FRIDAY, SEPTEMBER 23, 2016

Volume 3, Number 23

EIR Daily Alert Service

P.O. Box 17390, Washington, DC 20041-0390

EDITORIAL

The West’s Demise Is Now Evident, but a Full FDR-Style Economic and Social Reconstruction Is Now Possible

Sept. 22 (EIRNS)—Look down at the state of the United States from above. What do you see?

The population is in a state of collapse verging on civil war. The events in Charlotte, North Carolina over the past days demonstrate yet again the desperation of the disenfranchised poor, combined with racial divisions and prejudice which can spark chaos overnight. The youth are not only driven to drugs, but their addictions are promoted by a demented President. The banking system is disintegrating, as the casino mentality of Wall Street and London has destroyed the real economy and produced a derivatives bubble more than double the size of that which provoked the 2008 financial fiasco. The perpetual “regime change” wars of the past 15 years under Bush and Obama have vastly expanded the terrorist ranks, while costing trillions of dollars, turning entire nations over to barbarian gangs, and provoking a refugee crisis which is ripping Europe apart, generating right-wing movements not seen since the era of the Fascists and the Nazis. The police-state surveillance structure in the United States, although exposed by the courage of Edward Snowden years ago, goes on without restraint.

Yet, the truth about these atrocities is now before us all, in plain sight. The too-big-to-fail banks, led by Deutsche Bank, stand exposed as irretrievably bankrupt, while the population is increasingly impoverished. The drug epidemic has struck every community in America, including even small rural areas. The perverse make-believe violence of Hollywood is now the reality on the nightly news. The fact that our President stands on the side of terrorism has been exposed by the release of the 28 pages, and by Obama’s open defense of the Saudi sponsors of terrorism by announcing his intention to veto the JASTA bill, even though the Congress passed the bill unanimously and has promised to override Obama’s veto. As evidenced in Syria this week, the White House and the Pentagon are hell-bent on starting a war on Russia and China, even as the rest of the world is turning to Russia and China as the only source of development and win-win cooperation, as seen at the G20 Summit in China this month. This week, Chinese Prime Minister Li Keqiang brought this “G20/win-win” perspective into the institutions of the United Nations, hosting the leaders of 16 agencies (UNDP, WTO, WHO, IMF/World Bank, etc.) at a forum on the necessary world development agenda.

We could go on.

Helga Zepp-LaRouche today, looking at this pregnant moment in history, noted that if the $5 trillion spent on the Bush/Obama wars, and the $1 trillion Obama intends to spend on modernizing the U.S. nuclear weapons stockpile, were spent instead on rebuilding the United States, restoring and expanding the dearth of infrastructure, building new cities along new high-speed rail lines (as China has done), rebuilding the rust belts where U.S. industry once prospered, organizing Civilian Conservation Corps-type outfit to provide jobs, training, and rehabilitation in the rebuilding process for the millions of forgotten and drugged up youth, funding science and Classical culture again, especially in our degenerate school systems—if all of this and more were to be done, as it was done by Franklin Roosevelt through the New Deal, then there would be no war, no economic collapse.

The first step—after overriding Obama’s veto on JASTA this week—must be the same as Roosevelt’s first step: shutting down Wall Street, implementing Glass-Steagall, and unleashing a massive credit generation directed into the physical and social reconstruction process. This New Paradigm, as Lyndon and Helga LaRouche have called it, has already been set in motion by China and Russia, and is expanding on a daily basis throughout the world. The spearhead for bringing this process back into America has also been set in motion, by the LaRouche movement, centered in Manhattan, inspiring the population through Classical music, science, and truthful and optimistic alternatives to the ugliness of the counterculture and decay dominating life in America today.

As Thomas Paine once said, “These are the times that try men’s souls.” And yet, it was precisely that inspiration to dedicate one’s life to the creation of a productive future for all mankind in a time of crisis, which made America what it once was, and must be again. These coming days and weeks will be historic, for good or for ill, depending on the level of courage and creativity of the citizens of the world.

U.S. POLITICAL AND ECONOMIC

Hand-to-Hand Combat Heightens in Battle To Make JASTA Law

Sept. 22 (EIRNS)—Leaders of the 9/11 families continued their aggressive lobbying on Capitol Hill on Thursday, holding non-stop meetings with offices in the Senate and the House, delivering the message: Ensure that the Justice Against Sponsors of Terrorism (JASTA) bill becomes law immediately, over a President Obama veto, if required. Their pressure is being backed up by calls into Congress from constituents around the country, joined by voices of local newspapers, such as the central Illinois Jacksonville Journal-Courier, telling Congress to override a veto.

An overwhelming, bipartisan Congressional override of an Obama veto of JASTA would be a given, were this merely a domestic U.S. fight. But JASTA is a life-and-death issue for the United States’ Anglo-Saudi enemies, as the British Daily Telegraph made explicit in its June 6, 2016 article declaring that JASTA “is a threat to Britain and its intelligence agencies.”

Saudi lobbyists held a crisis meeting on Sept. 19 on how to head off JASTA’s becoming law, and top White House officials met the next day to do the same, the New York Times reported today. White House press spokesman Josh Earnest reiterated this Thursday afternoon, that Obama will veto JASTA by the Friday, Sept. 23 deadline, even as The Hill featured a story about Democratic Congressmen cringing over the damage this Obama veto will wreak upon the Democrats in the November general election. Barack Obama is not a Democrat, but a British agent.

The New York Times article, titled “Fight Between Saudis and 9/11 Families Escalates in Washington,” put the fight this way: “On Wednesday, these two powerful forces, one operating in the shadows and the other more in the open, converged on Capitol Hill in the culmination of one of the biggest and most emotional lobbying fights of the year. The battle is a reflection of the enduring dominance in Washington of the 9/11 families and the diminishing clout here of Saudi Arabia, which once advanced its agenda unencumbered in the West Wing and corridors of Congress.”

The Saudis had already spent $5 million this past year “to buy influence in Washington,” the Times reported. Now they have hired former Senators John B. Breaux (D) and Norm Coleman (R) to lobby against an override, and added “top PR firm” Sphere Consulting—a firm which brags that it specializes in taking “aggressive approaches to crisis situations,” most notably for its Wall Street clients fighting criminal charges—“to their already high-powered mix of lobbyists and consultants, including the Podesta Group, DLA Piper, Hogan Lovells and the BGR Group.”

Saudi Crown Prince Mohammed bin Abdulaziz al-Saud had thechutzpah to call for the United Nations to join in fighting the adoption of JASTA, which he denounced as “a serious threat to the sovereign rights … a breach of principles established in international law,” in his Sept. 21 address to the UN General Assembly.

The European Union backed up the Saudis, sending a scandalous “démarche” to the State Department, which called upon the White House “to act in order to prevent the JASTA bill from becoming law,” and, if it does become law, “to act to obtain the stay of proceedings as required” should the law effect “State sovereign immunity.” Helga LaRouche commented that for the EU to complain about a loss of sovereignty is a bad joke, given the EU’s systematic destruction of its members’ sovereignty.

Saudi lobbyists made that EU “démarche” public this week, and circulated the widely reported “open letter” issued by former security/defense officials writing of unnamed dire consequences, “chilling effects,” etc., should the law be enacted, according to theNew York Times. Lawyers Jack Quinn and Sean Carter, representing the 9/11 families, responded immediately with a letter to the Congress, the Times reported. Their message: “It is increasingly apparent that these false reciprocity arguments reflect nothing more than a desire to protect the Saudis from having to answer the legitimate claims of the 9/11 families, whose loved ones were murdered on September 11, 2001.”

As of this writing, the Senate leadership is set to call a vote to override an Obama veto before the Congressional recess, and Speaker of the House Paul Ryan has said that “if they pass it, then it’s going to come over here and we’ll pass it…. I do think the votes are there for the override.”

STRATEGIC WAR DANGER

Prof. Stephen Cohen Explains History behind Sabotage of Washington-Moscow Détente Efforts

Sept. 22 (EIRNS)—New York University Professor Stephen Cohen, during his weekly appearance on the John Batchelor Show on Sept. 20, cast serious doubt on the explanation offered by the U.S. Department of Defense for the U.S.-led attack on Syrian troops in Deir ez-Zor, on Sept. 17, not so much because of all the unanswered questions that still surround the incident, but because of the history of U.S.-Russian relations that he knows well.

Saying he believed the U.S. strike on Syrian troops was intentional, Cohen said: “I’m informed by a history of those things,” pointing to the planned meeting between President Eisenhower and Soviet Premier Nikita Khrushchev in 1960 that was sabotaged by the May 1, 1960, shootdown of the U-2 spy plane piloted by Francis Gary Powers. “The first détente was disrupted by someone in the United States—people thought it was Allen Dulles, the director of the CIA, who sent those CIA spy planes over and the Russians shot it down,” Cohen went on. “There have been a half a dozen famous episodes that, just as Moscow and Washington decide it’s time for cooperation, that the opponents of cooperation run an operation that is essentially sabotage. This is not conspiracy. This is history. So, I take very seriously what the Russians are saying—and not only the Russians—that this could not have been an accident. Now, we could ask why whoever is doing this is so opposed to cooperation with Russia.”

Cohen answers the question in a summary published by The Nationahead of the interview, in which he explains that there are several considerations at play for the war party in Washington. “Among them, of major foreign leaders, only Russian President Putin has opposed the neocon/liberal interventionist aspiration of a new U.S.-dominated ‘world order.’ Hence their incessant demonizing of Putin as a suitable American partner.” Secondly, “Russia’s return as an international great power, 20 years after the end of the Soviet Union, contradicts and offends the ideological premises of this aspiration. Another but-little-noted example is Moscow’s recent plan to mediate the decades-long Israeli-Palestinian conflict, which is based on increasingly warm relations between Putin’s government and Israel.

“Any cooperation with Moscow would therefore validate the ‘resurgent Russia’ phenomenon so resented by the American war party,” Cohen concludes.

Some Fightback in South Korea against THAAD Missile Deployment

Sept. 22 (EIRNS)—The Speaker of the South Korean National Assembly asked the government to bring the issue of THAAD deployment to the Assembly, “as it is a state affair of great importance,” according to Xinhua. Speaker Chung Sye-kyun told a press conference that such an issue should be discussed between the government and the parliament, although President Park Geun-hye has maintained that it needs no parliamentary ratification.

The Assembly will have to finance the purchase of the site for the THAAD once a site is determined, giving them some leverage.

Speaker Chung said the South Korean government’s lack of communications with its own people and neighboring countries caused troubles domestically and diplomatically, which can damage national interests, as reported in Xinhua.

President Park Geun-hye’s vision of Korea’s participation in the now unfolding development of Eurasia, has been severely undermined by her capitulation to Obama’s demand that the THAAD system be deployed, although it is clear that the system is useless against North Korea, and is only aimed at Obama’s encirclement of Russia and China with a gargantuan war preparation.

THE NEW GLOBAL ECONOMIC ORDER

China Is First Nation with ‘Sustainable Development’ Plan; Gives It New Meaning

Sept. 22 (EIRNS)—On Sept. 19, the eve of the opening of the UN General Assembly’s General Debate where national leaders make their presentations, China hosted an exceptional event at United Nations headquarters, where China’s win-win development perspective was put forward to leaders of 16 international organizations. Prime Minister Li Keqiang moderated the roundtable, titled, “The Sustainable Development Goals: A Universal Push To Transform Our World—China’s Perspective.” The occasion marked a new point in the advancement for the paradigm of policies of mutual benefit through economic growth, as China promoted at the G20 Summit in Hangzhou earlier this month.

Participants included UN Secretary General Ban Ki-Moon, and the heads of the UN Development Program, IMF, World Bank, World Health Organization, FAO, UNESCO, WTO, and others. UNDP Administrator Helen Clark later signed the first-ever UN agency Memorandum of Understanding with China’s One Belt, One Road project.

Li announced to the gathering that China had released that day, its national plan for carrying out the “2030 Agenda for Sustainable Development,” which last year’s 70th session of the UN General Assembly had adopted as a goal. China is the first nation to issue such a plan, and it lays out commitments for both domestic and international activity for economic growth to succeed worldwide. The Executive Summary of its “Sustainable Development Knowledge Plan” is clear about China’s role: “With China’s efforts, G20 has placed the issue of development in a prominent position in its global macro policy framework for the first time, to optimize development policy coordination. It is the first time that G20 members have jointly drafted a collective action plan on the 2030 Agenda…. And it is also the first time that G20 has discussed the issues of ‘Supporting Industrialization in Africa and Least Developed Countries’ to actively respond to demands of developing countries, especially African countries.”

China’s masterful use of the G20 framework, to further the stated UN goals for ending mass poverty by 2030—which the 2015 UN General Assembly adopted as its “Sustainable Development 2030 Agenda”—was readily acknowledged by many of the UN agency leaders at the roundtable. After all, China’s success record on UN goals is clear. Li spoke of how, over the 15-year period of the UN’s Millennium Development Goals, “China has lifted over 400 million people out of poverty, reducing the mortality of children under five years old by two-thirds, and that of pregnant women by three-fourths,” Xinhua reported.

It is happily apparent that China has judoed the once odious “sustainable” term—promoted for decades in the green genocide movement, especially since the 1992 UN “Conference on Environment and Development” in Rio de Janeiro, as meaning undercutting physical development, and deterring population growth.

Instead, China is using “sustainable” in its new plan and G20 role this year, to signify advancement of science, economic, social and cultural activity—the necessary conditions for “sustainability” of a growing population and universe.

Iran Bails Out Boeing and Airbus

Sept. 22 (EIRNS)—It seem that the Iranians are about to bail out the U.S. and European aviation industry with orders for 500 passenger aircraft over the next decade. The U.S. Treasury Department has approved licenses—containing “strict conditions” to ensure that planes are reserved for commercial passenger use, to both Boeing and Airbus—to sell airplanes to Iran. This will be a tremendous boon for these companies; Iran has to renew its entire fleet of passenger aircraft. Because of sanctions, the country has been unable to buy Western aircraft since 1979.

Iran Air has signed an agreement with Boeing to purchase 80 passenger jets, including the 29 new Boeing 737s, as well as the 777-300ER and 777-900ER craft. Iran has signed a $27 billion agreement with Airbus to purchase as many as 118 aircraft.

COLLAPSING WESTERN FINANCIAL SYSTEM

FDIC Flags Deutsche Bank’s Wild Leverage Ratio—But It’s Not the Only One

Sept. 22 (EIRNS)—Deutsche Bank was fingered again as the riskiest bank in the world, in data released Sept. 20 by the Federal Deposit Insurance Corporation (FDIC). According to the FDIC’s calculation (using the International Financial Reporting Standards), Deutsche Bank’s leverage ratio—a lender’s equity capital measured against its assets—is the lowest of the rest of the world’s “Global Systemically Important Banks” (G-SIBs). The FDIC includes the amount of derivatives which banks have on their books in its calculations of a leverage ratio, which shows how much equity capital a lender has against assets such as loans.

A low ratio means that a bank has less of a cushion if a crisis arises. DB’s leverage was estimated at a minuscule 2.68% as of June 30. That means DB has leveraged its capital 37:1 with debt, a slightly worseleverage position than that of Lehman Brothers in mid-2008 before its bankruptcy.

The risks of Deutsche “Bunk,” as Lyndon LaRouche has dubbed it, were the subject of a closed session of German Social Democratic lawmakers on Sept. 20, Bloomberg reported today, citing reports from two unnamed “people familiar with the matter.” Few details were reported, other than that participants discussed the coming U.S. Department of Justice fine and the bank’s financial reserves. Bloomberg contrasted that discussion, however, with the public silence maintained by the Merkel government on this looming blowout; Bloomberg’s sources say the topic was not raised at a closed-door session of the German parliament’s Finance Committee with Finance Minister Wolfgang Schäuble the same day.

DB may be the worst—and the IMF has called it the most dangerous spreader of bank risk in the world when it does blow up. But it is not the only “G-SIB” without much “cushion,” FDIC figures showed. Banco Santander of Spain, France’s BNP Paribas and Société Générale, Sweden’s Nordea Bank, Switzerland’s UBS, and Italy’s UniCredit were all under 4%—i.e., debt-leveraged by more than 25:1—and Goldman Sachs was only a hair over, at 4.14%.

FDIC Vice Chairman Thomas Hoenig warned, in releasing the FDIC’S Semi-Annual Update of the Global Capital Index, that “the degree of leverage within the global financial system increased in the first half of 2016,” as a whole. He made clear that U.S. big banks are included in that increased leverage—i.e., speculation.

“Although equity capital increased for U.S. G-SIBs in the first half of the year, assets increased more than proportionately, including a significant expansion of their derivatives books. The net effect was an increase in their overall leverage position,” he said. “Thus, as markets have recovered as central banks around the world continue quantitative easing programs, the incentives for increasing financial leverage have intensified.”

OTHER

‘Snowden’ Film Further Exposes Obama; Director Oliver Stone Hits U.S. Police-State

Sept. 22 (EIRNS)—The film “Snowden” directed by Oliver Stone is having a profound impact on the population, forcing viewers to come to terms with the police-state they have lived in since George Bush and Dick Cheney launched the NSA surveillance of every American citizen (and nearly every citizen on Earth) in the aftermath of the British-Saudi 9/11/2001 terrorist attack on the U.S. And, as the film powerfully demonstrates, Obama, despite his flowery pledges to end the system, expanded it further. Snowden, in fact, had personally revolted against what he recognized as a criminal process, but stuck with the system when Obama, in his campaign in 2008, pledged to end it. Only when it was clear that Obama had lied and was going even further than Bush, did Snowden decide he had to act on his own.

Agence France-Presse reports that Stone, presenting his film at the San Sebastián film festival in Spain’s Basque country today, said of Obama: “Obama has doubled down on the Bush administration policies. [He] has created … the most massive global security surveillance state that’s ever been seen, way beyond East Germany’s Stasi [secret police], way beyond that…. Let’s beware of fascists and tyrants who tell us ‘We are going to protect you.’ I don’t want that.”

Stone said many in the United States had grown disillusioned with a President they once saw as “a man of great integrity.”

It has been observed that the large audiences who see the film leave in a very subdued state, clearly reflecting upon not only the historical drama, but what it says about themselves for tolerating such vast crimes under Bush and Obama.

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