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EIR Daily Alert Service

THURSDAY, MARCH 16, 2017

Volume 4, Number 53

EIR Daily Alert Service

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

EDITORIAL

What Can You Do For Mankind?

March 15 (EIRNS)—The worst thing that can happen to a bankrupt and decadent empire, whose continuing control depends on the mental malleability of their intended victim populations, is for people to start calling their bluff. That, much to the City of London and Wall Street’s dismay, is a key process underway planet-wide.

The Chinese government, for example, is brushing aside those who are urging confrontation between the U.S. and China, stating instead that there are “bright prospects for China-U.S. cooperation,” while reminding the world that “China will remain an important engine for world growth,” as Prime Minister Li Keqiang stated March 15. A meeting between Presidents Xi Jinping and Donald Trump is now expected in early April.

Russia is also not going along with London’s “let’s-you-and-him fight” game. Top Russian analysts are dismissing the latest CNN video provocation against Vladimir Putin, by noting that “the West is now trying to use the last window of opportunity, which still exists before Putin meets with Trump, to demonize the figure of the Russian President.”

And inside the United States, there is growing ferment in the population and among political figures, of those who have had it with Wall Street and their Washington marionettes, and are instead in agreement with Lyndon LaRouche’s policy demands for a return to FDR’s Glass-Steagall law, and for the development of advanced scientific missions for Mankind such as fusion power and space exploration—along with the other elements of LaRouche’s Four Laws.

Lyndon LaRouche today responded to Wall Street’s insistence on sabotaging Glass-Steagall, and on shutting down what few nuclear energy plants are still functioning in the U.S. “This is a complete, witless mistake,” he stated. “We really have to fight this one and win; you cannot sustain the real economy without that protection,” the protection that is provided by nuclear energy and other advanced scientific capabilities.

LaRouche called on his associates to launch a national organizing thrust, to prompt a response in the population on these matters: It is a matter of action which has to be done. He stated that the life and work of the great German-American space pioneer Krafft Ehricke—who built the Saturn rocket that got the U.S. to the Moon—should be used to that effect, because it is a live issue which points to the kind of improvements that are needed. Ehricke was a precious individual, a man who went all the way to deliver results. By supporting the memory of what he’s done for the nation and the world, we can pose the question for our fellow Americans:

What can you do for mankind? Not just for the immediate objective intentions of policy, but what can you do for their minds?

U.S. POLITICAL AND ECONOMIC

GOP Senators Ask Tillerson To Investigate USAID Funding Soros’s Destabilization Operations

March 15 (EIRNS)—In a March 14 letter to Secretary of State Rex Tillerson, Sen. Mike Lee (R-UT) and five other Republican Senators asked that Tillerson investigate the role of USAID (U.S. Agency for International Development) in funding George Soros’s Open Society Foundation (OSF), which is destabilizing nations such as Macedonia and Albania under the guise of promoting “democracy and governance.”

On Jan. 17, Lee and other members of the Senate Foreign Affairs Committee wrote to U.S. Ambassador to Macedonia Jess Baily demanding he explain USAID’s funding of the OSF in that country, but received no satisfactory answer. Baily and the State Department, which runs USAID, stonewalled on answering Senator Lee’s letter and a similar one written by House Republicans.

Now, Sen. Lee has asked that Secretary Tillerson “use your authority to investigate all funds associated with promoting democracy and governance and review the programs, accounts and multiplicity of U.S. entities involved in such activities.” A review of how tax dollars are used is crucial, Lee said, “to halt activities that are fomenting political unrest, disrespecting national sovereignty and civil society, and ultimately undermining our attempts to build beneficial international relationships.”

After detailing OSF’s destabilizing activities in Macedonia, in its role as a USAID contractor, Senator Lee adds that Albanian leaders “have made similar claims of U.S. diplomats and Soros-backed organizations pushing for certain political outcomes in their country,” including a controversial judicial reform. “With these and other situations in mind, it is troubling that this behavior seems to have become a default for many of our embassies, AID missions, and diplomatic outposts throughout the world.”

Senator Lee reports that many foreign leaders visiting Washington have expressed concern that American taxpayer funds “are being used counterproductively in their respective countries.” And while Macedonia and Albania are timely examples of this, he concludes, “we have heard similar concerns from Latin American and African nations as well.”

The other signers of the letter are Ted Cruz (TX), James Inhofe (OK), Thom Tills (NC), David Perdue (GA) and Bill Cassidy (LA).

Russia Responds to Nasty CNN Documentary on Putin

March 15 (EIRNS)—On March 13, CNN aired a documentary about Russian President Vladimir Putin by host Fareed Zakaria, titled “The Most Powerful Man in the World,” which is chock full of the usual crap about “Putin controls everything in Russia…. He is afraid of a popular uprising,” and Russia’s alleged “intervention” in the U.S. elections. Kremlin spokesman Dmitry Peskov responded, yesterday, that the video was made “with a critical bias in line with the further demonization of our country and possibly our president.”

More to the point was the comment by Gregory Dobromelov, the director of the Institute of Applied Political Studies, to Radio Sputnik: “The West is now trying to use the last window of opportunity, which still exists before Putin meets with Trump, to demonize the figure of the Russian President.” Dobromelov said that the film is meant mainly for U.S. domestic consumption, and that it will not affect Russia’s image around the world. “In fact, many in the world don’t endorse the U.S. [policies] and are ready to support the foreign policy of Vladimir Putin.”

Scott Ritter Joins Drumbeat Pointing to Britain’s GCHQ Role in Wiretapping Trump

March 15 (EIRNS)—Former U.S. military intelligence professional Scott Ritter is the latest American intelligence specialist to point to the NSA’s British counterpart, GCHQ, as the agency which likely provided Obama et al. with the wire taps on the Trump campaign. Ritter, who had been a UN WMD inspector in Iraq, is well known for his vociferous campaign against the lies about Saddam’s alleged weapons of mass destruction which justified the invasion of Iraq.

Ritter’s bombshell article in Truthdig yesterday, “Trump’s Wiretapping Charge Could Contain Some Explosive Truth,” proposes how this charge can be traced back through the recording and transcript of Gen. Michael Flynn’s conversation with Russian Ambassador Sergey Kislyak, and suggests that an investigation of the production and handling of that transcript could lead to a bigger-than-Watergate scandal against Obama and his officials. After all, “the notion that U.S. government officials would knowingly and willfully violate laws designed to protect constitutionally protected rights should rightfully outrage everyone. That these violations were committed for partisan political purposes designed to undo the lawful results of a binding election (for instance, by undermining the appointment of a controversial and unpopular national security adviser) represents an attack on the very democratic processes that define the United States.”

Ritter explains how “the mere fact that a transcript of Flynn’s phone conversations exists” both points to the general accuracy of President Trump’s charge that Obama ordered his campaign wiretapped, and “represents a violation of U.S. law.” This is because the existence of a transcript that identifies American citizen “Flynn by name represents a deviation from the normal practices of U.S. law enforcement and intelligence that is not readily explained,” Ritter argues, that, as others have proposed, it is likely that the transcript was produced from outside of the U.S.

“The most likely candidate for this sort of role would be Britain’s Government Communications Headquarters (GCHQ),” in Ritter’s view. Ritter cuts to the chase:

“The transcript of Flynn’s telephone call with Kislyak needs to be forensically reverse-engineered, so that the entire chain of custody, from collector to consumer, and every step in between, is carefully vetted and assessed. At a minimum, such an investigation should produce indictments of all officials who knowingly violated Flynn’s constitutional right to privacy by possessing and releasing to the media information that was unlawfully obtained and retained by U.S. authorities. At most, the investigation will uncover an abuse of authority to use illegally acquired intelligence in a manner that would make the Watergate scandal pale by comparison. It also could uncover wrongdoing by Obama if he had in any way, shape or form been briefed on the existence of the Flynn transcript and failed to suppress and investigate its existence.”

STRATEGIC WAR DANGER

Korean Opposition Says, ‘Impeach THAAD,’ While China Prepares Counter-Measures

March 15 (EIRNS)—The U.S. rush to deploy the THAAD missiles in South Korea in the midst of political chaos in the country, is creating a major destabilization across the region. U.S. Secretary of State Rex Tillerson is arriving in Japan tonight, and will go to South Korea March 17 and China on March 18-19, where he will meet with President Xi Jinping, Foreign Minister Wang Yi, and State Councilor Yang Jiechi. Although the official U.S. position is that THAAD deployment is irreversible, it is still possible President Trump will consider using it as a bargaining chip in order to get serious talks on North Korea started, taking advantage of the fully new political environment in the U.S., China, Russia, Japan, and South Korea, to reverse Obama’s insane refusal to talk to the North, which has driven Pyongyang to proceed with nuclear weapon development.

In the meantime, with the election in South Korea now set for May 9 (60 days after the Constitutional Court upheld the impeachment of Park Geun-hye), members of the opposition parties, having successfully impeached the President, have turned their attention and their tactics to stopping the THAAD deployment. Xinhua reports today: “Key figures of various social standings as well as civic group activists in South Korea on Wednesday demanded the ‘impeachment’ of THAAD by people power, which had ousted former President Park Geun-hye.”

The opposition issued a resolution calling for the population to “join their fight for peace in the Korean Peninsula and against the THAAD deployment in their soil,” and called on Presidential contenders to demand removing the missile system, which is now in the country but not yet deployed to the chosen site. The resolution refers to THAAD “the worst catastrophe in security and diplomatic policies” under the Park regime. “When all public attentions were being centered on the impeachment ruling, [acting President] Prime Minister Hwang Kyo-ahn went ahead with the THAAD deployment step by step,” said Jeong Youn-soon, chair of Lawyers for Democratic Society, an advocacy group. He called for the “power of the candle” (candle light parades) to stop THAAD as it stopped Park.

China continues attacking the THAAD deployment, including imposing new sanctions against Chinese tourism to South Korea.

PLA Gen. Wang Hongguang (ret.) said today that China could counter the THAAD by using its own anti-radar technology. “We will complete our deployment before THAAD begins operations. There is no need to wait for two months” before the election of the next South Korean President. “We already have such equipment in place. We just have to move it to the right spot.” Similarly, PLA Air Force aviation equipment expert Fu Qianshao was quoted by the South China Morning Post that Beijing would send planes near THAAD to obstruct the system’s long-range radar signals.

COLLAPSING WESTERN FINANCIAL SYSTEM

American Banker Asked Yellen To Weigh In against Glass-Steagall— Which She Did

March 15 (EIRNS)—More than half-way through Fed Chairwoman Janet Yellen’s press conference following the Federal Open Market Committee meeting, a reporter for American Banker raised Wall Street’s biggest worry: Glass-Steagall.

Yellen claimed she hadn’t heard any specifics about a Glass-Steagall plan, but in any case, she sees no reason to go back to that. As the Wall Street Journal so elegantly summed up Yellen’s response: “Bring Back Glass-Steagall? Nah.”

Reporter John Helpman of American Banker cited the debate going on in the country: Trump campaign manager Paul Manafort announced in July 2016 that the separation of commercial banking and investment banking would be introduced into the Republican Party platform; White House Press Secretary Sean Spicer reiterated the President’s support for the Glass-Steagall policy last week; Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig outlined “a plan that would silo and separately capitalize commercial and investment banking activities within a single bank holding company while not entirely separating them,” which was posted to the FDIC website.

Like the Wall Street Journal, the American Banker raised the financier oligarchy’s related worry that Hoenig’s name has been circulated as a potential vice chairman for supervision at the Fed.

The exchange with Yellen went as follows:

Q: I have a regulatory question, if I may. The administration recently reiterated its support for a reinstatement of Glass-Steagall. Treasury Secretary Mnuchin has called for a 21st century Glass-Steagall. Keeping in mind that there’s no specifics on this proposal, is the fundamental idea of separating commercial banking from investment banking a fruitful line of inquiry? Is this the right path to be pursuing?

Yellen: So, I’ve not seen any concrete proposals along this line. I don’t really know what a 21st century Glass-Steagall would look like. I think my reading on the financial crisis is that that wasn’t the major source of the financial crisis. In fact, many of the problems emanated from firms that were investment banking units. To me, an important reform in the aftermath of the crisis was to make sure that investment banking activities where—that were a core part of the shadow banking system where leverage had built, that those were appropriately capitalized, had appropriate liquidity and their management was strengthened and that’s what we have tried to do.

But obviously, we would look at any proposals that are put forward. I’m not aware of anything concrete to react to.

Q: So you don’t think it’s necessarily a good idea?

Yellen: Well, I don’t think it was the cause of the financial crisis and I do feel that we have significantly strengthened supervision of bank holding companies that incorporate investment banking activities.

Wall Street Journal Nervous about Hoenig’s Bank Separation Proposal

March 15 (EIRNS)—A March 14 Wall Street Journal article headlined “FDIC Official Details Idea for a New Glass-Steagall Law,” frets that Thomas Hoenig’s March 13 proposal “closely resembles the Glass-Steagall Act [which] Hoenig has long praised,” and notes that “Trump repeatedly called for a ’21st century Glass-Steagall Act,’ an idea that White House Press Secretary Sean Spicer reiterated last week.” The article also notes that Hoenig will be stepping down shortly as vice chairman of the FDIC, and that he has “repeatedly expressed interest” in being named either FDIC chair or Federal Reserve vice chair for supervision.

Hoenig’s proposal, as noted in EIR Daily Alert on March 14 and 15, is not actually FDR’s Glass-Steagall (as he himself admits freely), but is a form of bank separation which is similar to the British Vickers or ring-fencing proposals, which would allow banks to retain both commercial and investment (speculative) activities, except that the latter would not be backed by the FDIC. That is a significant difference—which makes it a kind of ring-fencing with teeth. But it does not prohibit a single banking entity from engaging in both kinds of activities (commercial and speculative) as the FDR Glass-Steagall law does. Therefore, under crisis conditions the commercial side of the banking entity could step in to lend to the investment side. Or, to put a fine point on it, the Hoenig proposal could work—so long as there is not a crisis.

However, the Hoenig proposal has enough “Glass-Steagall-like elements,” as the Wall Street Journal put it today, to have Wall Street pretty nervous about what the Trump administration is actually going to do.

Marcy Kaptur Urges Trump To Save U.S. Steel Industry; She Will Collaborate To Do So

March 15 (EIRNS)—Rep. Marcy Kaptur (D-OH), who initiated the Glass-Steagall legislation in the House, sent a letter with an “urgent request” to President Trump on March 11, asking him and his administration to take action to avoid permanent closure of two more steel plants in Lorain, Ohio.

In a move coherent with her stated commitment to work with President Trump if he supports restoring the Glass-Steagall Act, Kaptur wrote that she “will do all I can to assist your Administration in securing the stabilization of the U.S. steel industry at this difficult time for domestic steel making … and work toward a reinvestment and modernization strategy for the sake of Lorain and our nation.”

Citing recently announced layoffs of more than 1,100 steel workers in Lorain—where the steel industry once employed 12,000 workers—Rep. Kaptur invited President Trump to visit Lorain very soon, if possible. She also told him in her letter that “the involvement of your economic team to meet with company and labor representatives of U.S. and Republic Steel as well as local and state officials—in Washington, D.C. or Lorain—could assist us as we seek an alternative pathway forward….”

Kaptur makes the mistake, however, of blaming the collapse of the United States’ steel industry on “unfair trade practices” and “closed markets” by China and Russia, in particular, rather than on Wall Street and the deliberate decision to turn the U.S. into a post-industrial, drug-addicted heap of rust.

THE NEW GLOBAL ECONOMIC ORDER

Could Trump Reverse the Stalemate in Israel-Palestine Peace Talks?

March 15 (EIRNS)—President Donald Trump’s Special Representative for International Negotiations Jason Greenblatt has been on an official tour of Israel and Palestine, where he met, respectively, with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas. Greenblatt met with Netanyahu on Monday for five hours as part of an effort to restart the peace process between Israelis and Palestinians. According to a statement by Netanyahu’s office, the visit aims to “continue discussions relating to settlement construction in the hope of working out an approach that is consistent with the goal of advancing peace and security.”

On Tuesday, Greenblatt met with Abbas in Ramallah on the West Bank. “They [Abbas and Greenblatt] reaffirmed the commitment of both the Palestinian Authority and the United States to advance the genuine and lasting peace between Israel and the Palestinians,” the U.S. Embassy in Tel Aviv said in a statement.

Abbas told Greenblatt that he believes that under President Trump’s leadership an historic peace deal is possible, and that it will enhance security throughout the region, the statement said. “He [Abbas] added that he is looking forward to discussing the possibilities for peace directly with President Trump during his upcoming visit to Washington,” the statement read.

Greenblatt underscored President Trump’s commitment to working with Israelis and Palestinians to achieve a lasting peace through direct negotiations. “He also emphasized the importance of all parties working to de-escalate tensions. President Abbas committed to preventing inflammatory rhetoric and incitement,” said the statement.

Prior to Trump’s election, Greenblatt was the head the law department at the Trump Organization.

Russia and Japan Appoint High-Level Special Representatives To Advance Relationship

March 15 (EIRNS)—Russian President Vladimir Putin appointed the head of the Russian Economic Development Ministry Maxim Oreshkin, as his special representative for trade and economic cooperation with Japan, according to TASS. He will serve as the Russian counterpart to Japanese Minister of Economy, Trade and Industry Hiroshige Seko, who was appointed by Japanese Prime Minister Shinzo Abe to the newly created post of Minister for Economic Cooperation with Russia.

China Stresses Importance of Rail Projects in Africa

March 15 (EIRNS)—Rapid railway grid development is important, as it “can help improve the economy, create jobs, and taxes will bring benefits in this regard. Most African countries welcome China’s presence there,” Chinese Ministry of Commerce spokesman Shen Danyang said.

“Africa is an important part of the One Belt rail initiative. Once our teams get on the ground, they survey the area for water so that the locals have water. Then we build roads because we need them for rail construction; third, we create jobs,” Wang Mengshu of the Chinese Academy of Engineering said.

Early next month, Chinese contractors are set to complete a 500-km standard gauge rail project in Kenya that will connect the port city of Mombasa to its capital, Nairobi. Meanwhile, in landlocked Ethiopia, a 700-km railway line linking its capital, Addis Ababa, to Djibouti on Africa’s east coast, has already been completed. And plans are underway to construct more rail lines in Uganda, Tanzania, and Rwanda.

“Africa can learn from our experience. They see that railways can boost an economy. Now we are seeing every African country planning to build 7,000-8,000-km of rail. We realized the same thing in China. No matter how tight money is, we spare some for our railroads,” Wang said.

It is expected that by 2020 Africa will begin to see the full potential of these rail networks. They are expected to open up markets and provide more efficient access for African goods, all thanks to the strong ties the continent has forged with China.

Li Keqiang: ‘China Will Remain an Engine for World Growth’

March 15 (EIRNS)—In his wide ranging press conference today at the end of the People’s National Congress, Chinese Premier Li Keqiang refuted those who argue that China’s economy is failing and will have a “hard landing.”

Xinhua reports that “China will remain an important engine for world growth amid sluggish global economic recovery, Premier Li Keqiang said.” Li stated that China’s 2017 “growth target of around 6.5% is not a low speed and it will not be easy to meet. If we meet the growth target this year, the size of the expansion will be bigger than the growth last year.” He said that “China’s economic performance in the past few years should suffice to put predictions of a hard landing to a full stop…. China has created over 50 million urban new jobs in the past four years.”

He also ruled out the possibility that China will suffer systemic financial problems, stating that China has “targetted measures to prevent them from spreading… So we believe that China will be able to continue to contribute to the stability of the global currency system.”

Chinese Premier Sees ‘Broad Prospects for China-U.S. Cooperation’

March 15 (EIRNS)—Chinese Premier Li Keqiang held the concluding press conference at the National People’s Congress today in a wide-ranging two-hour exchange with the international and Chinese media. The first question taken [interestingly] was from CNN on U.S.-China relations. Premier Li said that he felt there were “bright prospects for China-U.S. cooperation.” Li referred to the Trump-Xi phone call and Trump’s commitment to follow the One-China policy. Li said he was also optimistic because the U.S. and China, particularly after China’s recent period of economic growth, shared common interests. He noted that the two parties were now in face-to-face negotiations to set up a meeting between the two Presidents. Li also noted that the relationship was important for global peace and security. “Hence we must work together to continuously take it forward.”

On the trade front. Li noted that much of the profit U.S. companies operating in China were making flowed back to the United States. “Trade with China has created over 1 million jobs in the U.S.,” Li said. “If there would be a trade war, U.S. companies would bear the brunt.” He felt that there was “room for us to expand our common interests…. No matter what bumps the China-U.S. relationship may run into, we hope this relationship will continue to move forward in the positive direction…. There is a need and there are also conditions for us to continue to expand our common interests.” Li added that China believes the people of both countries have the wisdom to properly manage their differences. While he noted that all the disputes between China and the U.S. would not be resolved immediately, he felt that these could be resolved “over time.”

With regard to the South China Sea, Li said that he hoped China-U.S. cooperation would bring “opportunities to ASEAN countries, instead of trouble.” “China does not want to see any party in the Asia-Pacific region feel compelled to choose sides under the influence of a Cold War mentality,” Li said. “The Asia-Pacific is the common home of all countries in the region, and China believes regional affairs should be decided and handled on the merits of each case.” On the issue of North Korea, Li reiterated China’s position that it was committed to a de-nuclearization of the peninsula, stability and dialogue. “Conflicts would bring harm to everyone,” he said. “All parties should work to de-escalate the conflict. No one wants chaos on his doorstep.”

 

 

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