EIR Daily Alert Service, TUESDAY, MAY 1, 2018

EDITORIAL

British Geopolitics: Enemy of Trump, of America, of Peace

April 30 (EIRNS)—For President Donald Trump’s Presidency to survive and accomplish anything of importance for America’s future, the British attacks on his administration must be defeated.

These attacks have repeatedly aimed to force the President into confrontation with Russia “on Britain’s side,” or be driven out of office by a “Russiagate” scandal invented by British intelligence.

And British geopolitical thinking inside Trump’s administration is pushing him away from every policy to “make America great again” he promised in his campaign.

British demands for a war confrontation with Russia have created crises for the President and his intended policy of great power cooperation for peace and economic progress. Now, when that cooperation has produced a crucial advance toward peace and reconstruction on the Korean Peninsula, Trump is being pushed to attack Iran: again, Russia is the target.

Britain’s “Skripal poisoning case” and “Douma chemical attack”—which produced mass expulsions of Russian diplomats and war on Syria—now increasingly look to have been war hoaxes like Tony Blair’s “Iraq WMD.” So now, Israeli Prime Minister “Bibi” Netanyahu has suddenly claimed to have “100,000 secret files” he can’t reveal, about “Project Amad,” by which nuclear weapons are being made by Iran, which the United States must help Israel destroy. From the Israel which secretly acquired and developed scores of deliverable nuclear weapons, and still lies about them, this is outrageous. But its objective is obvious: Trump must choose war, choose British sides against Russia, abandon his policy of great power cooperation.

America’s economy is getting the same treatment.

President Trump is being pushed off his stated intentions—break up Wall Street’s “giant bubble,” build new high-technology infrastructure, expand the space program and again place “our footsteps on distant worlds”—to embrace the British alternatives. These were stated by Treasury Secretary Mnuchin on Fox TV Monday morning, while he made completely false claims about the actually meager performance of the U.S. economy. “Tax cuts,” said Mnuchin; the policy of competitive tax cuts among trans-Atlantic nations launched by Britain during Margaret Thatcher’s 1979-90 governments. “Bank deregulation,” was Mnuchin’s second shibboleth; invented by a 1986 British bank deregulation so sweeping it was called the “Big Bang,” which drove America to abandon the Glass-Steagall Act and have a financial crash exactly a year later.

And “privatization,” a policy developed in the 1970s and 1980s in the U.K. and British colonies New Zealand, Australia, and Canada, is being used to try to ruin the American space program and Trump’s commitment to build a new economic infrastructure.

On April 27 the head of the National Space Council created by the President forswore international space cooperation, while another official said NASA should not develop any new space system if it could buy an existing private one. The U.S. Transportation Secretary, visiting Beijing, virtually ruled out cooperation with China on new infrastructure projects.

China’s global network of great infrastructure projects, the Belt and Road Initiative, makes for the greatest opportunity for great power cooperation—the United States with China, India and Russia—which has ever existed.

If the United States persists in such stupidity, China, India, Russia, Japan will soon lead human space exploration while America looks up from the mud of economic stagnation and pervasive drug addiction.

In his 2014 “Four New Laws” proposal, Lyndon LaRouche specified “immediate re-enactment of the Glass-Steagall law instituted by U.S. President Franklin D. Roosevelt, [and] a return to a system of top-down, and thoroughly defined National Banking” in order to invest in productivity through high-technology infrastructure, an expanded NASA, and a crash program for fusion power.

That represents “the American System” the British geopoliticians have always sought to destroy—and which can defeat them.

STRATEGIC WAR DANGER

Netanyahu Launches Third British War Hoax Since March 1

April 30 (EIRNS)—Since Russian President Vladimir Putin on March 1 showed on national television that the NATO “anti-missile missile” encirclement of Russia (and China) had failed due to new-generation hypersonic weapons, and called for negotiations instead, devotees of British geopolitics have become deranged. In the United States, some neo-cons have demanded consideration of provoking a war with China now, since in 10 years it won’t be “winnable.” In the U.K., the Royal Institute of International Affairs (Chatham House) has called for a new, Commonwealth-centered military alliance “of the willing” against Russia to supersede NATO.

And since March 1, two successive British confrontations with Russia—first over the Skripal “poisoning on British soil,” and then the “Syrian chemical weapons attack” in Douma—have looked more and more like war hoaxes, recalling Tony Blair’s “dodgy dossier” which unleashed the 2003 Iraq invasion.

Over this past weekend, Israeli Prime Minister Benjamin Netanyahu stepped up with a third. Dramatically cancelling a holiday speech on Israeli television, Netanyahu instead announced to the world that Israeli intelligence had stolen “100,000 secret files, half a ton of files” from Iran. These proved, he said, that Iran had a nuclear weapons program and lied about it, before signing the 2015 Joint Comprehensive Plan of Action (JCPOA) with the five UN Security Council permanent members plus Germany, which blocked it from nuclear weapons.

Quite amazingly, Israel had, Netanyahu said, just obtained this information within the past 10 days, with just 10 more to go in which President Donald Trump must decide whether to withdraw from this agreement! He had briefed Trump on April 28, Secretary of State Mike Pompeo on April 29, and European officials on April 30; now, the “incriminating documents, charts, presentations, blueprints, and photos” were in a “very safe place.”

Netanyahu did not appear to make a case that Iran was violating the JCPOA, in making his demand to abandon it. Rather, he said he was proving that Iran had lied prior to the JCPOA—it could be said, much as Israel lied for years, and still does, about the many deliverable nuclear weapons it has.

But clearly his purpose was to create an atmosphere for war against Iran, particularly in Syria, while wrecking the JCPOA. Only hours earlier, nine missiles of still-undetermined origin had hit two bases in central Syria that Israel says are being used by Iranian irregular forces.

The threat of a proxy war, really pitting Britain and France against Russia and pulling Trump’s United States in, has been raised.

THE NEW GLOBAL ECONOMIC ORDER

China’s Consul Briefs Houston Leaders on Boao Forum for Asia

April 30 (EIRNS)—China’s Consul General Li Qiangmin in Houston, hosted a luncheon on April 26th to brief invited Houston business, academic and political leaders on the outcomes of the “Boao Forum for Asia 2018,” held on April 8-11. Copies of Chinese President Xi Jinping’s closely-watched keynote speech at the Boao Forum were provided to the guests at Thursday’s Houston luncheon.

Ambassador Li delivered the luncheon keynote, titled “New Era, More Open, Greater Vision.” He confidently presented China’s perspective to transform its economic development from one of “rapid growth” to “high-quality growth.” Addressing American concerns, Ambassador Li stressed four new measures to pursue further opening, as presented by Xi at Boao: (1) Significantly broaden market access; (2) creating a more attractive investment environment; (3) strengthen protection of intellectual property rights (IPR); (4) initiatives to expand imports.   However, Li made very clear the great role that China is already playing in the world economy, and as part of the community of nations. He stated that General Motors, for example, was already producing 4 million cars a year in China, with most them sold in China. China has already created new mechanisms to protect IPR, and wants to ensure IPRs are also protected internationally. Prospering, China has lifted 700 million Chinese out of poverty. Contrary to some reports, he could say that as a former diplomat in Africa, China is playing a very positive role there. Li made clear that he knew first-hand how China’s cooperative, mutual benefit approach was being received, and quoted African leaders to this effect.

“China has been a major engine and stabilizer of the world’s economic growth, with its economy contributing 30% of the world’s economic growth for many years,” Ambassador Li said.

The Schiller Institute was represented among the 200 invited luncheon guests, and accorded VIP treatment. Following the conclusion of the speech and a short Q&A, Schiller Institute representative Brian Lantz was immediately approached for a rapid succession of interviews by four Chinese media outlets, including Phoenix TV, ECNS.CN (News China), and Sinovision. Lantz has so far been quoted in coverage on the emerging New Paradigm, the important potential for joint U.S.-China investment in projects in third countries, and leaving the era of geopolitical “blocs” behind.

Ambassador Li also strongly defended the Confucius Institutes, centers of learning on at least 100 U.S. campuses. Referencing the attacks on the Confucius Institutes by Sen. Marco Rubio and others, Li pointed out that there are some 60,000 Americans now teaching English in China, but no one in China has accused them of being spies!

Participants at the event included many who had been part of Mayor Sylvester Turner’s December trade delegation to China, members of the Greater Houston Partnership, many Chinese-American businessmen, the president of Rice University, and Houston elected officials.

New Korea Diplomatic Motion; China’s CGTN Interviews EIR on Korea Developments

April 30 (EIRNS)—South Korean officials were reported by China Global Television Network (CGTN), today, to have given more details of the summit between South Korean President Moon Jae-in and North Korean leader Kim Jong-un, and on more diplomatic actions in preparation for a summit between Kim and U.S. President Donald Trump. The officials said that Kim had offered U.S.-South Korean inspection of North Korea’s nuclear test site, which it will shut down; and that North Korea will give up its nuclear weapons program if the United States will sign a treaty and commit not to attack it.

Kim also reportedly wanted to normalize relations with Japan and meet with its Prime Minister Shinzo Abe. Moon was said to have called Abe on the morning of April 29 to mediate this, after Trump and Abe had spoken by phone.

And symbolically, the D.P.R.K. will advance its clocks half an hour to conform to the R.O.K. time zone.

Chinese Foreign Minister Wang Yi will visit Pyongyang May 2-3, and President Moon will visit Washington again after his May 9 trilateral meeting with Abe and China’s Premier Li Keqiang in Japan.

President Trump tweeted April 29, “Things are going very well, time and location of meeting with North Korea is being set.” Secretary of State Mike Pompeo gave an essentially optimistic view of the prospect of this surprising Trump-Kim summit, when Pompeo appeared on ABC News “This Week” April 29.

EIR Washington Bureau chief Bill Jones was interviewed live by CGTN’s “Global Watch” on Korean Peninsula developments. Jones said the two Koreas are “now in sync” on more than one issue and that the Pyongyang’s time zone change was symbolic of that shift. Regarding the prospective Trump meeting with Kim Jong-un and whether the two could establish a friendly relationship, Jones replied that they already have something of a friendly relationship, referring to the positive statements that President Trump had made in Michigan, and the upbeat assessment of Secretary Pompeo after his Pyongyang meeting with Kim.

Jones told the Chinese TV network: “President Trump realizes if he succeeds in ending the Korean War, this will be a high point for his Presidency.” Jones said he felt that if Kim Jong-un is prepared for a verifiable denuclearization, there should be no obstacle to signing a peace treaty or to an American pledge not to attack the D.P.R.K., which Kim has been asking for. On the D.P.R.K., Jones also said that all the parties are working in the same direction—the United States, North Korea, also China, South Korea, and Russia—and this has created a powerful dynamic for success.

New Silk Road Rail Routes Are Key for Austria, EU’s ‘First Mover’

April 30 (EIRNS)—In a parliamentary debate on April 27, Austrian Transport Minister Norbert Hofer praised the planned rail projects of the New Silk Road as something that “is welcomed by many,” because the benefits—including those for the environment—are evident. The planned extension of the Russian broad-gauge track from Kosice, Slovakia, to Vienna, will be implemented in this larger context, Hofer said.

Gerhard Deimek of the Freedom Party also welcomed the New Silk Road orientation of the government, particularly because the President and Prime Minister’s mid-April visit to China established Austria as a “first mover” in European-Chinese cooperation, since Austria has so far been the only European Union country to sign an agreement with China on the realization of the project, which Deimek called “an important project of the future.”

China ‘Ready To Be Driving Force’ in International Effort To Rebuild Syria

April 30 (EIRNS)—Xie Xiaoyan, the Chinese government’s Special Envoy on the Syrian Issue, has signalled Beijing’s willingness “to do its best” to contribute to ordinary Syrians returning to a normal life. The envoy estimated that at least $260 billion in aid money is needed to restore the devastated nation, and that this is a task for the entire international community, speaking at a press conference at the Chinese Embassy in Moscow today. “Many people have died, millions have lost their homes or become refugees, and they all need humanitarian aid. As a member of the UN Security Council, China has always paid attention to providing humanitarian assistance both to Syrian citizens and refugees in the form of goods, medicine, food, and money,” Xie stressed.  He had just been attending the donors conference at the EU headquarters in Brussels.

Xie promised that “China is ready to become a driving force in this process and to involve its companies in the restoration work in Syria as soon as the security situation improves there. Apart from China and Russia, the countries of the region should also take part in the process, because only together will we be able restore Syria,” Xie said, reported Sputnik International.

SCIENCE AND INFRASTRUCTURE

NASA Cancels Sole Lunar Lander, Jeopardizing Manned Moon Program

April 30 (EIRNS)—The scientific community learned last week that NASA has cancelled its only lunar lander mission. The lunar Resource Prospector mission was to place a rover at the Moon’s south pole, drill three feet into the ground, and assess the resources, including water ice, which would be key for future manned missions. Engineers had been working on the spacecraft for four years, and prototypes were tested on Earth in 2015 and 2016, The Verge media reported on April 27. This cancellation was accomplished by the most crass bureaucratic maneuvering: transferring the program from the manned space exploration division, to the space science division, and then declaring that there isn’t enough money for it.

The response from the Lunar Exploration Analysis group, which is an independent advisory group to NASA of the top lunar scientists, was immediate. In an April 23 letter to NASA Administrator James Bridenstine, the scientists pointed out that cancelling the lunar Resource Prospector (RP) mission “is viewed with both incredulity and dismay by our community, especially as the President’s Space Policy Directive 1 directs NASA to go to the lunar surface. RP was the only polar lander-rover mission under development by NASA…. The cancellation of RP could be viewed as NASA not being serious about a return to the lunar surface.”

The deposits of volatile deposits at the pole “could be viable resources to support not only human exploration into the Solar System but also a thriving lunar economy,” the letter states. “There are six international robotic lander missions to the Moon’s polar regions planned between now and 2025 as other nations stake their claim to the resources we know are available on the Moon.”

Bridenstine tweeted a vague response, that the “Resource Prospector instruments will go r in an expanded lunar surface campaign.” No where or when. NASA released an equally vague statement, that there would be surface missions “later.” But NASA’s budget is currently projected by the administration to be flat for the next five years. Instead, the administration and the new administrator are banking on the commercial space industry to develop some of the infrastructure a lunar program requires. As a result, NASA officials report that the projected landing of an American on the Moon has stretched out to around 2030, more than five years later than earlier plans.

U.S. POLITICAL AND ECONOMIC

Mnuchin Is Mum on China Visit; Makes False U.S. Economy Claims

April 30 (EIRNS)—Treasury Secretary Steven Mnuchin, who will be in Beijing May 2-3 negotiating on trade and tariffs with China’s Vice Premier Liu He, appeared on a Fox-TV interview Monday morning. Despite interviewer Maria Bartiromo’s best efforts, Mnuchin would say nothing about his mission. What he wanted to do, was to make claims about the U.S. economy’s “fabulous” performance.

“President Trump has been very clear about the economic agenda going back to the campaign. It’s been all about tax reform, regulatory relief, and trade,” said Mnuchin.

This was false, as Trump’s campaign focussed on building new economic infrastructure, restoring manufacturing, reviving space exploration, and breaking up the “gigantic Wall Street bubble,” as well as implementing a “border tax” or tariffs. But Mnuchin continued, “We’re seeing the tax cuts just beginning to kick in … we’ve done a lot on regulatory relief, and we’re focused on … free and fair and reciprocal trade.”

“I think the economy is doing fabulous,” Mnuchin said. “Our objective is to create economic growth. When we got here everybody told us why the economy couldn’t grow at better than 2%; we said our objective is sustained 3% GDP or higher. We’ve had several quarters of that, and we are well on our way to sustained growth.”

The Commerce Department reported that growth was 2.5% for 2017 and 2.3% in first quarter 2018. This Mnuchin dismissed as “seasonal,” saying 2.3% was “better than the market expected.”

Wages grew in 2017 at only 2.6% for non-supervisory employees. The tax cuts were fully in effect throughout the first quarter of 2018, but business investment and personal consumption grew more slowly than for several prior years.

That U.S. households are again getting loaded with personal debt, is shown by their spending growing faster than their income for 26 consecutive months. Rent costs and housing prices have grown at 6-7% annually, and the past year’s pending home sales dropped by 4.4%. The chief economist of the National Association of Realtors said of this, “Prospective buyers are increasingly having difficulty finding an affordable home to buy.” There is constantly increasing homelessness especially in higher-priced cities.

There has been no protective infrastructure built to prevent another hurricane season of disasters like “Harvey” in Texas, “Irma” in Florida and Puerto Rico, and “Maria” in Puerto Rico, with lost lives and vast lost wealth—as LaRouche Congressional candidate Kesha Rogers said when she keynoted a meeting of Texans recovering from Harvey April 29.

COLLAPSING WESTERN FINANCIAL SYSTEM

Hoenig and Bair Warn Fed Is Letting Banks Bring on Collapse Again

April 30 (EIRNS)—Writing in Wall Street Journal April 26, outgoing FDIC Vice-Chairman Thomas Hoenig and former FDIC Chair Sheila Bair warned against the Federal Reserve plan to lower the biggest banks’ capital requirements, saying this risk model “failed to predict the 2008 collapse” and will do so again.

Hoenig and Bair wrote that, inevitably, the biggest bank holding companies will use the capital they no longer have to hold, under the Fed’s rule changes, to pay dividends or to invest in trading/broker-dealer speculation, not lending.

In 2004 investment banks were disastrously allowed to leverage themselves up to a debt-to-capital ratio of 30:1. As a result, Lehman, for example, was leveraged 38:1 by the time it failed and triggered general bank panic.

“America’s biggest banks are among the most leveraged financial institutions operating in the country today,” they wrote. “They are permitted to finance lending and other activities with 94 cents debt and only about 6 cents of tangible equity for every dollar in assets. Their profits are breaking records—for some, soaring 35% to an all-time high…. Therefore it concerns us that the Federal Reserve and the Office of the Comptroller of the Currency are weighing proposals that would permit further increases in bank leverage….

“The idea that lowering bank capital requirements boosts lending is urban legend. Ample research shows that banks with higher capital levels lend more, not less, through business cycles….

“Recall that at the start of the 2008 crisis the largest U.S. banks had tangible equity to assets of about 3%, or 97 cents of debt for every dollar of assets. They lost double their equity, and required trillions of dollars in liquidity and other assistance backed by taxpayers to bail them out and stabilize the economy. During that time their ability to lend fell as the threat of insolvency rose.”

OTHER

EIR Subscriptions To Revolutionize Truth-Telling

April 30 (EIRNS)—You trust EIR to tell the truth, overthrow the British Empire, and lift your perspective to new heights. Now we have revolutionized the total experience for subscribers, beginning this week.

(1) No need to remember your password.

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Here is how it works. As a subscriber you will receive an e‑mail announcement each week. This e‑mail will contain the full Table of Contents of that issue. Each individual article in the Table of Contents will be a link that can be opened by clicking on the name of the article with a mouse, or tapping on it on a touch-screen or cell phone.

These links will take the subscriber to a responsive (i.e., able to adjust to any size device) HTML edition of the new EIR magazine. To repeat: Just click on an article inside the e‑mail and you are taken to the article directly inside your browser. It is beautifully but simply laid out and easily read on any sized device. Very simple and very user-friendly.

This new system also makes it easy to share an article with a friend, representative, or institution.

Of course, you will still be able to receive e‑mailed epub or Kindle editions to take advantage of the features of ebook reading software. And you will still be able to download interactive and printable high-resolution pdf editions.

This change truly allows subscribers to “take the EIR with them” and to access it from anywhere!

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