Executive Intelligence Review
This dialogue appears in the January 19, 2007 issue of Executive Intelligence Review.

Dialogue With LaRouche

This is the transcript of the question-and-answer dialogue which followed Lyndon LaRouche's opening presentation at an international webcast held in Washington, D.C. on Jan. 11, 2007.

[Video and audio archives of the webcast]

Debra Freeman: Lyn, thank you very much for those remarks....

As people would expect, a number of questions have come in that relate to President Bush's speech last night, and various things that have developed off of that. I will get to those questions, but I'd like to start with some questions that are more directly related to the principal issue that Mr. LaRouche addressed today.

For those of you who have not yet had the opportunity to read Mr. LaRouche's paper on "The Lost Art of the Capital Budget," let me tell you that it is available both as a separate White Paper, and it is also in the second issue of Executive Intelligence Review of this year [Jan. 12]. It is also available on the website. And I would urge people not only to make sure that they study it thoroughly, but that they circulate it among their associates.

How to Raise Up the Unemployable

Now, Lyn, the first question comes from the Senate side on Capitol Hill. It is from a Democrat, from a new Democratic Senator, and his question is the following:

"Mr. LaRouche, as you're probably aware, there are two camps that seem to dominate the environment here on questions of economic policy. On the one side, we have the balanced-budget freaks, who insist that every expenditure has to be met by an equal receipt. And they obviously are not a happy group. The other camp takes the position that 'the deficit be damned.'

"Obviously, you've come in with a third way, with your 'Lost Art of the Capital Budget.'

"My question is a specific one, but one that I'd like you to address, and that is: Where do you put the massive cost of supporting that section of our population that has been thrust into near-poverty, and those who are not immediately employable, either because they are children, because they're old, or because they're mothers who would prefer to stay home and take care of young children? They are not, at least as I understand it, reasonably placed in what you are referring to as a 'capital budget.' Yet, their needs obviously have to be met, regardless of the size of the Federal deficit.

"Could you please give us some guidance on this?"

LaRouche: This is a question of thinking in terms of the future, not just the present. Now, first of all, any solution to any of these questions of this type, has to be situated in the knowledge that we are going into a period very rapidly, in which there will be a general collapse of the financial-banking system. And everything will depend upon the willingness of the Federal government to put the Federal Reserve System into receivership for reorganization, and thus to keep the banks' doors open, and functioning on essential functions, while putting the whole mass of debt through reorganization. Much of it will be cancelled.

For example, we will not be able to pay gambling debts. Now, financial derivatives, for example, are largely gambling debts. They don't originate in a product of production, or useful services; they're simply a form of gambling. The world economy today has become a giant casino, which makes Las Vegas seem very small (although Las Vegas is a part of it).

Look at the number of states in which gambling is considered the way to raise taxes to support the community. Look at the case of Louisiana, where they spent money on gambling, and didn't fix the levees. You see what the result was.

The problem is of that nature. So, we're going to have to reorganize the financial system, and the first thing we'll do, is actually move toward cancelling all kinds of financial claims which are in the character of gambling debts—that is, investments upon investments in speculation in financial investments: hedge funds. Hedge funds will have to be eliminated. Similar kinds of entities will be eliminated. That is, they will be allowed to sit there, but not do anything.

So therefore, we have to free the economy from this vast parasitical mass, but we have to come to the core economy, the productive economy, which also has a very large mass of capital investment, and we need more capital infused in order to expand the productive sector of the economy. So, we're going into an economic expansion mode, if we are sane. We're going to issue, with the credit of the Federal government, under a reorganized Federal Reserve System, Federal bills—by the authority of uttering, unique to our system, by the Federal government. We're going to create masses of capital budget, masses of capital investment, which will be allocated to build up infrastructure and necessary industries.

Now by this means, we will attempt to change the ratio of per-capita economic activity in the society. We will still have people who are in a sense helpless people. They have nothing presently they can do for themselves. They have to stay alive and raise babies and do things like that. We have to protect them. But the key thing here is to change the ratio per capita, per household. We have to decrease services employment, unskilled services employment; cut it down, replace it with increasingly skilled employment in physically productive employment.

That's the general thinking.

We want to bring back the factory. We want to bring back the family-owned farm. We want to do things like that, which built the economy beforehand.

So, therefore, what I proposed during 2005, in dealing with the auto industry, is that the Federal government must move in. The auto industry's going down, so we let the auto production go down. Let it be reduced to a marketable margin. Let's take the capacity, especially the machine-tool capacity, of the auto industry. Let's have the government create a corporation to absorb this capacity, and use it for what it's perfectly capable of doing: for high-tech infrastructure development. Put this as a complement to the kind of thing that I'm sure that the head of the House Ways and Means Committee will approve of: Look for infrastructure development which absorbs youth, in particular, who are unemployed, or unemployable, and absorb them in programs which may resemble in some sense the CCC [Civilian Conservation Corps], and things like that, from the past, the Roosevelt period. Because we've got to get this youth section, in particular, out of destitution. We've got to get them out of degradation. We've got to get them into something where they can build a future for themselves.

So, it's going to be, in a sense, the character of a physical investment in the future of these young people.

The main thing is to increase the ratio of physically productive people in the labor force, to those who are not physically productive. Which means, if every McDonald's in the country closes down, that's not bad. The kangaroos will apply. We don't need most of the services that are being supplied. They're make-work services: We don't need it! So cut it out! And open up opportunities with aid of the Federal government.

For example, take the automobile industry, which has a very important machine-tool-design factor in it, and things which are auxiliary immediately to machine-tool design. Now the auto industry functions on the basis of communities—or did function on the basis of communities. These are communities of people, which depend upon smaller industries, largely, which are actually auxiliaries, or ancillary, to the auto industry. So therefore, all these communities were based around the organization of the factor of the automobile industry's effect in the areas of, say, Indiana, Michigan, Ohio, and so forth.

So therefore, if you want to save these states, you've got to keep the production going.

For example, you had Lockport in New York State. Now, Lockport had a capability: It had produced airplanes in the war. It could produce systems for building locks and dams, and that sort of thing. It had all kinds of capabilities which are there, lying in the capabilities of the type of labor force it had, and the labor force associated with the surrounding community. "Oh, we have to fix the Ohio River system." "Well, there they are! They can do it. They can make a big contribution." It's similar all the way through.

Aerospace and similar areas are related to this. So our high-technology core is there.

Now around these high-technology factors, you have a general labor force, like the auto industry employees, and auxiliary industry employees. These people have families; they live in communities. And the fact that they have the machine-tool-capacity industry there, means that where they go, the people go. But the people are there. Okay, keep the work there. Keep the people there. Rebuild the communities. Don't demoralize them, as is being done today. So therefore, that's the way you organize.

Also, you want to kill outsourcing. We don't want deregulation. Kill outsourcing!

Look, what have we done? We ship production to China from the United States. Does it benefit the Chinese? No—it does and it doesn't. It makes them dependent upon us, like an addiction. When you take the increase of productivity in China, net, caused by outsourcing, with the decrease of productivity in the United States caused by outsourcing, you find that the net contribution to the human race is shrinkage.

The same thing is true in all outsourcing. Look at the effect of outsourcing on Mexico—it's lowered the standard of living of the people of Mexico, and the productivity of the people of Mexico, while lowering the productivity of the people of the United States. So, these ideas of globalization—which is an Anglo-Dutch Liberal imperial idea for destroying the United States—we're going to defend ourselves, I hope, against this outsourcing mania, which is a form of imperialism. To take away the culture of the most advanced sectors of the population, in terms of technology, and shift the responsibility to the least skilled section of the population for the sake of cheap labor; look at what the change means: taking productivity away from a high-technology productive area to a low-technology unskilled area, results in a net lowering of the productivity of the human race as a whole. Not a good idea. And that's what's happening now.

So, therefore, we have to reorient. We have to use protectionist methods. We have to reorient the economy, so that we protect investments in essential industries that we're supporting.

We give this protection, and we aim it in every part of the country, to make sure that every state in the country is on a functional basis, and that the country as a whole is on a functional basis. And we do that by Franklin Roosevelt-style thinking. And we do that. But the objective is always to increase the physical productivity per capita and per square kilometer of the U.S. territory.

So, we invest in the future.

Now the idiot doesn't understand investment. The idiot-think is return on investment, on a stock, or some other piece of paper. You see what's happening with the real estate bubble? The real estate bubble in the United States is now in a process of collapse, and it's headed toward a catastrophic collapse. That alone will wipe out the entire U.S. economy, right now, unless it is regulated.

What happens is you have a great speculative appreciation in the normal value of mortgages. But it's all crap. Including most of the construction. You've got nails going from somewhere to nowhere. And they're not even nails—they're tacks. It's junk, it's crap: shacks, tarpaper shacks, 2000-style.

So, this stuff is part of the so-called nominal value of the U.S. economy. But it's crap. And the fact that it's crap is asserting itself every day as this bubble collapses. Therefore, we have to think about the problems this creates. Only the Federal government can, or should be allowed, to create credit in this way. It has to be regulated. We have to regulate the economy to make sure that it doesn't go haywire, that it goes in the right place. We have to look at the performance in terms of people, sections of the country, and the general welfare. We have to think in the long term: Where does this take us in terms of capital ratios, down the line? We want to increase productivity, per capita. We're going to work our way out of this depression. We're going to work our way out of this financial crisis, by building up the physical economy, and we're going to be very inventive, in going through lists of everything we can do. We're going to go through the drawing boards. We're going to go through the places in government, where records of this sort of thing exist. We're going to go through that.

And we're going to have committees in the Congress, especially the House of Representatives, which will be concentrating on getting a facility, in the Congress—the Congress can vote to have one for itself. The kind of facility where this kind of question is faced, where all the resources of the United States records are available, and skills are available, to go through this thing, to develop the year-by-year approach to improving the productivity of the United States.

And by doing that, by regulation, we will get the population in gear. It will take us four, five, six years. We'll improve. Crises will be past. We'll be going ahead, as we did under Roosevelt.

Look back to the Roosevelt years, from the day he entered office; he could barely find a pencil in his office on the day he was inaugurated, and a couple of women in the room outside, and that's where he started. And you're going to have to do it the same way. He went through, with Harry Hopkins' help in designing this program, step by step, to build up the greatest machine the world had ever seen, in a period of less than a decade.

And that's the kind of challenge that lies before us now. And we take a hopeful view of this. These kinds of things can be handled. The problem is, the way of thinking is wrong. And we have to get younger people more and more into this process, as young adults, in the 18 to 35 age group, get more and more of them involved in this. Because it will rejuvenate the institutions of government, with young people who want to go someplace, not sit and wait to die.

U.S. Trade Policy Toward China

Freeman: Lyn, we have several more questions that actually go right to the heart of what you just addressed. One is a question raised by the leadership of the Joint Economic Committee, which has members from both the House and the Senate. It says: "Mr. LaRouche, as I'm sure you're aware, we are headed for the fifth annual record trade deficit. In November alone, the trade deficit was well over $58 billion, and almost $23 billion of it was from China. On the one hand, we recognize that this problem is a result of the overall collapse of production, and that that has to be addressed; but it is also undeniably the case that it is also due to China's unfair currency manipulation.

"The Joint Economic Commission will soon open hearings to investigate the appropriate policy response to the growing trade deficit with China and their own manipulation of their currency. Do you agree that as we take the necessary steps to restart American production and to protect it, we must also begin to take a hard line on Beijing and on its undervalued currency?"

LaRouche: We created this problem; it is not something created by China, the government of China. Blame the United States and blame the British. Blame the Anglo-Dutch Liberals; they created the system. We wanted to control China. Originally, the purpose was to control China as a force against the Soviet Union. This was the Nixon mission. Remember that China had many poor people, and they still have a great number of poor people. They require an increase in their employment each year which is rather fabulous. If they don't get it, they're in trouble. Now, you can't approach this as a China-U.S. conflict policy, it's not. It's a conflict created by the stupidity of the United States.

Remember what I referred to under the Capital Budget subject. The world system today is still a dollar system. As a result of the 1930s, and a result of measures leading up to the adoption of the Bretton Woods system, the U.S. dollar became the currency denominator for the world as a whole. The meaning of monetary value is defined by the dollar. Although the dollar was allowed to float, and this was confirmed in 1972 at the Azores Conference and elsewhere later, the dollar still remains, until the present day, the denominator of monetary value in the world system. Thus, this is one of the reasons why only a reorganization under the dollar could get the world out of a plunge now into a general breakdown crisis.

So you don't have to be worried about what's going to happen with relations with China during the coming months, because you're going to have to change the world system in those months, or you can forget it all anyway; it doesn't mean anything. So, the idea of fighting with China over this issue is a waste of time. I know Charlie Schumer [D-N.Y.] has been on this thing—he's wrong; he doesn't understand the situation, he doesn't understand the issue.

Now, what we represent, again, is the only credible existing monetary term of account within the international monetary system as a whole. There is no substitute for the U.S. dollar as a denomination of monetary value in the world today as a whole. The only approximate substitute is the British Empire, the Anglo-Dutch Empire—and it is an empire, and it's our enemy. So therefore, what we have to do is, in a sense, we're going to have to intervene on this whole thing with one strategy. We are going to organize a defense of the current value of the U.S. dollar in a relative form of fixed-exchange-rate system for the world. Because, if you get a 20% to 30% collapse in a short period time in the U.S. dollar on the world market, I guarantee you every part of the world system will disintegrate. Not collapse, disintegrate.

Because they'll all be sitting there with their own monetary systems, cutting their budgets, cutting their budgets, cutting their budgets, cutting their employees, and going into a Dark Age. Someone has to create a new system based on the U.S. dollar at a regularly fixed-exchange-rate standard, which becomes a standard of reference for every part of the world. Otherwise, the whole world goes to Hell, if you don't do that.

Therefore, any discussion about negotiations with the existing system, before that happens, is a waste of time, totally counterproductive. Because you occupy yourself with something which is a waste of time, when you should be organizing around something which is the only thing which will save the system. The U.S. dollar, as a fixed-exchange-rate denominator, is an arbitrary value; it is not a value in the sense of intrinsic value. It is something which is politically defined. We say, "In order for us to survive, and maintain our credit systems internationally, we must have a fixed-exchange-rate dollar, because there's no other currency that can perform that function." This does not mean that the dollar is entirely an utterance of credit from the United States; it doesn't mean that. It means that the U.S. dollar at parity is the standard of stability for the world, and there is no other instrument that can do that at this time, under these conditions.

If you don't do it, the whole world goes to Hell, so what are you fighting about? Who cares about China/U.S. relations under those circumstances? Either you do it, or you don't. If you do it, then you don't have a problem with China.

Now, the problem is: With us, with our deficit system, our dollar is actually undervalued in those terms. If we look at what the future of the dollar is, and its value, assuming that we take the initiative to restore a fixed-exchange-rate system of a slightly new form, then the dollar becomes immensely valuable, and the problem is fixed. But you've got to think in the right terms.

Right now, China is on the verge of disintegration. If the amount of trade between the United States and China declines, then China will not expand. If China does not expand its production, well, therefore, what's the result? China, instead of exporting to us, has to develop itself. Instead of trying to export to us, it has to produce for its own internal needs.

What's its problem? China is the only power in the world which has communist billionaires. They're a dominant factor in the situation—Communist Party billionaires, Communist Party officials, the big fellows of the Communist Party! And on the other hand, you have some of the poorest people in the world in China, in great numbers, as in India. The problem in Asia is that the Asian culture is an oligarchical culture. The advantage of the United States is, that it comes from a European culture in which the struggles since ancient Greece, since the time of Solon of Athens, have been to develop a society based on the people, not the oligarchy. The struggle between Sparta and Athens, in which we had Lycurgus' Sparta and Solon's Athens, was a struggle of oligarchism against freedom. Europe, even though it's gone through terrible oligarchies, has been influenced by those revolutions in European policy, which have established the principle that every human being is human, and is therefore intrinsically equal by the virtue of being human.

We are not monkeys. Admittedly, some of our politicians, like some in the White House, are monkeys, but most of us are human, and we recognize that as a principle. In other societies, including China, the idea of the sacredness of the individual personality is not recognized, not in practice. And this is an Asian problem; it is not a China problem, it's an Asia problem. Now, our task was, and has been, to assist the nations of Asia in acquiring the basis for establishing for themselves the kind of freedom we, in our best moods, demand of ourselves. And that's our mission.

Therefore, we're going to increase the value of the dollar, because by making the dollar the source of the world's greatest influx of public credit, regular credit, suddenly, on the basis of doing that and telling the British to pull their pants up, we will immediately increase the value of the dollar. The value of the dollar, relative to the Chinese currency, is a problem of the U.S. system, not a problem of China, and not a problem of U.S./China relations as such.

If I were President, I guarantee you, I would increase the value of the dollar by leaps, and that would solve the problem. If you aren't willing to do that in the United States, don't complain about China. That's the problem. See, the problem with our politicians is, it's Cartesian thinking. It's the people who believe in these idiot reports about statistical reports forecasting. They're all fake, or incompetent! And our members of Congress are sucked into believing this crap! They have economists who tell them this, they have others who tell them. It's all nonsense! It's gobbledygook!

If I were President of the United States, I could fix this problem without having to argue with China. As a matter of fact, I would get some cooperation from China; I know something about China—not everything, but I know some things, and they're important. I know some things about India, and they're important. I don't know everything, but I know some things. I discussed some of these problems with people like Indira Gandhi, in earlier times. So, I know these kind of things. If I were President of the United States, you would have no problem. Now, I don't intend to become President of the United States, right now. And therefore, I've got to make sure that this job is done as I would have it done, and that's the way to fix the problem.

Banker Rubin and the Politicians

Freeman: Lyn, this is another question in a similar vein. This one is from the House side, from a freshman Congressman; the other one was from a senior Senator. This question is: "Mr. LaRouche, when Bob Rubin addressed us, we didn't get a chance to ask him everything we would have liked to, but most of what he was asked had to do with questions surrounding the issue of trade. One of the things he said, was that while he recognized the problems and the failures of globalization, that at this particular time he would not necessarily favor suddenly shutting down these liberal trade agreements, because it would not help us, and it would also serve to collapse the economies of other nations.

"He also surprised me by saying that he thought that demanding labor and environmental concessions from low-wage countries like India and China, or enacting what he called 'tit for tat' trade policy deals, would ultimately not lead to progress. He insisted that the cure lies in our domestic policy. He talked about better education, a stronger safety net of health-care insurance and economic security in retirement, defense of the dollar, and all of that coupled with policies directed to address our infrastructure needs as the more crucial elements necessary to grow the economy, and also what he said, equally importantly, to induce the kind of optimism that will allow us to compete and prevail, regardless of what the trade environment was.

"In some respects, this bears similarities to what you are saying, but I also recognize there are differences. Can you please address this question overall, from the standpoint that Mr. Rubin did?"

LaRouche: You have to understand the difference between me and Bob Rubin. It's not a concept difference, it's a difference that he is a banker, who operates from the standpoint of what he must do as a leading banker, as opposed to what I must do, or people like me must do, to solve the problems to which he is trying to apply banking functions. In other words, if the politicians of the United States confront Bob Rubin with what they are willing to do as reality, then he is going to try to adapt to that reality as best he can, within the framework of what conditions they impose upon him by their policy shaping.

On the other hand, he would have entirely, personally and professionally, wishes for what the United States would agree to do, which might be quite different in their implications from what he is supporting. Because, he's saying: "I'm a banker, I'm a banker on the block. I have to operate within in the banking system. And what the government does by its policy, to determine the way the banking system can operate, is the things I must be guided by in my day-to-day policy shaping operations. If, on the other hand, you give me a more opportune set of circumstances, as politicians, then I would happily, enthusiastically, join you in shaping policies which are opposite to those I have now, which I would prefer, but I don't make those policies."

In other words, you have to look at this man as a leading, competent professional, who is not a Baby Boomer, which is one of his sources of genius, and he is adapting to the reality the politicians create. If you are coming into the Congress now, you have to look at the thing from your standpoint, and have an insight into what I just said about Bob Rubin. Don't assume that Bob Rubin is going to play the role of leading politician and banker at the same time. At a roundtable, in a confidential roundtable discussion, he will discuss the whole gamut of what his preferences are, what he thinks we should do, as opposed to what he thinks he can do, based on what we think we will do. He will say, "Give me a better policy than this one." We say, "No." He says, "Then I have to back this policy I don't like very much, but it's my best option as a banker."

That's what the problem is. Therefore, it is up to the people in the Congress now, and especially, in many respects, in the ferment which is going to be erupting and bubbling inside the House of Representatives. It is up to the body there to take up the self-education, the rapid self-education policy process to understand this. Don't try to come in with "common sense," to try to find a common sense solution to common sense problems. It's the system that's defining everything, and what is needed is a change in the system. You have to take Myron Scholes and his crowd and take them out. Get them down there collecting garbage or something that's useful, not forecasting (nor hindcasting, either). We have to have competence.

The Vibrancy of Freshmen Congressmen

Look, the way I do it with the Youth Movement: The way competence develops is not by dictating to people what they should believe. It's challenging them, sometimes in a very rough way, to force them to face the realities they must face and problems which they must solve for themselves. I know that process works; it does not work according to formula; it does work according to principles. I know how young people's minds are turned on. If they start to do that before the age of 27, they've got a good chance. If they wait until later, they have a difficult choice, because the wrong habits have settled in. You give up on being creative; you try to be professional instead of creative, and that's not very good.

They want to rely upon the younger people coming in as freshmen, into the Congress. They're usually younger (not always), who have not been in the system before, and now they're in the natural situation where they have to ask questions. They have to get a quick education, but it has to be questions; it has to be also challenging.

These young guys, or younger generation, came in, saying, "We want Cheney out. We want Cheney out! We want Cheney out!" They all came in singing that song, "The Marching Song of the Soldiers of Congress": "We want out, we want out, we want out!" They also want a solution for the general problems that face the American people. They come in not so much soaked with the doctrinaire character of the Democratic Party machinery, which is sometimes, you know, it's a snuff operation called the Democratic Party leadership, intellectually anyway.

You want to get them in with a fresh view, as representatives of the people, and asking and discussing the questions on which the well-being of the people depends. Challenging the Congress which they've entered, as much as submitting to it. This idea of "go along to get along"—there's a time when that idea has to quit. And you have to come to a time when you challenge these guys, say, "Look, we came fresh from the hustings, buddies. You're out there, you're up there, you think you're running the world. Well, we're out there, and we see the effects of what you think you're doing, and it ain't good! Now, let's have some discussion about this matter, and let's find a way to fix the mess that we came up here to fix. And we need your help and cooperation in the discussion which leads to fixing it."

And that's the way to go at it. The freshmen coming into the Congress now are a very valuable shock factor, because they came in often as Democrats, particularly, in opposition to Howard Dean's national committee. They came in despite Howard Dean. They were elected by the people despite Howard Dean, probably because of Howard Dean, because they wanted to spite Howard Dean. And they came in there to change things, to represent what they thought the issues are that occupy the people out there, and the suffering the people experience. They have to be heard, and we need a serious dialogue. We don't want a put-down of the young, of the freshman Congressmen. We want to force the dialogue, which is what the American people want. They want the dialogue forced: Cut the crap out! Get rid of the usual crap, and let's get down to business and face the reality.

Let's not go with "the issues"; forget the issues. Some of those issues stink pretty badly. Go instead with the interests of the people, and go especially for the interests of the two coming generations of the people. What's the interest of the people and the nation two generations from now? What are the interests of the grandchildren? Those things have to be discussed. You have to reformulate the question first. And from what I see, the key question is, we are in the biggest crisis the world has ever seen in terms of a monetary and economic crisis. It's global, and it's immediate; and if we don't fix it, nothing else is going to work. So you'd better finally get your attention to this issue, and realize this is the number one issue, which you can do something about, providing you put Cheney into retirement—probably in chains—and get adult supervision over the President.

Go Back to a Protectionist Mode

Freeman: Here is question from a freshman Democratic member of the House, from New York. "Mr. LaRouche, I came to Washington largely by virtue of support from people who have not been historically poor, but whose standard of living has been driven down by the collapse of U.S. production. While I agree that an increase in the minimum wage is long overdue, and I will certainly vote to support it, I also don't think it's going to address the problems that are faced by this segment of the population. Even a higher minimum wage will not allow these people to meet their mortgage payments, or pay their kids' tuition. I've looked at your economic proposals, and I happen to agree with them. I mean, really, who lives in this country and could argue against the need to rebuild our decrepit national infrastructure?

"But my question is, what about those of us who work in private sector industry, things like the garment industry, the shoe industry, things like that, that depend on consumer spending? It would seem that the only way to address those problems is by somehow addressing the issue of trade policy and outsourcing. I don't know any other alternative. I would be interested in your thoughts on this."

LaRouche: First of all, we have to go back to what some people call a protectionist mode. We have to. There's no sane alternative to returning to a protectionist mode.

Now, on the minimum wage thing, look at the history of this proposition. Roosevelt did it in several steps. One of the most important aspects of the minimum wage policy was that in order to secure a Federal government contract—and this then was extended to states—you had to adhere to a minimum wage standard. Trade unions became a significant factor in lobbying for negotiation of this trade condition. That's fine; that's good. Because even the proposed minimum wage does not meet the standard required for creating a family in the United States.

You look around, and you can find a phenomenon like these large, super supermarkets, where you have people who are vastly overweight standing in one position because they have difficulty moving, and they're steering people to counters where merchandise may or may not exist. So, you have people employed in this kind of way, and they become a larger and larger component of the population, and this is a real problem. The real problem here is, we have cut down the number of productive employment places in the United States as a percentile of the total labor force; that's where the problem lies.

But at the same time, you have to think of the cultural factor of the minimum wage in terms of what a minimum wage buys. And therefore, we have destroyed the ability to maintain a family. We have created problems among young people as a result of the decline of the standard of living in typical households across the United States. We have destroyed the orientation toward a future. So, therefore, yes, we have to do that.

Now, we have to have a sense of national economic security in terms of tariff and trade. National economic security is to ensure that in certain industries, you do have a tariff protection. We're going to have to go out there and bust up the whole operation, the entirety of this recent development, in terms of the globalized economy. It has to be busted up, otherwise, there is no economy for us; no economy for anyone else, either. So therefore, we're going back to protectionist system, which is a traditional American system. And as a matter of fact, the present agreements which the United States has entered into in international tariffs and trade, have been actually unconstitutional violations of the Preamble of the Constitution. And therefore, we find ourselves in a position where we regret very much that we have to announce our withdrawal from these agreements. And we are now entering into new agreements from that point on.

But the key thing flows from the top; we have to reorganize from the top. We must reorganize, first of all, the international monetary financial system, and it has to be reorganized on the basis of a relatively fixed exchange rate for the U.S. dollar, which will stabilize the world.

By the way, if we don't do that, if we do not make that change that I've just indicated, then the whole world is going to blow up very soon, and all these other questions will become irrelevant. So, it has to be done that way. There has to be a tariff and trade tradition, particularly in the garment and shoe industry.

For example, you get cheap garments today, but you can't get good ones. You can't even get a good set of underwear! For example, take an old man like me: You go out and you buy some undershorts, and being an old miser like me, you have some old undershorts you had from ten, twelve years ago, and you take your undershorts out of the drawer. And you look at the recent ones from Honduras, and ones you used to get from mills in the United States, by a very simple standard: What is the gauge of the thread and the gauge of the fabric which you're sitting on? And why are you getting blisters by typing?

Our problems of this nature, require a standard of quality of merchandise as this illustrates. You see, the poor guy down there in Honduras—who are a bunch of slaves—he's down there working like that because he's a slave, working to make everything cheaper for the benefit of some shark up here, or the international markets. And therefore, in order to make the product cheaper, they take the gauge out of the fabric. And you say, "What am I sitting on, here? Is there anything there?"

How About a Freshman Caucus?

Freeman: That should not be taken as an argument in favor of going commando!

Let's see. "Mr. LaRouche, I'm a newcomer to Congress, but not to Washington. And in these opening days, the incoming class has been bombarded with explanations of what can and can not be done. But, the veteran legislators' view of what can and can not be done is precisely what has led to the perception of a do-nothing Congress. Now, individually, the truth is, that not a single one of us has a chance. In recognition of this, some of us have been discussing the idea of forming a Freshman Caucus, so that we actually could address certain issues with one voice, backed up by a significant number of votes. We have been told that this is a very bad idea. What do you think about something like this? We're not trying to be disruptive, but we are trying to figure out how we can be heard."

LaRouche: If anyone has studied in recent years, my policies on a young adult youth movement, they know exactly what I think about this. What you need, as I said before in answer to a previous question, is the vitality of ferment. The vitality of ferment is the younger generation saying to the older generation: "This place is kind of screwed up. Maybe you had something to do with that? Why don't you at least listen to and discuss some different ideas from a slightly different perspective? Why don't you—"

You know it's like a man walking down the street. He feels that he's all well-dressed, the front of him is nice, the tie and so forth, but the guy from behind says, "Boy what a wreck he is." So, the fellows coming up behind a certain generation, will often see things that the fellow who's looking at himself in the mirror frontally overlooks.

And therefore, this idea of, yes, a Freshman Caucus, is not really a controversial issue. It's a normal generational process that people who have gone through, who are the older generation, or have been habituated to think like the older generation, think in a certain way. This way has ruined us!

These guys may have ruined us in a sense, but they're patriots or at least a great number of them. And therefore, because they realize the system is coming down, because they realize that it doesn't work, and it hasn't worked, and it's not going to work if continued, they realize that they have to have a certain openness.

Now, look at what happened in the recent election campaign, particularly with our intervention in it, the youth intervention: Look at the result. And look at what we're doing in terms of the continuation based on the bel canto principle of choral singing, in terms of political organizing. We are making a revolutionary change in politics, and you see that the marginal contribution of that younger generation, with its increased role in the recent midterm elections, has determined the present change which has occurred in the Congress. The landslide character of the Democratic victory in the House of Representatives, is a reflection of the 18-35-year-old younger voter, the increased increment of that vote turning out against the present system.

So, therefore, you find that the freshmen Congressmen, who are new to that part of the system, are reflecting that as a group. This is the way the Democratic Party has come back into existence after a long slot sitting in a sort of suspended animation, and that's the way this country will go forward. You find the reflection of that as not simply the anti-Bush war and so forth from Republicans. The important thing you're seeing in the legislative process in the United States today, is a reflection of the fact that a new, younger generation has manifested itself as a force in politics, an increasing force in politics, has changed the mood and thinking among older generations of politicians.

So, that's the coming generation. The Democratic Party is now in the process of virtually regaining what it lost in 1968. And so, therefore, an older generation screwed this thing up, a new generation will fix it.

Behind the U.S. Policy Toward Somalia

Freeman: Lyn, there are more questions on some of these issues, from both members of Congress and from, a couple from professional staffers whom we have been working with. I will get to those questions, but we are also being bombarded with questions on the situation right now in the Middle East and in Africa. I do want to take a couple of those questions, because there are so many of them, and they're coming both from the United States, and internationally, from young people and old people, as well—not old, just older. I don't want to get in trouble by saying somebody's old.

The questions actually cover two areas that are related. One is characterized by a question that was submitted from Mr. Abdulrazak Abdulrahman, who is in the audience here. He says, "Mr. LaRouche, what is the current Ethiopian administration doing in Somalia?" And the other questions are all asking you to please comment on the recent U.S. bombing in Somalia.

LaRouche: Well, the recent bombing in Somalia is a reflection of the extension of Cheney's intention behind the surge in Iraq and Cheney's intention to have a war against Iran. This is a long-term process, and it's all evil.

The policy on Africa, you can date from 1898 and British Lord Kitchener. That's the secret, if you look at Kitchener and at what British policy was after the victory in Sudan, then you'll see exactly the whole trend in the policy of today. This is an imperial policy you're dealing with. To understand this: Our enemy is the British government, or the Anglo-Dutch Liberal forces behind that government. Since 1763, since February 1763 to be specific, the intention of the British East India Company, which is now, essentially the core of what has been transmogrified as the current British Establishment, Anglo-Dutch Establishment, has been to create a world empire based on—not a copy of, but modelled on—the Venetian control of the Norman chivalry during the so-called medieval period.

That's the policy, that kind of empire. Not a Roman empire in the sense of ancient Rome or Byzantium as such, but something that is based on the same principle, but has a different form. That is where a consort of bankers, like a slime mold, different groups of bankers, who quarrel with each other, but also as a unit have certain common policies, certain parameters, who run private and other military forces, set up wars and other ways of controlling masses of people. And the intent of this crowd has been, since 1763, to establish a British Empire, which is actually an empire of the Anglo-Dutch Liberal circles, which would control the British and Dutch monarchies, and things like that. So now, Africa has been part of that imperial policy. Two policies are part of that: One is, well apart from the enemy; the British have always been the enemies of the existence of the United States since 1763. But the policy has been, in respect to Africa and Eurasia, since Abraham Lincoln's victory over the British puppet called the Confederacy—the policy has been called geopolitics.

The British Empire came to power by orchestrating the Seven Years' War, leading into the 1763 Treaty of Paris. The British Empire perpetuated its power and increased it through its agent, Napoleon Bonaparte. Napoleon Bonaparte didn't know he was a British agent, but what he did in destroying Europe, continental Europe, with his wars on Europe, weakened Europe to the extent that the British Empire has controlled—with the exception of the Roosevelt Administration—world politics, in Europe especially since the assassination of President McKinley.

Now, Africa policy is a special policy which is part of that. The policy of the British toward Africa is that expressed by Henry Kissinger in 1974. His proposal, specifically on Africa, was: The African population is too large, it is consuming too much of its own natural resources, which we want for our future. We don't want Africans using that up. We do not wish to have the African populations increase; we wish to cause them to decrease. We do not want Africans to increase their productive powers of labor; we want to prevent them from developing independent productive powers of labor in their own territory, so they will not use up raw materials which we think we own for the future, by actually applying technological progress in that part of the world.

What we have now, which is also very ancient—we don't have a conflict with Iran, we don't have a conflict with this; that's all nonsense, that's all secondary. What the issue is, the way to destabilize the world, is by taking an area called Southwest Asia, which is the junction point of Africa and Asia, and the reference point for Europe and northern Asia, and destabilize that entire area. Look at it! Ever since there was documented European history, that cockpit around Southwest Asia, Egypt, etc. has been the determinant of imperial policy—before the Roman Empire, under the Roman Empire, during the Byzantine Empire, under the medieval ultramontane system, and under the British Anglo-Dutch Liberal system. So what's happening now is an attempt to disrupt and destabilize the region by causing a general conflagration extending all the way from Central Asia, through Iran, Transcaucasia, from Turkey, down into the area of Lake Victoria. And the whole area is an area of geostrategic intentions.

Now, this is not Cheney's policy; this is a British policy which Cheney works for a dumb thug, working for his wife, who is not so "schmart," but a little more intellectual. And she's a fascist, and Cheney's the dog she has on a leash, which she sometimes unleashes. (She unleashed him in the bedroom at least twice.) This is what we are dealing with.

You have to deal not with a conflict like a comic book story conflict, or Hollywood scenario. What you have to do is, look at the fact that we're dealing with human beings, and human beings are creatures of culture, of transmitted and developed culture, using the power of human beings to generate ideas, which no animal can develop. An animal is born and dies, and that's the end of that animal; it has no personality. A human being never dies, because when the body dies, the impact of ideas transmitted through them, or developed by them, continues to radiate in society. A human being is intrinsically and implicitly immortal, and what they represent as immortality is ideas, the domain of ideas, rather than the domain of flesh as such. Therefore, when you're looking at this from the standpoint of human conduct, of human behavior, of culture, you see that the conflicts of this planet are cultural conflicts.

As Henry Kissinger professes to be a Hobbesian, that bestial mental conception about man, Henry Kissinger is not a human being. He has denounced it and torn up his membership card in the human race with these kinds of policies. Anybody else who has a similar policy, has a similar thing. People who tear up their membership cards in the human race become what we call evil. It takes the form—a Biblical form in a sense—of a struggle between good and evil. And what you're looking at with Cheney, with that poor, brainwashed idiot President, or Liz-biz Cheney, what you're looking at is a struggle by the forces of evil. Not evil because they represent an empire of evil as such, but because they represent a cultural tendency within civilization whose characteristic is to do evil.

This is not normal; evil is not something natural in the human race. It's a question of a degeneration of human beings. Human beings are naturally good; they're born good. But conditions and culture can turn a good person into a degenerate—bad culture can do that. So, we're fighting that culture.

What you're seeing here, in this operation, is the force of evil. Take Ethiopia. Ethiopia had a war with Somalia. How did this happen? Well, Henry Kissinger did it. How did he do it? Going into the 1970s, before Kissinger really took a hand at this, Somalia had been supported by the Soviet Union, and Ethiopia had been supported by the U.S. and the Europeans. And the conflict was arranged.

Henry Kissinger switched! He switched back and forth: The Soviets were now on Ethiopia, and the United States moved in with Henry Kissinger on Somalia. A war between Somalia and Ethiopia was orchestrated. At the same time, a war between Eritrea and Ethiopia was orchestrated. A war to control the waters of the Nile, from Lake Victoria to the Mediterranean Sea, was orchestrated. An agreement was reached among nations—Ethiopia, Sudan, and Egypt—on water regulation. If you destabilize that area, as was done before, which is what is being done from the outside, then the water agreements are broken. Then, the British take the water from the Nile, which was going to Egypt, put it in a pipeline, a plastic pipeline, and deliver the water to Israel.

That's what's going on, and that's only part of the story, but that's the way to understand this. You have a force of evil, habitual evil, which Henry Kissinger really merely reflects and typifies, which engages in these kinds of operations—not because they have a passionate cause which is endemic in certain governments, in certain nations. It's not that. Somebody plays them.

Look: The Seven Years' War in Europe, which made the British East India Company Empire, was played. The British supported Frederick of Prussia, Frederick the Great, against all the enemies of Prussia in Europe. And you had a Seven Years' War, regarding France, Russia, Austro-Hungary, and so forth, against Frederick the Great. The British gave him marginal financial support, so he could deploy an army, with his particular skill, to repel the attacks on Prussia. Once the British had achieved what they wanted, they shut off the assistance to Frederick the Great, and went back to other arrangements. As a result of this, Europe was so weakened, relative to British power, that the British have maintained power over Europe ever since that time.

They reinforced it by orchestrating the Napoleonic Wars. It was the British intelligence service which put Napoleon into power in France. He was nominally their enemy, but he fought the wars they wanted him to fight. He weakened all of Europe, to the point that from the Vienna Congress on, Europe is dominated to the present day (except for the intervention of the United States) by the Anglo-Dutch Liberals. This is the way these guys operate. Don't think in the childish terms, the comic book terms of history, of thinking that because so-and-so hates so-and-so, that's why the war starts. The war starts because, usually, somebody is orchestrating a war among people, but a third party is orchestrating that war, and usually it's an imperial force. Like globalization, like what happened in 9/11—that's the way things happen.

Iraq War: Emergency Action Is Necessary!

Freeman: Lyn, this is a question from a veteran Democrat in the United States Senate. He says: "It is clear from Bush's remarks last night that he believes he has the authority as Commander-in-Chief, to order a massive increase in the number of U.S. troops deployed to Iraq. Senator Kennedy challenged this idea before the fact, in what I thought were eloquent remarks delivered on Tuesday, in which he announced that we have now introduced legislation into both Houses of Congress, to stop this suicidal escalation. At the same time, Senator Biden has opened what he said would be four weeks of hearings on the Administration's Iraq policy.

"However, within hours of Bush's address, U.S. troops conducted a raid on an Iranian consulate, in one of the Kurdish areas, and took a number of Iranians into custody. When we have an Administration that is prepared to trample on all accepted diplomatic norms and agreements, do we really have the time to conduct four weeks of hearings, or is emergency action necessary?"

LaRouche: Emergency action is absolutely necessary, otherwise, everything else is a waste of time. What you have is, an Administration which is acting as a dictatorship, just like Adolf Hitler. The forces behind this Administration are the same interests which are represented by Adolf Hitler, for whom he worked. Only, after punishing the people who had worn uniforms of the Nazi service, we protected those at a discreet interval, and we restored to power those who had been behind Hitler in the United States, and in Europe, and in Germany itself. The interests which did that, which created the Hitler dictatorship, against which Roosevelt mustered a defeat, those forces still exist today as a social force, as a social continuity. They have similar aims today to those which the British and the Bank of England and Company had, and some people like Averell Harriman and Company had in New York.

Those people were behind Hitler. Many of them had been, like Churchill, behind Mussolini, and Churchill was backing Mussolini until 1939. And you had magazines like Liberty, and so forth, which had some of these featured articles by people on that. And it was a fact. And I had a friend of mine who was serving up in that area as the chief of OSS [Office of Strategic Services] in Italy on the ground, and he was chasing Mussolini, who was headed toward the border for a meeting with Churchill. Churchill was scared stiff, because Mussolini was going to try to blackmail Churchill, to "improve," shall we say, Mussolini's conditions in life.

So, somebody killed Mussolini, and the papers he was carrying with him disappeared until later, somewhat diminished in number and magnitude; and Mussolini's and his girlfriend's bodies were found hanging upside down at a gas station. And my friend, who had been chasing him with a .45 on his hip, knew that this was a big hoax. But those forces, which were behind Hitler and Mussolini and so forth, the forces which were behind the Liberty League here in the United States, and similar kinds of people—these guys wanted Hitler. Not because they loved him, but they wished to use him, like toilet paper, which they threw away afterwards—and they got new toilet paper, some of which is named Cheney, and some of it's named Bush.

The Biggest Terrorist Threat Is Cheney

Freeman: And that should not be taken as an excuse not to use toilet paper. Lyn we have a couple of more questions on this topic, and then we're going to come back to these questions of economy.

This is a question from a freshman member in the House of Representatives. "Mr. LaRouche, as a prelude to President Bush's speech, and I think not accidentally as such, the U.S. used massive force, supposedly in pursuit of three alleged al-Qaeda terrorists in Somalia. Last night, it seems we did something similar in a raid against an Iranian consulate. It seems that these days, absolutely anything is permissible in pursuit of al-Qaeda. Will you please give me your assessment of the actual terrorist threat that the U.S. faces, and the best way of addressing it?"

LaRouche: Well, the biggest terrorist threat we have right now, is Vice President Cheney. It's a fact. Now, as to al-Qaeda: Al-Qaeda was created, essentially, under the direction of then-Vice President George H.W. Bush, the father of the present incumbent, and Jimmy Goldsmith. What happened is, Brzezinski was the one who started this war in Afghanistan to hit the flank of the Soviet Union, in repayment for what had been done in Indochina, where the Soviet government, when the United States had started the war in Indochina, had assisted the Vietnamese in designing strategies of irregular warfare, or asymmetric warfare. So therefore, the United States decided to return the favor by launching asymmetric warfare in Afghanistan against the Soviet Union as a trap, as a monkey trap for the Soviet Union.

Now, in this process, the United States and Britain, as typified by the cases of Jimmy Goldsmith as an agent for Britain, and George H.W. as the Vice President of the United States, were involved in what was called the Iran/Contra operation. So the Iran/Contra operation, as associated with George H.W. Bush, was involved in running terrorist operations against the Soviet forces in Afghanistan. They relied on cooperation with certain Saudi families, and others, to recruit a certain type of Islamic believer, to become a fanatic fighter against the devil of Soviet ideology in Afghanistan. Among these, was a member of a family, the bin Laden family, which is very close personally to the Bush family. The person who was involved most prominently was Osama bin Laden. Osama bin Laden created a terrorist organization, which was deployed by the Anglo-American forces in Afghanistan against the Soviet forces. After the war had concluded, and the fall of [Berlin] Wall and so forth, this al-Qaeda organization still existed, and the bin Laden family maintained very close relationships, to the most recent time, with the Bush family in Texas.

So, al-Qaeda was a throwaway for somebody to use as a distraction and cover-up for actual authorship of what became known as 9/11. This was a coup d'état intended against the United States. At the time I knew something like that was intended. As I said before the inauguration of President George W. Bush, in January of 2001: On the basis of the indications of the incompetence of the Bush Administration coming in, and the fact that we had already gone into a new phase of a general financial crisis with the collapse of the Y2K bubble in the course of 2000, I said that George W. Bush would be incapable, with his policy orientation, of dealing efficiently and competently with that issue. And therefore, we must expect that, somewhere in the woodwork, someone would do what Hermann Göring had done to make Hitler a dictator, by setting fire to the Reichstag in 1933.

So, what happened was, we were looking for a Reichstag-like event. We had one which was staged out of the Italian protest against globalization, which was a terrorist-type event where Bush himself was threatened, and we then were looking at a prospective October security problem for Washington, D.C., which was being staged largely in Northern Virginia and other areas. So, we were monitoring that, and we knew that something was up.

So, on Sept. 11, of that year, before what we were looking at as the potential of a Washington, D.C. terrorist event, 9/11 happened. And since the United States and others, and the British had assets which were terrorist assets from the operations in Afghanistan during the 1980s, there was no shortage of talent to decorate the environment to attribute this thing to an Islamic target. The Islamic target comes from Samuel P. Huntington, who is a Kissinger associate, from their time in Boston under William Yandell Elliott, who is a British agent, who trained a whole group of British agents, including Henry Kissinger, at Harvard University's School of Government, and so you have that kind of situation.

This is the kind of problem we face. Now, we're looking at the use of what are methods of asymmetric warfare in place of, or in supplement of, actual acts of conventional warfare. That is, you start an asymmetric war, the way Hitler started the Polish event, which led to the beginning of official World War II. You stage an act of asymmetric warfare as a provocation to create an issue which then becomes a pretext for general warfare.

So, that's what they've done always since. Osama bin Laden has never been taken. There's never been a serious attempt to take him, despite bombing of all holes in sight. Osama bin Laden has never shown up. We wonder if he's at a place called the Crawford Ranch?—one place that has not yet been bombed! (Even by a certain lady who is terrifying George.) So what you're dealing with is what would be considered diplomatically as criminal acts such as this Iran consulate event, on the pretext of al-Qaeda, which is an operation created under the co-patronage of George H.W. Bush in this area. What you have is someone playing games! They're trying to incite the situation, through asymmetric conflict, which leads to the launching of an aerial bombardment, using nuclear weapons, in Iran. At the point that that occurs, which is what the meaning of the "surge" is in Baghdad—the surge in Baghdad is a flanking operation to support something in Iran, a bombing of Iran. That's what it is! The President probably doesn't know that, but there's many things the President doesn't know. Probably where his shoes are, eh?

We must not overestimate the intelligence of George W. Bush. If you wanted to destroy the United States, the first thing you would do from London is make George W. Bush the President and Cheney the Vice President. That's happened, hasn't it? The United States has never been so discredited, so low in its diplomatic influence, its credibility, its influence on world affairs, as now, as a result of the administration of George W. Bush and the actions of Cheney. The United States is being destroyed from within, by the installation of these clowns and their supporters inside our institutions of government, and people in the Congress ought to understand that. These bums have to be put out, because they're worse than traitors.

Tax the Richest, and the Speculators

Freeman: You know, in all the years I've been associated with you, you've put on the table a number of things that were incredible challenges, but probably the biggest challenge that I think Lyn has ever put before us, was what he just said, which is to not overestimate the intelligence of George Bush.

Lyn, I think this is a question that the questioner probably knows the answer to, but I think she wants you to be on record as saying it. This is from a senior staffer on the House side, and a good friend. She says, "Lyn, I'm sure you know, we have a $9 trillion overall deficit, and there is no question that Bush's tax cut exacerbated that problem greatly. I'd like you to just address for a moment what you think can and should be done, vis-à-vis our tax policy to deal with the situation."

LaRouche: Well, first of all, the upper income brackets of the population should finally take their fair share of the burden. Also, there should be a heavy tax, accompanied by criminal measures, against speculation of the type of hedge funds. The world is being destroyed by this kind of financial speculation, which is contrary to the intent of our Constitution. U.S. banks are involved with that. The U.S. banks have put the United States dollar into jeopardy through their hedge fund operations internationally. As a result of hedge fund operations conducted by these banks, condoned by the U.S. government presently, every major U.S. bank in the United States is currently, in fact, bankrupt. There's not a solid major bank in the United States tonight. That's why I think Bob Rubin would agree with me—he doesn't like to say it, but he would agree in effect—I say, put the entire Federal Reserve System in receivership.

Now, what has happened by these hedge funds and similar kinds of operations of financial derivatives, with the housing bubble, the Y2K bubble, all these other bubbles: The United States dollar has incurred a debt beyond belief. There is no possible way of scheduling the amount of outstanding claims against the financial system in the world today. None. Therefore, much of this debt must be cancelled. Therefore, it should be the finding of the Congress, that this practice of allowing the hedge fund and related financial derivative operations introduced heavily under former head of the Federal Reserve System, Alan Greenspan, that this practice was wrong and should be considered, because of its effect, as criminal by effect and also by intent.

Therefore, what do you do in a case like this? You pass two laws which are the same thing, or two sets of laws. One, you ban it. Two, such activity becomes now a subject of criminal law. In other words, it's like raping children. It's a crime. Stop it! This is raping nations, raping people, raping the banking system. This is a crime. Stop it!

And that's, essentially, the way you have to look at it. The U.S. dollar is our asset. It's a U.S. government asset under our Constitution. Someone who tampers with the dollar, who counterfeits the dollar, should be a Treasury Department target for enforcement. Now, who is the biggest counterfeiter in recent history? Well, one candidate is Alan Greenspan! Look what he did! Look what he did! He created the housing bubble. How did he do that? Mortgage-based securities! Using his flood of phony money through Fannie Mae and other institutions. How was the whole operation run during the 1990s to the present time? By him! Since 1987, by him, Greenspan. The whole system was rotted out by this use of financial derivatives, by him, and speculative instruments.

Take the case of Loudoun County, Virginia, an area with which I have some familiarity. This area is hopelessly bankrupt. The county was sucked into being stupid by some of the residents, who prevailed. What they did was they promoted a housing bubble expansion in a bedroom community called Loudoun County, without infrastructure. You have fancy housing in the million-dollar class, and you've got sewage coming up through the lawn, which means that the county planning ain't so good! Because there are no sewage systems. You have some Irish moss or something or other, which helps the sewage get to the grounds more quickly.

Now, what's happened is that Loudoun County is the most vulnerable target, in terms of scale, in the nation, of a complete blowout of the mortgage housing bubble. If this goes down, what happens to the country? First of all, you have a lot of housing of people who are in debt, housing they occupy, where they have less than zero equity in the home. As the price of housing value on the market declines, and as the accumulated unsold housing for sale rises, you reach a point where there'll be a general blowout of the housing bubble, including the particular Loudoun County center. What happens then to expenses of maintaining the government functions of Loudoun County, under those circumstances? The county itself goes bankrupt, and you have potential chaos in the county, insoluble chaos under present regulations.

Therefore, findings of this kind of fact, as in California, and elsewhere, the same kind of thing. And also in London. It's a worse thing in the London area, a terrible situation in Spain, and so forth and so on. So, therefore, here we have a pestilence which is a threat to life and well being, generally, of humanity, called hedge funds and related financial derivatives. This should be banned. Certainly, we banned opium traffic, cocaine traffic. This should be banned. It's criminal traffic. It's a drug traffic of this form! Therefore, we ban it, we confiscate the illegal assets, and we tax it, all at the same time, just as we have taxes on criminal income. We put 'em in jail, and we tax 'em at the same time. It's a double penalty.

So that's the way you have to approach this kind of thing, if you want to be serious, because we're never going to pay those debts, never! We never could. Try to pay them, you'll collapse the system. So, you can never pay the existing outstanding debts, largely denominated in dollars. The only thing you can do is disavow them.

Educating Congress—With Kepler

Freeman: That's what I keep telling my creditors. They're not friendly to the idea, though. Lyn, this is a question that was submitted by Heather, who is one of the leaders of the LYM here in D.C., and I think it's a useful question to have addressed. She says, "Lyn, in your recent paper, you outlined clearly the type of curriculum which some professional staff and members of Congress have to take up, in order to think more clearly about the long-term cycles of economics. The LYM, spearheaded by the animation crews, are slowly but surely working toward understanding the basis of modern science and Classical modes of communication. This, I believe, can be seen in the qualitative improvements in our deployments overall. What my worry is, is that these people need to take your scientific core curriculum more seriously, if they wish to make real economic policy for the future of this country and the world. So, we're thinking about how to integrate this teaching into the Congress itself, and I was wondering if you had any advice on how we might approach this question."

LaRouche: Yes, sure. This is what I'm interested in. I'm interested, of course, very much in the progress of certain projects. Now, for the next two or three weeks, we'll be having a report on the second series of Kepler's discoveries. The first one was on the discovery of gravitation and the inner planet relationship, the subject of his book The New Astronomy. The second one is on his World Harmonies, which is the organization of the Solar System from the same standpoint, and what they've been doing, of course, is going through each part....

You see, as I've said a number of times, the peculiar thing about Kepler is he's actually the founder of the application of modern physical science, and for years most people in universities have known nothing about Kepler. Therefore, many people who consider themselves scientists are actually incompetent in astrophysics and other related things, for just that reason. The peculiarity of Kepler, apart from the originality of his work, as Albert Einstein emphasized later, is that, in his writings, he takes the reader through every step and definition and data of the problem. So the reader has to go through the experience and make the discovery himself or herself, contrary to what you get from learning the formula, with a little fast pitch, in a university today.

Now, this then leads to a mind which, with the help of going back to the Pythagoreans and Plato and the method of sphaerics, is capable of understanding the fundamental principle of scientific work, fundamental scientific work, leaving aside a lot of things which are very important, but let's get the mainstream first. Eh? So, you get to the mainstream, then you go through the work of Gauss, which in respect to astronomy and other things, is based on Kepler and Leibniz, and then you go from Gauss to Riemann's conception of dynamics, and if you don't understand Riemannian physical dynamics, you don't understand anything really, functionally, about how an economy actually works.

So therefore, what we're getting so far is, that the young people, the LYM people who are working on these projects, are producing at the end of each cycle of the project, a report, a presentation back to others, and various kinds of discussions as well. They are also, in a sense, spreading a capability throughout the ranks of the LYM, a capability of dealing with the concept of science in a way which is superior to the presentation of science in aspects of universities today.

So therefore, this is immediately replicable for application to questions of economy from a physical-economic standpoint today. So yes, that's what must be done. Exactly. And you find some people in the Congress, either staff members or others and so forth, who would like to participate in the reports that we generate from these sessions. Make those available to them, and get some kind of clinical process of discussion with various people in the Congress, to strengthen the staff capability of the relevant Congressmen. If you get a number of Congressmen who increase their capability through the improvement of their staffs' capability—huh!—you get a nice benefit. I think that's the way to go.

The Pursuit of Happiness, and Legislation

Freeman: The last question that I'm going to ask, Lyn, is a question that's been asked both by a new member of the House and also by a LYM member. And I'll read each of them, because they're both the same question, just addressed in slightly different ways, and I'll let Lyn answer it. What I won't ask Lyn, but I think he will answer at some other time, in some other place, is the one topic outside of Iraq and the economy, that we have gotten more questions on from the United States and from Europe, but gratefully from only two people on Capitol Hill, a question regarding Al Gore's movie "An Inconvenient Truth." I don't want to take up the time here, even though it would give Lyn a lot of good comic material. I think one inconvenient truth from Mr. Gore is that he's not any better at making movies than he is at politics.

Here's the question that was submitted by a freshman in Congress, and then I'll read you the LYM question: "Mr. LaRouche, when Bob Rubin came to talk to us, the first thing that he said was that he wasn't licensed to practice politics, but I get the sense that you are. There are some very complex and technical issues that clearly we have to address with legislation, but the fact is that very few Americans are interested in or follow Congress's legislative agenda. My own view is that nevertheless, we owe it to our constituents to find a way to educate them on the details, without boring them to death, and I'm not sure exactly how to do that."

Now, a related question came in from Betiana González, who's here from the Argentine LaRouche Youth Movement, and we'd like to welcome her. Her question addresses the same issue, I just think she does it more eloquently. She says, "Lyn, the subject of my question is the pursuit of happiness, in terms of the general welfare, and how to actually organize the population with ideas and with beauty, instead of just bombarding them with mere information."

LaRouche: Well, let's go to the happiness first. The pursuit of happiness is the same thing, in a sense, a concept which was presented by Gottfried Leibniz, as featured in his New Essays on Human Understanding, a rebuttal of John Locke. And in this, in contrast to the utilitarian, vulgar attitude of Locke, Leibniz signified that, essentially, happiness lies in the immortality of the individual soul. That, are you doing something with the mortal life you have, which you are persuaded is going to be of merit for the benefit of coming generations? If so, and if you die in the effort to do that, then you have happiness.

One of the best examples of that is the case of a student, a famous student of Abraham Kästner, the famous mathematician and also an expert on areas of culture, Gotthold Lessing, of the famous Mendelssohn-Lessing alliance which launched the great Classical renaissance at the end of the 18th Century. Lessing led a life which was inherently very bitter, in terms of the circumstances. After years of trying to get married to his wife, she died very quickly after that, and so forth, and yet he maintained a positive attitude about life, no matter what he went through. His dramas are especially notable for that particular quality.

That is happiness: to be able to face death with a smile on your face, because you've made a contribution to the future of humanity, which affirms you as a human being, as opposed to a mere mortal animal. That's the issue.

The problem has been, the introduction of existentialism—which of course is all throughout Ibero-America, as well as in the United States. Existentialism, the idea of what this Nazi Martin Heidegger called "thrownness," that you are a thing thrown in a jungle called society, and you interact as jungle creatures against each other. The ideas of Horkheimer, or Hannah Arendt, and people like that, express this. So the idea that you are not a person in a human jungle, as the fascists think, as the Nazis think: You are a person in society, playing a role as an immortal intellect in the future of humanity, and your goal is not what you get in your pocket, not your essential satisfaction. Your goal is to live a life, which at the end, you can smile and say, the future of what I've done seems to be virtually assured to someone who comes after me.

This is what is lacking in the Baby-Boomer generation, especially the upper 20% of family income brackets in the United States today. This is what the Baby-Boomer problem is. And it comes out as they get older. Because if you are an existentialist by inclination, in this sense, as you become older, you become bitter, you become mean, you become resentful against everything. You want your way! "It's my life, I'm going to die! Who cares about you? It's not your time, it's my time! I want what I got coming to me now!" And that's the Baby Boomer.

So therefore, you're facing a Baby-Boomer-dominated culture which has been infiltrated by the influence of existentialist doctrine, as in the case of Argentina or Brazil and so forth. You find this in Mexico. You find existentialism all over the place, in art, and so forth. That's where the problem lies. And the motivation on which society is built is by the dedication of the individual and the existing generation to the future of mankind. This used to be expressed as: Immigrants to the United States would come here, live under difficult circumstances, work under difficult circumstances, and look forward to the future of their grandchildren. They came in as immigrant labor. Their grandchildren became the physicians, the scientists, and so forth of the United States,

The way to set the agenda, is to not just fight against what is going on now under Nancy Pelosi's leadership, in terms of their special agenda, which can become a trap, because it seems good, but it leads nowhere. The fundamental issue of determining the future of the existence of the nation is not discussed. So therefore, what do you have to do? You have a parallel track. Let that track go on. Let them discuss this. Fine, all of these are all interesting issues to discuss. Let them discuss them and vote them up or down. But let us, at the same time, make sure that we don't lose track of the vital issue: Is this nation, is this civilization, going to survive? That's the question! That's the fundamental question. Once you understand what you mean by that, and understand what you mean by a solution to that challenge, now you can legislate. If you haven't faced that question first, you don't have a yardstick to measure what the true results should be. And that's the point.

So therefore, what we do is, let's not fuss with these guys who insist on going with a small-minded agenda of point by point. Don't fuss with them. What we do is take the people who reveal themselves to be real leaders, by the fact that they can go to the higher level of the agenda. What are the issues? What is the legislation which should determine the future existence of this nation, and its role in the world? Start from that. Now, look at every one of the issues that come up, from that standpoint, and you will probably get it pretty nearly right.

Freeman: Well, we've accomplished bringing in the New Politics, and now we've got quite a job on our hands bringing in the New Economics. But I think that, if you take the quality of the discussion that has been presented here today, it's clear that we have the best shot that we could possibly hope for, in doing that. The LYM has been extremely effective this week, and I'm sure that they will continue to be extremely effective as this week progresses, and even as they go back to the various areas that they came here from.

I'd like to thank all of you. You've been a very good audience.

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