EIR Daily Alert Service, TUESDAY, JUNE 26, 2018

EDITORIAL

Trump Will Meet Putin Despite the Immigration Furor Meant To Stop Him

June 25 (EIRNS)—It is increasingly likely that President Donald Trump will have the “impossible summit” for the second time in a month, meeting Russian President Putin on July 15 in Vienna. There are already signs of what the potential may be, toward ending many years of war and terrorism in Syria and Afghanistan. Trump’s determination to advance great-power cooperation with Russia, China (despite mistakes and trade tensions), India, Japan continues to advance, and has the support of the American people. “Russiagate” is becoming a curse-word.

There should be no doubt that the current hysteria over immigrants, unleashed by a few liberal officeholders and a lot of national and international media, is a last-ditch attempt to grasp at Trump’s impeachment—perhaps even set him up for physical attempts—before he and leaders like Putin and Xi Jinping completely demolish the British geopolitical “world order.” That world order, of a sole superpower and no limits on regime-change war, is slowly giving way toward peace. With it comes the opportunity for productivity and economic growth to be unleashed around the world, as through China’s Belt and Road of great infrastructure projects—even if the Administration has not shown an understanding of this yet.

London, still the world’s dominant financial center, cannot stand for this. Only two months ago the U.K. was driving for total isolation of Russia with the Skripal poisoning case—which Theresa May’s government would now like forgotten. It was drawing Trump into a British-French missile attack on Syria, pushing hard for permanent U.S. occupation and large military forces in that country. Then there was the City of London financial publication The Economist’s sardonic headline, “Kim Jong Won”: too cute by half, false, and showing too clearly London’s hatred for the historic change being accomplished around the Trump-Kim summit.

That’s why, when the Trump Administration does exactly what the Obama Administration did with illegally immigrating families, the President is called a fascist by the Democratic faction trying to impeach him. In fact, Obama never mentioned the human-trafficking operation bringing Central American children to the U.S. border; President Trump has denounced it, for reaping $500 million/year—probably an extremely conservative estimate—by trafficking in lives.

Leading “impeacher” Rep. Al Green of Texas is going to be put out of office himself by the independent LaRouche candidate, Kesha Rogers, in Houston’s 9th C.D. That is how this phony impeaching campaign has to be dealt with.

But the only fundamental attack on these trafficking operations from economically prostrate countries, is development which provides productive employment and productivity breakthroughs, in the United States and in those countries. China’s Belt and Road Initiative is doing that for China and for many developing countries, including in Latin America. If Trump’s America joins in that great infrastructure initiative, it will also have the basis for settling the trade disputes. The United States must issue national credit for infrastructure building and productivity breakthroughs, in order to do it. And it has to break up the Wall Street banks before they trigger another speculative financial crash instead.

Helga Zepp-LaRouche on June 15 issued a proposal that the major European countries join with China’s Belt and Road development in Africa, instead of tearing the European Union apart over immigration. It points to the basis for action in the United States as well. [http://www.larouchepub.com/other/editorials/2018/4525-hzl-eu_summit_ singapore.html]

But the President has to be defended against the British-led drive to impeach him or stop his great-power cooperation policies. Let there be more “impossible summits.”

THE NEW GLOBAL ECONOMIC ORDER

Trump, Kim Peace Dividend Keeps Expanding

June 25 (EIRNS)—Following on Donald Trump’s cancellation of “provocative” military exercises off the shores of North Korea, the North Korean government of Kim Jong-un has now announced the cancellation of one of its own displays of anti-Americanism, the annual “Victory in the Fatherland Liberation War” celebration, commemorating the victory of the Korean War.

As close to the identity of a North Korean as the Fourth of July is to an American, the Victory celebrations actually fill a full month of nationalistic events, the Korean War having started on June 25, 1950 and ended on July 27, 1953. As described today by Associated Press, “Fist-pumping, flag-waving and slogan-shouting masses of Pyongyang residents normally assemble each year for the rally to kick off a month of anti-U.S., Korean War-focused events designed to strengthen nationalism and unity.” Last year’s opening rally reportedly brought over 100,000 people to Kim Il Sung Square.

Additionally, writes AP, North Korea has “noticeably toned down its anti-Washington rhetoric,” both leading up to and following the June 12 summit, with a “42-minute documentary-style news special” on the event, which began airing immediately following Kim’s return from Singapore. On top of the New Paradigm message, they report, “the program was also quite likely the first time [North Koreans] they had ever seen what Trump looks like.”

Beyond North Korea, UPI today is reporting that Japan “confirmed Friday [June 22] it will cancel future missile evacuation drills involving civilians,” Tokyo’s Chief Cabinet Secretary Yoshihide Suga stating that, with the easing of tensions, the drills are no longer necessary. “The urgent situation of Japan’s guarantee of security has been alleviated by the U.S.-North Korea summit,” Suga said. “We will for the moment hold off on nine kinds of civilian evacuation drills in Tochigi and Kagawa Prefectures.”

Panama President Proud That Our ‘Connectivity’ Coheres with Belt and Road

June 25 (EIRNS)—In a June 6 interview with China Daily, reviewing Panama’s first year of diplomatic relations with China, President Juan Carlos Varela stressed that his nation’s air, maritime, logistics and port connectivity “is compatible with the main goals of the Belt and Road Initiative: the integration of nations.”

That connectivity, he said, can offer China and other nations a point of entry into Latin America. And, “by forming part of the Belt and Road, Panama has been given the opportunity of opening and access to the region’s markets, of adding value to cargo that goes through the country … using our advantageous geographical position, and maximizing the potential of one of the world’s main trade routes, the Panama Canal.”

Asked about the high-speed rail line that China will be building from Panama City north to the Costa Rican border, Varela emphasized that aside from its domestic benefits, the train is a “first step toward the future integration of Central America, as it opens the doors for the continuation of the system outside of Panamanian territory, allowing for complementarity with the economies of neighboring countries and strengthening the region economically.”

At the same time, “it will enhance China’s connectivity with Latin America,” while complementing “Panama’s air, port, logistics and maritime platforms.” Not mentioned is that several of the nations through which a Central American train would travel, still maintain ties with Taiwan. Costa Rica, which has had diplomatic relations with China for ten years, is very interested in the proposed train. On June 21, its Foreign Minister Espy Campbell told Panamanian Foreign Minister Isabel Saint Malo, that her government hopes the train will extend beyond the border, to San José and then to the country’s main port, Puerto Limón, TVN Noticias reported.

China Offers U.S. Great Advantages in Trade Cooperation

June 25 (EIRNS)—A number of analyses of the current U.S.-China trade dispute demonstrate that the real “advantages” China has are not those imagined by the ideologues in Washington who created the dispute, but are rather of the type that could be offered to the United States under better policies.

One such analysis, published on CNBC’s site June 15, is by investment fund CEO Teresa Barger of Cartica Management. Her conclusion is that China’s value-added trade surplus with the United States is not huge. Its most valuable and high-technology exports to the United States have major production components in other Asian countries, Europe, or even in the United States itself. Apple’s iPhone and ZTE are examples. Since the United States has a countervailing services surplus with China of about $110 billion/year, China’s “value-added surplus” is only about $150 billion/year, not $370 billion.

Cartica continues that America lost jobs and intellectual property to China from the 1990s until the 2008 financial crash, but has not been losing either since. So U.S. Trade Representative Robert Lighthizer and Presidential trade advisor Peter Navarro are demanding, in effect, “punitive damages” for prior losses. Trump, on the other hand, may simply have the goal of reducing the nominal trade deficit in goods to $200 billion/year by 2021. The Lighthizer/Navarro punitive strategy could never do that. China’s total exports are $2 trillion/year, and are expanding significantly through the Belt and Road investments; they will develop the markets needed to support “Made in China 2025” even if those do not include the United States.

America, she concludes, is much more likely to succeed by increasing exports to China, but will need to use government direction and stimulus to do it.

Obama’s economic council chief, Berkeley economist Laura D’Andrea Tyson, published an opinion column June 18 for Project Syndicate, stressing the same points, and concluding the United States needs its own industrial subsidy policy, rather than attacking China’s.

In Irish Times June 23, a column by English economist Paul Gillespie also emphasizes the “value-added trade balance”; states the Navarro-Lighthizer line on China is that it can’t innovate, only copy; and shows this false. “The whole point of its development strategy and industrial policy has been to accomplish the transition up the value chain from ‘made’ to ‘designed in China,’ ” Gillespie writes. It “is central to Xi Jinping’s policy platform from now to 2025.” He concludes, “A civilization that first gave humanity paper, printing, the compass and gunpowder is hereby showing it can innovate and imagine a different future. Protective and defensive trade wars will not roll that back.”

Gillespie develops one striking example: “There is now being rolled out, with Xi’s full support, a plan to create a global electricity network eventually connecting 100 countries in all five continents” in the context of the BRI. State Grid Corp., world’s largest electricity company, is being subsidized to do this. China has excess power from dam projects and a top world-class grid. “Added to that is a remarkable piece of innovation: ultra-high voltage cable which can transmit electricity at 10 times existing speeds and volumes and far less loss than previous cables. The technology has been strategically developed and used in China and can now be rolled out worldwide.” (Emphasis added.)

General Electric is already involved in this extraordinary global work. But imagine if the Tennessee Valley Authority were to participate, with its world-beating history in advanced electrification-plus-development—and with U.S. Federal credit to support it in such projects. This is just the use of national credit indicated by the third in Lyndon LaRouche’s Four Laws.

U.S. POLITICAL AND ECONOMIC

Former Homeland Secretary Johnson: Obama ‘Expanded Family Detention’ at Border

June 25 (EIRNS)—Not getting the national attention it should is evidence that the Obama Administration—so revered by those now making the most noise against Trump—faced the same border crisis as Trump, and reacted in a very similar fashion.

Case in point is former Obama Homeland Security Secretary Jeh Johnson, who appeared on Fox News Sunday morning, “freely admitting” to host Chris Wallace that his department both expanded family detention as well as detained some children alone, and said, in language similar to Trump’s, that he believed the decision was necessary at the time. Where was CNN then?

As Wallace showed pictures—but from 2014—he pressed Johnson, “Did you handle it so well?” Johnson stammered, “Without a doubt, the images, and the reality, from 2014, just like 2018, are not pretty. And—so we expanded family detention. We had then 34,000 beds for family detention. Only 95 of 34,000 equipped to deal with families. And so we expanded it. I freely admit it was controversial. We believed it was necessary at the time. I still believe it is necessary to retain a certain capability for families.”

To his credit, Johnson several times during his presentation referred to the larger humanitarian picture: These families are fleeing utter destruction. “We did not want to go so far as to separate families,” Johnson said later, “but unless we deal with the underlying causes that are motivating people in the first place, we are going to continue to bang our heads against the wall on this issue.”

Mattis Heading To China, with North Korea on the Agenda

June 25 (EIRNS)—An unnamed U.S. defense official told media June 24 that the United States will soon present a timeline to North Korea with “specific asks” of Pyongyang after the historic June 12 summit.

The official “spoke to a small group of reporters ahead of a trip to Asia this week by Defense Secretary Jim Mattis,” reported Reuters, described Mattis’ trip as including a three-day visit to China on June 26-28, the first by an American Defense Secretary since 2014.  He will then go to South Korea and ending in Japan on June 29.

The official did not specify details regarding the timeline to North Korea, but suggested it would be rapid enough so that, “We’ll know pretty soon if they’re going to operate in good faith or not. There will be specific asks and there will be a specific timeline where we present the North Koreans with our concept of what implementation of the summit agreement looks like.”

Secretary of State Mike Pompeo told reporters last week that he would be returning to Pyongyang “before too terribly long” to follow up on the June 12 summit between Kim Jong-un and President Trump in Singapore.

COLLAPSING WESTERN FINANCIAL SYSTEM

Australia Glass-Steagall Bank Separation Bill Introduced, LaRouche Allies CEC Credited

June 25 (EIRNS)—A bill to instate Glass-Steagall bank separation was introduced today in Australia’s Parliament, by Bob Katter—the Banking System Reform (Separation of Banks) Bill 2018—off the long-term campaign of the LaRouche co-thinkers the Citizens Electoral Council (CEC). In his reading of the bill, MP Katter credited CEC’s Robert Barwick, and a chart of Australian universal banks’ derivatives exposure, circulated by the CEC, which drew attention to the need for a bill, like FDR’s 1933 Glass-Steagall Act that would separate commercial banks from investment banks, thereby protecting clients’ deposits from speculative exposure toxic paper. The July 2017 proposal for an Australian Glass-Steagall bill is available at CEC’s website.

A June 20 article in the MacroBusiness blog entitled, “Is Australia Sitting on a Ticking Derivatives Nuclear Bomb?” begins “There is a chart doing the rounds courtesy for the CEC (an Australian Political Party, who is advocating the introduction of a Glass-Steagall banking separation bill, and which is likely to tabled late June) which shows that the total value of financial derivatives in Australia is around AUS$37 trillion.” Author Martin North states that “people are asking about this.”

Australia’s GDP is about AUS$1.2 trillion, one-thirtieth of its banks’ derivatives exposure; the banks could very well lose that much, and quickly, in a new financial crash.

After a very long analysis of the situation, with many charts, North concludes: “The bottom line is the AUS$37 trillion is a good representation of the current gross exposures in our banking system, and this dwarfs the banks’ current balance sheets, and the country’s total economy. The risks are literally enormous, and in a system-wide banking crash, when multiple parties are exposed, a bail-out if required would likely have profound economic effects. It might be enough to swamp the entire economy. That’s how big the potential risks are. That’s why Glass-Steagall is worth pursuing.”

Now let it be pursued.

Trump Administration Escalates Sound and Fury on Trade

June 25 (EIRNS)—Stock markets sold off internationally after a Twitter statement by President Donald Trump threatening global “more than reciprocal” tariffs, and a Wall Street Journal story claiming the Trump Administration was escalating attempts to suppress China’s development of high-technology production.

But Treasury Secretary Steve Mnuchin explicitly labelled the Journal story “fake news,” and said new rules Treasury would announce later this week would apply to many countries, not just China. And still later, with markets still falling, Trade Advisor Peter Navarro told media, “There’s no plans to impose investment restrictions on any countries that are interfering in any way with our country. That is not the plan.”

Trump’s Twitter statement read, “The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” With this, which seems to demand complete global free trade while threatening tariffs, the President’s statements on trade have roamed very far from the practice of Alexander Hamilton and the American System of economy, which he embraced during his campaign and at early presidential rallies.

The Wall Street Journal’s lead story, attacked by Mnuchin, said that “people familiar with administration plans” say the Treasury Department will announce rules “at the end of this week” which block Chinese firms (even those 25% Chinese-owned) from buying U.S. companies involved in “industrially significant technology.” It also said the National Security Council was preparing “enhanced export controls” to keep American firms from exporting the products of such technologies to China.

Mnuchin tweeted, “On behalf of @realDonaldTrump, the stories on investment restrictions in Bloomberg & WSJ are false, fake news. The leaker either doesn’t exist or know the subject very well. Statement will be out not specific to China, but to all countries that are trying to steal our technology.”

SCIENCE AND INFRASTRUCTURE

China Is Creating a Nuclear University

June 24 (EIRNS)—Ground will likely be broken this year for China’s first nuclear industry university—very possibly the first in the world—which will be in Tianjin, reported China Daily on June 22. The city government signed a strategic cooperation agreement last week with China National Nuclear Corp.

It will be called China Nuclear Industry University, and will offer occupational training, master’s and doctoral degrees, international exchanges, and research.

Wan Gang, president of the China Institute of Atomic Energy, said that in 2016 CNNC recruited 2,300 graduates, but only 20% of them majored in nuclear fields. The universities can only provide half of the new graduates needed, he said.

China currently has 39 nuclear plants in operation, and about 20 large plants under construction. By 2020, the plan is to have 58 GW of nuclear capacity, with 30 more plants under construction. In the past, it was expected that China would not surpass the U.S. in nuclear energy capacity until at least 2030. But under the current accelerated plan, China could match or exceed the 100 GW in the U.S. earlier, considering the fact that the U.S. is shutting down plants and only building two new ones.

Tariffs on Imports from China Could Hurt U.S. Science

June 24 (EIRNS)—“U.S.-China Trade War Puts Scientists in the Cross Hairs,” Nature headlines an article on June 22. Under the category of “collateral damage,” or “unintended consequences,” the article gives examples in which trade tariffs levied against Chinese exports could have an impact on scientific research in the U.S. These include the import from China of chemicals, medical devices, tools for power generation and distribution, machinery, and equipment, such as DNA sequencers and microscopes.

“I am opposed to these seemingly ad hoc tariffs because it will further stretch the already anemic scientific research budgets in this country,” said Thomas Lapen, a geochemist at the University of Houston. The 25% tariff list includes geological-survey devices. Equipment used in research is the second-largest expense for scientists, after paying wages.

OTHER

EU ‘Migration Mini-Summit’ Shows No Mercy for Refugees

June 25 (EIRNS)—With substantial strong-arming applied by German Chancellor Angela Merkel, French President Emmanuel Macron, and EU Commission President Jean-Claude Juncker, 16 governments were pulled into the Sunday “mini-summit on migration” in Brussels—but of the 28 EU members, 12 governments stayed away. As for Merkel’s position, the fact alone that Luxembourg Prime Minister Xavier Bettel tried to joke with the media that the meeting was “not about whether Ms. Merkel stays Chancellor next week or not,” already says a lot. And the mini-summit yielded no concrete result, but only some vague ideas about setting up “disembarkation centers” on European soil now, and later on in Africa itself, to register incoming refugees from Africa and other regions in order to manage the forced repatriation of all those whom Europe does not want.

The UN’s International Organization for Migration (IOM) already criticized the idea of “disembarkation centers” in Africa, and said it would only cooperate with the commission on setting up migrant camps on EU soil. “You have an obligation not to send people back until they land somewhere,” said Eugenio Ambrosi, director of the IOM’s regional EU office. The lack of clarification where these centers would be inside Europe, also adds to new frictions inside the EU: Italian Interior Minister Matteo Salvini warned French President Macron, a leading proponent of the center concept, “If French arrogance thinks it can transform Italy into Europe’s refugee camp, maybe handing out a few euros as a tip, then they’ve got it totally wrong.”

The worst side of the EU’s anti-refugee geopolitics, however, is the militarization of the issue: In the context of the intensifying discussion about a “robust mandate” for the planned European border protection force Frontex, former German NATO Gen. Egon Ramms said, “If there is a mandate by the Bundestag, one could think about the Bundeswehr taking over outside security service for such Frontex missions as well as for refugee camps in North Africa.” German Member of the European Parliament Elmar Brok (CDU, Merkel’s party) proposed a joint mission of Frontex and UN blue helmets in North Africa, and CDU Bundestag member Armin Schuster called for an armed intervention of Frontex in North Africa against human traffickers.

 

 

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