EIR Daily Alert Service

WEDNESDAY, JUNE 14, 2017

Volume 4, Number 117

EIR Daily Alert Service

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

EDITORIAL

Damn the Russia-gate Hype—Listen to LaRouche: Federal Credit Now!

June 13 (EIRNS)—On Monday, amidst all the chatter about infrastructure—and Russia-gate hysteria—Lyndon LaRouche cut through it, to stress: Federal credit! Get the payments going. Speaking of the emergency situation in New York, he said, “There must be Federal government funding immediately to build new infrastructure in New York City. The Federal government must take over this crisis; it is the only source of an orderly form of credit for this problem…. We have had enough talk without any specifics, without any real payment coming in. Put it on the table—both the funds, and the use of the funds—now.”

Outside of New York City—a major national crisis, on whose solution the economy depends—there are appeals coming out daily for intervention, because of decrepit conditions of transport, water, power, public health and all other necessities. Yesterday Sen. Bob Casey (D-PA) was on the Monongahela River, near Pittsburgh, to call on Congress and President Trump to fund the rehabilitation of three aged locks, before a terrible failure occurs. These structures date back to 1917, on a waterway which today, for example, still carries 6 million tons of coal a year, to the U.S. Steel coke ovens in Clairton, for what’s left of the area’s steel industry. The locks’ rehab started 25 years ago, and remains unfinished to this day, after repeated stall-outs. However, Senator Casey offers no overview plan for how to fund the needed upgrades.

There is no way that any of the oft-heard talking points—public-private partnerships (PPPs), local or state government funding, nor “free market” wing-dings will finance the restoration of the economy. The Wall Street demand for 10+% returns from fees, tolls, levies, tickets, etc. is completely impossible. “Get the facts in order” on this, as LaRouche again stressed today.

We have to lift people up to the right approach. This begins with restoring Glass-Steagall to protect useful commercial banking, and ice out speculative finance; then establish a national credit institution, and extend Federal and private credit for large-scale priority projects and activities, and launch a science driver for space and fusion power advancement.

In New York City, people “on the street” are responding with great amazement and relief to the idea, “we can do this!” In turn, the enemies of this approach stand out all the more starkly.

Today in the Senate, Treasury Secretary Steven Mnuchin was a cornered rat on Glass-Steagall. At a hearing on the Federal budget, he responded to questioning by Sen. Bernie Sanders (I-VT) by saying that there are three different “21st-Century Glass-Steagall Acts,” and he opposes the Elizabeth Warren one to re-instate Glass-Steagall, and the Republican Party platform one, too. Mnuchin said, there should be no forced separation between commercial and investment banking. “We think that would hurt the economy, that would ruin the liquidity in the market.” In other words, Mnuchin is a killer. He is deliberately backing financial conditions leading to loss of life and loss of a future for the nation.

In direct opposition, we saw something of the “spirit of the Silk Road” in Iowa yesterday. At an Iowa-China symposium in Des Moines, a Memo of Understanding was signed between Chinese and American think tank representatives, to continue to exchange ideas for advancing their respective economies together. The Chinese Consul-General from Chicago reported on Chinese involvement in manufacturing, trade and agriculture matters in the nine Midwestern states he relates to. The Trump Administration announced the completion of the China-U.S. trade pact, under which U.S. beef exports can now start to China. Xinhua, CGTN and other Chinese media ask, “Is Iowa-China the model for a new U.S.-China relationship?”

On June 21, Trump will speak in Cedar Rapids, Iowa, for a send-off rally for Terry Branstad, the former Governor of Iowa who is going to China to serve as the new U.S. Ambassador. Branstad is a long-time personal friend of President Xi Jinping.

We call on people to rise above, and defeat, the Trump-gate/Russia-gate operation and the evil, British Empire crowd behind it. Come up to the plain of truth. What Vladimir Putin said about this, in the first installment of his interview with Oliver Stone last night, is: The anti-Russia hype in the U.S. is foolish. It may gain them some short-term advantage, but the problem with them is that they refuse to look 25, 50 years into the future, to see the consequences of their actions. We need cooperation.

U.S. POLITICAL AND ECONOMIC

Bipartisan Senators Concoct a New Sanctions Bill against Russia, as Tillerson Urges for Dialogue

June 13 (EIRNS)—On June 12, a bipartisan group of Senators on the Senate Foreign Relations Committee, including Committee Chairman Bob Corker (R-TN) and ranking Democrat Ben Cardin (MD) announced an agreement on a legislative package that would codify sanctions on Russia that were imposed by the Obama Administration, thus taking out of President Trump’s hands the ability to end them as quickly as Obama imposed them.

Secretary of State Rex Tillerson suggested as much in testimony to the Senate Foreign Relations Committee this morning. Tillerson said that the U.S. and Russia “have some channels that are open where we’re starting to talk, and I think what I wouldn’t want to do is close the channels off with something new.” Coverage in Politico hints that Tillerson’s opposition “spells trouble” for the sanctions deal. The House has yet to take up the bill, which is currently scheduled for a Senate vote tomorrow.

This new Senate anti-Russia bill places new economic restrictions, in an effort to economically harm specific individuals and Russia’s economy. The new sanctions would be placed on Russians “who violate human rights, supply weapons to the Bashar al-Assad regime in Syria or who are involved in the Russian defense and intelligence industry,” reported NBC News. Yahoo News’ Michael Isikoff reported on June 5 that the Obama moles in the State Department, cronies of former Assistant Secretary of State Victoria Nuland, gave birth to this effort, after going “berserk” last winter, over the possibility that President Trump might succeed in improving U.S.-Russia relations.

The Senators also agreed that these sanctions could not be lifted without Congressional approval. “By codifying existing sanctions and requiring Congressional review of any decision to weaken or lift them, we are ensuring that the United States continues to punish President Putin for his reckless and destabilizing actions,” Senate Minority Leader Chuck Schumer (D-NY) wrote in a statement endorsing the package, based on the lie that the Democrats lost the election because of the mythical Russian interference. “These additional sanctions will also send a powerful and bipartisan statement to Russia and any other country who might try to interfere in our elections that they will be punished.” The measure is to be attached as an amendment (identified as the Corker amendment), to Iran sanctions legislation that passed a Senate procedural vote 92-7, last week.

Sessions Testifies in Senate, Calls Alleged Collusion with Russians ‘Detestable Lie’

June 13 (EIRNS)—In feisty testimony today, Attorney General Jeff Sessions called Democrats’ insinuations that he had somehow colluded with the Russians during the elections, a “detestable lie.”  He said the only conversations he had during the campaign about Russia were about changing U.S. relations with Russia for the better, from their dismal current state.

Sessions substantively answered questions posed by the members of the Senate Select Committee on Intelligence, about his recusal, about the Comey firing, and the two limited interactions he had with Russian Ambassador Kislyak. Democrats on the Committee and apparently the FBI were alleging that Sessions had an undisclosed meeting with Kislyak at a Trump foreign policy speech at the Mayflower Hotel.

The news media and the Democrats, as is their wont, headlined the fact that Sessions refused to answer many questions about his conversations with President Trump, going so far, during a childish fit thrown by Sen. Martin Heinrich (D-NM), as to accuse the Attorney General of obstructing the proceeding.

Sessions appropriately claimed executive privilege concerning his conversations with the President, a zone of privilege which is to be asserted by the President but may be waived by Executive Branch officials speaking out without first knowing whether the President will exercise his prerogative.

Perhaps the highlight of the hearing was an exchange between Sessions and Sen. Tom Cotton (R-AR). Cotton at one point spoke in reference to there having been months of investigations, with no evidence of Trump or any of his campaign associates having colluded with Russia to interfere in the elections. He referred to Sessions’ encounter with Russian Ambassador Sergey Kislyak at the Mayflower Hotel.

Cotton: …Mr. Sessions, do you like spy fiction?  Daniel Silva?  Jason Matthews?  Do you like Jason Bourne or James Bond movies?

Sessions:  Yes, I do.

Cotton:  Have you ever, in any of these fantastical situations, heard of a plot line so ridiculous that a sitting United States Senator and an ambassador of a foreign government colluded at an open setting with hundreds of other people to pull off the greatest caper in the history of espionage?

Sessions:  Thank you for saying that Senator Cotton. It’s just like “through the looking glass.” I mean, what is this?…

Cotton:  And I gather that’s one reason why you wanted to testify today in public.  Last week, Mr. Comey, in characteristic dramatic and theatrical fashion, alluded to innuendo, that there was some kind of classified intelligence that suggested you might have colluded with Russia…. Do you understand why he made that allusion?

Sessions:  Actually, I do not.

Former Reagan Adviser Bandow Explains Why Trump Should Back China’s Belt and Road

June 13 (EIRNS)—Former Special Assistant to Ronald Reagan Doug Bandow, now with the Cato Institute, reports in an article published yesterday in The National Interest, under “One Belt, One Road: Why Trump Should Get Behind China’s Economic Growth Plan,” that he had just participated in an international conference in Macau, China, on “the Belt and Road and Macau’s Development, invited because “participants at the Macau conference wanted the United States to be involved…. In May, President Xi spoke of creating a big family of harmonious coexistence. Whatever his ultimate ambitions, local officials, with an eye to expanding economic opportunities, believe the more the merrier,” Bandow wrote.

Bandow works hard to not let himself get excited, spending most of the article between the headline and the concluding paragraph repeating all the doubts, caveats, conditionalities, and stupidities of the old paradigm about the intentions and “many potential pitfalls” of China’s grand international initiative.

But something real got through. Bandow concludes that “last month President Xi called on conference attendees to build an open platform of cooperation and uphold and grow an open economy. Properly structured, [the Belt and Road Initiative] BRI could advance that end. Then Beijing would be well positioned to challenge the United States and Europe, as well as India and Russia, to join China’s efforts. If they took up such a challenge, much could be accomplished for the benefit of all.”

STRATEGIC WAR DANGER

Chinese Take Initiative To Cool Things Down between Afghanistan and Pakistan

June 13 (EIRNS)—At a meeting with Afghan women’s rights activists at Kabul on June 12, Afghan President Ashraf Ghani said the Chinese Foreign Minister Wang Yi will be in Kabul soon to formulate China’s mediation between Afghanistan and Pakistan.

Kabul, in recent months, has repeatedly complained of Pakistani help to the insurgents in Afghanistan, causing mayhem. Pakistan has denied those claims. Afghanistan’s TOLO News reported Ghani saying, “It is the first time that China wants to be a mediator in Afghanistan’s peace process, and soon the Chinese Foreign Minister will visit Kabul. Peace with Pakistan was our demand and this must be solved between government and government.”

Ghani’s deputy spokesman Najibullah Azad told the media: “This time the quadrilateral meeting—which will be held between Afghanistan, Pakistan, the U.S. and China—would be different compared to past meetings. At this meeting, Pakistan must support Afghanistan’s policy over fighting insurgency,”  Azad also said that Kabul had recently gathered evidence showing that Pakistan is “supporting insurgency,” and had shared it with NATO, the U.S. Congress and other organizations. “When needed, the evidence will also be provided to the UN,” Azad said, reported TOLO News.

China has earlier participated in multinational talks seeking Afghan peace. But this is the first time that China is indicating the necessity to calm relations between the two neighbors in order to advance with peace talks and secure the China-Pakistan Economic Corridor, which runs close to the Afghan borders. Recent killing of two Chinese teachers by insurgents in Pakistan’s Balochistan province, bordering Afghanistan, is an alarming reminder that the security situation needs more attention. The Diplomat claims that the killing has allowed Kabul to nudge “China to help clear a workable path to peace.”

U.S. Senate Narrowly Defeats Resolution To Block U.S. Arms Sales to Saudi Arabia

June 13 (EIRNS)—The U.S. Senate voted, today, 47-53 against a resolution of disapproval that would have blocked the sale of $500 million worth of air-dropped munitions to Saudi Arabia. The resolution, which was co-sponsored by Senators Rand Paul (R-KY) Chris Murphy (D-CN) and Al Franken (D-MN), specifically addressed the proposed sale of GPS guidance kits for air-dropped bombs, fuses for those bombs and laser-guided bombs.

A similar resolution, last fall, garnered only 27 votes. Senate Minority Leader Charles Schumer’s (NY) announcement yesterday that he would support the resolution, undoubtedly helped to lift the vote in its favor.

Senate Foreign Relations Committee Chairman Bob Corker (R-TN) argued that the guidance kits were necessary so that the Saudi Air Force could bomb targets more accurately in Yemen and not kill civilians. Senator Paul rejected that argument, pointing out that the Saudi bombing of a funeral observance in the Yemeni capital of Sana’a, last October was no accident. That bombing killed 125 people and wounded over 500 others and was clearly aimed at the Houthi leadership that was present at the gathering. “This was no mistake,” Paul said. “This was no error.” Furthermore, the Saudis put protesters in jail, they behead and crucify them, they supported ISIS and “They are the greatest purveyors of hatred of Christianity and Judaism,” Paul said. “We don’t have to encourage their behavior by selling them weapons.”

THE NEW GLOBAL ECONOMIC ORDER

Panama, People’s Republic of China Relations ‘Set To Boom’ Now with Diplomatic Exchanges

June 13 (EIRNS)—Panama’s Vice President and Foreign Minister Isabel Saint Malo de Alvarado, and Chinese Foreign Minister Wang Yi signed a joint statement on Tuesday in Beijing announcing the establishment of relations and exchange of ambassadors.  Until today, Panama had recognized Taiwan, instead of the People’s Republic of China (P.R.C.). The joint communiqué states explicitly Panama recognizes that “there is only one China in the world; the government of the People’s Republic of China is the only legitimate government representing all China, and Taiwan is an inalienable part of the Chinese territory.”

Panama is now the second country in Central America to have diplomatic relations with the P.R.C. rather than Taiwan; Costa Rica is the other. Voice of America took due note that “the decision effectively expands China’s influence in Central America.”

Shortly before the signing, Panamanian President Juan Carlos Verela announced the decision to the nation in a television address. The P.R.C. represents 20% of the world’s population and it is the second largest economy in the world; no responsible head of state could continue a policy of no relations, he said. He alluded to decades of intense pressure from the Wall Street establishment and its geopoliticians against this move, noting that various prior Panamanian administrations had attempted to establish relations, but never did so, “for reasons it is not my business to explain.”

Economic ties are huge, the President pointed out. China is the second largest user of the Panama Canal; a Chinese ship was the first to pass through the expanded canal a year ago. It is the number-one source of goods going through the Colon Free Port. Large Chinese companies—logistics, construction, technological, etc.—are established in Panama, which provides them a platform for their entry into the Americas.

China, Valero said, is playing an important role internationally, and regionally. “I’m convinced that this is the correct path for our country.”

Xinhua agreed wholeheartedly, reporting that “China-Panama cooperation and exchanges are set to boom. Among many others, China is the world’s largest trader and second-largest economy, and Panama is an important regional logistics hub. Such complementary strengths herald a bright future of fruitful cooperation.”

Xinhua also notes that Panama’s decision “testifies to the growing global consensus on the new type of international relations China has been championing, which features win-win cooperation as the core.”

Japanese Business Delegation Makes Official Visit to Russian Far East

June 13 (EIRNS)—For the first time ever the Japan External Trade Organization (JETRO) is sending a delegation of representatives of 22 Japanese companies to Khabarovsk and Vladivostok, in Russia’s Far East on June 14-17 according to the press service of the Ministry for Development of the Russian Far East.

“Japanese entrepreneurs will visit trade companies, which Japanese chains plan to use to launch their branches. It is planned to hold a number of meetings with representatives of Japanese enterprises that already operate in Russia and with local partners in support of the promotion of Japanese service enterprises (restaurant business, distribution, retail, beauty salons, educational services) to the markets of the Far East…. JETRO is organizing the business mission in service sector to Russia for the first time,” the press service said.

The visit takes place within the framework of the Memorandum of Cooperation signed between the Far East Agency for Investment Promotion and Japan External Trade Organization (JETRO). This is part of the broad economic cooperation agreements signed between Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe.

SCIENCE AND INFRASTRUCTURE

China Hosts International Fusion Symposium, and Accelerates Its Fusion Education Program

June 13 (EIRNS)—For the first time in its 52-year history, the international Symposium on Fusion Engineering was held outside the United States, in Shanghai. The June 12 issue of ITER Newsline reports that the conference has close to 500 participants, 17 exhibitors, and 500 submitted technical papers, from the top fusion researchers from around the world. Explaining the choice for the change of venue, Hutch Neilson, from the Princeton Plasma Physics Laboratory who is the chair of the conference, said that the “general excitement and the dynamism of the fusion community in Shanghai were an asset for the organization of the conference.” He could have added that it could hardly be expected that the meeting would be held in the U.S., where the fusion program is fast disappearing.

Chinese presentations to the conference included a new design for their next-step advanced fusion engineering test reactor, and a report on the technical progress on their superconducting EAST fusion reactor.

“Well aware of the energy challenges the country is facing,” reports ITER Newsline, “the Chinese government has decided to accelerate the effort toward fusion electricity by developing an educational program dedicated to fusion science. ASIPP (Academy of Sciences Institute of Plasma Physics) and the University of Science and Technology of China have developed a nuclear school, aiming at training future engineers.” Yuntao Song, from ASIPP explained, “We have very talented students who will be trained to operate the industrial tokamaks in the coming years.”

China’s fusion program was also featured the 2017 World’s Fair, which opened June 10 in Astana, Kazakhstan. In an exhibit on International Thermonuclear Experimental Reactor (ITER), housed in the French pavilion, the project is explained through a series of multimedia models, displays, and virtual reality. Attending the inaugural ceremony were the heads of the European, Russian, Korean, and Chinese domestic fusion agencies, which are in charge of their nations’ work on ITER.

Opening the ITER exhibit, Director General Bernard Bigot said “the EXPO theme is ‘Future Energy.’ I cannot imagine any science and engineering project with a greater potential impact on the future than harnessing the power of the Sun and the stars: nuclear fusion.” He also urged EXPO-2017 attendees to “visit the Chinese exhibit, where they also showcase ITER and fusion, and have created a 4D cinema and an ITER model that is both educational and visually spectacular.”

COLLAPSING WESTERN FINANCIAL SYSTEM

Rep. Marcy Kaptur: ‘The Promise Was Written’ To Restore Glass-Steagall!

June 13 (EIRNS)—Interviewed by Cheddar on Monday on the Financial CHOICE Act recently passed in the House of Representatives, Rep. Marcy Kaptur (D-OH) kept the focus on the urgency of restoring full Glass-Steagall regulations, as she slammed away at Wall Street, whose “chicanery” and belief in taking speculative risk no matter the consequences, led to the 2008 crisis from which we still suffer.

Cheddar is an online TV-streaming channel which advertises itself as “the leading post-cable network,” broadcasting daily from the floor of the New York Stock Exchange. It plays to a younger crowd, whom Representative Kaptur was organizing.

She brought her charts, and told Cheddar watchers that “the banks should be paying you to rent your money as deposits. When I tell millennials, that in the 1980s, people holding [certificates of deposit] CDs were paid 5-10% on their deposits, they say ‘What? 10%!’ ” Summarily, she concluded: Why don’t they pay you now? Because the banks are diverting your money into speculation. The financial system used to treat consumers fairly, but now we have to set up a Consumer Financial Protection Board to try and get some justice, but what is recovered is small compared to what the banks owe the American people.

Cheddar asked if the bill she and Walter Jones are sponsoring, “is the 21st century Glass-Steagall Act that President Trump and Steve Mnuchin are looking at?”

Kaptur responded firmly: “I certainly hope so! There’s a version that exists in the Senate, as well, with just one line of difference, I think, between our two bills, House and Senate. Both political parties endorsed the restoration of the Glass-Steagall Act in their respective platforms last year.

“So it has broad support among the American people. The problem has been to try and get it through the funnel of Congress.

“I hope the President uses his authority. I’m a little concerned about some statements Secretary Mnuchin has been making lately. He sounds like he’s stepping back from the promise that was made,” Kaptur said, noting that it’s no secret that Mnuchin comes from Goldman Sachs, as do seven of Trump’s close advisers.

“So we’ll see where they are headed, but the promise was written, and it’s in both party platforms.”

OTHER

William Perry Blasts Bush/Obama North Korea Policy, Says There Is Promising Window, Today

June 13 (EIRNS)—Former Defense Secretary William Perry spoke “from the heart” (as he said) at the Institute for Korean Studies at George Washington University today. His 2015 book, My Journey at the Nuclear Brink, which has just been released in Chinese, has helped introduce a stern warning against Obama’s drive for war in Asia, and has advised the new administration on the urgency of talking to North Korea.

Perry gave a beautiful anecdote in his remarks: In 2006, four years after the Bush/Cheney team had ripped up the Agreed Framework that Perry and others had negotiated in 1994, and set North Korea on the path to building nuclear weapons, Perry was invited to Pyongyang to attend a guest performance of the New York Philharmonic Orchestra, which had been invited by North Korea. Perry was attending the inauguration of the new South Korean President the day before, and explained that he could not make it (one had to travel to the North via Beijing, so there was not time). When they offered to drive him across the DMV, to allow him to attend, and he accepted.

He knew this was a signal, and asked Condoleezza Rice if she would go. She said, “No, it’s only a concert.” Perry said: “That’s like saying the ping-pong with China was only ping-pong.”

He then attended the concert, which he said was magnificent, Everyone stood for the Star Spangled Banner, and the final piece, a Korean folk song, had the most hardened North Korean generals in tears. A 20-minute standing ovation followed the concert.

“And I was the only U.S. official there.” After this failure to respond to a message from Pyongyang, he said, it was all downhill.

“Sixteen years of feckless policy—or rather, no policy,” Perry said about Bush and Obama. “I’m bipartisan on this.” He stressed that, “You have to understand what the other side wants in diplomacy. We stopped listening. Bush wanted to overthrow the Kim Dynasty—well, that’s OK, but there was no way to do it, so it was foolish. Then Obama’s ‘strategic patience’—squeeze them and the Kim regime will collapse. Foolish, the same feckless policy.”

From years of working with North Korea, he said, he knows that they will never use their nuclear weapons, since they are neither crazy nor irrational, despite their ruthless actions. He understands that they have three goals: sustain the Kim dynasty; gain international respect; and build the economy—but it is important that it is in that order. They need economic development, and are calling for it, but never at the expense of losing the dynasty nor of being humiliated internationally. Their nuclear weapons give them these two things.

Therefore, Perry believes, a solution requires granting them their nuclear weapons, at least for now, and call for an end to testing, both bombs and missiles. This can be verified without inspectors on the ground.

But, the U.S. has no disincentives, since they have cut all support and loaded on sanctions. Only China has disincentives available, but will not go too far.

Thus, the U.S. and China must, together, talk to the North, and assure them there will be no war, no regime change, no humiliation.

EIR intervened to add that Russia must be part of that, and that it is only if Pyongyang believes that the U.S., China and Russia are truly working together, as Trump is tending to do, that they will make any deal. Perry responded: “I agree with you. I strongly agree. China is key, but Russia is crucial, and must not be left out.”

On the Six-Party Talks, he said they clearly failed, but the reason is that neither Bush nor Obama had a policy. Economic offers are good, but not sufficient. They must first be given security and respect, and are willing to give up economic support if they don’t get it.

Now, Perry said, with the new administrations in South Korea and the U.S., is a new window of opportunity, “a very promising window.”

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