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Der Fuher Invades Yugoslavia

House Denies Support for Airstrikes

Ah, come on! Give war a chance!

WASHINGTON (AP) -- Challenging President Clinton over Kosovo, a divided
House withheld its support for NATO airstrikes late Wednesday after
voting earlier to limit his authority to use ground forces.
The House first voted 249 to 180 to make Clinton obtain congressional
approval before sending ``ground elements'' to Kosovo or other parts of
Yugoslavia. That action provoked a quick veto threat from Democrats.

Then, in what was intended to be a largely symbolic vote, Democrats
sought approval of a resolution to bestow after-the-fact blessings on
the NATO bombing campaign. Even with the support of Republican Speaker
Dennis Hastert, it failed on a 213-213 tie.

The votes came despite appeals by Clinton for the nation to speak ``with
a single voice'' on the escalating conflict over Kosovo and a warning by
Democrats that Congress was sending a mixed message to Yugoslav
President Slobodan Milosevic.

``This is a gratuitous authorization,'' Rep. Doug Bereuter, R-Neb., said
of the vote to support airstrikes now in their fifth week. ``Bombing for
peace is wrong and it's not working.''

The Senate had voted bipartisan support for the airstrikes last month.
The House vote caught both Democratic and Republican leaders by
surprise. The administration said it would press ahead with its
airstrikes.

``The House today voted no on going forward, no on going back and they
tied on standing still,'' said White House spokesman Jake Siewert. ``We
will continue to prosecute the air campaign and to stop the violence
being perpetrated by Milosevic.''

Rep. David Obey, D-Wis., called the House vote an ``appalling lack of
judgment and an appalling abandonment of the troops in the field. It is
a day which this House will profoundly regret.''

A spokesman for Hastert, John Feehery, said, ``The speaker has been
telling the president all along that he needs to make his case to the
American people and to the Congress. This vote shows how he has to
continue to make that case.''

Clinton told lawmakers he still considers a ground campaign unnecessary
-- but promised to seek congressional approval if he changes his mind.

Even as Congress debated limiting the war, the Pentagon announced the
Air Force had alerted B-52 crews in the United States to be prepared for
the possible deployment of 10 additional bombers to Europe to join the
NATO air campaign.

They would be among nearly 300 additional aircraft -- mostly fighters,
refuelers and other support planes -- that NATO commanders have
requested in order to accelerate the bombing of Yugoslavia.

Suggesting the House-passed legislation was a veto candidate, Democratic
leaders said the ``ground elements'' wording was so vague it could even
apply to forces already in the region, or to the use of U.S. Apache
helicopters in Albania.

Republicans said the measure was intended only to apply to ground combat
missions.

``We should not even be in the Balkans,'' said Rep. Floyd Spence,
R-S.C., chairman of the Armed Services Committee. ``The national
security of this country is not at stake.''

Meanwhile, Senate Foreign Relations Committee Chairman Jesse Helms,
R-N.C., scheduled a hearing before his panel for Thursday to vote on a
measure by a bipartisan group of senators led by Sen. John McCain,
R-Ariz., to authorize Clinton to use ``all means necessary,'' including
ground troops, to prosecute the war.

At a White House meeting shortly before the House vote, lawmakers said
Clinton told them he would seek congressional approval if he decides a
ground campaign is needed.

``I can assure you that I would fully consult with the Congress,'' he
later told House Speaker Dennis Hastert, R-Ill., in a letter.

Republican leaders said they wanted to hold him to his word -- and
fulfill their constitutional responsibility for warmaking.

But Democrats said the vote, during the first extended debate on the
crisis since the NATO bombing campaign began on March 24, interfered
with Clinton's role as commander in chief and would send a message of
mixed U.S. resolve.

``The language in this legislation is unnecessary,'' said Democratic
leader Dick Gephardt of Missouri. He said the bill ``would be harmful to
our effort.''

Yugoslav President Slobodan Milosevic ``will be listening carefully to
what we say here today,'' Gephardt told colleagues.

For his part, Clinton said the 19 NATO nations had expressed unity over
the weekend and ``America must continue to speak with a single voice as
well.''

Clinton also appealed to lawmakers for quick approval of his $6 billion
request to pay for the conflict with Yugoslavia and urged them to resist
Republican-led efforts to double it. ``We must get a Kosovo funding
measure passed and to my desk now,'' Clinton said.

Republicans want to add more money to meet longer-term needs of the
Pentagon, including a military-wide pay raise.

While Clinton told reporters that lawmakers should ``resist the
temptations to add unrelated expenditures,'' members of Congress said
that during their meeting with the president, he did not say a $12.9
billion House GOP package was too large.

``He did not give a figure or suggest the dollar amount was a
controversy,'' said Rep. Jerry Lewis, R-Calif., chairman of the House
Appropriations Committee's defense subcommittee. ``I would have
noticed.''

After the vote on ground troops, the House turned to two more extreme
measures. It rejected, 290 to 139, a proposal to bring all U.S. forces
home and rejected, 427-2, one to formally declare war on Yugoslavia. The
two voting for war were Reps. Joe Barton, R-Texas, and Gene Taylor,
D-Miss.

Both were filed by Rep. Tom Campbell, R-Calif., who said he wanted to
test the terms of the War Powers Act.

``This is indeed war,'' Campbell said. ``We are on the verge of ground
troops. ... We are bombing bridges that we will be asked to rebuild
tomorrow. Mark my words. You know that.''

Even though the ground-troop restrictions were sponsored by Republicans,
the legislation was supported by 45 Democrats. Many argued that Clinton
should seek congressional approval for a ground war, just as former
President Bush had done in 1990 in winning support for the Persian Gulf
War.

Rep. Tony Hall, D-Ohio, called the choices before Congress ``a grab bag
of conflicting resolutions about the war. Proceeding in this fashion is
an embarrassment.''

Rep. William F. Goodling, R-Pa., an author of the GOP measure, said he
introduced the legislation ``because I don't believe the president can
conduct a war in Yugoslavia without the consent of Congress.''

At a Pentagon briefing to review the latest NATO airstrikes, Air Force
Maj. Gen. Charles Wald declined to discuss specific additional
deployments of bombers or other aircraft.

The officials who disclosed the B-52 bomber alert spoke on condition
they not be identified.

Unlike the eight B-52s that have been launching cruise missiles at
Yugoslavia since the start of the air campaign, the additional 10
bombers probably would drop 500-pound iron, or ``dumb,'' bombs on Serb
troop concentrations.

This would be a new tactic in the 5-week-old war, which so far has
relied almost exclusively on precision-guided munitions to strike fixed
targets such as buildings and missiles batteries.

Associated Press, April 28, 1999


Political Prisoners

Jim Norman's Letter to Warden of Manchester Prison

26 April 1999
Warden
FCI Manchester
P.O. Box 4000
Manchester, Ky
40962-4000

via fax to: 606-599-4115

Dear Sir:

On or about April 12, 1999, I mailed to you a transcript of an interview
with prisoner Charles Hayes (05930-320) for your comment. Having
received no reply or acknowledgment after two weeks, I expect to proceed
with the story. Your response is welcome at any time, but may now likely
come after publication.

In addition, the April 12 letter formally requested copies of Mr. Hayes'
medical and government service records, which he indicated he would
approve for release. Notwithstanding the fact that he has apparently
been relocated (in what appears to be violation of his sentencing order
by Judge Coffman), that document request remains and your prompt
response is expected.

Further, for the record, I would like to request a formal statement from
your office as to the reason for Mr. Hayes' transfer, the location to
which he has been transferred and the reason for sending him to that
facility.

Your prompt response would be appreciated.

Cordially yours,

James R. Norman
Senior Writer
212-xxx-xxxx
fax:: 212-xxx-xxxx


------------------------------------------------------------------------
New Address for Charles Hayes (as of 4/28/99)

Charles S. Hayes
05930-032 Wake Forest Unit
F.C.I. P.O. Box 1000
Butner, NC 27509
Charles Hayes on the cover of Media Bypass



Currency Competition

Dollars, Dollars, Everywhere

Argentina's dollarization proposal puts currency competition on the
table


Competition between currencies has been proposed by some free market
economists and was actually put forward by the British government as an
alternative to a single European currency. It has been given a new
relevance by Argentina's proposals for "dollarising" its currency.


Currency competition is already a reality judged by the amount of
foreign currency notes held for domestic purposes around the world. It
is known as dollarisation because the vast bulk of such currencies
consists of dollars. But it can apply to any currency.


A recent International Monetary Fund study - Monetary Policy in
Dollarised Economies - suggests that over half of all the $470bn of
dollar notes are held abroad. Average foreign currency holdings of
countries that have borrowed from the IMF since 1986 are equivalent to
over 16 per cent of total "broad money" - banknotes plus bank deposits.


Some individual countries hold very much more. The highest is Bolivia
where 82 per cent of all money consists of dollars. Even in the UK over
15 per cent of broad money consists of foreign currencies.


The IMF does not like foreign currency holdings because they complicate
the setting of domestic monetary objectives. But the study tries to
dissuade members from making dollar holdings illegal, as this would
drive them offshore.


Its main message is the long familiar one that dollarisation is a
product of lack of confidence in domestic policies. It admits however
that dollarisation has remained and even increased in several countries
after "successful stabilisation".


One halfway house is the currency board. This is based on an old British
colonial system, but has been adopted by independent countries, of which
Argentina is a prominent example. It has suffered less speculation
against its currency than Brazil.


Under a pure currency board the whole of a country's note issue and
reserve deposits by banks have to be covered by holdings of dollars or
other specified hard currencies. Countries with currency board features
include Estonia, Lithuania, Bulgaria, Hong Kong and Bosnia.


The most enthusiastic academic exponents of currency boards, Steve Hanke
and Kurt Schuler, complain that Argentina does not have a pure currency
board.* It has a central bank with limited independence in monetary
policy and up to one-third of the monetary base can be backed by
Argentine government bonds.


There is of course always some chance that a currency board will be
abolished by a future government. Because of this risk interest rates in
currency board countries are higher than in the US. In Argentina this
premium has recently been running at around 2  percentage points on
short-term interest rates and it was much higher during Mexico's
"tequila crisis" of 1995.


Carlos Menem, Argentina's president, would like to get rid of the
premium to stimulate the country's economy which has recently been
flagging. He proposes replacing the peso altogether by the dollar. He
claims that this would add 2 percentage points to the underlying growth
rate. The official preference is for a negotiated agreement with the US,
which might be take two or three years to implement.


The Hanke paper proposed unilateral dollarisation of the Argentine
currency within 30 days. Although not official policy, this is welcomed
in Buenos Aires as a reminder that Argentina could go it alone if
necessary. This would be technically possible quite soon as Argentine
dollar reserves are already more than sufficient to cover the existing
holdings of pesos and bank reserves. The operation is further simplified
by the fact that the exchange rate is one peso to one dollar.


Some 27 small countries, including Panama and Puerto Rico, are already
dollarised in the Argentine manner sense and the idea is under
discussion in Hong Kong. But dollarisation by Argentina, which has a
population of 36m, would be an altogether bigger move. Prof Hanke claims
that growth has been 50 per cent faster in 1953-1993 in countries which
are dollarised or have currency boards than in countries with orthodox
central banks, and that fiscal deficits have been 40 per cent less.


Nevertheless, action in Argentina is unlikely until after the October
presidential elections for which Mr Menem is not eligible to stand. It
is far from clear what a successor would do, but at the very least the
currency board features would be retained.


The US is obviously wary. Larry Summers, US deputy Treasury secretary,
has warned that the Federal Reserve would continue to base policy on US
domestic needs without taking into account Argentina. The Fed would not
be prepared to act as a lender of last resort.


How tragic would these limitations really be? The position would be
similar to that of a European country which had adopted the euro but had
no seat on the European central bank. The ECB does, irrespective of
voting, have to take into account conditions in the whole euro-zone. But
countries such as Ireland or Portugal - which individually account for a
small proportion of the euro-zone's gross domestic product - do not find
their interests mattering much anyway.


Curiously, Prof Hanke denounces orthodox central banking as a form of
central planning. But dollarisation also depends on a central banker -
the Fed. The legitimate reply is that the Fed has a better record at
providing low inflation and economic and financial stability than the
great majority of emerging economies.


Current proposals do not provide for any monopoly of the dollar.
Argentina is already one of the most liberalised financial economies in
the world and its citizens can hold any currency they desire. The
dollar's lead comes from the fact that this is what peso deposits and
notes would initially be converted into. Its legal tender status would
merely mean that contracts would have to be settled in dollars if the
currency of settlement was unspecified.


The main calculable loss from dollarisation would be "seigniorage", that
is state profits from the note issue. This only represents however about
0.2 per cent of GDP. It is also objected that dollarisation would
conflict with proposals for a "Mercosur" currency for Latin American
nations. The simple reply is that adoption of the dollar is a more
promising prospect.


Could an economic Eurosceptic who opposed British membership of the euro
because he did not believe in a "one-size fits all" monetary policy
logically support dollarisation by Argentina? He just about could. For
he could say that the operationally independent Bank of England has by
now established a good monetary track record. There is therefore an
alternative domestic route to low inflation which has gained
credibility. The same could not yet be said even of the more successful
emerging countries.


The implications of widespread dollarisation are sweeping. If Argentina
were to make a successful move, other countries would be likely to
follow. US leaders can say that they would take no notice of Argentina
in formulating monetary policy. But they could no longer be indifferent
if the greater part of the world's effective supply of dollars - not
merely currency notes - were held outside the US.


We would in practice then be near a dominant world currency and the Fed
would become a world central bank. This is not an honour to which it
aspires, but it will still need to think about it - as we all will.


*A Dollarisation Blueprint for Argentina, Cato Institute, Washington

The Financial Times, April 29, 1999
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

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