Lyndon H. LaRouche Back to previous selection / Retour à la sélection précédente A Dialogue with Lyndon LaRouche 29 April 2010 What follows are Lyndon LaRouche’s opening remarks on April 29, to a high-level discussion with top U.S. economists and relevant high-level foreign officials, and occurring somewhere inside the United States. The moderator noted, in introducing LaRouche, that the group had earlier heard the LPAC-TV Weekly Report from April 28, which had consisted of the discussion with LaRouche, EIR Russia Desk editor Rachel Douglas, and John Hoefle. Lyndon LaRouche: Well, I think the thing to emphasize now is the current world situation. Looking first at the situation in Europe, in particular — Europe, including Russia — we have an absolute catastrophe in process, now, and there’s no sign, yet, among any of the leading influences in Europe that they are willing to face the reality of the situation. We have some people, for example, in Germany who are somewhat exceptions to this, who are for and are campaigning for, a return to the d-mark, in place of the euro, and who recognize intrinsically that the euro is doomed. That’s my conclusion, too. It’s essentially doomed. But doom can come in various ways. It can come in a form which it dies out, and you still have society. Or, you can have the kind of doom that dies out, and takes you with it. And Europe right now, is hanging between those two choices. The Figures from Europe. I think some people, there on that end, may have followed some of these figures. But this is a nightmare. The United States is also a nightmare. The general situation, first of all, is I divide the world into two related segments, which are differentiated by certain characteristics. First of all, you have the trans-Atlantic system, which includes Europe in general, and the Americas, especially North America. We are now, both sides, we have shifted away from nuclear power: We are therefore, on the way down, as we stand now, and require a radical change in general policy, on power policy — so-called energy policy — if we’re going to save this part of the world. Then you have the other side, Russia, China, India, Japan, South Korea, are essentially nuclear powers. We are destroying railroads in the trans-Atlantic region; they’re building railroads and similar systems, in the Asian region. Russia’s intention, that is, at least the Putin faction, is to develop railroads, develop similar kinds of basic economic infrastructure, promote nuclear power, develop new kinds of processes. China is vigorous in this, in its own interest. India, may not be quite as vigorous, but it’s quite active in this. So, that you have two parts of the world: One is the Western Pacific side of the world, which is doing not too badly, relatively speaking. Then you have the trans-Atlantic side of the world which is a blasted catastrophe! Which, without fundamental changes is not going to make it. So, that’s the context we’re working in, and what’s happening in Europe right now — for example, just to qualify that — we have this Greece mess. Now, it was the worst piece of idiocy imaginable, to think of a Greek bailout! You didn’t need to bail out Greece! You had to ensure that it survived. You didn’t have to worry. But now, what they’ve done, is they’ve turned the Greek initiative into an aggravation of every problem in the euro system. And under the present system, there is no chance of its survival. The other thing, of course, is the role of the Rothschild interests, which are really nothing but another name for the British interests. And they control a good deal of the United States. They control much of the leading faction in Russia, which are idiots of the former government, and so forth. So you have, Russia, on the other hand, has an essential role to play, and it’s not only its role in nuclear power, but in the resources it has in northern Siberia and elsewhere, resources which are essential to meet the requires of nations, such as China, and India and so forth, which are relatively poor. China’s doing a good job in mass transportation, developing that, which it’s a promoter of development. India’s doing not badly in these areas, and Russia of course, is a leader, in the nuclear program for this part of the world. But the problem is, if the United States and Western Europe go down, then a collapse of the trans-Atlantic side, which is now in progress, very clear in progress, would create such a factor of loss, of economic potential in the world as a whole, that even if Russia were functioning properly, which it’s not quite doing, yet; China’s continues what it’s doing; India continues what it’s doing, they are doing the right thing, but, when you take the world as a whole, if the trans-Atlantic part of the world collapses, now, as it threatens to do — right now, under the present President of the United States, for example — and under the euro system, then the collapse of the trans-Atlantic part of the world economy will sink the entire world economy, and send the whole place into a new dark age. This forces us to take into account something I referenced a couple days ago: That the basic problem is, is that we believe in currency, we believe in money. Or, we believe, more specifically, in monetarists systems. And the monetarists system of the world are actually an empire. And whoever dominates the monetarist system in the world, tends to be the imperial power. The imperial power is the British, not because of the United Kingdom, but because of with the folly of our United States going into the prolonged Indo-China War of over a decade, we set into motion a destruction of the productive powers of the United States, so that we are no longer really in any degree of control, of the economic condition of the planet. What has happened is, the British interests, typified by the Inter-Alpha Group, has managed to take over, pretty much control, politically, of the world economy. And that’s what our problem is. So, the source of that problem is the belief in money. Monetary systems of the type we have actually should be dated, essentially — even though they were the first monetary systems — but dated essentially from the period of approximately the Peloponnesian War. Because out of there came a kind of society which was actually an imperial form of society based on an imperium of money. And since that time, the western side, the Atlantic side, or trans-Atlantic side, has always been based on the dependency on the power of money, and whatever combination of national powers controlled money, controlled the world. And the fact of the matter is, that money does not determine, or does not measure value, that is, not economic value. Real value, economic value, is physical. It’s physical in the sense of the Periodic Table, but also physical in the sense of living processes. And therefore, what happens is, we run an economy based on profitability — of what? We bet on the wrong things, or we bet on things in the wrong proportions. And what we do is, we starve people, we ruin people, to make other people rich in money terms. And it’s to the extent that money controls the economy, and controls the way people think about economy, we have this kind of process. As some of you have noted, that the United States went into a decline with the end of World War II, partly because we did the wrong thing: Truman and company, under the influence of Churchill and company, destroyed much of the great productive potential which we had developed for warfare; where Roosevelt had intended that we would eliminate the British Empire, and said so to Churchill repeatedly, during the course of his lifetime. It was actually during the wartime period: "Winston, we’re not going to do that any more. We are not going to have an empire, Winston, any more, after this war is done. We’re going to free these people and help them develop." And the intention was, to use the war capability, the war-economy capability, which we had built up, for warfare, and use it properly, not for warfare as such, but to use it for developing the world, to take nations which were poor, underdeveloped, and use the great power which we have accumulated as a war machine and apply it properly, to helping to meet the needs of people, as Roosevelt showed in northern Africa for example: Help to free these people, by giving them the means to develop their economy, their productive powers of labor and so forth. So, Roosevelt had a sense of that. We also had a Roosevelt system, which Truman began to destroy. The Roosevelt system was, first, Glass-Steagall: That is, to purify the system of precisely the kind of pestilence which attacks us today! The world is ruined by monetarism! By the idea of sustaining and ruling under monetary policy, instead of physical-economic policy. Now, our system, which actually started in Massachusetts, under the initial colony there, our system was based on a credit system, and on a physical production system. We did, in Massachusetts, in that period, we did create money, in the form of a special kind of credit circulation. And this credit system worked very much to our advantage, until the British crushed our Charter. And that model of the Massachusetts model from that period, under the Winthrops and Mathers, that is model for the design of the American System of political-economy. Yes, there were developments and changes and so forth, but the basic concept, as distinct from the European models, was what we call the American model, or the Hamiltonian model, which is built into our Constitution. In the case of Lincoln, he saved the United States in the period of the Civil War, by greenbacks. The credit of the United States, rather than some international currency, was the basis for the war economy, and also for the great development of the U.S. economy, which occurred in the same period. We won the Civil War, against the British and their stooges. We won it, because we developed the United States at a high rate. For example, the grain fields we opened up in the western states, Minnesota and beyond. These things made us a great power. That was set back after 1879, but then again, under some presidents, we managed to continue to progress. But then, under Teddy Roosevelt and Wilson, we were set back again. But what Roosevelt did, was simply take this example, which his ancestor, Isaac Roosevelt had, among others, represented, and applied that to the situation in 1933. The first thing was with this Glass-Steagall Act. This gave us a banking system which was based implicitly on a credit system. The U.S. dollar as the base for a credit system, not a monetary system. That was the first step. And then, in 1944, at Bretton Woods, Roosevelt added another essential, which was the Bretton Woods system, the fixed-exchange-rate system. At that time, we were able to do it, because the United States was practically the only country in the world that wasn’t bankrupt. And therefore, the U.S. dollar became the currency of relevance for all kinds of transactions internationally. And under that system by Roosevelt, we would never have gone into any of these financial crises, and similar crises which we’ve experienced since his death. So, what we need to do, is understand this, understand that we need a credit system of the type that Roosevelt intended, by the combined effect of Glass-Steagall and of the fixed-exchange-rate system. So, the dollar was the only relevant currency at that time. So therefore, by internationalizing the dollar through a fixed-exchange-rate system, and combining the concept of the dollar with the Glass-Steagall interest, that we had the model, which we should have stuck to, which we must return to, now. We must do what Roosevelt had intended, before he died. And that is, to create an international, fixed-exchange-rate system, which is also an international Glass-Steagall system. What we will have to do, is cancel most of the waste-paper, which we associate in the United States with Wall Street, the funny-money, money that has no value in it, no intrinsic value associated with it. It’s just money, like a parasite, sucking us out. So therefore, the problem we have to understand is a global problem, and we have to look at it from the standpoint of the United States’ experience, relative to that of Europe, from the time of the Massachusetts Bay Colony, where the roots of the American System were introduced. We have to understand it from our Constitution, which is intrinsically not a monetarist system constitution, but is actually a credit system constitution. And we have to get nations together, in their own defence, to agree, first of all: Use a Glass-Steagall approach internationally. Clean the mess up; throw away all the claims which are not legitimate, by a lass-Steagall standard. Go back to an agreement on a fixed-exchange-rate system among nations. Go to a policy of creating a credit system, which will be largely based on infrastructure, because the United States, for example, is dead as a productive nation! All we can do, is build infrastructure, largely with government credit, and use the development of infrastructure, as the source of stimulus for re-creating a productive economy, in agriculture and industry, and so forth, and raising the standard of living. Europe has to do something very similar. Conveniently, the euro system is going to die. It’s going to die very soon. We need to engage directly with Russia, China and India, as keystone nations with which cooperate, to go back to what Franklin Roosevelt had intended, and think about economics in those terms. I could say much more, but probably, that’s enough for the moment.