IN WAKE OF FCIC REPORT, LPAC SAYS:
LaRouche Was Right; They Were Wrong!
Jan. 27, 2011 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee.
Today the Financial Crisis Inquiry Commission (FCIC) released its study of the causes of the financial collapse. The report is useful in that it identifies the main cause of the crisis as the more than 3 decades long drive to eliminate those protections of the American people erected by Roosevelt in the early part of the 20th century, including emphatically the Glass Steagall Act. It also identifies Alan Greenspan as the leading champion of such deregulation.
The Commission identifies two major Wall Street initiatives which contributed to the collapse. First, the repeal in November 1999 of what remained of the Glass Steagall Act. In that month The Congress passed and President Clinton signed the Gramm-Leach-Bliley Act (GLBA).
Second on December 15, 2000 the Commodity Futures Modernization Act of 2000 was passed, which legalized over-the-counter derivatives in the trillions.
While the Commission now provides a useful service by identifying these measures, Lyndon LaRouche and his movement fought these speculative moves by Greenspan and Larry Summers at the time.
Specifically, in 1999 in the pages of EIR, the Gramm-Leach-Bliley Act was denounced as a "disaster." The announcement in April 1998 by the chairmen of Travelers Group and Citicorp of their intended merger, which violated the Glass Steagall Act was characterized by EIR as a violation of Federal conspiracy statutes.
LaRouche's EIR also characterized the Commodity Futures Modernization Act of 2000 as the "Derivatives Decriminalization Act."
These actions in 1999-2000, both fiercely opposed by Lyndon LaRouche, then set off the chain of events which by 2007 triggered the collapse of the world financial system.
Contrary to those who lie that nobody did or could forecast that this would happen, on July 25, 2007, Lyndon LaRouche gave an international webcast during which he correctly forecast the financial crisis which was to break out within weeks. In that webcast LaRouche stated the following:
Immediately thereafter in August 2007 LaRouche called for a Homeowners and Bank Protection Act (HBPA) to deal with the popping of the housing bubble, and the subsequent explosion of home foreclosures and the blowout of the mortgage-backed securities market and a chain reaction collapse of the world's biggest investment houses.
City Councils in more than 100 cities and at least six state legislative bodies, including the houses of Rhode Island, Alabama, Mississippi, Vermont, the state senate of Kentucky, and New York state passed the HBPA.
Thus, LaRouche not only correctly forecast the collapse in the July 25, 2007 webcast, but he also proposed the solution and mobilized a ground swell of support for it.
This action was, however, blocked on behalf of Wall Street and the Inter-Alpha Group by among others Rep. Nancy Pelosi, Rep. Barney Frank, and Senator Chris Dodd.
As the collapse worsened Wall Street and its stooges like Federal Reserve Chairman Ben Bernanke, New York Federal Reserve Bank Chairman Timothy Geithner and Treasury Secretary Hank Paulson, all criticized in the FCIC report, instead pushed through a policy of bailing out the very investment banks which had brought about the crisis through their gambling behavior now legalized by the repeal of Glass Steagall and the legalization of derivatives by the Commodity Futures Modernization Act of 2000.
The first bailout was of Bear Stearns on March 16, 2008. Lyndon LaRouche blasted it on March 20, saying that it violated the Emergency Banking Act of 1933 (FDR's first), which said only commercial banks could be bailed out, not investment houses.
Then on July 24 Treasury Secretary Hank Paulson moved to bailout Fannie Mae and Freddie Mac. On September 5, EIR denounced the Fannie and Freddie bailouts as "tantamount to treason," a backhanded way of bailing out the banks and their mortgage-backed securities.
On Sept. 12, an EIR factsheet exposed the crime of the Fannie/Freddie bailout as a violation of their FDR-spawned purpose of supporting the housing sector and as a bailout the banks.
On Sept. 20, Lyndon LaRouche issued a statement demanding that there be no bailout of Fannie and Freddie. Five days later on Sept. 25, in the wake of Paulson's push for the TARP bailout, Lyndon LaRouche issued a harsh statement against it:
On September 29, the House of Representatives voted to defeat the bailout, 228 to 205.
The next day, on September 30, 2008 in the middle of the Presidential election campaign Barack Obama called for the unconstitutional bailout of the Inter-Alpha Group-controlled monetarist financial system to be passed at the expense of the American people.
During another international webcast on October 1, Lyndon LaRouche attacked "Bailout" Barney Frank and his sabotage of HBPA as leading to the crisis. LaRouche warned that the bailout would lead to hyperinflation, and called for restoration of Glass-Steagall.
Two days later on October 3 the bailout passed the House by a vote of 263 to 171 under lying pressure that it would be a disaster if it didn't, and that there might be martial law required. Lyndon LaRouche issued statement on that date denouncing the passage as accomplished by fraud:
When the Congress, including both major Presidential candidates, told their constituents that the bailout was necessary, they didn't mention that among the major institutions lining up to be bailed out are foreign interests, LaRouche said. British, Dutch, and Spanish banks are all lining up to demand hundreds of billions of dollars from the U.S. taxpayers.
"They lied," charged LaRouche.
In the wake of the Congressional vote, motivated as it was by fear, LaRouche urged citizens to rally to his leadership. We're in this devastating crisis today because people did not rally to my Homeowners and Bank Protection Act and other positive actions back in August 2007, LaRouche said.
As is more than evident from the above time line those who said that nobody knew what the consequence of the repeal of Glass Steagall would be is a "big lie." We said it loud and clear. All those who are now saying that nobody knew are lying. They lied then and they are lying now and they should pay for it. They are the ones who got us into this mess.
Obama's crucial support for the bailout means that he lied too. Either that or he's insane and stupidhe can choose which.
It is on the basis of this that a fraud is being perpetrated on the American people and nation. We can clean this whole mess up with Glass Steagall, now! That is the issuenothing else. We knew what the result would be of the repeal of Glass Steagall and the legalization of the gambling known as derivatives trading then and said it. We were right; they were wrong.
LaRouche was the only ones who then knew what to do; he is the only one who now know what to do. He has known all along. Now listen to him.