This article will appear in the November 26, 2010 issue of Executive Intelligence Review.

Dialogue with LaRouche

This is the transcript of the question-and-answer period which followed Lyndon LaRouche's opening address at his Nov. 6, 2010 webcast.

Freeman: Well, as I think people here can imagine, we have a broad variety of questions that have come in. And the questions fit into different categories. Some of the questions come from people who—I guess the most accurate way to identify them is—who are tied, in one way or another, to the institution of the Presidency. Then, we have a number of questions that come from members of Congress, both from the House side and the Senate side. We do have some questions from the Stanford Group. We have some questions from the working group on NAWAPA. And then we have a wide potpourri of questions from all over the place....

Because there are so many questions from so many people, I always take some liberty in merging questions. But for the purposes of today's event, I'm going to take more such liberties, because very often I have five questions that are a variation on an identical theme.

We also have some guests here—I see Rachel Brown over here. And, now, I see Kesha Rogers, who I'd like to bring up here. Kesha, come on up here. As people know, Kesha just ran an absolutely brilliant campaign, and she ended it with a call for some "Sane ducks in Washington, as opposed to lame ducks." So why don't you say a few words?

Kesha Rogers: The Fight's Not Over

Kesha Rogers: Well, I think what we have just witnessed with Lyn's marching orders here, is that, as I put out in the final statement at the end of my campaign, the fight's not over yet. And I think it's clear, we have clear marching orders, that the first order of business, is that we have to get Obama out.

We have a mission for the country, to reorganize this bankrupt banking system. And I have to say, for the last year, it has been an extraordinary process, because what we found, is the mass strike hard at work, and the population responding to leadership, and recognizing that with the atrocious policies of this Administration, and as Mr. LaRouche defined very rightly in his April 11 [2009] webcast, that we have a narcissistic President, more and more people have been responding to the fact that what we represent is the only solution to this economic crisis. And I think the questions coming in from people today, are going to be typified by what we can do to turn this country around.

And so, we had a lot of fun during the campaign, and if people haven't had an opportunity to see some of the recent videos, and look at some of the material, the responses that we're getting from supporters, then you should go back and study that.

But, I won't take up too much time: And I think what we can look forward to, in these coming days and weeks, is people responding to the only solution that's being put out there: That Obama has to go; that we have a generation that is represented by the LaRouche Youth Movement, that really characterizes what alternative and revolution in science and potential we can have. And what we're seeing right now—I mean, I was blown away by Rand Paul—we can't allow any of this to unfold in our nation, because we are at a point, where if we don't fight as if our lives depend on it for the saving of this nation, then we have no chance of surviving. And so, I think the questions that are going to come in, today, are going to really exemplify where we go from here, and Lyn has laid that out, very clearly.

Thank you.

A Russian Editor: Will There Be War?

Freeman: Obviously, had more Democrats followed the lead that was exemplified by Kesha's campaign, by Rachel's campaign, and by the campaign of Summer Shields on the West Coast—we wouldn't be in this mess!

Before I dive into the mire of these questions from the U.S., as people know, in addition to the fact that many people here in the United States look to these webcasts, and look to what Mr. LaRouche has to say, as critical in helping them discern a reasonable path, for themselves and for their constituents in this current period of grave crisis, it is also the case, that there are many people around the world, who look to Lyn, in an effort to understand what would seem to be a rather insane situation inside the United States.

And today, we're very honored to have one of those people here, and I understand he does have a question. He has asked questions via the Internet, at previous events, but I'd like to ask him to come to the microphone: Ladies and gentlemen, this is the deputy editor of the Zavtra weekly, in Russia, Mr. Alexander Nagorny.

Alexander Nagorny: Thank you very much for this opportunity to pose a question, but personally, I would pose 100 questions to Mr. LaRouche. Mr. LaRouche is very famous, especially in intellectual groups in Russia, and of course, his ideas, one way or another, they penetrate into different countries.

And my question would be rather, I would say, complex: Because the latest elections showed that in the United States, there is a rising resentment towards the current situation, and current political leadership. But, we can not say that those elections gave some hope for the future, because, one way or another, they show more reactionary results. And if we stem from the situation in the States, and the election campaign, we will say that the British connection is always there, and it always uses the crisis circumstances, to prepare another circle of war.

How would Mr. LaRouche connect those things? Don't you think that, if the crisis deepens in the United States, in connection with the Federal Reserve System, and all other things, which you mentioned, that those circles could prepare war, first, say, in Iran, and with a strategic goal, to arrange the war between China, which actually is carrying out the more LaRouche-type policy, and the other countries?

Thank you.

LaRouche: Yes, there is a danger of that sort of war, warfare—it's really quite probable. Under the condition in which what I propose be done, is not done, I would say—the inclination would be, for example, in the United States—the United States is the key to all of this thing. If the United States does not do what I know it should do, if it tries to compromise internally, between the leadership of the Democratic Party, or what I would consider the core of that leadership, the valuable core of that leadership; and the Republican Party, especially the fascist wing of the Republican Party, now, I think the world will go down to Hell.

But Hell would take many forms. It would take, obviously, the form of local warfare, would be a new wave of warfare—it would be worse, it would be like the European crisis in the Dark Ages. The planet as a whole would go into a Dark Age, which would probably be characterized by all kinds of local killing and warfare, chaos. Because all that holds the world together, is the degree of cooperation. We can not maintain the population of this world, without cooperation around some common principle of development of nation-states.

We just are not going to have the means to maintain populations. When you get into this kind of extremely negative development, as we've seen in the Dark Age of the 14th-Century Europe, that would be the kind of situation, but on an augmented scale, we could expect, if we don't succeed in ending this process, now. So, therefore, it's important that leaders of nations who have the guts, as we say, take a strong stand on behalf of seeking cooperation among nations, among forces among nations, which will work together to prevent this process—[otherwise], I don't think we have a chance. I think chaos is here.

If we can find forces in various nations, especially key nations—. For example, we have the case of Russia, China, India—these are key nations, together with the United States. If you have cooperation among these nations, if that's possible, then you will automatically have cooperation with Korea. Japan is obviously going to cooperate, and other nations are going to cooperate. Europe: Germany will tend to try to come back into some kind of relationship to this. Some things in northern Italy might work out. Some people in France would like it.

But it will be a hellish situation, and therefore, if the United States does not—I see the United States as having the greatest responsibility, for the situation, because if we do not do what we could do, as a leading nation, and if we do not bring other nations to a common table with us on these kinds of conceptions and policies, we're not going to make it. This planet's going to a dark age.

And what we've seen since the fall of the Wall, in Germany, the kind of chaos which the British and French, Mitterrand, and the United States, with H.W. Bush, brought into play, will be the characteristic throughout the world. That kind of chaos.

So, we are at a point where we have to, first of all, accept the challenge of preventing this chaos from happening. And we can only do that by coming to an agreement on policies of development, which creates stabilizing conditions. If we can create a condition under which people believe that in their governments, there's a way upward available to them now, even if it's not perfect, but it's a way up, we can stabilize the planet, if we have good leadership in some key nations. And I think there is that possibility.

What I said today, earlier, what I'm talking about, are the U.S. internal negotiations now, which will be going on this week. There'll be very intensive negotiations among the parties this week, with party leaderships. And if the right attitude is not taken, if a firm position is not taken against what Rand Paul represents, in the United States, then the whole world is going to go to Hell. And that I can predict with certainty.

Because if the United States goes to Hell, the consequence will be, the whole world will go to Hell. The British can't make it. Some of the smarter British admit it, but they don't do much about it, apparently. But we're headed toward hell right now, and therefore, that is the issue. We must find a solution. We must establish that solution. I believe it's reasonable, I believe it can be done. I believe there is a will among forces among nations to do it. But we have to achieve it. We just can not talk about it. We have to achieve it actually.

How To Wipe Out the Imperialists

Freeman: Lyn, one more question from Russia, and then I'm going to bring you back to the United States.

This question is from a professor and a group of students at the MGIMO in Russia, which is the University of the Russian Foreign Ministry, and, as I believe you know, Lyn, on Nov. 24, they're holding an open seminar on world financial centers. There's been a great deal of talk, apparently, about Moscow becoming a world financial center, and they'd like to have your views on this. They say,

"Mr. LaRouche, first and foremost, what do we need world financial centers for?" And they note that they're asking this question particularly in the context of the latest moves by the U.S. Federal Reserve.

LaRouche: Well, the U.S. Federal Reserve system does not represent the interests of the United States, I can assure you of that. It's an insane institution, and it can be the center of a very destructive process right now. So there's nothing good about the whole thing.

On what can Russia do, and that kind of process, I don't think it will work.

The problem in Russia now, in terms of Russian policy, is that there's still a strong influence of a British intelligence operation which is called IIASA, the International Institute for Applied Systems Analysis, which was created by Bertrand Russell's interests. And this thing has had a long—in the history of the Soviet Union and Russia, Bertrand Russell has had a very bad and strong influence.

Now the problem is, IIASA does not believe in actual production. They believe in financial systems. A financial system, if you study it—and I've been fighting these bastards for a long time, the IIASA crowd. Back in the 1970s, I was deeply involved in fighting these guys in the leadership of IIASA. They were totally incompetent. They were tied to the Club of Rome, and they were tied to those people, and it's a completely destructive kind of conception.

And in Russia, there's a certain government tendency to try to think in terms of using some vehicle like this, for these policies—like the idea of going to a California model of economy. It won't work.

What is needed is precisely, a new world fixed-exchange-rate system, which has to be in the form of not a monetary system, but a credit system. This would mean, automatically, the end of the British Empire. Because what you're running into is, Lord Jacob Rothschild's 1971 launching of his system, of the Inter-Alpha Group, otherwise known as the BRIC. That institution was organized at the same time that complicit people inside the United States set up the breakup of the fixed-exchange-rate system.

The only way you can have sustainable cooperation among nation-states is through a fixed-exchange-rate credit system, as opposed to a monetary system. In other words, the curse of all European civilization, as defined by European civilization starting in the Mediterranean region, as a maritime culture, has been exactly this: That the monetary systems, or money systems, have been established in such a form as, whether by agreement or imposition, the power of money is supranational. In other words, as Rosa Luxemburg defined it, the problem is that international monetarist systems are inherently imperialist systems. And the reason that Europe was screwed up on the question of imperialism, was they didn't understand this. They didn't understand the history of the Roman Empire, Roman law, these kinds of things.

As long as you have an international monetary system, based on agreements on monetary agreements, you can not have a healthy economy. Therefore, you have to do, as Roosevelt did with the fixed-exchange-rate system, which is an approximation of this—that is, the U.S. dollar was tied to a Glass-Steagall standard for commercial banking. The role of the dollar as a commercial banking currency was thus used among other nations, for a fixed-exchange-rate system. A credit system. That was the basis for stability.

The cancellation of the fixed-exchange-rate system, as had been established by Roosevelt, in 1971, was the beginning of the end of the world economy. And what we're facing today, is we're at the breakdown point of this whole system.

Now, the other side of the thing is that, in the post-war period—and this is particularly relevant to all Russian institutions—the point is: At the end of the war, the Soviet Union and the United States had an agreement of opposition to their common ally, Churchill. The agreement was, and Stalin understood it, and maintained it as long as he lived, and as long as he had a prospect of agreement from the United States, that there would be no war, there would be no conflict of a war type, in Europe, as long as this relationship between the Soviet Union and the United States Presidency continued.

What happened was, as soon as Franklin Roosevelt died, President Truman became a patsy for the British imperialist interests, typified by Churchill. And so, therefore, you had a period of struggle, which was continued up until the assassination of President John F. Kennedy.

The assassination of John F. Kennedy: Kennedy was determined, under the advice of Gen. Douglas MacArthur, not to allow the United States to become involved in a protracted land war in Asia. And thus he opposed the idea of U.S. involvement in Southeast Asia. As a matter of fact, I'd been in military service in Burma, at the same time the United States and Ho Chi Minh had been allied against the Japanese occupation of Indo-China. So that we knew, we understood this problem. And senior people, despite Truman, despite the fact that the policy of the United States was oriented toward the British—you had leading figures like General MacArthur, General Eisenhower, and so forth, who still understood this principle. The lesson of World War II: We do not, as Roosevelt said while he was alive, and he told Churchill, no deals with the British against the world.

U.S. policy was, that China and the Soviet Union, after the war, would be the key anchors of creating a world system of peaceful cooperation among nations, for economic progress. That was Roosevelt's intention. And that was destroyed. But the idea was not destroyed.

We had factions inside the United States, which included some of the OSS, the patriots, people who were still significant in the 1980s, early 1980s. We still had people who belonged to my persuasion, that we had to organize cooperation among nations, along the Roosevelt tradition. That is, Roosevelt's orientation toward Europe, Roosevelt's orientation toward Stalin, and toward China. That we had to establish a permanent bulwark against the kind of warfare which the British Empire had used to control the planet. And that was understood. That was maintained.

That section of the OSS, which agreed with what I represent, agreed. Generals like MacArthur and Eisenhower agreed, were typical of those who agreed. And that's still my policy today, the continuation of the same principle. There is no need to try to find a way, to take differences on these kinds of issues, and use them for setting nations against each other, in the direction of warfare.

What is needed is an understanding of common interests, and common principles. Now, it may not be perfect, but if you have an agreement on common interests and common principles, you can improve upon that. If you go directly to warfare, you can't improve upon it. You get warfare. And that's the way imperialism, since the time of the Roman Empire, and even earlier, has always operated in European history. It's the utilization of protracted warfare, among nations which should be cooperating, as the way by which empires control nations. Therefore, you must have a unity of principle among nations, as nation-states, and you must protect that interest of nation-states, against any imperialism.

That is why you must eliminate a monetarist system, because a monetarist system makes money the emperor of the world. And those who control the money system, can control the world in an imperial fashion. Which is what has happened to us now.

So, our policy has to be based on those considerations. And what we need is not these so-called practical steps. I abhor them. They don't work, they stink. And I'm an old enough man to really know what I'm talking about when I abhor them. They stink.

What you have to have is state-to-state agreements, of this nature, and you have to have a fixed-exchange-rate system. Otherwise the treaty agreements don't mean anything. You need a fixed-exchange-rate system, among leading states, and I've indicated that if you have an agreement among the United States, Russia, China, and India, you have sufficient agreement among nation-states to re-establish what had been Roosevelt's policy for the post-war period, and a policy which had been continued whenever they had the opportunity to do so, by MacArthur and Eisenhower.

And that is why, under the influence of MacArthur, John F. Kennedy was determined not to go into a long land war in Asia, and rejected the idea of the Indo-China war. And the only way they got the Indo-China war was by assassinating President Kennedy. That was not done by a lone assassin. It may have been done by a banker, but not a lone assassin. That's how it was done. And that's what destroyed the whole process.

That's how the United States was destroyed; that long, ten-year long war in Indo-China, destroyed the United States, and let the British come back into power, in the form of Lord Rothschild's Inter-Alpha Group, the so-called BRIC group. And what you have to do, is destroy the BRIC group—that's the first step. And go back to a fixed-exchange-rate system, based on a state agreement among the United States, Russia, China, India, and some other countries. If you get that agreement, the world is safe. If you don't get that agreement, the world ain't safe.

From Marriner Eccles, to Hamilton & FDR

Freeman: Lyn, since you touched on this question, I'm going to mix up the order that I had so carefully established, and ask you a question that comes from one of the economists who's associated with the Stanford Group, who actually is an expert in international economic law and economic history. And he wanted me to preface his question by saying that, even though he happily serves as part of the Stanford group, he teaches at Princeton.

He says:

"Lyn, as I'm sure you know, we are about to enter head-first into a period of even greater deficit mania, and demands for austerity. And while it would be nice if this could all be blamed on the Republicans, I think that in fact, this is a view that is shared by many Democrats, and most specifically, by the President.

"I think that, if we watch the activity that comes out of the meetings of the Federal Open Market Committee, we can conclude that Bernanke's view may very well be the consensus of both Washington and Wall Street, but anyone who knows history, and just a little bit about economics, knows that it's also the exact opposite of the fiscal advice that was offered by one of Bernanke's most effective predecessors, and I'm referring to Marriner Eccles, who was the chairman of the Federal Reserve during the 1930s and 1940s.

"As I'm sure you know, Eccles called for larger deficits, and increases in government spending programs, to pull the country out of the Great Depression. He then went on to enlist the Federal Reserve to finance the huge World War II debt, at low interest rates, so that the post-war recovery could flourish. He was proved emphatically right, first in 1937, when the economy fell into a steep nosedive after the Roosevelt Administration, based on some bad advice, tightened fiscal policy. And then again, when the massive World War II fiscal stimulus of the 1940s, ended the Great Depression once and for all, and fueled the highest economic growth rate in American history.

"Fiscal conservatives prefer to ignore the history of the '40s, but it's a period when the Federal Reserve was far more accountable to elected officials, and far more independent of the private financial interests that have come to dominate the Fed in more recent days. During the '40s, the Federal government spent and borrowed far greater than today, as a percentage of overall economic activity."

And he notes that today, Federal spending is about 25% of the GDP, but in the '40s, spending peaked at about 45%. He also said that today the deficit is 9% of GDP; in the '40s, the deficit peaked at 31%. And he goes on to cite other figures. He says:

"After the war, the policy continued, and massive Federal spending funded social policy, through the GI Bill of Rights, which made available job training, tuition-free education, health care, and housing subsidies, to the 16 million returning veterans, who represented more than a third of the American workforce. The GI Bill spent a lot of money, but it bolstered an expanding working class. and middle class, and created the conditions for sustained economic growth.

"The growing economy pushed up tax revenues. It lowered the debt burden. And it helped Federal government pay down the debt.

"The fact is, that what we did in the '40s, both the spending and the borrowing, was much higher than it is today. There was no rise in interest rates. The Federal Reserve was held accountable to democratically elected officials. It was directed by the White House, and the Treasury, to peg interest rates at 3/8 of 1% on short-term Treasury borrowing, and 2.5% on long-term borrowing.

"The so-called peg period of public finance, began in the weeks following the attack on Pearl Harbor, and as the Federal Reserve itself would later describe the division of responsibilities, the amount of government spending was properly determined by Congress, and it was the Treasury's responsibility to determine the rate of interest it would pay on the borrowing. It then became the Fed's duty to purchase government securities in any amount, and at any price needed, to maintain the interest rate pegs for Treasury.

"Where am I going with all of this? Well, where I'm going is as follows: Many people run around today and scream that we should shut down the Federal Reserve, that the Federal Reserve is illegal, etc., etc. And perhaps that's true. But the bottom line is that the current reality is starkly different from the reality of the '30s and '40s, and the way that the Federal Reserve operated then. Back then, the Federal Reserve supported much higher levels of deficit spending, but they were needed for a recovery at low interest rates. In contrast, today, we have very low interest rates, but they're supporting business-as-usual in the banking center, and it is not translating into recovery for the real economy.

"The Federal Reserve today is not part of the solution—they are part of the problem.

"Few economists ever learn about this period in Federal Reserve history. It's been airbrushed from most mainstream texts, most especially from Bernanke's own economics textbook. To the extent that the Eccles period is discussed at all, it's dismissed as an odd anomaly. Today's new norm is a Federal Reserve bank captured by private financial interests, that is pursuing an elite agenda of deregulation, fiscal austerity, bailouts, and bonuses for bankers. But our nation's history shows that at one of America's finest hours, it doesn't have to be that way.

"I raise this very specifically, because among the things we have been looking at, as part of launching an economic recovery, is embarking upon the NAWAPA program, really the greater NAWAPA program that you have proposed. My argument is that, the Federal Reserve can play a role in this, if we choose for it to play such a role. I'd like your comments on this overall, and later on, I know that we will have some more questions for you regarding the whole issue of the Federal deficit, and whether or not it's something we should worry about."

LaRouche: Well, the thing you didn't mention explicitly, which is crucial to this matter, is: Take a point of reference: the closest associate, the collaborator, of the former head of the Treasury [Alexander Hamilton], was Isaac Roosevelt. And Isaac Roosevelt was the founder of the Bank of New York, and he was the ancestor of Franklin Delano Roosevelt. So, Alexander Hamilton's connection is there. And one has to look at this legacy, particularly of the role of Hamilton in defining the credit and banking policy of the United States, which was absolutely crucial.

And the destruction of the United States system, came essentially as the result of Andrew Jackson. Andrew Jackson against the Second National Bank of the United States—which led into, directly, the Great Panic of 1837. So, the problem is, that the British interest—and this is what it was, the British interest—was typified by the founding of the Bank of Manhattan. It was founded by the British, and what we call Wall Street today, is a result, chiefly, of the founding of the Bank of Manhattan, which became later Chase-Manhattan. And that was the opposition to the Bank of New York at that time.

Now, Franklin Roosevelt returned to that, as other Presidents had also returned to the same policy in later periods, though the re-establishment of the Bank of the United States, the National Bank, was not restored. And the problem with the Federal Reserve system is that it is not the National Bank, but it was created by the Wilson Administration on the instigation of the Teddy Roosevelt Administration. And this was done to try to destroy the United States' ability to establish, re-establish, national banking.

What Franklin Roosevelt did, was use the available junk institutions which existed at that time, and through the inauguration of the Glass-Steagall Law in 1933—without the Glass-Steagall Law, there's no understanding of this process in modern times. You have to go back to understanding the greenback policy under Lincoln; you have to go back to Isaac Roosevelt, you have to go back to Hamilton and the national banking concept. And that's where the thing is.

The key thing here is what is required is the replacement, and elimination, of monetary systems, by a credit system. Because only the control of a currency, under the rule of a credit system, can handle this problem.

Like this question of debt size. All right. When you create debt—well, that does not answer the questions that are involved, does it? When you create debt, under national banking, you are uttering credit. Let's take the NAWAPA project.

What we're talking about is, first of all, the United States is going to have to bail out the states. We've got to get the police in place, we've got to get the institutions of state government functioning, the essential social and other institutions of state government. They're collapsing now. And Rand Paul doesn't know about that. He doesn't know about infrastructure, he doesn't understand economics at all; he's an idiot on economics, which helps him to be an assassin in terms of other things.

So, therefore, you have to understand the American System, as it was defined by the constitutional effort, to which Hamilton made a great contribution, because Hamilton was the person, as an official at that time, who organized the reform of the banking system of the United States, which led to the adoption of the Federal Constitution! The Federal Constitution is based on the Hamiltonian principle! And what saved the United States at that time, was the establishment of that principle.

The idea was to free the Americas from the foreign banking influences, to establish a national banking institution which would be able to determine the value of the U.S. currency in its own borders and abroad. No monetarism is allowed! We may have a form of monetarism, because it's in the world at large, but we had to defend ourselves against monetarism.

And our basic enemy of the United States since 1763, has been the British Empire; the only permanent enemy of the United States is the British Empire, and that's been since 1763, since the Treaty of Paris in February 1763. That's the quarrel. We've got to get rid of the British Empire.

Now, Roosevelt had a good idea of how to do that, but Truman was a Wall Street whore, hmm?

I'd better explain this, because this is crucial, and it's important. It goes back to '37, and the '37 crisis and Marriner Eccles's role in that crisis.

What had happened was, that in a certain period, the British had made a comeback against the Roosevelt reforms, after 1936. And, this forced the President to back off from his own program, and to cut back his own program, because he did not have the political power—this was the issue with the Supreme Court reform—did not have the political power. The Supreme Court was still an agency of the enemy, by and large. So, therefore, Roosevelt had to back off at that point, and cut back on his reform program for that moment.

The British were running high, they were unloosing Hitler on the world; at that time, they were the backers of Hitler. After all, the British Empire created Hitler, and they were his backers.

Now later, there was a little difficulty which came when France fell. The French army, the French military, vastly out-gunned, out-massed, the German forces at that time. So, the Wehrmacht comes running through. How do they conquer France? Well, in the meantime, the fascist government of France had rearranged the military preparations, as well as the commands and so forth, for military forces which had a vastly superior force to that of the Germans! Why did the Wehrmacht come through? Because the French government opened the gates, for the Wehrmacht to overrun France. So this was what was going on.

At that point, then Churchill turns around; he had been out, determined, like the British, to destroy the United States, when they thought they had France under control, and were going to keep Germany with a war against the Soviet Union and Eastern Europe, and the Soviet Union and Germany were supposed to destroy each other. So, the Wehrmacht had an arrangement with the fascist government of France. So, the fascist government of France capitulated to the Wehrmacht. And then you had a shift. And then, Churchill screams for Franklin Roosevelt to come and bail out the British. That's how the change occurred.

So, this is the background of the situation.

So, now at this point, the British also had the agreement in the 1920s for Japan's attack on Pearl Harbor. It was part of a coordinated attack on the U.S. Naval forces. So now, it's changed. Now, Roosevelt is brought in by Churchill to support the British against the Nazi force in Europe. At that point, the Japanese are stuck, because they had been allied with Britain to attack the United States at Pearl Harbor. They built the entire fleet operation for the attack on Pearl Harbor, in the 1920s. The Billy Mitchell case was a part of this same case.

Now suddenly things have changed. Churchill is now screaming for the United States to save the British from the danger that there will be a western attack on Britain, and wipe out Britain. So, at this point, the United States is now supporting the Soviet Union's assistance, by the aid program. The British are allied with the United States as prisoner, because the only way they can save themselves, is with the United States. Japan is stuck; it still has the attack on Pearl Harbor in part, but it knows it's a potential loser. But they decide to go ahead anyway, even though they knew in the long run, they were going to be a loser.

So, this is what the history has been. Then, at the end of the war, Roosevelt dies, and the same bunch of bastards in Wall Street, which had caused this problem in the first place, now come in with Truman, who had been a Wall Street hack.

What had happened in 1944, in June of '44, when the United States had led the breakthrough into Normandy: At that point, the British changed their policy, and Montgomery was a good example of that. They changed their policy. So suddenly, Wall Street, which, as long as the British were screaming for U.S. help, Wall Street was behaving itself. Truman, who had been a fascist part of the Wall Street operation, had been elected—nominated and elected as Vice President—because the fascists were back in power in Wall Street; they had been unleashed again. The war in Europe was extended for another 12 months, virtually, by the British. A surrender of Germany was ready at that point, and the British intervened to have the German generals killed, designated, and killed, in order to keep the war going for another year.

So therefore, we came into completely different conditions, at that point. And that's been the history.

So now what happens is, we still have the fixed-exchange-rate system. We have the Bretton Woods agreement, which is Roosevelt's creation. The world is still organized for recovery, led by the United States. Now, they're out to destroy United States by the end of the 1950s.

At that point, they have a problem. Kennedy is elected, and Kennedy does not act like his father. Kennedy acts like a patriot, which his father was not too strong on. So Kennedy does a number of things: He defends the steel industry, against the steel bosses. He conducts negotiations; there is an agreement which is the Eisenhower-de Gaulle attempt, with Khrushchev. And Khrushchev was a British agent, so that was a real problem. Khrushchev screwed the whole thing up.

So now, things are going on, and then you've got these other developments which ensued, and that's how the history unfolded.

So then, you had the assassination of Kennedy, which allowed the Vietnam War to occur, and it was the Vietnam War, Indo-China War, which for ten years destroyed the United States. Now, the British move in, with Nixon, and by the assassination of two Kennedys, which helps this process along, in order to destroy the United States. And what destroys the United States? The British move in with the Inter-Alpha Group, which controls 70% of the world's banking today. The British financial system is the imperial force in the planet today; and my intention is to destroy it.

Thus, the question that's posed, really has to be reframed in this context. Because the form of the problem, is not necessarily the cause of the problem. And addressing the form of the problem will not correct the problem, because it's the cause of the problem you have to deal with. What's the root of the problem? And it's still the same thing today.

We're still in a fight in the United States since 1782, when the British started a counter-operation against the American Revolution. We're still in that same situation, today, and the issue is still the same thing: The Hamiltonian system of a fixed-exchange-rate system, which is the intention, the idea of our national banking policy, which is a Hamiltonian policy. The idea of a credit system, rather than a monetary system. We're now at the point where we should realize that after all this experience, we must eliminate the existence of monetary systems from the planet. And we must re-establish credit systems, national credit systems, which are bound together by fixed-exchange-rate credit systems of agreement.

We must organize—for example, let's take the case of this NAWAPA project. This NAWAPA project, we're talking about essentially, 30- to 50-year bonding, just to get the thing going. Remember, in order to build NAWAPA, we have to build rail lines to carry the heavy freight which is going into the mountain areas, up to 5,000 feet, in the Idaho region. And we're going to be hauling this; we're going to build the greatest dams that were ever built. We're going to more organization of water by far, than Three Gorges Dam. We're going change the weather system of the world. We're going to take the entire area from the West Coast to the 20-inch rainfall line area; we're going to create a new rainfall line area as a by-product of this water project.

We're going to change the character of the planet. We're going to open up the Arctic. Russia is dealing with the Arctic; Canada, Russia, the United States are the big factors in the Arctic region. We're going to go into this Arctic area, which we've never mastered, which has many important features which we have to master.

We're going to do these kinds of things. We're going to create a new world system. We're going to connect the entire planet, except for Australia, by railway systems. We're going to solve the problem of Africa, which we'll begin by the Transaqua policy, which some of the Europeans are opposed to. We have all these means.

So, what we have to do, when we're looking at the Eccles policy—which has many good features to it, that is true—but it doesn't bring to the surface what the real deeper issue is, and which Franklin does, and the Hamilton view does. And what I'm saying is, the time has come that we should learn from our mistakes. The national mistakes, and world mistakes. We have to go back to a true American System of political economy, which is based on a global fixed-exchange-rate system. And the idea of the fixed-exchange-rate system is to be able to generate long-term public credit for great projects which are needed by mankind, over the long term, at a fixed-exchange-rate and modest interest charges.

And you take this NAWAPA project, as I outlined it: You're talking about putting, in a very short period, 4 million Americans back to work—4 million. Not the phony stuff. Right now, the United States and the world are in a general breakdown crisis. The United States is not in a recovery; it's not in this, it's not in that. The United States is on the verge of being totally self-destroyed, right now! There's no recovery. You continue this President, there is no United States; there's no financial system.

Some people want to negotiate with these guys. I say, No! No, the Eccles thing is an important issue, but I think if you look at it in the way I've just defined it, in broad terms, you get a better understanding of what the issue was at that time, because Eccles was in a period which passed through the Franklin Roosevelt period and the post-Franklin Roosevelt period.

Save the Presidency, Remove Obama Now

Freeman: Lyn, the next question comes from a Democratic political consultant, who operates out of Washington and other places as well. And he says, "Lyn, before I pose my question to you, I think it's really important to set the record straight, because press all over the United States, and all over the world, are saying that the results of the election last Tuesday represent a humiliating defeat for Barack Obama. And the fact of the matter, is that as a Democrat, I have to disagree. Oh, I think he's humiliated; he's humiliated because the press says so, and he doesn't like that sort of thing.

"But the bottom line—I know it and a lot of other Democrats know it—is that this President and his staff, were hoping, for exactly what they got. Because in fact, they could not implement the policies that they wish to implement with a progressive Congress. They want to go on an austerity spree. They've made very clear, long before the Tuesday election, that it was their intention to cut Social Security, to cut Medicare. It was not the Republicans who put together the Presidential commissions. It was, in fact, this President, who, I believe, still identifies himself as a Democrat. Now, if we watch him following Tuesday's election, he holds up his hands, and he says: 'Oh, what am I to do? I'm a hostage now. I'm a hostage to a hopelessly gridlocked Congress.'

"My response to that is CRAP! It's time for him to stop pretending that he's a Prime Minister. Any decent President would act like a President. I think that the one thing that I want to communicate is that, built into our system of government, the President is not a hostage of Congress. If a President wants to pursue an agenda, there are plenty of ways he can do that, without any help at all from Capitol Hill. And I would refer people to their history books, and the Presidency of Franklin Delano Roosevelt.

"But the fact of the matter is, that even though things are different today, the President of the United States oversees a massive regulatory apparatus that would allow him—if he wanted to—to take on the banks, and put an end to the orgy that we've witnessed over the course of the last several years. There are many people on Capitol Hill who, because, on the one hand, they knew they couldn't get what they wanted in putting together the Financial Regulation Reform Act, put together a bill that has a lot of blanks in it. And the fact is, that Dodd-Frank has left so many blanks, they've left so many things to the regulators, that in truth, the vast [part] of the bill has yet to be written.

"My basic point is that people should not buy the crap, and while we have to pay attention certainly to what the Republicans are up to, we have to pay attention to what the deficit hawks will demand, and we do have to recognize that in fact, that it is the case in our system of government, that there are some limits to the power of the Executive; that our government is not organized around a Prime Ministership; this is not a parliamentary system. So, if things are screwed up, yes, blame the Congress, but understand that the real culprit is the President, and that if he wants to change it, he can.

"I'm saying this, because we have a number of tasks immediately before us, and I'm very concerned that people concentrate far too much attention on what happens on Capitol Hill, and not enough attention on what comes out of the Oval Office. I'll say it here, and I've said it before. If the President wanted to start fixing what was broken in the U.S. economy, he could start by firing Tim Geithner. And then, he could proceed to pull together a team that actually reflects something other than the interests of Wall Street.

"I know you'll forgive me for ranting, but this just really aggravates me. And it strikes me that if the American people fall for this garbage, then in fact, they will essentially prove Abraham Lincoln wrong. They'll prove that you can fool all the people all the time. I don't think that's true, but my question to you, Lyn, is, how do we address this mess? And how do we address the fact that now everybody's going to be screaming about gridlock, when really with any President who wanted to get something done, the gridlock would be irrelevant?"

LaRouche: Well, first of all, I have to agree with great enthusiasm, your emphasis on the Presidency; that's true. Our system is not a parliamentary system, it is a Presidential system. But there's another correction we better add to that—that this current President is clinically insane. Now the problem is, the Democratic factions of relevance, which I would acknowledge as being important in this matter, are ducking that issue. It doesn't mean they're ignoring its existence, but they're ducking it in the form of the calculations.

The fact of the clinical insanity of this President—and he is clinically insane—lies in his role as an asset of the British monarchy. He's not a Democrat or a Republican; he's a Brit! He's a kisser of the butt of the Queen. He's an enemy! Though he's a nut! He's crazy! He's a synthetic personality. He has not got a real personality. He's a sicko! Sick, sick, sick sicko!

Now, the problem is, is trying to get the Vice President, who is the responsible person inside the Presidency for this case, to take the step which will force the issue, during the lame duck session! While the composition of the Congress is what it is during the lame duck session. Now that's going to force a fight, at least if there's anybody with the guts to start that fight. But that's where you have to start. Sometimes, this lame duck has got to fly! This is the time to do it. Because this President is not—don't think of him as a Democrat or Republican. He's neither! He's a lunatic! He's a lunatic modelled upon the Emperor Nero, on the lunatic Adolf Hitler.

Now in history, we've had the use of heads of government and state, who are known lunatics, who are put in because they are lunatics. Because the lunatic will do automatically what no one else will do. That's why they're lunatics; that's why they use these lunatics. As the case of Caesar—the same thing; the whole family was a bunch of lunatics, actually. So that's the first thing you've got to start from—that this President is a lunatic; his actual loyalties do not lie in anything real, because there's nothing real about him. The guy's a mental case of a very special type, and an extreme type of case. He has no loyalties, because he has no personality.

Now, I laid this out on April 11 of 2009; I laid it out. The fact that now the thing is all over the place; the diagnosis, what I said, is confirmed. This guy is a lunatic. He lives in an imaginary world, not the real world. And he thinks of himself as the emperor of the world. I don't know if he really thinks that through, but that's the way his mind works. He thinks of himself as if he were the emperor of the world, and the more frustrated he becomes, the more he goes to this imperial thing. It's like Hitler in the bunker! It's like the suicide of the Emperor Nero—he went to the extreme in violence and mass murder. And when that no longer worked, he killed himself because he couldn't stand himself anymore. He's a lunatic!

And you're talking about working with a Presidency, and your argument, of course, on the Presidency, is absolutely clear to all of us who know this thing. The Presidency of the United States is the Executive institution of the United States. The Congress is an auxiliary, and also is a check and balance on some of the aspects of the Presidency. But our Constitution is a Presidential system, not a European parliamentary system. And some of our people here have gotten so soaked up with British parliamentarianism, that they don't understand the difference between a Presidential system and a parliamentary system. We're not a European parliamentary system; we're a Presidential system. That's our morality, and that's our strength.

And I emphasize that that is our morality, because the person of the United States President is responsible to a certain set of what we call checks and balances. The President's personality is one, therefore, which is defined as a servant of a function, the servant of a mission. And he has to be controlled to make sure he sticks to that duty of his mission—doesn't go off on some lunatic mission, like this poor lunatic. And he is a poor lunatic; he's a sick, sicko kid. And he should be relieved from these duties and replaced.

And I'm upset with the Vice President, because he doesn't do that. I know all the arguments, I know all the doubletalk, and all this thing. But you've got a lunatic in the Presidency! Do you say, "Well, we've got to keep the lunatic there. We can't move to get him out"?

You've got a lunatic in the Presidency, the most powerful institution in our system of government. And he's a lunatic; a dangerous lunatic, becoming more and more insane by the week. What's he allied to, the Republican Party, or Democrat? Neither! He's allied to his own lunacy. You have to understand that. He's like the Emperor Nero; he's like Hitler. Hitler was a creation of the British. It was done in a very special way, special training program. And they found he had the talent as a lunatic, a lunatic in a way they thought it was useful to them. And then he got a little bit wild, and you know how he went. Why do you think he went out? He went out as a raving lunatic, and he'd been a raving lunatic all the way through. And the whole Nazi system, the whole Nazi Party, the whole Nazi leadership was largely controlled by a bunch of lunatics, who participated in mass lunacy around the figure of a leader, der Führer, who was a lunatic. So you had a government which was based on the appendages of a lunatic. And when things got bad, the lunatic became, obviously, a really complete lunatic, in the process of murdering a lot of people.

And so, that is the issue.

But the issue for me is, how do you enforce this function of the President, if you have a raving lunatic as President? A man who has no real personality of his own, but only an adopted one; the adopted personality of a psychotic. Obviously, you have no solution for your problem unless you remove this President from office.

And if the Vice President doesn't act, he'll carry that guilt to his grave. This man must be removed from the Presidency now, because if the United States goes down—and if this guy remains President, it will go down; it'll go down soon—then the collapse of the United States will cause a collapse of the entire world civilization. And that's what you've got to think about. That's my basis today. You've got to think in those terms. Any change in the subject matter from those terms to some other issue of discussion, is a tragic mistake. This guy must be removed from office. There is no alternative. There is no other subject. If you don't put that subject first, that mission first, everything you try will fail.

Give Biden a List of Obama's Crimes

Freeman: "Lyn, as you know, although you have called for Obama's removal from office, and called for the invocation of the 25th Amendment, Vice President Biden is reluctant to take such action. And one of the things that we believe is necessary, is essentially to provide Biden with a list. A list of particulars that he can march into the Oval Office with, and say to President Obama, 'Look, if you have any hope of saving your Presidency, and of saving the nation, this is what you must do.' Lyn, I know you will see this as compromise, but we don't. It's a necessary step if, in fact, there is any hope of moving to do something as serious as invoking the 25th Amendment. What would you suggest be put on such a list of particulars?"

LaRouche: I'm not opposed to doing that, but it has to be done with a certain higher goal in mind. Yes, you know, when you're going in to pluck the chicken, so to speak, you have to have an end result in mind. Why are you plucking the feathers from this chicken? Perhaps because you intend to cook it, which would be a good idea.

So, therefore, obviously, in the very short term, what is required is a rapid fire of successive measures which lead to the orchestration of the result. One has to think like a master dramatist. What you need is to approach this with the mind of a master dramatist. You have a tragedy before you. And the tragedy is going to end with the subject of the tragedy being carried out, offstage. Off the stage. It will be off the stage.

Now, how do you orchestrate the drama, which brings you to that intended result? How does the greatest tragedian treat such cases of actual history? That's what you have to do.

Now, a list of these things. First of all, reasonable.

You have to go: "Mr. President, these are your mistakes, Mr. President. These are things which no President should have done. These are things that any President should have done." And so forth. You can take, for example, health care. "Mr. President, you have brought in a set of measures which are tantamount to what Adolf Hitler did in Germany, and what your predecessor in Britain has done, Tony Blair, with his NICE program. You've introduced a health-care policy which echoes that of Adolf Hitler. Mr. President, you've got to stop that. You'd better change that." And so forth.

So you go through those kinds of measures. Now, you have to—when you do that, you've got to take into view, the fact that this guy is really a lunatic. Don't go in there with saying, we're going to treat him as if he's a normal human being, and tell him he's got to behave more reasonably. This man is a lunatic. He will not hear you. This lunatic will not hear you [imitates Obama, staring into space]. You're going to appeal to reason with—what kind of fantasy life are you living in, if you think that's going to work?

No. What you've got to do, you've got to act—not to persuade him—you're going to act to persuade people, that they have to do something about him. So what you say to him is irrelevant, insofar as it is addressed to him. Because you've got to think about addressing the people who will hear what you propose. And what I would suggest, is that we have a famous case in France, by a famous French writer [Émile Zola]: "J'accuse." I accuse you. I accuse you. I accuse you. I accuse you. Now that was never implemented officially, but the impact of that being written, had an effect upon the history of France, which was good—it was not sufficient, but it was good at the time. And that's what we're dealing with.

You have to list the errors he's made. It should be a bill of indictment, not a proposal for a compromise. You can not get a compromise with the guy. Why try for it? You don't want a compromise with this guy. You want to answer the question, that the citizens out there are going to ask. You don't address this President, you address those citizens.

What's your problem? You've got citizens out there who are frightened, who are confused, who are going to make excuses for this President. You are going to strip them of the ability to accept, to defend him in their own conscience. You're going to appeal to the conscience of the citizen. The crimes this guy has committed! You want to present it to him—a list? Good. Excellent. But who's going to hear it?

You're going to talk to this President? You want to talk to the chicken about the price of eggs? No, you're dealing with a political process. What you have to do—you are showing leadership of the type that's relevant. And I believe, that the kind of people I'm talking about, do understand that, what leadership is. You're leading—you're capturing the imagination—of the American people, including leading circles in and around government.

You know you've got a bunch of cowards out there among our leading members of Congress, even the lame duck group and others. They're cowards. They've proven to me, to great satisfaction—they've achieved the acme of cowardice, political cowardice, in their recent period in office. I know they're cowards. They may not be cowards in every respect. They're willing to cook the chicken, or something like that—they're not cowards in that matter. But, what you're trying to do, is mobilize the political forces, and with a resonance with the citizens out there, who are going to be looking at you, for everything you say, really, sooner or later. And you're going to be presenting a case.

In other words, you're not walking around gossiping about the President, the lunatic, the nut case. You're not gossiping about anybody. You're not being mean. You're not starting a gossip action against him. You're challenging him to his snout. You're telling him, "Mr. President, you: J'accuse. I accuse you. I accuse you. I accuse you. The American people accuse you. We accuse you."

And you say it in such a way, point by point, to address—to reach the ears of whom? To reach the ears of leading political figures, who have a conscience, that you have laid out the evidence which convicts him. You're presenting a conviction. You're making a judgment, and you are presenting a conviction—a statement of conviction on that judgment. That's what you confront him with!

Now, what's his reaction? His reaction is to go into a new mental state. So you have to think about, who's holding the net, when this guy goes wild? He'll go wild, one way or the other—either catatonic, a suicide like Hitler, a suicide like Nero? You have to understand, he is insane! He's clinically insane.

Did you ever try to deal with an insane person? Were you ever face to face in dealing with—and trying to handle—an insane person? Any contrary assumption, any assumption that he is not an insane person is a terrible mistake. A dangerous mistake. Your job is to convince the people around him, in official position, and the citizens, that he has to be thrown out. That will get him out.

But you have to go in there and do that. Maybe you want to do it over the other side of the fence, but you have to do it.

To Stop Austerity Drive, Remove the President!

Freeman: The next question comes from a leading Democratic Senator, who did manage to get re-elected. And he says, "Lyn, in the days leading up to the election, we were well aware of the fact that the Democrats would lose the majority in the House, and right now, we're just somewhat thankful that we managed to hold onto the U.S. Senate. And certainly, there has been a lot of discussion about the fact that the period between the election and the swearing in of the new Congress is an absolutely critical one for our nation. It's an interval when many things can get done. And it's also an interval when the tone must be set.

"As I think you know, Washington right now is gripped by austerity mania. And we knew this, and we were more or less prepared to deal with it—at least some of us were—by going for the jugular of Wall Street and the banks.

"Now, here is the problem. My original question to you was going to be, a question concerning the order of battle, as to what you thought this lame duck Congress should fight to ensure in the days that we have left. And my question was, on the one hand, broad, but on the other hand, very specific. As I think you know, while I and many other members of the Senate, agree with Glass-Steagall, we unfortunately failed to get an adequate hearing for it in the last Senate. It's still alive. We can certainly take it up, but I had questions as to whether we needed to, because, as I think you know, there are enough loopholes in the Dodd-Frank bill, that if we wanted to implement it to its extreme, it would essentially serve as Glass-Steagall, and perhaps we could put our energies elsewhere.

"But, all of that has now been somewhat put into question, because in the days since I last talked with your representative, we've been informed by the GOP leadership, that they have plans of their own for the lame duck session. And that they have no intention of waiting for January to get down to their agenda. And this has to do with two very specific threats that have been made.

"One is, as I think everyone knows—one of the principal tasks that the Congress is going to face when it comes back to Washington, is the passage of a continuing resolution, to keep the government going. And the Republicans have made very clear that they intend to shut down the government, unless the continuing resolution has already built into it, major cuts of a whole variety of programs, including Social Security, Medicare, and various other social programs that we absolutely can not cut in the midst of a depression. What they are saying is, 'No cuts, no votes. We'll filibuster.'

"The other issue that has come up, with similar threats, is the question of unemployment. As I think you know, two weeks before Christmas, extended benefits run out for approximately 2 million Americans, who right now, are long-term unemployed. And we have been told by the Republicans, that there will be no extension of unemployment benefits unless it's coupled with approximately $5 billion in cuts that would go into effect immediately. That if the Democrats fail to respond to this, then again, they'll filibuster.

"So, we're now faced with something of a different situation. And I wanted to make sure that you were aware of it. But also, any advice that you have on how to approach this situation would be most welcome."

LaRouche: The American people are still there. And they're very angry. Now, if—suppose that the Congress, the Republicans in the Congress, decide to do a filibuster to prevent any remedy on this expiration of unemployment insurance, what do you do with that? Suppose they do that—you take it to the American people. You take it there.

You say, "These sons of bitches have said this. These sons of bitches have done this. These sons of bitches are threatening this." Take it to the American people. There's your constituency. Your constituency is not the members of the Congress. Your constituency is the American citizen. And the American citizen, which has had it, up to here, with these recent sessions of the past ten years of government. They've had it up to here.

You're going to have a mood. And you'll find that the constituency of members of Congress still has the power to influence the members of the Congress. Look, you're staging a fight. But you're not going to win without staging a fight. You've got to have the guts to stage the fight with the intention to win it. You've got to let these guys know who's boss. The American people are the boss, between themselves and the President.

The first move you have to do, is get this guy impeached! See, if you shrink from that, if you say, "We want this guy out, on the bad things he has done to the population on his bills"—his health-care bill, and so forth and so on, you are showing the public what the Congress heretofore has refused to do with this President. So you've got to go back and do what you should have done beforehand. And use this against him. Attack him on this.

So you go for the removal of the President from office. If you don't go for that as the step which must be taken first, no other step you would take or try, will work. I laid it out very carefully on this. I went through this very carefully. You must first remove this President from the Presidency! Until you do that, you can accomplish nothing on any issue. That's your problem.

Until Nero dies, or retires, you're not going to be able to do anything. You can not let your cowardice on one issue be an excuse, for your failure to face another. If you do not remove this President from office, on legitimate grounds, of his insanity, then you are responsible for everything bad that happens to this country and its people. And you personally are responsible. Maybe for reasons of cowardice. Fine. Cowardice is a good excuse, I suppose. But it's cowardice, nonetheless.

Do you want that? Do you want that record? Do you want that image? The image of the coward? The coward who betrayed his country, when he could have acted? There's nothing you can do, now, without causing the removal of this President from office, now!

He's insane. He must be removed. We have the amendment. The amendment means what it says. It's very carefully crafted. It's very accurate. The evidence is conclusive. Implement it! Enforce the law! Get him out of there. Otherwise everything else will be a failure.

To Create Jobs, Eliminate the Power of Money

Freeman: Lyn, I have roughly 40 questions here—these are institutional questions from Washington, all of which are addressing various elements of the austerity mania, the deficit hawks, and offering various proofs that Social Security, Medicare, etc., are not responsible for the Federal deficit, and asking for comments on it.

Really, I can't help but feel, that many of these questions are actually an avoidance of the central issue. So I'm going to go out on a limb, and kind of skip over them. Maybe we'll come back to them....

What I do want to do though, is address some of the questions that have come in on NAWAPA. And, this question is from a new member of the Stanford Group, who now serves on a Congressional Committee as well. He says:

"Lyn, you've been talking about Obama. And you've been talking about the economy. And one of the things that you picked up a month or so ago, that really captured my attention, was the discussion of NAWAPA. And I found this to be particularly important, because it's my absolutely firm belief, that the problem in the economy, is a problem that is not going to be addressed by fiscal measures, but that can only be addressed through the creation of jobs and rebuilding our nation's infrastructure.

"Now, we have a couple of problems, and I want to make sure that I'm thinking about this in the right way. First of all, the obvious problem is that many of the most aggressive pro-infrastructure Democrats, especially in the House, lost their seats. And they were the people who some of us were looking toward as the people who would be the obvious sponsors and proponents of things like NAWAPA, high-speed rails, etc. So they're gone now and that is a problem.

"And obviously, the other problem, is the insanity around austerity. And this is especially what I wanted to ask you about. Because it is the case, that most laymen believe, that the Federal government has to borrow money in order to spend money. They believe that the interest rate on Treasury securities is set in a market for government bonds, that the markets impose discipline on the government, and thus, 'fiscal responsibility' will produce low long-term interest rates for the Federal government, while irresponsibility will be punished by higher and eventually, intolerable interest rates.

"Clearly, if that was true, the markets would be terrified by the long-term deficit and interest rate projections that we face now. And no rational investor would buy a 30-year bond at 4%, if they really believed any of this.

"So obviously, this doesn't make any sense. The markets are irrational. And I don't—I think that what has gone on over the last several years, proves that the markets are irrational, and therefore, there's no real reason to address that.

"However, there is a further reality that does need to be addressed, because people do not understand how our government works. And again, I want to make sure that I'm thinking about this in the right way.

"My contention is that the U.S. government does not need to borrow, in order to spend. In the post-gold standard world, the U.S. government spends, and the Federal Reserve lends, by writing checks. Those numbers then appear in the bank accounts of the payees, and those payees may be government employees, private contractors, or the recipients of Social Security. The effect of the check-writing, is to create a deposit in the banking system. This is a free reserve. As long as U.S. banks are required to accept U.S. government checks—and I guess that means, as long as our republic still exists, then the government can, and does, spend without borrowing. If this were not true, we all would be speaking German right now.

"The fact is, that if bonds are then issued, that's just a convenience for the banks, which prefer to earn interest on their reserves. The extent to which those bonds are held locally or abroad—which is another common source of worry, depends on the U.S. foreign deficit. It has nothing to do with whether the Chinese like our policies. Foreigners hold bonds, because, just like the domestic banks, they like the interest.

"Additionally, sacrificing Social Security or Medicare to the goal of a lower deficit projection is dumb. It doesn't work. It has no effect. It would be cruel and it would be crazy.

"The only way to cut a deficit caused by unemployment—and that is what's causing the current deficit—is to create jobs. And right now, that has to be done with a substantial component of private financing, namely bank credit, or some substitute for bank credit, and it's a simple fact of accounting.

"But I think that we have to get some clarity on how the Federal government operates, and in fact, on how FDR raised the money, to get us out of the Great Depression. If we don't resolve this, and I'm asking you the question, because I want to make sure that I'm thinking about it the right way—if we don't resolve this, and resolve it immediately, then the question of NAWAPA becomes a moot point, because these nuts will go into a total frenzy at the mere mention of the price tag for it, regardless of what the payback for it is."

LaRouche: Well, you may find out with these nuts, that if they don't get NAWAPA through, maybe these nuts will find that they people are eating them. They are looking at them for the nutritional value!

The whole thing is idiocy. Look, we're living under a world system, which was dominated, until bad things happened in the 1960s—especially in the Vietnam War, in which we lost our sovereignty, or were induced to lose it, by canceling the fixed-exchange-rate system. Therefore, we created a hyperinflationary process internationally, in which we were run by the British Empire. And if you want to blame somebody for it, you have to blame Lord Jacob Rothschild, who was a key agent of this operation of the British monarchy. You have to blame British imperialism.

Please be a patriot! First rule. So we destroyed our own system, and we said, we accept the British system.

Now, what are we talking about here? The history of money, of monetarism—what is it? Now we can deal with monetarism, basically—to get a continuity—you go back to things like the Peloponnesian War, that period. And you have a period in which the collapse of the Persian Empire, and other land empires of Asia, brought about the secure domination of the Mediterranean region—the littoral and the lands about it—domination by a maritime power, essentially, the people who sailed. And most of the transportation of that period, from market to market, was based on ships. Ships run by mariners. And the mariner class represented the highest level of general technology existing in civilization at that time. That is, the ability to go. The history of the maritime culture had been—during the period of the great glaciation, there was much more trans-Atlantic traffic, than at a later point.

For example, you could, in the ancient period, the glacial period, travel from the area of Gibraltar, to the Caribbean, in about the same time that Columbus did. Use of sail, navigation methods—same thing, you would make the journey in approximately the same time that it took Columbus to make journeys to the Caribbean. The maritime skills existed at that point, and the major maritime skill was what? Was trans-oceanic use of star maps. Navigation. Stellar navigation.

So therefore, this continued, and the ability to deliver goods from one place to another, within the Mediterranean or otherwise, depended upon this method of navigation, maritime culture. And maritime culture was the most advanced technological culture in the world at that time.

Now during this period, what emerged—as all of this Greek material, and so forth, of the ancient Greeks and so forth, records it—was a development of an imperial system, called the oligarchical model. And the oligarchical model divided the population into—some people were called, as in Homer, gods, or in Aeschylus' dramas, gods. What were these? These were the people who represented this culture, this maritime culture. And because they were cleverer, or better educated, or had cultural advantages, they were able to dominate and loot the other people, the poorer people, who were the landed people, on the periphery.

And this continued, as a system of society, in the Mediterranean, up until Charlemagne temporarily broke that, by opening up not only the use of rivers for navigating the interior of Europe, but also connecting the rivers by a series of canals. And the development of the interior of Europe as a form of civilization and technological progress, depended on this maritime, internal riparian system, developed under Charlemagne, who was the first to develop an internal economy for Europe. We had the same thing in the United States.

We took the same idea, the riparian development. Rivers and canal systems, became the way in which we penetrated the interior of North America, from the coastal areas. So, we had a maritime culture, we were a maritime culture on the coast. We also had an interior which went into the Ohio River and beyond, through the development of maritime, of riparian systems. Then, we developed something else. We began to develop railway systems, steam-powered railway systems, moving along the banks of canals. Like the Erie Canal, which became the New York Central Railway system; or the Baltimore and Ohio Railway.

Then we went further, from railway systems which went along the banks of canals, with the shortcuts connecting to other canal areas, like Charlemagne: We went to a transcontinental railway system, which was achieved as a result, or with the impetus provided by the Lincoln Administration. It started in the 1820s; started with the Reading Railroad, during the 1820s, which was the first real rail system inside the United States of commercial significance. The same thing happened in Europe.

The geopolitical crisis in the world as a whole, was the British Empire's reaction against the success of the transcontinental U.S. railway system. It was a revolution in technology, and the British said, if we have—as Bismarck did, and as was done in Russia by Mendeleyev, and so forth—if you go from the idea of the achievement of what the United States had done by 1875, as picked up by Bismarck in Germany, and picked up by Russia, then suddenly you have land-based power, which is superior to maritime power as strategic power. That is what was the cause of the getting rid of Bismarck in the first place, and going on to the preparation of warfare from 1890 up to the present time; it has been always geopolitical warfare. And geopolitics meant maritime control vs. land-based control. That's called geopolitics; it's the only meaning for it. So, now we've been in a period of geopolitical warfare, on this basis.

So therefore, the geopolitical warfare then developed a monetary system. The monetary system became a maritime monetary system, where international debt, in the form of money, became the control of the value of currency. Now, there is no relationship, there is no functional relationship between economic value, physical economic value, and monetary value. They don't mean the same. Money is exchanged for money. You get paid interest on money. The money system is an international system which bridges nations. So nations are now the slaves of whoever controls the monetary system. Therefore, the answer to this thing is, eliminate the monetary system by returning the power of money to sovereign nations.

Now, what do you do with that? Then, you get sovereign nations to agree on a fixed-exchange-rate system, which protects their sovereignty. The Constitution of the United States was based on the concept of sovereignty. The United States Constitution is based on the idea of that—on a credit system, not a monetary system. And that's our problem. We have to recognize that's what our Constitution is based on—the idea of a credit system as opposed to a monetarist system.

We are being ruined by a monetarist system. And what happened is, as long as we had the fixed-exchange-rate system, before it was destroyed by the prolonged Vietnam War, the Indo-China War, the United States' sovereignty as a credit system, protected the United States and the world, against great hyperinflation. With the elimination of the fixed-exchange-rate system, and the establishment of the Rothschild system, the Inter-Alpha Group, the so-called BRIC, you had the opening for hyperinflationary swindles. Back to British imperialism.

Until the United States' success, British imperialism had come to control the world. The power of the United States, as expressed in particular by Lincoln's revolution, against the British attempt to destroy us, and by the effect of Roosevelt, had freed us from slavery to the British system, the imperialist system. The Indo-China War depleted the power of the United States, and enabled the British system to come in again, and take over with the Inter-Alpha Group system, as an extension of British imperialism. Our problem today, since 1971, is the role of the Inter-Alpha Group, which controls about 70% of the actual relevant banking activity of the world —that's our problem.

So, you have to start from the real problem, and the real answer to the problem: Re-establish a fixed-exchange-rate system. Re-establish what Roosevelt set up at Bretton Woods. Go back to it; impose it. Now what happens? The minute you do that, and you put our banks under that kind of control, then we now have a bunch of bankrupt banks which the Federal government is going to protect. These will be commercial banks, under a Glass-Steagall standard.

Now the Federal government will create credit, authorize credit to make these banks fungible. They will be able to utter credit, they will be stabilized, be protected, under Federal regulation. We will then turn, and the Federal government itself will authorize legislation which will create credit for building the NAWAPA system, and for the rail systems and other systems that go with making the NAWAPA system work. And for getting the states back into shape. Those are the objectives. And that's the solution; there is no other solution. We're talking about 30 to 60 years, essentially, of building this project, before the full force of it is completed, or will be considered to be completed. The greatest project that mankind has ever undertaken—this! And that's the way we fix it.

All we need to do is take this idea, and get people, maybe some nation in Europe like Germany and some others, Russia, China, India, and some other countries to agree to become partners in this kind of re-establishment of a fixed-exchange-rate system to eliminate monetarism from this planet. Monetarism is imperialism, and that must be eliminated. And the only way you can do it is by having a system of equitable agreements among sovereign nation-states. That's the only way to eliminate imperialism. We are victims of imperialism. Kill imperialism!

And base the thing—you don't have to have perfect neighbors. You have to have neighbors you can live with; there's a difference. If you can live with them, and cooperate with them, then you can build upon that cooperation to evolve a system which is more equitable, more beneficial, more just. But you have to start someplace. So, you start with an agreement which is an honest agreement, and you build. And the best way to build is to define great projects of long-term, capital-intensive magnitude, which change the planet for the better, and create a better situation for humanity. Base it on that; it's that simple, but just do it. Just do it!

Don't Listen to Accountants on NAWAPA

Freeman: I have a couple of questions that I'm going to make one question, that come from the working group on NAWAPA, and then I'm going to entertain one question from Argentina and one from Mexico. And by then, we'll probably run out of time.

On NAWAPA, Lyn, our questioner says:

"Regarding the subject of increasing the productive powers of labor, it appears that there is a paradox that occurs when the productive power is increased, that is counter to job creation, especially in the areas of construction and agriculture, with which I am most familiar. This happens through mechanization and computer applications.

"Agriculture, of course, is a very clear example. At the turn of the century, a farmer could, on a typical 160 acres, produce enough food to provide for his family, and maybe six other families. Today, a typical commercial farmer can single-handedly produce enough food to feed some 6,000 families, through the use of ever-larger sophisticated equipment and systems.

"I worked as a consultant to the construction industry, and I know firsthand that in a capitalist, profit-driven system, the goal is not to create jobs, it's to make a profit. In this current paradigm, the use of machines of ever more advanced software, etc., are far preferable to humans in the quest for profit. So, the question is, how do we reconcile that paradox in the new economy?"

And then, along with that, is "How can we build NAWAPA if we can't loosen the environmental regulations?"

LaRouche: Well, in your argument there are several assumptions which are mistaken, and I think if you eliminate those assumptions, the problem will tend to go away.

First of all, we are not really achieving much by the way agriculture has been going in the United States of late. As a matter of fact, agriculture in the western United States and the United States, is now in state of collapse. It is not in a state of collapse only because of the commercial aspect of distribution of agriculture products; it is that because we have not been paying for the water we use. We are not paying for the effects of depletion of land which we do by cutting away hedgerows and things like that. In other words, what you're doing is raping the land rather than improving it. And this is generally true in much of our production. We are raping the land.

Now, the productive powers of labor do not come from what most people, the accountants, will tell you. The first thing you want to do if you want to understand productivity, is keep the accountants out of the room. Because they don't understand. Now, I've been a management consultant, and a very good one, and I can tell you, accountants don't know what they're doing. Some of them know what they're doing, but not when it comes to organizing production. They don't understand it. The very principles of accounting will prevent you from understanding production.

The secret is not money. See, the problem here is, people who are in accounting, think in terms of money. And money as such is not the measure of value. When we impose money as the measure of value, we create a distortion. We create actually even a crime. Now, there's nothing wrong with doing accounting, but when you start to impose accounting methods on the design of industry, and manufacturing, and economy, you are making a terrible mistake. Because accounting is not competent for that purpose. Accounting is competent for what it does. It is the use of prices as a mechanism for sales, employment, and so forth; the role of that. But that does not determine value; that's where the mistake lies.

For example, the crucial thing in economy is the increase of the productive powers of labor; the physical productive powers of labor, per capita and per square kilometer. This requires the increase of the energy-flux density of the power sources employed. Now, accountants don't know anything about this stuff.

For example, take the Western states: We've lost the ability to produce food in these states. It was a failure; the whole policy was a failure. The changes in agricultural practices were a failure—not all of them, but for most of the recent period, yes, a failure. Especially since 1980, agricultural policy in the United States has been a net failure. It's been ruinous.

Using land? The productivity of land? The productivity of land is collapsing! Look at the Western states, the 20-inch rainfall line. Look at the collapse of the water resources; look at the conditions there. We have the destruction of the means of production of agricultural product, per capita and per square kilometer. Why? Because we said we'll take the water from the deep well. They go down to deep wells, and the deeper you go, the more costly it is to get the water up. You create a monopoly, you regulate prices. Monsanto comes in—Monsanto is a piece of thievery; it should not be allowed to operate the way it does. It's thievery.

So therefore, you have to look at the cost of the process of production, not the market price. The market price is one big swindle. The productivity is expressed by the increase of the productive powers of labor, per capita and per square kilometer.

The key parameter of this is technology in general: The advancement of technology is also expressed constantly by the increase of what we call energy-flux density. The increase of the energy-flux density employed, per capita and per square kilometer, and also in terms of intensity of employment. That's what determines value and product, which involves the expressions of the human mind in creating these improvements, and it's the practice of this.

What we've done is destroyed it; we've destroyed the whole system. And all of our problems have nothing to do with any innate characteristic of production. They have to do with stupidity, and stupidity is built into the way we run society. And the greatest source of stupidity is among the accountants; not because accounting is bad, inherently, but because it's employed for something for which it's no good. That's the mistake. This is the old British system about technology taking jobs away from people. The same old thing; the Malthusian argument. Not true; there's no truth to it.

If I were running the economy, we wouldn't have any problems. And the first thing I would have to do to get the economy to be more productive, and provide more employment, and provide better incomes, is NAWAPA. By employing 4 million people for the NAWAPA directly, and also for the supporting structures required by it throughout the United States, we'll create the number of skilled jobs—we'll upgrade the degree of skills in the population generally at the same time. We'll change the rainfall line. We'll multiply the rainfall in this area, which is now desolate for lack of rainfall.

We can do it. We have the people we're not using, who know how to do it. Many of them are retired, but they still know how to do it, how to set it up, and how to get it organized. We can build this United States to a degree of success and a standard of living per capita throughout, which is beyond anything we've ever imagined before. And we can do this over the next quarter century, and we'll do it with projects like NAWAPA. We'll drive it up; we just have to get our minds straight.

And don't assume that accountants can tell you how to run an industry. They can tell you when your figures are not working out for you. A good accountant can even tell you when your bookkeeper is swindling you, under the table, or something like that. I've had a lot of experience with that sort of thing. But that's the kind of thing; accountants are useful for some things, but when it comes to economy, they're not good. It's not their profession. Economy is physical; it's physical production, it's the mind, it's invention, it's creation of methods and procedures. It's all these things. It's investment in increase of energy-flux density. And of course, the small business mentality is not always too good at it, either.

For Argentina, the Problem is the U.S.

Freeman: The next question is from Argentina:

"Dear Lyn, a big greeting from Argentina. Your words are well known in these pampas, and some of us remember them well. I am an activist, and I am a leader of the Fronte Grande youth, which is part of the government coalition of Cristina Kirchner's government. Right now, we are very sad, at the loss of a great leader and a great man, our beloved Néstor, who left us, but who also left behind his seeds already growing and flowering.

"But my question for you is the following: the death of Néstor Kirchner has left a vacancy in a strategic area that is very important to us, which is the post of Secretary General of the Union of South American Nations. It is our understanding that Lula is being named as Kirchner's successor. What do you think of this, above all because of the importance of the Darien Gap, and that which keeps us from securing the project's unifying high-speed rail throughout all the Americas? How do you propose we address the loss of this leader and the incoming Lula at UNASUR?"

LaRouche: Well, the practical thing, I think, is sometimes an indirect approach to a problem like that. The problem is the United States. If we had a decent leadership in the United States, we would immediately go—it would coincide with NAWAPA. The Darien Gap policy is an extension, essentially, of the idea of NAWAPA; it's to build systems which are global systems, implicitly, which can provide the infrastructure for nations, through cooperation and so forth, to develop to a higher level, per capita and per square kilometer.

Now, we know, for example, in Argentina, from studies we did years ago, that the potential of Argentina in land area and population is much, much greater than we have realized so far. Because there are whole areas of Argentina which remain essentially underdeveloped, greatly underdeveloped. And this represents one of the greatest potentials for riches in that area.

Now, there's also a history in Argentina, within the population of Argentina, of skills. And therefore, the population has a built-in cultural potential for achievements in production. This was true back in the beginning of the post-war period, it was clearly manifest at that point, with Perón; that sort of thing. So, it can come back.

Take the case of Mexico, which has been virtually destroyed since 1982, since, you know, the destruction of Mexico, ordered by the British, and supported by people in the United States. And Mexico is nowhere near what it was back then. The people have been destroyed, to a large degree; the culture has been destroyed; the drug traffic is made possible by this cultural destruction, which is done by international, British-controlled financial interests. Colombia is a nation of considerable potential. Venezuela has never been quite as much developed. Brazil has potential, but it also has an internal social crisis between the very poor, and those who are, shall we say, more influential and more powerful. There are problems. Peru has been crushed from what it was trying to do before.

All these kinds of things are going on. So therefore, I think only a change in the United States would facilitate this as something you could schedule as programmable. If we had the right kind of government in the United States—and I can think of one former President who would probably still fit the bill to be President—we could organize from the United States, the kind of cooperation in the hemisphere, which would allow the potential of these various countries to be realized, and to be freed to be realized.

There is a cultural potential in Argentina which I am familiar with. It's good; but it needs an international context, a trading context, and so forth, to realize its potential. And I would think that a Roosevelt-style of approach to the hemisphere is the obvious answer. When you take things like the Darien Gap project, which we've laid out, that would open that up. There are other things there which could open that up. Simply, if the United States were playing the part of what Roosevelt called a "good neighbor," as with the Treaty of Rio and so forth later, in his time. But we could do these things.

And I think what we have to look for is, first of all, the political, intellectual cooperation of intention among these nations to summarize what their potentials are. And we need a system within the hemisphere; it's the kind of thing we've always fought for, some of us, which would give us the means to do that. Right now, there are no means to do that, but we could very easily create the means to do it.

And I think the first thing is the intention; if we have the intention among people in these nations to move in this direction, by establishing that intention as an agreement to intention, we can create the basis for actually realizing the result. The first thing is to make the invention of the idea, and then to work out to get the idea adopted for implementation. I think we should be optimistic, in that sense. I'm looking for—we're hoping that our work now will enable us to be in closer contact with some of the nations in South America, and that mere contact, and work, and cooperation and discussion together, will lay the basis for actually achieving what we want to achieve.

To Defend Mexico, Defeat British Drug Policy

Freeman: This next question is from Mexico. It's the last question that we'll take this afternoon. One of the reasons I wanted to pose this question, is because this same question has been asked in different ways from many people in different parts of the U.S.—people who hold office, who have held office in the past, and also by organizers.

"Lyn, we wanted to send greetings. As you know, we are watching the webcast in the office with a group of contacts, and as you also know, we are going to have a conference in the Mexican Congress, around the NAWAPA/PLHINO project next week. That conference will enjoy the participation of Congressmen, Senators, the nuclear industry union, engineers, LYM Mexico, and the Basement Team.

So far, we've organized in different universities, obviously, the Mexican Congress, and a variety of other institutions, as well as the population in general. And we're getting very good responses, but, we'd like to know what your message is for the patriots here in Mexico, and also around the world, who we keep running into, who want to fight. They want to fight for this new infrastructure concept, because they understand that it is key to stopping the current crisis, and is the first step to building a real future. That isn't the problem. The problem is that they're scared. And they're scared exactly because they do realize that this is a very serious fight, and they recognize that the enemy is trying to stop these kinds of efforts, and will do everything in their power to stop these kinds of efforts."

LaRouche: Well, Mexico is a fairly clear-cut policy: In the destruction of Mexico, after the conclusion of the termination of President López Portillo's term, Mexico was taken, step-by-step, down. The economy of Mexico was taken step-by-step down, increasing the intensity of the poverty, the impoverishment of the people, and the social conditions. Under these conditions, certain very wealthy forces, inside Mexico, largely British-influenced, built up a large drug-trafficking operation in Mexico. The reach of that drug-trafficking operation, now, with its murders, mass murders, going with it, feeds upon the poverty of the Mexicans, otherwise!

This drug-trafficking, which is an old British trick, and specifically British, run in Mexico, against both Mexico and the United States. And again, the impoverishment of the people of Mexico, by and large, becomes the basis for feeding the drug-trafficking. You have people, who don't have stable incomes, they don't have stable circumstances, and the drug-traffickers move in, like locusts, moving in on a field of grain. So, we must destroy the drug traffic! Which means, doing something about our own President, we have right now.

But we must realize, that without the development of a positive economic thrust, inside Mexico, you are not going to overcome the problem we have there. You must create an economic basis, which is an economic-social basis, and then you must move in, as a complementary measure, to crush the drug-trafficking—which Obama did not do in Afghanistan!

Obama sent people in, with the instruction, to defend the drug-trafficking, in Afghanistan! And for troops to die, for the purpose for defending the drug-trafficking, British drug-trafficking, in that country.

It's the British problem, also, in Mexico, that's the source of this thing. That's how this thing was organized. Narcotics traffic in the world, chiefly organized by the British Empire, is one of the major sources of income of the British Empire, in various parts of the world. If the United States goes back to itself, and we start to rebuild the economy of the world, then you'll find in cases like Mexico, we can win. But we have to give the aspiration, of freeing Mexico from its drug addiction, give it help. We have to create the kind of economic framework, which will enable people in Mexico to resist and fight against this disease. And that's the reality.

I've seen Mexico destroyed, since 1982. I know how and by whom it was destroyed. I know what the forces were. And it's a danger to us all, what's being done to Mexico.

So, obviously, Mexico has to be defended. But without the development of the economy, the ability to defend Mexico, against even the desperation of many of its own people, is not possible. We've got to do it!

That's one more reason, for getting this lunatic, Obama, out of office.

Freeman: Those are all the questions that we have time for this afternoon. I think that Lyn has laid out, with just remarkable clarity, what the task is immediately before us. I think it is extremely important, and I can not stress to those of you here in the audience, those of you listening via the Internet, just how important the immediate period before us is. The period between right now, between this moment, and the end of this year, gives us a critical opportunity, to do what should have been done, during the course of the last two years.

And I would stress that, even more critical than that period, which seems like a very long period of time, is the period over the next ten days, while President Obama is out of the country, which means that there's a certain freedom of discussion, without the distraction of his insanity.

But the fact is, that what is going to be required, in this period, is a different quality of thought, of activity, of activism, and of support, both from you, and from the people around you. If you're listening to the webcast via the Internet, then you already are aware of the fact, that in the days leading up to the election, there was a very significant upgrading of the website. That continues to improve, on a daily basis. The website provides you, with everything you need to wage this fight, and to win it! What it can not provide you with, and what only you can provide yourself with, is a sense of courage and moral strength, to pursue this fight. And I would ask you to dig down deep, to do that. And as long as you're digging down deep, you should make a contribution to LPAC.

Without any further comment, we've got a lot of work ahead of us, in these next days, and I'm sure that we will be getting together soon. But until then, please join me in thanking Lyn.

LaRouche: Thank you! Be good! Be successful! Be victorious!