Executive Intelligence Review
This policy discussion appears in the April 17, 2009 issue of Executive Intelligence Review.
LAROUCHE'S APRIL 11 WEBCAST

Dialogue with LaRouche

This wide-ranging policy dialogue followed Lyndon LaRouche's presentation, "President Obama's Narcissus Syndrome," to an audience in northern Virginia. See LaRouche's main presentation, "Seven Sequential Points" on science, economy, and the the future of humanity.

[PDF transcript of LaRouche's complete webcast]

Debra Freeman: Thank you, Lyn.

I want to start with a question that has come from a Democratic Senator, who's heavily involved in foreign policy questions, and in directing the Senate's role in shaping that policy.

He says, "Mr. LaRouche, one of the problems that we face here on Capitol Hill, is that it has become increasingly difficult for those of us in the Democratic leadership to determine administration policy.

"As I think you know, last week, we delivered—'we,' meaning the United States—delivered stern warnings, that if North Korea conducted a planned missile test, that there would be serious consequences. The fact is, the North Koreans went ahead and did it. That was over one week ago. However, since that time, there has been no indication of how we would respond. There has been no move for a resolution within the United Nations, no Presidential statement—nothing.

"At the same time, Secretary of State Clinton was sent off to tell the Russians, that no missiles would be placed in the Czech Republic or Poland, provided that the Russians cooperated with the United States around issues surrounding Iran and other related topics.

"We were briefed that President Obama indicated the same thing to the Russians, during the G20 meetings in London. But then, just a day or two later, the President was off to Eastern Europe, and he indicated quite the opposite, that the United States would, in fact, be placing missiles in the Czech Republic in order to contain Iran. Then, the President came back to the United States. And, as I think you also know, upon his arrival here, we were told that money for missile defense was being slashed; that the missile system that had been scheduled to be placed in Alaska was being halted.

"The fact of the matter is that for us, the issue is not one of agreement or disagreement with the President's policy. For us, the question is trying to figure out what that policy is. This has really created a terrible situation on Capitol Hill. You've been very critical of the behavior of the Democrats on Capitol Hill, both in the House and the Senate. But faced with a situation like this, how would you propose that we proceed?"

We Are a Presidential System

LaRouche: Well, the problem is that Capitol Hill tries to adapt to what Capitol Hill wants to do. And often Capitol Hill is insane. The very idea of ever supporting this missile thing, based in Czechia, and in Poland, was lunacy from beginning! There's no need for it. There's no purpose. First of all, it won't work! The pretext for this thing, was to have a counter to threat of missiles, from Iran! In Poland? The question is whether a missile from Iran could reach Poland! They're not supposed to be too well perfected, yet.

The Russians said, "Well, why don't you quit that. And let's go somewhere near Afghanistan, and we can probably get an anti-missile system there, which is much more relevant to something coming from Iran."

But of course, the issue is not really Iran! The point is, they want to destroy Iran, because some people like Saudi money. And the Iranian Muslims have a different religious background than do the Saudi ones, so this is all the kind of thing that goes on in this thing. It's completely insane!

Secondly, if we're to understand anything about economy today, you have a certain number of nations that are really responsible. Now Western and Central Europe is not responsible any more. Why? Because they don't have any sovereignty any more! It was taken away from them, by the globalization process, in Europe itself. No European nation has any effective sovereignty, in Western and Central Europe. So, don't ask them to make a decision, they can't! They have to wait for orders from London. They can't make their own currency, they're globalized.

Now, what have we got? I've set this thing clearly, and these guys in the Congress should stop trying to bat down loony questions and answers. Yes, the answer's loony, but the question was loony! How can we stop the threat of Iranian missiles by putting missiles in Czechia and Poland? Lunatic! Nuts!

I can stop it. Give me the authority. I'll talk to my friends in Russia, and China, and India, and we'll stop it. It's that simple.

Look, when you're talking about warfare today: Think! What is general warfare?! It's nuclear warfare! It's thermonuclear warfare!

There can be no general war, without thermonuclear warfare, today!

Well, what kind of defense do you want against thermonuclear warfare? In a sense, there is nothing. I was the last one who brought up that question. And I had an answer. They don't like that answer.

So, they're saying that Obama's loony. Of course he is. He does not have the capability to grasp certain kinds of ideas. Does it mean we have to throw him out of the Presidency? No. Our Presidency system has certain flexibility in it. If the President is confined to working with a system of the Administration, of the Executive branch, which has a relationship with the Legislative branch, and the Judiciary, we can do just fine. But we have to understand that the President is not the big loony be-all/end-all. And if he's nuts, we've had nutty Presidents before: Just look at what we went through with this monster we had for two terms just recently: a perfect lunatic! Or not perfect, but a lunatic.

So, we are a Presidential system. We're not a parliamentary system; they have some crazy guy who's called a "prime minister"—or the "primed minister." And every time they get unpleasant, they just throw him out, and get another one. There is no accountability, as with an executive system of government, a true Presidential system. You have an approximation in France; you have an approximation in Russia. The way we function when we adhere to our Constitution: We are not a one-man government.

Now, Obama seems to have a problem, in thinking that a President is running a one-man government. Ours is not a one-man government. What we have—do you know what we have? Do you realize the power we have in our system, politically? We have institutions of people, some of whom actually serve as members of government. Others, like me, will serve as part of government, but not officially. We're all putting our brains to the wheel, so to speak, to deal with the problems that have to be faced. We all are expressing ourselves up the stream, and the decision is made in our government, when it's functioning—when you don't have a George Bush, for example—and you have a fighting chance. With functioning institutions, we are the government.

Well, who is the government? The government is not the President. The President performs a function within the government, as the chief executive officer of government. And ours is a Presidential system, essentially.

And all of these channels work. What I deal with day by day, and I've done it for years now, is work exactly with that system. We have a system, a Presidential system, and that's the Executive authority, and the President has to be confined within the bounds of the Presidential system, and the larger system as a whole. The problem with Obama is, they're trying to make a nut out of him. They're using his incompetence in whole areas, to make him a nut.

And when you take this pack of fools, exposed by Time magazine, and add in Larry Summers—who's a piece of crap all in his own right—you put this crowd in there, and you don't have a Federal system of government. You don't have our system. You have a bunch of nuts, insane, lunatics. They should be kept in cages, not in offices. This pack—the whole bunch—are insane; they're morally insane! They have no affinity to our system of government. They don't believe in our Constitution. What the hell are they doing running our government? They couldn't pass an oath of office.

So therefore, what we need to, simply, is not to dump the President. Say: "Mr. President, you're now a member of the Executive branch. You have the title of President. You will be treated nicely if you behave yourself." It's true! So therefore, you have put him in a position where he has to vet any decision he makes, and rely upon advice, not just the advice and consent of the Congress, but advice in his own institution. His military.

Shut Down the British Empire's Drug Trade

For example, what he did in Afghanistan. He's putting troops in there, this nut. We don't want troops in Afghanistan. We want to get the drug pushers; we don't want to shoot Afghan farmers. We want to close the borders. We want to shut down every sign of drug traffic internationally, in the cross-border operation. You want to push drugs? Don't push them across the border or we'll get you!

That's the policy, as we're working now on the question of Mexico. We are going to crush the drug traffickers. That's not the farmer who grows the drugs, because the farmer's often the slave, as in South America or in Afghanistan. The farmer who's growing the opium is a slave, living under threat of death, under compulsion. He doesn't get paid much for this stuff. He barely makes a living. He probably gets a higher income from vegetables, but they will come in there, and force him to take a crop of opium. Then they will take the crop and pay him what they wish to pay him, and they'll move it into Europe. And a crop that's worth $600 on average for a farmer in Afghanistan, when it gets to Europe will be some millions of dollars, the same crop. So in Europe, what do you want to do? You want to shut that traffic down.

Ban the traffic. The drug traffic is killing us, just like it killed China in the 19th Century. We're going to shut it down. We don't want to put more troops into Southwest Asia, to get into wars with farmers, and start that kind of warfare. We want to seal the borders, and the first thing is, we put George Soros in a cage. He's the world's biggest drug pusher. Put him in a cage! Get rid of him!

But the British are running drugs. What's new? They've been running it since the 18th Century: international drug traffic. They destroyed China with the drug traffic. They're trying to do the same thing again to us, to Mexico, and to others. The same methods. The same destruction. Destroy civilization.

So the problem here is that the institutions are not responding to reality, and the reason they're not responding to reality is that there are extraneous things, like the British, who really run the only empire in the world—it's not the British people, they're not even involved on this thing—but the British Empire, as it's constituted, like a business organization, runs the world as an empire. And the only effective challenge to that is from the United States. If the United States has an agreement with Russia, China, and India, you will get other countries jumping in on the agreement immediately, and we will have the greatest power on this planet concentrated in the cooperation among these nations. And we can solve any of these types of problems. We don't need to start nuclear World War III.

I know the situation in these countries. I know the craziness that goes on. That's all right. I know how to deal with it. And I know people in this government—that is, people in the institutions of government of the United States, who also understand this kind of thing. They may not each individually understand it, but if you get them in the same room, the representative parts of the people, they'll all come to an agreement, because they'll recognize who knows what's going on and who doesn't. And they'll give in to what the person they think who knows what he's doing.

So, we don't need this kind of problem. We shouldn't get into these issues, and I know the Senate does that, and the House does it also sometimes. But it's nonsense. What we need is a national policy, articulated by a national executive, essentially, or institutions around the executive, who are in constant ferment about these things. I know there are people in these institutions of relevance, who understand these problems, but it's not getting through this President. He's not getting the message! Why? Because he's got other people giving him the message, people who should not be in government.

And our job is, we can take this President. We can use him. He can be President. If we function properly, he can be President. So he doesn't know anything, so what? We can make him look good, and he can go out with a good record. That's how we do it sometimes. I've seen this in corporations; for example, the head of the corporation is a big dummy, but the other people used to make it work, and they all cheered him as a hero. He didn't know a damn thing he was doing.

So, that's the point.

And we should try to formulate our ideas about these things in the right way. We need to have a Presidential system. We know also, the problem here is the Wall Street gang. It's a problem in the Senate, and so forth. The same Wall Street gang which robbed us! Who do you think the problem is? Who robbed us? Who gave us these multi-hundreds of trillions of dollars of debt, which are now coming down on us? You add up the score. See how big it is, because it's a self-expanding debt. Who gave us this cancer? Goldman Sucks and similar kinds of institutions. Well, why do we let them make the laws for us? Why did the Congress pass the laws? Why did they pass the bailout? Why do they get more bailout every time? Why did we loot our people, loot our industries, loot our farmers? Loot our medical system, which is breaking down now? Our health care system is breaking down, as a result of this thing. Why did we let that happen? In order to pay off Wall Street? To pay off London, with their ill-gotten gains?

The problem lies not with what the Senator's referring to. The problem lies in that we get into this mess because we refuse to take the bastards on whom we should take on! And then we find ourselves trying to build a fence, a walkway around an issue we couldn't face up to. Like this thing: How do we handle the Polish missile base? You don't give them one! They don't need one! What are they going to do with it, farm with it? Plow the field with it? Whatever?

You Don't Need a License To Practice Thinking

Freeman: This next question comes from some of our friends on the West Coast, out at Stanford. They say, "Mr. LaRouche, as you know, we were tasked to forge a series of economic policies directed to restore health to the nation's economy. We were told to assume an FDR-type of approach to restoring vital sectors of production, rebuilding decayed infrastructure, determining the need for new infrastructure, etc. And although the specifics of dealing with problems of monetary and financial policy were not part of our immediately defined task, it was made clear that we were expected to also address those issues. Obviously, we had to figure out how to fund the recovery programs we were proposing. For several months, we've been making very significant progress, although that kind of came to a halt these last few weeks when it became increasingly difficult for us to determine if the President still wanted us to proceed with our work. There has been almost no indication that the administration intends to do anything until Wall Street agrees to it. That is certainly not an FDR-style approach, and also, while Wall Street is clearly being consulted, we are not.

"This led us to forward a question to Washington, as to whether or not we should continue our work. The response we received rather quickly was, 'Yes, absolutely yes.' But this is a very frustrating situation. As a Presidential advisory group, we work independently and without compensation. That isn't a problem. When we speak, we do not speak on behalf of the Administration, but we are encouraged not to speak publicly for ourselves either. That is something of a problem.

"The truth is, and I know that I speak not only for myself but for many of my colleagues, these last few months have reminded me why I relocated to the West Coast in the first place. I wanted to get as far from Washington as I could, and still live in the United States.

"But, in all seriousness, the question is, how do we proceed? Should we simply ignore what is going on in Washington, and continue to try to forge these policies and analyses, even if it seems, at least right now, that no one is listening? Also, is it your estimate that no one is listening? Is it possible that there is some plan and we have just not been informed of it? Your thoughts on this would be greatly appreciated."

LaRouche: Well, I have a partial response to that of some relevance. I've been watching what has been coming out of Prof. James Galbraith, and I have just received recently—which I'm working on a reply to—he wrote a paper entitled, "A Bio-Physical Approach to Production Theory," and which has a flaw in it, but, he's a clear thinker, as thinkers go in the economics profession these days, and therefore he poses some questions which I think are highly relevant. And what I'm doing in replying to this, as I have in progress here, is to answer, basically, what I see as the implicit question he's posing, as opposed to maybe what he's actually directly asking. And I think he wants to see what I do with his statement, which, in other things, I wouldn't bother to waste his time with, in going over discussion of them, because I think the question comes down to some very specific turning-point issues. And that's what we should be doing. I think that you don't need a Presidential license to practice thinking.

I think, as I've tried to indicate today—I've sort of anticipated the situation in the seven points that I made—is that there are certain questions where their beliefs about economy, which are the deadliest enemies of the U.S. and world economy today, is what some people believe about economy. And therefore, if we can get that crap out of the system: Forget statistics. Just forget it! I mean, everything that's going to be said about statistics was said a long time ago. We don't need any improved statistics. It gets worse all the time! I think we went too far. We should call it back, you know, get rid of some of this stuff.

Real ideas are not statistical in nature. Real ideas are breakthroughs.

Owned by the Foundations

For example, let me explain what I mean by this, because this is what's crucial: They have shibboleths, and it's an academic problem. I go through this list of people, list of "experts," of the experts like the nut cases we're talking about today. There's nothing you can do with these guys. They predominate, because they get credit. Where do they get credit from? They get credit from London and they get credit from Wall Street.

Why are they professors? Because they can think? No! Because they know how to do what they're told by the people who give them the money. Who are the people who give them the money? Wall Street and similar kinds of things. It's a foundation—American Enterprise Institute and similar kinds of institutions, which control. You know, Rothschild, in the first decade of the last century, started this process of organizing these funds, special funds, a fund for this and fund for that. And these funds, which are actually the extension of the British Empire, which the Rothschild family of London, of Britain, initiated.

So the world economy is largely run by a collection of these kinds of funds and their extension, and these funds are actually like pimps! They have professors as whores and they run trains of them all over the world! And what they're doing is, they're working for their living, you know?

So, we have to recognize, and everybody who's serious in academia knows it, that you're besieged by all kinds of fakers. You know, David Rockefeller, when he was still able to think—not too well, but he could—would travel all around in his airplane. He would pick up ambitious broken-down Professor So-and-So here, didn't have enough money, and he'd say, "Oh, I can get you $10,000 for a book. You get your next book out there, maybe we'll do something with you." They bought up these also-ran professors in dozens. They parked them in key positions in universities, like the whole environmentalist crowd—all the so-called environmental scientists are fakers! When a guy says, "I'm a physical scientist," and he tells you that there's a "free energy" policy, that energy from solar power has the same value as a calorie of nuclear power—he's called a scientist? You know you're dealing with a prostitute—who promises to love you.

So, the problem is, we've got to admit among ourselves that the so-called university system and the foundation grant organizations are a racket, set up by the British Empire, and together with Wall Street, is the ideological empire which penetrates and subverts the United States, contrary to its Constitution.

As we've seen massively: They bought up the Congress! Our Congress is bought by these channels. The Congress is not independent. Their opinion is not independent. Barney Frank: He can't even gibber intelligibly. But he knows how to steal.

So the point is, we've got those of us who think and really care about the country and about the world, to go about our business, as I do: You do it because it's the right thing to do, and you enjoy doing it. Try to make something good out of this thing. We should not be deterred by the fact that we've got a bunch of fools, and worse, out there, who are occupying the key position where the decisions are made.

It's like the whole environmentalist movement. The whole environmentalist movement is one gigantic, anti-scientific fraud! There's not a single bit of truth in any of it. It's a faker. A guy says "I'm an ecologist, a scientific ecologist." All right, you're that? Well, I guess that's better than being a toadstool, I guess, huh? Because they're not worth anything. They're liars! Any guy who says, "I'm a scientist," and who says this free-energy policy is good, you know he's a faker. He's a fraudster. He belongs in prison. He's committed fraud. Shouldn't he go to prison? He's committing a fraud which is causing people to suffer. Shouldn't he go to prison? Well, put him in prison! They want to be institutional? Fine.

The problem we face—we who are serious—whether we agree or not is not the point: The question is whether we're having an honest discussion and a competent discussion of the issues. Those of us who are concerned should just do our work, whether we are blessed or not. And I will bless you, if you do it.

Trilateral Fraudsters

Freeman: This question comes from the office of a Democratic Senator who chairs a subcommittee that is currently conducting hearings on various aspects of the banking collapse. And it is my understanding that when the Senate comes back, that they are going to be bringing Bill Black up to the Hill to testify, and it's relevant to the question.

He asks, "Mr. LaRouche, during the savings & loan scandal in the 1980s, Bill Black, who teaches economics and law at the University of Missouri, Kansas City, was the Federal regulator who accused House Speaker Jim Wright and five U.S. Senators, who by the way included John Glenn and John McCain, of doing favors for the S&Ls, in exchange for campaign contributions and other things. They got off with a wrist slap, but Mr. Black and others successfully led a series of investigations of the savings & loans that resulted in convictions and re-regulation of the entire industry.

"On last Friday night's edition of the Bill Moyers Journal, Mr. Black said that the current economic and financial meltdown is driven by fraud. And he said that the banks got away with it, because of government deregulation. To quote him, he said, 'Now we know what happens when you destroy regulation. You get the biggest financial calamity that anybody under the age of 80 has ever seen.'

"He also pointed out the contradictions in what we are hearing from the Administration. He said that Tim Geithner is publicly saying—and we have all heard him say it—that it will probably take about $2 trillion to deal with the problem of the U.S. banks. But at the same time, the Treasury is allowing all the banks to report that they are not only solvent, but also fully capitalized. The fact is that both statements can't be true.

"The question, though, is: Why are they covering this up? Some would argue that it's because they're scared to death of a collapse, and that we just can't let the big banks fail. Others, like Mr. Black, seem to think that they're covering this up because they're covering up fraud.

"Now, some months ago, you called for a new Pecora Commission to conduct an investigation of how we got into this mess. You have also called for a return to a Glass-Steagall framework. My question to you is: Do you think it is possible, as many of my colleagues are arguing, that we can re-regulate without going through a Pecora Commission-type investigation? They argue that it would be much better to simply take an amnesty approach and just fix what is broken. I have trouble figuring out how we could do that. However, I do want to be able to move, and move quickly.

"My other question is, do you agree with Bill Black's assessment, that the current economic and financial meltdown is driven by fraud?"

LaRouche: Well, I think it's not the meltdown that's driven by fraud. What has happened is that the fraud has been going on for a long time. The fraud reached an intensive level with David Rockefeller and the Trilateral Commission. The fraud against the savings & loans.

Look at the housing industry in the United States, under the Roosevelt era-approach, which was the savings & loan associations, the 4.5% business. And what happened as a result of that? What was the biggest fraud committed in the area of housing? It was the breakup of the savings & loan associations, which was an integral part of David Rockefeller and his Trilateral Commission taking over the running of the U.S. government, not only under a poor President [Carter] who didn't know what was going on, but also throughout the entire period into 1989, especially up to '87-89.

The whole thing was a fraud. The Trilateral Commission ran the Reagan Administration! The Trilateral Commission destroyed the agriculture. The Trilateral Commission destroyed the housing system. The Trilateral Commission did these other things, all for the sake of the greater glory of the British Empire. I know David Rockefeller's operation. He's a fraudster of the worst type. Put him in prison! He belongs there. Maybe don't put him in there because he's no good any more; he can't do anything right.

The problem here: The enemy of humanity is the international financial scum. These people should be eliminated from all positions of power.

Back to Glass-Steagall

Look, what did I propose back on the 25th of July 2007? Put the thing in bankruptcy reorganization! You don't make deals! You put the thing into bankruptcy reorganization; the committees go in and determine, as Roosevelt did in bank reorganization: You want to keep the savings and loan type of thing, the Glass-Steagall provisions, you want to keep them in place.

It's very simple, really: You go into a bank and you say, well, I've got a bank in this community. This community depends upon this bank. Okay, we're going to keep the bank open. Well, what are we going to do? We're going to put it into bankruptcy. We will take all the garbage, and we'll put that in a different compartment. We'll take everything which is pro forma viable, because we want to do two things: We want to sustain the community. Private banking in this country is based on this kind of concept. You want to save the community. The bank is essential to saving the community. Without local finance, the community may shut down. The payrolls can't be managed; little things that have to be financed can not be done. You want to keep it.

So that bank's going to stay there, but under what condition? Well, you find the thing is more or less intact. In the simplest case, you find out, well, the derivatives and that similar kind of crap—all the stuff that does not conform to the Glass-Steagall standard—just shut it down. But keep the bank open. Take all the non-Glass-Steagall stuff and put it right in the garbage pail, and you seal it. Don't try to settle anything. Just put it in the garbage pail. And lock it in there, and say, "We're going to see what the value of this is later." You know, let it ferment for a while and see what you can sell it for.

But then you're going to take everything that conforms to Glass-Steagall, and you're going to keep that alive. You're going to keep the housing program alive. You're going to keep local business affairs alive. You're going to walk in there one day, and when you walk out—as Roosevelt's bank reorganization did—you're going to walk out, just like Roosevelt did it. That bank is going to stay in that community—if it's needed, it's going to stay there. And it's going to function like a bank. What the condition will be, under which the ownership or responsible people the bank will function, that has to be settled.

But before you do anything else, you assess what that bank is. And unless it's completely worthless, you don't just shut it down, you put it into reprocessing, and you take all the garbage that does not conform to Glass-Steagall, and you put that out, and you say, this is a postponed question. This bank is now going to function on the basis of Glass-Steagall standards. And the Federal government is going to ensure that that bank performs that function for that community.

And there goes your problem. You really don't have a problem, do you, at that point? And that's all you have to do.

Don't go through all these monkeyshines.

Look, if you look at the paperwork, you look at what happened: Michael Milken back in the 1980s, how he went to prison. What have you got in Wall Street? You've got a thousand Michael Milkens! They're all Michael Milkens! They all belong in jail! Who did it? Alan Greenspan. "My God! Do you have to put him in jail, too? You're going to give jail a bad name, if you put him in there."

So, that's the point. We don't need this rigmarole. We don't make compromises with thieves. This was considered to be theft and fraud beforehand. In the Roosevelt Administration, it was fraud: Larry Summers was key inside the Clinton Administration in pushing this fraud through, behind the back of Bill Clinton. The intention was fraudulent! Don't worry about whether he goes to jail or not. The intention was fraudulent. The whole deal was fraudulent. Shut it down! And get back to what worked.

But our concern has to be concern with our nation, concern with our communities of our nation. We must keep them functioning. The Federal government will strain itself to provide the credit necessary to maintain the function of this nation and its people. The Federal government will pay not one penny of tribute to swindlers, and they're just going to have to walk without! Look buddy, you're walking free, aren't you? Don't complain. You want to complain? We'll take you to court, and you'll be the defendant.

Hamiltonian National Banking

Freeman: This question comes from the Stanford Group, and they say: "Mr. LaRouche, there is a deep divide that seems to have developed over how, in fact, we should deal with the question of re-regulation. Nouriel Roubini recently pointed out that while he agrees that Wall Streeters are greedy and often stupid, arrogant, and incompetent on top of it, that the fact is, that we've had the worst financial crisis since the Great Depression. And therefore, the question that has to be asked is, are these Wall Streeters more greedy, more immoral, more arrogant, and more incompetent than they were 20 or 30 years ago?

"The fact is that I think the American people expect Wall Street to be greedy, but they also expect good policy-making to control that behavior.

"It's been pointed out, by Roubini and others, that the job of the Federal Reserve is essentially to close the bar when the party really gets going, but the fact is that the Fed not only didn't close the bar, but they brought in a case of vodka. And Alan Greenspan seems to have been the biggest proponent of the kinds of financial innovation that have gotten us into the mess we're in. Zero down-payment mortgages, no verification of income, interest-only mortgages, and negative amortization, all of this stuff. The fact is, that the Fed did have the power to control it, but they chose not to, because the prevailing ideology that seems to underlie the current crisis, is that of Wild West unregulated capitalists, and the idea that financial institutions will self-regulate. But it's clear that self-regulation means no regulation.

"Our question is, when we talk about re-regulating and when we talk about regulation, is it your view that this is the responsibility of the Fed, or that it has to be imposed by some other regulatory body, whether that be the FDIC, a completely new institution, whatever? Because, certainly, while the Glass-Steagall framework seems to function, and seems to be something that should be applied, we are also familiar with some of the recommendations that have come out of former Federal Reserve chairman Paul Volcker, who seems to think that Glass-Steagall—while it's the right approach—would definitely require some serious updating to deal with the current geometry that we are functioning in."

LaRouche: Well, the answer is the following: The United States Constitution was made possible and necessary by the fact that the state banks, which had been state-chartered originally, of the separate colonies, were now all virtually bankrupt because of the funding of the War of Independence. And at this point, Alexander Hamilton, who was to become the first Secretary of the Treasury, came up with the proposal which resulted in the adoption of our Federal Constitution. So you can say, in that sense, the Federal Constitution is actually essentially Hamiltonian.

Now, what he proposed was the concept of national banking. That is, that you have an intermediary agency, because of the nature of finance, between the Federal government and its Treasury, and private banking and semi-private banking. You have an intermediary institution, which is a regulatory agency which facilities the integration of the function of government, on the one side, as separate from this, and on the other side, the private banking aspect. And this is the American System.

Now, you have to recognize a couple of things that are involved here in the line of the proposition, the question posed, which affect this. First of all, you have to know that Andy Jackson was no damned good. And once you accept that, you're on the way to seeing things.

What did Andy Jackson do? Andy Jackson, first, was an agent of Aaron Burr. Aaron Burr was a traitor and a British agent. And Andy Jackson worked for him. And what did Andy Jackson do as President? Andy Jackson was the vehicle for Wall Street and London interests in shutting down the Bank of the United States, the American banking system. And they brought in the land banks, state lending banks, which, in 1837, resulted in what was called the Great Panic.

So actually, the United States was a victim, the target of a British operation, the same operation behind the slavery in the United States, which Van Buren, the later President, was part of, the land banks: And it broke the power of the United States to finance its own society. It was done on behalf of the guy who owned Andy Jackson at the time, Martin Van Buren, who set up the land bank system, and shut down the National Bank in the United States, the Second National Bank. So, I don't think Andy Jackson is a good image for the Democratic Party. Also, because the Cherokee may have something to say about it, too. He was part of the process of getting them killed, and selling them into slavery.

So the point is, we need to get back to national banking. What does that mean? At this point, the Federal Reserve System is implicitly bankrupt, in the respect that, if it's functioning as a chartered organization under Federal law, that means it automatically goes into receivership to the Federal government. What do you do? Now, you have assets in there which are U.S. government assets. The U.S. government implicitly owns the Federal Reserve System. It is not an independent agency. It's bankrupt. You take and you sort out all the obligations. So, the Federal government simply has to have one act: the Third National Bank of the United States.

You put the Federal Reserve System not only into receivership, but into a form of receivership where the assets of the U.S. government, which owns the Federal Reserve System, are now put into the custody of a National Bank, using the precedent which inspired the adoption of the U.S. Federal Constitution, to deal with the problem of the local state-chartered banks, in the aftermath of the Revolutionary War.

Now, you go to a national banking system, under which the Federal government uses a National Bank as the interceding party between the Federal government's functions and the general banking function with foreign banks, and so forth, and so on, as Hamilton laid it out.

The thing's bankrupt. Put it into bankruptcy! Bankruptcy is not a bad idea, you know. Bankruptcy was set up to prevent slavery, debt slavery, and swindles. You put it into reorganization in bankruptcy, and since the Federal government is the chief creditor of the Federal Reserve System, we do two things: First of all, we end the Federal Reserve System's function of uttering notes, in the name of the United States government. You go back to the utterance of currency by the Treasury, and credit by the Federal government, under an act of Congress.

To create credit under our Constitution, you must get a bill through the House of Representatives, and with the approval of the Senate, and on the initiative and approval of the President to sign that bill. That's how you're supposed to print money, or utter money in the name of the United States. Not through some intermediary which takes over that job, and adapts us to the international British system. You put the Federal Reserve System into receivership, and use it as a part, as a subsidiary feature, its assets as a subsidiary feature, of national banking.

Now, we can, instead of bailing out this thing and bailing out that thing, what we simply do is, we use the power to create credit by the Federal government, and use that credit to assist bankrupt institutions being put through bankruptcy reorganization. We don't bail out! We salvage. No more bailout! No more Federal Reserve helicopter money. No more bailout! We reserve the credit of the United States, not to waste it as we're doing now on a great scale, but you now use the credit of the United States as a weapon of organizing investment, to rebuild the economy.

Social Security and the Auto Industry

Let's take the case of General Motors and so forth. Look what happened. In 2005, I was on two projects which started Nov. 11, 2004. It was an adjunct of what I'd been doing in support of the Kerry Presidential campaign. So, the Democratic Party was folding up, on Nov. 2, they were folding up. We had a meeting in Washington, on Nov. 9, and I proposed that we save the Social Security system. And this was picked up by some Democrats, and when the meeting was being held, constituting the new Congress, this was put through. So, we launched a fight, to save the Social Security system, when George W. Bush was about to destroy it, running around and doing crazy things, as he always did.

So, the second thing, was a proposal to reorganize what had become the auto industry. The same thing: Take the auto industry, and strip it down to size. Strip it down, first of all, to where the automobiles were actually needed, justified.

Take the capacity—we had miles and miles and acreage of plants, which had been used since World War II, for building airplanes and everything else you can think of, and that capability still existed, in terms of floor space, and in terms of the memory of the skills that went with with floor space.

All right: Separate this into two things. Reduce the auto industry into what the auto industry can do, making autos that were needed. Take the other part, especially the machine-tool-design part, and use that for what? Our river systems need to be repaired. We had all kinds of things! We need a national railway system again! We need these kinds of things, we need all kind of things which are typical of the U.S. government's involvement in basic economic infrastructure.

The machine-tool-design capacity of the United States is concentrated in the auto industry! You're going to shut it down, you idiot? No! You take it out, and you put it under government protection as a new corporation, a new government corporation. And you use it for these missions: All the things we need: We need highways, we need hospitals, we need river systems fixed; you need to take care of the Katrina operation, all these kinds of things that came up that year. We can do it with the machine-tool capacity of the auto industry!

And the machine-tool capacity of the auto industry, which represents floor space, and represents people, also represents a labor force which is associated with the auto industry as its employment! So, put them together! The same people, working in the same communities, can produce this for that area of the world, right where they are! You don't need to move them around, you don't need to change anything. They report to the same place, that they reported to before, essentially; but now it's a government corporation.

The auto industry is still there. It's operating separately. This thing is operating as a government agency for things we need for public infrastructure. Railway systems, magnetic levitation systems, port systems, hospitals, whatever we need! The way we did it under Roosevelt. And that's what we should do.

So therefore, what we need is, we need a National Bank as the intermediary between the private sector and this kind of thing. So the National Bank operates in that area, where you have a public-private area, and you don't want to contaminate the public area with the private sector, and you don't want to contaminate the private sector with the public sector.

But the connection is, it is the Congress which enacts a law which authorizes this production, as in war production before, which is the mechanism. So what do you do? You set this thing into motion, and now you create all kinds of entities, projects and so forth, which are independently funded. You have this public and private financing operation, which sets up these new kinds of things. It's these new industries to fill the vacuum.

So the Federal government comes in with its money, sets something up under government protection. It's useful. These things lead then to private entities which are spun off, because they're now new industries. And so, what you're really doing is, you're spawning new industries that we need for the future, as an action of government. And when the government creates it, it may maintain a fatherly interest in the success of the thing, but you try to make it a private enterprise in most of these cases. It's the right thing to do.

We don't need to do this hokey-pokey that we're doing now.

And the thing is, the Federal Reserve System is a corrupt institution, totally corrupted. Take it into receivership, make it clean, make it honest. Make an honest woman of it. Marry it, or something or other. And that's the solution. The thing is, somebody comes up to us and says, how can I do this? And sometimes that's the wrong thing to do. Step back a step. What is the need? What is the real purpose that should be adopted for this purpose? Then define what should happen, which may not be what somebody asks you to do. But it's the right thing to do.

Does it do the job? Does it conform to the interests of the United States? If it does, do it. And I don't think we'll have any problem whatsoever in doing that job. You'll have a lot of problems in implementing it, but in principle there's no problem in doing the job.

Look at our labor force: What section of the labor force is actually productive, the so-called employed? Very little. We need to transform the labor force's composition, so we have people producing useful things. Physical things, scientific progress, all that sort of thing. We need to promote Federal activity in this area. We also need to create spinoffs of new private industries which will fill the gap, and you have to get them started. So, the government should be starting these things, or helping them get started. And that's what we do. Keep it simple.

We're Talking About Fascism

Freeman: This is another question on regulation, and this one also comes from the chief of staff of a United States Senator.

He says, "Mr. LaRouche, the regulatory framework that Treasury Secretary Geithner presented to Congress was certainly impressive in its scope. However, it doesn't address several critical points, and we believe that those omissions indicate something of a serious philosophical flaw. What Secretary Geithner did not ask for is any structural change to the firms that would be subjected to all of the new regulations that he proposed, and this is markedly different from what has been proposed by Paul Volcker.

"It seems that the Treasury Secretary believes that these new rules that he's putting forward under the control of some kind of risk regulator, can keep Wall Street from raging out of control once again. But the fact is that Geithner's proposals do not even contain a serious reining-in of the over-the-counter trading that occurs off of exchanges globally. Instead, he has some proposal for over-the-counter trading for derivatives contracts going through a central clearinghouse, but even that clearinghouse will be industry-run. The problem here is that, really, Geithner doesn't want to address what we see as the central problem.

"This office was one of the few that opposed the repeal of Glass-Steagall. The fact is, that in light of Glass-Steagall's repeal, the financial sector is much larger and far more complex than anything we have ever dealt with before. Clearly, Geithner, and Bernanke along with him, have a very strict 'don't change the structure' approach. Our problem is that we see this as a philosophical flaw. Can you address the immediate crisis, without broad and deep restructuring of the entire sector?"

LaRouche: The short caption answer is, "You can't." The system is crooked inherently, and the crook has to be treated accordingly. There's no such solution.

Where I agree with Paul Volcker, despite our differences on other questions, is that he believes in a clean banking system, one that is actually a banking system, and he's very upset by this sort of thing, I think. He'd probably like to use some blunt language, and I'd prefer to use a blunt instrument. But what we need to do essentially is, we have to put this whole thing into bankruptcy.

Let's look back at what's going on here. Look: We're talking about fascism. We're talking about international fascism, is what we're really talking about. The British created fascism. The British created Hitler. Hitler was a project of the British interests, of the Bank of England. What Roosevelt cleaned out in the 1930s, temporarily, was to clean out a bunch of fascists. These think-tanks, you know, these interest groups and that sort of thing—the American Enterprise Institute, etc.—are all products of fascist organizations, of a network of fascist organizations which were planted in Wall Street and so forth, from London. And what Roosevelt was taking on, was the fascist influence of London.

Hitler was created by London. Hitler was created by the Bank of England! George Bush's grandfather, the former President's late grandfather, was an agent of the Bank of England, who signed the credit slip, which got Hitler financed to become dictator. The whole crowd that Roosevelt fought against were a bunch of Nazis, who had voted and supported the British in putting Mussolini into power in Italy, and putting Hitler into power in Germany, and backed the Synarchists in France, which is another version of fascism.

So, these bankers, the New York bankers, the guys that Roosevelt went against, and the guys who came back to power the day after Roosevelt died, in the United States—this is what you're talking about—the Trust, this is what you call this kind of interest. They're all fascists!

Now, what we're dealing here with, we're dealing with a political-economic system, which is imperial and international, and the center of its headquarters is London, the British monarchy. That's the center of it, the political center of its organization. And these guys are all a bunch of fascists: Amity Shlaes, fascist; American Enterprise Institute, fascist. We have the tape on these guys. We know their pedigrees; we know what pig farm they came from.

And therefore, you have to understand, this situation is economic, but it's also political. It's political economy in the true sense. Our problem is, the interests which are resisting a rational reorganization of an inherently bankrupt system, are all fascist organizations—extensions of the British Empire. And that's your problem.

Now therefore, if you're going to defend the United States, what are you going to do? This force has declared war on the United States. Remember what could have happened in 2007, say in September. My proposals were clear. We would have gone through a reorganization without any of this bailout, and we'd be clean today. Not clean of all debt, but clean in the sense of politically clean.

What happened is, the fascists moved in, and took control of the situation, and gave us Barney Frank. And gave us that kind of operation. So, the problem now is political. Are we going to accept fascist dictatorship, and what these scum represent? Which is now controlling the President here. These guys have taken over, as Time exposed them. Time is not exactly an anti-fascist organization, Time magazine. But Time magazine recognizes today that this fascist-bastard bunch is their enemy, too. It's going to destroy everything. So, they're telling tales out of school, so to speak. And we're dealing with a fascist thing—when I say fascist, I do mean Adolf Hitler, I do mean Benito Mussolini. I do mean these think-tanks that Roosevelt sort of kicked back a bit, back in the 1930s. They're back again, and this is the problem.

Our job is to destroy them! For the sake of the United States and other nations, while at the same time giving fair treatment to every honest citizen, and every honest institution, if they suffer. If these swine suffer, "Sorry, buddy, you're lucky enough to be in the dungeon, where you deserve to be for your behavior." These guys have no rights; they've forfeited them; they're bankrupt. They can not claim a right which a bankrupt couldn't claim, and they're not honest bankrupts.

So therefore, the point is, we have to recognize that this is a political issue. Are we willing to defend the United States and the human race against a takeover by fascism? A fascism as bad or worse than Hitler. A fascism created by the same British monarchy which gave us Hitler. That's the way you've got to think about it. Once you say that, then that clarifies your mind wonderfully, where you can now look at the issues objectively, not assume that these guys are some honest poor guys who have to be understood.

Did You Ever Hear of a Con Man?

Freeman: Lyn, this is another question from the Stanford group: "Mr. LaRouche, we were somewhat startled by the change of tone coming out of Washington last week, when suddenly everybody seemed to think that we were at the beginning of the end of what they call a recession.

"On top of that, President Obama started urging Americans to refinance their houses, so that they could take advantage of the low interest rates, and save money, and start spending again. His estimate was that the average American family would have an additional $2,000 to spend each year, and that that was far more than any tax rebate that they might get.

"At the same time, Larry Summers started saying that we had turned the corner, and that the country was likely to see positive economic signs in the next few months. As Larry spoke, Wells Fargo announced—or rather predicted—a $3 billion profit for the quarter, saying that it was the surge in new mortgages that had put them in this position.

"Now, the fact is, that none of this should be particularly surprising. Of course, mortgage rates are declining, and new mortgages are increasing. The fact is, that the Federal Reserve is flooding the market with money, and when you have this amount of money just sloshing around, the price of money is bound to go down, and cheap money tends to induce some borrowing; but the question—and it seems like an obvious one to us—is whether this is any indication of an economic turnaround.

"The answer, it would seem to any sane person, is that it does not. My friend Robert Reich, said that it was cheap money that got us into this mess; that it was, in fact, under Greenspan's reign, that interest rates were lowered to 1%, and that adjusted for inflation at the time, that made money essentially free, at least free to large lenders. Now, the large lenders did exactly what they would be expected to do with free money, which is, to get their hands on as much of it as they could, and then lend it out to anybody who could stand up straight, and, obviously, a lot of people who couldn't.

"But, there were no regulators looking over their shoulders, and therefore, what they did was legal, even if we might argue that they got away with murder. While it's true that a lot of the big banks are going to claim to be profitable, the fact is, that neither they nor anybody else knows what their assets are actually worth. And the fact is, that even they admit that they're sitting on probably well over $1 trillion in taxpayer equity and loans. None of us can figure out how they are determining or calculating their profits, and frankly, if you can, we would be interested in knowing what that is.

"But, the bottom line is that there is still absolutely a wide gap and insurmountable chasm between the economy's productive capability, its productive capacity, and what we are now producing. It is our view that there is absolutely nothing that can turn the economy around, until that gap begins to close, and bank profitability has nothing to do with it. We'd appreciate your assessment of whether you agree with that, and also where you think this newfound optimism on the part of the Administration is coming from, because certainly we don't see any cause for it."

LaRouche: Well, you ever hear of a con man? There's no truth to any of it! Look, you see what happens is, you get fooled. You say, "Okay, let's take all these guys out there, and they all claim to be in a profitable situation, or prosperous, prospective prosperity, or whatever. Now, if you look at the total U.S. economy, the people, the production, the levels of production, and look at the fact that the employment is collapsing by hundreds of thousands in very short periods of time, you know the production is not occurring. You know the income is not being earned. It's not happening."

What they do is say, "Well, you don't know what this firm is doing. You don't know what this firm is doing." You know, it might be anything. "We think it's prosperity, we just don't have the figures." It's like a bunch of people who invest in a pig; it's the only pig in that town. But they invest in a part of the pig, and each claims that their part of the pig is profitable. "Don't talk about the pig as a whole. I'm only talking about my part of the pig. My part of the pig is profitable, I don't know about the other parts of the pig, but I hear they're profitable, too."

So, where's the pork?

The President's Nero Problem

And the point is, it's obvious: The United States and the world, the world economy today, is bankrupt, and not only bankrupt, it is disintegrating. The world system is in a breakdown crisis; the world as a whole, and the world is a whole.

That's the reality! Don't believe the lies. You know they're lying, so why do we believe this stuff? Why? Because you're afraid of the fascists; you're not willing to fight them. It's a problem in the institutions of government. They are afraid to fight these guys. That's the reason why I insist that the people in the lower 70% to 80% of family-income brackets, is the only location of serious guts in this part of the country right now, plus a few of us individuals. That's it!

The Congress has lost its guts! I mean look, frankly: Take "Tight Lips," the Speaker of the House: She has been in there since the beginning of 2007, and she's not worth anything! She's no good for anything! A completely useless blockhead, who gets in the way—you know, she can't move her mouth, so therefore, she can't consent to anything. She's a fake; she's a fraud! We all know she's a fraud, anybody in the Senate, anybody in the Congress, knows this woman is a fraud. And yet, there she sits! Lips sealed by medical science.

I mean, what are we? Are we fools? We don't know? We ask ourselves questions in order to shut ourselves up?

The point is, this is a question of guts. The question of guts, which I raised today, you know? The President of the United States is acting like something worse than a fool. He should not be let out without a leash. He shouldn't be going running around the world, because he's going to make a mess of things. You've got to get him under control. We don't want to throw him out, because we don't want to create a new element of instability in the system.

We want to put him under parental administration; not by his wife. We want him put in a situation where he's able to perform the functions of a President, even though he doesn't have the mind of a President, and this requires some adult supervision. Confine him to areas where he can't do damage with his ignorance, and put him in custody, as President. He's a President under custody. Let him do things. He's not unintelligent, he's just mentally disordered. He's got a serious mental problem.

Look, I said before, and I can say it again: He has a Nero problem. He's a contemporary Nero. Famous kind of problem. And if you leave him in there, you're going to find out the kind of effect he's going to play; he's going to play the role of a Nero. He may not have the specific problems that Nero had, some of them, but he has this idea—look: "The One"? The One? The miracle man? Who doesn't know how to find the key to the front door? Or the back door? He's not competent! We stuck him in there. The system stuck him in there; he's President. He's lawfully President. But you don't let him play with firecrackers!

Take that crowd which affects him and controls him, and take them, and get them out of government! And put him under the condition where he has to talk and make policy with people who are not corrupt, and who are competent! We have people in government, in key positions in government, who are perfectly capable of making competent policy for the United States. They may make mistakes, in the process, but they're competent. Put him in a position where he has no handles on which to operate with the Federal government except in concert with those competent people. Don't let him run loose! We've got to keep him there because we elected him. He's not unintelligent; he may be educable, but you have to control it.

You see, his instincts are wrong! And his self-adulation, his manic, euphoric self-adulation, is the mentality of the worst kind of dictator. Don't let him get in a position where he has that kind of power. Keep him under constraint, the legal constraint within the American Presidential system, as it works. Keep him in that constraint. If you don't, you're creating a monster. You don't want a Frankenstein monster. You don't want a Narcissus in the Presidency, and he's a case of Narcissus, just like Nero. And the program is basically like that of Nero.

He's a danger to all humanity if you don't keep him under control. He's a danger to himself, as well as everybody else. So, you ain't persecuting him, when you're protecting him from himself.

How To Define a 'Depression'

Freeman: The next question comes from a national official of the AFL-CIO. He says: "Mr. LaRouche, last week I was asked to talk with a Presidential advisory group that is discussing issues around economic recovery, and I presented a picture which was dire at best. I was a little bit surprised when, just a couple of days later, at an economics club luncheon in Washington, Larry Summers said that while there were what he called 'still substantial downdrafts' in the economy, which I suppose, is how he refers to half a million Americans losing their jobs every month. He also said, and this is a quote, 'But you also have to see that there has been a substantial anecdotal flow in the last six to eight weeks, of things that felt a little bit better.'

"Well, I don't know what he's feeling, but from where I sit, I firmly would assert that you can not talk about any measure of economic recovery, unless you address the fact that Americans are still losing jobs by the millions.

"I recently had lunch with my friend Robert Reich, and we talked about some of these issues. I also spoke to him on the phone after I heard what Summers had to say. And Reich responded by saying, that for the first time in a long time, he found himself agreeing with at least half of what Larry Summers said. He said that he agreed with Larry that we have passed recession. He said that where he disagreed, was that he believed that we had passed recession and gone into depression.

"Reich has repeatedly pointed out that, aside from the fact that we've lost millions of jobs, that every lost job has a multiplier effect throughout the economy. And that, essentially, it is unemployment, and not the prospect of bank failures per se, that creates the broader anxiety that keeps Americans from spending money, which, in turn, leads to more job losses, etc., etc. Reich, Galbraith, Krugman, and many other leading economists agree with us that the government should stop fooling around with Wall Street, and instead, put its resources into creating jobs.

"Galbraith spoke before Congress recently, and one of the things that he said was that the most important current economic fact remains the loss of 600,000 jobs every month, and that there can be no talk of recovery without job growth. I'd be interested in hearing: 1) If you agree; 2) How you think that jobs should be created. And finally, and this may seem like a very simple question, but I really do think that it's time that the question is posed, and that is: How do you define a 'depression'?"

LaRouche: A depression is what has happened a long time since, and going down still. We're in a depression. The problem is, that people play with money. They talk about money. Now, money today is pretty much fake; it's fraudulent. There's no control over the way it's uttered. And there are all kinds of things that are used to generate money. What you're looking at, essentially, is something which is very much like what happened in Germany in 1923. You're looking at a period which went into a take-off period, in which they began printing money to compensate for a collapse in production. They kept doing it.

Well, in Germany's case, they had no choice, because they were under Versailles conditions, and they were forced to do that. They were not allowed to do anything else, it was under the threat of occupation of Germany, and the looting of it. So, it was at the point of a gun. But this is not at the point of a gun, as such. This is the system, doing to itself, what Germany did in the 1920s, under the Versailles conditionalities.

So, now you're looking at what is the physical output per capita, the net physical output per capita of the nation. What is the net physical output per capita of the collection of nations? What is it? It is collapsing!

What about the auto industry? What part of the economy of the United States, Germany, Italy, France, and so forth is represented and tied up in the automobile industry? It's collapsing. What is happening with agriculture? What is happening with basic economic infrastructure?

In other words, put money aside. What is the reality, the physical reality of economy? Don't say what people are buying, ask what are they eating? What are they wearing? Where are they living? How long are they going to be able to continue to live there under present conditions? What's happening to medical care? What about medical care in the United States? Doesn't anybody know we're on the verge of a total collapse of medical care, and the pension system, and everything else?

What does it take for people to realize that that's reality? That what they're talking about—"Oh, are we really bankrupt?"—and talking about spending money, it's irrelevant! It doesn't mean anything!

See, the problem is, the cowardice, even in these questions. You ask a question which is not relevant, in order to create a doubt about something which you already know with certainty is true.

Are people producing less? Are people eating more poorly? Is medical care, necessary medical care, a vanishing quality of life? What's your drinking water like? What's your educational system like? What are all the things that go into making an economy, a physical economy, in which people live, not the fantasy in which they dream about money, or sign pieces of paper and call it wealth?

The United States is being destroyed; China is being destroyed; Russia is being destroyed. India is being weakened. Continental Europe is being destroyed, from Poland westward. What does it take for people to recognize that we're not in a recession, we're not even in a depression? We're in a breakdown crisis! This is a crash with no bottom!

What do you do with such a system? Well, we decide we're going to go back into the production business. Don't worry about what's happening to the money. Stop the bailout psychosis! You can't prime the pump if there's no water in it. You're insane!

But the problem you're getting from the Congress is, they ask these questions, which are sincere questions in a certain manner, but there's a gimmick. The gimmick is what? "We're not ready to get lynched by bankers."

Let's Burn Down Wall Street!

Look what's happening all over the world. I have a very simple solution, as I've said many times. If I get together with Russia, China, and India, and a few other countries that would join us, this world's going to change! You need enough power together to change the world. In western and central Europe, there's no capability of doing anything right now. They haven't got the guts to do it, and they don't have the system to do it. They don't have the guts to establish the system to do it.

In the United States, everybody's afraid of the bankers. Everybody's worried about Wall Street. Let's burn down Wall Street! Let's get it over with. Stop talking about Wall Street; it's no good, it's dead. Burn it down, and we can get a cow pasture down there, or something like that. Call it the Center for the Promotion of the Milk of Human Kindness.

No, the whole thing, people are kidding themselves, even in asking these questions. We know the system is bankrupt. We know it's worse than the Depression of the 1930s, already, because this is a breakdown crisis, and under this system there never will be a recovery. If somebody tells them they saw the recovery, you say, "Who is their psychiatrist?"

There will never be a recovery of this system. What we can do is use our knowledge and experience of the past. We can create a sound system. The power of government can create a sound system. We've had experience in creating sound systems before. We had a system. All you have to do is like: Here's Alexander Hamilton, faced with the fact that the state banks of the now newly independent United States are all bankrupt, because of the financing of the Revolutionary War.

Okay, we're now going to promise to make certain commitments which we will capitalize as monetary wealth assets. We will accept that debt; we will take that debt as our national debt. We will promise to pay that national debt, and on our willingness to pay, to meet that promise, we will create a new system which looks as if nothing bad had happened in the meantime.

What you want is, you want the factories open. I want, now, what used to be the automobile industry—which is the largest single repository of the machine-tool capability and potentiality of the United States still surviving—I want that floor space and that personnel organized. I want it capitalized. I want to create a new infrastructure industry, which is going to fix our water systems; that is, the canal systems and things like that. It's going to build a new railway system. We can build a magnetic levitation system for the United States. We know how. We have the technology available. Let's do it!

We can build nuclear power plants. And without nuclear power plants, we can't do much of anything. We can build nuclear power plants on a scale never imagined before. We can develop sufficiently high degrees of power to perform miracles in technology. We can rebuild the agricultural potential of the United States. We can rebuild cities that are hopeless; they're not productive, because they're in such condition.

And we need these things, urgently. We need to rebuild our health-care system. It's urgent. It's not economic waste. Building a healthy population is the first key to increasing the productive powers of labor. We have all the needs; all we have to do is have a government that says, "We're going to do it."

And I'm prepared to say, that that's a good investment. We can take a debt of the United States government, and use that commitment to indebtedness to rebuild the U.S. economy along the lines, parallel to what was done under Roosevelt in the 1930s and early 1940s. We can do that; so let's do it! Stop debating these questions, which are simply questions. You're posing questions that you can't answer. And then you say, "How do I answer this question?" It's not a problem.

What you have to do is, instead of trying to answer these questions, one by one, one at a time, what you have to do is say: "What are we going to do to cure the problem?" Start from that end. Establish a system of credit and regulation which enables us to start putting people back to work in productive functions. That will solve the problem; it's the only thing that will. So, stop trying to negotiate with these swine, these so-called financial swine. Why do it? They're only thieves. You want to do something with them? Put them in prison!

A True Narcissus Case

Freeman: This next question comes from someone here in Washington, who is someone you know well—he's long been part of the overall institution of the Presidency.

He says, "... Our President chooses to present himself as the 'Great Reformer'; as the President who will say the things that no one else wants to say, and will get tough, and who will speak on behalf of the American people. But the fact of the matter is, that this Administration has yet to place the blame where it belongs, and there is absolutely no indication that they have any intention of doing so. Because if the President was inclined to do that, he would, in fact, stop coddling failed banks with billions of dollars of money that none of us have any access to....

"He says he also would not allow these banks and brokerage houses to give their executives lavish bonuses, when millions of Americans are out of work. But really, most significantly, he would not populate his Administration with various individuals who are products of this system which he claims he wishes to reform.

"And that brings me to the question of old Larry Summers. You know, when it came out this past week, that Larry received over $5 million last year working for a $30 billion hedge fund, and that he did that showing up for work only one day a week; when it came out that he got another $3 million in cash from the very beneficiaries of the bailout that he has promoted, it really brought up for me, a very clear point. And that is, that if anything like that had happened during the eight years that Bill Clinton was President, that individual would have been out on his ass.

"And this is not secret information. Nor is it secret that Larry has always been completely infatuated with derivatives and these other exotic financial instruments that have gotten us to where we are right now. Yet, there's Larry—top economic advisor to President Obama; the guy who coordinates what information gets through, what analysis gets through, and how the President is briefed on the current collapse.

"Now, President Obama is no economist, so when he turns to his top advisor, and he says, 'Larry, how did we get into this mess?', what do you think Larry Summers is going to say? Is he going to attack the people who pay the bulk of his salary? Is he going to argue for regulation, when he is known as the principal deregulator who operated during the Clinton Presidency? When President Obama, who is no economist, turns to his chief economic advisor and says, 'Hey Larry, who the hell recommended the repeal of Glass-Steagall anyway?' Do you really think that Larry is going to confess? Somehow, I don't think he is.

"The President clearly is not an economist. That was obvious when he travelled to London. And there he was, standing next to Gordon Brown, and he was asked what or who was to blame for the current financial crisis. Barack Obama is an incredibly glib speaker, yet this usually eloquent public spokesman for the United States, responded with a rambling, incomprehensible answer.

"Now, I could be optimistic and say it's really not the President's fault. Larry Summers is the guy who's briefing him everyday. Therefore, it's hardly surprising that the President doesn't have the whole picture, and that the President doesn't understand what's going on. If that were the case, I'd be upset, but I wouldn't be furious.

"The bottom line, is that Larry Summers is Larry Summers. But Larry Summers is not the President; Barack Obama is. And while I do know what Larry Summers thinks, my greatest fear is not that Larry Summers is misinforming the President, but that Larry Summers is telling the President precisely what the President wishes to hear. And if that's the case, then firing Larry Summers—something that I don't disagree with—will not solve anything, because the bottom line is that Larry Summers does not seem to be the problem. President Obama, on the other hand, does seem to be the problem, and frankly, I do not know how to begin to address that."

LaRouche: Well, there are a lot of things you can say about that. You know, I said that essentially when you have the case of Larry Summers and Geithner, I described that as Mephistopheles and his Faust. It's essentially what it is. They're both fakers. You see, Larry Summers would say this, if you saw him speaking. That's what he does, he does funny things with gestures; he goes into a whole business of gestures intended to intimidate and distract the audience, while if you look at what he's saying, he's saying nothing; the whole thing is a fraud.

But, you've got to understand the other thing: When you criticize the President, you've got to see clearly, as it became very clear to me when I saw the evidence: This guy is a Narcissus case. Specifically, he maps in history, on the profile of the Emperor Nero, who was put into power by his mother, who he later killed. Who was educated by Seneca, who he tried to kill in several successive ways, before the job was finally done. And who understood nothing.

A true Narcissus case, like Nero, is not concerned with reality. He is concerned with his illusion. He lives really in a fantasy life, and the only way you can deal with him as President—and I've indicated what the problem is about removing him as President—is, you have to put him in an environment where the environment refuses to allow those games to be played.

You stick him in a position—see, he's not unintelligent. He's got the mechanism of intelligence, but he has no moral criteria. The Narcissus case, like an Emperor Nero, has no intrinsic moral character. The Narcissus has a self-image; and what he tries always to do, is to avoid collision with the self-image as he's crafted it. So, he wants to see himself as always powerful, a genius, everything else. He's a guy who's a quick study; he's a facile asset, a quick study. He's a chameleon. And you imagine, what does a chameleon think about himself when he's standing on a Scotch plaid?

And that's your problem with this type of person. This guy is a very specific type of personality. All the evidence is conclusive; you don't have to get into anything more than we know now. It's there. This is a Narcissus, which maps onto the image of a Narcissus type, such as the Emperor Nero. If you keep him in, the way he's being kept in now, he's going to be that type. That's where he's going; that's what his character is showing you.

If, on the other hand, you put him in the position where he's treated as a boy, who's allowed to play certain games and not others, then he will wait until he has his opportunity to strike, as Nero would strike.

So, to deal with the problem—you're worried too much about the wrong things. I understand the anger, but you have to worry about our institutions of the Presidency, which is what I worry about. As long as he's in control of his position, with that retinue on which he depends—remember, he depends on a very specific group of people, which is identified essentially by the Time magazine report. That's his personality! That's the truth!

You are who you eat. You are what you're fed to be. He's fed to be a Narcissus type, of this type. Don't feed him. Don't feed the disease, and he's forced then to attempt to assimilate himself into a position where he's credible. Remove the credibility of the other thing, because our problem is that we're not governed. This nation is not governed! There has been a total breakdown of the government under this jerk we had for two terms. Fortunately, we escaped the other great danger—a Gore! A Gore as President would be the worst possible affliction you can imagine. You've got a slimeball who's a Narcissus. That would be really something bad.

The Whole Planet Is in Agony

So, the point is, we should not focus too much on the personality. We have to focus on the personality from a clinical standpoint. But our concern is the fact that we don't have a government. Look at all those Senators! People who have asked questions today. Look at others who are comparable to that. What's the characteristic of that? They're not asking the question: How do you get a government to replace non-government? What kind of a government do we require to deal with this situation? They're like dealing in a debaters' club kind of situation, on the terms posed, the questions posed. Not dealing with the reality. And my concern is: We don't have a world system in which humanity can live! We don't have a U.S. government on which this nation can live.

I don't give a damn about Obama, or anybody else as an individual, in that sense. I'm concerned about this nation. I'm concerned about the future generations of humanity, and the great threat is not Obama. You're not going to remove him, and find a scapegoat and solve your problem. The real problem is, this nation does not have a capability of self-government. And I'm determined to try find a way to create the competence of self-government.

Europe has no competent self-government. Russia has a self-government crisis; China has a self-government crisis. India doesn't have a big export business, so it doesn't have a big self-government problem. Most of the world is suffering. The whole planet is in agony; it's about to break down. We're headed for a holocaust on this whole planet as a result of this thing.

I'm not concerned about an individual as being the problem. They may be a problem, but their problem is defined in a context, and the reason we have the problem, is because we don't have a functioning government. And Europe doesn't have functioning government; and most of the world doesn't have a functioning government. And that's what we've come to.

I've come from a time, at my age, when I have known conditions under which we had actual governments. I've known a time when the United States government meant something. It doesn't mean anything anymore, as a government. It's a reflection of incompetence. Rub two incompetents together, and call it government. I'm concerned about what should be there, which Obama is not. Obama is not the problem; he's a symptom of the problem. He's a symptom of the problem that we no longer have the ability to govern ourselves as a nation.

And I'm just hoping that the angry people—and they're angry out there—and some of these people in the Congress aren't listening. Those people out there are angry! The 80% of the population out there is angry. They have no future, and they know it, and they're angry about it. And people in positions of leadership aren't concerned about that. They're concerned about what the rich feel, or what the would-be rich feel; not about the nation, not about humanity. They don't give a damn about Africa! They'll talk about how they're pro-Africa. Bunk! I'm involved in Africa. They're not there.

Look at our own country—they're not there. They don't care. What about the people who are losing health care in the United States? Do you know how many deaths that means? Do you know what kind of suffering that means? What's being done about that? That's your problem! Take all these problems of this type—the economic problem, the health-care problem, the education problem, the drug problem.

What does it all add up to? One thing: We don't have a government. We have an administration of some foreign power, probably from Mars or someplace like that.

Stop the Bank Bailouts!

Freeman: We have a number of questions from state legislators, which we're not going to be able to get to. We really are very close to the end of our time. So, I'm going to ask this as the last question, and I'm going to kind of mush a few of these questions together in asking it.

It says, "Lyn, you certainly have given us a great deal to think about, and you've raised many points that I haven't considered. But, there also is one central problem that all of us in state government have to deal with, and we have to deal with it immediately, and that is the following:

"When President Obama was elected, he indicated that he would initiate an economic recovery program from the bottom up. Now, since he has taken office, there has been one payment to the states, that came as a product of his initial stimulus bill, and that money did, in fact, allow many states to continue basic functioning when they would not have been able to otherwise. But it is also the case, that for most states, that money did not go very far. And on top of that, soaring unemployment has only served to worsen the situation.

"Almost all state governments right now, whether they are dominated by Democrats or Republicans, are being forced to enact both tax increases and increases in virtually all fees that we charge our citizens for basic services. And we are being forced to do that at the very same time that we make cuts in vital services.

"Now, the Administration has prioritized dealing with the financial and banking crisis first, and in that area, you had the first bailout and the second bailout, and it looks like a third and fourth bailout. And I suspect that surely there are more coming. But the fact is, that aside from the very first stimulus bill, which everyone seemed to agree was inadequate, there has been no action coming from Washington. And the fact is, that right now, we all face emergency conditions....

"So, my question to you is really twofold. One is the obvious question, and that is: What are we to do under these conditions? But also, what are we to do, and what are we to instruct our constituents to do, in order to effect the kinds of changes in Washington that are necessary if any of us are going to make it through this crisis? Thank you again for all of your remarks today, and please don't stop fighting."

LaRouche: I won't.

All right, first of all, there is something we can do, and should do right away. First of all, stop all bailout of banking systems. Put them into bankruptcy receivership, immediately. Stop all bailouts. No bailout! You put the financial institution into receivership in bankruptcy. That includes the Federal Reserve system, which is actually bankrupt. Don't bail anybody out, financially.

All right, now why? Because we have a need for very large amounts of credit. For example, we have to worry about a general collapse of the health-care system. We're on the edge of a breakdown of the health-care system. You're not looking at what I'm getting from doctors out there, from physicians out there.

You're about to get a United States which is about to lose a lot of population because there is no health care available for ordinary people. You have people who are in the system now, as physicians, who want $1,500 before they'll even talk to you. You can't have their telephone number, unless you pay up $1,500. And the fees are still gigantic. What about our population out there which has lost its income? What are you doing? What are you, insane? That goes together with Social Security.

Now, also, we have an automobile industry—we had—which, as I indicated, we don't need the automobiles. We've got too many automobiles. What we need is a mass-transit system, and we need it fast. We need all kinds of things, which the former auto industry, with its machine-tool capability mobilized, and its personnel mobilized around it, all these things that we need urgently.

Now, what we need: We've got to look from the bottom up also; not the top down, only—the bottom up. The bottom up is, we need a work program, which will function within states as Federal programs which are needed objectives. We need to authorize these things immediately, these kinds of things. We have to reverse the trend of collapse in employment in this sector—not bailout—but in this sector.

You don't need the auto industry. Stop talking about the auto industry; it's dead, killed. We have a Japanese auto industry. That's what we're going to have to go along with for the time being, but we need the machine-tool-driven capacity for what was the auto industry for any number of projects which that industry is capable of producing, as I proposed in 2005, up to 2006, until they stepped on it. The Speaker of the House stepped on that one. We need that.

We also need programs on the state level. You want a trickle up economy, not a trickle down economy, because you've got to go in these states, which are nearly in destitution; you've got to get the states functioning again, economically. You've got to put the money there, and that's the way to work it. In the immediate trend, that's the direction we've got to go in. Don't worry about bailout. You need a bailout? We'll put you in bankruptcy. That should be the answer.

You want a bailout? Okay, you're going into bankruptcy tomorrow, and we want to look at all your assets. Because you're going through bankruptcy, buddy, remember? You're going into bankruptcy reorganization, including personal bankruptcy reorganization. No golden parachutes!

So therefore, we need to put the limited resources of the credit-emitting resources of the United States, the Federal government of the United States, into things which are needed, which as a result, will stimulate a resurgence in actual useful growth in the local areas, and that's the way to do it. You've got to start on the high end. You need the commitment. We're going to build a national rail maglev system for this nation. Let's get going!

We're going to build nuclear power plants for this nation, because the other things won't work. We're going to actually look at agriculture. We're going to look at water system rebuilding; we have a water system crisis in the United States. We have a mass transportation crisis in the United States. We have a health-care provision crisis in the United States.

All of these things are where the Federal government can utter credit, either subsidies or credit, to state areas, which will generate a reversal of the income flow and employment on the state level, on the base level of the population. That's what Roosevelt did. This is a different situation, but the principle is the same. You've got to stop the bleeding! If you stop the bleeding, then you can work from there.

But the turn has to be a decision to reverse the process. Stop the bleeding! Put the blood injections in the state level. Do it through the Federal government, because that's the only institution that can generate credit in this nation, original credit. So, take those programs, which are Federal programs—like revive the CCC [Civilian Conservation Corps]. We've got a need for that sort of thing right now, with all these youth who are drugged up, and so forth. You need something to save them. So, things that will benefit the local and state level, as benefits, through Federal projects, which are valuable Federal projects; that should be the priority.

And anybody else needs a bailout, we've got a wonderful bailout; it's called bankruptcy. Make a list of all your assets; we're going to be reviewing those.

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