STRATEGIC ALERT

English Edition

Vol. 15, No. 44 November 1, 2001


This week's headlines:

The Weird War
America's Real Economy In Free Fall

Asia & Europe "On The Brink" Of Depression
Money Volume Rising Sharply, Worldwide
The Stage Is Being Set For Targetting Syria & Iraq
A "Putin Doctrine" For International Relations?
Bin Laden's Men In Kosovo & Macedonia

The Weird War

The United States' and Britain's war in Afghanistan is now in its 4th week and almost nothing is proceeding "according to plan." Osama Bin Laden has neither been caught nor killed, nor has the Taliban regime crumbled; and, even if these goals were to materialize, Afghanistan would remain a military and political cul de sac for the US. With amazement, international public opinion followed Admiral John Stufflebeem's Oct. 25 appearence at a Pentagon press conference, when the deputy director of operations for the Joint Chiefs of Staff stated: "They [the Taliban] are proven to be tough warriors. I am a bit surprised at how doggedly they are hanging onto power."

The same day, Secretary of Defense Donald Rumsfeld was asked by the daily USA Today, whether Bin Laden would be taken, "dead or alive." Rumsfeld answered: "Well, it's a very difficult thing to do. It's a big world. there are lots of countries. He's got a lot of money, he's got a lot of people who support him, and I just don't know whether we'll be successful.... My attitude is that if he [Bin Laden] were gone tomorrow, the same problem would exist," given Bin Laden's extensive network. And, when asked if, after several weeks of bombing, he believed Taliban would be ousted, he said, "Has it really been several weeks? Has it been that long? Three weeks, I'll be darned. I'm really surprised. I was thinking it was something like 10 or 12 days, but it's been three weeks. Yes, I think there will be a post-Taliban Afghanistan. That is easier than finding a single person." The next day, Rumsfeld tried to relativize his remarks: "From time to time, I suppose things come out of my mouth not quite the right way."

The most extensive - and weird - elaboration of the military morass, the US and Britain have gotten themselves into, came from Chief of British Defense Staff, Admiral Sir Michael Boyce, as reported in the Oct. 26 Financial Times. Gesturing at a map of Afghanistan in his office, Boyce remarked: "This is different from anything else we've done before. What we should try and do is not to let them think that we're going to give up and go away, or lighten up. We need to get ourselves into a situation where they feel oppressed and continue to feel oppressed until such time as they conform to decent standards of behaviour.... If you're in that country [Afganistan], every time you look out of your window, you're going to see evidence of international focus on you by seeing an aircraft in the sky, and if you're a good person, you'll metaphorically get a food parcel and if you're a bad person, you'll get a bomb."

Boyce addressed the growing discomfiture and criticism of the Anglo-American conduct of the war, saying: "People say 'how are you getting on?', 'what are you achieving?', 'can't you do it any faster?'" But, proclaimed Boyce, "there is obviously a limited amount that the military can do in a country which is as difficult as Afghanistan is for military operations.... It's not like Kosovo. It's not like Desert Storm where you had very clearly defined phases and relatively straightforward objectives. There is a much more murky area in which to work."

On Oct. 27, Lyndon LaRouche stated that the axiomatic assumptions underyling the ongoing US military operation in Afghanistan doom it to fail. There are too many delusions about "clever implementation" of a lousy, unworkable policy - derived from British "Great Game" policies. Don't invest any more resources in a losing venture, LaRouche advised. If the Bush administration continues to invest in a failed cause, it will only create more problems. Someone has to frankly tell President George W. Bush that the conduct of the war in Afghanistan is based on a delusion, it can't work.

Some alternative policy for dealing with the Taliban needs to be adopted, fast. Don't even bother to explain the change in policy, said LaRouche, just do it and the beneficial results will speak for themselves. There is an alternative policy that can work: Shut down the Taliban's drug operations and dry up their drug revenues. And, crush ruthlessly the massive international illegal money-laundering flows. This will seriously degrade not only the Taliban's terrorist capabilities.

America's Real Economy In Free Fall

In recent weeks, especially "small investors" have been drawn into the stock markets, betting on a short-term recovery of the American economy, perhaps in the 1st or 2nd Quarter 2002. At the same time, all available indicators show that, contrary to such wishful thinking, the US economy is sinking deeper into its first outright depression since the 1930s.

As the Federal Reserve reported on Oct. 16, US industrial production fell in September for the twelfth consecutive month, marking the longest contraction of US industry since 1945! (cf. WI 43/2001) However, as new orders for companies continue to shrink, a further contraction of industrial output is already pre-programmed. According to the Commerce Department, new orders for manufactured durable goods in September decreased by 8.5% compared to August. For the first time in 9 years, durable goods orders have fallen for four consecutive months. Compared to one year ago, durable goods orders are down 12.8%!

The 46.6% collapse of new orders for non-defense aircraft and parts was hardly a surprise after the Sept. 11 events. But the contraction of new orders for the automobile sector (-15.1%), machine building (-4.9%), and computers and electronics (-9.1%) cannot be attributed to the terror attacks. Meanwhile the implosion of the socalled "high-tech" sectors is continuing. On top of the dramatic declines within the last 12 months, new orders for telecom equipment in September fell by yet another 39.7% compared to the month before.

The more production has collapsed, the more unemployment has grown. During September, the official number of unemployed reached 7.01 million. Since July, 2000, the US manufacturing workforce has lost a staggering 1.105 million jobs. In the week ending Oct. 20, first-time jobless claims in the US rose to 504,000. The four-week average of first-time jobless claims - 505,000 - was the highest in more than 10 years. Continued claims for state jobless benefits in the week ending Oct. 13 rose to 3.65 million, the highest level in 18 years. According to the Conference Board, the number of new jobs offered across the United States has fallen to the lowest level since February 1982.


Washington Insider 44/2001

WASHINGTON INSIDER

English Edition

Vol. 11, no. 44 November 1, 2001


This week's headlines:

The Come-Back Of "War Bonds"
LaRouche On Wall Street's "Suckers' Rally"
Enron's Market Value Evaporates
Unocal & The Taliban
Remember DC General Hospital?
Republican Congressman For Nuclear Bombing Of Afghanistan

The Come-Back Of "War Bonds"

As the American economy slides into depression conditions at an accelerating pace, the tax revenue base of the government is rapidly shrinking as well. At the same time, the government plans a "stimulus package" for the economy of some $70 to $100 billion, most of which consists of tax cuts. These come on top of the "tax cut package" of almost $100 billion for this year, which passed Congress last May. Add to this some $60 billion in combined subsidies for the airline industry, post-Sept. 11 reconstruction programs, rapidly increasing defense spending plus expensive "anti-terror" programs for law enforcement and intelligence agencies. In sum, this public spending spree is wild.

While not too long ago, there still had been fantasies about "giant fiscal surpluses," there are now clear signs of fiscal desperation gripping the US government. One indication for this was the large bond auction by the US Treasury on Oct. 24. In a single day, the Treasury sold $19 billion in 2-year government bonds - the highest one-day auction volume of such bonds ever.

Now, another alternative to finance the government has been approved by the House of Representatives: War Bonds, the first to be issued since the end of World War II. On Oct. 24, the House passed legislation directing the Bush administration to issue such war bonds, in hopes that patriotic Americans would buy these emotionally charged financial instruments even if they have considerably lower yields than normal government bonds. Republican Representative John Sweeny of New York commented: "We need to find constructive ways for the American people to take part. This is one of them."

Between 1941 and 1945 - in a real war with a real war production mobilization - about 85 million Americans had bought $186 billion war bonds. The legislation will now move to the Senate, which is expected to approve it, because the Senate already in September attached an identical bill to the annual spending bill for the Treasury Department. The US Treasury praised the "patriotic intention" of the the war bond initiative, but added that Americans could also help boost the economy by increasing their consumer spending.