-----Original Message-----
From: Brian Lantz <[EMAIL PROTECTED]>
To: Linda Minor <[EMAIL PROTECTED]>
Date: Tuesday, July 06, 1999 11:24 AM
Subject: Re: Fw: [CTRL] ime: Clinton Approves CIA Role
>At 05:26 PM 07/05/1999 -0500, you wrote on Clinton's CIA role. Attached is
>a recent compendium of developments - "slugs" mostly - on key developments
>
> -Brian
>
>
Briefing - July 6, 1999
(Compiled from July 1-6, 1999)
Lead:
THE OLIGARCHY SACRIFICES ITS OWN
Look at the extraordinary treatment that Henry Kissinger
received last week in -- of all places, London -- where is it
reported that he walked out of one rather hostile interview in a
rage, and he was reduced to laughing and spitting in the face of
another interviewer. Among the questions posed to Henry -- who
is being likened to a war criminal -- was whether he felt like a
fraud.
That this would happen to Kissinger, in London, is but one
reflection of the turmoil now raging in the oligarchy; one
section of the oligarchy recognizes that the global financial
system is blowing up, and, realizing this, they are willing to
sacrifice some from their own ranks, in order that they can
continue to rule. They will slaughter their own.
They know their system is blowing up; even to the extent
that they publicly announced this in the pages of {Daily
Telegraph} last week, which warned that the phase of low
inflation is ending, and that very rapidly, as the bubble bursts,
the system can shift into the phase of hyperinflation.
This is a period of coups, destabilizations, and
dictatorships. The question is thus posed: unless the world goes
LaRouche's way, it goes the way of coup d'etat and dictatorship.
That is the trajectory of the world financial system, which
determines how it will behave. Either that system is overthrown
and replaced, or it hurls the world into a New Dark Age.
Exemplary of the current state of mind of the oligarchy, is
the way they ran the Balkans war, and the way they are now
determined to sabotage the peace. Look at the op-ed by former
German Defense Minister Lothar Ruehl last Friday in the {FAZ},
entitled "A Half Victory," in which he pointed out the failure of
the air war against Yugoslavia to inflict anywhere near the
amount of damage which was being claimed. Ruehl described a
situation of total incompetence by NATO -- in which one can only
conclude that the lunatics are in charge. These are the
"Sorcerer's Apprentices" playing out their role.
What then was the aim of NATO's war? What did NATO do? The
only bombing that was "effective" was that which targetted the
civilian infrastructure of Yugoslavia. The objective was to
destroy the infrastructure of the Balkans region, spread
destruction and chaos into Russia and Central Asia, and into
Western Europe as well. The aim is to bring down the European
economy.
What the oligarchy is carrying out, is a Dark Age strategy.
That is their intent. This is a Guelph-League strategy. They want
a planetary dark age, they want to eliminate the nation-state,
and to eliminate what they regard in their evil minds as
"over-population."
Look at how much money was spent to conduct the war, but
now, they won't spend anything to shape the outcome of the war,
and to guarantee a stable peace. Billions for war, but not a
penny for peace! The oligarchy wants to destroy -- it doesn't
want to build.
And don't believe any of the b.s. about "democracy," that if
Yugoslavia "democratizes," then it will get reconstruction money.
The people claiming this, are the same people that are working to
keep Milosevic in power!
And, speaking of Henry Kissinger, that brings us to the case
of Susan Rice, the U.S. Assistant Secretary of State for African
Affairs, who recently gave a confession reminiscent of
Kissinger's 1982 Chatham House address, the one in which he
divulged his own British pedigree.
Speaking at Rhodes House at Oxford University on May 13,
Susan Rice gushed that coming back there, after nine years, was
like coming home. Nine years ago, she recalled, she spent much
of her time in the library at Rhodes House, and she went on to
reveal that "much of what I know about Africa was discovered
within these walls, refined at this great university, with the
generous support of the Rhodes Trust."
Contrast this with the speech given by Zimbabwe's President
Robert Mugabe -- who, in effect, told the IMF to shove it. Mugabe
attacked the conditionalities of the IMF, which he called "this
creature," and he said that Zimbabweans are a proud people. "We
will strive to go our own way," Mugabe declared. "The IMF can go
away if they want."
By the way, we have heard from high-level Japanese sources,
that the Japanese financial balloon will stabilize only when it
reaches a geo-stationary orbit.
So, the system is coming down. The only issue is, does it
collapse of its own accord, dragging the world into a new Dark
Age of disease and warfare, or will it be brought down in an
orderly way, to be replaced by LaRouche's New Bretton Woods
design and global reconstruction. That shouldn't be a difficult
choice, should it?
LEADING DEVELOPMENTS
[Sources: Moscow insider; British press, mainly London <Guardian>
magazine, July 1]
WIESBADEN, July 5 (EIRNS)--IS KISSINGER ABSENCE IN MOSCOW LINKED
TO ROUGH TREATMENT HE RECEIVED IN LONDON?
A Moscow source reports that, over the past weekend,
there was a meeting in the Russian capital, of prominent "former
foreign secretaries." Yevgeni Primakov was there from the
Russian side, and there were top figures from India, Britain,
Japan, various European countries, etc. A notable absence was
that of Henry Kissinger, who sent a message to the conference,
but said he could not personally attend, because of "bad health."
The relevant circuits are abuzz with another explanation,
namely that Kissinger was recovering from some nasty run-ins last
week in, of all places, London.
Indigestible Henry arrived in London over the June 26-27
weekend. On June 28, he gave an interview to the Hollinger (on
whose board of advisers he sits) {Daily Telegraph}, pontificating
on the situation in the Balkans, and praising the British for
loving to fight wars. But then, on the night of June 28,
troubles began. He appeared on BBC's "Start the Week" radio
program, interviewed by host Jeremy Paxman. What happened, was
synopsized in a July 1 London {Guardian} feature on Kissinger:
"He has had a tough week.... Paxman, at his belligerent
best, seemed to unburden himself of a quarter century's worth of
suppressed bile. It was a pummelling more than an interview. In
short, Paxman asked how a man could accept a Nobel peace prize
after being responsible for bombing the life out of a neutral
country (Cambodia), for extending a war well beyond the necessary
(Vietnam), and for destabilizing a democratically elected Marxist
government (Chile)? Didn't he feel a fraud?.... Over the past
couple of decades, Kissinger has grown more and more unpopular,
so much so that a mainstream radio program can treat him as
something approaching a war criminal."
{Guardian} writer Simon Hattenstone claims that Kissinger
lost his temper so badly on the Paxman show, that he "walked out
in a rage." This has been denied by Kissinger, as well as by the
Paxman show itself, but EIRNS is further looking into the matter.
The {Guardian}'s Hattenstone interviewed Kissinger, and
begins the account of the interview by reporting Henry freaking
out, because Hattenstone asked for two hours interview time, an
amount which Kissinger never grants: "Henry Kissinger is laughing
at me in disbelief. Laughing in my face. Spitting in my face,
actually. I surreptitiously wipe away the spray from my cheek,
and tell him I'll be more than happy to make do with an hour.
It's the last time I see Dr. Kissinger laugh."
The {Guardian} text is then filled with many other
derogatory characterizations of Kissinger, as "pompous," and so
on, and Hattenstone follows up Paxman's question, whether
Kissinger admits to being a fraud? The one big "catch", is that
Kissinger is described as "the unacceptable face of American
imperialism," and his love affair with Great Britain, as
epitomized in the May 10, 1982 speech to Chatham House, is never
alluded to. (mjb)
[Source: AFP, 7/5/99]:
ZIMBABWE PRESIDENT MUGABE CALLS IMF `THIS CREATURE'
IN SPEECH AT NKOMO'S FUNERAL. Zimbabwe President Robert Mugabe used
the occasion of the funeral of independence fighter and leader
Joshua Nkomo to excoriate the IMF, which has again refused to
release its promised monies to Zimbabwe, which is not in arrears
in debt payments. According to AFP, Mugabe attacked the IMF for
imposing conditions on its loans, and called the IMF "this
creature." He said that Zimbabweans were a proud people who would
not take orders from others. "Nkomo goes to the grave a proud
man. We will strive to go our own way. The IMF can go away if
they want. The struggle continues." [ldh]
[Source: Financial Gazette, Harare, 7/5/99]:
IMF REFUSES AID PACKAGE BECAUSE ZIMBABWE
GOVERNMENT SEEKS TO AVOID FOOD SHORTAGES. Millers
are refusing to release maize-meal, "mealie-meal," the basic staple,
because the government price is too low to even pay for
production. The government raised the
price to producers but will keep the regular price for consumers.
"Any action by the government to extend price controls by
controlling the price of bread will not be consistent with the
economic program that the government has presented to us" to
qualify for IMF funds, intoned Micheal Nowak, assistant director
at the IMF's Africa Desk. "That will not be appropriate action by
the government, and it certainly would cause considerable
problems for the new program the IMF is working on," he said.
[ldh]
[Source: AFP, 7/5/99]:
SOUTH AFRICA TRADE MINISTER ALEC ERWIN CALLS G7 DEBT
POLICY CRIMINAL. Speaking at an economic summit of southern African
political and business leaders, Alec Erwin declared that for the
Group of Seven "to be cautious on debt is criminal. It's
criminal."
Erwin was responding to castigations from U.S. Deputy
Commerce Secretary Robert Mallett that the SADC must erase all
barriers to free trade regionally. "The global economy is here,
and unlike Europe, you don't have 40 years to get your act
together," the "ugly American" said.
"Erwin answered: "In Mozambique, Zimbabwe, Zambia, how can
we do projects in public-private partnerships when the sovereign
risk is so massive because of debt? If we want to build southern
Africa, G7 can help, but not by preaching to us about governance,
but by taking debt off the books so we can have genuine
public-private partnerships." [ldh]
BALKANS RECONSTRUCTION FIGHT
WIESBADEN, July 3 (EIRNS)--THERE WILL BE NO REBUILDING SAYS
UNHCR; WE'RE BROKE. Today's Guardian quotes Dennis McNamara of
the UN High Commission for Refugees (UNHCR), saying, "I find it
quite incredible, after a hugely expensive conflict in Europe,
that we have to keep on saying `We haven't got any money.'...
We're just about bankrupt in terms of cash flow.
"We're asked to coordinate complicated returns throughout
devastated territory, and we're constantly looking to see whether
we can afford to do it ... that is no way to run an operation."
After noting that 500,000 people have returned over the last
three weeks, the Guardian concludes that "as a last resort" the
UNHCR may be forced to stop repatriation, owing to the lack of
funds for the most basic supplies such as plastic sheeting,
timber and blankets.
Officials in Helsinki told the Guardian that funds for the
Eurpean Agency for Reconstruction would be "ready in October,"
which is far too close to the onset of winter. [klk]
[Sources: NYT, July 3; Itar-TASS, AFP; Ivashov in Nezavisimaya
Gazeta 6/25 via FNS]
July 3--INTENSE NEGOTIATIONS OVER DEPLOYMENT OF MORE
RUSSIAN
TROOPS INTO KOSOVA. The {New York Times} makes its lead story
today, a report on fevered NATO efforts to keep Russia from
reinforcing its contingent of the international peacekeeping
forces in Kosova. According to the report, Russia sought
permission to cross the airspace of Hungary, Romania, or
Bulgaria, but was denied. Secretary of State Madeleine Albright
was on the phone with Foreign Minister Igor Ivanov, reportedly to
demand delay in the dispatch of Russia's up to 3,600 troops,
until more details of their deployment are agreed.
Disputes are surfacing, about what the command structure
will be. NATO SACEUR Gen. Wesley Clark is quoted in the {Times},
that "unity of command" is sacrosanct, while Russian Defense
Ministry official Gen. Col. Leonid Ivashov has continued to
stress that "our contingent in Kosova will be under complete
political and military control of the Russian command." Ivashov
also stated, in his interview to {Nezavisimaya Gazeta} on June
25, that "Russia's position in Kosova will not be a fixed one; it
will change, depending on the situation. This allws us to expand
the zone and change the geography of our zones."
Today, Itar-TASS wires report Russian study of options to
bring their KFOR troops in by sea rather than air, using Black
Sea fleet vessels. Interfax yesterday, according to AFP, cited
military sources on the impending sailing of three ships from
Sevastopol, bearing military personnel and supplies to Kosova.
Airborne Forces commander Georgi Shpak said that more ships would
set sail from Tuapse, also on the Black Sea, on July 7 with 300
paratroopers aboard. [RBD]
[Source: The New York Times, letter to the editor; Washington
Times, 7/4/99. Atlanta, Washington].
July 4--REFLECTING THE ENVIRONMENT IN THE BALKANS, the
president of CARE International, Peter Bell, announced that that
organization has suspended its operations in Serbia, since the
safety of its staff can no longer be guaranteed. In May, the
Milosevic government convicted three CARE humanitarian workers
for allegedly passing on secret information to a foreign
organization, namely CARE, Bell told {The New York Times} in a
letter to the editor.[filed, crr]
[Source: Washington Times, 7/4/99. Washington]
July 4--ANY BALKAN RECONSTRUCTION PLAN MUST `EVENTUALLY'
INCLUDE SERBIA, said Pertti Torstila, director general for
political affairs at Finland's Foreign Ministry, during a trip to
Washington this past week. ``If we leave a black hole of that
size in the middle of the region, we will have a big headache for
years to come,'' he said. Finland is about to begin its six-month
term as president of the European Union, and Torstila was in
Washington to work out the details of his government's EU agenda.
He said that Finland's priorities for the EU agenda through the
end of 1999 include Balkan reconstruction, relations with Russia,
improving European security and defense capabilities, and the
Middle East. Torstila emphasized that Finland {would not} move
forward on the issue of aid to Yugoslavia, without the full
consensus of the EU's 15 member-nations. He did call for
suspending ``war related'' sanctions against Belgrade, however,
such as oil, and air travel blockades. [filed, crr]
[Source: Corriere della Sera July 1]
July 1 -- ITALIAN FOREIGN MINISTER DINI: SERBIA IS MORE DESTROYED
THAN KOSOVO. Italian Foreign Minister Lamberto Dini was yesterday
in Kosovo, where he delivered polemical statements to the press
to the effect that Serbia is much more destroyed than Kosovo and
deserves reconstruction aid. "By flying in helicopter over Kosovo
last week," Dini said, "I realized that it is less a disaster
than what it is feared. Sometimes it looks like the Po [River]
plain [in Italy], with crops growing beautifully. The territory
is ordered, a few houses are destroyed. The real problem for
reconstruction is Serbia. Kofi Annan himself said that we must
rebuild water and electrical infrastructure of Serbia, and I do
not see how we deny the Serbs the gasoline they need for their
tractors, nor how we can keep sanctions". [ccc]
WIESBADEN, July 1 (EIRNA)--REBUILDING THE BRDIGES `OUT OF THE
QUESTION' SAYS EUROPEAN COMMISSION'S TOP AGENCY FOR
RECONSTRUCTION. In a background discussion with this news agency,
a highly-placed British official in the European Commission,
whose name we are not authorized to cite, expressed remarkably
candid views of what London will, and will not have happen, in
the Balkans.
Q - What role is the European Commission playing, relative to the
US or member states as such ?
A - The US Agency for International Development can come in,
bilaterals can come in, but it is going to have to be clear that
it is [the European Commission--klk] which is the lead
organization in Kosovo.
Q - The Danube region is on the verge of collapse. Are there
plans to clean up the mess ?
A - Fixing the bridges over the Danube is out of the question! It
would cost 10 billion euros. We don't have it. Nobody is going to
come up with that kind of money. When Serbia does come on line,
maybe. But we're going to follow the political line of the US on
this. The other member states will never give us the resources
for this.
You can't spend money on destroying a regime and then feed
it back up again!" (laughs)
The whole role of the Danube is over-estimated. There is no
reconstruction exercise we can do which will change the
parameters we're in.
Q - What about what Koffi Annan said on Serbia on Monday?
A - (Laughs) What Koffi Annan says ... well, I'd just say the UN
is not a political structure. It's we at the Commission who have
contractual relations with Eastern Europe. So far as Serbia is
concerned, we'll repair the water supply, that kind of thing, but
that's it.
Q - Kosovo is not a separate country. How are you going to work
it, from the standpoint of law ?
A - We'll be working on this with the World Bank. Bretton Woods
will have to come up with a financial system. Kosovo's cut off.
It has no central bank, no state banks to speak of. We'll have to
import a whole new financial system. Bosnia will be the model.
Q - Bosnia ?
A - (Laughs) Westendorp, King of Bosnia! He's King, isn't he ?
Wouldn't you agree with that? He bangs on the table, and they
vote up a law. He tells them to change their flag and they
change their flag. ESFOR has built their barracks in Bosnia to
last for 50 years, and that's what it'll take. It's going to be
the same in Kosovo.
The looting and terrorizing of Serbians in Kosovo is going
on right under NATO's eyes. Don't you think they could stop it if
they wanted to ? But they don't. Because the best thing that
could happen to Kosovo is reverse ethnic cleansing. The Serbs
should get out. That's the best solution.
Q - I see you have a brilliant career in diplomacy ahead of you!
A - (Laughs uproariously, chewing on something). Yup! That's why
I chose to be on the economic side of things! [klk]
[Source: ANA, July 1]
WIESBADEN, July 1--GREECE AND TURKEY SHOULD COOPERATE IN THE
RECONSTRUCTION OF THE BALKANS, Greek Foreign Minister Papandreou
said after a meeting with Turkish Foreign Minister Cem in New
York yesterday. The two diplomats had come to New York for a
session of U.N. General-Secretary Annan's new initiative,
"Friends of Kosovo" (which includes China, as well), and their
discussion touched upon many areas of mutual cooperation, for
example, in the fight against drugs and terrorism.
"We also decided that we must strengthen our cooperation
at a multipartite level, particularly in the Balkans and the
Black Sea," Papandreou told journalists about his meeting with
Cem.
"Specifically for the Balkans, in the framework of the
Stability Pact, the two countries could cooperate on issues
concerning the reconstruction of the Balkans, and on this issue
in particular, our two business communities must cooperate," he
said. (rap)
U.S. POLITICS
[Source: "Retirement Life," July 1999, magazine of the National
Association of Retired Federal Employees (NARFE); FEC Website
(www.fec.gov).
LAROUCHE LISTED AS ONE OF 12 (3 DEMS) LEADING PRESIDENTIAL
CAMPAIGNS BY FEC. Lyndon LaRouche's presidential campaign is
listed as one of 12 "selected" presidential campaigns on the
official website of the Federal Election Commission. This is
picked up in the July issue of {Retirement Life,} the monthly
magazine of the National Assn. of Retired Federal Employees
(NARFE), in its first in a series of reports on the national
elections for November 2000. LaRouche is listed by the FEC as one
of only three Democrats and nine Republicans. Gore and Bradley
are the other two Democrats. The Republicans are, alphabetically,
Alexander, Bauer, Buchanan, Bush, Dole, Forbes, McCain, Quayle,
and Bob Smith.
The NARFE article states: "There are 131 declared and
potential candidates for President of the United States. This is
twice as many as the same time frame prior to the 1996 elections.
Twenty-six candidates have formally announced their candidacy, 60
have filed papers with the Federal Election Commission, and six
have stated they have decided not to seek office; others have
formed exploratory committees, are the focus of draft plans by
various groups, or are being seriously discussed by media and
political organizations as possible candidates.
"The Federal Election Commission has selected the following
dozen candidates and posted this list of their principal campaign
committees and treasurers on their web site.
"As this list changes during the primaries, we will narrrow
the field and provide more information. Future reports in the
series will detail the primary calendar. Suggestions gratefully
accepted."
Amelia Robinson subscribes to the magazine and faxed the
article to Leesburg, saying how proud she is of LaRouche! [mw_]
[Source: Arianna Huffington syndicated column, Washington Times,
June 30, page A17].
DEMOCRATIC REPS. JESSE JACKSON, JR., AND TONY HALL SUPPORT
AFRICA ANTI-AIDS BILL AGAINST GORE. "The reasons why Mr. Gore
tried to get Mr. Mbeki to acquiesce to the drug companies,"
writes Republican columnist Mrs. Huffington, "are chillingly laid
out in next month's {American Prospect} magazine. John B. Judis
exposes `K Street Gore's interlocking directorate' of aides,
friends, advisers and lobbyists, moving seamlessly between the
pharmaceutical industry and his inner circle. Among them are
Anthony Podesta, a top adviser and friend of Mr. Gore, and one of
the Pharmaceutical Research and Manufacturers of America's chief
lobbyists; Mr. Gore's chief domestic policy adviser David Beier,
who was previously the top in-house lobbyist for Genentech; and
Peter Knight, Mr. Gore's main fund-raiser, who made $120,000
lobbying for Schering-Plough. (According to Public Campaign, Mr.
Gore has helped raise at least $1.4 million from drug companies
during the course of his career.) With all of this crossover, a
drug to loosen Al up on the campaign trail can't be far off.
"It is no wonder that the African Growth and Opportunity
Act, sponsored by Rep. Phil Crane, Illinois Republican, with the
full backing of the President and the Vice-President, does not
even mention the AIDS crisis. Fortunately, Rep. Jesse Jackson,
Jr., Illinois Democrat, has introduced a competing bill that
would prevent the United States from applying sanctions on South
Africa and other sub-Saharan nations that are attempting to make
AIDS drugs widely available. `American drug companies want some
of the poorest people in the world to pay U.S. market prices for
drugs,' Mr. Jackson told me. `But AIDS drugs can cost $500 per
week -- which happens to be the annual per-capita income of
sub-Saharan Africa.'"
"One indication that the Jackson bill is gaining steam, is
the fact that Rep. Tony Hall, Ohio Democrat, who originally
co-sponsored both bills, has now decided to support Mr.
Jackson's. `It is the better bill,' he told me. `The White
House called me and asked me to suport Mr. Crane's, but it puts
trade above all other humanitarian concerns.'" [Mrs. Huffington
does not mention that Rep. Tony Hall is a close friend of the
President.]
"The Vice President's office says it is trying `to help AIDS
patients by making sure drug companies maintain profit levels to
develop new AIDS medications.'
"But what good are AIDS medications if they can't get to the
people with AIDS?..." [ap]
OP-ED BY HAROLD JAMES
WILL MILLIONS DIE IN SOUTH AFRICA BECAUSE OF AL GORE'S
POLICIES?
JUNE 30, 1999
Disturbing reports have come to public attention recently,
concerning the apparent role of Vice President Al Gore in denying
affordable AIDS medications to the people of South Africa.
"It's hard to appreciate the horror of the situation," said
Jamie Love of the Center for the Study of Responsive Law.
"Millions of South Africans will die because of what Vice
President Gore has done."
Why would Al Gore take actions, which would unnecessarily
increase the suffering and deaths from AIDS in Africa?
Groups like the coalition AIDS Drugs for Africa, the Center
for the Study of Responsive Law, among others, have documented
the following facts:
1. AIDS represents a massive national emergency in many
African countries, where the disease is spreading rapidly due to
poverty, lack of proper sanitation, overcrowding, unsanitary
medical conditions, lack of education, etc. In South Africa, it
is estimated that 20% of pregnant women are HIV-positive, along
with 45% of members of the military and 20% of all young people.
At least 3.3 million, and possibly as many as 6 million people
out of a total population of 40 million are infected.
2. The prices charged by multi-national pharmaceutical
companies for AIDS medications are far beyond the reach of
African nations.
3. Although sub-Saharan African nations account for 70% of
the world's new HIV cases and 80% of all AIDS deaths, less than
1% of AIDS drugs are sold there.
4. In 1997, the government of South Africa passed
legislation allowing the domestic production of generic versions
of AIDS drugs, and the purchasing of cheaper types of AIDS drugs
on the world market. The law also requires a reasonable fee to be
paid by domestic producers to the drug companies which hold the
patents. The pharmaceutical industry is worried that if South
Africa and other Third World countries go ahead with these plans,
their ability to charge vastly inflated prices back home in the
U.S. may be undercut. While AZT, for example, can be purchased on
the world market for 42 cents for 300 mg, it retails in the U.S.
for nearly $6 a pill.
5. Under pressure from U.S.-based pharmaceutical companies,
the United States government has retaliated by pressuring South
Africa to suspend this law and imposing sanctions, such as
placing the country on a "watch list" and denying it special
tariff breaks on its exports. As a result, the South African law
has not been implemented.
6. As U.S. head of the Commission on Binational Relations
with South Africa, Al Gore is the one responsible for this
policy. Gore made a point of pressuring then-South African Deputy
President Thabo Mbeki on this issue in their meeting last August.
At the end of April, Gore increased the pressure by ordering a
special full review of South Arica's trade policies.
James Love, of the Center for the Study of Responsive Law,
and other Aids Drugs for Africa coalition members explain Gore's
attitude by pointing to the tens of thousands of dollars
contributed to his campaign so far by the pharmaceutical
industry. They point out that several of Gore's top advisers and
fund-raisers are also lobbyists for major drug companies. They
charge that Gore is willing to see millions of Africans suffer
and die prematurely, in order to attract more money to his
presidential campaign.
Even more troubling, supporters of Lyndon LaRouche's
Democratic presidential campaign point to Gore's 1992 book "Earth
in the Balance," where Gore claims that "overpopulation" is the
greatest threat to the global environment. They say that
propaganda about alleged "overpopulation" in Africa and other
"non-white" areas is nothing but a cover for genocide,
promulgated by those who would welcome millions of deaths from
AIDS in those parts of the world.
Indeed, in his book, the countries that Gore singles out as
the most "overpopulated" are Nigeria, with about 300 people per
square mile; Kenya, with 128 people per square mile; and Egypt,
with 168 people per square mile. Gore writes, "it is truly
frightening to imagine the impact of doubling or tripling their
numbers."
However, while Gore is frightened at the idea of doubling or
tripling the numbers of black people in these African countries,
he seems unconcerned with the numbers of people in the developed
European countries of Belgium, with about 868 people per square
mile; the Netherlands, with 976 people per square mile; or
Germany, with 610 people per square mile.
These European examples seem to show that a large
population, but one that is also well-educated and allowed to
develop modern industry and technology, is one of the things that
goes along with a strong, prosperous nation. The problem in
Africa, contrary to Mr. Gore, is underdevelopment, not
"overpopulation."
Recently, Rep. Jesse L. Jackson, Jr. (D-ILL), introduced an
African development bill, which, among other things, would
prevent the U.S. from applying sanctions on South Africa and
other sub-Saharan nations that are attempting to make AIDS drugs
widely available. "American drug companies want some of the
poorest people in the world to pay U.S. market prices for drugs,"
Jackson said. "But AIDS drugs can cost $500 per week, which
happens to be the annual per capital income of sub-Saharan
Africa."
If we want to see Africa saved, if we want to see her
prosper and develop, if we are truly a moral nation, then the
United States should reverse its unconscionable policy of denying
affordable AIDS drugs to South Africa.
Otherwise, Vice President Al Gore will have a lot to answer
for.
-------------
Source: Los Angeles Times (Reuters), The Dallas Morning News,
internet version, 7/4/99. Austin, Los Angeles]
July 4--AN ISSUE IS BEING MADE OF GEORGE W. BUSH'S SERVICE
IN THE TEXAS AIR NATIONAL GUARD during the Vietnam War, in which
he reportedly received ``highly favorable treatment and uncommon
attention.'' According to the {Los Angeles Times}, George W.
received ``an instant commission'' as a second lieutenant and
went directly to pilot training, after completing basic training.
``Although getting into the state units was difficult for most
others, George W. Bush was soon in the Guard.'' The {Dallas
Morning News} adds on the same story that Bush showed
``below-average potential as a would-be flier, but scored high as
a future leader.'' Bush's score on the pilot aptitude section of
the test for pilot trainees was in the 25th percentile, ``the
lowest allowed for would-be fliers,'' the {News} reports. The
article quotes Ralph J. Ianuzzi, the Air Force captain who signed
Bush's score sheet, who remarked ``that score for pilot seems
low. I made that, and I'm dyslexic.'' Douglas W. Solberg, who
served with Bush, was quoted in the {News} that being in the
Guard ``was a cushy way to be a patriot.'' Bush was supposed to
serve in the Guard until May of 1974, but was allowed to leave in
October of 1973 to attend Harvard Business School. [filed, crr]
[Source: Boston Globe 6/30/99 by Frank Phillips]
GORE STRATEGY OF BREAKING WITH CLINTON THREATENS TO
UNRAVEL HIS CAMPAIGN. "Gore Losing Grip on Bay State, May Want to Rethink
Strategy" is the headline of a Boston Globe article which
analyzes Gore's faltering campaign in the Bay State
(Massachusetts), and strongly suggests that Gore's break with
Clinton is a strategic mistake that will play out nationally. The
article cites a new survey taken by the University of
Massachusetts that shows former U.S. Sen. Bill Bradley has pulled
even with Gore in Massachusetts, with Gore at 37.9 percent,
Bradley at 34.6 percent and 10.3 percent undecided. This
contrasts sharply with Gore's standing only two months ago in a
similar U. Mass. poll, where he led Bradley by 14 percent. The
article notes that "what may be unsettling for Gore is that his
slip comes as Clinton's standing among Bay State voters has
jumped 10 percentage points since the Kosovo victory."
One of the poll's designers quoted said that Gore seems to
be in a "free fall" and that the results raise questions about
Gore's strategy of separating himself from Clinton. Although the
U. Mass. poll does not square with recent national polls that
show Gore with a much stronger showing over Bradley, the poll's
designer, Lou DiNatale, senior fellow at the U. Mass. McCormack
Insitute, said that his survey may have picked up an early trend
that spells trouble for the vice president and his strategy to
distance himself from Clinton. "One of the fundamental
assumptions of the Gore campaign is that if he separates himself
from Clinton, he should gain in the polls. But with Massachusetts
so pro-Clinton, there may be a downside to the strategy that the
Gore campaign has not fully thought out." The Globe asks: "Has
Gore made a strategic mistake that will play out nationally for
him?" [MJM]
[Source: Daily Telegraph, July 3, 1999]
`DESPERATE GORE PUTS CAMPAIGN ON RED ALERT,' is the
headline in today's London Daily Telegraph on Vice President Al Gore's
response to the announcement that George W. Bush has raised over
$35 million for his Presidential campaign. They also report that
former Sen. Bill Bradley (D) has emerged with support from senior
Democratic senators, allowing Bradley to "emerge as a dangerous
anybody-but-Gore candidate." The DT goes on: "Mr. Gore, whose
leaden style makes some Democrats fear he is unelectable, claims
to be unruffled," according to one of Gore's staff.
Gore has brought on Carter Eskew, a political publicist and
old friend to help run the campaign. Eskew is known to have
helped the tobacco companies campaign successfully defeat the
anti-smoking legislation which Gore himself had supported. Eskew
apparently is an old enemy of another Gore campaign adviser Bob
Squier and the DT claims that "having the two of them on the same
team is a desperate move by Gore."
The article concludes, "If Mr. Gore loses an early primary,
the Democratic establishment could easily wash its hands of him
and support Mr. Bradley. Even if he narrowly beats Mr. Bradley,
it would be damaging." [dea]
July 5 (EIRNS)--MIDWEST RACIST SHOOTER BELONGED TO A GROUP
SPAWNED BY THE CANADIAN SECRET SERVICE. The latest saga of "blind
terrorism" may have been a real blunder, in that the BAC murderers pulling the
strings have left a blatant trail to themselves.
A man identified by the FBI as Benjamin Nathaniel Smith,
suspected of killing a black man and a Korean-American, and
wounding orthodox Jews, had shot himself to death while being
chased by police. (Radio reports said Smith supposedly shot
himself three times.) Smith's shooting episodes began Friday,
July 2 in Chicago and ended Sunday with Smith's death in Salem,
Illinois.
The Associated Press and other news agencies said Smith was
a member of the "World Church of the Creator" -- a racist group
brazenly manipulated, and in effect re-created, by the Canadian
Secret Intelligence Service (CSIS), Canada's domestic
intelligence agency. Canada's intelligence services report
directly to Britain's secret services and to Queen Elizabeth II.
A July 5 Reuters wire said, "Smith was formerly a student at
Indiana University in Bloomington and until recently passed out
hate-filled literature on or near the campus for the East Peoria,
Illinois-based World Church of the Creator." Sometime before his
terrorist attack this past weekend, Smith had been "talked to" by
the Bloomington police about his activities on behalf of the
"Church," according to Bloomington Police Captain Bill Parker.
The "Church of the Creator" is a sub-entity of the Heritage
Front, Canada's main organization of neo-Nazis. Heritage Front
burst into the headlines in Canada in 1994 when it was revealed
that Grant Bristow, an informant paid a $50,000 yearly stipend by
the CSIS, founded and funded the Heritage Front, and led it into
violence.
In one infamous incident, a computer containing names of
members of the "Church of the Creator" and the Heritage Front was
stolen from the "Church." According to an affidavit by Heritage
Front leader Wolfgange Droege, CSIS agent Grant Bristow told
"Church" security director Eric Fisher that a certain member had
stolen the computer. Fisher, a Canadian airborne special forces
veteran, forcibly detained and beat up Bristow's suspect. After
the victim, Tryone Mason, went to the police and Fisher was
charged with kidnapping and assault, Bristow warned Mason to drop
the charges, according to Mason's affidavit.
"Church of the Creator" is said to have been founded
originally in the early 1970s by one Ben Klassen, who grew up in
Canada but moved to the U.S. and became a Florida state
legislator. During 1992, South African police spies revealed they
had been ordered to join and use the "Church" for recruits in an
undercover war against the African National Congress. In the
U.S., the Southern Poverty Law Center filed suit against the
"Church," driving it towards bankruptcy and the 1993 suicide of
founder Klassen. The Canadian secret service and army uses of the
group, of which we have record, occurred during this chaotic and
increadingly leaderless period of the "Church"; the reorganized
"Church" had become an "affiliate" of the Heritage Front.
After the Toronto {Sun} and {Globe and Mail} broke the story
that Grant Bristow had "co-founded" the Heritage Front, Canada's
Security Intelligence Review Committee held hearings on the
Heritage Front affair. This official British Commonwealth review
body mildly criticized Bristow and the CSIS, but praised the CSIS
for maintaining "active" agents in racist groups -- supposedly to
avert racism and violence.
The nominal leader of the Heritage Front, Wolfgang Droege,
immigrated to Canada as a teenager from Germany in 1963. Droege
went to jail for his part in a 1981 secret-services-backed scheme
of Canadian and U.S. racist mercenaries to overthrow the
government of the Caribbean island of Dominica. After another
U.S. term for cocaine trafficking, Droege returned to Canada and
was asked by CSIS agent Bristow to create Heritage Front using
Droege's name.
In an April 26, 1996 affidavit, Droege describes Bristow's
role in funding Droege personally, and funding the creation and
development of the Heritage Front, funding its publicity, running
the provocations and harrassment against leftist anti-racist
groups, funding and personally running all aspects of its
outreach to the U.S. and other countries, and running its legal
protection from the Canadian authorities. For an example on the
legal front, observers were astonished by the 30-day sentence
offered by Canadian prosecutors as a punishment for "Church of
the Creator" security director Eric Fisher in the
Bristow-instigated kidnapping.
Perhaps not surprisingly, the B'nai B'rith, parent of the
FBI-affiliated Anti-Defamation League, praised the CSIS for
Bristow's role. The B'Nai B'rith stance stood out in contrast to
other Jewish groups' reaction to the affair.
Hal Joffe, a spokesman for the Canadian Jewish Congress,
said in 1994 that he was angry that taxpayer dollars had possibly
been used to build the Heritage Front. "Essentially, I have paid
for the development of an organization bent on my demise," Mr.
Joffe said.
But Frank Dimant, a B'nai B'rith Canada spokesman, praised
CSIS for placing an informant who "had his finger on the pulse"
of the Heritage Front, on the grounds that "information" he
obtained could be used against the group in a trial. [ahc]
U.S.-RUSSIAN RELATIONS
[Source: Associated Press, New York Times 7/4/99. Moscow]
July 4--THE RUSSIAN GOVERNMENT EXPELLED A U.S. MILITARY
ATTACHE three days ago, after declaring him persona non grata.
Lt. Col. Peter Hoffman was an assistant Army attache at the U.S.
embassy in Moscow. No details have been given as to why he was
expelled, and the report on his expulsion is couched in terms of
``worsening tensions'' between the U.S. and Russia.
BBC News today highlights ``Tensions between U.S. and
Russia'' in its coverage of the delay in the departure of Russian
troops assigned to Kosovo as peacekeepers [see m.b. 7/4/99].
Reuters quotes Russian military officials who said the U.S.
decision to delay the arrival of the Russian peacekeepers was ``a
provocation.'' A NATO official in Brussels told Reuters that
Russian diplomats will return to Brussels this coming week to
work out the final details of their peacekeeping mission in
Kosovo, and that until then, it were better that Russian troops
in Kosovo {not be reinforced}. Reuters is also reporting that
four ships from Russia's Black Sea Fleet will set out for
Yugoslavia this week, escorted by two other vessels, and will
pick up as many as 1,800 Russian paratroopers, in addition to
tanks, armored personnel carriers and other military equipment at
Novosibirsk. [filed,_crr]
July 3 (EIRNS)--RUSSIAN DEPUTY DEFENSE MINISTER'S BOOK HIGHLIGHTS
"PHYSICAL ECONOMY" FROM LEIBNIZ THROUGH LAROUCHE, AND
"AMERICAN SYSTEM" VS. "OFFICIAL BRITISH POLITICAL ECONOMY."
{EIR} has received the Russian-language book {Osnovy fizicheskoi ekonomiki}
{(Foundations of Physical Economy)}, which was published in
Moscow earlier this year. As we reported some time ago, the book
is co-authored by Dr. Yu.S. Savrasov, Dr. D.S. Kontorov, and Dr.
N.V. Mikhailov, who is the First Deputy Defense Minister of the
Russian Federation, and includes an introduction that reviews
"physical economy" as brought to life in our time by Lyndon
LaRouche. First Deputy Defense Minister Mikhailov is identified
in the book as the author of that introduction.
Dr. Mikhailov is a leading Russian specialist in
anti-missile defense (see accompanying slug). In 1996, he became
deputy secretary of the Security Council, before moving to the
Ministry of Defense the next year.
Following are excerpts from the introduction to {Osnovy
fizicheskoi ekonomiki}:
Economics is "the law of the house" (Gk. oikos - house,
nomos - law), from the household to the planetary level, the
planet being the house for all humanity....
The first known book on economics was the Book of Genesis.
There it was said, that man is destined to live in no other way,
than by means of daily labor, to be fruitful and multiply, to
replenish the Earth and have dominion over all living and
non-living beings of nature. It is evident, that mankind is
following those dicta down to the present day, although not
always with success.
Economic science (in the modern sense) is significantly more
recent. The works of Leonardo da Vinci (1452-1519) show that
there were successful efforts to develop economic science already
in the Fifteenth Century. In 1671, Gottfried Leibniz (1646-1716)
published his article "Society and Economy," devoted to questions
of real value and compensation of productive labor. He
established the terms "work" and "power," which subsequently were
used in physics. He defined the term "technology." From 1791
until 1830, Leibnizian economic science became known worldwide as
"the American system of political economy," which played a marked
practical role.
At the beginning of the Seventeenth Century, the tendency of
cameralism had emerged, which was a variety of mercantalism,
manifested as the State's active intervention into economic life
in the interest of merchants. The partisans of this teaching
believed that profit was created in the sphere of exchange, and
that the wealth of a nation was comprised of money. The teaching
of Leibniz was broader and deeper. In essence, Leibniz originated
the synthesis of physics and economics. Then, the physiocrats,
who modelled their schema on the Chinese economic model,
influenced views in economics to a certain degree. Rejecting the
notion of wealth as an accumulation of money, they considered
nature to be the sole source of wealth....
Official British political economy begins with the book {The
Wealth of Nations}, by Adam Smith (1723-1790). The British
scientific paradigm opposed the American one, and took the upper
hand.
Economic science underwent fundamental anticapitalist
development in the works of Karl Marx (1818-1883), who
synthesized the British, American, and physicalist tendencies and
brought to the fore {human labor} as the source of wealth.
Thus it came to pass, that the fundamental ideas of Leibniz,
about the concepts of labor and power, were first moved to the
back burner, and then quite forgotten, although the principle of
least action, which he discovered, was the central element for
defining productive technology.
The discoveries of Leibniz and his followers (Huygens,
Carnot, et al.), using the differential calculus and other
mathematical achievements, were the basis for the development of
heat-powered machinery, the creation of the coal and iron
industries, and for methods to economize labor in economic
practice. They played a certain role in forming the technosphere.
This fruitful tendency was continued in the works of F. List
(1789-1846), Henry C. Carey (1793-1879), E.P. Smith (1814-1882),
and, in our time, Lyndon LaRouche, who based his work on the
geometrical conception of Bernhard Riemann (1826-1866), and the
works of Kepler (1571-1630) and Gauss (1777-1855). {Physical
economy} did not win due recognition, perhaps because economics
is inevitably bound up with the concept of law. Physical economy
borrowed the idea of {natural law} from N. Kuzansky [Nicolaus of
Cusa] (1401-1461), who defined it as the {law of equity}. The
economics of Adam Smith and his follows -- traditional economics
-- proceeds rather from a notion of juridical, {legislative law.}
It became a descriptive science, which identifies and interprets
processes in production relations.
It may seem paradoxical, that the impulse to create physical
economy came from the thinking of the idealist Plato, while the
point of departure for modern traditional economics, which is
alien to the physical paradigm, is the concepts of the
materialist Aristotle. This paradoxical character, however, is
purely superficial. The profound causes of the difference have
another genesis. The pretensions on the part of traditional
economics, to be able to establish economic laws that are
effective for purposes of prediction, proceeding only from the
conditions of existence, turned out to be illusory. In that
sense, traditional economics failed to justify being called "the
law of the house."...
Despite the dispensing of Nobel prizes for economics, this
discipline has yielded virtually no fundamental achievements,
which have predictive validity.
In the mid-Twentieth Century, a new tendency arose --
mathematical economics, which is linked with the names of J. von
Neumann, O. Morgenstern, L.V. Kantorovich, H. Nikaido, V.V.
Leontyev [W. Leontieff], D. Meadows, M. Mesarovich, et al. The
research and prognoses of the Club of Rome became particularly
well known, but were not borne out. A powerful and highly
ramified mathematical apparatus was developed, but due to the
absence of promising economic ideas, the pragmatic validity of
this tendency proved inadequate. The world developed so rapidly,
that economics was unable not only to forecast coming changes,
but even to explain those that had already taken place. In this
phase, too, economics failed to justify its name, and, despite
the prestige of the profession of economist and the need for such
a science, it did not attain genuine scientific status as a basic
science.
It is impermissible to deny the great contribution to the
development of economic thought by such nearly contemporary
scholars as Samuelson, Nikaido, Marishima, M. MacNelsh,
Dornbusch, Li Tyne [?], J. Fischer, J.M. Keynes, P. Magnusson.
The Soviet school added little to the gnoseology of economic
processes, but it achieved significant successes in the
development of mathematical models (V.L. Makarov, D.S. Lvov, et
al.). Contemporary Russian economists are pure pragmatists, and
not very good ones. Using the experience of the West, some of
them carried out a monetarist policy, paying no attention to the
specifics of the real situation in Russia. Another group appealed
to "the achievements of socialism" and called for restoring it,
with some corrections. Not one economist in the world, however,
has yet been able either to predict, or to explain the economic
phenomenon of Russia in our time.
Physical economy makes it possible to use physical analogies
as a predictive instrument for economic research. Although the
ideas of physical economy go back to Plato, Leibniz, and Cusanus,
physical economy is becoming a scientific tendency, recognized by
the public, only in our time -- due to the inability of
traditional economics to solve problems of forecasting, and to
the pressure of practical requirements. The representatives of
this tendency -- L. LaRouche [biblio. ref. to Russian edition of
{So, You Wish to Learn All About Economics?}], P. Kuznetsov, et
al., have concentrated their attention on practical, as well as
conceptual problems. [RBD]
[Sources: Russian Defense Ministry web site www.rian.ru/mo;
Nezavisimaya Gazeta via www.rian.ru; EIR files]
July 3 (EIRNS)--FIRST DEPUTY DEFENSE MINISTER N.V.
MIKHAILOV IS KEY FIGURE IN RUSSIAN MILITARY SCIENCE, ANTI-MISSILE
DEFENSE. Dr. Nikolai V. Mikhailov, 62, has been First Deputy Defense
Minister of the Russian Federation since September 1997, with the
additional rank of "state secretary." Before that, he was deputy
secretary of the Security Council of the Russian Federation,
beginning in July 1996. He holds degrees as "doctor of economic
sciences" and "grand doctor of philosophy."
N.V. Mikhailov has worked chiefly on the industrial and
technical side of Russian defense. In 1997, he received a State
Prize of the Russian Federation "for projects on the creation and
development of warning systems against missile attack, space
control systems, and anti-missile defenses."
From 1986 until 1996, Mikhailov headed an important Soviet,
subsequently Russian, design bureau called "Vympel" ("Pennant"),
which did classified work on radioelectronics and anti-missile
defense. In 1993, "Vympel" was identified as one of the
initiating organizations for the Russian "Trust" proposal for
joint Russian-American anti-missile R&D, presented at the
Vancouver summit. (See slug from the archives, below, and the
cover feature in {21st Century Science and Technology}, Summer
1993, where Prof. Mikhailov's picture appers on page 42.) [RBD]
[Source: Nezavisimaya Gazeta via www.rian.ru]
July 3 (EIRNS)--N.V. MIKHAILOV ACTIVE IN CURRENT
DELIBERATIONS ON RUSSIAN MILITARY POSTURE. Russian First Deputy
Defense Minister Nikolai Mikhailov has published several articles
in recent months, concerning the global strategic situation and
Russia's defense posture. These may be reported on later. The
most recent article appeared April 30 in {Nezavisimaya Gazeta},
titled "Weighty Answers to Military Challenges -- It is possible
for Russia to have a rational military-technical policy under
crisis conditions." [RBD]
PHYSICAL ECONOMY
[source: {EIR} discussions with Department of Commerce; Dept of
Commerce data]
July 3 (EIRNS)--U.S. SAVINGS RATE IS NEGATIVE; INCOME DOES
NOT KEEP UP WITH EXPENDITURES. For the month of May, the U.S.
savings rate was negative 1.2%, the lowest recorded level in
history, and the sixth consecutive month that savings were
negative. A principal cause is that income has not kept up with
expenditures.
The negative savings rate reflects a longer process of
falling living standards since the start of the 1980s. This is
the major reason. Although the "wealth effect" from increased
capital gains and dividends derived from the stock market does
figure into the picture, it would be a mistake to attribute the
fall in the savings rate as purely an epiphenomenon of the
increase of the "wealth effect."
To determine the savings level and savings rate, the
Department of Commerce first calculates "personal income."
Personal income is the sum of a) wages and salaries; b) other
labor income; c) income of proprietors (farms and small
unincorporated businesses); d) rental income; e) interest income
(the income earned from bonds and bank accounts); and f) dividend
income, which comes from stock dividends. Capital gains from the
stock market are {not} included in personal income. The Commerce
Dept. then deducts taxes (and some related payments) from
personal income, yielding what is called after-tax "disposable
income." The Commerce Dept. also determines the level of
expenditures by most consumers, called "personal consumption
expenditures." The savings level is disposable income minus
personal consumption expenditures. If disposable income exceeds
personal consumption expenditures, then there is a positive
savings level; if the reverse is true, then there is a negative
savings level.
The assumption is that, whatever part of one's disposable
(after-tax) income one does not spend, one would save.
The "savings rate" is arrived at by dividing the savings
level by the level of disposable income. See Table 1.
Table 1
Savings Level and Savings Rate
Savings Level Savings Rate
($ bns) (percent)
1980 169.1 8.5
1985 207.4 6.9
1990 213.3 5.1
1992 264.1 5.7
1995 179.8 3.4
1996 158.5 2.9
1997 121.0 2.1
1998 27.7 0.5
May, 1999 - 61.0 - 1.2
Thus, the fall in the savings level and savings rate is a
function of the two-decade transformation of the United States
into a post-industrial society, and did not just arise from the
``wealth effect'' of the last few years. [ref]
[source: same as above]
July 3 (EIRNS) -- CAPITAL GAINS INCOME ON STEEP UPWARD
PATH.
It is absolutely the case that the fall in the savings rate is
{principally} due to the contraction of the U.S. physical economy
and productivity of approximately 2% per year, but there also
exists an increase in the capital gains income from the
hyperinflated appreciation of stocks and real estate (and
secondarily art work), sometimes labeled the wealth effect. To
the extent that the wealth effect is in effect, an individual who
realizes a capital gains, would be able to either spend or save
that money. Supposedly, to the extent that he or she saves that
money, that would, in part, offset the fall in the official
savings level, since capital gains are not considered as part of
official savings.
A realized capital gains is the profit an individual
realizes from selling an asset that has gone up in price which
the individual has held for a year or more--whether that asset is
a stock, real estate, work of art, etc. The profit represents the
difference between what the individual paid for the asset and
what he sells it for.
Table 2
Realized (Net) Capital Gains
($ bns)
1980 27.1
1985 60.9
1990 107.8
1992 109.1
1995 167.4
1996 249.5
Table 2 shows realized net capital gains, and its rise
reflects the steep profits that have been realized from selling
primarily stocks and homes which inflated in value due to the
bubble economy. Thus, in 1996, one-quarter of a trillion dollars
came from capital gains. {EIR} estimates that capital gains in
1997 were $350 billion or more (the data come from the Internal
Revenue Service reports on income tax returns, and 1996 is the
latest year).
Comparing the official savings level (which does not include
capital gains), and capital gains, one sees that between 1992 and
1996, the level of savings fell from $264.1 billion to $158.5
billion (see Table 1), a decline of $105.6 billion. Meanwhile,
for the same period, the level of realized net capital gains rose
from $109.1 billion, to $249.5 billion, an increase of $140.4
billion.
Superficially, it would appear that the rise in capital
gains ($140.4 billion) more than offsets the fall in savings
($105.6 billion). {EIR} is investigating this further. While
40-45% of the households in the United States own stocks, and
these households benefitted to some extent in the fake
appreciation of stock and realized capital gains, the benefits
may actually be less than is commonly bandied about in the
financial press. Prof. Edward Wolff of New York University has
produced a study, based on data from the "Consumer Expenditure
Survey" compiled by the Federal Reserve Board of Governors, which
shows that America's wealthiest 10% of households own, by
themselves, 88% of the value of stocks and mutual funds.
Presumably, they would realize 88% of the realized capital gains,
or very close to that.
Thus, the "wealth effect" from capital gains, while real,
may have benefitted mostly the wealthiest 10% of the population,
but not filtered down as much as supposed to the lower 90% of the
population to offset their decline in savings. [ref]
FINANCIAL
WIESBADEN, July 5 (EIRNS) -- `BANK CREDIT LINES TO HEDGE FUNDS
HAVE BEEN CUT BACK DRAMATICALLY SINCE THE RUSSIA DEFAULT AND
LTCM,' claimed a senior European banker just returned from a
wide-ranging series of discussions with leading hedge funds. "If
you take 100 as the level of capital which hedge funds had from
major banks to speculate, that 100 was the level, say, just
before the Russia default last August. Then we could say that the
level of funds fell to 40 by last October in the wake of LTCM.
But the process has continued, and today, I would estimate the
level is 10% that of pre-August 1998. That is, banks have become
extremely risk-averse. Bank management has also severely cut
their own in-house proprietary trading as well. This process is
one reason recent events such as the Prodi remarks about Italy
leaving Euro were not target of a major speculative new assault.
Where the process goes now is anyone's guess, but this in any
case is the state of hedge fund access to speculative leverage
today." [eng]
THE INTERNET BUBBLE HAS YET TO DEFLATE. According to an
analysis of the 66 leading listed stocks of Internet companies,
compiled by Steve Leuthold in what he publishes as "Perception
for the Professional," the 66 largest traded stocks of Internet
companies such as AOL.com, AdobeSy, Amazon.com, despite a huge
selloff in May, has risen in paper terms since January, by 75%.
Since the market low of last October, the average price of the
same 66 Internet companies has risen by 453%. If their value is
tracked since January 1997, the stock rise has been 1,000%, a
stock bubble surpassing anything seen even in the 1927-29 stock
mania. Total market capitalization of these Internet stocks today
exceeds $430 billions. [eng, Barrons]
LEESBURG, July 5 (EIRNS)--RICHARD GRASSO IN HIS OWN WORDS. A full
transcription of NYSE Chairman Richard Grasso's June 29 New York
press conference on Colombia will appear in next week's {EIR}, as
part of a broader package on the IMF's move to legalize `Gross
Narco Product.' A few gems are provided here for use in the
organizing. Note that no journalist asked him about the FARC's
drug-running, and while {EIR} was on-line for the conference, no
questions were taken from journalists not physically in New York.
Grasso on the FARC, dope and the Chile model: "The
leadership that I met with, I believe understands the value of a
peace in Colombia. {Comandante} Reyes and the FARC recognize that
it is not acceptable to the world that Colombia be viewed solely
as a narco-traffic [sic] economy, and that the days of that being
the principal industry are over. He is {very} well-attuned to the
subject of alternative investment, what will happen when a peace
is arrived at in Colombia, and is very open to the dialogue we
had on the whole process of democratizaton of capitalism: How
neighboring countries such as Chile, and others in Latin America,
had repositioned their economies to create nations of owners. He
was very interested in the model here in the United States,
because, to his surprise, we spent a bit of time talking about
the breadth of share ownership in America. How stockholders were
not simply those in the financial community, but those who are on
assembly lines, those who are teaching school, driving buses....
"It was an {extraordinary} experience, in the sense that the
{Comandante} was trained as an engineer in the former Soviet
Union. {Very} sophisticated, despite what the surface appearance
may have been in terms of his jungle fatigues and his M-16. And
he knew a {lot} about investment and capital markets, and the
need to stimulate outside capital coming to Colombia. Very
interested in how Colombian companies could come to the U.S., and
raise capital to be invested in the country. So it was
extraordinary...."
And later, he repeated himself: "I invited {Comandante}
Reyes and the Supreme Commander [sic!], to walk the trading floor
with me.... And to do that together with President Pastrana, and
I hope that when they do accept that invitation, they'll have the
first hand experience of what we talked about on Saturday.... I
think extending and permitting differing factors the opportunity
to come here, and to walk the trading floor, and to understand
capitalism first hand, will be very valuable in a post-settlement
Colombian economy. I'm not so naive as to think that the
{Comandante} will be here next week, but he certainly recognized
the value of coming to America, and experiencing, not just the
financial markets, but the technology of agriculture, which will
become very important in redeveloping the Colombian economy;
where and how to stimulate foreign investment in Colombia; how to
raise capital, both in the region and outside of the region. And
again, to underscore: This was a very, I believe, sophisticated
leader. I think that Raul Reyes, {Comandante} Reyes, is quite
knowledgeable, and very much interested in coming and seeing this
first hand. Perhaps meeting many of you."
Asked about the FARC killing of three Americans earlier this
year, Grasso dismissed the murders as one more "issue" which will
have to be worked out at the negotiating table.
As for the State Department role, he said: "The American
Ambassador to Colombia was gracious to give us a briefing before
we went into the jungle. He was with us Saturday night [after the
FARC meeting], when President Pastrana hosted a dinner for the
business community and the financial community, and we openly
shared our experiences." [Full transcript in 99272ggs.002; ggs]
[Source: EIR Mexico City bureau, 7/2/99.]
July 2--MEXICO'S PRIVATE SECTOR FOREIGN DEBT IS UNPAYABLE,
AND CONSTITUTES A MAJOR CRISIS FOR THE ZEDILLO GOVERNMENT.
The
amount of private foreign debt coming due is hair-raising. For
the second half of this year, and for the year 2000, $25 billion
comes due -- not to mention the $17 billion which comes due for
the banking sector in the same timeframe. Over the next 18
months, the private sector must obtain, and make payments in the
amount of $32 billion! If the $27.3 billion credit line just
arranged with the IMF/World Bank (referred to as Mexico's
"financial rumor") is supposed to prevent the Mexican government
from having to go as little as possible to international capitals
markets, the private sector has no other option but resort to
those markets. "What the government announced was the refinancing
of public sector debt," said Jorge Marin Santillan, president of
the Business Coordinating Council. Finance Minister Gurria has
emphatically stated that the stand-by credit will "not be used to
bail out any company, or assume any private sector credit risk."
Faced with the impossibility of obtaining new credit, or
rescheduling their debts in the capitals markets, Mexican
businessmen (especially those who overnight became business
bigwigs through Carlos Salinas de Gortari's fraudulent
privatizations), are now having to declare bankruptcy or auction
off their companies. Exemplary is the case of the Ancira Elizondo
and Autrey families, owners of the country's largest steel
producer, Altos Hornos de México, a subsidiary of the Grupo
Acerero del Norte, which defaulted on a debt of $1.9 billion.
Raymundo Gomez Flores is in the same boat. Having paid $311
million for his Motor Coach Industries Inc. in 1994, he just sold
it for $80 million. Gomez Flores had become the primary producer
of buses in North America.
Altos Hornos produces 25% of Mexican steel, and is
responsible for 19% of the country's steel exports. The Autrey
family is also the majority owner of the Inverlat bank, which is
on the government's waiting list of banks that have to be bailed
out with public funds. [99263rcm001; rcm/crr]
[Source: Gestion, 6/30/99 report based on Financial Times. Lima]
July 2--THE COLOMBIAN, ECUADORAN, AND PERUVIAN BANKING
SYSTEMS ARE IN THE GREATEST DANGER OF COLLAPSE, London's
{Financial Times} warns in an article reproduced in Peru's
{Gestion}. The daily says that the cost of bailing out Ecuador's
banking system could amount to 33% of that country's GDP,
surpassing the 22% of GDP used to salvage Chile's banking system
when it fell apart in 1982. In 1994, 20% of GDP was spent to bail
out Venezuela's banking system, and 17% of GDP to rescue Mexico's
banking system in 1995. Today, the FT lies, Mexico's banking
system is in very good shape, relative to the rest of the
continent. It also argues that it will be relatively easy to
restore "confidence" in Peru's banking system, give the large
reserve ratio requirement, and the fact that of the five largest
banks, four are foreign-run. [99264per002; crr]
End of Briefing
