FRIDAY, AUGUST 23, 2019

Volume 6, Number 167

EIR Daily Alert Service

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

• The Alternative to a Catastrophic Crash
• LaRouchePAC Statement: Pro-Nuclear CO2 Reduction Is Still Genocide
• ‘When We Were Apollo’ Movie Conveys Idea of Mission and a Culture of Creativity
• U.S. and Venezuelan Presidents Confirm High-Level Contacts Between Their Governments
• Now Is the Time for a New Bretton Woods, not More Purely Monetary Manipulation
• Lega Deputy Claudio Borghi Insists, Exit from Euro Would Be Good for Italy
• Putin Remarks, U.S. Tested Ground-Launched Cruise Missile Too Soon After End of INF Treaty
• Excellent Exposure of U.S. and British Subversion of Hong Kong
• Syrian Army Captures Khan Sheikhoun

EDITORIAL

The Alternative to a Catastrophic Crash

Aug. 22 (EIRNS)—If a new financial crash, worse than 2008, strikes, say, this fall or during 2020, the President will have to rely on an energetic mobilization of the U.S. citizenry, to stampede the Congress into immediate passage of emergency recovery legislation rather than bank bailouts. Congressmen will have to taste the fear of God, to the point that they will just forget about their Wall Street campaign contributions and special interests.  Our Congressmen must be forced to vote up the use of federal credit for loans directed exclusively into the real, physical economy, to crank up productive jobs in infrastructure and industry. No more bailouts for speculators’ losses like the $23 trillion that was dumped down that sinkhole in 2008, with the results that we see today.

How will we will deal with the problem of contagion: the danger that speculators’ losses will shut down the commercial banking system on which our economy depends?  Not by bank bailouts, but by hiving off the dens of the Wall Street gamblers’ speculation from the commercial banking system, through a revival of Franklin Roosevelt’s Glass-Steagall law. (A law which President Donald Trump campaigned to revive.) Then their dubious gambling assets will not be eligible for federal taxpayer support, and can be written down or written off over time, as they are sorted out.  Only legitimate commercial banking functions will be protected, not speculation.

The issuance of low-interest federal credit exclusively for productive employment of unemployed or unproductive labor and capital, is not inflationary.  If it is vectored towards science-driver programs like the Trump Administration’s international Moon-Mars program, or the international effort to harness controlled fusion energy, it will be counter-inflationary, increasing the productivity of all labor, as scientific and technological breakthroughs filter through the economy.  In the United States, this policy is as old as the George Washington Administration, and lay behind the economic success of the Abraham Lincoln and Franklin Roosevelt Administrations.

The late economist Lyndon LaRouche (1922-2019) developed and fought for these policies for decades and summed them up in his “Four New Laws” of June 8, 2014 (“The Four New Laws To Save the U.S.A. Now! Not an Option: An Immediate Necessity,” EIR, June 13, 2014).

Internationally, at the first sign of a new crash or earlier, President Trump should invite the leaders of Russia, India, and China together for what will amount to a wartime alliance with him against a common enemy—namely a devastating world depression. Together, these four great nations have the power to supplant the current London-Wall Street speculative monetary system, which is collapsing, with a new world credit system based on the lessons of Franklin Roosevelt’s design for the postwar Bretton Woods system. (Despite its post-Roosevelt problems, the longest period of world economic growth occurred under Bretton Woods, especially in Western Europe and the U.S.)

The new system will facilitate massive, long-term, low-interest development credits to developing nations of Africa, Asia, Central and South America, and Eastern Europe.  With the help of the space program and a cultural renaissance, the United States will have to cast off the rot of the past decades and surpass Japan and Germany as a great exporter of high-technology capital goods into such areas as China’s “Belt and Road.” As in Roosevelt’s conception, this New Bretton Woods system will be a dollar-based gold-reserve system of relatively fixed exchange rates—without which such long-term, low-interest loans are impossible.

Lyndon LaRouche designed this system and fought for it for decades.

This can be done.  Americans must join with their Presidency to make it happen.

U.S. POLITICAL & ECONOMIC

LaRouchePAC Statement: Pro-Nuclear CO2 Reduction Is Still Genocide

Aug. 22 (EIRNS)—The following statement was issued by the LaRouche Political Action Committee on Aug. 22:

With the recent escalation of the man-made climate change catastrophe propaganda campaign, there is a growing emphasis on nuclear fission—and even fusion—as the basis of a CO2 reduction policy.

Although LaRouchePAC has vehemently supported the development and mass implementation of advanced nuclear fission and fusion power, any attempt to pair nuclear expansion with a CO2 reduction policy would condemn hundreds of millions of people to unnecessary suffering and premature death.

Present global nuclear fission production capacity is woefully inadequate, and mass production of fusion power will take significant time to develop (even under a crash program). CO2 emitting coal and natural gas consumption will need to be increased to support a more rapid gear-up of the needed manufacturing capacity for fission and fusion mass production.

Any CO2 reduction program—even one that supports nuclear—would be devastating to the growth requirements of the planet.

The Present Global Picture

In 2012 the global electricity consumption rate was 2,500 gigawatts (GW).

Coal and natural gas provided the majority, roughly 60% of global power (1,500 GW).  Hydro provided 15% (375 GW), nuclear fission provided 10% (250 GW), and “non-hydro renewables” provided 8% (200 GW).

According to a 2018 assessment published in EIR (“Mass Production of Modular Nuclear Reactors To Industrialize Developing Countries Until Fusion Power Comes Online,” by Ramtanu Maitra, Nov. 16, 2018), the total global manufacturing capacity for producing nuclear power plants can only add 30 GW of nuclear power per year.  Meaning, with present capacity, it would take 50 years to replace all existing coal and natural gas with nuclear.

A massive ramping up of nuclear power production capacity is clearly needed, however, it would be devastating to dedicate that expanded nuclear production capacity to an accelerated replacement of CO2-emitting power sources (coal and natural gas), rather than keeping existing coal and natural gas policies (including expansion) and adding new nuclear power on top of CO2-emitting power sources.

The Realities of Energy Poverty

According to the International Energy Agency, one-seventh of the world population—1.1 billion people—don’t have access to electricity.

If we examine this by nation, there are currently 3 billion people in 34 nations with catastrophically low levels of electricity consumption—averaging less than 100 watts per capita.  By 2045 those 34 nations will have 4.5 billion people.

What will be required to lift these nations out of energy poverty?

In 1990 China’s energy flux-density was 60 watts per capita. By 2015 (25 years later) China increased its energy flux-density nearly eightfold, to 450 watts per capita (while its population also grew 20%). Presently 65% of China’s electricity comes from coal and 20% from hydro (with 5% from wind and 4% from nuclear).

For these 34 energy-starved nations to go through the same rate of growth in electricity consumption per capita (energy flux-density) that China went through from 1990 to 2015, it would require an additional 2,000 GW of electricity production by 2045.

What’s more important over the next 25 years? Using nuclear to replace 1,500 GW of existing coal and natural gas plants, or using nuclear to provide 2,000 GW of new, additional power generation for the poorest countries on the planet?  We presently don’t have the production capacity to do either, let alone both.

Further, the 2,000 GW of power required for these 34 energy-starved nations to go through a China-comparable 25-year growth in energy flux-density, is far from what’s needed globally.

A Planetary Perspective

A minimum goal for global electricity consumption by 2045 is 10,000 GW, four times 2012 levels (2,500 GW)—although that’s probably far below what Lyndon LaRouche would be calling for under a Moon-Mars program. For comparison, the World Energy Council projects global electricity consumption to be 6,000 GW by 2050 (rather than 10,000 GW). That gap of 4,000 GW would ensure premature death and unnecessary suffering for hundreds of millions (if not billions) of people.

For example, since infant mortality rates correlate with a nation’s energy flux-density (power per capita), we can estimate that 90 million infants will die unnecessarily by 2045 if these 34 energy-starved nations aren’t able to go through a China-comparable 25-year growth in energy flux-density.

This is a clear example of the cost of CO2 reduction, 90 million human lives ended, before these people even have a chance to speak.

The reality is coal and natural gas consumption will need to increase to support a more rapid gear-up of the needed manufacturing capacity for fission and fusion mass production. In a few generations coal and natural gas use will naturally decline in the context of a fission- and fusion-driven global energy program, however, any policy mandate to unnaturally accelerate CO2 reduction (even if it’s premised on expanded nuclear power) is tantamount to genocide.

‘When We Were Apollo’ Movie Conveys Idea of Mission and a Culture of Creativity

Aug. 22 (EIRNS)—A movie, “When We Were Apollo,” manages to capture, almost physically, the change in human personality induced by a mission orientation to conquer the unknown and unexplored, shared entirely by 450,000 people, as the result of a challenge by the President of the United States, and a crash scientific effort with management techniques innovated as the project moved along.

Unlike other productions, this one does not focus on the story as told by astronauts or by the chief scientists, but rather by Apollo’s engineers, technicians, builders, and contractors describing their roles in the project and that of others at key stages, against the backdrop of the social turmoil which engulfed the United States as Apollo proceeded.

One very poignant note introduced in the film, states, simply, “Thank you Apollo, for saving 1968.” Another particularly telling moment is the description by those interviewed of the end of the Apollo program, a limitation caused by the program being a race with the Russians to get to the Moon, and the failure of vision and will to continue to inhabit the Moon and move on to Mars.

What is remarkable about the film, at least to this writer, is the artistry of these young filmmakers in capturing a different generation, and conveying the depth of what it was like to be fully engaged in a highly productive and completely intellectually challenging enterprise. The workers they interview are white and black. Many trained for the mission in place, as the result of the various educational and skills efforts attached to the Apollo program. The film features Wernher von Braun reading NASA’s order against any form of racial discrimination to his team of scientists and engineers.

The film was released during the recent Apollo 11 celebrations and was shown on PBS in July.

Here is how the film’s creators describe its mission: “Half a century later, the Apollo Space Program remains the single greatest initiative in peacetime the world has ever known. Its storyspeaks to the most beautiful characteristics of our humanity: A metaphor for our ability to rise to challenges once thought insurmountable and push past them with even bigger and bolder solutions. Behind every astronaut who set foot on the Moon and every figurehead who inspired us to get there was Apollo’s massive workforce: A team of men and women over 400,000 strong—spanning race, socio-economics, culture, company and country—who came to understand that the overall Program was only as good as the effort they put into it.”

The movie, produced by Contact Light Films, is available on Amazon.

U.S. and Venezuelan Presidents Confirm High-Level Contacts between Their Governments

Aug. 22 (EIRNS)—In the past two days, both Donald Trump and Venezuelan President Nicolas Maduro have confirmed that contact between a U.S. intermediary and high-level officials of Maduro’s government have taken place. Sputnik on Aug. 21 reported that Maduro told it that this has been going on “for months,” and that such contact would continue.

In Aug. 20 remarks to White House media, President Trump confirmed that “we’ve been talking to various representatives of Venezuela. We’re helping Venezuela as much as we can. We’re staying out of it, but we are helping it, and it needs a lot of help.” He did not say whether there had been contact with National Constituent Assembly head Diosdado Cabello. “I don’t want to say who, but we are talking at a very high level.”

On day earlier, Associated Press and Axios news services reported that an unnamed intermediary for the U.S. President had been in contact with members of Maduro’s inner circle, including the powerful Cabello, whom the U.S. has sanctioned for his ties to the FARC drug cartel, among other unsavory connections.

The Wall Street Journal on Aug. 21 cited sources in Washington and Caracas, who said the talks are seeking a negotiated solution to the crisis, involving new elections, and assuring Maduro’s closest collaborators they will not face prosecution or sanctions and can remain in politics—including future elections—once Maduro is out of office. Washington think tank analysts point out that talks are also aimed at sowing discord within Maduro’s inner circle.

Whether these produce any results remains to be seen. There are clearly many elements of a possible agreement under discussion in more than one venue. Norway’s Foreign Ministry is still involved in brokering an agreement between Maduro and the opposition in Barbados. Those talks were temporarily suspended two weeks ago, but are scheduled to resume next month. According to the Journal, in Barbados, Venezuela’s Communications Minister Jorge Rodriguez and his sister Vice President Delcy Rodriguez offered the opposition the possibility of presidential elections in the coming months.

The bottom line is that the situation urgently requires a workable, humane solution free of British geopolitics. The neocon regime change plan has failed; U.S. sanctions have dramatically worsened the country’s humanitarian crisis, and neighboring governments are struggling with the burden of caring for the large numbers of Venezuelan refugees who have flooded their countries.

COLLAPSING WESTERN FINANCIAL SYSTEM

Now Is the Time for a New Bretton Woods, not More Purely Monetary Manipulation

Aug. 22 (EIRNS)—The Jackson Hole proceedings involving central bankers and investors sponsored by the Kansas City Federal Reserve District begin Aug. 22 and will run through Aug. 24, with Fed Chairman Jerome Powell scheduled to speak tomorrow. The race is on between purely monetarist solutions to the oncoming financial crisis, and the late Lyndon LaRouche’s proposal for a New Bretton Woods monetary regime, channeling credit to infrastructure and other capital-intensive projects with collaborative investments on the frontiers of science and technological transformation embodied in fusion energy and the exploration of space.

The monetarist solution under conditions of collapse can only end in austere command economies, functioning pursuant to ideological myths, such as those of Hitler and Mussolini and the Green regimes presently being proposed worldwide, a fact admitted by the king of modern monetarist theory, Abba Lerner, in his debate with Lyndon LaRouche in December 1971. LaRouche alone predicted the collapse of the Bretton Woods system in August 1971 and a collapse into fascist systems if monetarist solutions were allowed to prevail.

The negative interest rates imposed in the wake of the 2008 collapse by Sweden, the ECB, Switzerland, and Japan were aimed, it is claimed, at heading off deflationary collapse while stimulating inflation. The stimulus regime ostensibly would force lending by banks and encourage citizens to spend money rather than hoard it. Additionally, it would alleviate speculative pressures on national currencies.

Lawfully, these policies have only resulted in recreating the gigantic bubble which collapsed in 2008, as banks, hedge funds, and speculators used the easy money regime for stock buybacks, corporate debt, and interest rate speculation in derivatives. They are creating a new housing bubble. Most of these geniuses do not know how a productive economy works; others have consciously worked to create precisely the mess we now face. Germany’s offer of a 30-year bond with a below-zero coupon spectacularly flopped at auction Aug. 21. The reason why these schemes end in disaster is because they are based, ultimately, on the idea that humans are beasts and, accordingly, behave in terms of fixed patterns of behavior, which can be manipulated based on a calculus of pain and pleasure. The sociology of money behaviors is the most studied of all.

The countries which implemented easy money policies are now said to be hooked on them, as speculation drains all economic activity away from production. A rise in interest rates would, potentially, provoke a crash under these conditions. This is the context for the Standing Emergency Fiscal Facility (SEFF) proposed by BlackRock’s Philipp Hildebrand, the former Swiss National Bank president and current BlackRock vice-chair heading the BlackRock Investment Institute; Stanley Fischer, former Federal Reserve vice chairman and former Bank of Israel governor; and Jean Boivin, former Bank of Canada deputy governor, and aimed as an emergency measure for discussion at Jackson Hole. SEFF is a scheme for central banks to print large issues of money and directly hand them to government treasuries for use in “creating inflation.”

Lega Deputy Claudio Borghi Insists, Exit from Euro Would Be Good for Italy

Aug. 22 (EIRNS)—In an interview published in the latest issue of the German monthly Capital, Lega Party Deputy Claudio Borghi, chairman of the Chamber of Deputies Budget Committee, said, “I am convinced that an exit from the euro would be good for our country.” The euro takes away from Italy “the freedom to decide on our own financial policy,” he stated. Capital hints that, being the economic adviser to Lega Chairman Matteo Salvini, Borghi might play a role in a revival of the euro exit debate, now that Italy is facing early elections.

Borghi told Capital that he would “go for the exit only if I had democratic legitimacy for it, for instance with an election victory above 50% of the votes, or if I were forced to do it for reasons of national security.”

Asked about the charges made by pro-euro circles that Borghi’s idea of mini-bots (short-term debt paper issued by the state to pay bills and tax cuts) would undermine the euro, Borghi told Capital that “after the euro crisis, governments and central bankers were not tired of claiming that the ‘euro is forever, the euro is stable, the euro is irreversible.’ I ask myself then: is the euro undestroyable or not?” The minibots are meant to stimulate the Italian economy, Borghi explains, because “ever since our country has had the euro, this so-called wonder piece, we have had a growth problem.”

Concerning the EU principle of balanced austerity budgets, Borghi says: “Even in Germany, more and more people realize that the ‘black zero’ [balanced budget] is not good in the long term: not even for the German economy…. We don’t have the intention to create a mega deficit. But if there were an attempt to decree (a deficit of) 1.5% maximally, our answer would be: no.”

Will Italy stay in the Eurozone? Borghi says: “That depends on the will of the EU and its member states to take right and intelligent decisions. We do not want conflict with Brussels. But we will not accept anything that goes against the interests of our citizens.”

STRATEGIC WAR DANGER

Putin Remarks, U.S. Tested Ground-Launched Cruise Missile Too Soon after End of INF Treaty

Aug. 22 (EIRNS)—Russian President Vladimir Putin, in Helsinki where he met with Finnish President Sauli Niinistö yesterday, addressed the U.S. cruise missile test for the second of three days. “First of all, the Americans tested this missile too fast, too soon after they announced their withdrawal from the [Intermediate-Range Nuclear Forces] treaty. In this sense, we have grounds to believe that the work on this missile (on the ‘landing,’ as this is a sea missile) had begun long before they started searching for a pretext to withdraw from the treaty,” he said, according to the Kremlin transcript. He reiterated that Russia will not deploy counterpart missiles “unless corresponding missile systems produced in the U.S. are deployed in a given region. We have not received any response from our American or European partners so far.” He stated that the test showed that “These missiles can be launched from existing launchers in Romania or ones that will soon be located in Poland.”

Putin also said that he agreed with Niinistö that there should be a dialogue on these issues. “We have no such dialogue so far,” he said. “We will take reciprocal steps regarding these actions. We made proposals on such a dialogue some time ago, but we will stick to our point of view: We are ready to discuss this with the Europeans and the Americans, but we will provide for Russia’s security.”

The implication of the U.S. cruise missile test was taken up at a session of the UN Security Council, this afternoon, but it was mainly characterized by the U.S. and Russian representatives trading accusations over who was responsible for the demise of the INF Treaty.

Excellent Exposure of U.S. and British Subversion of Hong Kong

Aug. 22 (EIRNS)—Dan Cohen, a journalist who produced the documentary “Killing Gaza,” has turned his focus to the U.S. and British subversion of Hong Kong. Much of the material in his extensive report, published in Grayzone (and republished as “U.S. Backs Xenophobia and Mob Violence in Hong Kong,” in Consortium News on Aug. 19), has been covered in EIR, but Cohen provides great detail and insights.

Cohen reports on the (public) financial support and training provided to multiple actors in the Hong Kong “democracy movement” by the National Endowment for Democracy, and makes clear that the “peaceful demonstrations” reported on around the world have been anything but—firebombs, breaking into political buildings and trashing them, occupation of the airport and brutal beating of several reporters and others, physical attacks on police and police stations, and so on.

He targets Jimmy Lai, the Hong Kong garment and anti-China media tycoon who helped fund the “Occupy Central” chaos in 2014 and continues doing so in the current rioting. Lai works with a close associate Mark Simon, who was in U.S. Naval Intelligence with CIA connections. Lai has maintained close contact with the likes of Paul Wolfowitz (in 2014), while this year he travelled to Washington for meetings with China-phobes John Bolton, Mike Pence, Mike Pompeo, and Sens. Ted Cruz, Rick Scott and Cory Gardner, speaking at the right-wing Washington think tanks. Lai describes himself as a follower of free trade economists Friedrich von Hayek and Milton Friedman, whom, Cohen reports, Lai claims as a personal friend. Lai told Fox News that the people of Hong Kong “are very different from the rest of Chinese in China, because we grew up in the Western values, which was the legacy of the British colonial past” (British colonialism is “Western values”!).

Cohen also illuminates two small organizations that have been highly visible in the riots for their waving of American flags and the Union Jack. One, the Hong Kong National Party, which promotes Hong Kong independence from China, is shown in a video with American flags, singing the U.S. National Anthem in the streets during the riots, gaining wide coverage in the Western press. The other is the Hong Kong Indigenous Party, also promoting Hong Kong independence while waving the British colonial flag, coining the phrase now chanted by the protesters, “Retake Hong Kong.”

One aspect of the Hong Kong National Party which Cohen leaves out of his account is even more revealing. Its founder Andy Chan attempted to run for the legislature in 2016, but his party was banned for its public breach of the Basic Law, which asserts that Hong Kong is part of China. The Asia editor of the Financial Times, Victor Mallet, who was co-chair of the Foreign Correspondents Club (FCC) in Hong Kong, hosted Chan to address the FCC in August 2018. The Hong Kong government told the FCC that this crossed the “red line” on One China and the Basic Law, but the FCC went ahead anyway. Mallet was then denied renewal of his visa. Rather than sparking an international outcry against the FT for openly sponsoring subversion, Mallet became an international hero of “free speech,” standing up to supposed Chinese subversion of Hong Kong’s partial autonomy under the Basic Law.

Syrian Army Captures Khan Sheikhoun

Aug. 22 (EIRNS)—Yesterday, elements of the Syrian Arab Army completed the liberation of Khan Sheikhoun and closed the pocket that the SAA had created in its assault on the city from both the east and the west. An unknown number of jihadis are now encircled in several villages that straddle the Idlib-Hama border, as is the Turkish observation post in Morek, about 12 km to the southeast of Khan Sheikhoun.

The Turkish military will have to coordinate with the Russian military, because they are allowed access to the Hama-Idlib Highway, per the Sept. 17, 2018 Sochi Agreement, Al Masdar reported. As of last night, according to the Al Masdar report, Syrian troops were still engaged in clearing Khan Sheikhoun of both any remaining jihadis and of any booby traps they may have left behind. The official Syrian Arab News Agency (SANA) reported this morning that Syrian troops are conducting further operations against jihadis in the villages in the pocket.

SANA also reported that the SAA has opened a humanitarian corridor to secure departure of citizens exiting terror-controlled areas in Hama and Idlib provinces. SANA also stated that shelter, food and medical care will be provided to those leaving the jihadi-controlled area.

Reach us at eirdailyalert@larouchepub.com or call 1-571-293-0935