IN THIS ISSUE:
Perspective: Economic Time Bombs
Deregulation and the Secret New U.S. Constitution
The expanding drive for governmental regulation is based upon a long-range strategy of economic change for political purposes. It is aimed toward the implementation of a secret New Constitution completed in 1974 after a multi-million dollar, 10-year effort. A public "Bicentennial Declaration" in 1975 proclaimed the planned timetable for change: 1976 to 1989. We are now halfway through this timetable, and the deregulatory strategy is half completed. Deliberate mis-application of deregulation to utility-like activities such as airlines and telephones is leading to predictable negative consequences. These in turn are to set the stage for "correction" by planned final changes to come.
World Debt and the Persian Gulf War
Third World nations owe $600 billion to Western banks dominated by the same interests who are behind the New Constitution. Rival interests are trying to explode this financial structure. To that end, new moves are afoot in the Iran-Iraq war, intended to drive up oil prices, push debtor nations into default, and thus set off a chain reaction of collapses in the world banking system.
Copyright © 1983, Audio Books, Inc.
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Perspective: Economic Time Bombs
Deregulation and the Secret New U.S. Constitution
Economic news these days tends to be made up of contradictory and often confusing ingredients. On one hand the stock market is riding high and setting new records; on the other hand "real" interest rates (interest minus inflation) remain at stock-market-threatening high levels. Everyone says that a recovery is underway, yet bankruptcies are at the highest level in half a century and still accelerating. President Reagan, elected partly on his righteously indignant-sounding pledges to balance the federal budget, now presides over by far the largest deficits in U.S. history; meanwhile his Treasury Secretary preaches a new economic "gospel" that says deficits don't affect interest rates after all.
The fact is that many economic decisions and maneuvers are taking place for reasons that are not economic. A basic fact of life, yet one known to relatively few Americans, is the continuing power struggle within the U. S. Government. The protagonists are the Rockefeller Cartel (encompassing the leaders in big oil, big banking and big business) and their bitter rivals, the new U. S.-based Bolsheviks. These two factions are former allies turned enemies. The Cartel was partially dislodged from governmental power by a largely hidden Bolshevik coup d'etat which began with the murder of Nelson Rockefeller in January 1979 (AL#42).
Now each side is using its respective areas of strength to the maximum in an effort to overcome the other. The prize: control over the U.S. Government and over the American people.
In this ongoing power struggle, economics is a prime battleground. The Rockefeller Cartel is following a long-term economic strategy to bring about radical political change. The Bolsheviks are trying to cut short that strategy and impose their own will instead by exploiting deliberate crises.
Our economy is being shaken by this power struggle which has turned the U. S. Government into a house divided against itself. Where is all this leading? Our Lord Jesus Christ said long ago: "Every kingdom divided against itself is laid waste, and house falls upon house. And if Satan also is divided against himself, how will his kingdom stand?" Thus if America's fate is left to these two feuding factions, it will lead to disaster.
Economic news in the United States these days is dominated more and more by so-called governmental deregulation and its consequences. Airlines, trucking, banking and communications have been bitten conspicuously by the spreading bug of deregulation. And there is more to come.
Current political rhetoric tends to make many people think that deregulation is something that came in with Ronald Reagan. However, that is not at all the case.
The big push for deregulation began under Jimmy Carter, who was installed in the Oval Office by David Rockefeller (AL#20). It continued, without the slightest change in direction, when Reagan replaced Carter--again at the behest of the Rockefeller Cartel (AL#60). Under Carter, deregulation was justified as a populist move. Just part of the alleged drive to reorganize and simplify government, we were told. Under Reagan, deregulation has taken on just the opposite image, as a bow to business interests. Yet the actual policy has not changed one iota.
To those who are so unwary as to believe presidential campaign rhetoric, this continuity under supposedly radically different administrations ought to look a bit odd. But the fact is that deregulation is neither a Democrat nor a Republican policy. It is a Rockefeller Cartel policy. To the Cartel, it matters not what political rationale is used, or who the White House occupant is who enunciates it. All that matters is that the game plan of which so-called deregulation is a part shall continue.
It is true that the Rockefeller interests lost control of parts of the Carter Administration beginning in early 1979, following the murder of Nelson Rockefeller (AL#42).
It is also true that the ousting of Jimmy Carter and his replacement with Ronald Reagan was blocked from fully restoring former Rockefeller Cartel power within the government (AL#61). Even so, the governmental bodies which are economic-oriented continue to be dominated primarily by the Rockefeller Cartel. This economic power is the Cartel's primary weapon in its struggle for restored control over the U„ S„ Government as a whole (AL#67)„
Sheer continuity is not the only strange thing that should be noticed about the big deregulation campaign now underway. It is worth pointing out some of these oddities, because they raise a very large red flag. Deregulation is not what it appears to be.
The big deregulation push got underway in 1977, initially at the initiative of then-Chairman of the Civil Aeronautics Board, Alfred Kahn. Using the falsely populist image then in vogue for the Carter Administration, support for deregulation was drummed up among liberals such as Sen. Ted Kennedy. The Air Cargo Deregulation Act of 1977 and the Airline Deregulation Act of 1978 were the results. Next came the Motor Carrier Act of 1980, lifting most regulations from the trucking industry. Meanwhile other deregulatory moves were also getting under way, such as the decontrol of natural gas prices.
These were the vanguard of the deregulatory movement. Now that movement is transforming other major industries, such as banking and communications.
In banking, the latest deregulatory step took effect just a few days ago on October 1.
Interest-rate ceilings and minimum-deposit requirements were totally eliminated from all savings accounts with a term of 32 days or more. This is part of a broader process of deregulation of savings deposits. That in turn is part of a much larger pattern in which banks and other financial institutions are being encouraged to cross each other's lines of activity. The line between savings and loans and banks has all but dissolved, and other lines of demarcation are being erased as well. Banks, real estate brokers, stockbrokers and so on are gradually being stirred together into one giant pool of multi-service financial activities.
The blurring of these lines is creating a free-for-all situation. In some ways it is a situation that resembles what existed before the crash of 1929 and the ensuing Great Depression.
In communications, several major initiatives are underway or in the offing. These range from international satellite communications in outer space right down to your own telephone. Communications Satellite Corporation (Comsat) has for 20 years been the exclusive U. S. conduit for international communications.
Deregulatory moves by the Federal Communications Commission (FCC) may soon replace that with a free-for-all in which anyone who can afford it can have their own earth stations to bypass Comsat. And then there is television and radio: on Sept. 22 the FCC proposed relaxing or eliminating the 30-year-old rule that limits the number of TV and radio stations which one owner can hold. That would open the door for media conglomerates and networks to monopolize what you see and hear over the free airwaves. And then. . . there is the telephone.
The impending breakup of American Telephone and Telegraph (AT&T), alias "Ma Bell, " is in some ways the most important and revealing deregulation situation of all. It is deregulation disguised as an antitrust action. It is being portrayed as protecting the public interest by breaking up the world's largest company. Instead, it is actually allowing the core company to spin off the relatively unprofitable 22 local telephone operating companies. In return, AT&T is being set free from strict regulations which narrowly limited its business activities until now.
The chained giant is being unleashed.
AT&T grew into the towering giant that it is today over a century's time, within a regulated environment. Regulation guaranteed the company's financial health and growth, and regulation also required that this strength be channeled into ever better telephone service. The result is a U.S. telephone system that is the envy of the world. Even the competitors of the Bell System in this country and abroad have depended primarily upon AT&T research and new technology to upgrade their telephone services.
Under the totally integrated Bell System which will shortly cease to exist, local telephone rates have been kept relatively low by subsidizing them from long distance profits. This is a result of regulation. It has been justified by a value judgment which goes beyond cold dollars and cents.
The rationale has been that the heaviest users of long distance--namely, business and those who are not poor--can afford to pay slightly elevated long distance rates and still get their money's worth. By contrast, those who rarely use long distance because they cannot afford extra expenses still have to have a telephone: it is a necessity in today's society. And since everyone must use local service whether or not they use long distance, it was reasoned that holding down local rates would essentially hurt no one and help many people who really need it. Thus, long distance has, by regulation, subsidized local telephone service.
This guarantee of affordable local service for all is one of the "evils" which are about to be cured by the AT&T breakup. After Jan. 1, 1984, AT&T will retain only the highly profitable long-line services, and on Sept. 21 it announced a proposed decrease in long distance rates to take effect at that time. But that decrease will benefit, on balance, only those who do a substantial amount of long-distance calling each month. Those who mainly use only local service will see their rates go up very considerably. The spun-off local telephone companies, no longer subsidized by long distance, will have to get the money by raising your basic local phone bill.
Meanwhile, the unchained tiger of AT&T is crouched and ready to leap into high-profit business fields from which it has always been denied up to now, such as computers. Without enlightened regulatory action, AT&T will no longer have the in-centive--or even the economic option--of concentrating as in the past on service, or on telephones. The criterion of success will become one of profit instead. If it turns out to be more profitable for AT&T to, say, move into the computer field than to keep advancing telephone technology, it will be free to do so. This prospect has many potential competitors of the "new AT&T" petrified. And no wonder.
AT&T possesses what is widely regarded as the finest private laboratory complex in the world--Bell Laboratories. The Bell Labs research budget for this year alone is a little over $2 BILLION. Up to now, under the "bad" old regulatory setup, Bell Labs has been noted for its unique policy of making its research results publicly available for all to use. Such revolutionary discoveries as the transistor, the laser, and fiber optics are all traceable to Bell Labs.
They were all shared, and entire industries completely unrelated to Bell Labs have grown up to reap the benefits. But now, strong incentives will arise to shrink back from that policy sooner or later. As AT&T moves into new fields, it will have every incentive to exploit its own research results instead of handing them to competitors. Thus, on balance, the day can be foreseen when the big new breakthroughs of Bell Laboratories will tend to benefit just one company--AT&T--instead of many. Otherwise viable companies can look forward to being crushed under the profit-oriented juggernaut of the new AT&T. Yet the days of ever-improving telephone service may be coming to an end.
All this is being accomplished by means of an ingenious mis-application of antitrust laws. To understand why this route was chosen, consider the alternative. Suppose AT&T had publicly said something to the effect: "Let us spin off the local telephone operating companies. They are not profitable, they are a financial drag on our lucrative long-lines operation, and they are the main focus of regulatory headaches. Let us get rid of those, keeping only the long-lines moneymakers and Bell Laboratories. And take away all the regulations that keep us from using our research power to dominate other fields. Then--just watch us go!"
Had that approach been taken, of course, people would have said: "Nothing doing! You got big and rich as a regulated enterprise, and we won't let you walk away from your responsibilities. You must continue your commitment to maintaining and improving America's integrated telephone system. "
The reality of what is happening has been masked by use of the antitrust machinery which otherwise has been virtually shelved by the Reagan Administration. The unchaining of the AT&T giant is being portrayed as an antitrust breakup.
We said earlier that the overall deregulatory movement now afoot contains oddities that raise a very large red flag. It is illustrated by the AT&T situation, on which we have dwelt at some length. It is simply this:
"Deregulation" is being applied in every case to activities which are basically public utilities.
The airlines, for example, are transportation utilities. In our modern society, their existence is not a take-it-or-leave-it luxury: it is a necessity. The airlines have become indispensable arteries for the movement of people, cargo and mail. Moreover, they have acquired this status through governmental policies which have, over decades, promoted air travel at the expense of America's rail system. Civil aviation technology grew to maturity by drawing generously upon government-funded military technology. The federal air traffic control system, airports paid for by public bond issues, and other ingredients of America's air system reflect this "public utility" aspect. It is an inescapable fact of life.
The deregulation of the airlines has deliberately ignored this crucial fact. After half a century of development as utilities, they have been thrown virtually overnight into treatment as if they were noncritical commodities with no public interest factor. The entirely predictable result: a shift away from the former emphasis upon excellence and continual improvement, toward cutthroat competition for dollars.
Service is no longer mandated by the Civil Aeronautics Board, so many smaller communities have simply lost air service altogether. Everyone is fighting to control the lucrative long-haul markets with their dense traffic (analogous to long-distance telephone service), with destructive price wars which will ultimately degrade, not improve, service. Meanwhile the remaining short-haul routes (analogous to local telephone service) are in many cases seeing fares skyrocket.
The point is this. The big deregulation campaign, by concentrating on utility-like activities, is leading to completely predictable, guaranteed economic and service disruptions. It is happening now with the airlines: some 20 airlines, including Braniff and now Continental, have been driven into bankruptcy by deregulation. Many of the current survivors will turn out to have no staying power: their short-term price-cutting will end up leaving nothing over to finance new technological developments needed to sustain good service. It is a situation tailor-made for self-destruction.
The Source of the Deregulation Drive
In July 1975 Dr. Beter revealed (AB#4) that a secret New Constitution had been written for America. It took ten years, drew upon the efforts of over 100 persons, and was produced by a tax-exempt foundation (Center for Study of Democratic Institutions) with Rockefeller Cartel ties. The final product, the 40th draft, was produced in 1974 after a ten-year funding of the foundation amounting to around $25 million total. In his tape, Dr. Beter gave a legal critique of the Secret New Constitution. Soon thereafter he released a pamphlet through Audio Books, Inc. , which gives the entire text of the Secret New Constitution along with excerpts from his taped legal critique. (This pamphlet may be ordered from NewsA LER T for $2.00 in U.S. & Canada; U.S. dollars payable through a U.S. bank only, please. )
The Secret New Constitution is a detailed prescription for dictatorship, disguised with the superficial trappings of falsely democratic institutions. On the surface it would look a lot like the original U. S. governmental structure, but it would function entirely differently. And its economic underpinning would be a governmentally deregulated, monopolistic business structure designed to fulfill the dreams of the Rockefeller Cartel.
These provisions are found primarily under the heading: "VII. Regulatory Branch. " Under that heading, Section 3 provides" for federal chartering of all large corporations. Section 4 then authorizes chartered corporations to "organize joint Authorities. " These would be empowered to set the rules for "fair competition, " to "set standards for quality and service, " to "assist in standardization" and so on. They would also be allowed to set up joint research activities (a development now cropping up in the news). And: "Nonmembers shall be required to maintain the same standards as those prescribed for members. " (Our emphasis, ) These provisions are the recipe for ironclad cartel arrangements far more powerful and extensive than those which spawned the "trust-busting" era 3 generations ago. And they would be the law of the land.
Section 6 delivers the coup de grace against protection of the public interest against runaway greed. It specifies: "Member enterprises of an Authority shall be exempt from other regulation. " (Our emphasis. ) In other words, from a governmental viewpoint they would be, . . DEREGULATED.
It should be noted carefully that governmental regulation of business would be replaced by private regulation (by the so-called "Authorities" envisioned by the Rockefeller Cartel). To bring this about, a multi-step transitional process is underway:
Step 1: Raise objections to the evils of governmental regulation, and demand change. (Accomplished. )
Step 2: Deregulate utility-type industries in ways which will lead to economic turmoil. (Underway now. )
Step 3: "Solve" the economic turmoil by setting up business Authorities to serve the functions spelled out in the Secret New Constitution. (Future & final step. )
There is a definite timetable planned for all this. In 1975 the Rockefeller Cartel published a little-understood manifesto for the changes they desired. Called "A Bicentennial Declaration, " it was a product of the National Committee for the Bicentennial Era, headed by the late John D. Rockefeller 3rd. (If you have access to a good library, you can find the "Declaration, " a full-page ad, on page C-23 of the New York Times for March 31, 1975. It was published repeatedly in a number of major newspapers and magazines around that time. )
The Bicentennial Declaration proclaimed that ". . . we have reached the point in our history when a second American Revolution is called for, a revolution not of violence, but. . . of new directions. " (Emphasis theirs. )
The Declaration also said very specifically: "Thirteen difficult years elapsed between the signing of the Declaration of Independence and the creation of an enduring system of government based on the Constitution. . . . Therefore, the second American Revolution will require at least a comparable period of time to grow strong and firm roots. We endorse the concept of a Bicentennial Era from 1976 to 1989. . . " In other words, it took 13 years to bring in the first Constitution, so it will take 13 years to bring in their Secret New Constitution to replace it.
For most Americans, the American Bicentennial celebrations of 1976 are a bygone memory. But not for the Rockefeller Cartel. It is now 1983, halfway through their proclaimed "Bicentennial Era, " and their economic game is halfway to its goal. So-called governmental deregulation is an economic time bomb, set to go off toward the end of this decade. If it does so as planned, it will explode the free enterprise system upon which America's other freedoms depend. That will leave the Rockefeller Cartel as the ruler of all Americans.
World Debt and the Persian Gulf War
The economic program of the Rockefeller Cartel is moving right along--but it is not without its problems. In the realm of banking, the Cartel's enemies--the U. S.-based Bolsheviks-have been working like termites since early 1979 (AL#44). As of the end of September some 597 banks in the U.S. are listed as "problem" banks by the Federal Deposit Insurance Corporation due to their unsound financial condition. That number is the highest ever recorded, and amounts to one out of every 25 banks in the United States.
The Bolsheviks here want to destroy the Rockefeller Cartel bid for power so that their own silent takeover of the U. S. Government can be completed. The biggest single time bomb that could blast the Rockefeller Cartel out of the water is the world debt overhang. Third World nations now owe Western banks around $600 billion which they cannot pay back. In the past the Rockefeller group could always count on bailing themselves out with taxpayer money in various ways if such loans went sour. Now that has changed. As Dr. Beter reported in his final tape (AL#80), the U.S. Bolshevik faction outmaneuvered the Cartel at the September 1982 meeting of the International Monetary Fund (IMF). Requests for increased IMF quotas as a disguised bailout for the banks were squashed by President Reagan, reading from a Bolshevik script.
At the end of last month this year's joint meeting of the IMF and the World Bank was held here in Washington. This time Reagan read exactly the opposite sort of script from last year, saying: "I have an unbreakable commitment to increased funding for the IMF. " But that is only lip service. On Capitol Hill, where it counts, a bill which would approve $8. 4 billion in extra appropriations for the IMF is going nowhere fast. At least two additional loans and advances to the IMF by rich nations are also being held up, as other countries wait to see what Congress will do about this basic measure. Meanwhile the IMF says that if something doesn't break loose, it will run out of hard cash by year's end. Previously planned loans to financially squeezed Third World nations are being suspended.
Without those IMF loans, more and more of the debtor nations will be unable to maintain even a semblance of financial solvency. Two of the three biggest debtors, Brazil ($92 billion) and Argentina ($37 billion) are far behind in their loan payments. If that cannot be corrected somehow, the Rockefeller Cartel and other banks who made the loans will have to start admitting that they are "non-performing" loans. That would take them out of the solid asset column and reveal the true condition of some very big banks as being very shaky indeed. So the Rockefeller and allied interests want desperately to get the IMF supplied with funds which can be funneled back to the banks as interest. It is a hanging-on-by-the-fingernails approach to buy time until improving economic conditions can begin to alleviate the situation.
But the Bolsheviks here want the Rockefeller Cartel-dominated banking empire to collapse. So far they have succeeded in delaying, delaying, delaying all efforts to prop up the wobbly IMF and thereby the banks. And now they are trying to set off the debt bomb by means of the Persian Gulf war between Iraq and Iran.
In our "Crisis Alert" two weeks ago (NewsALERT #4) we reported that a key event to watch for would be the delivery of 5 French Super Etendard jets to Iraq. Today, Oct. 7, that delivery got underway. Efforts by Rockefeller agents to stop it proved unsuccessful.
Iraq intends to attack Iran's oil-exporting capability by using the jets and Exocet missiles. Iran may or may not succeed in closing the Persian Gulf to all oil exports, as threatened. But one result is virtually guaranteed: a rise in oil prices, possibly to levels twice as high as they are now.
If oil prices should rise by even a few dollars per barrel, it would be catastrophic for Brazil, which is the biggest debtor nation of all and an oil importer. The Brazilian Congress has already signaled growing resentment against the austerity conditions imposed by the IMF as a condition for new loans. There is talk of a moratorium on repayment of foreign debts. . . a nice word for default. Rising oil prices due to the Persian Gulf war could be the straw that breaks the camel's back. Similar threats of default are also growing in Argentina.
The Persian Gulf war may or may not lead to real shortages of oil. But it could well set off the world debt time bomb.
Next scheduled issue: October 21, 1983
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