From oneb!cs.ubc.ca!destroyer!caen!uunet!ccs!covici Fri Jan 1 20:33:55 PST 1993 Article: 14317 of alt.activism Path: oneb!cs.ubc.ca!destroyer!caen!uunet!ccs!covici From: covici@ccs.covici.com (John Covici) Reply-To: covici@ccs.covici.com Newsgroups: alt.activism Subject: EIR Talks to Lyndon LaRouche: 12/28/92 Message-ID: <231-PCNews-124beta@ccs.covici.com> Date: 2 Jan 93 0:30:21 GMT Organization: Covici Computer Systems Lines: 654 The following interview with Lyndon LaRouche was taken from Executive Intelligence Review V20, #2 and was originally broadcast on the radio show EIR Talks With Lyndon LaRouche which is available by satellite. Interview: Lyndon LaRouche Return to the fundamentals of production-based economics {The following interview was conducted with U.S. economist and statesman Lyndon LaRouche from his prison cell in Rochester, Minnesota on Dec. 28, 1992. The interview was conducted by Mel Klenetsky for }EIR'{s radio show ``Talks With Lyndon LaRouche.''} EIR: We're coming up to the one-year anniversary of the formation of Commonwealth of Independent States, and of the Yegor Gaidar and Jeffrey Sachs ``shock therapy'' program, which has given the former Soviet Union 2,000% inflation. Can any country survive that kind of policy? LaRouche: No, absolutely not. It's a rather complicated but important point, important not only for eastern Europe, but also for the United States, that no nation, including our own, can survive the kinds of so-called free market deregulation policies which are currently advocated by the U.S. government, by people at the Harvard University economics department, and so forth. It just cannot be done. It is a radical form of monetarist policy, absolutely wild, which is guaranteed to destroy any economy which is foolish enough to accept such policies. In the case of the so-called shock therapy, this little fellow Sachs, educated in the modern fads in economics, that is, in totally incompetent economics, has proposed to use the shock therapy {to destroy} the structures of economy which were associated with the former communist economies, in order to clear the way for the gradual mushrooming, beginning with little peddlers, of a new so-called free market economy. And what he gets, is a combination, on the one side, of a total destruction of the economy, piece by piece; zooming inflation as a result of a collapse of the economy--for no other reason--and then a host of speculators playing upon the shortages thus created to make superprofits. The image of the Mercedes Benz 600 vehicles in Moscow amid the relative hunger, is an example of that, or the virtual total collapse of the economy of Poland relative to what it was before Sachs got in there. And the same thing is true in the United States. Britain is destroyed as an economy, and the United States is destroying itself as an economy, all as a result of the same kind of philosophy of economics. EIR: What is shock therapy, and what is a free market system and free market policies? LaRouche: The free market system is insanity. We fought our [American] Revolution for independence against the policies of what were then called Adam Smith's doctrine of wealth of nations, which was a milder, less radical version of free market than is being pushed by Sachs and others today. These fellows look only at buying cheaply, from the cheapest source, and destroying every part of the world economy which does not meet that price of cheapness. This, in its milder form, the Adam Smith form of the British East India Co., destroyed many economies. Every time we tried this model in the United States, as we did under Presidents Jefferson, Madison, Jackson, Polk, Buchanan, or Pierce, we destroyed our economy and went into a deep depression. The United States never had a depression which was not caused by our submission to some version of this so-called free market economy. And the only way we ever got out of a depression, was by rejecting that free market economy, as it's called now. EIR: What are the principles of shock therapy? LaRouche: There's no principle at all. You simply allow no protection for your economy. You drop prices below replacement costs; you pile up debt--it looks like a leveraged takeover. What happened in Poland, for example, as shock therapy, is not much different than what happened to Northwest Airlines, which is not yet bankrupt, and to a lot of other airlines, which did go bankrupt. Somebody moved in with a leveraged buyout; they took over the economy, or the company in this case. They piled on a lot of debt to cost of acquisition which was piled on the company. They sold off and otherwise looted parts of the company, cut wages, and so forth and so on--all in the name of paying off this debt, which had been created in the process of the takeover. In the United States, there are a bunch of sharks that do this. They'll take somebody, set him up, invest in him, build up his company; he'll buy a lot of assets. And then at one point they pull the string and artificially drive him into bankruptcy, and then, one of the creditors ends up buying out the other creditors, taking over the whole company at 20-30@ct on the dollar. That's what shock therapy is in practice, as applied in Poland. EIR: Free market and free trade policies are what everyone learns when they go to school; they're told that protectionism is bad. And yet, what you're telling us is that protectionism is the system that built this country. LaRouche: Yes, precisely. There is the case of Prof. Robert Reich, who's been designated by President-elect Clinton to become the secretary of labor. Now prior to that announcement, there was much mooting of the possibility that Reich, who presumably had been one of the leading advisers to the governor on economic policies for his presidential campaign, might become the so-called economics czar. There was a great protest from various people, saying, well, Professor Reich does admittedly write a great deal on economic policy and teach on it, but remember, he's not accredited as a tenured professor where he's teaching, because he has not qualified himself in the requisite academic courses in economics. Now, I laughed about that, and I said, that's the very reason he might be qualified. Anybody who has been educated in the college level, for example, in what is called microeconomics and macroeconomics, is unqualified to be hired for an administrative position in any branch of government or any company firm today. What is taught as economics in universities today is wretchedly incompetent. And the person who has successfully passed the courses in those subjects, {is a failure.} If you turn them loose in a corporation, they'll ruin it. If you turn them loose in a national economy, they'll ruin it. Economy has nothing to do with this free market nonsense. Economy is the relationship of the individual and the society to nature. It's a matter of how we, as human beings, manage to produce enough and increase our productivity to the point that we as a nation, as a people, are able to survive. And we look at the nation, and we look also at the individual in that connection. We also look at the family, because the family after all is the unit which reproduces the individual; and therefore the development of the individual within the family, up to the point of maturity at least, is the crucial point of the development of economy. Now, you don't develop an economy just simply by producing enough. In order to produce, you must have what we call infrastructure. You must have water management, land improvements, transportation, energy supplies, and so forth, which are all infrastructure. You must also have in a modern economy an educational system which teaches something which is not the so-called current fad in economics. You must also have a health delivery system; otherwise your population may be dying of lack of sanitation or lack of care. So, these ingredients called infrastructure, which include the local city library for example, are {absolutely indispensable} to the functioning of productivity of society. They are the first cost of investment in maintaining a modern society. And today, we have a collapse in the United States of infrastructure. We have a water crisis, which is going to kill us--we're beginning to look like Africa, not as bad, but we're headed in that direction. We have an energy crisis. We're going to brownouts and blackouts with no energy supplies to replace it. We have no transportation system; the rail system is collapsed, and rail is still the cheapest and best way of long-distance freight movement, apart from the bulk freight which we move by water. We don't have a health care system, our health-care capacity is 20% below the needs of the population. We have no educational system to speak of. For example, even Stanford University, which is a highly respected university formerly, is one of those which has gone into the policy of not teaching students the writings of what are called ``dead white European males.'' Now it happens that the {bulk} of all human knowledge to date involves dead white European males of the past 2,500 years, beginning with people like Solon, Homer, Plato, Pythagoras, and so forth. All of our knowledge is based on the development of the ideas developed by these people. And a university which is not teaching the work of dead white European males, has no physical science, no music department, virtually no literary department--nothing! On the high school level, we have again the political correctness program spilling down. The ``World of Difference'' program, for example, put in by the Anti-Defamation League, is destroying much education in parts of the country. But one thing I agree with the {Wall Street Journal} on, is that ``political correctness'' on the university level is destroying it. So we have no infrastructure. We don't have a labor force which is as qualified to produce as it was 20 years ago, and all as a result of these kinds of crazy ideas associated with the current fads in economics. EIR: If you go to an economics class today on the university, the main philosophy is the law of supply and demand. Why does the law of supply and demand not solve these problems? Why does it fail? LaRouche: It always did. Supply and demand is a piece of idiocy. It was dreamed up during the 18th century in particular. It was revised in the 19th century. It's nonsense. If you don't produce the supply, you can demand all you want, you're not going to get it. If you don't have infrastructure, you won't get it. This is a long and more complicated problem, which goes to the axiomatic roots of the incompetence of what is taught as economics. Its advocates argue that you start with a fund of money. Where this fund comes from, is a big mystery. Then, they argue that there are consumers, who buy, and that producers are merely people who go out and work as cheaply as possible to satisfy the demands of the consumers. And when the consumers don't have anything, the consumers are willing to pay a higher price; and when they do have something in abundance, they will pay only a lower price. That's essentially the whole theory. The fact of the matter is, that society is based not on consumption--obviously, we have to consume. But society is not driven by consumption. Society, economies, are driven by production. They're driven by the productivity of labor. They are determined by how much of the physical needs of mankind can we get from an average square mile of land area, by aid of human production. Supply and demand has nothing to do with that. For example, the belief in supply and demand, and the use of that as an argument in policy-shaping, is the reason why the British economy is the useless rust bucket today, and why the United States is headed in the same direction. We're not being cheated by Japan. We're not being cheated by Europe. They're not unfair with us, we're unfair with ourselves. We shut down our infrastructure investment, which Japan did not do, which Europe has not done to the degree we have. We shut down our investment in technology, which they did not do to that degree. We did all these crazy things, and we ruined our economy. Everything that transformed us from the world's envy in economy at the beginning of the 1960s, to virtually becoming a Third World nation today, is the result of our own doing, our own stupidity, and what is taught as economics is largely responsible for shaping the policies which have turned us from a proud, prosperous nation into a junkheap today. EIR: If the law of supply and demand and free trade policies do not lead to infrastructure development, how do you get it going? LaRouche: It has to be done by the state. First of all, you have to start with this question of money. According to our federal Constitution, the creation of money and the circulation and regulation thereof, is a monopolistic responsibility of the federal government. Under Alexander Hamilton, and under all sensible presidencies, the way we've gotten money is not to have a Federal Reserve System or any central banking system, not to allow it. That's how we're looted. The way we're supposed to get money, is, as the Constitution says, the President goes to the Congress and asks the Congress for a bill, which authorizes the Executive branch to print and circulate money or to create specie. Acting upon the authorization of that congressional bill, the President instructs the secretary of the Treasury to proceed. And the proper procedure is that the secretary of the Treasury {issues the money,} paper money, specie, and so forth, or authorizes someone else to do it on the Treasury's behalf, like a printing company or a mint, for example. This money is then properly placed in a national bank. It's not spent usually for government expenditures directly. It's not paid out by the government. But it's put in a bank. When it gets to the bank, it is loaned. U.S. government money is loaned at a low interest rate to governmental agencies such as state governments, state projects, or federal corporations, that is, corporations which are authorized by the federal government, like water project companies or the Tennessee Valley Authority, for example. These companies use that money to create wealth in the form of infrastructure. The money is also to be loaned, mixed with private savings and loans, to private companies for worthwhile categories of private investments to build up the economy generally. And that's normally the way a healthy economy will grow. If it's investing in technological progress, capital-intensive, energy-intensive technological progress, such investment of federally created money will cause full employment (relatively), and prosperity and continued economic growth. And it will not cause any federal debt, except the imputed debt of balance sheet liability of the federal government to back up its own currency. And if the currency is properly invested, there won't be any problem on that account. Our problems today are essentially centered on the operations of the Federal Reserve System. That is the key to our economic problems. EIR: What is the basic difference between the Federal Reserve and the kind of national bank that you're talking about setting up? Who controls it? LaRouche: The Federal Reserve is a private corporation, licensed, franchised by the federal government. A group of private bankers, domestic as well as foreign (but through domestic banking channels), sets up a bank called the Federal Reserve bank. They run it. Now, they create money. For example, today, the Federal Reserve System will issue money at less than 3% to New York bankers and similar people. They print it by discount mechanisms. These banks in turn will loan that money to the federal government by buying federal debt at 5.5%, or something like that, or on long bonds they'll go as much as a 5% spread. So what we have is the spectacle of money which is created out of thin air, loaned at 3% or less to banks and others who in turn loan that fiat money to the federal government at up to a 5% spread. So the debt is being created, the federal debt is being built up to bail out the private banks. And the federal government, in order to conduct its own operations, in order to pay the debt service that it already owes to the banks and similar people, borrows money, federal debt, which it pays for by this means. And so the federal debt is built up precisely because of this Federal Reserve System. EIR: Assume that we get our infrastructure going again, we create a national bank. How does the United States compete with countries like Japan and Germany, who are so far ahead at this point in terms of infrastructure? LaRouche: We really don't have to worry about competing, except in the sense of realizing that the level of technology in these countries represents a standard with which we must have parity. We don't have to have exactly the same industries, or the same complex of industries they have; but we have to meet that technological standard. That means a change in our policies presently; our tax policy, our credit policy--all have to change. For example, let's start with the farmers--agriculture. Most people don't know it and most wouldn't even believe it, but the United States is a net food importing country. True, we export grains, but we are wiping out the American farmer. Why? The American farmer is being paid far less than it costs the farmer to produce. For example, about 90-95% of parity is the price the average farmer must have in order to maintain farming, that is, to meet the costs of production. We have been for years forcing the price paid to the farmer down below 60%, to as low as 30%. Obviously, farmers go bankrupt as a result of trying to meet those prices. The agriculture department of the U.S. government for years has been run by the grain cartels, chiefly the Cargill firm. For example, under President Reagan, we had a fellow called Daniel Amstutz in there, who was originally the foreign trading executive for Cargill, the largest grain-trading operation, running the agriculture department's foreign trade. We have people who were former Cargill officials, former Cargill attorneys, Cargill assets, running the agriculture department. These guys have been looting the farmer. People like Dwayne Andreas have been looting the farmer. So, farmers are going out of business. They didn't go out of business all at once; they got into government debt. Then the government turned the screws, often illegally, violating the law, to put the farmers out of business, even put them in jail, for doing nothing other than trying to keep the farm going and supplying food to the United States and the world {at below the cost of production.} So obviously, we have to build up the agricultural sector again, to the point that we can produce enough food so we're not dependent upon foreign countries for our food supply, which is what we've done by sinking the American farmer. We have to do the same thing in the manufacturing sector. We have to create more jobs in manufacturing and transportation and so forth. We have to have a larger percentile of the total labor force involved in producing wealth and a much smaller percentile of the labor force involved in low-grade service industries, or in financial services and outright parasitism. We have to have more people in production, more people employed in science, and fewer in, shall we say, low-grade social services. We have to have a policy of capital intensity, that is, a lot of investment in production, in machinery, in equipment, and a relatively shrinking percentile of investments in the simple direct cost of production. And we have to have an emphasis on scientific and technological progress. We have to supply the infrastructure, including the transportation systems, the energy systems and the water systems which are necessary to allow industry and agriculture to function. Those should be our objectives. EIR: Why do farmers need parity to survive? LaRouche: A high-quality farmer will run a family farm of maybe 400 acres of land. He's a small businessman--actually, farmers are among the best small businessmen in the United States. They were better at managing the farm than probably 80% of the businessmen, including some large corporations, were at managing their companies, in terms of efficiency, everything considered. They worked harder, they had a higher degree of competence for their work, and their product was relatively superior. Now, parity reflects the average paid-out cost of production for these farmers, plus a small margin of return on investment, to cover borrowing costs and profits. That's all it is. So when you say ``parity,'' you're not saying some magic term or some made-up term. Parity is simply the average cost of production plus a small percentage for borrowing costs and profit. That's all it represents. Some farmers are much more productive; therefore, that means a fairly substantial profit to them. Other farmers are less productive, but we need all of these farmers to produce an adequate food supply, and that's the way we calculate parity. So when you force prices of commodities {below} parity, you are bankrupting farmers. EIR: Who's forcing them to produce below parity? LaRouche: The U.S. government is backing up the grain cartel. The grain cartel comes in, cuts a contract, and says we'll buy at this price. And they use their monopolistic power against the relatively small businessman, the farmer, taking him on one at a time, and they crush him. And if the U.S. government does not intervene against these monopolies, these oligopolies--they're actually violating the anti-trust laws, in principle--to prevent them from abusing the farmer, then the farmer will be crushed, because the farmer is a small businessman up against a giant like Cargill. How is a small farmer, grossing a couple of hundred thousand dollars year, going to compete in the so-called free market against a $40-billion-a-year giant, which, with its friends, the Union-Pacific crowd in Omaha, controls the Chicago market, controls the grain trade deals in Minnesota? How is that individual farmer going to compete in the marketplace, which is rigged by these powerful grain cartels, with the assistance of a complicit agriculture department? The U.S. government creates double talk. They call parity a ``subsidy'' for the farmer, and say that's coming out of the mouths of babies. Bunk. What we're subsidizing, by not maintaining a parity policy, is these cartels which are looting the farmer. EIR: Farmers are being driven off their land. Who's buying up the land? LaRouche: Sometimes they're not even buying the land; they're taking the land for a song. There are many people involved; it's a complicated question as to what's happening. But we are ruining the land. We're forcing the farmer down to dustbowl conditions, or something similar, by forcing him to produce from stored-up values in the land and in capital goods, until the point that the whole machine essentially breaks down. He's out of business, saying, ``I just can't do it any more.'' It's a cruel story, but the point is, the whole thing is based on the lie that parity is a violation of free market; and if Americans want to sustain that lie, they're going to find themselves going very hungry--because of a shortage of supplies and because we can't afford to import them. And the dumb American, who thinks that cheap food prices based on a bankrupt farmer is somehow good for the consumer budget, who thinks that he or she gets his or her food from the supermarket and doesn't have to be concerned with the farmer, is going to be punished by his or her own stupidity. We are now in a grievous worldwide food shortage, an acute one. People are dying of famine all over the place, for many reasons. But essentially the reason that we're having this food shortage, is because of the very policies of the U.S. government, which many foolish consumers in the United States think are good for the consumer budget. EIR: If the United States is going to restore itself as an economic power, it will have to deal with the educational level in this country, which, according to statistics, has fallen behind the level in other industrialized countries such as Germany and Japan. How does it do that? LaRouche: First of all, look at how we went down. Forget the statistics. They're bunk. Yes, we are falling way behind these other countries, no question about it. That's obvious. But we're falling behind ourselves. If we look at the content of education in the 1950s and 1960s, the first half of the 1960s in particular, when the National Science Foundation grants to education were still in progress, for example, the average graduate of a university today, including many with doctoral degrees in social sciences, {could not pass} a competent high school standard of education from that period. Similar things are occurring in Europe. For example, between 1968 and 1972, German education was collapsed by the so-called Brandt reforms of the late Willy Brandt, who was then chancellor. The German who is coming out of a high school in Germany today is virtually a barbarian compared with his older brother or parent who came out of an equivalent high school in 1966-68. So, comparing the United States with other countries masks the problem. The problem is worldwide. Generally, the level of education, the competence of people graduating from high schools and universities, is such that often the university graduate of today would not be qualified for a high school diploma in a respectable high school, say, of 25 years ago. And that's where the problem lies. The key to this, which is why I find myself in this uncomfortable alliance with the {Wall Street Journal} against political correctness, is that if we allow these thugs, the so-called deconstructionists (the name they use for themselves), these modern Nietzscheans, to use the Modern Language Association and other vehicles in colleges and high schools to introduce this political correctness program where truthfulness is no longer a standard of teaching, but rather sensitivity as they define it, is that we're going to find that we have a bunch of barbarians. I refer people to Jonathan Swift's {Gulliver's Travels,} which many people think is simply a children's book; it is not. It's a very powerful satire on the condition of England at that time. And I refer them to the famous story about the Houyhnhnms--Houyhnhnms being horses. Poor Gulliver lands in the land of the Houyhnhnms, and he finds that horses, i.e., a parody of the British aristocracy, are running the place, and that human beings exist only in the form of baboon-like immoral, disgusting, ignorant, speechless specimens called Yahoos. And that's what's happening. Our high schools and universities, and our general cultural system over the past 25 years, has been turning the American from a proud human being into an illiterate, drugged, ignorant, babbling, disgusting Yahoo. And if we want to have a civilization, let alone compete, we better start attending to remedying this sickness. Do you want your children and grandchildren to be a species of Yahoos who are unfit, unqualified, to survive? Or do you want grandchildren left behind you who amount to something? I think if we focused on that moral question, we would find that the economic questions would fall into place for us. EIR: If we look at the cabinet which is being chosen by Bill Clinton, it seems to be a paradigm of political correctness. We have a certain number of women, a certain number of minority groups. Is this going to present a problem for this country? LaRouche: Absolutely. One shouldn't look at it too simplistically. In framing a government, at least in terms of nominations so far, what the Clinton team has done, is to provide an assortment of representation to every geographic area of the country, and every part generally of the spectrum of the so-called political, sociological rainbow. Now, what's been created by doing so, in economics, for example, is at least four different mutually conflicting points of view on economic policy, all equally represented. Sooner or later, those conflicts are going to have to be sorted out, and something, either one of the four or something else, is going to have to take the place of most of the policies coming in there. What you have is really the beginning of a rough-and-tumble; not a policy. In this rough-and-tumble, admittedly, we have some very bad things. We have this rainbow political correctness idea--it's going to be a disaster. None of it's going to work. The U.S. economy is going to become worse until it changes. So therefore, whatever happens, if the political correctness prevails, to that degree you will have a failure. The administration is going to have to choose policies, or tilt toward policies, which are against failure, which will tend to be against political correctness. EIR: The backdrop of the incoming Clinton administration is a world in turmoil--the former Soviet Union, Europe, the developing sector. How do we restore some direction to the world strategic situation? LaRouche: I see things becoming much worse than that. The former Soviet Union is not going to disappear; at present, it's being reconsolidated. What's happened is that the Russian {nomenklatura} (some of the old communists, of course, are in it) is sitting back and saying, ``Okay, these fellows want independence from us. Let them have it for a while, let them try to swim on their own. They'll sink, and they'll beg for us to come back in.'' If you look at what's happening, you will find that the communists, with the blessing of Lawrence Eagleburger and others, especially the British government, that the Serbian fascists of Slobodan Milosevic are committing genocidal atrocities, with concentration camps and genocide, which are beyond those even of World War II. It's unbelievable. It's the worst extremes of the Nazis and beyond that. These are communists. And that's destroying that part of the world, threatening a Balkan war there. The Russians are going to come back as an imperial power very rapidly, partly through agreements with forces in China, but otherwise, the United States will be disintegrating--while willing to play the role of world policeman, we'll collapse on the basis of our economic collapse here at home, which is now ongoing. So, we're in a terrible mess, and we have to recognize first of all that we're in a terrible mess. EIR: The former President of the former Soviet Union, Mikhail Gorbachov, recently said that he expects to see a return to some of the integration that existed in the former Soviet Union. What is going to happen in terms of the Soviet Union, and what will this mean for the world strategic situation? LaRouche: It's hard to say exactly what will happen. Gorbachov is correct in seeing the shift back in that direction. That was obvious to me from what I've seen from various sources. Some of the thinking among the leading Russian {nomenklatura,} back when Gorbachov fell, was that they said, ``Okay, we'll go through this period of deconstruction. We'll go through a period of placating Jeffery Sachs and the International Monetary Fund. We'll go through hell, but we're going to let our people see what it looks like. They think that they want the American system. Well, let them see what it's like these days. And when they get enough of the American system, they'll come back to us.'' That is generally the thinking in some sections of the old apparatus, the {nomenklatura.} And you'll see that expressed among military voices more clearly than anywhere else, but the military voices are speaking for a broader group of people. This is true in Central Asia. The Russian troops will sit back, let the people shoot each other; when they get tired of shooting each other, and call for the Russian troops to come in and save them, the Russian troops will come in and save them--maybe not promptly, but slowly. So that process is going on. To develop these areas, to render them stable, requires fairly large-scale infrastructure projects. The problem of the Soviet economy, up to the point of the dissolution, was a rapid disintegration of infrastructure. And this occurred for many reasons. But this disintegration of infrastructure will prevent any economic development from occurring on a large scale. So they're going to have to tackle this infrastructure problem. That will require, from their standpoint, some sort of integrated effort, and Moscow, naturally, would like to have this integrated effort occur under Moscow's dominance. And that's what Gorbachov is reflecting when he makes those kinds of observations. I'd say that's a fairly good estimate of the direction of things. And remember, the former Soviets have about 30,000 warheads and a strategic naval fleet which is very impressive, so they still are a superpower, whereas the United States and Britain and so forth collapsed, partly because of this crazy Balkan war which the Anglo-Americans started and have kept going. We're going to find that the Russians, even though they've gone back a great deal, will be relatively stronger, relative to the United States and Britain, than they were in '89. Very soon, they'll be ahead, the way things are going now. EIR: In terms of the strategic situation, is there any policy that can be quickly pushed in motion in terms of Europe and the former Soviet Union, that the United States should be looking toward? LaRouche: Yes. Forget the military policies as such; that's a longer subject. Go back to fundamentals. Fundamentals are economics. We need to scrap every economic policy which was introduced as an innovation during the past 25-odd years, and go back to the kind of thinking in economic policy which was characteristic of the period of the John Kennedy administration. This is the right policy for the world as well as the United States. That's the fundamental thing we have to do, and that's what they're blocking on in Washington these days. ---- John Covici covici@ccs.covici.com From oneb!cs.ubc.ca!destroyer!caen!uunet!dtix!darwin.sura.net!uvaarpa!murdoch!brain.med.virginia.edu!prs9k Fri Jan 1 20:34:08 PST 1993 Article: 14318 of alt.activism Path: oneb!cs.ubc.ca!destroyer!caen!uunet!dtix!darwin.sura.net!uvaarpa!murdoch!brain.med.virginia.edu!prs9k From: prs9k@brain.med.virginia.edu (Phil Scarr) Newsgroups: alt.activism Subject: Re: EIR Talks to Lyndon LaRouche: 12/28/92 Message-ID: <1993Jan2.031811.8750@murdoch.acc.Virginia.EDU> Date: 2 Jan 93 03:18:11 GMT References: <231-PCNews-124beta@ccs.covici.com> Sender: usenet@murdoch.acc.Virginia.EDU Organization: Neuroclinical Trials Center, University of Virginia Lines: 24 In article <231-PCNews-124beta@ccs.covici.com> covici@ccs.covici.com writes: > >Interview: Lyndon LaRouche > >Return to the fundamentals of production-based economics > >{The following interview was conducted with U.S. economist ^^^^^^^^^^^^^^^ >and statesman Lyndon LaRouche from his prison cell in Rochester, ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ >Minnesota on Dec. 28, 1992. The interview was conducted by Mel >Klenetsky for }EIR'{s radio show ``Talks With Lyndon LaRouche.''}You forgot CONVICT and CRACKPOT... 1/2 :-) -Phil -- PHIL SCARR \ We are Microsoft... / (o) 804.243.0229 University of / OS/2 is irrelevant. \ (f) 804.243.0290 Virginia, \ UNIX is irrelevant. / prs9k@Virginia.EDU Neurosurgery / Openness is futile. \ prs9k@Virginia.BITNET HP-UX is my life!\ Prepare to be assimilated... / ...uunet!virginia!prs9k From oneb!cs.ubc.ca!destroyer!caen!zaphod.mps.ohio-state.edu!cis.ohio-state.edu!rutgers!concert!uvaarpa!murdoch!brain.med.virginia.edu!prs9k Sat Jan 2 10:08:41 PST 1993 Article: 14327 of alt.activism Path: oneb!cs.ubc.ca!destroyer!caen!zaphod.mps.ohio-state.edu!cis.ohio-state.edu!rutgers!concert!uvaarpa!murdoch!brain.med.virginia.edu!prs9k From: prs9k@brain.med.virginia.edu (Phil Scarr) Newsgroups: alt.activism Subject: Re: please...no more LaRouche fascist crap!! ok?! Message-ID: <1993Jan2.164359.27119@murdoch.acc.Virginia.EDU> Date: 2 Jan 93 16:43:59 GMT References: <1993Jan2.120902.19161@uvm.edu> Sender: usenet@murdoch.acc.Virginia.EDU Organization: Neuroclinical Trials Center, University of Virginia Lines: 42 In article bfrg9732@uxa.cso.uiuc.edu (Brian F. Redman) writes: >aforum@moose.uvm.edu (autonome forum) writes: > >>What more need be said??? > >>Fight fascism!!!! >>Beware of LaRouche fascist front-groups!!! > >Could you please substantiate your claim? Larouche's conspiratorial, dishonest and larcenous tactics have already landed him in jail. I don't think much needs to be done to substantiate ANYTHING negative about LL that hasn't already been done. The guy's a loony crook! Everyone here who believes the Queen of England is: 1) A Zionist Dupe 2) A tool of the Masons 3) An international drug smuggler and 4) The Spawn of Satan raise your hand. (with the exception of #4, LL has claimed the QofE is all of those things). > > >Brian Redman >(bfrg9732@uxa.cso.uiuc.edu) >"Ah yes, Armageddon. I remember it well." -Phil -- (--)======================================================================(--) || || || As evey cell in Chile will tell / The cries of the tortured men || || Remember Allende in the days before / Before the army came || || Please remember Victor Jarra / In the Santiago Stadium / Es verdad || || Those Washington Bullets Again! --The Clash || || || (--)== prs9k@virginia.edu === Phil Scarr === Department of Neurosurgery ==(--) From oneb!cs.ubc.ca!destroyer!sol.ctr.columbia.edu!usc!cs.utexas.edu!asuvax!asuacad!idjmw Wed Jan 6 12:21:46 PST 1993 Article: 14427 of alt.activism Path: oneb!cs.ubc.ca!destroyer!sol.ctr.columbia.edu!usc!cs.utexas.edu!asuvax!asuacad!idjmw Organization: Arizona State University Date: Tuesday, 5 Jan 1993 15:15:25 MST From: Jo Namio Message-ID: <93005.151525IDJMW@ASUACAD.BITNET> Newsgroups: alt.activism Subject: Re: EIR Talks to Lyndon LaRouche: 12/28/92 References: <231-PCNews-124beta@ccs.covici.com> <1993Jan2.031811.8750@murdoch.acc.Virginia.EDU> Lines: 8 Good old Lyndon L. Many of us active in the Freeze Campaign (you remember, back in '84) (you must remember, BUSH hasn't forgotten, he's still whining) are still chuckling over LaRouche's insistence that we were all KGB dupes and were getting paychecks from Moscow. As for me, I'm still waiting for that check! j. From oneb!cs.ubc.ca!utcsri!skule.ecf!torn!cs.utexas.edu!uunet!ccs!covici Tue Jan 19 07:21:36 PST 1993 Article: 15279 of alt.activism Path: oneb!cs.ubc.ca!utcsri!skule.ecf!torn!cs.utexas.edu!uunet!ccs!covici From: covici@ccs.covici.com (John Covici) Reply-To: covici@ccs.covici.com Newsgroups: alt.activism Subject: EIR Talks with Lyndon LaRouche 01/11/93 Message-ID: <235-PCNews-124beta@ccs.covici.com> Date: 19 Jan 93 7:10:46 GMT Organization: Covici Computer Systems Lines: 760 ``EIR Talks With Lyndon LaRouche'' will be broadcast on satellite from 7:00 to 8:00 Eastern this coming Saturday night. Radio stations and others may get the program on either of the coordinates below. Stations may otherwise make arrangements to obtain tapes of the program for broadcast from the EIR Press Staff. Galaxy 2, 74 Degrees W | Satcom C-1, 137 Degrees W Trans 3 74.9 mHz NB, SCPC | Trans 2 7.5 mHz 3:1 Companding, Flat | Wide Band Video Subcarrier EIR ``Talks With Lyndon LaRouche'' January 11, 1993 - Who Arranged the Assassination of Turajlic - MEL KLENETSKY: Welcome to {Executive Intelligence Review'}s ``Talks With Lyndon LaRouche.'' I'm Mel Klenetsky. We're on the line with Lyndon LaRouche from Rochester, Minnesota. Mr. LaRouche, recently, the assassination of Bosnian deputy prime minister Hakija Turajlic has brought up the thoughts that we're back in a 1914 situation, a World War I situation. It's been likened to the assassination of Archduke Ferdinand. What is going to be happening in Bosnia and in Yugoslavia, and what can be done to reverse the crisis, which seems to be deepening, every single moment? LAROUCHE: Well, first of all, you have to, before trying to forecast anything--and you cannot predict, you can only forecast, which means you can only set up the parameters which will lead to each of the alternative, visible possible results. Now, look at the assassination itself. The UN essentially, under French direction in this case, the French UN troops' direction, actually {arranged} the assassination. The French contingent of UN forces was responsible for taking the vice president[sic] from one location to an adjacent location. They placed him inside an armored personnel carrier. On the way out, they dismissed, by orders of the UN command, several of the armored contingents, elements, of that assignment, that contingent. On the way out shortly, they were intercepted by an ``irregular,'' so-called, Serbian unit. And contrary to all rules, {they opened up} the rear of the armored personnel carrier, which they're not to do, and stood by while the Serbians shot the vice president. They are not supposed to, in any case, identify a passenger in such a convoy. Nor are they, under any condition, to open the rear to allow inspection, which was the pretext under which they {arranged} the assassination of the vice president of Bosnia. That incident in itself, is the issue. The issue is not the Serbs, they do that all the time. They're murderers, they're rapists--what not, everything you want; that is, these particular Serbs, the ones who are working under the communist-fascist faction of Serbians. The point here is, the French unit, under UN direction, arranged the assassination. That is beyond doubt, it is beyond question. The rules were broken. The rules were not broken once, by one accident; they were broken repeatedly and deliberately, in advance of and during the incident. So there's no question of that. All right. {French complicity,} under UN direction, in this atrocity and others, is key to understanding this situation. Okay. The government of France, specifically a government which is tied to a very specific freemasonic group, the Grand Orient Lodge in France, which is the same group which is tied to the Serbian Lodges: this particular group, together with the British group around Kissinger's friends, such as Lord Carrington and now Lord Owen, the U.S. group: not only Kissinger's group but Cyrus Vance, the Russians, a group in the United Nations which is reflected in the Security Council by Secretary General Butros Butros Ghali, and others, are all complicit, {intentionally, deliberately, before the fact} in this horror show in Bosnia. This was done, to the deliberate purpose of destabilizing Central Europe. It was done as an {anti-Germany, anti-continental Europe operation,} initiated by British intelligence, with the complicity of the French government, and with the complicity of the U.S. State Department, specifically Brent Scowcroft and Larry Eagleburger, who were the two key figures, and their co-Kissinger colleague, Lord Carrington, were the key figures visible in arranging, {before the fact,} this particular horror show. Once that's in place, then you see the danger of a World War III. What has happened, is that a Russian faction, typified by former Defense Minister Yazov {of the Gorbachov regime,} not the Yeltsin regime, but the Gorbachov regime, set this into place on the Russian side. This has been a Russian pan-Slavic operation, with their little Serbian brothers, playing the Serbian front against the Balkans and against Europe. {Precisely} the kind of thing against which I warned in a nationwide, U.S. television broadcast back in 1988, as part of my campaign then. It has come to pass. And it is this. And if it spreads into conflict involving Bulgaria, Greece, and Turkey, which will happen if the Serbs go into Kosova and Makedonia. In that case you'll have a generalized Balkan war, and who knows what can happen. But the lines are already drawn. The interesting thing is that {the allied powers of World Wars I and II, are the governments}--that is, Russia, France, Britain, the United States--have created the mess, and what we're headed for, is a Cold War-type conflict with the former Soviet Union in the Balkans. - Tavistock Institute-Trained Psychiatrists Behind Mass Rapes - Q: Mr. LaRouche, the situation in Serbia and Bosnia has been called genocide, you called it genocide just a few moments ago. Is there some kind of psychological warfare that is going on with the rapes, the murders, the beheading of children? This is a situation which is unprecedented in the recent period. It takes us back to World War II and the Nazis. What are we dealing with here? LAROUCHE: We're dealing with a rather complex situation, in terms of the details. But the details come to a very simple fact. I say it's complex, because most people don't know some of the background facts of this, which make the thing fairly simple to those of us who are professionally qualified. The Yugoslav government, the Tito government, has always based its concept of warfare on guerrilla warfare. Remember that the communist military of Yugoslavia under Tito, was forged in guerrilla warfare. That is, despite its training in modern warfare, it is essentially a guerrilla or irregular warfare force. That's its greatest capability. And in the mountainous regions of Yugoslavia, this is particularly notable. Now, the Serbian forces are divided into several elements. One is the major Serbian forces based in Serbia directly itself. And these are Serbian remnants of the former Yugoslav army, which were dominated by Serbian officers to begin with, Serbian officers who are generally very close to the Soviet military, to the Red Army. Very close relationship, even continuing during periods of apparent conflict between the two states. The Serbian reserves outside Serbia proper, within the former Yugoslavia, had been formed into Croatian, Bosnian, Kosovan, Makedonian, etc., special units, quasi-guerrilla type units. Irregular warfare with artillery plus, and with Serbian support. Now, the command for this guerrilla warfare, was technically directed by a unit of the Serbian military or the Yugoslav military, which is formerly based in the Croatian capital of Zagreb. This unit in Zagreb was the psychological warfare unit of the Yugoslav forces, the unit which specialized in the dirtiest aspects of irregular or guerrilla warfare. The commanders of these units, especially, notably, in Bosnia, which are doing the worst atrocities currently; the commanders of the units which are doing the atrocities in Croatia, particularly in the case of Vukovar, where war crimes of a terrible dimension were created there: These people are {psychiatrists}--military commanders who are psychiatrists, associated with the Zagreb center of the former Yugoslav Army's guerrilla warfare/psychological warfare center. These people were trained in these arts, {by British psychological warfare}--that is, the London Tavistock Institute, which is an outgrowth of the Rockefeller-funded London Tavistock Clinic (the Institute by the way itself was also assisted by the Rockefellers), and is associated also with the Frankfort School types. Now this group in Yugoslavia, is not only connected to British intelligence, through people like Fitzroy McLean, who is still alive (he was Churchill's man, the guy who Churchill used for the relationship with Tito during World War II which is why the British supported the Communist partisans there, and also very close, however, to the Bertrand Russell crowd). Bertie is one of the dirtiest people you can imagine--was, he's dead now. But these fellows are all very tightly interfaced with British intelligence. And these guys, received their training from the Freudians of the London Tavistock Institute. And what they're doing, in terms of atrocities, is what Goebbels called, during World War II, {Schrecklichkeit}--{war by terror.} On the mass rape, officials of various governments, who have been on the ground conducting surveys indicate that {not less than 20,000 women and children} have been {raped} by Serbian guerrillas under the direction of these psychiatrists; that many of these women and children are retained in {rape concentration camps,} where they are repeatedly raped. And many of the children being raped, die, as a result of the horror of the rape. This goes together with the ethnic cleansing, otherwise [called] genocide; burning down the houses of anyone who is not a Serb, or killing people who are not Serbs, beheading people, terrifying them, driving them out. This is all part of {terror,} or is what Goebbels called {Schrecklichkeit,} using techniques which were developed, not only out of Zagreb by these psychiatrists, but developed {in cooperation with} institutions such as the London Tavistock Institute. And that is the horror which faces us, this kind of warfare. And we're doing nothing, of course, to stop it. Some people are complaining about it, but we're doing nothing to stop it. The worst horror show of the 20th century is now occurring there, and in effect, United Nations forces, under a French commander, with the backing of Vance and Owen, and others, are condoning the continuation of the worst genocide, the worst war crimes, crimes against humanity of the 20th century, in this location. And that's the story. Q: This is an incredible story that you're telling, in terms of the French complicity. Is there an international investigation into this that is now going on? LAROUCHE: Well, there may be investigations, but remember, publicly, since this is UN security, and since this horror show is being run {with the consent} of the Russian, British, French, U.S., and Israeli governments--as a matter of fact the Israelis are supporting it, the Greek government is also supporting the Serbs and so forth and so on. Under these circumstances, the New World Order which George Bush hailed with the collapse of the Iron Curtain back in '89 and '90, is the sponsor of this horror show. And therefore, people who are complaining, and there are people who are complaining, there are fairly high level people, a minister was fired in Germany for complaining about this horror show and the condoning of it; there are people in the British Parliament who are complaining about it, and elsewhere. And in France. But at the highest level, of the governments in power right now, the lid is on, and they refuse to accept the implications of these facts. - The New Age Ideology: The Extermination of Christianity - Q: In the recent period, this use of psychological terror by irregular forces has been seen, in Peru, for example, used by the Sendero Luminoso. Is this also a Tavistock operation? Now you mentioned Tavistock. It would be also useful to clarify the Tavistock psychological testing operations that were used during World War II and how that continued. LAROUCHE: We've warned about the Tavistock operation for years. We made a major expose of that in '73 and '74. We published a series of reports, which was captioned, collectively, ``The Tavistock Grin.'' We've mapped the people in this. These Tavistock people, are New Age; and people have to realize, to appreciate this, that Sigmund Freud, was a very evil man, he was very clever in some respects in psychology and you can't deny his cleverness or some of the things he describes as psychological phenomena, pathological, actually occur. But Sigmund Freud was a very evil and very dangerous man. And he is one of the intellectual authors of the processes which have been applied in the field in this case. If you're looking at Sendero Luminoso, which is, in effect, supported by a number of governments, for example, Amnesty International supports, very actively has supported, Sendero Luminoso and its practices. There are French intelligence elements which go way back, in the Ayacucho operation [at the University of Huamanga]. As a matter of fact, it was the standing joke, and it was a very ugly joke, that you couldn't become a leading member of Sendero Luminoso, unless you spoke French, unless you were a French professor. The teacher of Jacques Soustelle was very keen on setting this into motion. What you're looking at here, is people who are specifically committed--personally, philosophically--to eradicating Christianity from this planet. And they're carrying civilization back deliberately, to a pre-Christian standard of bestiality, to {paganism.} One of the Tavistock experts, or consultants to Tavistock, has commented on that specifically, that what this is doing, by the world tolerating these mass rapes--you know, you wink at a girl in an office these days, you can lose your job and go to prison, I guess; but if you commit mass rape in Bosnia, you'd probably have the blessing of the same U.S. courts that would support the complaint against sexual harassment in a U.S. office. That's the nature of things these days--insanity. But what we're seeing, is a breakdown in the morality, not only of the Serbs, of these communist-fascist types who are doing this, but we're seeing a breakdown in morality of {all of the governments} which are participating in condoning and covering up this atrocity. Q: The New Age doctrine, and its attempts to destroy Christianity: Can you develop that a little bit for people? People understand that we're losing our moral base, but they don't understand that there's a deeper operation involved here. LAROUCHE: This is an old story. It goes back years to the end of the 16th century-beginning of the 17th century, the formation of Rosicrucian cults in England and Bavaria and France and elsewhere, which became known as the Enlightenment, that is, the Enlightenment of Descartes, Locke, Hobbes, Newton, and so forth. And certain elements of freemasonry, which were direct outgrowths of the Rosicrucians, such as the British Freemasonry in 1640 and later, were essentially these Rosicrucian cults, which were paganist, pro-paganist, which revived ancient religions, such as the religions of Hiram of Tyre, pagan religions of that type. The Isis cult of Egypt, the Magna Mater cult of the Romans, and so forth, with the idea of eliminating Christianity and going back to paganism. So, among very high-level and influential circles, there has been, for some centuries, a lingering determination to bring about a revival of a kind of world order, a one-world order, which is modelled upon the pagan Roman Empire. A number of Nazis and others, such as the friends of Houston Stewart Chamberlain, the cousin of Neville Chamberlain in England, have argued that the crime of the Jews, was to bring into being Christianity, and it was Judaism and Christianity which destroyed the magnificent Roman pagan civilization, and if we're to get something ``beautiful'' like the Roman pagan imperial civilization back, we have to get rid of this ``virus'' of Judaism and especially Christianity. Hitler was of those views. Hitler's specific words were, that his operations against Jews were simply a pilot operation for his main purpose, which was, had he won the war, {to exterminate Christianity from this planet.} And not only on Hitler's side, did we have that kind of thinking, but on the British side, such as the Houston Stewart Chamberlain side, the Bernard Shaws, the H.G. Wells, these other Satanic figures, such as Aleister Crowley, who were sympathetic to Hitler at one point or another; these characters in the West have been as much in that direction as was Adolf Hitler. And that's what we're up against, is the influence of that, through the New Age, the elements of Satanism being purveyed to our children through the rock-drug-sex counterculture, and other things of that sort. - The West's Policy Toward Eastern Europe: - - ``Geopolitical Malice'' - Q: We have been discussing the breakup of eastern Europe. Mr. LaRouche, eastern Europe has been subject to political chaos and the economic policy that the West has offered eastern Europe, has not been sufficient to deal with the social and political chaos that's occurring there. What is wrong with that economic policy, and how can it be changed? LAROUCHE: You've got two things. First of all, there is a certain element of geopolitical malice in policies such as the IMF policies toward eastern Europe and the former Soviet Union, as well as incompetence. They've applied the same policy which they've applied to developing countries such as South American countries, which have ruined those economies; or to Africa, which has turned sub-Saharan Africa particularly into a region of outright genocide through economic means--Somalia, Ethiopia, has been living with that for a long time. Kissinger started that war between Ethiopia and Somalia, back when he was Secretary of State under Ford, and actually prepared it while he was under Nixon. So that war, that genocide in Sudan, I know Kissinger's role in causing genocide in Sudan, as well as in Somalia and Ethiopia. So these policies are responsible for this sort of thing. Now, the interesting part about the policies, is that in core, the philosophy, the rhetoric, which is used to justify these policies, is the rhetoric of Margaret Thatcher and is the rhetoric of most of our leading university economics departments in the United States today, as well as people like Senator Phil Gramm or other people in the Congress, who have been pushing deregulation, who have been pushing radical free trade, such as Carla Hills, for example, who is an exponent of the same disease. So, what they've done is two things. First of all, they have tried to bring the whole world into a homogenized arrangement under deregulation/free trade--which, incidentally, includes the intention to destroy the sovereignty of the United States itself. That's the intention of these people. And when they start moving jobs out of the United States, into Mexico or into the coast of China, because they say labor is cheaper there, and propose that a U.S. population with a much-reduced real wage level, instead of producing its own goods, will now buy them from cheap labor in Mexico or Communist China, you see that these fellows are very consciously destroying not only the American farmer, which they've done consciously, but destroying the sovereignty of the United States itself. So they're not really misguided in the sense of having some love for the United States. They have no love for the United States, not really. They're out to build a one-world mess. Now what they intend to do, is to keep the domination not of the United States, but of the wealthy foundations which control the United States and control Britain and so forth, to make the Anglo-American section of these superwealthy foundations, the ruling force on this planet. And one of the things they intend to do, of course, is to destroy everything that was the former contending number two superpower--the Soviet Union. So therefore, they wish to destroy as much as they can of eastern Europe and the former Soviet Union, prior to the time that Russia, when it gets fed up with this nonsense, decides to go back and become an empire again. So that's part of the process. But the gut of the thing, is that these economic policies, of free trade, deregulation, all this nonsense: this is what has destroyed the United States over the past 30 years approximately, since the assassination of Kennedy, particularly since about '65, '66, when this process of turning us into a post-industrial junkheap began. And that's what they're applying in eastern Europe and in the former Soviet Union--{with malice.} - Media Lies versus Economic Reality - Q: Most people in the United States feel that free trade, deregulation, will help them. It will decrease the amount of government spending, and it will therefore lower the cost for the middle class, and other types of arguments along these lines. LAROUCHE: I don't know about most people believing that. I don't think that's true. The media tell us they do. We've got a lot of homeless people out there, we've got a lot of farmers who are out of business, about 50 percent of the farmers are being eliminated from agriculture. We've got people losing their jobs left and right. Industries are going down. People are going from jobs in which they can support a family, at least with some difficulty, but could do it, into flipping hamburgers or flipping ``Hamburger Helper'' disguised as hamburger in some fast-food joint, at near-minimum wages. I don't think these people {believe} that what's happened to them, in reducing their standard of living and throwing them into the street as homeless or so forth; I don't believe that they think that the economic policies of the past quarter-century have done them much good or their families much good. What you have, is you have a vocal group of people who essentially make their living as parasites. For example, the Yuppies who work on Wall Street, peddling futures and other kinds of things of that sort--derivatives of derivatives, they're sometimes called. And these parasites, who think that the world owes them a living, and who are much touted--people who still have enough money to buy a copy of the {New York Times} and the {Washington Post} every day and buy the magazines, and who go to the fancy restaurants, such as they are. These are the people whose opinions are quoted, usually. And yes, they're deluded. Because they think that they're somehow better than the majority of the people who are out there struggling. And when we talk about, when will people wake up to how bad the economy is, generally you mean: When are these jerks going to be thrown out of their jobs, these parasites, going to be thrown out on to the streets, to realize that they are not prosperous? They don't care about the United States as a whole; they only care if they've got a job, if they think the income is flowing their way, or if they think they're going to make a killing on their speculation against tomorrow. So we have news media and others, who are pumping up so-called public opinion. We have foolish people who believe differently, who nonetheless think they ought to be overheard saying that this is good for us. But I don't think the majority of Americans, if push comes to shove, actually believe any of this nonsense. - How to Solve the Problem of the National Debt - Q: For 60 months we were told, during the Reagan administration, that we were in a period of economic growth. What is the difference, when we have the stock markets growing and people making money, and people working at flipping hamburgers, and other types of economic development? Why couldn't that growth just continue? LAROUCHE: It couldn't. People are not making money. They're stealing it. These are speculators, Wall Street people. Take the way our national debt is growing. How is the national debt growing? It's growing because of the Federal Reserve system, and follow the procedure. Exactly how is the national debt created? Not this monkey business that Phil Gramm and jerks--forgive the expression but I think it's appropriate--around the Congress and elsewhere, say it on the talk shows. The national debt is created, when the Federal Reserve system begins by taking paper from a bank, for example, and discounting it, let's say, today, at less than 3 percent. It then gives that bank a check in the model operation. The bank deposits the check with its bank--or maybe this is done electronically, it's the same thing. That check is processed for clearing. It goes back to the Federal Reserve, which takes U.S. currency printed by the Federal Reserve and issued by the Federal Reserve, and issues that to cover the check. Now in effect, this bank has borrowed the money, which is created out of thin air, at something around 3 percent, from the Federal Reserve system. Where did the Federal Reserve system get its money? From no place. It created it out of thin air, and loans it at about three percent, to these bankers or others. These fellows turn around today, and they {loan} that money to the Federal government at a one and a half percent spread, four and a half percent, up to eight percent--a five percent spread. And the debt grows and grows and grows. Q: They loan it to the Federal government, you said, or they loan it to the public? LAROUCHE: They loan it to the Federal government. The public, they loan it at 18 percent, through credit card debt. They create it out of thin air, and loan it to the public at, say, up to 18 percent. They loan it to the Federal government at four and a half percent. {Federal debt is being paid to this process chiefly.} The bankers are not in the banking business. They're in the business of raping the Federal government, raping the fiscal life of the United States government. And the problem that Clinton is facing, is that unless he tackles this, there's no chance of getting a recovery going. There never was a recovery. That's all bunk! There was a four percent decline, estimated, in retail sales, relative to a year ago, this past December. There {was} no recovery. They're going to downsize these things fast, but for the meantime, they talk about recovery. They were lying--as usual. As they have since 1983. Just plain lying. But the public reads it in the newspaper, the public sees it on these soap operas which are called the evening news broadcasts, or CNN, which is a big soap opera. And they tend to believe it, because who are they to contradict such almighty, wise oracles as CNN? Q: So you mean to say that the banks borrow the money from the Fed, and then loan it back to the government, make profit from the government, make profit from the public; how are we supposed to get rid of the Federal debt? LAROUCHE: Very simply. Go back to the Constitution. The Federal Reserve has been unconstitutional and illegal therefore from the beginning. But nobody's had the guts to say so, except a few people who are called kooks and cranks are saying so--but they happen to be right. And it's actually those who say the Federal Reserve is necessary and good for us, who are the kooks and the cranks. They happen to be the majority. But that's the way things go, sometimes. Q: When Clinton, Perot, and Bush were asked whether the Federal Reserve was the problem during the Presidential debates, they all said no, it wasn't the problem, that the Federal Reserve has to be maintained. LAROUCHE: Well honestly, I think that none of them understand anything about it. I know Clinton doesn't--otherwise he wouldn't have been euchred the way he was. I know that Ross Perot doesn't understand anything about it. He's probably a smart huckster, but he doesn't know anything about economics. And he's showed that repeatedly, in this piece he commissioned to have these various people write for him, and in some of the things he said on television, that I witnessed. He has {no} understanding of economics. You don't have to know anything about how the economy works sometimes to be a smart businessman, if you're in the business of fast deals. He said a few useful things, of course, but they weren't that major. And Bush, of course, was in a state. Bush doesn't really {wish} to understand anything about economics, and never did. Bush never made a nickel in his life that wasn't given to him by his family or by Farish or somebody. So how do you expect {him} to know anything about economics? - Why Clinton Should Rely On My Advice - Q: Clinton comes into office, he's facing a debt which is $400 billion a year or bigger. What does he do? LAROUCHE: He's going to be in a tough position. Domestic policy is going to be in tough shape this time around. Clinton said certain things up through November. Now see what's happening. On foreign policy, except for Warren Christopher, who does know something about the foreign policy establishment, who's in there as secretary of state, the Clinton administration has almost no understanding of anything about the world at large. Very parochial, very ingrown, very attuned into popular opinion or mis-opinion, misinformation, misinformed opinion in the United States. He doesn't know anything about the world at large at all--despite his trip to Oxford. But what the Bush administration has done (I don't think George has done this, but George has been played, to play a key role in this), the Bush administration has created, for the incoming Clinton administration, the biggest thicket of complex and highly dangerous worldwide foreign policy crises, that any incoming government has seen, even including Roosevelt facing World War II in this century. And there's no sign of understanding what he has to do about it. So Clinton is going to be so tangled in foreign policy problems, that he's not going to have much time or energy for domestic problems. On domestic problems, he's simply going to fool around with his cutting medical care for the aged and the sick and the weak and the poor, actually. And a few other things like that, because he's been boxed in to the point, that he actually has no recovery stimulus program at all left. We're facing a disaster and Clinton's facing a disaster, at least with the present trends, in continuing from his campaign in his policy shaping. Q: On domestic policy: What does Mr. Clinton have to do? LAROUCHE: Well, first of all, he has to rely on, I think to a large degree, my advice, because it's the only thing around that could possibly save him. This crew that he's got working for him--some of them may be well intentioned or might become well intentioned; but they simply {don't know.} For example: He's got a bunch of people who are trained in economics. They're university-trained in economics. They put Reich over in Labor with the argument that he hadn't had an economics education. He probably was the most intelligent of them in that lot, on economics. He had the advantage of not being brainwashed by economics at some university. These guys have been trained. They're young people who came up in the generation that went into college about the early '70s. They are the post-1968 generation. They have been {brainwashed} more than the generation before them. They have had no real education by the standards that we set, say, in the '60s or '50s. And, when they're faced with these crises, they have their ideology, the things they've been taught work, they've been reading in the {Washington Post,} the {New York Times} and elsewhere, that what they say is a credible philosophy; but {it doesn't work}--but they believe in it. They have no preparation for turning around. Finding their whole philosophy doesn't work, their whole policy doesn't work, and coming up with an alternative. They'll just fumble and fumble, worse than ever. So Clinton will probably find from {within} his administration, barring a few old hands that might have some inkling of what you do in a situation like this, such as Christopher, who is connected to older people. He has no resources among his young people for dealing with this crisis. And that's why I say, without exaggeration: If I'm not loose and supplying the guidelines of what has to be done, Clinton is going to be the worst catastrophe of the 20th century--not necessarily because of any bad things he's done himself, but simply because he lacks the ability--so far--to even understand what the problems are he faces. - ``Clinton's Economic Stimulus Program Is Tokenism'' - Q: Clinton had been talking at some point of an industrial recovery program, of an economic stimulus program. How does that compare with the industrial recovery program that you have put forward? LAROUCHE: It has nothing to do with it. It's tokenism. Look, we have a problem, in terms of full-time equivalent unemployment, that is, combining part-time unemployment and full- time unemployment, to turn it all into the equivalent of full-time employment: There are {17.3 million people} in the United States labor force who are unemployed. We have a shrinking percentile of the employed labor force actually {producing} anything--that is, producing infrastructure, producing in manufacturing or in agriculture. We are an {importing nation.} We do not produce our own food supply any more; we get it from other countries, because we've eliminated our farmers. We no longer meet our own manufacturing needs, because we've destroyed the skills, we've destroyed the industries, we've destroyed the tool industries. Then we blame Germany and Japan for cheating for not being as stupid as we are in our economics. We have no infrastructure. We have a water crisis, it's going to get worse. We're going to have brownouts and blackouts increasingly. Whole sections of the country will collapse for lack of energy on the continuing policy. And so forth and so on. So, in this kind of situation, you've got to have a lot of people put back to work in hard industry, that is, infrastructure, basically, in manufacturing and also, in improving agriculture. - To Create Employment - - Clinton Must Take on the Federal Reserve - Q: The big question, Mr. LaRouche, is how do we create new jobs, and the kind of jobs that would make a difference? What would be your advice to Mr. Clinton in terms of reversing this economic depression as quickly as possible? LAROUCHE: Very simply, he has to tackle the Federal Reserve question, and has to tackle the idiots in the public generally, as well as in the university economic departments. We have the unemployed. We either have, or can secure the capital goods, the equipment, needed to put those unemployed to work. All we need is the money, and I mean cash, credit, to employ both those people at productive capacity, with that equipment. We have to put things together. Now, any cash we put into this, on the average, we pick the right things, will bring back more wealth, than is represented by the cash issue. So therefore, it's an investment, it is not a subsidy, in the sense of a giveaway. It's not welfare. It's a productive investment, the best productive investment we can make. Most of this investment, has to go, primarily--that is, as initial investment, into infrastructure. That means water projects, rail projects, some highway patching, some bridge repair, some bridge replacement, things of that sort. Energy. And so forth. Now, as a result of investing in these projects, these projects will in turn buy from U.S. corporations, such as the aerospace automobile complex for building locomotives of the new type, or building trains for the new rail system, that sort of thing. So this is the natural stimulant of the economy, which ensures that for every nickel we invest generally, on the average at least, we're getting seven cents or something back, in terms of new physical wealth of a type which we badly need. We're also putting people to work in upgraded jobs on the average--not only upgraded from unemployment, but upgraded from going back to technological emphasis in skills. And when you increase technology, these pay scales, these skills, the standard of living generally goes up. And that's the way to do it. Now to do that, you have to recognize: We have a hole of about a trillion dollars a year in our throughput in production, which is required to balance the tax budget, the fiscal budget, and all these other things. So what you have to do, is to create that money, not by the Federal Reserve system--we cannot have the Federal Reserve issue the credit, nor can we have the money coming out of there to finance the private credit, to get these projects going. It won't work that way. You've got that 3 percent, 4 and a half percent to 8 percent, to 18 percent factor. It would be hyperinflationary, if you tried to stimulate the economy under the Federal Reserve system. Q: So how do you create the credit? LAROUCHE: You have to create it by the government printing press as the Constitution specifies. The Congress passes a law at the request of the President. The President issues the money, places it on deposit with national banks like the Federal Reserve institutions physically, which distribute the money as lending power, to the government, state, and federal agencies, and their private vendors, to get this economy going. And you have to put in between a half-trillion and a trillion dollars of that kind of credit {per year} to get this economy turned around. Clinton's talking at best between $20 and $30 billion a year. That's a bad joke. Until he gets up to $500 billion a year, he's not even serious. MEL KLENETSKY: Mr. LaRouche, we'll be back next week. Thank you very much. This is {Executive Intelligence Review'}s ``Talks With Lyndon LaRouche.'' ---- John Covici covici@ccs.covici.com
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