bent and prospective economics and central banking officials to the sanity rest which Eddie George would have flunkedgloriou sly. Among the probable benefits of this, the least would be creating suddenly many encouraging vacancies for the sane unemployed. The test consists of but one crucial question: Prove conclusively that the near-term disintegration of the prfsently bloating global financial and monetary bubble is unstoppable by any means alternative to governments acting to place the relevant institutions into bankruptcy reorganization. Those officials about to be examined so could look up the answer in the back of the book, so to speak. We supply it here and now. Would that be cheating on thei� part?Not at all; it would be becoming sane.

LaRouche as a forecaster About my qualifications: I have introduced relatively few forecasts of critical events during my 4O-odd years as an economist (not counting my repetitions of some of those warnings). To date, every forecast which I have made on the basis of my LaRouche-Riemannmethod has been confirmedby timely developments. I now present a summary listing of those forecasts, for the purpose of identifying my authority for designing the indicated test of economic sanity. 1) During late autumn 1956, in connection with a marketing study, I forecast the imminence of a major U. S. economic recession, triggered by the over-stretch-

24 Feature EIR June 24, 1994 •

Lyndon LaRouche. during a nationally televised presidential campaign broadcast in April 1988. compares the collapse of the U.S. economy to a bouncing ball. whose rebound gets lower and lower with each successive bounce.

ing of a post- 1954 credit-bubble centered in financing of 3) In November 1979, during my campaign for the Dem­ automobiles, housing, and analogous consumer goods. This ocratic Party's presidential nomination, I warned that the recession broke out in February 1957 statistics, and was gen­ measures which the Carter administration and Federal Re­ erally, if reluctantly acknowledged to have occurred several serve had just taken, at the urging of newly appointed Federal months later. The recession-spiral lasted into mid-1958, and Reserve Chairman Paul A. Volcker, would lead to the out­ was followed by a prolonged stagnation until an upturn ap­ break of a devastating recession, beginning early 1980. Ev­ peared under the Kennedy administration . ery detailing of that forecast by EIR magazine's quarterly 2) During 1959-60, I made my first long-range forecast: projections through 1983 was the most accurate forecast is­ that near or shortly after the middle of the 1960s, we would sued publicly by any agency; in fact, most, including Chase, see the first of a series of major monetary disturbances, lead­ Wharton, Evans, and Data Resources, were absurd in their ing toward a collapse of the existing Bretton Woods agree­ sensing of the direction of the trends. ments. I forecast that this collapse would see increased loot­ 4) In February 1983, in the course of an exploratory ing of what were then termed developing sector nations, and back-channel discussion I was conducting with Moscow in that the breakup of the Bretton Woods agreements would coordination with the Reagan administration, I informed the lead rapidly to austerity measures modelled upon those of Soviet government, that if it were to reject what later became fascist regimes, in international economic relations and in known as the Strategic Defense Initiative of March 23, 1983, the U. S. domestic economy. the strains on the Comecon economy would lead to a collapse All of my economics forecasting and related activities of of that economic system in about five years. This forecast the 1960s, through spring 1971, were premised upon that was repeated in an EIR Special Report, Global Showdown. same judgment. The first of the series of major monetary issued July 1985. The collapse occurred during the second disturbances of the period occurred with the collapse of the half of 1989. British pound during November 1967, followed by the dollar 5) In spring 1984, inmy renewed campaign for the Demo­ crisis of January-March 1968. The break-up of the Bretton cratic Party's presidential nomination, I warned,in a nation­ Woods agreements occurred beginning Aug. 15, 1971, and wide half-hour TV address, and elsewhere, of the outbreak was consolidated by the Azores monetary conference of of a collapse in a large section of the U.S. banking system: 1972. In immediate response to the August 1971 develop­ the savings and loan and related sectors. ment, the U. S. government instituted the radical austerity 6) In May 1987, I forecast, as published in EIR magazine measures known as Phase I and Phase II. and elsewhere, the outbreak of a major collapse in the stock

EIR June 24, 1994 Feature 25 market beginning approximately Oct. 10, 1987. This was my disintegration is inevitable, because it could not be stopped firstand only stock-market forecast. now by anything but the politically improbable decision by 7) During my renewed Democratic candidacy of 1988, leading governments to put the relevant financialand mone­ in a nationwide half-hour TV address, 1 described the tary institutions into bankruptcy reorganization. That is "bouncing ball" phenomenon as the key to following the LaRouche forecast No. 9-the addition to the list of eight, continuing collapse of the U. S. economy through the course above. of apparent, short-term fluctuations relatively up or down. That has continued to the present day. The rational standard of belief 8) During my renewed Democratic candidacy of 1992, 1 What has been summarily reported on the firsteight fore­ warned that we were already gripped by a global financial casts shows that something is missing in the intelligence or mudslide, "down, down, down." morals of anyone who refuses to take the ninth forecast very This is a record of nearly 40 years, a record which cannot seriously. Yet, that being said, although the public record be even approached on the public record by any currently shows that 1 am probably the world's best forecaster living living economist, even by France's (and Le Figaro's) emi­ during the past 40 years, does that unmatched record in fore­ nently sane Nobel Prize-winning Maurice Allais. casting guarantee that my ninth forecast is right? Any respon­ Out of that same unequalled competence, 1 say to you sible government says, "He may be the world's best econo­ now, as 1 informed various relevant scientific institutions of mist, but, even in his case, 1 still need the proof that his ninth Russia during the last week of this April past: The presently forecast is right." existing global financial and monetary system will disinte­ Think of an economist advising a governmentas morally grate during the near term. The collapse might occur this in a position like the physician advising a patient. Would it spring, or summer, or next autumn; it could come next year; be consistent with medical ethics to prescribe a medicine on it will almost certainly occur during President William Clin­ the basis of "I happen to findthe labels on the pharmaceutical ton'sfirst term in offi ce; it will occur soon. That collapse into company's products attractive"? How should the physician

Then the Bank of England sent an "urgent fax" to Bank of England replies, EIR's office in Germany, the text of a speech by Executive Director Brian Quinn before a joint meeting of the Futures defends derivatives and Options Association and the Futures Industry Assoca­ tion on May 25. The speech is entitled, "A Central Bank­ EIR spoke to Bank of England Governor Eddie George's er's View of the Growing Use of Derivatives." Here are press spokesman John Footman on June 13, and read to excerpts: him the first couple of paragraphs of Lyndon LaRouche's "The ingenuity of the specialists who design and price article, describing George as a case study of the dictum derivatives products ...seems boundless ....No offi­ "whom the gods would destroy, they firstmake mad." We cer charged with managing other people's money can af­ asked whether George really believed what he was saying, ford to ignore the benefits that can come from a judicious or whether he was only mouthing such words to keep use of the current range of derivative products; and busi­ down the level of panic. ness and finance courses at universities and colleges al­ Footman replied, with his best City of London cool: ready see derivatives as a subject that must be coveredin "Our perception is that there is a need to monitor risks and the curriculum .... regulators. We sympathize with some of the concerns that "Derivatives are here not only to stay, but probably we see in the GAO [U.S. General Accounting Office] also to grow, albeit perhaps at a less hectic pace .... report on derivatives and other places. We are concerned Derivatives do not entail any new risks ....If the pres­ about the derivatives transactions done by subsidiaries of ence of derivatives makes prices of financial assets more securities firms. The generation of a speqdative bubble volatile, does this necessarily mean the financial system would concernus if we saw that, but we see the risk being is inherently less stable? The instinctive answer to this laid off in various directions, in an extremely complex question seems to be 'yes.' However, academic work­ way. What we need to be sure of, is that traders are not while inconclusive-suggests that, if anything the oppo­ suffering undue risk, and that traders protect themselves site is the case ....More generally, the markets seem to from counter-parties, such as hedge funds. We need to be developing their own safeguards and sanctions, not watch all this very closely, and to make sure that all this least in the form of losses to shareholders." is done in a professional way." -Mark Burdman

26 Feature EIR June 24, 1994 judge? He is morally responsible for using scientificmethod, Fidelio. "On LaRouche's Discovery," (Spring 1994) is and for working in concert with those other members of the an account of the original work, over the years 1948-52, profession whom he knows to be governedin their utterances which produced my original fundamental discovery in the by obedience to scientific method (rather than some official science of physical economy. This, including fo otnotes of an insurance company controlled by investment trusts, for (pp. 37-55), is a concise report of the discovery. The example). What is the comparable ethical requirement in second, longer treatment of the significance of economic connection with economic prescriptions? policy in history, is found in "The Truth About Temporal Contrary to what most scientific illiterates among U.S. Eternity," in the Summer 1994 issue. college graduates believe today, science is not statistics. Sci­ If the reader has advanced competence in mathematical ence is the method by which a series of successfu l fu ndamen­ physics, including the issues associated with such matters as tal, and other crucial discoveries have been generated. Sci­ Bertrand Russell's fraudulent attacks upon Bernhard Rie­ ence is not mathematics; it is the delimiting conditions which mann and Georg Cantor, or the related matter of KurtGooel' s the successively successfulmethod of physical science, over shattering proof of a crucialblunder by John Von Neumann, nearly 2,500 years since Plato'sAcademy at Athens, imposes those two articles report enough to constitute rigorous scien­ upon mathematics today . tific proof. If the reader lacks that advanced training, the Any responsible government today is asking the follow­ contents of the two articles will be nonetheless highly infor­ ing three questions about the ninth forecast in that series: 1) mative and relevant. Is the method which I employed to develop the first eight of It is my intent, that any literate person, whether one with these forecasts consistent with the method upon which the adequate scientific training or merely good moral sense in ninth depends? 2) Is the method which opponents of this such matters, will be suitably informed by the following forecast employ identical to the failed method which their description of the proof for my ninth forecast. circles used in failing to meet the standard of each and all of the first eight forecasts in my series? 3) If the answer to What is a financial bubble? the preceding questions is "Yes," then show the additiori'al, As the first step in understanding the derivatives bubble crucial proof that my method conforms to the actual princi­ about to pop, ask yourself the question which I posed to ples by which physical growth in economic processes is sus­ members of my class in economics back in 1966, a class tained. which included Virginia's present-day Democratic celebrity That is what any responsible government will demand of Nancy Spannaus and a number of other university graduate me, once it recognizes that it would be terribly, morally students. Why do slumlords find investment in New York reckless to continue its disastrous former blind faith in my City slum-housing so profitable? Nancy Spannaus, together failed "Brand X" competitors of the post-World War II peri­ with others among those graduate students, set up a field od, such as John Von Neumann, Abba Lerner,Milton Fried­ investigation, a project which involved many long hours at man, Friedrich von Hayek, Karl Popper, Arthur Bums, Paul the New York Hall of Records, tracing the history of New Samuelson, George Shultz, Paul Volcker, Margaret Thatch­ York slum properties and their sites back as far as several er, Wharton, Evans, Chase, Data Resources, and, at the generations. Spannaus and other members of the task force bottom of the barrel, that notoriously poisonous academic found and proved the answer to my question. imp from Harvard, Jeffrey Sachs. Take any income-producing investment, whether a facto­ The future will judge the governmentsand the electorates ry, a farm, a retail sales outlet, or a slum rental-housing of the present by the way in which they respond, or fail to property-title. From the total revenue which the owner of that respond to their obligation to pose those policy questions investment obtains annually, a certain portion is taken out of respecting that ninth forecast. The future will demand: 1) If the total. By "taken out" is signified "not poured back into you had asked those questions, you might have foreseen the reproducing or improving the physical operations of the in­ mass-murderous disaster which was about to hit your nation vestment itself. " Four elements of this withdrawn portion of and the rest of the world besides. Did you ask those ques­ the total sales revenue are of primary concern to us at this tions? 2) If you did ask those questions, did you receive an moment: Withdrawn rent, interest, profit, and a certainpor­ answer? 3) What would have been the result had you accepted tion of the taxes paid. that answer? This moral accountability applies to govern­ Focus for a moment upon the withdrawn-rental portion­ ment; it may determine whether· or not certain economists the portion of the rent not put back into either paying taxes deserve to sit in Hell; it is also a measure of the morality of on the real estate or maintaining and improving the structure. the voting-age population in general. Let us suppose that the current holder of the title to that The reader will find all the crucial features of the slum rental property decides to sell this property as a rental method employed in all nine of the list of past and present property; hqw do we determine the expected valuation used forecasts identified adequately in many published locations, for determining the selling price? That valuation will not be including two most recent editions of the quarterly journal based on the cost of constructing a replacement building, or

EIR June 24, 1994 Feature 27 A scene in New York City'sSout h Bronx. As LaRouche and his associates documented back in 1966, a slumlord can make more profit on properties used by poor fa milies, than a legitimate landlord can take infrom decent housing. Thisfact was a harbinger of the age of utter economic degeneracy which we have now entered-the age of junk bonds, hostile takeovers, and derivatives. the depreciated original cost of the building; it will be based admirers of George Bush and Maggie Thatcher. The landlord upon a mUltiple of the withdrawn portion of the rental in­ with the scummiest morality, and the least degree of redeem­ come, or some analogous consideration . able value to society , was being rewarded more richly than a Thus, for this classroom example, we have two values landlord with decent morals. for that slum property. One is the depreciated value of the That economic category, fictitious capital, is key for original construction, including depreciated value of im­ understanding why the present-day derivatives bubble is provements added. The other value is a multiple of the por­ precisely analogous to a cancer of the world financial and tion of the rental income withdrawn from the physical cycle monetary system in its terminal phase. Let us describe of maintenance and replacement by the holder of the title. the present global bubble in these terms of reference, Let us give a name to the difference between the depreciated before turning to analysis ot , some of the crucial points value of the original construction and the market value as­ of our proof. signed to the rental income from that building. In 1967-69 Instead of a 1960s slum rental property, take today's New York City, the latter valuation was vastly greater than near-approximation of that: Milton Friedman, Margaret the first. The increase of the latter valuation over the former Thatcher, George Bush, and Wendy and Sen. Phil Gramm's is termed fictitiouscapit al. (R-Tex.) U.S. economy. That is the "post-industrial" United The task force of which Nancy Spannaus was a member States which has replaced its steel industry-centered econo­ found that the slumlord system was extracting greater actual my with a free-to-steal marketplace economy, the present­ rates of returnon slum properties used by very poor families, day Wall Street Journal, American Spectator, and Washing­ than more legitimate landlords were taking in from decent ton Times's economy of Michael Milken and kindred neo­ housing renting to middle and higher income households. By conservative bandits. squeezing the rental income to the maximum, through non­ It is visible that the net physical investment in mainte­ maintenance and use of related tricks, a slum property real­ nance and improvements of productive capacities of basic ized a higher yield than a non-slum property . One could have economic infrastructure, farms, and factories has long since seen in those facts a warning of the coming age of utter dropped way below the level of zilch. The collapsing of economic degeneracy, the age of junk bonds, hostile take­ farms (for the greater glory of George Bush's cronies in the overs, and derivatives: one might say, the age of the keenest grain cartel), and the collapsing of numbers of industrial

28 Feature EIR June 24, 1994 and other skilled operative's work-places shows conclusively century South Sea Island and Mississippi bubbles, and to­ that the U.S. economy is being contracted rapidly by a pro­ day's Bush-league practices behind the junk bond and deriva­ cess of asset-stripping. This is a global process. It took off tives bubble. first in the developing sector, especially afterthe installation As long as money and assets discountable for moneytreat of the post-August 1971 "floating exchange-rate monetary such property-titles and contracts as negotiable assets, money system," in place of the former gold-reserve standard set treats real-income streams and fictitious capital gains more earlier by the Bretton Woods agreements. After the introduc­ or less equally. In this circumstance, a legion of worse-than­ tion of the New York Council on Foreign Relation's 1975- useless Wall Street, City of London, and kindred parasites 76 "controlled disintegration of the economy" doctrine as around the world become immensely rich, while families of Federal Reserve Chairman Volcker's October 1979 "Volcker farmers, industrial operatives, ordinaryhonest businessmen, measures," this disease of looting spread throughout the U. S. and the nation at large become increasingly poor, even as economy, into all sectors. destitute as Russia under the policy-influences of Margaret By the beginning of the 1980s, through the asset-strip­ Thatcher, George Bush, and Jeffrey Sachs. ping already in place during the "post-industrial" binge ofthe As long as the prospective purchaser is prone to act upon 1970s, the United States economy had lost the technological the belief that a nominal capital gain in a contracted fictitious capabilities on which the successful 1960s manned landing capital represents an expected and discountable income­ on the Moon had depended. Under the guidance of Senate stream, this imagined new income-stream can be assigned a president and later President George Bush-as the late Rob­ fictitiouscapitalization in the same way a slum-property title ert Benchley wrote back in 1943-matters went "from bed is assigned a fictitious valuation based upon the purchaser's to worse." From the end of 1982, the asset-stripping process willingness to pay a market-price for acquiring title to the ran amok under the influence of the Gramm-Bush push for stream of rental income. Once this next phase in the spiral of radical deregulation of finance. The measures of deregulation financial speculation becomes the basis for a new marketin pushed by Bush and Gramm could be fairly termed !he such instruments, a process of "geometric" growth of nomi­ "Kravis and Milken Junk-Bond Feeding Legislation." The nal fictitious capital is unleashed. A ballooning of fictitious "planned train-wreck" called the Gramm-Rudman bill, puta­ aggregates occurs. That is the distinction of a truespeculative tively intended to balance the budget, balanced nothing, but bubble, as contrasted with endemic formsof speculative ac­ rather unbalanced much of what was left of the economy, tivity within markets. and also the minds of its credulous supporters. Look at this degeneration of our economy through the What is a 'cancerous bubble'? eyes of a 1960s New York City slumlord-his admiration The present global financial and monetary bubble goes would be orgasmic. one fatal step beyond a mere ballooning of fictitious capital Look at the real income-stream taken away from the "re­ gains. It has a dimension which marks it as fatally cancerous productive cycle" of the process of production and distribu­ for the financial and monetary systems which it infests. tion of goods and of such specifically indispensable services Asset-stripping is the key to this point. as education, health care, and science. Trace the profit, inter­ Let us use the term "leverage" to identify the implied est, rent, and taxes from these sources. Now carry that extrac­ multiplier which converts an imputable annual rate of in­ tion away from reinvestment in the physical improvement come-stream into a corresponding magnitude of nominal fic­ of those cyclic processes of production and distribution of titious capital. In the case of the slumlord, looting the tenants product, and sell those extracted sums of income-flowon the to increase the income-stream from rental income is a way of financial market. Sell them as slumlords sell property titles increasing the imputable income-stream, and thus the ficti­ . to slum-rental holdings-not the physical property, but rath­ tious capitalization of the property-title. The valuation of the er the legal title to the rental income. secondary and tertiary fictitiousca pitalizations spun offfrom Generate thus large masses of fictitious capital. Now, in the imputable marginal gains in fictitious capitals are them­ addition to the real-income stream from primary sources of selves so based upon leverage against the primary, real in­ rent, profit, interest, and taxation, a second kind of income­ come-stream. stream has been generated,fictitious capital gains. The valuation of the interconnected whole market in fic­ In any market economy, even in the rural barter of live­ titious capital gains depends thus upon both the relative and stock, the occurrence of fictitious capital and of fictitious corresponding absolute magnitudes of the primary income­ capital gains is endemic. Under certain kinds of conditions, streams taken as a whole. This fact is illustrated dramatically the pyramiding of fictitiouscapital gains as an income-stream by the case of the asset-stripping needed to sustain the mas­ upon which a second order of fictitious capital is generated, sive creation of fictitious capital in the RJR Nabisco opera­ sets into motion a process made famous in modem economic tions. Without massive asset-stripping against the economy history by such disastrous lunatic binges as the seventeenth­ as a whole, the speculative bubble as a whole would have century tulip bubble in the Netherlands, the early eighteenth- collapsed approximately a decade ago.

EIR June 24, 1994 Feature 29 This is complicated by the fact that without an increase charges and the U.S. income-tax revenue today, and in the flow of fictitiouscapital gains at the top of the bubble, then the significance of the derivatives bubble is clearly the bubble as a whole would collapse. For, without a continu­ symptomized: Doom is on the way. ing growth of the magnitude of fictitious capital gains, the Through its relevant U.S. agent, the House of Morgan, bubble as a whole would collapse under pressures of reversed London bankrupted the United States governmentduring the leverage. last quarter of the nineteenth century by a congressional law "Collapse" would be a most misleading sort of euphe­ called the U.S. Specie f{esumption Act. This act, enabled mism in that case. "Reversed leverage" in such a bubble is through massive corruption of members of the Congress, best approximated mathematically by the same Kolmogorov unlawfully repealed relevant sections of Article I of the U. S. equations used to describe a chemical, fission, or thermonu­ federal Constitution, by requiring the U.S. government not clear explosion, or a firestormlike that which the British war­ only to cease engaging in its sovereign constitutional right to time Royal Air Force created at Hamburg and Dresden: in issue currency, but to call in existing, Lincoln-series U.S. mathematical-physical terms, a "shock front," and a very currency-notesto a degree conforming to the demands of the hard one at that. In effect, one evening the financial markets London gold-exchange market. This collapsed the United appear normal, stable; by the end of the next day, or some­ States into a protracted social crisis, manipulated from Lon­ thing approximating that, everything is rubble; the financial don, under which conditions London was able to buy up the and monetary system built up since August 1971 has disinte­ choicest morsels of the still-growing U.S. economy. By the grated as it were in a single day's trading. tum of the present century, London, which had been con­ As in the case of a heroin or methadone addict, the habit stantly the principal mortal adversary of the United States of looting the real-economic basis must be fed to prevent a since 1763, was suddenly promoted in Jim-Crow Anglophile collapse. Feeding the habit prevents the immediate collapse America into our closest ally! The natural follow-on to the by hastening the date of total collapse. The addicted state is protracted crisis caused by the Specie Resumption Act was destroyingthe basis upon which it feeds to sustain itself. As the plainly unconstitutional Federal Reserve System. is illustrated by the tragic fate of the enterprises gobbled up The Federal Reserve System is key to the derivatives in the RJR Nabisco caper, this is the fate of the world's bubble of today. Without corrupt, virtually treasonous com­ economy under the rule of the cancerous financial bubble plicit officials at the Fed, the speculative mania which has marked by derivatives speculation. ruined our nation and much of the world besides would not So, to sustain the bubble, the bubble must grow. To have been possible. The Fed is a privately owned central cause the bubble to grow, the real basis must be looted more bank, chartered by the federal government, which has gained savagely: asset-stripping. We see the result in the collapse of increasing, unlawful, extortionist power over our govern­ the constant-dollar value of the market-basket of per-capita ment itself. It is principally an agent of those major commer­ and per-square-kilometer real consumption by households, cial banks and private banking and other financial houses farms, and manufacturing. We see the collapse of the similar­ based in New York City. During the recent 15 years, the ly adjusted value of tax-revenue base per capita and per principal functions of the Fed have been to manipulate the square kilometer. U.S. government in Washington, and to use the monetary Go back to 1913, to Paul Warburg's notorious Federal authority usurped by the Fed to subsidize bankrupt and other Reserve System scheme. See Confederate agent Alan banks and other wild speculators in New York City and. asso- Bulloch's nephew, Teddy Roosevelt, running a Bull Moose ciated localities. campaign to bring about the election of Ku Klux Klan The Fed operates in collusion with complicit Treasury booster Woodrow Wilson. Both are supporters of War­ officialsto increase the private indebtedness ofthe U.S. gov­ burg's Federal Reserve and federal income-tax proposals. ernment tothe clients of the New York City-based market in Roosevelt's actions, and the later Wilson White House U. S. bills and other securities. This debt -creating mechanism backing for the re-founding of the Ku Klux Klan, ensure is used principally to feed the Fed's process of generating its three things: that the two acts will be declared legally own unconstitutional, private U. S. Federal Reserve curren­ enacted, and that the United States will be pre-committed cy-notes; this generation of currency-notes is managed to to go to the side of Britain's planned war against Germany generate a subsidy for the Fed's true private owners, and, (otherwise Britain would not have gone to war, and then during the recent dozen years, to feed the Bush-leaguers' there would have been no World War I, or its sequel wildly speculative financialbubble-b uilding. World War II). Look at the present situation from the When the Fed was originally conceived. the adoption of standpoint of the state of Paul W arburg' s original Fed a nationalincome-tax was designated as the lawful source of budgetedfunds to meet the debt-service obligations upon the and tax ,System proposals back about 1913, and look briefly at the relevant preceding development, the U.S. Federal Reserve-created U.S. government debt! Now. we Specie Resumption Act of 1875-79. Look at the relation­ see that the U.S. revenue from the income-taxis being gob­ ship between Federal Reserve-engineered U. S. debt-service bled up more and more by the debt-service requirements on

30 Feature EIR June 24, 1994 the fe deral debt! As the sign carried by the fe llow wearing nail historical account of the controve�y over the appropriate the white robe and beard says, "The end is nigh!" method for study of economic processj!s. The constant-dollar value of the per-capita tax-revenue Let us situate the internal modern history of political­ base is contracting, largely as a result of the asset-stripping economy in a nutshell. Modem political-economy began to impact of Bush-league speculation practices. To increase the be developed in Cosimo de' Medici's, mid-fifteenth-century tax rates on anything but the speculative financial markets Florence, Italy through the initiatives Of the Byzantine schol­ themselves would be to increase the income-stream out of ar George Gemisthos, also known as "Plethon." It began to the real economy, accelerating the economic contraction, assume modem form during the sixt�enth century, in such hastening the collapse. To cut entitlements, another per­ expressions as the writings of France1s Jean Bodin and the sisting proposal made on behalf of the Wall Street speculative establishment of political-economy within a body of state­ pirates, would have similar effects. craft known formally as cameralism.: The first work estab­ That relationship between federal debt-service and in­ lishing a scientific basis for the stud)! of political economy come-tax base is but one of numerous signs to the same was Gottfried Wilhelm Leibniz's de\lelopment of a branch critical effect. As the driver explained, bringing the bus to a of physical science known as physical economy over the halt before the washed-out bridge, "Brother, it looks like we interval 1672-1716. are about to run out of road." At the end ofthe seventeenth centl,lry, Venice's far-flung The cancer of speculative derivatives burgeons-an ugly intelligence services launched a vigorous campaign through­ growth. Worse, to exist, the cancer must loot the healthy out Europe, mobilizing for the destructionof France and the tissue in at least equal degree. Thus the monster grows, while discrediting of Leibniz. The key fig�re leading this eigh­ the human being is sucked to death so. Excise the tumors, teenth-centuryoperation in the field---,inFra nce, Britain, and kill the cancer without killing the healthy tissue. The task is Germany-was a most senior Venetian nobleman, Abbot destroy the parasite, to save its victim. Antonio Conti (1677-1749), whose network included such notorious Venetian operatives against France as Giovanni The issues of method Casanova (1725-98), Count AlessanPro Cagliostro (1743- The problem has been described. We are thus situated to 95), and the founder of late-eighteentb and nineteenth centu­ consider the likely varieties of significant objections to that ries' British radical empiricism, GiammariaOrtes (171 3-90). description. The point to be stressed here is tbat all of the doctrines Known objections to the foregoing description fall into for which Adam Smith, Jeremy Bentilam, and Thomas Mal­ three broad classes, of which two can be summarily discarded thus are best known today were copied from the writings of as cases of a speaker who offers no rational argument for his Giammaria Ortes. It was through the "forkof Ortesthat Smith no less vehement objections. The three are: obtained his dogma of "the invisible hJlnd," and Jeremy Ben­ 1) What we may describe fairly as the Eddie-George-the­ tham his "hedonistic calculus." Maltbus's 1798 On Popula­ pantry-bandit syndrome: "Mommy, you are exaggerating tion is a direct plagiarism, in more PQPularized language, of again; there are no cookies in this jar." Ortes's 1790 Rifiessionisulla Popolafione delle Nazioni. 2) The opinionated-common-gossip syndrome: "People To situate the discussion, consider the widespread lie whose opinion I respect say that you are wrong." which asserts that the United States w�s founded upon Adam 3) The academic standpoint: any one or a combination of Smith's doctrine of "free trade." Th¢ fact is, the economic several fads commonly taught in contemporary classrooms, and social issue of the U.S. Warof Independence against textbooks, and economics and financial trade periodicals. Britain was the American colonists! rejection of Britain's Only the last has any further interest for us here. eighteenth-centuryversion of "InternJltional MonetaryFund Within that third class of objections, the principal aca­ conditionalities," in favor of what Wl$called later a "protec­ demic premises are, variously or in combination: a) the mar­ tionist" economic policy. ginal intellects, the utilitarians who deeply resent personally "Free trade" was first brought to the United States in any attempt to distinguish between productive and non-pro­ 1783, as a peace condition dictated to France and the United ductive occupations; b) the idiot-savant mathematicians of States by Britain's Lord Shelburne, I in the 1783 Treaty of the "Chaos Theory" cults; c) the ever-faithful gnostics chant­ Paris. As a consequence of this concession to British "free ing, with an obligatory uprolling of the eyeballs, "the magic trade," the economies of the United States and France were of the marketplace." Conveniently, all three, and related bankrupted by 1789. The United States used its head, wrote other varieties of professionalist objections, including the a federal Constitution which arranged the outlawing of "free lately fashionable "Chaos Theory," share the fundamental trade," and recovered to prosperous growth under President flaw of the late John Von Neumann's efforts to derive a George Washington and Secretaryof the TreasuryAlexa nder mathematical dogma of radical marginal utilitarianism from Hamilton. The king of France acted differently; failing to use a set of linear inequalities. his head, he lost it. It greatly simplifiesthe discussion to begin with a thumb- The strongly Leibniz-influencedeconomic policies of the

EIR June 24, 1994 Feature 31 U. S. federal Constitution and the first George Washington Demographic science administration were known officially from that time onward The science of physical economy is premised upon the as the anti-British "American System of political-economy." conclusive proof that the human species is unique in the "Free trade" was revived in the United States several known universe, set absolutely apart from and superior to times during the nineteenth century. Under the influence all other known forms of existence. The crucial evidence of British agent Albert Gallatin from within the second for this conclusion is found in studies of the changes of the Jefferson administration and the Madison administration. human species' potential relative population-density: Only Under the influence of British asset and New York banker mankind is manifestly capable of willfully increasing this Martin van Buren over the second Jackson administration, potential popUlation-density by decimal orders of mag­ causing the Panic of 1837. "Free trade" was the doctrine nitude. of the New England opium-traders and the southern pro­ The study of this phenomenon begins with scrutiny of slavery faction during the early nineteenth century. Under two more readily measurable sets of phenomena: changes the treasonous Pierce and Buchanan administrations, the in demography, and changes in the per-capita productive effects were ruinous. Every period of economic recovery powers of labor. First, we examine changes in relative popu­ into 1875 was the direct result of rejecting "free trade" lation-density, and then their correlatives in, second, demo­ in favor of reviving the "American System" policies of graphic characteristics, and, third, productive powers of Franklin, Hamilton, Henry Clay, Mathew and Henry labor. Carey, and Friedrich List. As a matter of elementary scientific rigor, implicitly Despite Cobden and Bright and their "Com Laws" this study encompasses many different cultural series over reform, throughout the late eighteenth and the nineteenth thousands of years, and even longer, preceding our time. centuries, Britain never made a general application of a Of course, it also includes the past 6OO-odd years since "free trade" dogma to itself, but only to those competitors the fourteenth-century European Black Death pandemic. and colonies which it looted for the enrichment of the The scope of the investigation indicates that the question London financial houses. To defend what Britain saw as of money is introduced only as a tertiary fe ature of the its special economic or related interest, she was a jealous studies. We are concerned primarily with the physical protectionist, to the point of war. Her policy on that point relationship between society and nature as a whole; the could be fairly described: "Free trade was meant for the principles involved must be adduced without introducing suckers." The "invisible hand" turns out to be her hand any consideration of money. Money matters are studied in your purse. later, against the background of the monetary system's All of the grounds for putatively professionalist objec­ interaction with the physical-economic processes upon tions to my description of the speCUlative process, including which money-systems are superimposed. the work of the utilitarians, of Walras, of John Maynard In demography, we begin with the obvious considera­ Keynes, of Von Neumann, of the modem "Chaos" theorists, tions of fertility of households, and life-expectancy and con­ and so on, are merely differentdisguises for the same under­ ditions of health of households' members by age-interval lying set of mid-eighteenth-century axiomatic assumptions stratifications. We consider not only the typical individual introduced to Britain through the work of GiaminariaOrt es. household, and also the immediate society with which the All of the issues posed by the third of the three named classes household is associated, but also the reciprocal functional of critics can be addressed comprehensively, and most effi­ interaction of the individual person and the society with one ciently, by examining the crucial differences in axiomatic and another, and of both with the entirety of the human assumptions separating the method of Leibniz's influential species. We examine the productive powers of labor in terms science of physical economy from the derivatives of Ortes' s of a demographic model of social reproduction of the house­ hedonistic calculus. hold, the society and mankind as a whole. We measure these The essential difference between Leibniz' s physical productive powers in terms of the market-baskets of both economy, on the one side, and the liberal, Marxist, and neo­ households' goods and of means of production required to conservative dogmas, on the opposing side, is between those, maintain improvements in demographics per capita, per like Leibniz, who base the measure of economic performance household, and per square kilometer above a conjecturable on the starting-point of human demography. and those, like "0," or so-called "equilibrium level." British economist Karl Marx, who are obsessed from the start We examine the effectof the development of basic eco­ with someone' s primeval hoard of "my money." First, look nomic "hard" infrastructure (e.g., water, general land-trans­ at political-economy from the standpoint of Leibniz's and port, power, sanitation, and communications) upon demo­ my own science of physical economy, and then contrast that graphic and productive factors . We include three qualities of with the teachings of a mathematical pseudo-science such services---education, health care, and scientific and equiva­ as John Von Neumann's and Oskar Morgenstern's famous lent development-as "soft" infrastructure, and also include Theory of Games and Economic Behavior. as "hard" infrastructure the logistical means required for

32 Feature EIR June 24, 1994 maintaining these three essential categories of services to households and productive facilities. To shorten the account, sum up a number of steps in the following terms: We define consumption in terms of a roster of goods included in market-baskets of consumption, whether by households, or by production of goods. Excepting the three indicated special classes of services (education, health-care, and scientificprogres s), the designation of goods is limited to physical goods. These goods are listed as elements of market-baskets, each associated with corresponding catego­ ries of the gener�1 social division of labor in employment. We have as broad categories of market-baskets: households ' goods, hard-infrastructure goods, soft-infrastructure goods, agricultural producers' goods, industrial producers' goods, plus a general social-overhead allowance for consumption by other categories of employment as a whole. We also define economic activity by categories of land­ use. We have waste land, reserve land, land used for urban­ ized and rural residence, respectively, land used for urban administrative and general social functions, and land as­ signed to the categories of each of the principal elements of the social division of labor. In practice, in a well-designed university curriculum, economic science starts with the study of the changes in these categories and their ratios during the recent 550 years in western Europe and the Americas. Once the student is famil­ A 1921 cartoon entitled "The Anglers" shows speculators fishing iar with the conceptions which are prompted by studying fo r victims in the stock exchange. Today, the speculative mania five centuries of changes in those locations, the student is has created the biggestfinancial bubble in world history. prepared to contrast the modern European case with the quali­ tatively different cases during the preceding 2,000 years of European civilization, and with the older civilizations of Asia typifies this argument. For our purposes here it will be suffi­ and Mediterranean Africa to about 6000 B.C. Those studies cient merely to summarize the argument supplied in the indi­ prepare the student to study pre-Columbian America, Ocea­ cated relevant sources. nia, and sub-Saharan Africa . This gives the student a global overview within the bounds of the intraglacial warming peri­ Technology as creativity od in which we presently dwell. And, so on . In any branch of science, there is no way to avoid certain The ascertained cause for the somewhat correlated chang­ deep-going conceptual problems without foundering forever es in potential population-density, demographic profiles, di­ in the incurable incompetencies of one's own foolish bab­ vision of labor, land-use, content of market-baskets, and so bling. In economics, the key such conception is that of cre­ on, is changes in human behavior of a quality typified by ativity. valid fundamental scientific progress. Such scientific prog­ The investigation of this conception begins, pedagogical­ ress merely typifies the quality of thinking common to the Iy, with the subject of those forms of creative discovery spectrum of changes in statecraft and in Classical forms of which are most easily represented, the mathematical form of fine arts which, together with scientific-technological prog­ what are justly called "revolutionary," or "axiomatic-revolu­ ress, cause the improvement in demographic performance. tionary" qualities of fundamental scientific discoveries. The In other words, what is reflectedher e is an increase in man­ yardstick we apply to the study of such discoveries and their kind's per-capita power over the universe, as measured in impact is the standard of technological progress, by which respect to per-capita power per square kilometer of the we signify increase in the qualitative powers of physical Earth's habitable surface. productivity of labor per capita, per household, and per The subjective cause for the increase of this power admits square kilometer of usable land-area. of no description other than "creative powers of the individu­ Once the idea of "creativity" is removed from the domain al mind." The case for a valid fundamental discovery within of emotionally colored, vague imageries, and is rendered the scope we assign to the name "mathematical physics" an intelligible scientific conception of willful practice, the

EIR June 24 , 1994 Feature 33 entirety of economic science begins to open up for the stu­ Each of those required an axiomatic-revolutionarychange in dent. Until that step is made, professors of economics will our notions of physics as a whole. never move much beyond the pre-Stone Age level ofcompe­ Over the millennia precedingA.D. 1400,the revolutions tence, bungling and babbling over all of the crucial concep­ came more slowly, and there were even long periodsof steril­ tions upon which this branch of science is absolutely depen­ ity, or even falling backwards in too many cultural strains. dent. Once creativity is rendered an intelligible, practically Yet, the same principle is reflected in the shards of very old applicable conception, all of economic science begins to prehistoric cultures. This type of willful increase in man­ open up rapidly for the student. From that standpoint, the kind's power over nature per capita and per square kilometer, incompetence of all critics of the foregoing description be­ is what most clearly sets the human species absolutely apart comes transparent. from, and above all other known forms of existence within To the degree any mathematical physics can be represent­ physical space-time. ed in a mathematically consistent way, it may be represented, That brings the inquiry to a crucial point: "Why must if only for purposes of description, by what is termed a "theo­ one equate 'axiomatic revolutionary' with 'creative'?" The rem-lattice." That signifies, that any formal mathematics can mastery of the science of physical economy depends upon be regarded as a network of theorems which are each mutual­ the student's comprehending this connection. Once this point ly consistent with all other theorems of that some collection. is grasped, the essential incompetence of today's politically This mutual consistency is representable by a set of intercon­ correct university economists and their textbooks is shown nected theorems and postulates, such as the theorems and readily. The immediate relevance of this is that it involves postulates of a formal Euclidean geometry . proof of the fraudulent character of the assertionsof Norbert Therefore, we may think in terms of some collection Wiener and John Von Neumann, and their followers the of interconnected theorems, each and all of which are not idiot-savant chaos-theorists, on the subject of the human in­ inconsistent with any among that set of interconnected telligence and mathematics generally. axioms and postulates. In looking at this business in that way, we are able to conceptualize both the presently known LQgic versus creativity and yet-to-be-discovered theorems which would satisfy those Given two theorem-lattices, separated from one another restrictions. We may describe this as all the theorems of that by only a single change in axiom. There is no consistency formal mathematical-physical type. between any theoremin one of these lattices with any theorem Against this background, consider the case, that one is in the other. The difference between the two is therefore, able to define experimentally a theorem which is true in mathematically, a formal discontinuity. In real life, this sig­ nature but which is not consistent with any previously known nifies, that in the case of every valid axiomatic-revolutionary mathematical-physical type. Close analysis shows that this discovery in mathematics, or mathematical physics, once new theorem requires a specifickind of change in one or more we have discovered the axiomatic change which defines the of the axioms of the presently accepted form of mathematical successor theorem-lattice, we shall always be able, on princi­ physics. Enter Socrates: The fun begins. pie, to treat every theorem of the preceding lattice as a special The question is thus posed implicitly. Suppose we adopt case of the latter; however, no theorem of the second lattice a new set of interconnected axioms and postulates, one which can be reached by consistency with the axioms of the first. conforms fully to the new experimental theorem, which in­ This principle was well known to Plato and his associates. troduces only the absolutely necessary modifications in the Plato's Parmenides dialogue is a demonstration of the way previously established collection of axioms and postulates. in which a creative discovery must appear from the stand­ Can we secure an experimentally valid, revised version of point of the mere formalist Eleatic (or the Aristotelian Im­ the theorems of the old system which fitthe new set of axioms manuel Kant's Critiques). To the formalist, such a discovery and postulates? appears as an inexplicable leap of the intellect. In effect, that is what a revolutionary discovery in science The classical modem illustration of Plato's point is the forces us to do. In that case, a crucial experimental theorem solution to the paradox in Archimedes' quadrature of the of those troublesome specifications has introduced an axiom­ circle by Nicolaus of Cusa. atic-revolutionary change into formal mathematical physics. Until Cusa, mathematicians were fooled by the fact that That kind of successive axiomatic-revolutionary change has a series derived fromArchimede s' constructionmay estimate been the characteristic of both formal mathematics itself and the value of the ratio of the circular radius, 1T,to any required of modem physical science since Nicolaus of Cusa's De decimal position. Cusa showed (A.D. 1440, 1453) that this Docta Ignorantia of A.D. 1440. The discovery of Dmitri apparent arithmetic convergence had an embedded falsehood Mendeleyev's Periodic Law, Georg Cantor's transfinite, insofar as one assumed falsely from the apparent conver­ Max Planck's quantum of action, radioactivity, and nuclear gence in numeric values that a circular perimeter was con­ fission typify the revolutionary changes which erupted at the structable in this way. The values were, in fact, nearly equal, close of the last century and the firstthree decades-odd of this. but never congruent. Cusa defined circular action as of a

34 Feature EIR June 24, 1994 different, higher mathematical species than the Greeks had ics whether human life were statisticaltrpossible . The central assumed all incommensurables to have been. Later (1697), premise upon which this writer's 194�-52 discoveries refut­ the physical significanceof Cusa's discovery was proven for ing Wiener and Von Neumann were ljased, was the position radiation of light by Jean Bernoulli and Gottfried Leibniz, that a theory which cannot be shown t� be consistent with the and established as the basis for what they termed "non-alge­ existence of the theoretician is bad pitrsics. In later years, a braic" or "transcendental" functions. few notable thinkers have expressed either the same or a very Since 1697, this discovery, known under the rubric of similar position.

the continuum paradox, 1 has continued to be the center of the Plato's Academy at Athens demon�trated their proof, that principal methodological controversy, and a source of the there existed geometric magnitudes which are not congruent most significantclas sroom and textbook fraudswithin mathe­ with rational numbers, geometric magnitudescalled "incom­ matical physics.2 A crucial treatment of this from the stand­ mensurables." Later, Nicolaus of Cu�a was the first to show point of Karl Weierstrass's work was given by Georg Can­ us that we must divide those incorrimensurables into two tor's presentation of the series of Aleph transfinites (1897); distinct species, species which Leibnitl later identified as the the exposure of the axiomatic fallacies of the entire life's "algebraic" (the lower species) and the "non-algebraic" (the mathematical work of Bertrand Russell, and also the related higher species), the latter commonly referenced today under work of John Von Neumann, was given by Kurt GOdel in the rubric of "transcendental functions." The continuum par­ 1931.3 Despite the conclusive proof, from these and other adox, the central topic of Leibniz's iMonadology, and the sources, the denial of the existence of what Riemann de­ center of the work of Riemann later, !must be recognized as scribes as the "continuum paradox" persists stubbornly as showing us that there exists yet a higher species of mathemat­ a leading, fraudulent feature of the standard mathematical ics. This is a higher domain in which tileprinciple of cardinal­ physics curriculum today. As in the exemplary cases of Nor­ ity is preserved, but not ordinality a$ we know it from the bert Wiener's popular Cyberneticsand the work on economy three lower species of mathematical 40mains. It is this last, and the human mind by John Von Neumann, this popularized the fourth and highest domain (from ;Cantor's Aleph 1 and classroom fraud plays a dominant role in the mistakenly gen­ up) which enables us to represent s�ientific creativity and erally accepted versions of professionally taught and prac­ its effects, a representation which i$ impossible from the ticed economics doctrine today. standpoint of lower orders of mather$tical physics. Back during the 194Os, this writer sometimes amused So, although we cannot representlscientific creativity by himself by asking some of the pompous varieties of academ- any of the mathematical methods taught in engineering schools, a propercomprehension of the work of Cantor from I. See BernhardRiemann 's celebrated 1854 Habilitationsschrift, Uber the standpoint ofLeibniz' sMonadoloay and the Riemann Sur­ die Hypothesen, welche der Geometrie zu Grunde liegen, in Collected Works face shows us how to deal with this formal problem once we of Bernhard Riemann, Heinrich Weber, ed. , Dover, New York, 1953, pp. 272-287. For a passable translation, see Bernhard Riemann, ''On The have identifiedthe physics of represen.ing a demographic pro­ Hypotheses Which Lie At the Foundations of Geometry ," Henry S. White, cess of development under the impetus of technological trans ., in A Source Book in Mathematics, David Eugene Smith, ed. (1929), progress. Dover Reprint, 1959, pp. 404-425 , possim. 2. The cult-fad of "Chaos Theory" in political-economy , for example, is a delusion of those Bourbaki and kindred idiot-savants who confusereality Economic measurements with arithmetic estimates assigned to computer algorithms such as Mandel­ This problem was forced upon me during the 1948-5 1 in­ brot figures. The influenceof the late John Von Neumann is largely responsi­ ble for the spread of this and kindred lunacies within political-economy and terval of my efforts to definea rigorous refutation of the obvi­ other areas. NorbertWiener, the author of Cybernetics and co-author of "in­ ous frauds by Wiener respecting a Boltzmann H-theorem­ " formation theory ," was justly expelledfrom a Gottingen University seminar based definition of "negative entropy I and Wiener and Von by the great David Hilbert, for reason of the same methodological incompe­ tence which Wiener later exhibited in his outrageous notions of"negentropy," Neumann's mechanistic misconceptions of human thinking and his own and John Von Neumann's sick notions of the human mind. processes. My approach to that problem may be summed up These and kindred pathologies explain some of the reasons for the high as part of what ought to become st!U\dard pedagogy in any rate of insanity among many highly trained mathematical formalists. If one attempts to define a "general field" theory of mathematical formalism on the respectable university classroomin economics today. basis of the false assumption of Bertrand Russell, John Von Neumann, et aI ., The lesson of the internal history! of mathematics, espe­ that externallybounding limits can be accessed as a theorem of the externally cially during the recent 550 years of the rise of European bounded theorem-lattice, the person so deluded must either give up that as­ sumption, as KurtGOdel did (for example), quit mathematics, or become an science, is that we must always see� to measure, but must obsession-crazed fanatic, a lunatic dwelling in some wildly mystical para­ not trust blindly the tape-measures which were issued to us noid's fantasy world. Thus, in the ancient Greek cult of Delphi , it was recog­ as students in the classrooms or textbooks. Sometimes, we nized that peering out from between the cracks of the mind of Apollo there is a leering Friedrich Nietzsche, a Bakunin, a Richard Wagner, a Martin need to invent a new yardstick, just :as we have today four Heidegger, a raving Dionysos-Python, or, as Herodotus underlines, a Satan, distinct species of mathematics. Uqtil the end of 1951, I an Osiris, a Siva. knew of but three species of mathematics; I was about to 3. Kurt GOdel, "On formally undecidable propositions of Principia Mathematica and related systems I," in Kurt GOdel Collected Works , Vol. I, learn a fourth , beginning January 1952. S. Feferman et aI., eds., Oxford University Press, pp. 144- 195. Apply what was then, circa 1950�51, standard industrial

EIR June 24, 1994 Feature 35 engineering knowledge of the structure of a successfully de­ as a way of organizing an economic recovery! Thinking about veloping agro-industrial economy. Define as the relevant in­ the story behind that apparent economic anomaly did not put and output of a function an array of households' and make warfare less wastefulof life and material; tracing out a producers' market-baskets containing nothing fu nctionally few economic facts made clear the reasons for the anomalous significantexcepting a combination of physical products plus appearances. three categories of services: education, health care, and sci­ The characteristic of modem regular warfare is excep­ entific progress. Draw a cut through the continuing cycle of tionally high rates of technological attrition. Technologies production-consumption at any point. Measuring all inputs are developed during a few years of forced-draft, which and outputs in terms of per capita, per household, and per would have required decades otherwise. As some of the Man­ square kilometer, compare the input (consumption by either hattan Project's veterans described this to me in some detail, households or producers) and output (products of infrastruc­ the intensity of scientific collaboration in that undertaking ture, agriculture, mining, and industry, plus services of clas­ packed decades into about fiveyears of research and develop­ sical forms of education, health care, and scientificprogr ess). ment. If the history of "crash program" technological devel­ Since any economic process trapped in a zero-technologi­ opment is traced from its origin in the 1793-1814 technologi­ cal-growth mode must collapse "entropically," our firstcon­ cal leadership of France by Lazare Carnot and Gaspard cern is to maintain growth of productive powers of labor. Monge, through the military and aerospace crash-programs Therefore, subtract input from output, and divide the remain­ of the subsequent 150 years, what stands foremost for one's der by input: The result must be larger than "0." The margin attention is what may be fairly described as a four-step pro­ by which the ratio must be greater than "0" will be an amount cess for injecting high rates of prosperous growth into any greater than the rate of technological attrition. modem economy. Thus far, not problematic. Term the input "the energy of The top of the mountain is fundamental (axiomatic-revo­ the system," and the remainder the "free energy" margin. lutionary) progress in science. Slightly down the slope, there See the ratio as a "free-energy ratio. " is the elaboration of these most crucial discoveries at the Then comes the problem: Not only must there be a rate summit of the mountain into subsidiary discoveries. At both of technological progress, to offset required growth plus ef­ levels, the new discovery prompts the design of demonstra­ fects of attrition of natural and man-improved resources; to tion-of-principle experiments. As these experiments are re­ sustain the needed, relatively rising free-energy ratio, the fined, the lessons of the successfulexperimental designs are value of the energy of the system must increase per capita, taken to a place a short distance down the slope from the two per household, and per square kilometer. No matter how we levels of scientific work: Here we encounter the transforma­ adjust the list of items in the bill of materials and process tion of the successful experimental designs into machine­ sheets, that difficultyrema ins. That locates the crucial issue. tool or equivalent principles. Downstream from the advanced The next step, is to refine the picture by writing down machine-tool-design sector, we have the new machine-tools and verifying a series of linear inequalities correspondingto revolutionizing product designs and productive powers of the direction of changes in the social division of labor, and labor at the base of the mountain, where production occurs. demography, which accompany the indicated, twofold trans­ In "crash program" mobilizations, not only scientificand formation in the apparent functional form of rising free-ener­ related progress at its most intenSe, but every new conception gy ratio. The principal such inequalities describing success­ is quickly turned into improved military or other applica­ ful economic growth of economies during the recent 500 tions. The machine-tool sector is expanded rapidly to accom­ years are described in my 1984 textbook So, You Wish to modate to this. The rate of flowof tools proven in the highly Learn All About Economics? It is easily shown that, during mobilized military or aerospace applications, for example, the same centuries, all economies which violated those con­ spills at exceptional rates into the economy in general. straints suffered decline, that violation of these constraints is The way in which to think about such experiences is stop the characteristic of declining economies. all the wimping and whining about budget-balancing and There should be nothing surprising about the fact of my kindred mind-crippling, dog-like obsessions, and concen­ lines of inquiry into these matters during 1948-52. trate upon the crucial lesson to be learned from examining During the late 1940s, after the 1930s depression, and such an anomalous appearance. Concentrate upon the end­ following the war, experiencing the recession of 1947-48, result, the effect of delivery of large masses of technologies, and the 1949 economic recovery sparked by the Cold War at accelerated rates, into both the improvement of product­ revival of the Korea conflict, all we veterans who were rea­ designs and increase of the productive powers of labor. The sonably sentient were aware of the anomalous fact that, dur­ lesson is, that if we would use our heads, unlike the King ing the twentieth century to date, the only prosperous periods Louis XVI who failed, during 1783-89, to use his, we should had been those associated with relatively larger expenditures always have the "moral equivalent of war-mobilization." To for the costs of war. During those days, the u.S. and other wit: We should insist that a large part of the total labor force governments were frequently charged with seeking warfare be engaged in developing, investment in, and production by

36 Feature EIR June 24, 1994 high rates of massive injection of newly discovered science tured as Venetian dupes: Walsinghani and his circles around and newly developed technologies into the promotion of im­ Queen Elizabeth, and the evil Francis Bacon, and so forth, proved product designs and high rates of increase of the aroundthe unfortunate King James I. E�en during theCivil War productive powers of labor overall. in England, Venice controlled bothsides, including thePallavi­ That object-lesson should reenforce our appreciation of a cini-linked Oliver Cromwell, and the Restoration Stuarts after point which ought to have been clear beforehand. The sum­ Cromwell's son and heir had been oVl.'jrthrown. total of the lessons for statecraftfrom history and pre-history , Those points are key to u�ders�ding the great control is that creative, revolutionary progress in scientificand analo­ Venice exerted upon not only Adal!D Smith, Jeremy Ben­ gous knowledge is not an occurrence on the periphery of tham, and Thomas Malthus, but the entirety of what came man's vision: It is the essence of human existence, it is what to be identified as British politicalJ social, and economic distinguishes us as the Mosaic heritage specifies, as in the thinking from the middle of the eightbenth century to former image of God the Creator by virtue of our developable indi­ President George Bush riding like � sick cat on the tail of vidual potential for creative reason. Prime Minister Margaret Thatcher's!broom. During the late The anomalous aspect of the mathematical picture of a seventeenth and early eighteenth cdnturies, in Britain, the growing economy is that the essence of the economy is not Liberal Party of the Duke of Marlborough, Walpole, King the production and consumption of objects, but rather the George I, and the notorious Hell-f1ire Clubs were already upward transformation of the cycle of consumption for pro­ known as the "Venetian Party," as IDisraeli referred to the duction of the means of improved human existence. The imperial party of mid-nineteenth-century Britain. creative powers of reason are the source, the cause for that Venice saw London as becoming the "Venice of the growth upon which the avoidance of social collapse depends North," a worldwide maritime power,building a global em­ absolutely. The anomalous aspect of the economic process is pire, and moving on to establish a system of world-govern­ that the characteristic feature of a viable economic policy of ment consistent with Venetian financialand social principles. performance is human creative reason, that principle of rea­ London's Liberal Party, in turn,waS content to be guided by son which the economic doctrine of the late John Von Neu­ its Venetian mentors. Still, during [the eighteenth century, mann and the contemporary "Chaos" theorists implicitly until the city was weakened somewhat in its quarrel with the I deny to exist. Genoese asset Napoleon Bonapart¢, the Venetian intelli- gence service was very widespread!, deeply embedded, fe­ Adam Smith has no morals rally capable, and still verypowe rfull. No nation as a whole has ever profitted from the dogma The portrait of Venice's decadence during the seven­ of "free trade" except by employing the doctrine as a ruse for teenth and eighteenth centuries wPuld probably turn the looting another nation. The technical flaw in Adam Smith's stomachs of even the citizens of old Sodom and Gomorrah. dogma is not derived from a defect within his nonexistent Vile creatures such as Conti, Grandi, Ortes, Casanova, science, but originates purely and simply in his lack of all Cagliostro, and, later, Capodistria,!were the appropriate in­ human decency. One has but to read the moral basis for his struments to devise the ultimate ex�me in systematic immo­ dogma of the "invisible hand," in his earlier, 1759, Theory rality copied from Ortes's writings by Adam Smith, et al. o/ the Moral Sentiments. Ortes is the key. Nothing could be further from (he truth than the British From the beginning of Venice's deployment of the Fourth empiricists with their dogma respe�ting "human nature"; no Crusade to loot and ruin the competitor power of its former one was more inclined to the unna�ral than these Venetian master, the Byzantine Empire, in A.D. 1204, until the col­ bachelors who taught them. Man i� not a creature of mere lapse of the Lombard debt-bubble during the middle of the appetites and sensual passions; wer� man as Bacon, Hobbes, fourteenth century, Venice ruled the Mediterranean and Eu­ Locke, Hume, Smith, and Bentharp. portray the individuals ropean usury as an imperial maritime power. This power was of our species, our species would nelverhave ascended above threatened by the A.D. 1440 Council of Florence, leading to the level of baboon-like Yahoos subSisting precariouslyupon the alliance of nations-the League of Cambrai-which a few berries mixed with decayed flotsam cast upon the came close to conquering and destroying Venetian power beaches of Africa's coast. during the first decade of the sixteenth century. In the after­ Human nature is that essential !Characteristic which sets math of that, Venice survived by placing each and all of its our species as a whole absolutely ajpart from, and above the enemies against one another's throat, the Papacy, France, beasts. That quality is the potential for development of cre­ Spain, the German Empire, the Ottoman Empire, and ative reason in every person, the qUality which the tradition England, chiefly.By playing upon the sexual susceptibilities of Mosaic monotheism recognizes � man in the image of God of a possibly insane King Henry VIII of England, Venice the Creator. Human nature is a chiltlwhose mind and morals split England from its close relations with Spain and with the have not yet been destroyed by a modern Frankfurt-school­ Tudor House's ally in France. Thus, by the close of the style day-care center, a loving child asking parents, relatives, sixteenth century, the leading circles in England had been cap- neighbors, and virtually everyone tise besides: "Why?"

EIR June 24, 1994 Feature 37 �TIillInternational

Calls grow to boot ou,t IAEA and develop Korea by Kathy Wolfe

Despite the demands emanating from Great Britain and the Selig Harrison of the Carnegie, Endowment told a June 16 neo-conservative press in the United States that the Clinton Washington press conference, illlresponse to a question from administration take military action against North Korea,the EIR . "The IAEA has simply taken over this situation, as you Clinton administration took steps the week of June 13 to cool suggest," said Harrison, who had returnedfrom a June 4-11 out the crisis that erupted when officials of the International visit to Pyongyang where he int�rviewed Kim Il-sung. "The Atomic Energy Agency (IAEA) declared that North Korea U.S. has become a tail to the IAEA kite." had blocked the inspection which the agency demands. IAEA chief "Hans Blix is a lawyer," he said. "They go Afterfull briefingsfrom the Clinton administration, for­ into North Korea and say: 'Section 3 says you must do this,' " mer President Jimmy Cartertraveled to Pyongyang for direct to preserve the IAEA' s power to threaten the nuclear pro­ talks with North Korean leader Kim Il-sung. On June 17, grams of all nations. "The IAEA is only concerned with Carter emerged from meetings with the North Korean leader restoring its effectiveness, which it lost in Iraq ....This is to announce that Kim had repeated the North's desire to scrap an invasion of sovereignty." its plutonium reactors, if the West would help Pyongyang Ackerman and Harrison both!called for the "package solu­ replace them with new modem light water reactors (LWR s). tion," developed in 1991 by Northand South Korea in reuni­ Carter said President Clinton was receptive to this, and in fication talks; it specifies that the United States, Japan, and return, is willing to drop his previous insistence that the South Korea would aid Pyongyang to build a new non-plutoni­ IAEA conduct all inspections first, before talks could re­ um L WR nuclearpower industry, in return forshutting down sume. The administration is also considering "North Korea's its decrepit 1 950s plutonium reactors. The North Koreans pro­ desires for some kind ofU . S. declaration against using nucle­ posed this to President Clinton's negotiator Robert Gallucci ar weapons in Korea," Cable News Network reported. The last July in Geneva, Harrison rtvealed. Gallucci accepted, North has been seeking diplomatic recognition from the Unit­ but IAEA provocations caused discussions to break down. ed States and a pledge of "no firstuse" of nuclear weapons. At the same time, voices began to be heard protesting the The Bertrand Russell dO

38 International EIR June 24, 1994 demanding buildup of U. S. troops. U. S. allies in the region-South Korea andJ apan, which want A new Korean war is a threat-not because of Kim 11- a diplomatic solution to the crisi$, and also the People's Re­ sung, but because British followers of the late Bertrand Rus­ public of China, which could use its veto power in the U. N. sell, author of the "Dr. Strangelove" doctrine, would like Security Council to stop any U.N. action against NorthKorea. another Hiroshima, or threat of one. Russsell got the United After the IAEA announced thpt it was dissatisfed with the States to drop the bomb in 1945, to terrify nations into creat­ North Korean response to its demands, U.N. Ambassador ing the United Nations, EIR founder Lyndon LaRouche Madeleine Albright announced ! a new U.S. proposal for pointed out recently. Now, London wants us to grant the "modest" sanctions against North Korea June 15; but both U. N. full powers of government,in which the IAEA' s Nucle­ China and Russia turned down the draft. It calls for an arms ar Non-Proliferation Treaty (NPT) would have power not embargo, a ban on non-passeng�r air traffic, a cutoffof aid, only over all nuclear weapons, but over nuclear power plants and bans on scientific, technical, commercial , cultural, edu­ and even economic policy. cational, and sports exchanges. i The British, it is well known, would also like to torpedo But the next day, Presiden� Clinton, after speaking to President Bill Clinton's re-election. President Carter by telephone aft�r Carter's firstmeeting with "Why would people vote for a hoax?" said LaRouche Kim Il-sung, expressed a desire, for "an alternative path" to on June 11, speaking of the "sense of Congress" resolution avoid sanctions and get NorthKorea "more engaged, in ways passed 415-1 by the House on June 8, which demanded sanc­ that would be much better for their own people." tions against North Korea. "Why did people support what Dr. Selig Harrison, at his pr(jssconfer ence, called on the was done in Panama? What was done in Iraq? Because the President to drop all sanctions aM other such IAEA "condi­ U.S. is in a state of collapse! You've got some jo-jos over at tionalities" and negotiate. the Pentagon, and the foolish citizen on the street, who wish Last July in Geneva, he said; Assistant Secretary of State to divert themselves from their perception of impotence, de­ Robert Gallucci "was quite su�rised" when North Korea cay, and collapse, by getting drunk and beating up some poor proposed "that their nuclear p�wer program be changed, guy half their size .. .. from a graphite-based plutoniuJlIl program, to a light water "We're prepared to get into a holocaust with NorthKorea reactor program. They said, 'We don't have enough money over nothing, for no reason." to do this, but if you're willing tphelp us, then, to show you "The game being played with the IAEA, is a game run we're not trying to make weap(jns, we're willing to shiftto by the Thatcher-Bush crowd entirely," LaRouche said June LWRs.' " 15. "Take John McCain, who doesn't want to do anything to On June 5, Kim Il-sung, Hatnson said, agreed "to freeze stop the genocide in the Balkans; that to him would be a the operation of the [YongbyonJ plutonium-reprocessing 'quagmire.' But he wants to go full force into North Korea, plant, and freeze construction .of their new 200-megawatt saying we can bomb them into the Stone Age. McCain is a plutonium reactor, as soon as there is a firm, binding contract typical Bush-leaguer in the Thatcher-Bush crowd. for one or more light water r¢actors-when the financial "North Korea and China are related," he added. "The arrangements have been concluded, and the credits areguar­ same people behind this 'Bomb North Korea into the Stone anteed .... Age on any pretext,' are lined up behind the British," such as "That proposal is an importl\-ntinitiative which opens the the London InternationalInstitute for Strategic Studies' Asia way for a settlement of the nucle� issue. Their offer is serious division, "trying to promote a civil war in a post-Deng China. and specific," Harrison said. "If the U.S. wants NorthKorea "This is also being used to hammer Japan. " to change its position, the U.� . should immediately enter Much of the U.S. military establishment is against war into unconditional negotiation� on the proposed package in Korea, a defense intelligence source told EIR June 15. "If agreement. " the IAEA and the U.N. 'new world order' decide they want "Acting Foreign Minister Kang Jok SU," said a press to bomb Kim Il-sung, they'd better have their own air force." release by Harrison, suggested: that the United States "ear­ he said. He cited several chiefs of the service branches and mark some of your aid to Russi� for the purpose of providing members of the Joint Chiefs of Staff. "John McCain is a nut us light water reactors, helpiqg them, and resolving your case," he said. Air Force Chief of Staff "Anthony McPeak concernsabout our nuclear program. Japan and South Korea told the Senate Armed Services Committee recently that could contributefinancially ." : North Korea's nuclear facilities are not susceptible to our Also part of a package soilution would be normalized strikes. They are buried too deep, and we don't have the on­ diplomatic relations, a peace tre�ty formally ending the Kore­ the-ground intelligence which would allow us to pinpoint an War, and general economic cooperation, he said. anything." President Clinton wants to doth is, administration sources have told this news service, but the IAEA objects. The British A nuclear-powered solution just don't want Third World countries to have nuclearpower, The necessity for the Clinton administration to negotiate since they know that such a prQgram could create a nuclear­ a settlement is made all the more urgent by the reactions of power based development boom in East Asia.

EIR June 24, 1994 International 39 a U.S.-led invasion force. There is a precedent for such action in the guerrilla resistance to an American occupying force during 1918-20. The U.S. Marines finally'W iped out Haiti invasion means the guerrilla movement, at the cost of thousands of civilian casualties, and stayed in the country until 1934. disasterfo r Clinton On June 12, Haitian President Emile Jonassaint, citing the threat of foreign invasion, declared a state of emergency, by Cynthia R. Rush and his government is now considering expelling the joint U.N. and OAS human rights observer mission. Sen. Osner Eugene charged that the mission "was destabilizing Haiti." At the June 6-12 meeting of the Organization of American There are also reports that the government may impose a States (OAS) which took place in Belem, Brazil, member curfew, restrict movements in the provinces, expel foreigners nations approved a joint resolution recommending a "total who are believed working against Haitian interests, and pos­ embargo" against the starving island-nation of Haiti, includ­ sibly close down foreign embassies. ing the added ban on all commercial flights to Haiti to begin on June 25, and suspension of any bank money transfers to Voices of opposition Haiti, announced by President Clinton. These newest sanc­ Although most Ibero-American nations are still resistant tions, in particular the ban on money transfers, mean an end to participating in the firstwa ve of a military invasion, many to the $200-300 million a year which Haitians living abroad governmentshave agreed to commit troops to a multinational have sent to family members at home, keeping many Haitians peacekeeping force in Haiti, under the mandate of the United alive-barely. States. That U.N. mission would serve as a police force as With these measures, the majority of Ibero-America's well as protect elected officials, embassies, and humanitarian "democracies," many of them with their own problems of supply personnel. political instability, have thus capitulated in large measure to However, some recognize what such action means. In EI the pressure campaign coming from the United Nations and Salvador, which experienced U.N. "democracy" when its from elements in and around the Clinton administration who governmentwas forced to drastically "downsize" its defense are demanding a "surgical" invasion of Haiti in the immediate forces and share power with the Marxist Farabundo Marti period ahead. Pro-invasion factions in Washington, as well guerrillas, the editors of the newspaper El Diario de Hoy as several Ibero-American governments, have chosen to ig­ wrote: "A military attack on Haiti, like the embargo currently nore the implications of the actions they are so casually con­ ongoing, seems designed to send a message to all of Ibero­ templating. America more than anything else. The support for [ousted The consequences for President Clinton, were he to en­ dictator Jean-Bertrand] Aristide is a kind of unwritten support dorse such a genocidal action, would be strategic disaster. for the extremist movements of the continent to not fear Not only would he be discredited, but the U.S. presidency taking power: Washington will back them, come what may, would be enslaved to the U.N. 's one-worldist colonial appa­ even if it leads to the ruin of the people who have the misfor­ ratus. Any "peacekeeping" force sent to Haiti would have to tune of suffering them." be deployed on a long-term basis, thereby destroying the The Roman Catholic Archbishop of Santo Domingo, principle of national sovereignty in Ibero-America. Cardinal Jesus LOpez Rodriguez, who is also president ofthe Latin American Bishops Conference, has repeatedly attacked National dignity is the issue the U .S.lUnited Nations embargo against Haiti. On June 13, The history of Haiti gives some indication of how their he characterized it as "cruel and unjust" and said that it was government is liable to respond. Haitian historian Georges subjecting an innocent population to "cruel, inhuman, dishon­ Michel has written, "In modem times, a sense of Haitian est and immoral" treatment. He demanded the immediate de­ nationhood began as patriotic resistance during the 1915- parture of U.S. military personnel who have been sent in to 1934 occupation." Historian Roger Gaillard explained in a "help" the Dominican Republic, with which Haiti shares the recent interview that "the fight against the occupation was a island of Hispaniola, "monitor the border" and enforce the fight for Haitian dignity, a fight against injustice. Still, in embargo against Haitians. The Balaguer government's agree­ many ways you can say that Haiti is still occupied. The U. S. ment to send its own troops, and accept these foreign "advis­ Marines aren't here, but they are still controlling us, keeping ers" was the result of blackmail by the U.S. State Department us hostage. " which threatened to embargo that country's exports to the According to several reports, in anticipation of an inva­ U.S. if the governmentdidn 't acquiesce to its demands. sion, the Haitian military is said to be planning a "strategy of Tragically, Dominican troops deployed to the border with evaporation"-that is, disappearing into civilian clothing and Haiti have already shot to death a Haitian attempting to smug­ carrying out guerrilla attacks rather than directly confronting gle a few gallons of gasoline into his country .

40 International EIR June 24, 1994 within Nigeria, in the United Stat�s, and in London had pledged to go ahead with demonstr,tions and strikes begin­ ning over the weekend of June 11J12 to force the Abacha Opposition wants IMF government to step down, but this .ction subsided after the firstday . June 12 was the one-year arniversary of an election program for Nigeria stopped in mid-stream because of I "irregularities." Abiola insists that he would have won thi� election, and has been by Lydia Cherry campaigning in Washington and Lqndon for these two gov­ ernmentsto assist him in securing �wer.

Multi-millionaire Nigerian business tycoon Moshood Abiola The danger of civil war is now in hiding in Nigeria, after he announced on June 12 Members of the Nigerian military and civilian elite ap­ that he would head an alternativegovernment, and urged that pear to be keenly aware that, without real economic develop­ the international community withdraw recognition from the ment, there are fissures within the oountry that could again, military government of Gen. Sani Abacha. By throwing in as they have in the past, lead to civil war. However, many his lot with the International Monetary Fund, Abiola has Nigerians in the West, particularl� those who left Nigeria cleared up any remaining questions about what his "demo­ during the 1980s when the military: government of General cratic" government would actually mean: Both he and his Babangida imposed the IMF prescription that nearly brought representatives in the United States made clear the first week the country to its knees, are now caught up in the worst of in June that an Abiola government would mean full rap­ the United Nations blather of "democracy" at all costs. At prochement with the IMF. the National Press Club gathering, tNhich was sponsored by various interlocking Nigerian non�governmental organiza­ Abacha measures would be reversed tions, none of the spokesmen seemejd to have any notion that Speaking in Lagos on June 9, Abiola pledged that his democracy in a decaying economy is meaAingless. regime will immediately scrap the economic controls that Instead, people such as former 1I.S. congressional staffer head of state Abacha put into effect early this year in an Randall Echols, Abiola's officialre �resentative in the United attempt to rescue the country from the effects of seven years States, and E.C. Ejiogu of the Nigdrian Democratic Aware­ of IMF structural adjustment programs. "There can be little ness Committee; touted their connections with people in high meaningful economic growth if the economy is run through places within the Anglo-American power structure.. This in­ commands issued by those better suited to the battleground," cluded the announcement by Echols that on that same day, Abiola said in Lagos, Reuters reported. Reuters made clear British Conservative Member of Parliament Alan Duncan that Abiola has now "pledged to reverse the Abacha measures had introduced into the House of Commons a motion support­ which had marked a major retreat from seven years of Inter­ ing Abiola's claim to office, which, Echols said, "calls for national Monetary Fund-backed free market reforms. " General Abacha to step down imme�iately," and "urges indi­ Responding to a question whether the IMF and World vidual governments and the United ;Nations to support Chief Bank aresupportive of Abiola' s proposed economic program, Moshood Abiola in his legitimate cl�im to the officeto which at the National Press Club in Washington on June 13, an offi­ the people of Nigeria have elected bim." Echols was furious cial spokesman for Abiola claimed: "We have the program, that the westernpress had not report�d his claim that Abiola's and this program is something that the United States will feel swearing-in ceremony on June 1� had been attended "by comfortable with.. ..We believe that, by and large, [Abio­ more than 10,000 Nigerians." Any\one who doesn't believe la's] economic program will be something that those two bod­ this could contact the British Bro�dcasting Corp., because ies [IMF and World Bank] would want to try." "BBC reporters were there," he tbld the press. (Showing In an announcement that sent tremors throughout the lousy coordination, if nothing else, Reuters, which for weeks world of Anglo-American finance in early January, General has been seemingly regurgitating �very word the Nigerian Abacha pointed out that "the military still remains the only democracy crowd has been sayingJ let slip that no reporters institution in the position to put an end to the drift toward were present at the swearing-in cer¢mony.) total collapse," and announced that the days of applying Ejiogu focused on the upcoming "social explosion" com­ IMF structural adjustment programs to the Nigerian economy ing in Nigeria unless the military telinquishes power. "All were over. He announced decrees fixinginterest and currency around the borders of Nigeria, Pllople are arming for the exchange rates, imposing controls on foreign exchange trad­ upcoming battle with the military,'1 he said. He insisted that ing and imports, and, most important, providing that 60% of large supplies of military equipment were coming into the all bank credits will be directed to agricultural and manufac­ border areas. Without immediate anternational recognition turing enterprises. for the Abiola government, Nigetlia will become "another The western-linked "Project Democracy" apparatus Rwanda," he promised.

EIR June 24, 1994 International 41 European Parliament elections show impact of economic crisis by Rainer Apel

In the June 12 elections for European Parliament, 10 of the 12 the continuous sex and corruption scandals implicating an governments of the European Union (EU) lost considerable impressive number of senior administration or Tory party percentages of votes. One might argue that the European officials, which has built a sentiment of revolt and non-con­ Parliament is an assembly without real power, like the parlia­ fidenceins ide Major's own party thatmay soon cost him the ments of 19th-century Europe, so that not much attention post of prime minister-maybe as early as this autumn, if should be paid to the results of this election. But the reality parliamentary elections are held earlier than the anticipated is that the election was a test of voters' views on the perfor­ late- 1995 date. The outcome of the European elections is mance of their own governments, in-between or shortly be­ expected to accelerate this process of Major's replacement. fore elections for the respective national parliaments or (in In France (see article, p. 45), two recently created protest the French case) for the presidency. parties, one of bankrupt businessman BernardTapie and the What is one to make of the following picture: In Britain, other of media mogul Sir James Goldsmith and of Vendee the Conservative government lost massively; in Spain, the region nobleman Philippe de Villiers, received 12% of the Socialist governmentlost; in France, the conservative adver­ vote each. This means that the two newcomers will be in a saries of the pro-European Union establishment advanced; in "kingmaker's" position for the presidential elections next Germany, Chancellor Helmut Kohl consolidated his support, spring. while the leftistopposition to the establishment drew most of The situation in Spain is linked with the same mix of the protest vote; and in Italy, the new Forza Italia ("Go, economic crisis news and public scandals as in Britain or Italy") party of Prime Minister Silvio Berlusconi, whose poli­ Italy, although unlike the Italian case, no entirely new politi­ tics in many ways resembles the popUlism of America's Ross cal movement is on the horizon. Spain's governingSo cialists Perot, was the big winner. lost no less than 25% of their own constituency and finished Ideological interpretations won't explain why in one case at 30%, instead of the 40% they had received in the last the leftists won, and in the other, the rightists, and in the European elections in 1989. The conservative opposition third case, a "mixed bag." To explain voters' choices, it from the Popular Party almost doubled its vote from 21.7% makes more sense to look at the worsening economic situa­ to 40.2%, and the pro-communist United Left(I U), the other tion in the key European Union countries. bloc of the opposition, more than doubled its votes from 6.2% to 14.9%. Ideologies are out the window The vote disaster was worst for the Socialists in the most In Britain, vote losses for the Tories, the Conservative densely populated region of Spain, Andalusia, which can be government partyof Prime Minister John Major, were sub­ attributed to the rapid decline of industrial employment in stantial enough to cost the party almost 50% of their 34 seats that region which, along with the steel production in Asturia in the European Parliament and give the opposition Labour and the car-manufacturing complex in the Basque region, Party 62 of Britain's 88 seats. This political landslide corre­ once belonged to the big boom areas which the Socialists sponds to the fact that the Major government has the worst launched in the early 1980s, at the beginning of their regime. ratings in public opinion of the past 64 years. This has to Spain, which has an unemployment rate of 24% (twice do, first of all, with the devastating domestic employment as high as France or Britain) has seen a pattern of strikes situation in industry and the public sector, which also trans­ and other protest actions, some of them even supported by lates into a worsening social situation-mainly the heritage industry (as in Asturia), throughout the past 12 months, so of the previous Thatcher era, but someting that has become that Prime Minister Felipe Gonzalez's low public ratings associated with the name of Major in the three years since don't come as any surprise. A majority of Spaniards would Margaret Thatcher left office. vote the Socialists out, if national elections were held right There is also increasing disgust among British voters at now.

42 International EIR June 24, 1994 A paradox in Germany the social effectsof the deindustrialization policy of the Kohl Germany and Italy are the only countries where the gov­ government in Bonn, after German unification in 1990, ernment party did not lose votes, but gained. Chancellor which has led to a jobless rate in many eastern ci�ies of 40- Kohl's Christian Democratic Union (CDU) benefitted from 50%, and related to that, a rebellious ferment among voters the loss of votes on the part of the Social Democrats (SPb), there. as well as from losses by the liberal Free Democrats (FDP), The PDS now has enough votes in the east to compensate who are no longer seated in the European Parliament. The for its weakness in the west; thus the party only narrowly FDP is the coalition partner of the CDU in the current gov­ missed the 5% threshold nationally on June 12 which is man­ ernment. datory under German law for a seat in the national parliament. It might seem an overwhelming victory for Kohl, but that The PDS came out as the fourth-strongest party in the Europe­ is not the case. Lyndon LaRouche, asked to comment on the an Parliament elections with 4.7%, and it expects to broaden election result in a June 15 radio interview with "EIR Talks," its voter base by mid-October and win 5% in the national said, "I wouldn't make the mistake of assuming that Kohl is elections then. home free for the next elections on the basis of this result. ...The collapse of the financialsy �tem, which is oncoming What kind of Grand Coalition? rapidly, is a great threat to Kohl in the next round." Another result of the June 12 elections in Germanyis that The wave of spectacular collapses of industrial firms and the Free Democrats failed to re-enter the European Parlia­ financial institutions, combined with growing unemploy­ ment, since they received only 4.2% of the vote. This has ment, stand in sharp contrast to the Kohl government's pro­ major implications for the next national elections: Through­ nouncement that an immediate recovery of the economy lies out the entire postwar period, with the sole exception of ahead. 1957-6 1, when the Christian Democrats had an absolute ma­ The protest in Germany against the economic decline did jority of votes, the FDP has always been the minor coalition not send voters to the main opposition party, the SPD, bu� to partner for governments led by either of the two big parties, the post-communist PDS and the ecologist Greens, which the SPD or the CDU; the disappearance of the FDP into non­ replaced the Free Democrats as the third-strongest party, parliamentary status would imply either a combined "left­ with more than 10% (an increase of 2%). wing" majority of SPD, Greens, and PDS, or a "conserva­ This paradox, that Germans could have been expected to tive" minority of the CDU, or-as a third and most likely vote against Kohl's party but didn't, can be explained by the option-a Grand Coalition of CDU a':1dSP D. fact that, unlike in Britain or Spain, voters don't believe in The first such Grand Coalition was put in power in late the opposition as an alternative. The SPD does not give any­ 1966 and lasted through the economic recession of the late one the impression that it has an economic alternative to 1960s; both the CDU and the SPD have declared again and the present government. A significant percentage of German again in the past months that they want no new coalition of voters is no longer debating the pros and cons of the SPD, this type, except in case of a "national emergency." but is looking for other parties in the opposition; mostly this With a large corporate collapse making headlines in Ger­ expresses itself as populism. It undermines the potential for many almost every other week, with banking and other scan­ forming the traditional kind of coalition governmentbetween dals, increasing jobless figures, and a furtherdecline of vot­ one big and one small party, because no such combination ers' preference for the SPD, that "national emergency" may will have enough votes for a parliamentary majority from well be there in October. If the option of a left-winggovern­ now on. ment does not come about for lack of SPD votes, there would This poses the threat of increasing ungovernability, as the be either a powerless minority government of the CDU, as . Greens and the PDS, both being populist parties with no pro­ the larger of the two big parties with an expected vote percent­ gram that would be acceptable and appropriate for a modem age of about 40%, or the aforementioned Grand Coalition of industrial nation like Germany, can be expected to broaden the SPD and CDU. their own voter base in the near future. There has been a great deal of discussion in Germany The ecologist Greens have been in the western states of about the latter option, but it was largely theoretical before Germany for 15 years, and the fact that the country's main­ June 12; now, after the European elections, it has turnedinto stream ideology now is environmentalism, in numerous color­ a much more concrete perspective. ations, worked to the benefitof thi! Green party on June 12. A Grand Coalition could do much with a good economic In the easternstates ofthe country, the PDS, the "convert­ policy, or could ruin everything with a bad one. Since Germa­ ed" former state party of the East German communist regime, ny is the strongest economy on the European continent, and managed to survive the collapse of the regime in late 1989 since Franco-German cooperation is essential for the effec­ and consolidated its voter base in the fiveeastern states at a tive functioning of the EU, the decisive battle to get out of level above 15%, with recent trends pointing toward 20% the economic depression will take place in Germany, in the and slightly beyond. The PDS was able to do so because of election campaign from now through mid-October.

EIR June 24, 1994 International 43 BBS Campaign in Germany .

Zepp-LaRouchebrin gs realityto election by Ortrun Cramer

The victory of Gennany's main governing party, the Chris­ tian Democratic Union, in the June 12 European Parliament election, was a pyrrhic one indeed. Chancellor Helmut Kohl's party should be alanned about the fact that only 62% of the Gennanelectorate went to vote (a very low turnoutby Gennan standards), and of those, more than 8 million voted for parties such as the Greens, the fonner communist PDS , the right-wing Republikaner, or various kooky New Age groups (see preceding article). Yet in this political environment, the voice of Helga Zepp-LaRouche and the Civil Rights Movement Solidarity (BBS) which she heads, introduced a much-needed dose of reality. Although the party's vote total was small (less than Helga Zepp-LaRouche, leader of the Civil Rights Movement Solidarity: "We are the partyof the fu ture. " 1 %), its impact was larger than the statistics would indicate. Four times, Mrs. LaRouche, the wife of U.S. statesman Lyndon LaRouche, appeared on Gennannational television presentations in favorable articles, with headlines like "Faith spots, where she addressed the reality of an immediate, un­ in Idea of Freedom" (Zwickauer Tagblatt) or "The Fight Has stoppable financial collapse in Gennany: "Not only do we Not Yet Ended" (Osterholzer Kreisblatt). findourselves in a global economic crisis, as we have warned � Besides appealing to Gennan voters to learn from the for 20 years, but the final collapse of the financial system struggle of African-Americans for the right to vote, and not associated with the IMF [International Monetary Fund] and to throw away this precious instrument of policy-shaping, World Bank, has started." And further: "Speculation instead Mrs. Robinson supported the BBS's campaign to stop the of production: This incompetent monetary economics has not United Nations depopulation conference, planned to take only taken millions of work places, but the speculation has place in Cairo this September. This issue was the subject of turned into a cancer, which is killing the patient-the real a press conference held in Bonn on June 6, addressed by Mrs . economy." LaRouche, Mrs. Robinson, and Moscow professor Dr. Taras - She reiterated the principal slogan of the BBS, "Wir ha­ Muranivsky. ben das Patentrezept!"-"We have the cure-all prescrip­ Professor Muranivsky and Moscow civil rights activist tion!" This slogan has created considerable tunnoil in the Viktor Kuzin had been speaking at campaign events of the political arena, since all other parties and leading industry BBS, presenting the disastrous economic situation in Russia, spokesmen for years have hysterically denied that there is and calling for implementation of Lyndon LaRouche's Paris­ any such solution to the crisis. Vienna-Berlin "Productive Triangle" program for economic development of eastern Europe and the states of the fonner An international focus Soviet Union. On a poster which was put up on billboards in major cities The next battleground will be the campaign for the Bun­ . and on smaller posters all over the ·country, Mrs. LaRouche destag, the national parliament, with election day on Oct. appeared with African-American civil rights veteran Amelia 16. The BBS is now petitioning to run slates of candidates in BoyntonRobinson. Mrs. Robinson came to Gennanyto cam­ at feast eight states in Gennany, and will continue to confront paign fof almost six weeks, to support the party. Her presence the public with the looming international financial crash. In was another element of reality injected into the elections, her TV appearances, Mrs . LaRouche expressed confidence reflected in the fact that most her campaign events were that this campaign will eventually succeed: "Vote for us; we well-attended, and several regional newspapers covered her are the party of the future ."

44 International EIR June 24, 1994 ing swindled a business partner of some 11 million francs, France he now faces charges as head of the Marseillefootball team for corruption of players in an attempt to rig the game, as well as for embezzlement. Why did he get 12.5% of the vote? Aftermonths of media lynching, Tapie comes across as a man tracked down by a system which is more and more hated by the population. An Italian-style Tapie, a kind of charismatic street fighter who has been fend­ ing off all attacks with incredible stamina, has become a kind shakeup of thesys tem offolk hero among workers, employees, and youth, drawing on sections of the population who no longer feel represented by the Socialist Party. by Christine Bierre The Other Europe The results in France of the June 12 European Parliament The 12.5% attained by The Other Europe slate was also election indicate a great potential for rapid devolution of the very surprising. This was not a protest vote, but a very delib­ French political scene on the model of Italy, where all the erate vote against the Maastricht Treaty that created the Euro­ traditional parties ofthe postwar period have vanished, virtu­ pean Union. De Villiers and Goldsmith benefittedfrom un­ ally overnight. In France, the two main established political der-the-table support from the anti-Maastricht Gaullists, groupings, the UDF/RPR right-wing majority and the Social­ such as Interior Minister Charles Pasqua, President of the ist Party, both ended up with very poor results, while two National Assembly Philippe Seguin, aqd the head of the RPR dissident groups, BernardTapie 's Radical Energy List and parliamentary group, Bernard Pons. From that standpoint, The Other Europe of Philippe de Villiers and Sir Jimmy the de Villiers vote is an expression of significant and well­ Goldsmith, made considerable breakthroughs. justifieddiscontent with a supranational Europe. If the UDF/RPR is the absolute winner, with 25.5% of The problem, however, comes in with the personalities the vote, one can hardly call that a victory, especially since of both de Villiers and Goldsmith, as well as with the number­ that electoral alliance had been credited by public opinion four man on the slate, "anti-corruptiOlIt"ju dge Thierry Jean polls with 45% at the beginning of the race. The Socialist Pierre, a trio which has the potentialof �estroying the French Party faired even worse: Their 14.5% is the most catastrophic RepUblic. result they have ever gotten, and there is a real question now Goldsmith, a high-flying financier'wi th dual citizenship whether Michel Rocard will be able to remain chairman of in Britain and France, became popular by striking a very the party. sensitive chord in France: the fightaMinst supranational in­ If those parties deserve to be the victims of a citizenry stitutions such as the General Agredment on Tariffs and more and more fed up with their inability to deal with the Trade (GAIT) and the Maastricht Treaty. On this basis, he economic crisis, the new forces appearing on the scene are first won over Rural Coordination, a Iitational movement of even worse than what they are replacing. farmers which had strongly campaigned against GAIT, and later on, Philippe de Villiers, a Republiban Party deputy from Bernard Tapie, a corrupt 'folk hero' the Vendee, a strongly Catholic region, who was well known Bernard Tapie is a variation on the Italian phenomenon as a champion of "values." of Silvio Berlusconi. Like the new Italian prime minister, The solutions proposed by GoldsPlith's group to these Tapie is officiallya "success story ," having gone from child­ urgent problems, however, are totally I wrong. They want to hood in France's poor suburbs to become a successful busi­ create a Fortress Europe and a Fortres$ France, stopping the nessman. Tapie made his political career over the last few flow of immigration. This, they claim hypocritically, would years, promoted by the Socialist Party. Two years ago, he be sufficient to stop the drug plague---yet they know very held the post of Minister of the City in the national govern­ well that it is banks and such financiall interests in the North ment, some six months before he had to resign in haste, just which benefit the most from that traffic. prior to his firstindictment for corruption. Even worse is the bucolic oligarchism of both Goldsmith Tapie is one of the dirtiest individuals to have hit the and de Villiers. In a recent book, The Trap, Goldsmith pro­ political scene in a long time. He made his career in the 1970s poses a New Age dream. He attacks science and technology, as an asset stripper of the worst sort, buying up bankrupt in particular nuclear power, as the soUrce of evil in society, companies for nothing, laying off personnel, restructuring and calls instead for a "society rich in -Villages, in artisans, in and selling them for a bundle. Over the last couple of years, a multitude of small and medium comllanies . . . founded on Tapie has had to face up to several indictments and legal local development rather than on urban concentration," and investigations. After a first indictment accusing him of hav- developing a "non-intensive agriculture." Sir Jimmy's para-

EIR June 24, 1994 International 45 dise comes with its own brand of spirituality and sacred few years. rituals, namely those of the Amerindian religions, and explic­ It was he who leaked to the press his investigations on itly opposes the Judeo-Christian religions and the mandate the Pelat affair, one of the main reasons for the suicide of of Genesis, that man should be fruitful, multiply, and subdue former Prime Minister Pierre Beregovoy. Jean Pierre has just the Earth. published a Black Book on Corruption in France, targeting Unfortunately, the bucolic ideology of Sir Jimmy has the two main public works companies, CGE and Lyonnaise found an echo in the worst tendencies of de Villiers's own des Eaux-Dumez, as being responsible for 80% of the politi­ "defense of the soil," and the racist, anti-immigrant mentality cal corruption in the country. No sooner had this been done, typical of those right-wing Catholic circles who joined ranks than the report made the front page of the Wall Streetlournal, with Marshal Petain, the premier of Vichy France, during provoking massive selling out of those companies on the part World War II. Thanks to Sir Jimmy, de Villiers has now of London and New York investors. In the meantime, the become as anti-nuclear as he. City of London was awash with rumors that two officials of those companies were soon to be indicted, a campaign which 'Clean Hands,' but dirty politics was considerably reenforced by the Hollinger Corp. 's Sun­ . As if this cocktail were not bad enough, add to it Judge day Telegraph in London. Thieuy Jean Pierre, who joined the slate with the specific "Will France Be the New Italy?" asked the Sunday Tele­ purpose of using it to launch a "Clean Hands" campaign graph even before the results of the election were known. against illleged corruption in France and in Europe as a France can still avoid such a fate , on condition that the coun­ whole, a10ng the lines of what was done in Italy already, for try is steered, as Gen. Charles de Gaulle once steered it, purposes which had nothing to do with "corruption," but away from a chauvinist "defense of the soil," and is given everything to do with political blackmail. Jean Pierre's hand a mission to bring economic, scientific, and technological is behind some of the most important scandals hitting the progress to the world, and in particular, to the poorer nations government of President Fran�ois Mitterrand over the past of the planet.

offi ces in the northand south pf the country . What is the UNDP Banda, however; insistedon organizing a referendum onthe princi ple ofareturnto multi-partypolitics , in which doing in yourco untIy? the President's grouping garnered only 37% for retaining a one�party system. In his wounded pride, Banda wanted not It turnsout that the United Nations Developme nt Program to prove throughth e re ferendum thathe was capitulat­ (UNDP) has gone into the business of running'eJections ing to internatio nal pressure but to the will of the people. in sovereign countries. Case in £>Oi:nt: Matawi . On May' Eight parties conte sted the May 17 elections with three 1 7, ninety-year-old President Kamuzu Banda stepped pre sidential candidates-Badda of the Malawi Congress dow n fro m office after a 30-year dictatorship . EJ)claved Party; CakufwaChihana , an exiled trade unionist backed and isolated fromthe world, Banda rarl'Malawi as a regi­ by the U.S. AFL-CIO; and 'Bakili Muluzi, imprisoned mented society where the Malawi Congress Party �ej gned secretary general of Banda 's party , who later created the supreme. In 1971, Banda declared himself l1e sident for United Democratic Fro nt. �uluzi, a Muslim from the Life. But the ending of apartheid in Soutll Africa; tQe south , won the elections, andlBandaconceded defeat. extr eme poverty and economic de pende ll£o 'of Malaw i , The election is now being openly used as a feather in andBand a's own deteriorating health, euJmina� in forc ­ the •.c a£ of the UNDP. UNDP ad ministrato r James Gustave ing him to bow to pressurefro m donorco untriesw ho were Speth .,wrote a letter to the Ne w York Times to say that their aid conditioning on the introduction of "democratic ' the Malawi elections show "the bright side of the United " governance anda "free-market economy." Nations /� The UNDP, he said, has "been involved in In stepped the UNDP to dictate the change . In July prac tically aU steps of the elections.. ..The United Na­ 1993, a representative of the UNDP, Australian judge" tions helped organize the Malawi elections, including pro­ Michael Kirby, presided over a constitutional confere n<;e vision of supportf or human rights re forms that have also with financial assistancefr om Britain.A .new constitution fou nd a pl ac e in the cou ntry's new constitution"-which was drawn up, without even the participation of Ml:llawi of course the UNDP wrote! nationals! A "United Nations ElectionAssistanee Secre­ Now, who' s re ally Malawi? tariat" runninr was set up in the capital, Lil()ngw,e, with regional -Lawre nce Eyong-Echaw

46 International EIR June 24, 1994 Andean Report by ManuelHidalgo

Open skies for cocaine nation with the United States and the Peruvians are charging the U.S. with "defecting" from thewar internationalcommunity . . . the pos­ sibility of legalizing the drug trade." on drugs, and with pursuing legalization instead. The most hypocritical arguments against the war on drugs come from those who seek tOI smear its prosecu­ tors with corruption charges, namely the police and defense forces. Such On May 30, the U.S. State Depart­ informed Peru and Colombia of the is the case with Hernando de Soto, ment abruptly announced that it had suspension of its anti-drug coopera­ the advocate of a black market econo­ suspended all its support for the iden­ tion, especially in view of the fact my. It is also the case with the anti­ tification and interception of drug that "the decision was backed by an military Andean Commission of Ju­ planes in Peru and Colombia through argument that we should reject. To rists, which is linked to the "human the withdrawal of U.S. surveillance insinuate that the identification and rights" organiiation Americas planes and radar in those two coun­ interception of drug planes might not Watch. Americas 'Watch gets money tries. Implementation of the new poli­ be in agreement with U.S. and inter­ from international, speculator George cy had already begun on May 1. national law is stunning. . . . A new Soros, who is also a funder of the pro­ The news hit like a bath of ice human right is born: that of the drug legalization Drug i Policy Foundation water on those two countries, which flight. Woe to the country which dares in the United States. One of Americas have relied heavily on the AWACS to ask a narco-plane where it comes Watch's directors fS Peter Ball, who is and radar as the key ingredient in anti­ from, where it is going, and what it also a director of the pro-legalization drug cooperation between the drug­ carries. " and anti-military Ipter-American Dia- producing countries and the leading The State Department has justi­ logue. : drug-consuming country. "This uni­ fied the withdrawal of its anti-drug U.S. Assistant Secretary for Nar­ lateral and inexplicable decision af­ collaboration with the argument that cotics Affairs Rotkrt Gelbard had de­ fects the war against drug traffick­ providing information to a state which clared on April 4,tStill worrisome is ing," said a high-level Colombian might use that intelligence to shoot the fact that Peru' � government is not official the next day. "Every moment down a "civilian aircraft" (carrying trying drug traffi�kers . . . and the that the radars don't operate, the drugs) is in violation of the 1944 Civil continued corruption of the Army in flightsof the drug traffickersincr ease. Aviation Agreement. the [coca-growing] region of the Up­ ...For 30 days, they have been free­ The truth behind this argument, per Huallaga Valley." On May 30, ly coming and going, without any wrote Ricketts, is that "the United Peruvian Armed Forces commander control." States is moving toward the legaliza­ Gen. Nicolas Htrmoza denounced Peru's political leaders and press tion of drugs. The incident of the ra­ such charges as opginating with "the fully agree that Washington's "open dars is nothing more than a link in a real protectors oqhe drug trade ," and skies policy toward the drug trade" long chain. But it is a very important added that "surely they seek to take can only benefit the cartels. Influen­ one, because with it, the entire pro­ away the moral force [of the Armed tial Peruvian journalist Patricio Rick­ gram is now evident to all." Ending Forces] and give , time to the narco­ etts went even further, charging in his this last level of U.S. anti-drug coop­ terrorists to regropp." June 1 column in the daily Expreso eration with the Andean nations also While the military authorities an­ that the United States had "defected" provided one more excuse to the nounced that the War on drugs would from the war on drugs. "After we would-be druglegalizers , who imme­ continue, the Peruvian Congress ap­ have put up with years of accusatory diately surfaced to demand that Peru proved a contrary law on June 2, insolence and minimal participation offi cially abandon its war on drugs. which ratifiesthe �ecriminalization of in the war on drugs, they open the For example, the daily Expreso the "micro-trade": and "personal con­ skies to cocaine," Ricketts bitterly on June 8 editorially proposed that, sumption" of ! drugs. Strangely protested. given that Peru cannot fight drugs sin­ enough, with the exception of the And in a June 3 column, Ricketts glehandedly and that the United Ibero-American Solidarity Move­ described as "unacceptable" the man­ States has deserted the fight, "it were ment and a handf,Uof journalists, no­ ner in which the United States had better to begin to evaluate in coordi- body has protested.

EIR June 24, 1994 International 47 InternationalIntelligence

trand Aristide, a man who is "mentally un­ fought for the liberation of Paris. He was Yeltsin callsfo r stable, declares himself a Marxist, pledges later involved in the Alsace and Gennan cutting Army troops to take away the property of the • wealthy " campaigns. In peacetime, he served as mili­ threatens to extenninate his opponents, and tary commander of the Antilles/Guyana mil­ seeks an alliance with Castro." Military "The Anny should be more active in cutting itary region when de Gaulle started building leader Gen. Raoul Cedras is not the ideal the number of servicemen, I cannot under­ a military-civilian rocket launch site at statesman, but is clearly the lesser evil, in­ stand their hesitation," Russian President Kourou, French Guyana. sisted EI Diario, adding that "more frighten­ Boris Yeltsin declared on June to, in re­ The general was among the firstmilitary ing moral incongruences exist in this dra­ sponse to demands fromthe military that the figures in France to recognize the impor­ ma," such as the United States' readiness to defense budget be increased and that more tance of the Strategic Defense Initiative and smash the Haitian regime, but refusal to take money be allotted to help servicemen who to support LaRouche's SOl concept. At a on other dictatorships, ranging from Cuba are in an increasingly desperate economic time when most French military figures re­ to Egypt. plight. jected the SOl in favor of a dogmatic defense "A military attack on Haiti, like the em­ Yeltsin insisted that "we cannot, society of a nuclear deterrent policy, General Re­ bargo currently ongoing, seems designed to cannot, today maintain a 3 million-strong vault d' Allonnes showed them that Gaull­ send a message to all oflbero-America more Anny." This was the figure from Soviet ism had nothing to do with clinging to old than anything else. The support for Aristide times, but is not necessary in the Russia of doctrines. On the contrary , Gaullism meant is a kind of unwritten support for the extrem­ today, Yeltsin said. Furthennore , he said revolutionizing human practice according to ist movements of the continent, not to fear it is "necessary to cut orders for military new demands placed on it. taking power: Washington will back them When Lyndon LaRouche was thrown in equipment. " come what may .. .. jail as a political prisoner of the Bush admin­ Marshal Yevgeny Shaposhnikov, for­ "Electoral democracy is a means to an istration, the general agreed to head up the mer head of the Community of Independent end: that of preserving the rule of law. If it InternationalCommi ssion on Human Rights States (CIS) defense structure, issued an ar­ does not, democracy becomes a potentially Violations in the United States. ticle warning that the combination of budget fatal masquerade, since elections become cuts and "regionalization" of Russian mili­ the instrument for destroying essential tary operations could lead to an "explosion rights and liberties, as very probably oc­ which can make the Anny unmanageable." curred under Aristide ....No one should Ibero-American leaders As an indication of how serious things forget that Hitler and the Nazis came to pow­ have become, Air Force pilots in the Russia avoidpro- life resolution er through free elections; if the Gennan Far East have yet to receive any pay in 1994, army had overthrown them, the U . S. would according to Sovetsky Sakhalin newspaper, Argentine President Carlos Menem's pro­ have hypothetically come to the Fuhrer's as quoted by the Aerospace Daily. In pro­ posal for a joint statement calling for the defense. The absurdity is clear. " test, the wives of pilots set fires on runways. defense of human life from the moment of Air Force representatives sent out to deal conception, "divided the 21 lbero-Ameri­ with the protesters told them they could sup­ can rulers assembled in Cartagena, Colom­ plement their income with prostitution. In memoryof France's bia at the Fourth Ibero-American Summit" which concluded on June 15, according to Gen. Revault d'All onnes an AFP report published by the Dominican Salvadoran daily Republic daily Hoy . Menem' s proposal was Gen. Jean-Gabriel Revault d' Allonnes, a a responseto the malthusian draft document blasts phony democracy companion of Gen. Charles de Gaulle in the of the U.N.'s Cairo '94 depopulation con­ wartime Resistance and a friend of Lyndon ference. The Salvadoran newspaper El Diario de LaRouche and the political movement asso­ Menem had wanted the statement to be Hoy devoted an editorial in May to drawing ciated with him, passed away at the end of part of the Cartagena declaration. But, "the the conclusion that the "pro-democracy" May and was buried in a military ceremony proposal was rejected by Spain's Prime line used to justify U. S. policy toward Haiti in his hometown of Pagney, France. Minister Felipe Gonzalez, on the basis that is not only immoral and hypocritical, but The general had fought in the Second the laws of his country forbade him from constitutes support for radical movements AnnoredDivisi on of General LeClerc dur­ backing the statement." He was joined by across the continent. ing World War II. He joined the Resistance Cuba's Fidel Castro, "who said that al­ The editorial pointed out that the U.S. in the African campaign and participated though none of the Presidents is opposed to justification for placing an embargo upon later in the Syrian and Fezzan campaigns. the right to life, he could not support the Haiti is to reinstall as President Jean-Ber- He was part of the Nonnandy landing and declaration condemning abortion because it

48 International EIR June 24, 1994 Brifdly

• TEN ASIAN countries agreed at is legal in his country, although he affirmed grown sharply in the past three years, and a secret meeting in May not to inter­ that his government strives to avoid it. " rose 25% to 52 billion yuan last year. fere in each other's problems with Taking the prize for cowardice, Portu­ However, with the devaluation of the separatist groups, said Jose Almonte, gal's Prime Minister Mario Soares urged yuan, in international terms that means that head of the National Intelligence Co­ that the subject "be left in the hands of the official Chinese military spending is only $6 ordinating Agency in the Philippines, foreign ministers, for them to deal with it at billion-the same as it was in 1992 in dollar according to Reuters . He said they the upcoming Cairo conference ." Colom­ terms. That compares with official figures also talked about creating a regional bia's President Cesar Gaviria, the host of that year of $300 billion for the United common market. The countries are the summit and incoming secretary general States, with less than one-quarter ofthe Chi­ Indonesia, the Philippines, Malay­ of the Organization of American States, nese population; $275 billion for the Com­ sia, Singapore , Thailand, Brunei, came up with a compromise plan for draft­ munity of Independent States; and $30 bil­ Vietnam, Burma, Laos, and Cam­ ing a separate document, so that those lion for Japan, which does not officially bodia. against abortion could sign it, without em­ have an army but only "self-defense" forces. barrassing the others. China's Army has 3 million soldiers, mean­ • FORMER U.N. Secretary Gen­ ing that expenditure per soldier is minus­ eral Javier Perez de Cuellar has de­ cule. However, eltpensive areas , including clared that he will be a presidential research and development and pensions, are candidate in Peru's 1995 elections. China's Jiang names not included in the official expenditure In a private meeting in Paris, he de­ figures. 19 new generals termined the composition of his pres­ idential and parliamentary slates, The Chinese Communist Party's Central whose members come from the ranks Military Commission, chaired by head of of the human rights lobby, druglegal­ state and Communist Party chief Jiang Zem­ Arafa t closes PLO ization advocates, and narco-terrorist ing, has raised 19 officers to the rank of sympathizers. general, in the biggest promotion since the offices in Tunis People's Liberation Army restored military • SWEDEN on June 7 became the ranks in 1988. The number of generals rose The beginning of a new era: Palestine Liber­ third Scandinavian nation to legalize from 23 to 42. . ation Organization Chairman Yasser Arafat marriage between homosexual cou­ The move shows "the political determi­ has ordered the formal closing of PLO head­ ples. The Swedish Riksdag (parlia­ nation to bind the Army to the Communist quarters in Tunis. The move is seen as prep­ ment) voted 171-141 , with five ab­ Party , and that would indicate that Deng aration for his return to Jericho and the for­ stentions , to accept the Registered Xiaoping is not very well," said a European mal establishment of the Palestinian Partnership Laws. Denmark legal­ military expert in Beijing quoted by AFP. Authority in Gaza and Jericho. ized homosexual marriages in 1989, In his speech, Jiang called on Army The move coincides with the announce­ and Norway did so in 1993. leaders to study the thought of Deng Xiaop­ ment that international donors will release ing and "apply and uphold the party line to $42 million to the Palestinian Authority for • IRAQ, "being one of the most tfie letter." Jiang, Deng's successor appar­ the payment of startup costs and operating potent Arab countries, must be rein­ ent, recently made a statement justifying the expenses of the self-governing authority . tegrated into the world community," Army's crushing of the 1989 pro-democra­ This announcement was made in Paris, said Hans Stercken, chairman of the cy movement. where the donors' committee, chaired by German parliament's foreign rela­ Seven commanders of military regions Jan Egeland, Norway 's deputy foreign min­ tions committee, in a radio interview and eight political commissars from four of ister, met with the PLO . Nebil Shaath, who on June 9 afterreturning from talks in the same regions are among the new gener­ headed the PLO delegation, said the out­ Baghdad. Stercken met with Saddam als, which makes the promotion more re­ come was "better than expected" and that he Hussein and other Iraqi leaders. markable in terms of the posts held, than,the hoped to see another $35 million released in total number of men promoted. July. Uris Savir, a senior Israeli Foreign • TAJIKISTAN'S Deputy De­ According to a new report by the Lon­ Ministry official who was also on hand, told fense Minister Ramazan Radjabov don International Institute of Strategic Stud­ the press that Israel "believes the Palestinian was assassinated on June 15, along ies (IISS), China's total military expendi­ side has created the necessary conditions for with five soldiers travelling with him, ture is now the third largest in the world, if progress." He added, "We need the eco­ when their car was ambushed by Is­ both unofficialand officialfigures are count­ nomic ingredient to make the Palestinian lamist guerrillas. ed. Official Chinese military spending has Authority a success."

EIR June 24, 1994 International 49 �TIillStrategic Studies

Terrorist upsurge threatens. entire WesternHemis phere

by Dennis Small

Over the next four months between now and mid-October, a But at the same time, it may come as a shock to some tidal wave of armed uprisings, ethnic chaos, and other forms readers that the U.S. State Department has adopted a specific of civil war is slated to sweep across the continent of Ibero­ policy of backing the Ibero-American revolts and armedin­ America. Unlike the Marxist guerrilla revolts of the 1960s surrections. The State Department is doing so in the name of and 1970s, this explosion will be centered in the largest defending its own self-serving definition of "human rights" nations in the region-Mexico, Brazil, Venezuela, and pos­ and "democracy." This insane policy agenda was foisted sibly Argentina-and will involve foreign-controlled indi­ on the Clinton administration by British intelligence and its genist and other peasant populations, in the main. It will Washington offshoots, such as the Inter-American Dialogue, resemble the bloody rampages of Peru's Shining Path narco­ the Washington-based bankers' lobby which favors drug le­ terrorists in their heyday of the early 1990s, only this time galization and other New Age atrocities. Their broader objec­ spread across the entire continent. tive is to spawn and use the chaos to bring about a paradigm This probable upsurge poses a major national security shift in Ibero-America, away from its traditional Catholic threat to the United States, both because of its proximity to outlook and in favor of a more "modem," New Age cultural the U.S. border, and because it will sink the entire hemi­ matrix based on the degraded premises of the French Enlight­ sphere into something akin to the horror now visited upon enment. They are in the process of cementing such a para­ Bosnia. No house is safe when the entire neighborhood is digm shift in new constitutions drawn up especially for this going up in flames. purpose, with the 1991 Colombian Constitution the model The groundwork for this planned, imminent explosion now being held up for emulation in Mexico, Venezuela, was laid by a decade of financialgenocide at the hands of the Argentina, Uruguay, and elsewhere. International Monetary Fund and the area's creditor banks, In the eyes of the proponents of this bankers' new world which has leftthe Ibero-American popUlation exhausted and order, the urgency of achieving this transformationin funda­ desperate. Over that time period, banks and other financial mental values is underlined by the current popular outpouring institutions have looted well over a half-trillion dollars worth of Ibero-American hostility to the global depopulation policy of tangible wealth from the region. Yet despite the fact that which is to be featuredat the planned United Nations Interna­ most of that wealth was exported supposedly to pay offIbero­ tional Conference on Population and Development in Cairo, America's foreign debt, the debt actually grew instead by Egypt. 100% from 1980 to 1993, from $257 billion to $5 13 billion. This C'ancerous debt structure has now metastasized into It all started with Chiapas new forms of derivatives and other speculation, which has The upcoming wave of armed narco-terrorism was irre­ only accelerated the looting, and hastened the onset of an versibly set into motion by the Jan. 1, 1994 Zapatista (EZLN) explosion. uprising in Chiapas, Mexico, and the response to it from

50 Strategic Studies EIR June 24, 1994 • Washington policy circles. The Chiapas revolt changed the Add to this the current U. S. policy fiasco around Haiti. continent of Ibero-America permanently. Here we have the case ofthe United States government, again On that day, British intelligence gave the green light on the urging of the Inter-American �ialogue crowd, among for their assets in anthropological and Catholic Theology others, starving a tiny nation into subplission and threatening of Liberation networks to launch an armed uprising in the to go to war against it, in order to impose a hated, narco­ southern stateof Chiapas. Although the Mexican government terrorist member of the Sao Paulo iForum-Jean-Bertrand and armed forces could have easily put down the revolt, as Aristide-as its President, all in the name of "democracy." was their initial reaction, before the week was out, a heavy­ This, too, is being watched wi.h smug satisfaction by handed international pressure campaign coming from Wall the Sao Paulo Forum's candidates for President in Mexico Street, the U.S. State Department, and diverse human rights (Cuauhtemoc Cardenas of the PRD), Brazil ("Lula" da Silva organizations, forced the Mexican government to back off, of the PT), and elsewhere. "If the State Department will go and instead to promote a policy of negotiation and dialogue­ to bat for Aristide," they are thinking, "they'll do it for me, with a bunch of armed, hooded outlaws! too. " The evidence of State Department support for the Zapa­ If the State Department additionally proceeds to pressure tistas is incontrovertible. As early as Jan. 15, Assistant Secre­ other Ibero-American nations to deploy their military to join tary of State for Inter-American Affairs Alexander Watson in a multinational invasion of Haiti, or even a post-invasion admitted that Washington had preemptively threatened the "peace-keeping force," it will irreversiblyshatter those coun­ Mexican government about purported violations of EZLN tries' armed forces. It is a little-known but crucial fact, that human rights. "It was not reacting to information. It was the Feb. 4, 1992 attempted coup agaiJnstthe corrupt President preemptive," Watson bragged. And on March 10, Richard Carlos Andres Perez in Venezuela Was triggered principally Feinberg, a former president of the Inter-American Dialogue by his attempt to deploy the Venezuelan militaryto reinstate currentlyon loan to the National Security Council as its Latin his pal Aristide in Haiti. American director, confided that "the North American Free And when the Ibero-American militaries are shattered Trade Accord [NAFTA, among the United States, Mexico, beyond recognition, then who will contain the coming armed and Canada] is too young to have affected [the insurgents] in uprisings? Will the British propose that Clinton send the Chiapas, but some of them are probably alive today because Marines to half a dozen Ibero-American countries simultane­ of its existence." Curiously, this exact formulation was used ously? in early June by EZLN Sub-commander Marcos, in an inter­ view with VanityFair magazine, when he explained that the Coming chaos Mexican military was in a position several times during 1993 As we document in the articles that follow, the volcanic to wipe out his narco-terroristarmy , but that the government rumblings in Mexico are mirrored by developments in Brazil of President Carlos Salinas de Gortari had pulled back each and Venezuela, in particular. In the liormer, a radical terrorist time for fear of adversely affecting the imminent U.S. con­ grouping called the Landless Movement, or the MST, has gressional vote on NAFTA. You could say, said Marcos, broken onto the national politicall landscape over recent that NAFTA saved the EZLN. weeks, and threatens to spread violent land seizures across Under this internationalmantle of protection, the Zapatis­ the country as part of the presidential campaign of the Sao tas have not used the hiatus in the fightingsin ce mid-January Paulo Forum's Luis Inacio "Lui a" da Silva. "Lula" is cur­ to negotiate and come to terms with the government; in fact, rently the frontrunner for the October presidential elections they just formally rejected a peace treaty which was the result in Brazil, and he recently traveled to the United States, where of almost five months of negotiations. Instead, they have he received the blessing both of the State Department and of used the opportunity to consolidate their positions, further the Wall Street banking crowd. arm themselves, and spread their legions to other parts of Washington may think that it can control "Lula" and his Mexico, where they are reportedlynow receiving substantial movement, and that his leftistrhetoric will be only that; but quantities of modem weapons, including AK-47 assault they are seriously missing the point. Even if the bankers do rifles. The stage is now set for a massive, Mexico-wide out­ manage to control "Lula," the fact is that "Lula" does not break of narco-terroristviolence in the days leading up to the control the PT, the MST, and so on. At best, he may control August presidential elections, and immediately afterwards. 10% of the party and related apparatus. The rest is run by the Moreover, Mexico's forced capitulation to the EZLN's Theology of Liberation fanatics wh� abound in the Brazilian blackmail has sent a message across the continent: Armed Catholic Church, under the control of such individuals as insurrection works, and Washington will back you up. This Cardinal Evaristo Arnsof Sao Paulo, who is a close ally and message is now being read loud and clear, especially by the collaborator of Mexico's Zapatista Bishop Samuel Ruiz. And parties which make up the Sao Paulo Forum, an alliance of like Ruiz, they fully intend to sink Brazil and the entirety leftist and narco-terrorist parties from across Ibero-America of Ibero-America into indigenist, ethnic civil war over the which was set up with Fidel Castro's sponsorship in 1990. months immediately ahead.

EIR June 24, 1994 Strategic Studies 51 those of the Zapatistas have been observed there. According an Agence France Presse news wire, "in the first days of February, an entire guerrilla training camp was detected in Will the Zapatistas Guerrero, where there were more than 20,000 automatic weapons, probably AK-47 rifles." go Mexico-wide? To evaluate the potential for an outbreak of "Zapatismo" on a national scale in the coming months, it must be asked how the Zapatistas managed to get arms for the firstround of by Carlos Cota Meza their uprising. An article by Manuel Mejido, published in the Mexican daily El Sol de Mexico in early February, provides Allegations in the Mexican press about large-scale arms some useful information on this. Using a simple arithmetic smuggling point to an international plot to create a bloody calculation, Mejido estimated that the EZLN struggle has cost civil war that will carve up Mexico. around $12 million so far. For starters, there are an estimated The allegations appeared in the June 1 issue of the daily 2,000 guerrillas who are heavily armed, each outfitted with newspaper El Financiero. Citing governmentsource s, the pa­ an AK-47 (which on the black market sells for about $2,5(0), per reported that Memorandum No. 6454, dated Feb. 8, 1994, and an average of four grenades (each worth about $3(0). from the Mexican Departmentof Defense to the Department Thus, one combatant is equipped at a cost of $3,700,meaning of Interior, indicated that "a reliable source" had alerted the that the 2,000 heavily armed men need about $7.4 millon to Mexican military attache in Washington to an "imminent ar­ equip them. Mejido makes a rough calculation that an addi­ rival of 2,000 AK-47 assault rifles, which would be sent from tional $6 million was spent on munitions for the EZLN, which that country into national territory." The shipment, according adds up to a total of over $12 million. to the memorandum, was presumably part of "a larger ship­ Add to this the cost of feeding a total EZLN army of ment of nearly 20,000 of this kind of weapon, destined for 12,000 or so, and you are talking about another $1 million the state of Guerrero." The report notes cryptically that in per month. Guerrero, "some events have occurred which allow us to pre­ Which raises the obvious question: Where are the Zapati­ sume the possibility that drug trafficking and other criminal stas getting all this money from? Could it be from drugtraf­ activities are associated with the nascent subversion." ficking?Even the U.S. State Department is looking into that The news provoked an uproar. On June 2, the Department possibility, according to Crescencio Arcos, Assistant Secre­ of Defense issued a bulletin stating that ever since the early tary for Narcotics, Terrorismand InternationalCrime . January uprising in the southern state of Chiapas, investiga­ tions into the illegal introduction of weapons into the country A Zapatista 'Contra' had increased. All such information on arms trafficking is If that's how things were in Chiapas in February, today thoroughly investigated, the Defense Department explained, they are worse. The bishop of Tuxtla Gutierrez in Chiapas, adding that "on various occasions the investigation, as in this Felipe Aguirre Franco, said in an interviewwi th the newspa­ case, has turnedup nothing." per El Heraldo on May 29 that official Army spokesmen Despite the officialdenial on this specificcase , an opera­ reckon there are more than 10,000in surgents in the Lacando­ tion is indeed afoot to spark armed insurrections over a latge na jungle of Chiapas: "3,000 without arms or in the training part of the Mexican territory. Although the armed actions of stage, 7,000 equipped with conventional arms, and 2,000 the Zapatista National Liberation Army (EZLN) were sus­ with sophisticated, high-powered weapons." The prelate also pended in mid-January, when the government of Mexico charged that the creators of Zapatismo in Chiapas "hide beind buckled under to international pressure and agreed to negoti­ the various human rights commissions-some of them, not ate with the hooded rebels, the Zapatistas and their narco­ all-and the non-governmental organizations, the NGOs, terrorist allies have exploited the lull to extend and organize which were there in Los Altos de Chiapas mountains before their influence nationally, to arm themselves, and to prepare Dec. 31." actions for the upcoming election period in Mexico. Their The alleged shipment of another 2,000 AK-47s, and of a leader, Sub-commander Marcos, threatened in a recent inter­ possible lot of 20,000,would indicate that the problem has view that if there is "fraud" in the presidential elections this worsened by an order of magnitude-with hair-raising con­ August, "the armed struggle" will expand "to other states of sequences for Mexico. Such an arms-smuggling operation the country. " involves millions of dollars and the shipment of several tons The state of Guerrero (see map) is particularly worri­ of cargo, which would have to originate from one of the new some. Historically it has been plagued by drug trafficking, European republics, or from China, Vietnam, Korea, Iran, and also by guerrilla activities, such as the cases of Lucio Cuba, Egypt, or Israel, among others, and then shipped from Cabanas and Genaro Vasquez in the 1960s and 1970s. More some European port to the United States, and from there to recently, well-organized narco-terrorist activities similar to Mexico.

52 Strategic Studies EIR June 24, 1994 The narcoterrorist weapons supply network in Mexico

UNITED STATES o Miles 300

San Antonio � Entry points for what is known as weapons "micro-contraband: Usually, the weapons seized from drug runners are "legally" registered in some U.S. armory. The weapons used to murder Cardinal Posadas in Guadalajara, and the gun used by the assassin(s) of PRI candidate Colosio in Tijuana, as well as others, were registered in Califomia.

� In the state of Sinaloa, drug traffickers recently attacked the police from a Bell- 12 helicopter. Press reports suggest that the helicopter could have been smug­ gled into Mexico from Belize, which is a center for contraband of various-calibre weapons as well as sophisticated communications equipment.

Eduardo Valle, an expert and formerly anti-drug adviser detected and seized a cargo of R-15 rifles and ammunition, to ex-attorney general Jorge Carpizo, noted that smuggling plus various types of grenades and mortars, coming from on that scale would have to involve "the large international Czechoslovakia. It was said at the time that the probable arms-trafficking networks directly linked to intelligence itinerary was from Veracruz on the Gulf of Mexico to Manza­ agencies and, of course, in tum to the major drug-trafficking nillo on the Pacific coast. From there, they would be re­ crime multinationals." shipped to some port in Nicaragua as a part of the "equip­ Valle wondered if this quantity of weapons would be ment" being given to the Contra forces there. distributed immediately in Veracruz, Michoacan, Mexico None of this has ever been clarified. As CIA contract State, Oaxaca, and Nayarit, or if they would instead be ware­ agent Terry Reed exposes in his book Compromised, Lt. Col. housed for a while in the mountains of Puebla or in the Oliver North's gang operated for at least two years (1986- ranches of the northern desert around San Luis PotosI. In all 87) in Mexico, using the Guadalajara-to-Manzanillo corridor of these regions, it is known that drug-trafficking bands, as the base for trqnsferring weapons and drugs in his famous kidnapping rings, Zapatista-style movements, and NGOs co­ Iran-Contra operations. exist-ali seeking the destruction of the Mexican state. Events clearly show that we are not looking at so-called An operation of such magnitude has not been unleashed "micro-smuggling" of arms, but rather at the operations of in Mexico since the end of 1988, when the Armed Forces one or more new Oliver Norths.

EIR June 24, 1994 Strategic Studies 53 A volcano of political violence is set to erupt in Brazil by Silvia Palacios and Lorenzo Carrasco

This past May, Luis Inacio "Lula" da Silva, the presidential tion, etc. candidate of the neo-communist Workers Party (PT) and one This terrorist apparatus now threatens to spread through of the coordinators of the Sao Paulo Forum, visited Washing­ the length and breadth of the country. According to a confi­ ton as the likely victor of the presidential election upcoming dential report of the SAE, referredlto by the daily lornal do in October. As he was being feted by myriad creditor bankers Commercio of May 20, the matte� is considered a question and other establishment spokesmen, back in Brazil, a pro­ of "national security," given that ill1minentnew invasions are terrorist wing of the PT, the so-called Landless Movement, expected to spread the agrarian conflict, where "12 million was unleashing. a well-coordinated nationwide wave of mili­ landless may adopt violence as a political method," and there tary-style land ocpupations, under the motto: "Cry for the will be insufficient forces of law and order to contain them. Earth." SAE head Admiral Flores has acknowledged that the mobili­ The Landless Movement's violent actions are causing zation capability of the Landless i� greater, in certain cases, particular worry in national security sectors in Brazil, since than that of the Brazilian Army. they prove that this organization, known by its initials MST, Worse still, the visible machinery of the MST is part of a is now emerging as an armed movement similar to Peru's much larger semi-invisible apparatus which overlaps with Shining Path or the Zapatistas in Mexico. According to re­ the PT, with the UnifiedWorkers C;onfederation (CUT), and ports from Brazil's Strategic Affairs Secretariat (SAE), ex­ especially with the networks of the pastoral Movement of the cerpted in the June 2 and 4 issues of the newspaper 0 Estado Land (CPT) and of the Theology df Liberation, who are the de Sao Paulo. the MST "is a paramilitary organization which true initiators and creators of the MST. possesses guerrilla training centers" in various parts of the country. "The reports indicate," continues 0 Estado. "that Roots of the MST in their training, the Landless rely on the collaboration of The MST was created about 1� years ago by the CPT. representatives from Germany, Chile. Nicaragua, Cuba, and Since then, it has succeeded id settling approximately the former Soviet Union. It also says that the MST is tied to 1 30,000families on land which they occupied. These families peasant organizations in Latin America and the Caribbean, remain linked to the organization, �d its successes are always besides maintaining links with Chile, Uruguay, EI Salvador, obtained through carefully planned!and often violent land oc­ and Nicaragua." cupations. To that end, it has built up an intelligence infra­ ' o Estado reports that "the document compares the MST structure which enables it to know every detail, down to the to a paramilitary organization, with a primer on how to invade legal status of each property, thereby anticipating possible tracts of land, resist [effortsto eject them] , and produce in the responses by the owners and the government, etc. For exam­ invaded zone in order to guarantee holding on to the land. The pie, at the present time, it holds same 91 occupied encamp­ Executive Intelligence Service is specifically exposing the ex­ ments nationwide, accommodating about 20,000 families istence of two guerrilla training camps, one in Pernambuco, who are ensnared by the hope of furtherland appropriations. for invading the northeast region, and another in Santa Catari­ In the words of one ofthe MST's most important leaders, na, for those of the south." Gilmar Mauro, they are doing everything to "prepare the It is also reported that at one of the Landless encampments, hearts and minds to resist the police. That is why we prepare the military police of Sao Paulo found "a booklet dated August them for at least one year of hard living before getting the 1987, on revolutionary methods of leadership. The text is at­ land." tributed to the Sandinista movement in Nicaragua." The MST traps miserably poor peasants in its nets, by According to the June II issue ofthe magazine Veja . part making the subsistence of their families dependent upon the of the MST leadership was trained by the Cuban Communist land occupations. This turns them .into ideal instruments for Party . In the same report, Veja details the. agenda that the unleashing a virtual caste war-poor against rich, landless MST has distributed among its affiliatesand supporters, with against landed, peasants against farmers-fed by the general­ the following holidays marked: the Cuban Revolution, Karl ized impoverishment that affticts the nation and keeps 60 Marx's birthday, the anniversaries of the deaths of terrorists million Brazilians in a state of extreme misery. Carlos Lamarca and Carlos Marighela, the Russian Revolu- The MST' s potential for insurrection is causing grave con-

54 Strategic Studies EIR June 24, 1994 cern not only because of the fragility of police services, but especially because of the state's flaggingsec urity intelligence capabilities, which were dismantled during the two years of President Collor de Mello's corrupt government, allowing the unchecked proliferation of these subversive groups. Even Collor de Mello's Navy Minister Adm. Mario Cesar Flores, today the head of the Strategic Affairs Secretariat (SAE), joined the ranks of the gullible who parroted the myth of the "end of the Cold War" in order to justify the takedown of the state's intelligence apparatus. The admiral went so far as to propose that Brazil cede its sovereignty to become a part of the global order-a position which led him to establish closer ties with political elements of the Workers Party. It is for this reason that the MST's startling growth took government authorities by surprise, especially the SAE, which is now hurriedly trying to learn to play firemanjus t as the countryside is about to burst into flames.

The MST's godfather The MST's godfather, the Pastoral Movement of the Land (CPT), uses the MST as its political arm. In its capacity Luis lnacio "Lula" da Silva during a visit to Washington. as official agency of the National Bishops Conference of Brazil (CNBB), the CPT cannot directly identify or take sides in conflicts(though the public proclamations of several heir to the British throne. The RLF is part of the Gaia Founda­ Iiberationist bishops are well-known). The CPT supplies po­ tion, which was created to spread the theology of the New litical justification for the MST to dedicate itself to land Age based on the pagan belief in Gaia (Mother Earth), and occupations, with the argument that "the state is the active which counts among its ranks several of the more notorious agent of violence in the countryside ." members of British nobility. The links between the MST and the Theology of Libera­ The CPT and the whole apparatus that surrounds it, is tion are close and obvious. The MST's main offices, for also closely related to London's Catholic Institute for Interna­ instance, are located in a building provided by the Sao Paulo tional Relations (CIIR) , which coordinates operations world­ diocese, under Cardinal Paulo Evaristo Arns, the chaplain wide for the Theology of Liberation. The CIIR was founded of the Ibero-American terrorist network gathered under the in the postwar period, in the same initiative that also launched umbrella of the Sao Paulo Forum. the World Council of Churches, with which it maintains The CPT's membership includes the creme de La creme close ties in the latter's Geneva headquarters . One of the of the Theology of Liberation, such as the Basque bishop of CUR's founders was Lady Barbara Ward Jackson, who is Sao Felix of Araguaia, Don Pedro Casaldaliga, who is close­ known for having introduced the bacillus of pagan environ­ ly linked to the terrorist Central American network controlled mentalism into nominally Catholic circles. Ward is also a by Fidel Castro, whom Casaldaliga calls his "elder brother, prominent member of the International Institute for Environ­ first comrade, Patriarch of the Greater Fatherland," ad nau­ ment and Development (lIED), headed and financed by the seam. Don Casaldaliga is also intimately tied to Mexican multinationals' Robert O. Anderson of Arco and Tiny Row­ Bishop Samuel Ruiz, not only through their mutual love land of Lonrho. The CUR's leaders identify Gustavo Gutier­ affair with Fidel Castro, but also through the methods of the rez (founder of Liberation Theology), Leonardo Boff, and MST, which Don Samuel used to forge the Zapatista National Cardinal Paulo Evaristo Arns as their models. Liberation Army (EZLN) of which he is the unofficial "Co­ In 1992, Cardinal Basil Hume of London, who is part mandante Uno." of the CIIR network, awarded Father Ricardo Rezende, a spokesman of the CPT, the medal of the Anti-Slavery Inter­ British manipulation national (ASI), a group which, under the cloak of fighting Through the CPT, the MST is tied to several international slavery, actually promotes supranational interventions entities which are enemies of Brazil's sovereign interests. In against targeted nations. Founded in 1787 and self-described 1991, the British organization Right Livelihood Foundation as "one of the oldest human rights organizations," the ASI (RLF) gave an "alternative"Nobel Prize to the CPT; the same includes various of Britain's most renowned oligarchical award was given to Brazil's former ecology minister Jose families, such as Wilberforce and Buxton. Lutzemberger-an unbalanced ecologist who is considered This international clique founded the so-called Brazil to be one of the gurus of the equally afflicted Prince Charles, Network, with headquarters in London and Washington, so

EIR June 24, 1994 Strategic Studies 55 Americas announced that the IRDC will finance the cre­ British are caught ation of a computer communications network linking "in­ running terrorism digenous" activists in Brazil, Ecuador, Mexico, Peru, Co­ lombia, Guatemala, and Canada, according to 0 Estado de Sao Paulo of June 5. The computer network is sched­ New evidence documenting the role of British intelligence uled to be operational within four months, and will allow in directing, hands-on, the combined narco-terrorist and Indian separatist activists to coordinate human rights cam­ so-called "indigenous" separatist assault upon the nations paigns, investigations, and joint projects against their re­ ofIbero-America has been uncovered by this news service. spective national governments. The two specificBr itish intelligence operations presented Given the well-documented role of foreign anthropol­ in this package-London's Anti-Slavery International ogists in directing virtually every single "indigenous" sep­ (ASI) involvement with the Brazilian Workers Party's ter­ aratist movement around the globe, the new supranational rorist arm, the Landless Movement, and the Canadian-cen­ computer network clearly represents a potential capability tered indigenous support operation-which threaten the for espionage and destabilization. integrity of several nation-states as well as the hemispheric Canada's IRDC had provided $50,000 for the Second order, bear immediate investigation and action by national Encounter, held in early June in the Amazonjungle village security and intelligence forces in the region. of Poianaua, in Acre, Brazil, organizers reported, and Their goal is not to eliminate slavery or poverty, but they will now finance, set up, and train personnel for the rather to eliminate sovereignty. "Sovereignty, once new computer link-up project. achieved, dies hard," ASI board member Lord Archer of Sandwell complained at the ASI's annual meeting in Sustainable indigenous genocide 1992. But "one battle which is already won is the recogni­ The central organizing role of the IRDC in this net­ tion in principle that the sovereignty of a governmentdoes work demonstrates once again how the international in­ not extend to a right to ignore the international consen­ digenous rights movement is not indigenous at all, but sus." The next step, he said, is to enforce sanctions against rather is financed and run by British intelligence's United governmentsthat step out of line. A former chairman of Nations apparatus, which seeks to deploy native popula­ the Parliamentary Group for World Government and of tions as cannon-fodder in its ongoing war to establish a Amnesty International in Britain, and 12-year member malthusian world dictatorship under the aegis of the Unit­ of the Executive Committee of the Fabian Society, the ed Nations. proletarian Lord Archer exemplifiesthe oligarchs seeking The IRDC, founded by the Canadian Parliament in world government deploying these fraudulent "humani­ 1970 as an official aid agency, functions as the Western tarian" concerns. Hemisphere branch of British intelligence's Institute for Take the case of the most recent operation launched Development Studies (IDS) at Sussex University, the lat­ by the Canadian government's InternationalResearch De­ ter set up in the 1960s as an informal continuation of the velopment Center (IRDC). Organizers of a Second Inter­ old British Colonial Office. Sussex institute founder Paul national Encounter of the First Indigenous Nations of the Streeten, for example, played a leading role in drafting

as to better coordinate the efforts of the leading non-govern­ tional federation to supervise the campaigns to nullify Brazil's mental organizations (NGOs) such as Amnesty International, sovereign control over the Amazon, supposedly because of Survival International, Oxfam, World Wildlife Fund, environmental concerns,but actually for the purpose of seiz­ Greenpeace, and Friends of the Earth. All of these groups ing the Amazon for looting by raw materials multinationals. are determined to limit Brazilian sovereignty through the The Brazilian subsidiary of the Brazil Network is the pretext of environmentalist, indigenist, and human rights Institute of Socio-Economic Studies (INESC), which re­ "causes." In the United States, Brazil Network was founded ceives funding from several international foundations. The with the aid of Franciscan groups, and "its firstgeneral meet­ INESC serves as a lobby for those same international inter­ ing took place in the headquarters of the American Friends ests within the Brazilian Congress, while at the same time Service Committee in Philadelphia, in June 1987," according serving as an information and coordination vehicle for the to its own propaganda. NGOs tied into the Network. On Sept. 30-0ct. 1, 1989, in Sheffield, England, the Bra­ Apart from the international financing of the Anglo­ zil Network and the CIIR jointly sponsored a symposium on American foundations, the CPT, the MST, and the Unified "Amazonia: Whose Environment, Whose Struggle?" The Workers Confederation of the PT all receive abundant funds symposium's declared purpose was to organize an interna- from the Misereor and Caritas foundations.

56 Strategic Studies EIR June 24, 1994 which the mystery of Christ is supplanted by the "mystery of the just-released 1994 U.N. Development Program Gaia," and the Catholic Church is replaced by the "land­ (UNDP) Human Develop ment Report 1994 , which out­ community"-this apparatus celebrat�s its rituals of indoctri­ lines the project for world dictatorship. nation and findsjus tification for acts of violence. Since its founding, the IRDC has played a central role As a part of this , some priest alwa)js seems to be available in the United Nations' international intelligence and con­ in the vicinity ofMST-occupie d tracts; ready to offer a Marx­ trol operations. One of its founders was the former head ist interpretation of the Bible. It is alsO common for the MST of the U.N. Environmental Program (UNEP), raving mal­ ranks to recite verses dedicated to ag*arian reform, some of thusian Maurice Strong, who in 1992 chaired the U.N. them written by Don Casaldaliga, ana others by Frei Betto, Conference on Environment and Development, (Eco '92) compiled in the book Liberation PsdJms and Prayers. The in Rio de Janeiro. Rio '92's concluding document, Uruguayan magazine Tierra Amiga eXjPlained the occupation Agenda 21 , outlined a program to shut down industrial and method: "The settlements have their own schools, and the scientific developmentgloba lly. In 1984, the IRDC set up teachers come from among the settlers. They receive special­ a Third World Network of environmental and anti-devel­ ized information from various NGOs Ilinked to popular edu­ opment non-governmentalorganizations (NGOs), to pres­ cation methods, and apply the pedagqgyof Paulo Freire, the sure national governmentsinto participating in the malthu­ noted author of Pedagogy of the OppTfessed." sian Rio '92 summit; today, the IRDC has been given responsibility by the Canadian governmentfor implement­ Lula's terrorist links ing Agenda 21 globally. The IRDC proudly proclaims that Although the candidate of Theology of Liberation , "Lula" it is dedicated to imposing "sustainable development"-a da Silva, dishonestly denies any link$ between his PT party fraudulent construct which their own publications pro­ and these pro-terrorist movements, i they are evident and clahn was created to eradicate developing nations' com­ many. The MST recently became a part of the so-called Peo­ mitment to "economic growth and prosperity. " ples' Movements Confederation, in which the PT's labor It is only as they can be used to further this agenda that branch, the CUT, also participates. the confederation was the IRDC is interested in the fate of impoverished native founded in 1993 for the purpose of seizJingpower , channelling communities in the Americas. As far as the IRDC is con­ the fury of the most impoverished sectors of the population. cerned, native communities must be kept in miserable The confederation includes a series lof informal groupings backwardness. A recent IRDC publication argued that which constitute the cultural effluviaOf the New Age-femi­ "traditional environmental knowledge (TEK)," that is, nism, indigenism, ecologism, etc.-which are the intended "folk ecology," must be promoted worldwide, because shock troops for bringing "AyatollahiLula" to power. "TEK challenges westernscience 's foundation in the Jud­ Lula's spiritual adviser Frei Betto bad the following to say eo-Christian belief in humanity'S dominance over na­ aboutit: "The peoples' movements beg� to proliferate in Brazil ture," and promoted "shamanism," that is, pagan "ritual starting in 1970. Their strengthtoday is notable, when one sees performances, myths and world views" as a better "politi­ how it is that certain parties succeed i� electing so many con­ cal and religious technique for managing societies." Like­ gressmen and mayors and, even more,i head up the racefor the wise, Indian children should be denied the right to "institu­ presidency of the republic in 1994. Hqwever, those who think tionalized childhood education."-Gretchen Small thereis a politicalparty behindeach movement, arewrong . More frequently, one findsthe churches, thei NGOs." At the same time, the MST acts in coordination with other entities which follow the PT's gendral policy orientation, The bloody Gaia cult without necessarily being an organicl part of the party, such What unites the ancestral British families with the Theol­ as the CPT and the Missionary Council (CIMI). The MST, ogy of Liberation movements, especially the MST, is their together with the CIMI, the CUT, :and other indigenous, shared worship of the pagan Mother Earth goddess. It is black, etc. organizations, also form Partof the "500Years of to Gaia that the biggest propagandist of the Theology of Resistance People's Peasant and Indlan Movement," which Liberation, former priest Leonardo Boff, offers his most fer­ was created to decry the evangelizat�on of America, whose vent allegiance. In the process of becoming a convert to the fifthcentenary was celebrated in 1992. New Age, Boff elaborated an interpretation of his beliefs Thus, the MST's mentors have Placed themselves in the which identifies the "land-community" with Gaia. privileged positionthat, regardlessof Whether Lula wins or los­ For the MST and the CPT, as well as for the innumerable es, the conditions will exist for provokJingsocial conflagrations "base communities" linked to them, the key to their victori­ that could destroy what's left of B�il's fragile institutional ous insurrection lies in their ability to "spiritualize the land." framework. At the same time, the MSrr'sactions prefigure the They view the land as "a mystery" in the religious sense, and likely futuredynamic of a PTgovernm�nt, whereby each sector for them, "to free the land is to create a space for God to act of the party will tend to resolve their internal disputes through in this world." With this thoroughly anti-Christian view-in the violent deployment of their own c�nstituencies.

ElK June 24, 1994 Strategic Studies 57 Left-right pincer is fo rcing Venezuela into civil war by Alejando PeiiaEsclusa

Not since the bloody civil wars of the last century, has Vene­ In a recent two-part interview appearing in the daily Ulti­ zuela been so close to a mass bloodletting. Everything is on mas Noticias of Jan. 31 and Feb. 1, Chavez spoke of Fidel the verge of explosion, and it could happen before the year Castro in the following terms: "I deeply respect the achieve­ is out. ments, especially the social ones, of the Cuban Revolution; The scenario: Venezuela's international creditor banks we may have differences of focus with its leader Fidel Castro pressure President Rafael Caldera's government to bend to . . . but independentof any difference . . . we recognize that the demands of the International Monetary Fund (IMF) and this man made history and represents a reference point in impose austerity. Leftist groups-some of them armed, like America." those behind Col. Hugo Chavez (see box) and the Radical This is no mere courtesy, since Chavez also says in the Cause party-as well as corrupt sectors linked to former interview that "I believe that Marxism as a science-because President Carlos Andres Perez (CAP), organize a "popular it is a science that goes beyond questions of political intent, uprising" to protest the IMF package. The Armed Forces as a means of analyzing reality and prospects for the future­ repress the disorder. A sector of young military officers, continues to be valid, as do all the political currentsthat exist seeing no third option between neo-liberalism ("savage capi­ and have existed throughoutthe centuries." talism") and the Marxists, join the latter, thereby splitting Chavez doesn't hide his sympathies for the Mexican Za­ the Armed Forces. Sectors of the Catholic Church linked to patistas who staged an insurrection this past January in the the Theology of Liberation follow the example of Bishop southern Mexican state of Chiapas: "What is happening in Samuel Ruiz in Chiapas and join the uprising. The country Mexico is a rediscovery of our roots. To return to Zapata is plunged into civil war. is to return to [Venezuelan peasant revolutionary Ezequiel] Zamora, to the roots of America, to Tupac Amaru, to Guai­ The pincer's left arm caipuro, Tamanaco, to the Indians who fought to rescue the On Feb. 4, 1992, all of Venezuela applauded the military lands that belonged to them more than 10,000 years ago." coup headed by Colonel Chavez against the country's most Chavez knows, orought to know, that the "indigenist" move­ despised President, Carlos Andres Perez. Although the coup ments like the Zapatistas are manipulated by forces linked to failed, the pressures continued with the "pots and pans" pro­ British intelligence whose sole purpose is the balkanization test of March 10 and the second failed coup attempt of Nov. of Ibero-America. 27, ending with CAP eventually being booted fromof fice. . In the magazine Zeta of Feb. 1994, Chavez returnsto the But a short time later, Chavez demonstrated that he was issue of the Zapatistas and Chiapas: "Without trying to offer no alternative. In a televised interview from jail with journal­ the ultimate analysis of this development, so important for ist Jose Vicente Rangel, Chavez declared that his model the future of Latin America, I nonetheless findcertain simi­ for political strategic thinking was the Italian communist larities to the Feb. 4, 1992 insurrectionin Venezuela." Cha­ ideologue Antonio Gramsci. As his model for the kind of vez explains that "Saying 'Emiliano Zapata' in Mexico is state he desires, he offered the theories of the Darwinian like saying 'Ezequiel Zamora' in Venezuela, both leaders of sociologist Max Weber, author of the fraudulent tract The agrarian and peasant revolutions. It is thus that an ideology Protestant Ethic and the Sp irit of Capitalism. is no longer a simple system of ideas, but becomes instead Many Chavez well-wishers explained afterwards that the motor that drives the people's action against servitude." Chavez had in fact never read those authors, didn't know what he was talking about, and had only quoted them in order Chavez and Radical Cause to sound erudite. That may well betrue; but Chavez suddenly Chavez's "people's action" is indeed no mere "system of began to appear surrounded by some of the most dangerous ideas." According to EI Nacional's Nov. 13, 1992 issue, Lt. elements of the radical leftand by Castroite ideologues such Raul Alvarez Bracamonte, who stole a cache of weapons as Domingo Alberto Rangel. from a military installation on March 1, 1992, said Qtat"Col .

58 Strategic Studies EIR June 24, 1994 roa constantly repeats that "our inteI1Pretation [of 19th­ Hugo Chavez's century Venezuelan history], which we once again reaf­ firm, coincides with that of Soviet historian Anatoli Shul­ pseudo-Zamora gosky." For Shulgosky, and therefore also for Brito, Zamora's Former Col. Hugo Chavez Frias tells the story that in 1846 uprising in defense of the canoidacy of Leocadio 1975, shortly after he graduated from the Military Acade­ Guzman is the Venezuelan expression of the "struggle of my with the rank of firstlieutenant, "Hunting in the head­ the peasants sent by Pugachov," or the model of Emiliano quarters library [at Fort Tavare], I came upon El Libro Zapata in Mexico. [The Book] . Surely some curious officer had left it there That was a time when in reality, th� intellectual leader among various U.S. military pamphlets and publications of the anti-liberal opposition, Fermin Toro, had already and a few booklets on Marxist-Leninist theory and guerril­ written his brilliant work in which he demonstrated that la tactics. That night, I again read the master [Federico] usury is responsible for all of society'� ills. With his pro­ Brito Figueroa (we had previously read him in the Military posal for a society of solidarity based on the principles of Academy when we studied 'the insurrections of the Negro the social doctrine of the Catholic Church, Toro was the slaves in Venezuela's colonial society'), this time in the antithesis of Guzman. fascinating pages of his The Times of Ezequiel Zamora. For Shulgosky and Brito Figueroa, Venezuela's Fed­ From then on, it became my most important book" (report­ eral War, the bloodiest of the last century after its war of ed in Ultimas Noticias, May 16, 1993). independence, was simply a war b�ween the wealthy Chavez's bigger-than-life image of Zamora is the con­ and the exploited-a class struggle. The truth is that the coction of Brito Figueroa, who is currently an official in FedeFal War' wasn't in defense of feoeralism, but rather the offices of the the mayor of Caracas, Radical Cause was a Jacobin uprising against the Toro's constitutional party member Arist6bulo Isturiz. In reality, Zamora was program. Even Guzman as an old manadmitted that had a rather insignificant figure, molded ideologicallyby Leo­ the Torb's program for the 1859 constitution been called cadio Guzman, the leader of J acobin liberalism in the mid- a "federalist" program, the liberals w(!mld have raised the 19th century. Zamora went on to lead several Jacobin banner of centralism. uprisings, before his death during the Federal War of The first victim of that bloody warwas Zamora him­ 1859-63. self. The tragedy was that the federalist victory brought Brito Figueroa's pseudo-Zamora was one of many Leocadio's son to power, the autocrat Antonio Guzman such socialist -realist figurescreated by Marxists who were Blanco, who made corruption a fOlim of government. being financed by the old Latin America Institute of the From then on, official liberal historiography simply re­ Soviet Academy of Sciences. In his essay Ezequiel Za­ moved all mention of Fermin TorQ's anti-usury pro­ mora and Venezuela's History of Militancy, Brito Figue- gram.-David Ramonet

Hugo Chavez Frias gave the weapons stolen from Fort Tiuna American guerrilla groups also belonjg. The main parties in to Congressman Pablo Medina, of the Radical Cause party." the Forum are all intimately linked to the gigantic armsdepot Alvarez Bracamonte belonged to Chavez's Bolivarian Revo­ discovered in Nicaragua in late 199$, along with detailed lutionary Movement (MBR). plans for kidnappings and other terroristacti ons. According to a military intelligence report published on Rear Adm. Heman Gruber Odreman, leader of the Nov. June 12, 1994 by El Nacional, Chavez began his political 27, 1992 uprising against CAP, wrote in a letter to Chavez activities by putting distance between himself and Radical and published in his book The Milita� Insurrection of Nov. Cause. That separation was, and is, fictitious. Members of 27, 1992: "By the way, Chavez, we are firmly convinced Radical Cause greeted Chavez in Charallave (a town on the that it is inappropriate to arm civilians. Weapons are for outskirts of Caracas), and accompanied him in all of his tour the military." In clear reference to Chavez's project, Gruber activities there. The report adds that "Hugo Chavez Frias reprimanded him: "We cannot adopt extremist or ultra ideas seeks to advance his strategy for power by trying to channel as our own, because we are certain th,.tthey contradict Vene­ all accumulated discontent, especially among the poorest zuelan nature." sectors, into insurrection." Radical Cause belongs to a narco-terrorist organization The pincer's right arm controlled by Fidel Castro, known as the Sao Paulo Forum, On June 1, El Universal reported that Defense Minister to which the Cuban Communist Party and numerous Latin Gen. Rafael Montero Revette told th¢ Defense Commission

EIR June 24, 1994 Strategic Studies 59 of the House of Deputies that "leftist, rightist, and centrist hike in the inflation rate, which can only increase the chances groups are involved in a plan to destabilize the democratic of mass rebellion. In every strike and demonstration, the system." Days earlier, Interior Minister Ram6n Escovar Sa- same complaint can be heard: "There is money for the corrupt 16m had said the same thing, in a veiled reference to CAP ones of Latino, but no money for our petitions." and his network. The former ousted President has every reason to want to Venezuela's 'emerging bankers' destabilize the government. President Caldera's "war cry" Various commentaries in both the national and interna­ has been the fightagainst corruption in Venezuela, and every­ tional press have suggested that the group of bankers who one knows that CAP has been the epicenter of that corruption. enriched themselves under CAP's protection (the so-called Today , CAP is being held in El Junguito prison in Caracas "emerging bankers") and who allied with the centers of inter­ on charges of embezzlement, and he would not look unfavor­ national financial power, are threatening President Caldera ably on a change that would free him from jail and restore with a coup d'etat to force him to embrace CAP's deal with him to political power. the IMF and to avoid or prevent implementation of nationalist The Cisneros Group, closely linked to CAP, also has measures that would protect the economy from disintegration reasons for wanting to destabilize the government. Stemming and chaos. from the governmenttakeover of the Banco Latino, an arrest Banker Jose Alvarez Stelling, partner of "emerging bank­ warrant was issued against Ricardo Cisneros for robbery, er" Orlando Castro (who has been identifiedas Radical Caus­ fraud, and conspiracy. Former bank directors, such as Siro e's principal financier), spoke on June 2 at the conference Febres Cordero and Gustavo G6mez L6pez, have publicly series "How to Have Confidence in Venezuela," organized stated that the real controllers of the bank, as well as the by the Alvarez-owned Consolidated Cultural Center. Alvar­ primary beneficiaries of its soft credits, were the brothers ez complained that the emerging bankers are being blamed Ricardo and Gustavo Cisneros. There is already a popular for the crisis afflicting Venezuela's financial system. "If we petition for the assets of the Cisneros Group to be seized, to respond to the financial crisis by turning the banks and the cover the bank's losses. The Cisneroses fear that Dr. Caldera bankers into the targets of public enmity, confidence in the could order this measure. In early June, Zeta implied that currency will be undermined, causing runs against our re­ Gustavo Cisneros was using his television channel to feed serves which will make the macroeconomic adjustments the the destabilization process. country has ahead of it that much more difficultto carryout ," The Cisneroses are self-declared neoliberals, but they also said Alvarez. That same day, theboliva r, which had already have their connections to the left. EIR 's book Narcotrafico, been dropping in its value against the dollar, fell to 170 to S.A . (the Spanish-language edition of Dope, I nc.), which was the dollar. banned in Venezuela as the result of Gustavo Cisneros's ef­ But what has truly thrown fuel on the fire is the attitude forts, details the links of the Cisneros Group to Fidel Castro. of the international forces linked to the creditor banks and In February, when the Venezuela Labor Party (PLV) , which the IMF. An article written by Richard Freeman and pub­ supports the arguments presented in Narcotrafico S.A., de­ lished by EIR (June 3, 1994, p. 24), documents the efforts nounced Radical Cause for its links to the SiioPaulo Forum, of the internationalbanks to "slam the Venezuelan economy" the leaders of the latter party found refuge with Cisneros's and try to "put Caldera up against the wall." television channel, which they used to attack the PL V. On June 1, Prof. Rudiger Dornbush, adviser to the IMF, Despite his formal ousting from the Democratic Action World Bank, and United Nations, traveled to Venezuela and (AD) party, CAP still controls important sections of the AD, threatened that if President Caldera does not apply the IMF's particularly in the powerful labor sector which is capable of draconian austerity prescriptions, "the crisis will worsen until organizing strikes and demonstrations like those which only the moment is reached in which a [Argentine President Car­ recently rocked Venezuela, and which, leftist provocateurs los] Menem, a [Peruvian President Alberto] Fujimori, or will surely seek to infiltrate and sow chaos and violence. perhaps someone very improbable, will impose stabilization CAP's links to Fidel Castro, who campaigned for CAP in the in the most radical way possible." In other words, if President 1988 elections and was the first to express his support for Caldera doesn't do it, "someone else" will surface to displace CAP after the 1992 coup attempts, is a matter of public the President and impose IMF dictates by force. This is the record. most direct threat that has been issued so far against President Unfortunately, Venezuela's current government has Caldera. Dornbush was invited to address a series of forums committed serious errors which are being used against it. For organized by the Venezuelan-American Chamber of Com­ example, instead of embargoing the assets of the owners of merce (Venancham). Two days later, U.S. Deputy Secretary such collapsed banks as Banco Latino, in order to guarantee of State Strobe Talbott completed Dornbush's threat, saying reimbursement to bank depositors, the government allocated that if the government did not deepen the measures of "eco­ 700 billion bolivars-more than half the national budget­ nomic opening" begun by CAP, the country would fall out­ to bail out those banks. This, in turn, has caused a dramatic side the sphere of U.S. "economic cooperation."

60 Strategic Studies EIR June 24, 1994 Why U.N. plans lor ..ar id government must be stopped

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North candidacyis a test for thena tion

by Ed and Nancy Spannaus

President George Bush's flunkey Oliver North has emerged Texas revelations as the front-runner in the Virginia U.S. Senate elections, North's role in bringing planeloads of cocaine into the following the June 14 Democratic primary and deadline for United States as part of the arms-supply operation to the the filingof independent candidates. The outcome of North's Nicaraguan Contras in the mid-1980s, was never pursued by candidacy will have major consequences for the political Congress or the special prosecutor. But the evidence on the direction of the United States. Can a proven drug-runner, public record is extensive, and devastating. masquerading as a patriot representing "family values," get The most documented source is the Kerry Committee elected to the U.S. Senate? report, released in December 1988. The report concluded The line-up for the Virginia seat begins with incumbent that "there was substantial evidence of drug smuggling Sen. Charles Robb, who won the Democratic primary with through the war zones on the part of the individual Contras, 58% of a dismal 9% of the electorate voting. He is joined Contra pilots, mercenaries who worked with the Contras, by independent candidates from both the Democratic and and the Contra supporters throughout the region." Investiga­ Republican parties: formerGov . L. Douglas Wilder on the tor Jack Blum found that cocaine was brought into the United Democratic side, and former Attorney General Marshall States by the "planeload." Coleman on the Republican side. While Wilder reserved his There are additional sources of information readily avail­ final declaration of candidacy until June 18, he fileddouble able. One is the set of North's notebooks, in the public domain the necessary petition signatures, and is expected to go due to his trial on the more trivial charges of lying to Congress ahead. and receiving illegal gratuities. The other is a whole group of Under these conditions, the section of the Republican individuals in theintelligence community who were involved in Party which nominated North, over the opposition of former the secret government operations, or in covering them up. Reagan budget director James Miller, arguably commands One of these individuals, Celerino "Cele" Castillo, has just the strongest base for any candidate in the state. In addition, gone public. His storyhas been published in a monthly magazine North has a massive national base which has been cultivated with a 1O,OOO-copy circulation, the Texas Observer. Celerino, under the ruse of his "victimization" by the special prosecutor who was the Drug Enforcement Administration's main agent in in the Iran-Contra affair. EI Salvador during the years 1985 to 1991, told authors Dennis But North's popularity could evaporate in a flash if his Bernsteinand Howard Levine that "a huge drug- and gun-smug­ real history as a drug-runner and operative in Bush's secret gling operation . . . was runout of the Ilopango military airport government mafia were publicized. In fact, North felt com­ by the 'North Network' and the CIA." pelled to respond to charges from LaRouche Democrat Nan­ Castillo told journaliststhat he and his agents observed both cy Spannaus, who ran in the Virginia primary, claiming that cocaine and drug money being run out of Ilopango's hangars 4 they were "balderdash." This shows a sensitivity that could and 5-both of which were owned and operated by the CIA and be effectively exploited, if North's opponents were willing North's right-handman , Felix Rodriguez (a.k.a. Max Gomez). to take on his true criminal record. Castillo wrote a memo in February 1989 to the U.S. attache in

62 National EIR June 24, 1994 Guatemala, which identified more than two dozen known drug smugglers who worked out of those hangars. One was Carlos Alberto Amador; another was Walter "Wally" Grasheim, who was documented as a cocaine and arms smuggler. Castillo made more than one effort to inform authorities of the illegal drug-trafficking which he had obselVed. In addition to his written report, he provided verbal reports to the ambassa­ dor to EI Salvador, Edwin Corr; to FBI agent Mike Foster, who was working with Special Prosecutor Lawrence Walsh; and to Vice President George Bush himself. Castillo told the Observer that he spokedirectly to Bush at a cocktail party in Guatemala City on Jan. 14, 1986. After Castillo had detailed North's operation, Bush "shook my hand and he walked away," Castillo said. This is not surprising since, as outlined in National Security Decision Directives 2 and 3, Vice President George Bush was in charge of the secret governmentapparatus which ran the Contra supply operation, and for which White House National Security Council aide Oliver North was the point man. Oliver North, the front-runner in the Virginia senatorial campaign. Have we reached the point that a proven drug-runner Will it be exposed? can be elected to the U.S. Senate? The Texas Observer story was picked up as a front-page item in the Charlottesville, Virginia Daily Progress on June II, and was cited by Virginia's Lt . Gov. Donald Beyer, Jr. crimes, ranging from his drug running, to his illegal activities in a speech that same day. But, otherwise, the exposure of as part of the parallel secret government which was run by North's drug-running has been leftto the LaRouche wing of Vice President Bush. One of the targets of those activities the Democratic Party. was the prosecution of Lyndon LaRouche and his associates, The coverup is coming from both Republicans and Dem­ who vigorously opposed the Contra operation at the time. ocrats. On the Republican side, televangelist Pat Robertson is playing a crucial role in burying North's responsibility Democratic Party values for the drug-running, even as he attempts to use the Contra It will take more than a negative campaign for the Demo­ operation as a weapon against President Clinton. Robertson's cratic Party of Virginia (and nationally) to avoid disintegra­ use of serious moral issues in his pursuit of making money, tion. Democrats came back to the party to elect President has built himself a large following in the nation among many Clinton despite their disgust with the party's agenda for gay citizens who are genuinely appalled by the destruction of rights and other radical anti-family positions. If the Demo­ family values. Revelations about how North embraced com­ crats, including Robb, do not abandon Republican-style eco­ munists, drug-runners, and other advocates of free trade, nomic policies, they are likely to find theirbase eroding even would likely shatter Robertson's efforts on North's behalf. more rapidly. Nor is it at all clear that North himself could remain cool Democratic activists with long memories recall when the in the face of the truth coming out. His history contains party stood for something very different. They remember numerous examples of his going off the deep end under psy­ the Democratic Party of Franklin D. Roosevelt and John F. chological stress. Kennedy, which, for all its faults, stood for government More surprising is that the Democratic Party has yet to action in favor of scientific and industrial progress. Today, pick up on North's involvement in drugs as part of its arsenal the only place they finda continuation of such policies is in against a formidable opponent. Sources have reported to EIR the LaRouche wing of the party. For this reason, certain that Senator Robb will avoid this line of attack altogether. sections of the party which have previously campaigned for Indeed, the senator's public statements have consistently ejecting LaRouche Democrats, are now eager to include the stressed his intention to confront his opponents on various former pariahs-if only to ensure that the necessary ideas of social issues, from "reproductive rights" to "gay rights" and reindustrialization are discussed. more traditional forms of human rights. There is no question but that a realignment of U.S. poli­ The LaRouche wing of the Democratic Party has commit­ tics is under way-as the splits and chaos in Virginia's Senate ted itself to pursue the attack, of course. Candidate Spannaus race dramatize. Whether any of these parties will represent has announced her intention to form a political action com­ the American System values which the nation requires, is mittee that will spearhead the campaign against North's still an open question at this point.

EIR June 24 , 1994 National 63 ties to ARGUS. Bryant becomes the latest member of the "Get LaRouche" task force to be indicted or convicted for criminal ARGUS conduct. On June 3, former Loudoun County Sheriff's Lt. head Bryant Donald L. Moore pleaded guilty to felony charges for his involvement in a 1992 kidnapping of a D.C. woman. Last faces charges year, Galen Kelly, a self-styled "deprogrammer" for the Cult Awareness Network, was convicted and sentenced to A federal grand jury in Washington , D. C. has indicted hunt seven-and-one-half years in prison for his role in the same country millionaire J.c. Herbert Bryant, Jr. of Middleburg, kidnapping. Virginia on charges of impersonating a federal officer, pos­ The indictment stems from an incident in September sessing a hand gun in the District of Columbia without a 1992 when Bryant was stopped in front of the Mayflower license, and making false statements to a federal official. Hotel in Washington, D.C. when Israeli security forces, Bryant, who calls himself a "major general," was the who were protecting visiting Israeli diplomats, called the founder of ARGUS (Armored Response Group U.S.) with police. The police found three 9 mm handguns, a .44 caliber Loudoun County Sheriff John Isom. Through ARGUS, Bry­ handgun, and a .22 caliber handgun in the car. Bryant avoid­ ant purchased military equipment, which he made available ed arrest by telling police he was a special deputy U.S. to the Loudoun County Sheriff's office. Some of this equip­ Marshal. A deputy U.S. Marshal was sent to the scene and ment was used in the notorious Oct. 6, 1986 armed raid in Bryant was released. Leesburg in which an intended assassination of Lyndon H. After learning Bryant had lied to them, D.C. police filed LaRouche was thwarted only at the last moment. Through misdemeanor weapons charges against him but were unable ARGUS, Isom provided Bryant with law enforcement cre­ to extradite him from Virginia to D.C. dentials and access to Sheriff's Department computers and While a fugitive from the D.C. gun charges, Bryant was communications equipment. Bryant, in tum, took Isom and given an award by the Marshals' Association at a dinner in other top brass from the Sheriff's Department on hunting Los Angeles attended by U.S. Marshals head Henry Hudson. trips in Mississippi and feted them at his Middleburg estate. Hudson had previously been the U.S. Attorneyfor the East­ Bryant was also a leader in the U.S. Marshals' Associa­ ern District of Virginia, where he was in charge of the frame­ tion, a private booster group for the U.S. Marshals Service. up prosecution of LaRouche. During that investigation, gov­ At one time, he was given a special deputy Marshal's badge ernmentpr osecutors and investigators under Hudson's direc­ even though he was not a sworn law enforcement officer. tion engaged in illegal "black bag jobs," illegal wire-taps, Bryant was forced to give up his badge afterthe FBI began witness tampering, instigating a fraudulent bankruptcy pro­ investigating the Loudoun County Sheriff' s office and its ceeding, and other violations of the law.

Collaborators of the "Get LaRouche" task fo rce: Virginia hunt countrymoneybags J.C. Herbert Bryant(right) , who is now under fe deral indictment. and Loudoun County. Virginia SheriffJohn Isom. Will lsom's be the next head on the chopping block?

64 National EIR June 24, 1994 Single-payer health care plan is no solution to medical crisis by Linda Everett

Among the plethora of health care reform proposals inundat­ delivery of health care services. Under the plan, 85% of ing Washington, the single-payer, Canadian-style health care health care would be federally financ�d, based mainly on plan is one of the least known. Originally proposed by Rep. revenues from an 8.4% payroll tax on �mployers with more Jim McDermott (D-Wash.)-and Paul D. Wellstone (D­ than 75 full-time employees earning more than $24,000 a Minn.) in the Senate-H.R. 1200 has over 91 co-sponsors year, a 4% payroll tax on employers with less than 75 full­ in the House. A slightly altered version (H.R. 3960) was time employees earning less than $24,000 a year, a 2.1 % introduced into the House Education and Labor subcommit­ employee payroll tax, a 2.1 % non-wage/non-salary income tee on Labor Management by Rep. George Miller (D-Calif.) tax, a $2 per pack tax on cigarettes, and a 50% excise tax on in March. The bill would replace the health insurance indus­ handgun ammunition. try with the federal governmentas the sole provider of health The original bill's levy of a $65 a month premium for insurance for Americans, although insurers could still be long-term care/health insurance on el�erly citizens caused utilized as fiscal intermediaries or administrators of the na­ concern among the American Associ.tion of Retired Per­ tional program. sons. Under the amended provision, t*tyment for home- or It's obvious why the health insurance industry doesn't community-based long-term care servi

EIR June 24, 1994 National 65 tus. Individual states would plan their own program and cording to Larry Gage, president of the National Association allocate funds among providers according to the state's of Public Hospitals, managed care organizations and insurers needs. States would negotiate fees annually with hospitals, who contracted for TennCare beneficiaries engaged in illegal community health centers, and doctors, who must accept marketing practices to enroll large numbers of patients quick­ fees as payment in full. They cannot bill patients beyond ly. Prospective enrollees were offered life insurance policies the negotiated fee. and secured credit cards as inducements. Agents were paid The plan is highly decentralized, allowing states to al­ on commission, new enrollees were given turkeys, hams, and most exclusively administer their own programs as long as even cash for signing up. The more patients they enrolled, they meet federal qualifications and guarantee individuals the more profits and control for the HMO or managed care free choice of private fee-for-service physician or health organization-while hospitals and doctors are being reim­ maintenance organization (HMO). This last provision is in­ bursed at only 40% of their costs. While the public hospitals dicative of the single-payer advocates' fierce opposition to and facilities dedicated to providing the public health needs forced participation in HMOs and other managed care plans, ofthe poorest population are forced out of existence, insurers which deny patients free choice of doctors and which heavily rework the delivery of health care to their own ends. influencedoctors to restrict patient services. The bill's focus on free choice of doctors is a marked departure from reform The Canadian model proposals built on managed care or managed competition But the single-payer plan would wipe out all utilization formulas which allow insurance companies or HMO cartels review programs except the federal government's. Will the to dictate how and when treatment or specialist referrals are deliveryof medical care definedby the nation's plummeting allowed beyond the assumed guarantee of primary or preven­ economy be any different? Consider Canada's single-payer tive care benefits. system, where the federal government used to fund about But all this focus on "choice" is deceptive, because nearly 40% of the cost of the basic package of services for its 10 every aspect of health care delivery would be dictated under provinces. But eroding tax revenues have radically reduced this bill by five different federal boards overseeing every­ Canada's budget for the provinces to about 25%, forcing thing, including national and state funding levels, cost con­ hospital closings, cuts in services and hospital beds, and long tainment, benefits, approved prescription drugs, state pro­ waiting lists. In March, the Quebec government mandated grams, medical education, and medical practice guidelines. that the province must, by law, reduce the total employment Should systematic reviews of physicians' practice patterns level of their health system by 12.6% within two years. The reveal that doctors are compromising care, such "outliers," directive called for a 20% reduction in executives and a 12% as they are called, face "reeducation." There are a score of reduction of employees-an overall reduction of21 ,000full­ professional, technical, and temporary advisory committees time jobs, or 12.6% of the total employment level of the operating on national and state levels as well. health care system of the province. Nevertheless, it is lawful that health care providers and Last year, one survey found that residents in all 10 prov­ patients alike would endorse a single-payer system, especial­ inces wait at least two months for hospital procedures. The ly given the insurance cartel's ruthless takeover of medical average wait for hip replacement in Manitoba is more than a delivery systems. Consider California's experience, where year. In Prince Edward Island, it takes 27 weeks just to see for-profit HMOs and managed care groups contract with the an ophthalmologist. In Ontario, ophthalmology patients wait state to deliver health care services for the uninsured popula­ 4.3-51 weeks; elective orthopedic surgery patients wait 8.5- tion. The HMOs essentially lied about their ability to provide 51 weeks. Patients needing cardiac bypass surgery wait a services. They signed up large numbers of patients but few year, which forced the British Columbia governmentto con­ physicians, and never bothered to provide indigent families tract with Washington State hospitals to perform the surgery witha single doctor visit. The families were forced to obtain on 200Canadians--

66 National EIR June 24, 1994 Letters to the Editor

fore curtseying to the London-Wall Street eyes open wide as he soaks in every juicy crowd--on charges real or imagined. The detail. Inform him that a Dan Rostenkowski Don't be defensive fact that the wholly, provably innocent Lyn­ has been charged with pilfering postage about Rostenkowski don LaRouche was so targeted is the critical­ stamps--orworse , using the wrong zip code I was glad to see that the EIR editorial of experimental demonstration that the alleged and thus tying up t�e entire mail system­ June lO took up the issue of parrying the malfeasances have nothing to do with the and watch the veinsl virtually pop out of his attack on Congressman Dan Rostenkow­ legal witchhunt. Instead of meekly sug­ neck, as he launches into his litany on "cor­ ski-and, more importantly, on representa­ gesting that we should let Congressman rupt politicians." tive government in America-that has been Rostenkowski have his day in court , EIR Poor Joe Blow fS in no position to ap­ launched by the one-world "Bush league" would do better to shout out: That evil appa­ preciate the howlidg irony that the one­ apparatus that still runs a huge chunk of ratus must be broken up ! world gangsters-"ass murderers, dope Washington. But I sure do wish that your Second, what was completely leftout of overlords, and satabic enemies of western defense were a whole lot less defensive . the cited piece is by far the most important civilization-are thl: same forces running There is no need for any extended dis­ aspect of Rosty-gate and its innumerable the legal frame-up operations that regularly cussion of the legal ins and outs of the Ros­ predecessor-scandals: the massive, repeated bring down their pkltential adversaries on tenkowski case per se, or of the inequities conditioning of the U.S. population to the charges that are thfl political equivalent of of the federal plea bargaining system, with point where the average American literally jaywalking. No, I, do not condone jay­ which the bulk of the editorial was occu­ cannot comprehend politics except in soap­ walking. But I do Ixllieve most strongly that pied. And conversely, the two real issues in opera terms . Point out to Joe Blow that the the editorial rnisse� a golden opportunity the affair were either underemphasized or Bush-Thatcher blockade of Iraq (tragically, to show the Americian people how they've omitted altogether. continued thus far by the Clinton adminis­ been jerked around

Stop the cult of 'political correct-'ess'

Under the banner of • political correctness: the public school curricul�m has been rewritten to eliminate real education, in favor of infantilism The and hedonism. Our report documents �ow the National Education Association worked over decades to Libertarian implement this "reform.· i Many opponents of SUCh kookery in the schools have fought rearguard battles, but have Conspiracy failed to stem the tide of �political correctness.' Not only did they fail to understand the enemy fully; they also lacked a real alternative. Our To Destroy reportfea tures Lyndon L�Rouche's proposal for a classical education curriCUlum, including reviving the concepts of the Humboldt education America's Schools reform in 19th-century Germany. High-quality public edueation is essential for a republic, and is the right lof every child.

EIR SPECIAL REPORT ElK News Service P.o. Box 17390, Washington, D.C. 152 pages $250 20041-0390

67 National EIR June 24, 1994 Congressional Closeup by William Jones

Sanctions against North his reputation. At a press conference found particularly objectionable the Korea urged by House following a hearing before U.S. Dis­ requirement that businesses pay 80% The House urged sanctions against trict Judge Norma Holloway in Wash­ of workers' insurance, and a cost con­ North Korea if Pyongyang does not ington on June 10, Rostenkowski trol measure that would set limits on allow inspection of its nuclear pro­ said, "Talk is cheap" and "allegations insurance prices if they continue to gram, and urged the rescheduling of come easy. . . . I will fightand I will rise too rapidly. U.S.-South Korea "Team Spirit" war prevail." Daniel Moynihan (D-N.Y.), games, in a non-binding "sense of the Rostenkowski's lawyer, Dan chairman ofthe Senate Finance Com­ Congress" resolution approved on Webb, called the charges "completely mittee, unveiled his version of a June 8 by a vote of 415-1. The war overblown." Webb noted that the in­ health care bill which would raise the games were suspended in an effort to dictment "raises some grave and seri­ 24¢ federal cigarette tax to $2 a pack win North Korean agreement to nucle­ ous constitutional concerns.. ..Who and boost handgun ammunition taxes ar inspections. determines what are official expendi­ in order to finance health care. Gerald Solomon (R-N.Y.) urged tures? We will examine that." Five committees are trying to the House to act quickly, before the Rostenkowski is charged with de­ write major health bills, and all have issue of sanctions were taken up by frauding the government of over faced months of delays because of U.N. Security Council. Washington's $500,000 by keeping employees on ideological and partisan conflicts as U.N. Ambassador Madeleine Al­ the payroll who did little or no official well as more mundane technical prob­ bright said on June 7 that she was ne­ work, and misusing funds from the lems with budget data. gotiating a sanctions resolution for House Post Office. Because of the in­ Kennedy said he hoped to get Re­ U.N. consideration. dictment, Rostenkowski was forced to publican support for a health bill this Republican calls for action against temporarily step down from the chair­ summer, afterhis bill is blended with North Korea are becoming louder. In manship of the Ways and Means whatever proposal comes out of the hearings before a House Foreign Af­ Committee. Finance panel. "We're looking for­ fairs subcommittee on June 9, the ward to continue working with the Fi­ State Department's point man on Ko­ nance Committee, the majority lead­ rea, Robert Gallucci, said the U.N. er, and the House to take what is really Security Council would need consid­ the opportunityof a generation before erable time to work out possible sanc­ Health care bill this Congress, to deal with an issue tions against Pyongyang and that he passes first hurdle which is as compelling in importance could not predict whether China The Senate Labor and Human Re­ as Medicare and Social Security," he would agree to sanctions. sources Committee, in the first step said. Kennedy modified Clinton's Jim Leach (R-Iowa), demanding toward some sort of health care pack­ bill, turningmandatory insurance pur­ "punishment" against North Korea, age, on June 9 approved a bill guaran­ chasing alliances into voluntary ones, said: "We are operating a policy as if teeing health insurance for all Ameri­ and allowing several alternative ways we can stop a crime being committed, cans. The bill's author, committee of buying insurance. but it is clear that a crime is under chairman Edward Kennedy (D­ Companies with fewer than 11 way." Mass.), hailed its passage as "the op­ employees and average wages of un­ portunity of a generation." der $24,000 will be exempt from the The vote was 11-6, with one Re­ employer mandate, although they will publican, Jim Jeffords (Vt.), crossing have to pay a 1-2% payroll tax, de­ party lines to back the measure. pending on their size. Low-wage Rostenkowski vows "There was a lot of pressure for me workers will get subsidies to help to fight indictment to vote against this bill, and a lot of them purchase health insurance. Rep. Dan Rostenkowski (D-Ill.), the pressure for me to vote for it," said Moynihan's plan has a similar former chairman of the House Ways Jeffords, who plans to team up with provision, although the exemption ex­ and Means Committee, under indict­ other moderates to try to nudge the bill tends to firms with up to 20 workers. ment on "corruption" charges, has re­ toward the center when it reaches the Kennedy's plan allows people the op­ jected any plea agreement and vowed full Senate. tion of selecting from the identical to fight the charges and "wash away Republicans rejected the bill as menu of health plans that serve sena­ the mud that has been spattered" on too regulatory and too costly. They tors and other federal employees. It

68 National EIR June 24, 1994 also introduces a long-term care insur­ senators equally divided between the worst drug-infested areas in the black ance program, with incentives for two parties, and to allow Republicans community in at least five major people in their 30s and 40s to start to issue subpoenas without Democrat­ cities. They have also initiated very making provisions for their old age. ic consent-a proposal Mitchell said successful programs in Washington, Senate Minority Leader Robert Dole was unprecedented. D.C. and elsewhereto combat and to (R"Kan.) has said that he will refuse Meanwhile, on the House flooron treat AIDS. to support any health care bill which June 9, Robert Doman (R-Calif.) and In a letter to R�p. Peter King (R­ involves employer mandates. Dan Burton (R-Ind.) attacked Clin­ N.Y.), the initiator of the action, on ton's connections to Dan Lasater, an May 27, HUD Assistant Secretary Arkansas businessman who had been William Gilmartin said that HUD indicted and convicted of dealing in "does allow all {lublic and private drugs. The two are demanding that owners of subsidized properties to Whitewater hearings Fiske focus on the Lasater connec­ procure the services of firms which set to begin in July tions, warningthat if he doesn't, they have successfully met the procure­ I The Senate approved a resolution will attack the Fiske investigation as a ment requirements " sponsored by Majority Leader George "coverup." The Nation o( Islam has been a Mitchell (D-Me.) by a vote of 56-43 Doman and Burton are focusing systematic target lof allegations of on June 14, setting hearings on the so­ on the drug-running operations "anti-Semitism" by the Anti-Defama­ called Whitewater affair to begin no around Mena, Arkansas, exposed in tion League. The! attacks escalated later than July 29. the book Compromised: Clinton, when the group began to develop clos­ The focus of the hearings will be Bush and the CIA , by Terry Reed and er ties to the Congressional Black narrow, concentrating only on the first John Cummings. Although the Mena Caucus. i phase of Special Counsel Robert operations occurred during the time Fiske, Jr. 's investigation, including: Clinton was governor, they were an contacts between the White House integral part of aU. S. intelligence op­ and the Resolution Trust Corp. re­ eration under the direction of Oliver Conservativd Christians garding the failed Madison Guaranty North and then-Vice President George protest EEOC iguidelines Savings and Loan Association and its Bush. If Doman and Burton succeed A number of conservative Christian ties to Whitewater Development in bringing to the fore the drug-run­ groups protested Ifederal guidelines Corp.; the Park Police investigation ning operations, the targets may not aimed at combatting religious harass­ into the death of White House Deputy be President Clinton, as they hope, ment, warningthat the proposals, far Counsel Vincent Foster; and the but rather Bush and Senate candidate from helping to fig�t religious bigotry White House handling of Foster docu­ North. in the workplace, ,"",ould in effect pro­ ments, including those removed by hibit any expression of faith in occu­ the White House after Foster's body pational settings. The guidelines were was found on July 20, 1993. issued last year by!the Equal Employ­ Republicans attempted to force a ment Opportunity Commission. full-blown Senate investigation of the Funding for Nation of In statements to the media and be­ affair. An amendment to an unrelated Islam-linked firm hit fore a Senate sub¢ommittee on June bill, proposed by Alfonse D' Amato A group of 25 House Democrats and 10, representative� of a variety of reli­ (R-N.Y.) and Minority Leader Bob Republicans has appealedto Housing gious organizatiqns said that the Dole (R-Kan.), called for hearings on and Urban Development Secretary guidelines would bave a "chilling ef­ all aspects of the financial dealings Henry Cisneros to terminate federally fect" on displays Of faith at work and surrounding Whitewater, as well as funded security contracts with a pri­ called for their removal. Hillary Rodham Clinton's commodity vate firm associated with the Nation Michael Whitehead, general futures trading, which allegedly net­ of Islam and its leader, Minister Louis counsel for the SolilthernBa ptist Con­ ted her $100,000 on a $2,000stake . Farrakhan. In a letter to Cisneros, they vention's Christiar;Life Commission, But Mitchell insisted on a more complained about funding going to a said the guidelines would encourage confined inquiry. "We will not be a "hate group." employers "to baq all means of reli­ party to a political circus," he said. The Nation of Islam has played a gious expression �n order to avoid a Republicans wanted a panel of 18 major role in cleaning up some of the possible lawsuit." !

EIR June 24, 1994 National 69 National News

that "by offering advice and cheerleading," in the world, guiding 200,000 followers in they "can be the midwife at the birth of a 130 countries, controlling $500 million in new generation of U . S. social programs." holdings and having the ear of political Connecticut fails to According to materials distributed at the leaders ." Morgan State University conference where pass OBE bill Schmoke announced the plan in early June, Legislation to implement the brainwashing among the new "family planning methods" curriculum known as "outcome-based edu­ USAID hopes will be made available to cation" died in the final weeks of Connecti­ stem the rapid rise in so-called "unwanted cut's legislative session after vigorous op­ births" among the nation's poor are: Nor­ EEOC drafts 'religious position was raised by grass-roots groups plant II, a new plastic male condom; a new harassment' code and the teachers unions, according to the low-dose hormone-releasing IUD vaginal Westport News in late May. The Commis­ ring; new injectables and implants for men The Equal Employment Opportunity Com­ sion on Educational Excellence in Connecti­ and women; and contraceptive vaccines for mission (EEOC) has drafted new work cut drafted a report over 18 months recom­ men and women. The program also boasts guidelines to outlaw "religious harass­ mending OBE reforms for a "world-class" of its support for Norplant, the hormone­ ment," which may go so far as to outlaw any education system, complete with a $200 releasing contraceptive implant that is al­ expression of religious profession. Ac­ million price tag . Some legislators said they ready being surgically inserted into the arms cording to a commentary by Mary Senander Minneapolis Star Tribune, thought the plan could be brought back if of Baltimore schoolchildren without paren­ in the the new reworked and public hearings were held. tal consent, and without a comprehensive guidelines require employers to establish The Committee to Save Our Schools medical examination. "an explicit policy against harassment" and (CTSOS) claimed credit for rallying the to be "responsible for acts of harassment in public to keep the bill from reaching the the workplace." The measures are not yet in force, and the EEOC was to receive written floor. In response to the criticism they public commentary until June 20. mounted, the commission changed its word­ Under the proposed guidelines, "Sec­ ing to "Results-Based Education" from out­ Lubavitch 'messiah' tion 1609.1 (d) provides that employees come-based education. CTSOS has set up have standing to challenge a hostile or opposition groups in many parts of the state, dies in New York abusive work climate even if the harassment claims it has 70 chapters, and vows to now Rabbi Menachem Schneerson, head of the is not targeted specifically at them." Sen­ tum its attention to "the right reforms." Jewish Hassidic Lubavitcher sect, died on ander continued that the EEOC would test June 12 at the age of 92. Schneerson's edu­ "religious harassment" complaints not by cation included studies of philosophy in standards that offend people in general, but Berlin in the 1920s and 1930s, and engi­ by what offends members of the supposedly neering at the Sorbonne in Paris. He took victimized class. According to the author, Baltimore opened to over the Brooklyn, New York-based group the display of anything religious could be in 1951. deemed harassment under these guidelines. USAID 'foreign aid' Schneerson's entirely secular education Baltimore Mayor Kurt Schmoke has un­ and his background in the machine engi­ veiled a plan that would make Baltimore the neering business contrast with his reputation first U. S. city targeted by a new program as the messiah among his adherents, many sponsored by the U.S. Agency for Interna­ of whom are said to be expecting Schneer­ tional Development, according to an article son to rise from the dead. The Lubavitchers Barr, Hudson pollute in the June 20 issue ofthe weekly newspaper run social-work, psychiatric , and drug clin­ New Federalist. The program would apply ics as part of their far-flung missionary es­ Virginia parole reform its population-control methods used in tablishment. Many carry beepers-"for William Barr and Henry Hudson should be Third World countries, to deal with the calls to alert them that the messiah has thrown off Virginia Gov. George Allen's problems of teenage pregnancy in the Unit­ come." Members of the Lubavitcher sect Commission on Parole Abolition and Sen­ ed States. The program, called "Lessons have also participated in the kidnap-for-hire tencing Reform, Lyndon LaRouche re­ without Borders," was born of a conversa­ operations of the Cult Awareness Network's cently said. Both men are gUilty of fraud tion late last year between USAID Adminis­ Galen Kelly. with respect to the railroad prosecution trator J. Brian Atwood and Marian Wright The number of Lubavitchers worldwide against LaRouche and his co-defendants on Edelman, the longtime head of the Chil­ is estimated at anywhere from 100,000 to the federal level, and, by implication, dren's Defense Fund. 300,000. While reporting on the "intense against five associates of LaRouche cur­ Although by law, USAID, a State De­ struggle for power" among possible succes­ rently serving decades-long sentences in partment agency, is not permitted to imple­ sors to Schneerson, the New York Daily Virginia on related fraudulent charges. ment programs domestically, with the "Les­ News wrote: "Whoever gets the job will be The commission has begun a series of sons without Borders" program, AID hopes the most influential Jewish religious leader four "town meetings" to whip up public hys-

70 National EIR June 24, 1994 I Brildl.y

• BALTIMORE SCHOOLS Su­ perintendent Walter Amprey has teria to force the state legislature to end pa­ "mainstream" with "Philadelphia," a sym­ been forced to back off his plans to role for fe lons. pathetic portrayal of an AIDS-stricken ho­ • expand the role' of the private, profit­ Henry Hudson, a prominent member of mosexual's legal battle to remainemployed making Education Alternatives, Inc. the commission, is the former u.s. Attor­ with his high-priced law firm, which is pre­ in taking over city schools. Amprey ney for the Eastern District of Virginia who sented as America's leading civil rights said he was slowing down his com­ led the fraudulent legal prosecution of Lyn­ battle. mitment to EAI after encountering don LaRouche and his six co-defendants in Demme is making a film of the real strong resistance from the teachers 1989. Barr, co-director of the commission, 1960s civil rights movement, but based on union. Ampre}l had sent threatening was U.S. Attorney General under George Taylor Branch's book Parting the Waters . letters to 10,000 employees warning Bush beginning in October 1991, and made According to the Sun, Demme introduced of layoffs and reassignments over sure that LaRouche stayed imprisoned while Branch to Aristide, and Branch is now urg­ their oppositioq to EAI. Bush held the presidency, in the face of ing the use of the U.S. military to install overwhelming evidence showing Aristide in power in Haiti. • THE ANTI-DEFAMATION LaRouche's innocence. League of B'nai B'rith (ADL) re­ Barr has also been identifiedby authors leased a book-l�ngth attack on June 9 Terry Reed and John Cummings as the attor­ on what it calls, the "Christianrigh t." ney for Southern Air Transport who set up The ADL book!purportsto document the covert arms supply operations to the Nic­ the "movemen�'s anti-Semitic rheto­ araguan Contras in Mena, Arkansas and lat­ ric and the fer!>city of its efforts to er in the State of Michoacan, Mexico. Ac­ u.s. has contact with enforce its ex¢lusionary orthodoxy cording to their book Compromised, Barr on local gove�ents and schoolsys­ (alias Robert Johnson) was present at sever­ Algerian FIS exiles tems," accord ng to a New York al key planning sessions for the illegal Con­ 1 The subject of U.S. and French policy to­ Times comme�ary. tra supply and training effort . Lt. Col. Oli­ ward Algeria occupied an important place ver North, using the alias John Cathey, was in a joint interview that President Bill Clin­ • TELEV A�GELIST Pat Robert­ the White House case officerfor the Arkan­ ton and French President Fran�ois Mitter­ son's International Family Entertain­ sas and Mexico operations; both Barr and rand gave to French TV in early June. The ment suffered�6 5% first-quarterloss North reported personally to then-Vice United States "wants the Algerian govern­ through deriv"tives trading. IFE President Bush. North's role as part of the ment to broaden its base by working with owns Family Otannel, which report­ "Get LaRouche" task force has been amply elements of its opposition who are not in­ ed a $2. 106 nllllion loss in deriva­ documented by EIR . volved in terrorism," said Clinton, making tives trading, While IFE itself posted his first statement on this issue. The United earningsof $2. t;I million, down 65% States has openedup contacts with moderate from $7.36 million for the first quar­ exiles from the Algerian Islamic Salvation ter of 1993. Front (FIS), he said. The President insisted 'Cannibal' film director several times that the United States is • THE OHIO STATE auditor has against any formof violence, but that it "is ruled that the treasurer of the Vermil­ backs necklacer Aristide on the side of the peoples of Islam who re­ lion, Ohio schools is liable for A major Hollywood backer of Haiti dictator spect the international rules of life." $127,000 lost in an investment in fi­ Jean-Bertrand Aristide is one Jonathan According to an articlein the Parisdaily nancial derivatives. He also found Demme , the founder of Artists for Democ­ Liberation on the subject, until last autumn, the company and salesmen who sold racy in Haiti. According to the June 13 issue U.S. policy considered the Algerianregime the instrumentslia ble. of the Baltimore Sun, Demme played an as a "lesser evil and a shield against Islamic insider role in the creation of the pro-Aris­ integrists." Now, however, the United • LAROUCHE DEMOCRATS tide movement in the United States, includ­ States considers the regime as "beingpart of in Massachusqtts filed petitions for ing meeting with National Security Council the problem. " three congres�ional candidates on official Richard Feinberg and his lobbying Liberation continued that the United June 7. In all tllree races for the Sept. President Clinton. States, seeing how little hold the Algerian 20 primary, thty are the only opposi­ Demme is best known as the director governmenthas over the political and mili­ tion to the incumbents. Denise Ham of the Oscar-winning film "Silence of the tary situation, thinks that "there is no other will run against Barney Frank in the Lambs," about a serial killer named "Hanni­ choice [than] to recognize the strength of 4th CD; Rogen Ham will run against bal the Cannibal," who consumed his vic­ Islam in Algeria." Hence, White House Gerry Studds in the 10th CD. Both tims. Aristide, by contrast, merely advo­ strategy is to separate the moderate FIS lead­ Studds and FI1Ink are homosexuals. cates "necklacing" his opponents: killing ers from the extremists who lead the armed The Hams are 'husband and wife. In them by setting a gasoline-filled tire around groups, by encouraging the Algerian gov­ the 9th CD, Dennis Ingalls will run their necks on fire . ernmentto "show a serious intention of dia­ against Joseph Moakley. More recently Demme broke into the logue."

• EIR June 24, 1994 National 71 Editorial

Out ofthe morass

No one can honestly deny that the United States faces and the side-effects of monetary inflation, including a crisis in medical care . More and more Americans are higher real estate costs which inflate the cost of hospital losing relatively well-paying jobs and are forced to stays, medical technology accounts for only about 2% subsist on makeshift part-time work or worse . What of the total bill. medical coverage they do have suffers from the overall Research investment in the health sector, as it does decline in their standard of living. At the same time, a in every other sector of the economy, has an extremely continued decline in the physical economy (as opposed high payoff. For example , National Institutes of to inflated speculative gains) is eroding the tax base Health-funded research that discovered the bacterium which could otherwise help to defray these costs responsible for chronic ulcers , allowing ulcers to be through the provision of social services. treated with simple antibiotics, has a cost-benefit ratio In an effort to deal with the crisis under conditions of 1-28. For every dollar spent on that research, $28 is of declining physical economic output, various health saved from health care costs of ulcer treatment and lost plans are now under debate in Congress. But they are income . all seriously flawed. For one thing, they are biased Over the past five years , laparoscopy has revolu­ against what is termed "high-technology" medicine, tionized most abdominal surgery , replacing traditional which, it is claimed, diverts limited funds needed for techniques for removing gall bladders and performing base-line care for large numbers of people, to the spe­ vaginal hysterectomies, colectomies, appendectomies, cial needs of a few. This argument is totally fallacious splenectomies , and even herniare pair. The technology when one considers that early diagnostic and modern involves making small cuts in the abdomen through noninvasive therapies have reduced many hitherto fear­ which a small camera, a cutting tool , a light source, a some conditions to outpatient treatment or shortened laser, or electrocautery source are inserted . The camera inpatient stays. But if these people are barred from allows the surgeon to guide his tools to the appropriate productive employment, then shortening their recovery organ, which can then be properly treated. time does not show up as a benefit to the economy . If the health crisis in the United States is to be Any health care plan that does not encourage techno­ solved, it will be necessary to re-focus the discussion. logical innovation will fail miserably to decrease health Rather than debating how to cut costs, Congress should care costs while providing increased quality of health be discussing how to guarantee that there is sufficient care over the long term . Only innovation can do that. funding to ensure a continued stream of new discover­ Other administrative changes will, at best, lead to a one­ ies on the medical front, and to ensure that these bene­ time decrease in costs , followed by skyrocketing costs. fits are immediately accessible to everyone. The Hill­ It has become fashionable to attack medical tech­ Burton Act, which became law in the United States in nology as responsible for the rising costs of medical 1946, is a paradigm of the correct approach. The fund­ care . Currently, 14% of the Gross National Product in ing proposals were based on a survey of need for hospi­ the United States is spent on health care , and by the tal care , particularly in cities such as Los Angeles that year 2000 it is projected to rise to 18%. With the GNP had experienced rapid growth which outstripped medi­ for 1993 at $6,378.1 billion, that means total U.S. cal care facilities. Funding was provided as needed to medical care costs were around $892.9 billion. Howev­ guarantee a proper ratio of hospital beds to the popula­ er, a careful analysis shows that this cannot properly be tion of the catchment area. laid at the door of overutilization of advanced medical Concern for the value of every human life, rather technology. At most, discounting for population than financial considerations alone, is the only proper growth , increased insurance and administrative costs, framework forthe discussion.

72 National EIR June 24, 1994 SEE LAROUCHE ON CAB L E TV Al l programs are Th e LaRouche Connection unless otherwise noted. ALASKA DISTRICT OF COLUMBIA • ST. LOUIS PARK-Ch. 33 • SUFFOLK, L.I.-Ch. 25 • ANCHORAG E-ACTV Ch. 40 • WASHINGTO N-DCTV Ch. 25 Friday through Monday 2nd & 4th Mondays-10 p.m. • Sundays-12 Noon 3 p.m., 11 p.m., 7 a.m. SYRACUSE-Adelphia Ch. 3 Wednesdays-9 p.m. • ARIZONA FLORIDA ST. PAU L-Ch. 33 Fridays-4 p.m. Mondays-8 p.m. • SYRACUSE (Suburbs), • PHOENIX-Dimension Ch. 22 • PASCO COUNTY-Ch. 31 MISSOURI NewChannels Cabl�Ch. 13 Fri., June 10 & 17-1 2 Noon Tuesdays-8 :30 p.m. II • ST. LOUIS-Ch. 22 4t h Sat. each month-4 p.m. CALIFORNIA GEORGIA • Wednesdays-5 p.m. WEBSTER-GRC Ch. 12 • • ATLANTA-Ch. 12 DOWNEY-Conti. Ch. 51 NEW JERSEY Wednesdays-9:30 p.m. Thursdays-9 :30 p.m. Fridays-1 :30 p.m. • YONKERS-Ch. 37 • • STATEWIDE-CTN E. LA to SANTA MONICA- ILLINOIS Fridays-4 p.m. Mondays-2 a.m. Century Cable Ch. 3 • CHICAGO-CATN Ch. 21 OREGON Fridays-6 p.m. NEW YORK Weds ., J u ne 28 - 10 P ..m • PORTLAND-Access • • ALBANY-Capitol Ch. 28 E. SAN FDO.-UA Ch. 25 INDIANA Tuesdays-6 p.m. (Ch. 27) Fridays-7 p.m. Mon., July 11,1 8,25-5:30 p.m. • SOUTH BEND-Ch. 31 Thu rsdays-3 p.m. (Ch. 33) • GLENDALE/BURBANK-Ch. 6 • BRONX-BronxNet Ch. 67 Thursdays-10 p.m. PENNSYLVANIA Fridays-8 p. m . Saturdays-6 pm • • HOLLYWOOD-Conti. Ch. 37 LOUISIANA • BROOKHAVEN-(E. Suffolk) PITTSBURGH-PCTV Ch. 21 Mondays-8 p.m. • MONROE-Ch. 38 1 Flash or Ch. 99 Mondays-7 p.m. • LANC./PALMDALE-Ch. 3 Mon.-7 p.m.; Fri.-6 p.m. Wednesdays-5 p.m. TEXAS Sundays-8:30 a.m. MARYLAND • BUFFALO-BCAM Ch. 18 • AUSTIN-ACTV Ch. 10 & 16 • MARIN COUNTY-Ch. 31 • BALTI MORE-BCAC Ch. 42 Mondays-6 p.m. (call station for times) Tuesdays-5 p.m. Mondays-9 p.m. • HUDSON VALLEY-Ch. 6 • DALLAS-Access Ch. 23-B • MODESTO-Access Ch. 5 • MONTGOMERY-MCTV Ch. 49 2nd Sunday monthly-2 p.m. Mon.-2 pm; Fri.-1 1:30 am Thurs., July 14-6:30 p.m. Tuesdays-1 1 p.m. • ITHACA-Pegasys Ch. 57 • HOUSTON-PAC • MTN. VIEW-MVCTV Ch. 30 Thursdays-2 :30 p.m. (first 3 weeks each month) The LaRouche Connection Tuesdays-1 1 p.m. .·WESTMINSTER-CCTV Ch. 19 Tuesdays & Fridays-8 pm Mon., July 4-5 p.m. i ORANGE COUNTY-Ch. 3 Tuesdays-3 p.m. Wednesdays-5 pm The Col/apse is Coming • Fridays-10 p.m. MASSACHUSETTS MANHATTAN-MNN Ch. 16 Tues., July 5-7 p.m. • xCompromised: PASADENA-Ch. 56 • BOSTON-BNN Ch. 3 VIRGINIA Tuesdays-2 & 6 p. m . Clinton,Bush,CIAx • Saturdays-12 Noon ARLINGTON-ACT Ch. 33 • SACRAMENTO-Ch. 18 Tues., June 28-3 p.m. MICHIGAN • Sun.-1 pm, Mon.-6:30 pm & ''':'ds.-10 p.m. OSSINING-Continental Wednesdays-12 Noon • �A� fJ�6' • CENTERLINE-Ch. 34 D Southern Westchester Ch. 19 • FAIR FAX-FCAC Ch. 10 Tuesdays-7 : 30 p.m. Cox Cable Ch. 24 Rockland County Ch. 26 Tuesdays-12 Noon .TRENTON-TCI Ch. 44 Saturdays-12 Noon 1st & 3rd Sundays-4 p.m. Thurs.-7 pm, Sat.-10 am Wednesdays-2:30 p.m. • Southwest Cable Ch. 16 POUGHKEEPSIE-Ch. 3 • LEESBURG-Ch. 6 MINNESOTA Mondays-8:30 p.m. (call station for times) Mondays-7 p.m. • • • SAN FRANCISCO-Ch. 53 EDEN PRAIRIE-Ch. 33 QUEENS-QPTV Ch. 56 • MANASSAS-Ch. 64 Fridays-6:30 p.m. Wednesdays-5:30 pm Saturdays-3 p.m. Tuesdays-8 p.m. • .. • SANTA ANA-Ch. 53 Sundays-3 :30 pm ROCHESTER-GRC Ch. 15 WASHINGTON Tuesdays-6:30 p.m. • MINNEAPOLIS-Ch. 32 Fri.-1 0:30 pm, Mon.-7 pm • SPOKANE-Cox Ch. 37 • W. SAN FDO.-CVI Ch. 27 Saturdays-9:30 p.m. • SCHENECTADY-P.A. Ch. 11 Wednesdays-1 p.m. Fridays-8 p.m. • MINNEAPOLIS (NW Suburbs) Fridays-5 : 30 p.m. • TRI-CITIES-TCI Ch. 13 COLORADO Northwest Comm. TV-Ch. 33 • STATE N ISL.-CTV Ch. 24 Mondays-1 1 :30 a.m. • Mondays-7 pm. Weds.-1 1 p.m., Sat.-8 a.m. DENVER-DCTV Ch. 57 Tue.-6:30 pm; Thu.-8:30 pm Wed.-1 1 p.m.; Fri.-7 p.m. Tuesdays-7 am & 2 pm If you are interested in getting these programs on your local cable TV station, please call Charles Notley at (703) 777-9451.

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------� Dope, Inc.: The Book that Drove Kissinger Crazy, by an EIR Investi­ Call (703) 777-3661 or gative Team (1992). Third edition of the book commissioned by Lyndon Toll-Free (800) 453-4108. LaRouche in 1978 that dared to name the names of the people "above suspi­ cion" who use the world drug traffic to keep their hold on political power. The Ben Franklin Booksellers, Inc. cash revenues of the narcotics cartel have doubled every five years and now 107 South King Street exceed $1 trillion annually-while the legitimate economy plunges into Leesburg, Virginia 22075 depression. 667 pages, illustrated, index. $16. No. George Bush: The Unauthorized Biography, by Webster G. Tarpley Please send me: copies Total and Anton Chaitkin (1992). Bush was votred out, but his policies, and even his Dope, Inc. $16. top aides, seem to persist in power. Why? This detailed biography of the ex­ George Bush $20 President by two distinguished historians, tells the inside story of power in the Ugly Truth About ADL $7 __ United States in this century. 633 pages, illustrated, index. $20. . Travesty $12 The Truth About the Anti-Defamation League, by the Editors Ugly Civil War $15 of EIR (1992). How a freemasonic frontgroupfor organized crime, masquerad­ Set of Five Books ing as a Jewish civil rights organization, became the leading dirty-tricks arm of $58.50 the liberal Anglo-American establishment in the U.S. government, Congress, Subtotal and judicial system. 142 pages, index. $7. Sales Tax (Va. residents add 4.5%) Travesty, A True Crime Story: The Du Pont Kidnap case and the Team A millionaire so­ Shi • LaRouche Railroad,by an EIR Investigative (1993). book, .50 each cialite is puton trial, along with thugs-for-hire fromthe Cult Awareness Net­ additional($3.g8�1 book) $ work, for conspiring to kidnap his 36-year-old son, an heir to the Du Pont for­ TOTAL tune-just to stop him from practicing his political beliefs. This riveting story o Enclosed Is my check or money order, of the trial andthe shocking acquittal is based on court records. 248 pages, payable to BenFranklin Booksellers, Inc. illustrate , index. $12. � Charge my 0 Mastercard0 Visa

The Civil War and the American System by Allen Salisbury. The "Civil No. ------War"which was in fact a battle between the American System of economics Explr. Date ------and the British System of free trade. Today that battle continues, over the British-inspired NAFfA and GATT agreements, whose purpose is to drive Slgnature______down Americanliving standards and loot the nations of the Third World on behalf of Anglo-American financial institutions. 440 pages. $15.