EIR Daily Alert (Larouche Pub(lications))

MONDAY, NOVEMBER 7, 2016

Volume 3, Number 54

EIR Daily Alert Service

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

EDITORIAL

History Loves Paradox

Nov. 5 (EIRNS)—Between October and early November, a great paradox has arisen in the United States.  On the one hand, we hear of millions of Americans who have fallen into disgust and even despair over the Presidential campaigns and the candidacies.  But at the same time, there is a tangible presentiment in the nation that the time is coming very soon, when America will be able to turn its focus and its whole effort to the “affirmative aims and needs of human individual and social life,”— with never a backward glance to the grief and shame of the Bush-Obama years.

You probably never expected this, and you may not be able to explain it, but it is undeniable once you have sensed it.  Its cause is not in the candidacies or the campaigns,— far from it. Its cause is in the very human spirit itself; its cause is the “divine spark” in man, which is speaking through the hope which so many of our citizens suddenly find they share,— apparently in spite of everything.

Percy Shelley understood all of this when he wrote his “In Defense of Poetry” and other works.  So did the German “Poet of Freedom” Friedrich Schiller.

Does this unexpected spring of hope correspond to reality? Is the possibility really there, for the rebirth of something even better than the America of John Kennedy, which led the world upwards to the exploration of boundless space, and at the same time toward the overcoming of poverty, underdevelopment and war on earth?  The answer is yes: the hope is valid; it is not deceiving you.  Why this is true, is a profound question,— but the answer can be quickly summarized by noting that the laws of the creative human mind, that is the laws created by our reason, are the laws of the universe.

There are no guarantees, and tremendous, coordinated moral and intellectual effort will be required, comparable to total war, but the opportunity is there at this late date to save our nation.

An important part of the environment of the change in mentality of our citizens, has been the truly heroic leadership shown by Russia’s President Putin (whatever Hillary Clinton may say) and the leadership of China.  They have led their nations up from out of the mud towards the stars during our lifetimes. Russia was a wreckage after the so-called “reforms” of the 1990s; look where it is now.  China has lifted 800 million of its citizens out of poverty.  But they are not bossing others around or aspiring for hegemony; instead, they strive for cooperation in equality.  China’s international proposal for the New Silk Road is an international development plan twelve times the size of the Marshall Plan, in which 70 nations are participating, with many more to come.  And without Putin’s role, there would be no hope of suppressing the terrorism which Barack Obama has fed in the Middle East with Hillary Clinton’s help.

A critical element in conditioning the current upsurge of hope among Americans, and one which will be required for its success, is the two-year old “Manhattan Project” of Lyndon LaRouche.  Through Manhattan, LaRouche has inspired key networks throughout the nation in behalf of the original principles on which Manhattan’s Alexander Hamilton created our nation, as expressed anew in LaRouche’s “Four Laws.”  In briefest summary, these include reinstatement of Franklin Roosevelt’s Glass-Steagall Act; creation of a new Bank of the United States; a national credit policy committed to increased productivity of labor; and a crash program for controlled fusion energy, with the revival of NASA and the U.S. space program killed by Barack Obama.

Although no one has even pointed out the reality of this new national mood until today, candidate Donald Trump nevertheless responded to it in his own way during late October, when he publicly endorsed Glass-Steagall, and called for a revival of NASA and its commitment to deep space exploration.  He also pointed out that a President Hillary Clinton would launch World War III against Russia, as Lyndon LaRouche has long shown.

We point this out because of its clear relevance, but never imagine that pulling the lever for a candidate will save our nation at this late date; it will not.  The inexplicable hope which you have suddenly felt with so many others, is an inner whisper to prod you to do what you must do; there may not be another chance.

COLLAPSING WESTERN FINANCIAL SYSTEM

Trump’s Glass-Steagall Call Came from Bankers Committed to Real Economy

Nov. 6 (EIRNS)—Donald Trump’s call that “it’s time for a Twenty-First Century Glass Steagall” stated in his Oct. 26 Charlotte speech, goes back to deeper roots in that side of the American banking system committed to increased productivity through loans to manufacturing, agriculture and infrastructure. This includes thousands of community banks that oppose Wall Street’s casino economy.

These forces gathered at the Huntington Convention Center in Cleveland, Ohio on July 11, 2016 to insert Glass-Steagall into the Republican Party platform, prior to the July 18-21 Republican National Convention. Columnist John Gizzi, in an article in the July 12 Newsmax, entitled “Why Is Bernie Sanders’ Favorite Legislation in GOP Platform?” disclosed, “Meeting at the Huntington Convention Center in Cleveland [on July 11], the Government Reform Subcommittee of the GOP Platform Committee voted to include in the party platform restoration of Glass-Steagall landmark legislation that separated risky trading and investment form traditional banking activities such as business lending and consumer finance after it was passed in 1933.”

Gizzi stressed, “As to how … Glass-Steagall found its way into the Republican Platform, I spoke to the driving force behind it within the GOP. John Lynch, Platform Committee member from Illinois and past president of the First Midwest Bank in Chicago recalled that, ‘Glass-Steagall was always the wall that kept consumer banking away from big risks. Bill Clinton broke down that wall when he signed its repeal in 1999.’ ” Gizzi continued quoting Lynch to the effect that that the repeal of Glass-Steagall “exposed consumer banking to higher risks, as some people sought to make as much money as possible.”

Lynch had several decades experience as an employee and then as an officer in regional banks in the Midwest. He rose to become President of the Midwest Bank of Illinois, which is now a community bank, with $11 billion in assets and offices in Illinois, Indiana, and Iowa.

In his biography on LinkedIn, Lynch, a strong Trump supporter, cited among his publications, the “Reinstate Glass-Steagall Act of 1933 Amendment to 2016 GOP Platform,” which he defined in his own words as:

“In order to prevent another collapse of our U.S. banking system and a major recession or depression, I propose reinstating the Glass-Steagall Act of 1933, enacted in response to the failure of 5,000 U.S. banks and the Great Depression, prohibiting commercial banks from engaging in high risk investment banking, insurance and other non-banking businesses. It was repealed under President Clinton in 1999 at the request of Citibank and ultimately led to the 2008 financial collapse and a recession, as well as the taxpayer funded bailout…. Crooked Hillary would definitely vote against my proposal because she is ‘owned’ by the megabanks and Wall Street.”

Within one week, on July 20, an agitated American Banker Magazine ran the banner headline, “Is Trump the Community Banking Candidate?”

Thomas Hoenig Warns of TBTF Danger in Handelsblatt Interview

Nov. 5 (EIRNS)—Thomas Hoenig, the Vice Chairman of the FDIC and former President of the Kansas City Federal Reserve Bank, told German business daily Handelsblatt this week that the too-big-to-fail banks are far too highly leveraged, and major changes are required to avoid another systemic crisis which would raise demands for a new taxpayers’ bailout.

In an interview which was part of Handelsblatt’s U.S. election coverage, that the TBTF banks are bigger than they were at the time of the 2008 Lehman Brothers blowout, and they are currently holding an average of only 5% capitalization. He said they must restore liquid capital to 10-12% to avoid another systemic crisis.

If any of the TBTF banks fail under current conditions, Hoenig added, the system will not survive the shock without another massive taxpayers bailout. In addition, he warned that the zero-interest-rate policy has further crippled the banks’ ability to make a profit, given the reduced investment returns, and this, too must end. We must, he insisted, return to a normal monetary policy.

U.S. POLITICAL AND ECONOMIC

U.S. Military Could Be Implicated in Saudi War Crimes in Yemen

Nov. 5 (EIRNS)—While officially the Obama Administration is “reviewing” its military support for the Saudi war in Yemen, Congressman Ted Lieu (D-CA), who has been outspoken in his criticisms of the Saudi war, warned in a Nov. 2 letter to Ash Carter and John Kerry, that U.S. personnel could be held legally liable for participating in Saudi war crimes. Lieu said the administration’s insistence that it is not taking part in target selection for Saudi “coalition” sorties—many of which have hit hospitals and schools—does not excuse the United States from legal responsibility.

“I find it deeply troubling that the U.S. apparently has no advanced knowledge of what targets will be struck by jets that are refueled by U.S. personnel with U.S. tankers,” Lieu said in his letter. “The U.S. would appear to be violating LOAC [laws of armed conflict] and international standards by engaging in such direct military operations, if U.S. personnel are not aware if targets are civilian or military, if the loss of life and property are disproportional, or if the operation is even militarily necessary.”

But the problem is worse than “just willful blindness” on the part of the United States, Lieu went on. “By now, the U.S. has knowledge that in the past 18 months, coalition jets have struck civilian targets multiple times. Amnesty International and Human Rights Watch have already documented at least 70 unlawful airstrikes by the coalition on civilian targets, such as children at school, a wedding party, a civilian market, and multiple hospitals,” Lieu wrote. “An airstrike on a funeral last month reportedly killed at least 140 people and injured over 500 civilians. Saudi Arabia admitted that coalition jets intentionally struck the funeral ceremony.”

Lieu warned, therefore, that “U.S. personnel are now at legal risk of being investigated and potentially prosecuted for committing war crimes. Under international law, a person can be found guilty of aiding and abetting war crimes.”

Lieu dismissed the administration’s argument—expressed later in the Guardian’s coverage of Lieu’s letter—that there’s no reason to worry because there’s no one who will prosecute. “That’s an awful dangerous game to play,” Lieu told Britain’s Guardian. “That we’re going to violate the laws of war because no one is going to prosecute us.” He said a future administration might take a different view of the U.S. involvement in Yemen.

Earlier, Lieu lectured on the laws of war during his service as an Air Force Judge Advocate General (JAG) lawyer.

 

STRATEGIC WAR DANGER

Obama Publicizes His Cyber War against Russia

Nov. 5 (EIRNS)—The Obama Administration is publicly bragging that it is waging cyber warfare against Russia, supposedly in retaliation for alleged Russian meddling in the U.S. presidential election. On Oct. 14, Vice President Joe Biden told NBC’s Chuck Todd, host of “Meet the Press,” that “we’re sending a message” to Putin and that “it will be at the time of our choosing, and under the circumstances that will have the greatest impact.” A report posted by NBC News on Nov. 4 seems to indicate that in fact, the cyberwar is already underway, and that NBC itself has been chosen as one of the conduits for that war. “U.S. military hackers have penetrated Russia’s electric grid, telecommunications networks and the Kremlin’s command systems, making them vulnerable to attack by secret American cyber weapons should the U.S. deem it necessary, according to a senior intelligence official and top-secret documents reviewed by NBC News,” the network reported.

The Russians wasted no time responding to this dangerous nonsense, pointing out that there may be ulterior motives for it.

Russian Foreign Ministry spokeswoman Maria Zakharova said that the United States should carefully assess the legal implications of such threats, and added that the absence of official reaction from Washington would mean the “existence of state cyberterrorism in the United States.” The chairman of the Foreign Affairs Committee of the Federation Council (the upper house of parliament) Konstantin Kosachev, warned that Russian security specialists should be ready to counter such threats. “There is no doubt that the U.S. administration and intelligence are behind the leak [to NBC], thus ‘visualizing’ the threats uttered earlier by U.S. Vice President Biden to use a cyberweapon against Russia,” he said.

James Bamford, the author of several books on the history of the National Security Agency, warned earlier this week, that there is every possibility that a tit-for-tat cyberwar could turn into a hot war. In a Nov. 2 op-ed published by Reuters, Bamford reports that former cybersecurity czar Richard Clarke told him that it’s necessary to understand what the potential consequences of such an exchange could be. “It’s highly likely that any war that began as a cyberwar,” Clarke told him last year, “would ultimately end up being a conventional war, where the United States was engaged with bombers and missiles.”

THE NEW GLOBAL ECONOMIC ORDER

Economist Kotegawa on Japan/China Business and Academic Diplomacy

Nov. 6 (EIRNS)—Japanese economist and statesman Daisuke Kotegawa believes that China and Japan are sending “signals” that they are ready to dramatically put aside their differences and work together for global development and peace.

EIR reported last week that the Japanese business association Keidanren had sponsored a CEO forum in Beijing, bringing together leading CEOs from both sides, discussing cooperation in third countries such as the Silk Road nations.

At the same time, the two major universities in Beijing, Beijing University and Qinghua University, sponsored an alumni event in Tokyo last week, bringing together academics and analysts from the two sides, discussing future cooperation. Another conference in Shanghai brought academics and think-tank people from Japan, China and other Asian nations.

The “track two” cooperation among business and academic layers is setting the stage for further government-to-government cooperation.

Kotegawa also noted that the governing LDP party in Japan has decided not to introduce the constitutional revision elimination the pledge not to go to war, which Abe had championed and planned to introduce next year to the Diet. If this is the case, a major block to China-Japan cooperation will be removed.

Also, he noted that Japan’s government and press had been very positive about the visit to Japan by Philippine President Rodrigo Duterte, finding him “not a wild man, but quite amiable and cooperative.”

None of this will sit well with Obama and his neocon cohorts, who have counted on Japan above all others to be the Asian bedrock of their military confrontation with China.

China To Create €10 Billion Central and Eastern Europe Fund

Nov. 6 (EIRNS)—Following his meetings with 16 Central and Eastern European (CEE) leaders at Riga, Latvia, on Nov. 5, Chinese Prime Minister Li Keqiang announced that “China is establishing a €10 billion investment fund to be run by the Commercial Bank of China to finance projects in infrastructure, high-tech manufacturing and consumer goods sectors in Central and Eastern Europe,” the BRICS Post reported today. The fund is aiming to raise €50 billion in project finance for sectors such as infrastructure, high-tech manufacturing and consumer goods, the bank said.

Reuters, in its report about the event, wrote: “The fund will be government-backed but will operate under business principles and be guided by the market. Central and Eastern Europe are part of China’s modern Silk Road…. China’s Vice Commerce Minister Gao Yan had said last year that Chinese companies have already invested more than $5 billion in CEE countries.”

The BRICS Post also reported Li saying he supported growth of an investment-friendly environment between China and the CEE countries. To that end, the Chinese Premier said that “China was ready to begin the construction of industrial and technological parks in cooperation with CEE nations.” Li has said that his country considers Latvia, the summit host country, an important transit station for China-EU trade.

SCIENCE AND INFRASTRUCTURE

Will NASA Have To Ditch Its Commercial Cargo Rip-Off?

Nov. 4 (EIRNS)—Following a string of commercial space vehicle failures, resulting in delays of cargo delivery to the crew on the International Space Station, NASA is pulling back on its reliance on private companies to service the space station. According to industry sources, as reported by Andy Pasztor in yesterday’s Wall Street Journal, NASA has decided to (at least) temporarily suspend cargo launches to the ISS by Orbital ATK’s Antares rocket, which is one of only two  commercial cargo delivery companies, the other being SpaceX.  No specific cause for the change was stated in the article, but clearly NASA has determined that the Orbital rocket is too high-risk, considering that the crew needs the supplies. Inventory on the station is not as robust as NASA is comfortable with, and following an accident in September, SpaceX has suspended its own next cargo delivery flight.

So NASA is not taking any chances, and has decided that the Orbital cargo supply ship, the Cygnus capsule, will be launched to the station on an Atlas V rocket, not on Orbital’s Antares rocket, which had a catastrophic explosion two years ago. The Atlas has had more than 60 successful flights in a row, and its highly-reliable legacy goes back to the 1960s.

As Pasztor notes, NASA wants “added insurance” for both meeting the schedule, and for “mission assurance,” or a high degree of expected success, which tells you what they think of the commercial suppliers.

It is also worth pointing out that recent detailed analyses of the next-step “commercial” crew program, sold to ideologues especially in the Congress by promising that it would be “cheaper” to use commercial companies than NASA vehicles, has shown the opposite. It has demonstrated that the $58 million per-astronaut-seat, while “cheaper” than the $80 million-per-Soyuz-seat the Russians are now charging, does not include the nearly $100 billion NASA has already paid these “free market” companies to develop the spacecraft.

Perhaps there is an increasing recognition that it’s time to ditch the whole policy, and bring back a real space program.

OTHER

Fascist Attacks in Ukraine Exposed in Scandinavia

Nov. 4 (EIRNS)—The Schiller Institute press release “Azov and Ukrainian Security Service (SBU) Seize Progressive Socialists’ Office,” in its Swedish translation, was published in its entirety in two leading Scandinavian left blogs. The Steigan.no blog is the leading leftist blog in Norway and is also read by many conservatives there looking for news outside the mainstream media. The Swedish blog Nyhetsbanken is also very influential in the left and is published by Stefan Lindgren, a long-time political activist, Russia specialist and translator. He added his own comment to the Schiller Institute press release on what goes on in Ukraine, ending with a strong attack on the Swedish Foreign Minister Margot Wallstrom’s support for the coup d’état in Kiev and the putschists treatment of their opposition.

Lindgren’s headline was “After Communist Ban—Socialist Ban?” with a picture of Progressive Socialist Party of Ukraine head Dr. Natalia Vitrenko, captioned: “Her party is now locked out from their premises by the regime in Kiev.” Then the article starts off “The legal corruption in Ukraine increases. The Schiller Institute has received an e-mail from Kiev, reporting on the seizure and occupation, by government security forces, of the offices of the Progressive Socialist Party of Ukraine (PSPU). The raid occurred on Friday, October 28.” The whole report follows, including the Nov. 1st statement from PSPU—with its conclusion that the raid by the SBU and Azov Battalion “marks the beginning of a new phase of political terror against the PSPU”— and the links to Dr. Vitrenko’s earlier statements.

Nyhetsbanken comments: “PSPU has been put in question for its connections with the European Labor Party and the American financier Lyndon LaRouche who is financing this movement, just as it has been put in question for its Russian contacts. But such is part of the regular reactionary political technology—guilt by association…. Natalia Vitrenko is a strong politician, who in 1999 gathered 11% of the votes in the presidential elections, in 2005 won 5%, but in 2009 was not allowed to register as she had not paid a registration fee of 2.5 million hryvnia.

“Everything points to the fact that the regime continues on the road to open fascism. Earlier the Ukrainian Communist Party was banned, a feat that met some protests in Western Europe. Here at home, even the strongly anti-Communist [longtime leading public radio journalist and author of many books, just deceased and much celebrated] Kjell Albin Abrahamsson protested. After that there was silence. And our Minister of Foreign Affairs continues the ‘feminist’ foreign policy of sending millions in support to the more and more undemocratic government, and closes her eyes when struggling women are treated as a leper.”

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