EIR Daily Alert Service, TUESDAY, March 17, 2020

TUESDAY, MARCH 17, 2020

Volume 7, Number 54

EIR Daily Alert Service

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

  • ‘World Healthcare Mobilization’ Can Be Based on FDR, and LaRouche’s New Bretton Woods
  • White House Working With Governors in Growing National Unity, to Fight Pandemic
  • Pentagon Considers Civilian Use of Military Hospitals and Other Aid During COVID-19 Crisis
  • Trump May Pardon General Flynn Before Sentencing
  • Novel QE Virus Strikes Fed Governors, Threatens Hundreds of Millions
  • Defender-Europe Exercise Effectively Cancelled
  • Jihadis Refuse to Leave Syria’s Southern Idlib per Russia-Turkey Deal
  • Argentina Seeks To Sell Nuclear Small Modular Reactor to Indonesia
  • Ethiopia Using Chinese Model for Value-Added Exports

EDITORIAL

‘World Healthcare Mobilization’ Can Be Based on FDR, and LaRouche’s New Bretton Woods

March 16 (EIRNS)—Parts of the U.S. economy are shutting down into a severe recession; the same is true in Europe and other industrial countries, as in China before. And everywhere there are healthcare facilities of all kinds lacking to meet the great challenge of the novel coronavirus epidemic. In some industrialized countries this lack is only potential, coming at us soon. In many developing countries that lack is nearly total when put against a very communicable and unusually lethal respiratory disease, one which is going to persist among humanity in serious epidemics for some time.

Let us reverse that—all of it. Let us begin a mobilization for world healthcare, including building 2 million or more new hospital beds, fully equipped, all over the world, including 300-400,000 new beds in the United States. New diagnostic and testing equipment and materials, respirators, protective suits and masks, all possible antiviral medications; laboratories for analysis are needed in many countries; tent hospitals and “pop-up” hospitals for COVID-19 patients only, like those built in China in a couple of weeks, are needed everywhere.

In the mobilization led by President Franklin D. Roosevelt before and during World War II, scientists constantly developed new technologies; every sort of company produced new products they had never made before. We hear that all the airlines and aircraft makers are parking thousands of planes, going bankrupt and will soon have to be bailed out. No—let them fly high-value scientific instruments, testing equipment, medical devices to the newly-built hospitals all over the world.

Small electric power plants will be needed all over the world for these hospitals, along with water purification facilities.

Heads of state of leading nations must cooperate to do this. The Group of Seven nations’ leaders, who had a teleconference today, perhaps have passed the baton to the G20, which includes China, Russia, and India. The biggest job—creating the credit to do all this—starts with the leaders of the United States, China, Russia, and India agreeing on a new international system of credit and currencies. Lyndon LaRouche proposed this “New Bretton Woods” and spelled it out many times during the last 25 years of his life.

Wall Street and the City of London banking center should shut down. The Wall Street markets would be released from their misery by shutting them. Quarantine “the Street” and “The City” in London. It is the Street and The City which have weakened and deindustrialized our economies for 50 years by deregulations which, in every way, prioritized financial speculation over productive investment. They have produced speculative bubbles which crashed over and over since the 1980s, dragging down economies each time. Eventually, LaRouche warned 50 years ago when Roosevelt’s Bretton Woods was destroyed, new diseases would find the human race without defenses to fight them.

So the big banks need to be broken up while markets are shut, using the Glass-Steagall Act which Congress must restore fast for the purpose. And a world health mobilization can be launched against this coronavirus and other new and returned diseases, with “No triage” its model.

U.S. POLITICAL AND ECONOMIC

White House Working with Governors in Growing National Unity, To Fight Pandemic

March 16 (EIRNS)—There is increasing tendency to national unity in facing the coronavirus pandemic. It is manifest in rising cooperation between the Trump White House, and its task force, and governors of many states from both parties; and in legislative negotiation and cooperation between the White House and both parties in Congress. The President, at today’s Task Force press conference this afternoon, said “If everyone makes this change or these critical changes and sacrifices now, we will rally together as one nation and we will defeat the virus.  And we’re going to have a big celebration all together.”  New York’s Gov. Andrew Cuomo described his suggestions to the White House at his press conference today, and declared: “I often tell you when I am unhappy with the federal response to this state. The fairness dictates that kudos where kudos are due, and here the Vice President and the President responded very quickly, so I want to thank them for that.”

But a critical physical-economic issue has yet to be addressed in purposeful terms. That is: building the additional hospital and public health capacity we must have to handle “the worst,” which Dr. Anthony Fauci says is coming; or falling into triage of which patients to treat and not others—which must not occur.

Every expert and leader, from Cuomo to HHS Secretary Alex Azar to NIH National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci, says the same thing: “Flatten the curve” of the epidemic or it will overwhelm the hospital system. This means “Slow the spread of the virus to a rate that the healthcare system can manage,” as Cuomo put it March 15. But as he acknowledged, that may not happen: “We have never fought a virus like this with this potential consequence.” Governor Cuomo pointed out, “The overwhelming crush is going to be on the ICU beds….” At his March 16 press conference Cuomo was more explicit: In New York, “We don’t have the billions of dollars that you would need to implement an immediate emergency hospital construction program. This state can’t do it. No state can do it.”

In his open letter to President Trump, Cuomo called for the Army Corps of Engineers “to leverage its expertise, equipment and people power to retrofit and equip existing facilities—like military bases or college dormitories—to serve as temporary medical centers.”

Pentagon Considers Civilian Use of Military Hospitals and Other Aid during COVID-19 Crisis

March 16 (EIRNS)—At today’s Pentagon briefing on COVID-19 preparedness, given by Joint Staff Surgeon, Joint Chiefs of Staff, Brig. Gen. Paul Friedrichs (USAF) and Pentagon spokesman Jonathan Hoffman, they were asked about the military providing hospital beds for civilian use in the emergency. The briefers’ reply: We will do our part in the “all of government” response. They said that the Department of Health and Human Services is the lead agency in charge of activating requests to the Defense Department, and “we can offer what we can do.”

Friedrichs said that, so far, “We have not seen huge demand signals” requesting assistance, but the military is willing. He said that portable tent packages can be moved quickly by plane. Other, larger materials are slower to move. Hoffman said, the Defense Department has ready “the numbers of tent and field hospitals” it can offer. But, “We don’t have an estimate on pouring foundations or concrete”—that is, on actually building hospitals.

The role of military hospital ships was discussed, with reference to how the USS Comfort has been used in the Caribbean in recent months to help after the hurricane disasters.

“We’ve done it before,” the briefer said, clarifying that there are special categories of medical use, such as emergency room and trauma care. But, shipside conditions in which patients are four-deep on litters, are not appropriate for all varieties of care. Further, “Hospital ships are relevant along the coasts.” It won’t help “in St. Louis.” An additional point is that the ships are run by a complement by merchant mariners. They do not have the 1,200 or so medical professionals needed to staff them. These have to be mustered. The military typically partners with a civilian agency to provide the medical staff for specific deployments.

Otherwise, the military may provide help in other ways, there is authorization under “Title 32” of relevant law. The National Guard is doing this now, under “Title 10.” They typically might provide law enforcement, cleaning, transportation, or other support functions, “a lot of things.” March 16, some 1,000 National Guards were deployed in Maryland; such deployments are happening in many states now.

Trump May Pardon General Flynn before Sentencing

March 16 (EIRNS)—President Donald Trump is considering a preemptive pardon—that is, before sentencing—for Lt. Gen. Michael Flynn (ret.), the President’s first National Security Adviser, reported ABC News yesterday.

President Trump mooted a pardon for Flynn on March 15, tweeting, “So now it is reported that, after destroying his life & the life of his wonderful family (and many others also), the FBI, working in conjunction with the Justice Department, has ‘lost’ the records of General Michael Flynn. How convenient. I am strongly considering a Full Pardon!”

When General Flynn was interviewed by the FBI at the White House on Jan. 24, 2017, on his second day as National Security Adviser, FBI agents asked if they could come to his office to ask a few questions, and Deputy Director Andrew McCabe actively dissuaded Flynn from having an attorney present at the interview. Flynn, not suspecting any set-up, agreed and talked to them without a lawyer. In the aftermath, his expensive lawyers got nowhere before D.C. Circuit Court Judge Emmet Sullivan, and Flynn was nearly forced to file for bankruptcy.

When Flynn’s new attorney, Sidney Powell, began demanding documents, the prosecution refused to turn over “302” forms of Flynn’s questioning which were exculpatory, and which exposed FBI bias, claiming they were “lost.” A remedy may be at hand.

COLLAPSING WESTERN FINANCIAL SYSTEM

Novel QE Virus Strikes Fed Governors, Threatens Hundreds of Millions

March 16 (EIRNS)—The Federal Reserve’s announcement of its new $700 billion “quantitative easing” (QE) bank bailout included the claim: “We are prepared to use our full range of tools to support the flow of credit to households and businesses.” That is exactly what the zero-rate, zero-bank-reserves, $40 billion-a-day QE will not do. As with what the Bush Administration wanted to do after the British pulled the plug on Lehman Brothers, the combined central banks’ wild dollar-printing will go exclusively to support collapsing financial speculation of all kinds in the American and European financial systems. The financial system is being pushed toward a hyperinflationary explosion.

A serious deflationary shock has hit speculative financial assets throughout the trans-Atlantic and Japan, and many other locations, resulting in losses which are cascading because of reverse leverage, and a global dollar margin-call of immense size. The Fed’s response? Its Board of Governors evidently thinks it will stop this by buying every financial asset in the world. Beyond its novel QE and pouring hundreds of billions into the interbank lending market every day, it set up an agreement on large dollar swap-lines with other central banks, as in October 2008, because these collapsing assets require settling in dollars. These newly printed dollars are intended for banks and nonbanks all over Europe as well. As with a hundred such programs by central banks since 2008, the banks will still say there is a lack of demand for commercial loans. Businesses which do come in for loan largesse will either a) use it exclusively to pay off toxic debt or b) not have any use for it because of lack of demand for their production.

As of Monday, the manufacturing index of the New York Federal Reserve Banks’ General Business Conditions Survey for its district was typical. This “Empire manufacturing survey” fell from 12.9 positive in mid-February to −21.1 negative in mid-March, its lowest level since the start of 2009 after the 2008 global financial crash. The oil price has fallen by $3, or 10%, since the Fed’s latest eruption, more than undoing the effect of President Trump’s attempt to provide oil demand. Among the big airlines, Alitalia, which is bankrupt, was nationalized by Italy today, and will cost the government $600 million. Delta and Lufthansa Airlines have both asked for government aid. A general bailout of U.S. airlines appears to be on the agenda of Trump and Treasury Secretary Steven Mnuchin.

Former FDIC head Sheila Bair said, in a MarketWatch interview yesterday, “They are throwing money in the wrong place…. Lowering interest rates to zero doesn’t help if businesses can’t pay their loans back and they don’t have cash flow…. We need to get help out there, especially to small businesses and people already losing their jobs.” As for demand, to “help businesses and households,” President Trump will create more anti-deflationary economic demand with his order to the Treasury to buy just $2-3 billion of oil for the Strategic Reserve, than the Fed with its $700 billion QE and trillions in liquidity.

STRATEGIC WAR DANGER

Defender-Europe Exercise Effectively Cancelled

March 16 (EIRNS)—As called for by Schiller Institute founder and President Helga Zepp-LaRouche, the U.S.-sponsored Defender-Europe 2020 military exercise is now effectively cancelled, even if U.S. European Command refuses to use the word.

“As of March 13, all movement of personnel and equipment from the United States to Europe has ceased. The health, safety and readiness of our military, civilians, and family members is our primary concern,” EUCOM said in a statement posted today. Forces that have already deployed to Europe, amounting to about 6,000 troops, including a brigade combat team, will return to America, the EUCOM statement said. All side events associated with Defender-Europe “will not be conducted,” though EUCOM said that it still hoped that the brigade already in Europe would participate in a gunnery exercise with NATO allies called Allied Spirit.

The purpose of the exercise was to test the U.S. military’s ability to deploy a division-sized force of 20,000 troops from the U.S. to Europe and use them to conduct operations all along Russia’s western periphery. This was to include paratroop drops in Latvia and Georgia, which, along with other exercise events in the other Baltic states and in Poland, will not now happen. Those troops could now be redeployed to help fight the coronavirus in the U.S., were the President to issue such a directive.

Jihadis Refuse To Leave Syria’s Southern Idlib per Russia-Turkey Deal

March 16 (EIRNS)—The al-Qaeda-like jihadi groupings in Syria’s southern Idlib province are refusing to abide by the terms of the ceasefire agreement struck on March 5 in Moscow by Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan. The agreement requires that the jihadi groups, which have organized themselves into a coalition called “Rouse the Believers,” withdraw from the line of contact with Syrian army units south of the M4 highway and move to at least 6 km north of the highway. However, Al Masdar News reports, this morning, citing opposition media, “they have rejected the outputs of all the Sochi, Moscow, Astana and Geneva meetings,” writing that they will continue to confront the Syrian Arab Army and its allies in northwestern Syria.

Al Masdar reported yesterday that, because of the refusal of the jihadi groups to evacuate from the area south of the M4, the chances are now high that the Syrian Armed Forces will resume their Idlib offensive, which is something that the Turkish government has opposed and hoped to avoid.

SCIENCE AND INFRASTRUCTURE

Argentina Seeks To Sell Nuclear Small Modular Reactor to Indonesia

March 16 (EIRNS)—Argentina recently announced that its development of the CAREM nuclear reactor would once again be a national priority, after several years of delay and defunding under the previous government of neo-liberal Mauricio Macri. Their idea was always to use it domestically and export to other countries with no nuclear power.

But, on Energy Central, last week, Dan Yurman, editor of NeutronBytes blog, reported an even bigger surprise: Argentina says it has plans to sell its 25 MW small modular reactor (SMR) to Indonesia. “In an unexpected development, the country’s National Atomic Energy Commission announced this month that work on the first-of-a-kind unit would be finished by the end of next year and offered for export to Indonesia. In addition to the 25 MW design, Argentina is said to have ambitions for 100 MW and 300 MW versions for export.”

The local report, cited by longtime nuclear industry analyst Arnaud Lefevre at NBN Media, does not include an expression of interest from Indonesia. The latter has had serious talks, but no deals, with several options for nuclear power, including a molten salt reactor from U.S.-based Thorcon and a conventional 1000-MW VVER from Russia’s Rosatom. Barriers to making a commitment by the Indonesian government include hesitations about having the capacity to regulate the safety of the plans, financing and costs, and the risks of damage to reactors from earthquakes, which are common among its many islands.

Another market for the SMR is likely to emerge. Progress on the CAREM reactor has been an on-again/off-again affair based on the available funding. The restart of funded work, and an official objective of a completion date within the next 12 months, could put Argentina in the market with a viable product, Yurman said in his March 7 report.

THE NEW GLOBAL ECONOMIC ORDER

Ethiopia Using Chinese Model for Value-Added Exports

March 16 (EIRNS)—Ethiopia is using the Chinese model to advance its economy from being merely an exporter of raw materials to processing materials (adding value) domestically prior to export, developing an industrial base in the process. With China’s help, Ethiopia has now created 10 Special Economic Zones (SEZ) in two years for processing everything—from coffee to cattle—prior to export, thus transforming itself from a simple exporter of “raw materials” and raising the productive capability of workers and the entire domestic economy. Chinese companies have continued to aid in construction of industrial parks in Ethiopia.

To use one example, coffee—what a March 13 article for the China Africa Project website calls the report in the country’s “most important” Export—Melange Coffee Roasters opened last summer to grind and roast beans in Addis Ababa, buying grinders from Turkey. Using this strategy, the African company, Melange, is now looking to export powdered coffee to the world market, immediately starting with China and South Africa. Similar examples exist in flour, with the creation of a domestic biscuit manufacturer, and other agricultural products, “from pulses to cattle products are processed domestically into secondary products first, rather than exported in their raw forms,” writes author Pippa Morgan.

This focus on Ethiopia by the Chinese was detailed in a 2017 report from the Fudan University School of International Relations and Public Affairs, “Development and Industrialization of Ethiopia, Reflections from China’s Experience.” From the start, the Fudan study rejected the British Empire free-trade model, referring to the “Washington Consensus,” as the deadly IMF/World Bank conditionalities became known in 1989.

“Mainstream contemporary economics identifies institutions (property rights and free markets) as the key, and advises liberalizing institutional reforms (the ‘Washington Consensus’). However, the most successful cases of industrial development in the post-World War II period have not followed Washington Consensus prescriptions, Japan, the four ‘Asian Tigers’ (South Korea, Hong Kong, Singapore, and Taiwan), and later China all transformed from low- to middle- or high- income economies over just a few decades,” stated the Fudan report. Morgan goes on to summarize that these countries “were all able to grow extremely quickly by developing industrial manufacturing jobs. Meanwhile, many countries in Africa and Latin America continued to rely mainly on primary products and did not see the same developmental success.”

Will Ethiopia succeed in what Morgan calls “its sizeable ambitions”? It’s too early to tell, she says, “although its approach makes sense on paper, it hasn’t been plain sailing in practice.”  Its industrial parks have suffered from lack of consistent electrical power on the one hand and the country lacks foreign exchange. She concludes: “However, employment in the agro-processing sector has been growing steadily. … Importantly, Ethiopia, like many other countries in the region, enjoys structural advantages (such as a large, young population and low wages) that underpinned the early decades of China’s rapid growth, which suggests its potential is great. If Ethiopia can realize this potential, its China-inspired economic strategy could be a compelling model for other African countries.”

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

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