Freitag, 9. November 2007

The Peak Oil Crisis: The Washington Post

The Peak Oil Crisis: The Washington Post
Written by Tom Whipple
Thursday, 08 November 2007

On Monday, our colleagues over at the Washington Post ran a front-page story in an effort to explain to official Washington why oil prices have soared by $25 a barrel in the last ten weeks and just what it might mean.

Now anyone who follows the peak oil story knows the answer already. World Oil production stopped growing two years ago; consumption of oil in China, India, and the major oil producing countries themselves continues to grow rapidly; a gap between demand and supply is opening which for a while will be filled by drawing down world stockpiles; increasing prices are forcing the poor nations to get by with less oil.

Those who follow peak oil also know that within the next few years, unless a really bad economic recession cuts consumption massively, depletion from existing oilfields will run ahead of efforts to develop new oil fields and alternatives. Liquid fuels production then will begin to drop.

If, however, you have not taken on-board these easily observable facts of life in the 21st century, you must search for other explanations to account for rapidly rising oil prices. Sadly, this is the course that the Washington Post’s 1,800-word story takes.

The Post starts out by asking the rhetorical question “How high can [oil prices] go?” This of course is an irrelevant question, for the answer is “as high as necessary to keep supply and demand balanced”. Oil will eventually be $100 a barrel, $200 a barrel, and ultimately many hundreds or perhaps thousands of dollars a barrel. The key point is that the era of unlimited oil supplies is over and from here on there will be increasingly severe supply limitations.

The Post clearly does not yet grasp this point for in the second paragraph they opine that unlike previous oil spikes, the current one does not appear to be linked “to any physical shortage.” NO SHORTAGE? For weeks now the U.S. and the International Energy Agency have been shouting “shortages coming this winter” and imploring OPEC to boost production as much as they can.

Perhaps the Post has been listening to OPEC spokesmen endlessly repeating their mantra that “the market is well supplied,” the market is well supplied.” OPEC is right of course, for whatever the price of oil, be it $100, $200, $500 or even $10,000 a barrel there will never be a “shortage” of supply. There may not be too many oil-powered cars running around, but supply will be there to meet demand at the going price.

After declaring we are not running short on supplies, the Post settles on “traders” – a polite word for speculators – as a key reason prices are going up. These traders, taking advantage of a weak dollar and using money fleeing from an uncertain stock market, are buying oil as something with intrinsic value.

Polling “veteran” oil analysts the Post suggests that our current price spike may be a bubble that might just burst when we have a warm winter, slower economic growth, or when OPEC cranks out a few more barrels per day.

To maintain journalistic balance, the writer sought out some traders to get their side of the story. Being well grounded in reality, the traders pointed out that we have an unusually thin cushion of excess capacity so when you consider continuing rapid growth in Chinese and Indian consumption, you have a different situation than during earlier price spikes.

A little realism then creeps into the Post’s story which notes that we live in a world that is now consuming 85.9 million barrels a day and only has 2 million barrels a day of spare capacity, most of which is undesirable heavy Saudi crude. The Post draws the obvious conclusion that with almost no reserves, the oil market is much more sensitive to threats that would have been disregarded in other years.

To get back on a cheerier note, the story notes that some experts say “high prices will change the balance, creating new supplies and lower demand.” It quotes Daniel Yergin of Cambridge Energy who tells us those very high prices “will “catalyze responses in supply and demand and innovation.” Whatever that means it sounds promising!

After pointing out that oil prices went into slumps in the late 1980’s and late 1990’s the story gets back to the underlying question of whether or not our current oil spike is fundamentally different than the last. So in its most lucid moment, the story says “A few argue that the world is running out [of oil]” and notes that massive growth of U.S. suburbs and exurbs coupled with major economic advances in China and India means that very high demand for oil is not going to go away with increasing prices.

The story ends with the question of if and when the U.S. economy will be laid low by increasing oil prices. After noting that many thought $50 or $60 oil would be the end, the story happily notes that at $96 we are still growing at nearly 4 percent with low unemployment and modest inflation. This happy development is explained by a more efficient economy that uses much less oil per unit of production and that energy costs are a much smaller piece of the average household budget.

What can we make from all this? The Post’s writer and editors who put this story on the coveted front page certainly know about most if not all the dots that make up the story of oil production and prices in the fall of 2007. The biggest missing dot is a failure to mention that oil fields run dry as you use them and if you cannot replace the ones that are drying up fast enough you are in trouble.

There is nothing wrong with pointing out that there are many intangible factors that can drive the futures market up and down. But the Post is missing the forest while discussing the trees. The forest of course is the fact that oil prices have risen nearly five fold in this decade and show no signs of retreating.

One of these days the Washington Post will connect all the dots and start explaining to official Washington and the many policy makers among their readers the true story of oil. We can only hope that day will not come too late.
http://tinyurl.com/2xwraz

Democrats wake up to being the party of the rich

Democrats wake up to being the party of the rich
By Michael Franc
Published: November 4 2007

A legislative proposal that was once on the fast track is suddenly dead. The Senate will not consider a plan to extract billions in extra taxes from mega-millionaire hedge fund managers.

The decision by Senate majority leader Harry Reid, the Nevada Democrat, surprised many Washington insiders, who saw the plan as appealing to the spirit of class warfare that infuses the Democratic party. Liberal disappointment in Mr Reid was palpable at media outlets such as USA Today, where an editorial chastised: “The Democrats, who control Congress and claim to represent the middle and lower classes, ought to be embarrassed.”

Far from embarrassing, this episode may reflect a dawning Democratic awareness of whom they really represent. For the demographic reality is that, in America, the Democratic party is the new “party of the rich”. More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers – single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 – and combined them to discern where the wealthiest Americans live and who represents them.

Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

This new political demography holds true in the House of Representatives, where the leadership of each party hails from different worlds. Nancy Pelosi, Democratic leader of the House of Representatives, represents one of America’s wealthiest regions. Her San Francisco district has more than 43,700 high-end households. Fewer than 7,000 households in the western Ohio district of House Republican leader John Boehner enjoy this level of affluence.

The next rung of House leadership shows the same pattern. Democratic majority leader Steny Hoyer’s district is home to the booming suburban communities between Washington, DC, and Annapolis. It boasts almost 19,000 wealthy households and a median income topping $62,000. Mr Hoyer’s counterpart, minority whip Roy Blunt, hails from a rural Missouri district that has only 5,200 wealthy households and whose median income is only $33,000.

Income disparity – to use the class warrior’s favourite term – is greatest among the districts of lawmakers that lead each party’s campaign arm. Maryland senator Chris Van Hollen chairs the Democratic congressional campaign committee. With more than 36,000 prosperous households and a median income of nearly $70,000, his suburban Washington district even out-sparkles Ms Pelosi’s. In contrast, fewer than 5,000 such wealthy households are found in the largely rural district of his Republican counterpart, Tom Cole from Oklahoma. The median income there is only $35,500.

Democratic politicians prosper in areas of concentrated wealth even in staunchly Republican states such as Georgia, Kansas and Utah. Liberal congressman John Lewis represents more than 27,500 high-income households in his Atlanta district. The trend achieves perfect symmetry in Iowa. There, the three wealthiest districts send Democrats to Washington; the two poorest are safe Republican seats.

Soon this new political demographic may give traditional purveyors of class warfare the yips. To comply with new budget rules, liberal Democrats on Capitol Hill are readying a tax increase of at least $1,000bn over the next decade. Ms Pelosi says she wants to extract all of this from “the wealthy”. When has a party ever championed a policy that would inflict so much pain on its own constituency? At what point will affluent Democrats crack and mount a Blue State tax rebellion?

Will we see the emergence of a real-life Howard Beale, the television anchorman played by Peter Finch in the movie Network? Beale was disgusted with America’s deteriorating 1970s economy and culture. One night he snapped and implored viewers to get out of their chairs. “Go to the window, open it, and stick your head out and yell: ‘I’m mad as hell and I’m not going to take this any more!’”

Or will Democratic voters follow a different cinematic lead, that of the fraternity pledge in Animal House? Perhaps they will accept these tax rises as a political and economic hazing and greet each new tax hike with: “Thank you, sir. May I have another?”
http://tinyurl.com/2ww7kc

Clinton Papers Won't Be Released Until After Election

Clinton Papers Won't Be Released Until After Election
Diane Blair Papers Detailing 1992 Clinton Campaign Won't Be Released Until 2009
By JAKE TAPPER
Nov. 6, 2007 —

Democratic frontrunner Sen. Hillary Clinton, D-N.Y., has been taking heat from her Democratic and Republican opponents for the reams of papers detailing her various activities as First Lady that the National Archives has yet to release from the William Jefferson Clinton Presidential Library.

And now questions are being raised about why another set of papers relevant to her political career at yet another Arkansas library will not be available to the public until well after election day 2008, despite earlier indications that the papers would have been released by now.

Those papers were written by Diane Blair, a close friend of Bill and Hillary Clinton, who taught and engaged in Arkansas politics until her death due to lung cancer in 2000.

As a trusted friend during then-Gov. Bill Clinton's successful presidential run in 1992, Blair was permitted to extensively interview 126 senior and junior Clinton campaign aides, which resulted in four enormous binders full of information.

The information was to be published in a book that Blair, a historian and author, ultimately never wrote.

Only two copies of the Blair Report were ever made; one was given to the Clintons, the other remained in Blair's custody until after her death, whereupon the books were given to the University of Arkansas Library.

Last month the University of Arkansas announced that the Blair Papers would not be made public until 2009. Andrea Cantrell, the head of research services at the university library's Special Collections, told reporters that the Papers were not yet processed.

But that claim seems questionable, according to statements the Library itself has made obtained by ABC News.

In its 2005-2006 University Libraries annual report, for example, the University of Arkansas reported that the process was almost done. "Archivists were hired to process both the Diane Blair Papers and the records of former third district Congressman Asa Hutchinson, and both collections are nearing completion."

Moreover, while in November 2005 the University appointed Kerry Jones the "Diane Blair Papers Archivist," the University Of Arkansas Library Newsletter one year later, in 2006, implied the job has been completed, describing Jones as having "previously processed the papers of the late Diane Blair."

Jones was desribed as taking on a new task, as part of the Special Collections Department team "gearing up to begin processing its largest manuscript collection, the papers of former U. S. Congressman John Paul Hammerschmidt."

"All I can say is that was a preliminary estimation and neither of the collections that were reported on are finished, neither Blair nor Congressman Hutchinson's papers," Tom Dillard, head of the Special Collections Department, told ABC News. "They're just not ready."

Dillard acknowledged that while "there has been a preliminary processing," and that Jones "did his part," the Blair Papers require much more "quality control" work.

"The big problem are the oral histories," he said. "Those require a lot of legwork. The other process is going through it box by box and making sure the contents of what's in the file folders is what they're supposed to be. There is a lot more work that needs to be done."

A spokesman for Clinton's Senate office, Philippe Reines, told ABC News that no one from Clinton's Senate office, her campaign, or from the office of former President Clinton have had any contact with the University of Arkansas about delaying the release of the Diane Blair papers.

"It's not a conspiracy," Dillard told ABC News. No representative of the Clintons has been in touch with the Library, he said. "No, absolutely not. No political campaign has been in touch with us. Nor have any individuals been in touch with us asking us to do anything different from what we would normally do."

The library newsletter indicated that two years ago Jones had extra help in processing the papers.

"Visitors to the Library's Special Collections Department might notice two students working diligently processing the papers of the late Professor Diane Blair," wrote the University Of Arkansas Library Newsletter in 2005. "These students are the first two Diane Blair Interns appointed by the University Honors College in a collaborative venture with the University Libraries."

Intern Lindley Carruth Shedd "commented that she finds her work in the Blair papers fascinating, and she believes the Blair collection "will be a great resource to those who want to study women's issues, state politics, or Bill and Hillary Clinton."

Two biographies of Clinton released this year and criticized by the Clinton campaign -- Jeff Gerth and Don Van Natta Jr.'s "Her Way" and Carl Bernstein's "A Woman In Charge" -- reported on the Blair papers as a treasure trove of information about the 1992 Clinton campaign.

Blair's "questions, based on extensive preparation," wrote Gerth and Van Natta, "elicited candid remarks from aides who trusted her. She chronicled the highs and lows of a dogged campaign and quickly generated a mountain of insightful information.

In the end, she compiled her lengthy report -- the introduction alone numbered thirty pages -- into 'big bound volumes.'" Bernstein was able to interview Blair before her death and see the papers.

Dillard said he did not know when the Blair Papers would be made available, and he said the Library would not release her 1992 report separately since it was not customary.

"We always open a collection in its entirety because individual component parts do not always make sense," he said.

Despite Clinton's suggestions that she would support a more transparent government as President, Newsweek first reported, that in November 2002 former President Bill Clinton specifically requested that the Archives "consider for withholding" various "confidential communications" including those pertaining to "sensitive policy, personal or political" matters as well as "communications directly between the President and First Lady, and their families, unless routine in nature."

The term "withhold" is a term of art relating to presidential papers not necessarily meaning that the papers be kept from the public, but rather that they be reviewed before release.

Historians have complained that while the decision of what to release is ultimately up to the National Archives, Clinton's letter at the very least doesn't expedite the process and may even be delaying it, though the former President disputes that.

The National Archives controversy, as well as questions about the release of the Blair Papers, touch on a murky and well-traveled ground where politicians insist they are releasing information while historians and reporters suspect forces at play delaying immediate disclosure.

Information as yet un-released from the the days of her husband's presidency stored at the Bill Clinton Library constitutes more than 99 percent of 78 million pages' worth and 20 million emails worth of documents, according to the National Archives.

In response to questions about papers not yet released by the Clinton Library, Sen. Clinton told Radio Iowa, "I think it's like people think we have boxes of records in our basement and why don't I just go and get them and hand them over. And you know my husband has never blocked a record ever. He has been the most forthcoming of all presidents."

Bill Clinton's 2002 request and Sen. Clinton's confusing answer on the subject when asked about it at last week's debate, have fueled attacks from Clinton's Democratic and Republican opponents that the Former First Lady is, if not hiding something, not willing to completely disclose everything.

"We have just gone through one of the most secretive administrations in our history," said Sen. Barack Obama, D-Illinois, during the recent Democratic debate "And not releasing, I think, these records -- at the same time, Hillary, that you're making the claim that this is the basis for your experience -- I think, is a problem."
http://tinyurl.com/ynjwfv

The mysterious death of Lyndon LaRouche's printer

Publish and Perish
The mysterious death of Lyndon LaRouche's printer
posted: 8 Nov 2007
By Avi Klein

For forty years, the Lyndon LaRouche movement has been a ubiquitous, if diminishing, presence in the political landscape of America, and of Washington. LaRouche has made eight runs for the presidency, including one campaign from prison. At D.C. press conferences and think tank events, a reporter for a LaRouche publication called Executive Intelligence Review can often be heard asking strange questions about the grain cartel. Young, malnourished LaRouche acolytes frequently stop Hill staffers on their way home from work and hand them pamphlets with titillating titles like "Children of Satan" or "The Gore of Babylon." A peek inside offers details on LaRouche's many enemies, such as the "Conrad Black–backed McCain–Lieberman–Donna Brazile cabal."

One of the LaRouche movement's longest-serving loyalists was Ken Kronberg. A handsome classics scholar and drama teacher, Kronberg owned and managed PMR Printing, the outfit that has generated the idiosyncratic propaganda that sustains LaRouche's entire enterprise. Last year, the LaRouche organization spent more than $2.5 million—at least 60 percent of its publicly reported expenditures—on printing and distributing pamphlets. Most of this money went to PMR. LaRouche's output was so prolific, in fact, that PMR ranked among the country's top 400 printers by sales. Despite this, the company's finances were in perilous shape. Various LaRouche organizations owed Kronberg hundreds of thousands of dollars. When the IRS and Virginia tax authorities came calling over withholding payments, Kronberg knew he was in serious trouble.

On April 11, 2007, Kronberg sat in PMR's offices in Sterling, Virginia, forty-five miles northwest of Washington, to read the "morning briefing," a daily compendium of political statements that reflect the outcome of the executive committee meetings held at LaRouche's house in the nearby town of Round Hill. This particular briefing struck unnervingly close to home. Written by a close associate of LaRouche's and addressed to the movement's younger followers, the brief bitterly attacked what it called the "baby boomers" in the organization—members like Kronberg who had joined LaRouche in the late 1960s and early '70s. The brief named "the print shop"—Kronberg's operation—as a special target. "The Boomers will be scared into becoming human, because you're in the real world, and they're not," the brief read. "Unless," the writer added, the boomers "want to commit suicide."

This note may have had an effect. At 10:17 a.m., Kronberg sent an e-mail to his accountant instructing him to transfer $235,000 held in an escrow account to the IRS. He got in his blue-green Toyota Corolla and drove east. He mailed some family bills at the post office, then turned around onto the Waxpool Road overpass. Just before 10:30 a.m., Kronberg parked his car on the side of the overpass, turned on his emergency lights, and flung himself over the railing to his death. (Although LaRouche's home is only fifteen miles from the St. James Episcopal Church in Leesburg, Virginia, where Kronberg's funeral was held, LaRouche didn't show up for the service.)

True to form, LaRouche's current and former followers immediately burst forth with conspiracy theories. Had Kronberg been deliberately goaded to commit suicide by the movement's leaders? Had this private and modest man killed himself in a public fashion in order to draw attention to LaRouche's murky finances? Much of this speculation took place on FactNet, an Internet discussion board for former cult members. Users soon posted leaked internal memoranda from the LaRouche leadership showing that it, too, was blindsided and uncertain.

Whatever the answers to these questions, Kronberg's life and death perhaps tell an even more interesting tale. From the very beginning, the LaRouche movement has been a thoroughly paper-based cult. Its strange propaganda, disposable to most people who encounter it, has been central to both the movement's proselytizing activities and its finances. Although most of PMR's problems stemmed from LaRouche's own impecuniousness and his insatiable demand for printed materials, Kronberg's financial and legal troubles infuriated LaRouche. LaRouche was furious because he was frightened. Ink is the lifeblood of the LaRouche organization, and in PMR's impending demise, he could see the likely death of the organization itself.

The LaRouche movement has been called many things: Marxist, fascist, a political cult, a personality cult, a criminal enterprise, and, in the words of the Heritage Foundation, "one of the strangest political groups in American history." More than anything else, however, what it resembles is a vast and bizarre vanity press.

Lyndon Hermyle LaRouche was born in 1922 and raised in rural New Hampshire and in Massachusetts. Bullied at school, but forbidden by his Quaker parents to fight back, he turned to philosophy as his weapon, dismissing his schoolyard persecutors as the "unwitting followers of David Hume." His father, a shoe executive who edited a right-wing newspaper and carried on two simultaneous feuds with rival Quaker groups, was a dominating influence during his childhood.

LaRouche served a brief stint as a noncombatant in World War II, and claimed to have worked as a medic in the China-Burma-India theater. By one account, he distinguished himself as a polyglot capable of playing multiple games of chess at once. Exposed to Marxism while overseas, he joined up with the Socialist Workers Party (SWP) in Boston upon his return. Like socialist movements of every era, the SWP put a high premium on agitprop pamphlets, newspapers, and denunciatory internal memoranda. LaRouche had found his medium.

Staying up sometimes for forty hours straight, discarded drafts piling up around his typewriter, LaRouche cultivated the multidisciplinary stream-of-consciousness style that would distinguish his output for years to come, writing under the nom de plume Lyn Marcus. For instance, here is LaRouche expounding on the nature of the Marxist dialectic in a 1969 essay, "The Philosophy of Socialist Education (From an Advanced Standpoint)":

In sum, on this particular point, pre-conscious or dialectical processes of mentation may be contrasted with formal logic, etc., as a "domain" of process conceptions of whole processes in which the particularity, including the particular conception introduced to consciousness, is a determined feature of a determining holistic process.

What really distinguished LaRouche's writings from those of other abstruse revolutionary theorists was the all-encompassing quality of his erudition. A discourse on local Marxist politics might veer into a discussion of the proper pitch to be used in bel canto singing, before touching on Plato and Aristotle, the German philosopher Friedrich Schiller, and concluding with a riff on the grain trade.

Despite LaRouche's productivity, it was not a happy time for him. He was awkward in social settings, and his only political activities outside his writing were, he later recalled, "limited to occasional meetings and instructions to my (former) wife to attend to dues and pledge payments." Moreover, very little of his writing was deemed to be suitable for publication. (One SWP member characterized LaRouche's oeuvre as "thick, dull, [and] endless.") LaRouche resolved to start over, deciding that "no revolutionary movement was going to be brought into being in the USA unless I brought it into being."

In 1967, LaRouche began holding training seminars for "revolutionary leadership cadres" at New York's Free School. Sometimes sporting a wild beard and a floppy bow tie, and always glaring out from behind Woody Allen glasses, the forty-five-year-old LaRouche mesmerized his much younger students with what appeared to be a deep understanding of how the world really worked. During the 1960s and early '70s, followers flocked to his side. Unlike the young members who distribute LaRouche literature today, these recruits were not what we tend to think of as cult material. Intelligent and idealistic, they were educated in the classics, mathematics, and psychology. Most were seeking an intellectual Marxism without the free love and druggie ethos that dominated other left-wing groups of the time. When LaRouche explained that classical literature and science experiments alone could save the world, many were hooked.

Ken Kronberg belonged to this first wave of converts. He grew up in New York in a Jewish immigrant family. In 1970, after graduating from St. John's College in New Mexico with a philosophy degree, he returned to New York, hoping to join a Marxist group. Kronberg soon found work at the publisher John Wylie & Sons, editing science books. But when he picked up a LaRouche newspaper at a friend's house, his literary and political ambitions were subsumed. "He was sold on the guy from the beginning," a friend of his from college told me.

It was a perfect fit for Kronberg, because production of political literature was driving the growth of LaRouche's movement, now formally known as the National Caucus of Labor Committees. Street teams holding signs with arresting slogans—for example, "Feed Jane Fonda to the Whales"—would hand pamphlets to passersby, followed by invitations to a lesson or meeting. LaRouche believed fervently in the mystical power of the written word, reasoning that if he distributed his ideas widely enough, they would permeate the public consciousness even if his movement's membership remained small. To that end, he urged his followers to publish lengthy discourses of their own. "Success in organizing the working class," explained one memo from the time, requires "the intellectual self-development of cadres through the sort of writing we are now demanding for The Campaigner and New Solidarity." LaRouche was not the first cult leader to use the technique of saturating potential converts with his message, but he was adept at making founding members feel important, both by exaggerating the intellectual significance of their work and by rewarding loyalists with authority.

Kronberg quickly proved himself a skilled and popular editor and typesetter for the group's twice-weekly political newspaper, New Solidarity. Two years later, he was named to the organization's national committee—making him a rising star in a core of approximately twenty-five organizers supposedly responsible for policy and operations. In truth, LaRouche made all the decisions.

Some of those decisions tested Kronberg's loyalty, but he passed the trials with distinction. In 1971, Kronberg had met Molly Hammett, an energetic and sharp-tongued twenty-three-year-old. In 1973, Hammett joined the movement so that she could marry Kronberg; soon afterward, she became pregnant. However, LaRouche had impressed upon his followers that the fate of humanity lay in their hands; families were a dangerous distraction. Responding to that sentiment, Kronberg persuaded her to have an abortion. (The couple later had a son, Max, in defiance of LaRouche.)

Events took an even darker turn in 1972, when LaRouche became convinced that Chris White, his ex-wife's new boyfriend, had been brainwashed by the British to assassinate LaRouche. He undertook a two-week "deprogramming" of White, a process that started in Kronberg's apartment on West Seventy-third Street. According to a tape recording later obtained by the New York Times, these sessions were marked by "sounds of weeping and vomiting." At one point, according to the Times, a voice could be heard saying, "Raise the voltage."

The so-called Chris White Affair horrified Kronberg, according to several of his friends from that era. So did a technique known as "ego-stripping" that LaRouche began to practice on senior cadres. (In one such session, a former member told me, a disgusted Kronberg threw a soda bottle across the room and stormed out.) Still, convinced that LaRouche was a genius destined for the White House, and gratified to play an integral part in his rise, Kronberg rationalized his leader's seemingly crackpot ideas. Ken "would construct reasonable and coherent backgrounds for the ludicrous statements being given," said a family member. "What's the motive, what's the plan behind this, he doesn't believe this, he's using it to get something."

What LaRouche wanted was to become president of the United States. In 1976, he ran on his own U.S. Labor Party platform, winning 40,000 votes, or .05 percent of the national total. By 1980, the LaRouche organization had swerved dramatically to the right, working closely with such groups as Willis Carto's Liberty Lobby and promoting conservative causes like the strategic defense initiative. Predicting that Ronald Reagan would win the election, and eager to gain his favor, LaRouche joined the Democratic Party in order to launch more effective attacks on Reagan's Democratic opponents. LaRouche would run on the Democratic ticket for his next seven campaigns.

During the 1980s, LaRouche reached the apex of his influence. The organization had a steady income stream from its aggressive telephone fund-raising teams and remarkable political contacts in Washington. Within the Beltway, it sold itself as a private intelligence agency, and many people fell for its pitch, including senior staffers on Reagan's National Security Council such as Richard Morris, a top aide to National Security Adviser William Clarke. Throughout Reagan's first term, LaRouche acolytes were invited to provide NSC staffers with frequent briefings. During this time LaRouche also purchased large blocks of television airtime, which he used to expand on his views about national politics (such as his conviction that Walter Mondale was a Soviet agent). In 1986, the group possessed sufficient organizational ability to win the Democratic primaries in Illinois for lieutenant governor and secretary of state, although both of its candidates were handily defeated in the general election.

LaRouche's increased visibility came with a price. By vaulting himself onto the national stage, he was attempting to convert a small-time, somewhat manageable propaganda production outfit into a national political machine that required substantial infusions of money. As always, LaRouche looked toward the printing operation to underwrite his aspirations.

By this point, the group had already established a number of publications, including a newspaper, a wire service, an arts magazine, a news magazine, numerous science magazines, and a theoretical journal. (As a general rule, the less each publication contained of LaRouche's writing, the better it sold.) The movement also traded on LaRouche's supposed cachet in the intelligence world to peddle "special reports" that could be bought for up to $250 per copy. These were typically popular only in Third World embassies, where officials—under the impression that LaRouche was still a Marxist—were convinced that he possessed secret knowledge about international politics. By 1980, the group was clearing almost $200,000 a week from campaign contributions and donations to various LaRouche-connected nonprofits and magazine subscriptions, all of which were treated as belonging to a single account. (This marked the beginning of the group's problems with the FEC, which penalized the organization after discovering that it had illegally reported numerous magazine subscriptions as political contributions in order to qualify for more matching funds.)

It is nearly impossible to make sense of the LaRouche movement's convoluted finances. However, one fact is clear: although the print shop generated crucial short-term cash flow from subscriptions and report sales, this income never came close to covering the group's payroll, rent, and advertising costs. The organization also had sizable legal expenses, because it was constantly on the run from its creditors. Partly this was due to its refusal to abide by established accounting techniques. Mostly, though, the problem was that some of the leading cadres seemed to believe they didn't have to pay bills, because they were performing heroic revolutionary deeds. Lawsuits from landlords, vendors, and former employees clogged the New York City docket. By the early 1980s, the committee had outstanding accounts with most of the large printing shops in New York.

In response, LaRouche encouraged members to set up private editorial and printing companies. The idea was that in-house printers could produce the publications that the organization used to raise money at a far lower cost than private vendors. With financial help from his wife's family, Kronberg created World Composition Services (WorldComp), a typesetting company that he operated out of LaRouche's offices. At the time, WorldComp was a cutting-edge venture, the first company of its kind to use computer typesetting in New York. Kronberg came to control PMR as well, which printed most of the group's pamphlets, books, and newspapers. (Because LaRouche's idea of "low-cost printing" often meant, in reality, "free printing," the two companies took on other regular clients, including the United Nations and the Ford Foundation.)

Kronberg's foray into capitalism wasn't unique. "Unlike the average flower-selling Moonie, many of LaRouche's devotees had advanced degrees and highly marketable skills," writes Dennis King, author of Lyndon LaRouche and the New American Fascism. Yet these enterprises seldom ran smoothly. Cadres found it impossible to resist LaRouche's constant demands for cash and services performed on credit. In one case, bankruptcy proceedings revealed that Computron, a well-respected software company owned and managed by high-ranking cadres, was spending $5,000 to $10,000 a week to cover 20 percent of the organization's budget. LaRouche poured most of this money into his 1980 presidential campaign. In New Hampshire, for instance, he spent $1 million to paper the state with pamphlets, which he believed would allow him to capture 15 percent of the Democratic primary vote. He received a mere 2 percent.

Hoping to achieve a better result in subsequent elections, LaRouche became more grandiose in his operations, and the fund-raising methods employed by his printing shop became correspondingly more dubious. In one favored approach, his representatives would contact a donor known to be a soft touch with an offer to invest in a large project, such as delivering copies of LaRouche's latest report on the strategic defense initiative to every congressional office. The potential donor would be quoted a price in the tens or hundreds of thousands of dollars, reflecting the supposed market price of the report, even though the information it contained was generally worthless, not to mention unreadable.

Molly Kronberg was often involved with deceptions practiced by members of the organization. In 1978, she had helped to open the New Benjamin Franklin Publishing House in order to serve as the publisher of Dope Inc., a massive project that famously named the Queen of England as the head of the international drug trade. It was first serialized in Executive Intelligence Review and later published as a book. Under pressure to pay PMR for printing the books, Molly took out modest loans. They weren't enough. She began traveling around the country and pressuring LaRouche supporters to sign promissory notes to the movement on wildly generous terms. She was eventually arrested for her role in another creative hoax, in which a Wall Street economist loaned the company more than $75,000 to republish what he thought would be the works of various nineteenth-century economists he admired. However, as Dennis King reports, "the only books that were published were by or about LaRouche."

In 1989, Molly was put on trial in New York state court with a number of other cadres. She tried to prevent LaRouche from testifying in her defense, believing that he would not make a good impression on the jury. To LaRouche, this was a grave betrayal. Eager for any public platform he could get, he insisted on speaking on her behalf. Molly was eventually sentenced to five years of probation for defrauding lenders.

LaRouche himself was in prison by then, having been convicted in 1988 for mail and tax crimes by a Virginia federal court and sentenced to fifteen years. PMR was a direct beneficiary of these schemes, but because Kronberg had never been involved in soliciting loans and did not play an active role in the group's finances, he managed to escape indictment.

By the 1990s, most LaRouche members had relocated from New York to Leesburg, Virginia, a bucolic town forty-five minutes northwest of D.C. known for its antique shops and horse farms. LaRouche had moved to the area in the mid-1980s, wanting to be closer to Washington. (Former associates explained that he also wanted plenty of land on which to hide from would-be assassins.) He settled on a 171-acre estate called Ibykus Farms, where he was waited on by cadres; an internal budget from 1995 shows that he ran a weekly tab of $4,500 for security guards. He and his followers, however, didn't really fit into their new locale. Leesburg's citizens rebelled when the group deployed its aggressive organizing techniques on the town's picturesque streets. Later, the local small business association almost shut down after LaRouche cadres flooded its membership rolls and usurped its agenda. LaRouche added the townspeople to his list of enemies, describing Leesburg's garden club as a "nest" of Soviet agents.

For many members, the period of LaRouche's imprisonment in the early 1990s offered a rare time of sanity. Some followers drifted away; others stayed and tried to clean up the organization's finances. The first thing they turned to was PMR, which was in deep trouble. LaRouche owed it money for numerous printing orders, and in 1992 he ran for president from jail, burdening the company with yet more unpaid bills. In desperation, Kronberg had started to skim FICA payments, and the IRS had noticed. Anxious that the print shop not go under, the organization borrowed heavily against Ibykus Farms. (It lost the property the next year after failing to make payments on the loan.) The millions of dollars these loans brought in covered PMR's debts and "saved the organization," recalls a former member of the finance office. It saved Kronberg too, at least temporarily.

When LaRouche emerged from jail in 1994, he perceived that his influence among his founding followers was waning. For one thing, his activist power had declined, as his aging members no longer wanted to do menial organizing work. The organization's finances were deteriorating as a result of his notoriety and parole conditions, which stipulated that ethical lapses in any LaRouche entity would cause his parole to be revoked.

To LaRouche, however, the group's gravest problem was that it no longer distributed his literature very effectively. In 1999, when the conditions on his parole were lifted, he devised a bold plan: a new youth movement that would fan out to major cities and college campuses around the country, pushing LaRouche publications and reestablishing him as a major player on the national scene.

The remaining senior members enthusiastically supported the initiative. This was a big mistake. Experts who study political cults have observed that such groups thrive on an imagined enemy in opposition to which the group constructs it own collective identity. LaRouche had always encouraged members to believe they were the victims of mass conspiracies (usually perpetrated, according to LaRouche, by John Train, a New York investment advisor and cofounder of the Paris Review). While LaRouche maintained his belief in these plots, he concocted a sinister new nemesis: the baby boomer.

This perceived enemy was a very useful device to LaRouche as he formed his new group, the LaRouche Youth Movement. This group attracted very different people from those who had joined the movement with Kronberg. The later recruits were mostly college dropouts, many of them mentally unstable, whom LaRouche pressured to leave school and live in organization group homes. In order to seal their allegiance, LaRouche latched on to the boomers as a perfect indoctrination device, a way to channel the rage new acolytes felt toward their parents at a nearby, internal enemy: the founding generation of his own followers.

Things quickly took a nasty turn. Death, LaRouche warned repeatedly, was the best choice for the boomers, whom he called a "mass of maddened lemmings" and a "leaf of poison ivy." In a speech in Los Angeles, he directed the Youth Movement to take a hard line with the organization's older members. "They will stubbornly, angrily, furiously, cling to their mores. And you simply have to push, as I do. Ride roughshod," he said. "Because, they'll do everything they can to sabotage you, by using peer group pressures among themselves. They'll conspire—they actually will form little conspiracies, and they'll go behind your back."

As his finances became more precarious, LaRouche grew obsessed with the adversary he had created. He became convinced that the older members who ran his printing operation were engaged in a conspiracy to destroy him. In speech after speech, in internal memos and published literature, he accused the boomers of "sabotage" and "censorship" when fund-raisers failed to bring in enough money to pay for printing costs. He also believed that Kronberg was the head of a cabal that had plotted to have Executive Intelligence Review's second-class mailing privileges revoked—a development that pushed the magazine's distribution costs even higher at a time when fund-raising was lagging.

What was really killing LaRouche's enterprise (in addition, of course, to its peculiar philosophies and inability to keep a simple balance sheet) was that its leader was clinging to a dying medium. Enamored by print, he had failed to exploit the Internet. The Web could have solved many of his problems. Compared to printed material, online propaganda is virtually free to produce, and the Internet offers limitless space for disquisitions on esoteric subjects. (If anyone was made for blogging, it was surely Lyndon LaRouche.)

But LaRouche's politics had always focused on physical infrastructure—in recent years, for instance, he had championed massive maglev construction and giant waterworks projects. The rise of the information and services industry held little interest for him, and so, having failed to predict the Internet, he proceeded to ignore it. Moreover, Computron and other similar fiascos had forced out the talent that made the group an early adopter of technology in the late 1970s. Although the group's fund-raising had improved in the '80s, it had failed to attract new classes of committed, educated senior cadres. This generational gap left the organization painfully unaware of the Internet's value as an organizing tool.

When the group's older leaders eventually ventured online, they often stumbled. They were slow to grasp that although the Internet allowed the free dissemination of ideas, it also made criticism equally accessible. Around 2003, the organization set up a discussion board and then a Yahoo group, but both were discovered by a former member who delighted in asking inconvenient questions about Jeremiah Duggan, a young Briton who died in 2003 under mysterious circumstances at a LaRouche conference in Germany. Organization members shut the boards down and tried a more proactive approach, popping up on anti-LaRouche sites to defend the organization. That tactic only inspired more criticism, and confirmed to posters that the LaRouche organization was worried about what they were saying. Eventually, Youth Movement members were ordered to stay off social networking sites like MySpace, which LaRouche deemed an "Orwellian brain-washing operation."

Instead, the organization persisted in its print habit. This dependence weighed heavily on Ken Kronberg, because PMR was once again in trouble. For at least five years, Kronberg had been billing the committee at or below cost, and to cover the shortfall he was forced to cut back salaries for national committee members on the payroll, including his own. Molly went back to work as an editor in the private sector to help make ends meet. By this time, however, the IRS was asking questions, and PMR and WorldComp were facing tax liens totaling hundreds of thousands of dollars. The LaRouche organization tried to keep PMR going by feeding money into an escrow fund dedicated to PMR's tax bill, but it was an inadequate solution. Some of the donated money was transferred from LaRouche's political action committee (LPAC) to PMR under the guise of advance payment for printing—a serious FEC violation.

Two weeks before Kronberg's death, LPAC informed him that they were cutting him off. Seeing little point in paying bills to a company poised on the brink of insolvency, LPAC also demanded the return of a recent $100,000 advance, which PMR had already spent. Kronberg worried that the organization would try to raid the escrow account, which then held $235,000 earmarked for the IRS.

As long as Ken controlled the printing operation, he believed that he played too important a role in the movement for LaRouche to risk launching personal attacks against his family. As it became clear that PMR was about to fold, Ken realized that he was no longer protected. Four days before he died, he told Molly that he was going to have to shut down the companies. "I will be vilified. You and I will be vilified like nothing you've seen yet. It will be ugly; it will be brutal," he told her. "This is going to be the worst week of my life." The morning briefing confirmed that Ken and his family were now vulnerable to the relentless psychological abuse LaRouche directed at members who had displeased him. When Ken committed suicide, he didn't leave a note, but Molly and other members are convinced that his death was an attempt to draw attention to the organization's troubled finances, and as such was the bravest political act of his life.

Ken Kronberg's death threw the LaRouche movement into chaos. Molly was still on the national committee, and at first senior members reached out to her. But her colleagues soon started to suspect that she was leaking internal information on the Internet, and one morning she woke up to find that her organization e-mail accounts had been blocked. LaRouche drafted an attack on her, saying that donations of $1,025 she had made to Republican causes in 2004 and 2005 foreshadowed her treachery to the movement. Defying LaRouche, other members delayed publication of his screed for a day. LaRouche was forced to acknowledge that internal unhappiness was widespread: "It is not [the members'] fault," he said, "if some things for which they have worked so hard, and sacrificed so much, did not produce the results they had the right to achieve."

For LaRouche, this admission was startlingly candid. In the almost forty years since its inception, despite spending hundreds of thousands of dollars a week in operations and annually printing millions of books and magazines, the LaRouche operation has had no significant effect on American politics. It is remarkable in its impotence.

Despite the unrelenting loyalty of his followers, LaRouche has never come remotely close to being elected president. In fact, no LaRouche cadre has been elected to office at any level higher than school board. Nor have his economic theories attained any kind of recognition. The LaRouche-Riemann Method, an economic model that LaRouche calls "the most accurate method of economic forecasting in existence," has gone unnoticed by the social science indexes. Many former members admit to not understanding it.

In one perverse way, of course, the movement did work. For thirty years, Ken Kronberg printed, and all the other members edited and distributed, everything that LaRouche wrote, whether anybody understood it or not. If, in the late hours of the night, LaRouche determined that 50,000 copies of his latest essay on the Treaty of Westphalia needed to be distributed around the country, his followers did their best to oblige. That model, however, couldn't be sustained forever.

Two weeks after Ken died, PMR finally ran out of ink and paper. The IRS took action to collect LaRouche's 2004 campaign debts to the company. Fund-raisers were ordered not to sell any more subscriptions to LaRouche publications, while current subscribers have been directed to unappealing electronic versions. With no ability to get credit and with its publications shuttered, the group now copies one-pagers at Kinko's. Most humiliating of all, it has been forced to operate on the Internet. On its Web site, LPAC now urges readers to print out and distribute its fliers themselves.

Meanwhile, membership at the Washington, D.C., branch of the LaRouche Youth Movement is said to be disintegrating, and its pamphleteers are seen far less frequently than in previous months. The 2008 election will be the first in thirty-two years in which LaRouche has not sought the presidency. Recently, a senior member published an article that dared to speculate on a topic that once would have been unthinkable: a post-LaRouche world. "What was so upsetting," said one longtime member and friend of Kronberg's who is no longer with the group, "was to realize how pointless it all was. How we had no effect at all."
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