Larouche Online Almanac

Published: Monday, Dec. 9, 2002

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Volume 1, Issue Number 40
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Need to Know This Week

LaRouche Tells Californians: Time For a Super-TVA

Democratic Presidential pre-candidate Lyndon LaRouche delivered the following address by videotape to a town meeting in the Los Angeles area on Dec. 7.

The United States is gripped presently, by the ongoing, accelerating economic collapse, of a failed international monetary-financial system, and the bankruptcy, in fact, of many U.S. Federal states. The Federal government, if it were a Federal state, would be bankrupt. Because the Federal government has a credit-creating capacity, it is not bankrupt, but if it did not have a credit-creating capacity, it would be bankrupt.

The U.S. economy, overall, under present financial conditions, is hopelessly bankrupt--our banking system, the Federal Reserve System. And also, a similar situation exists in Western Europe and Japan.

Therefore, we have to face this now. People don't wish to face it. They wish to assume that there is some "fix it"--there's some piece of legislation, some arrangement, some tax cut, some revenue-expenditure cut, or something, which is going to "fix it"; or, maybe an increase in taxes. None of these things will work, because the system is inherently bankrupt.

Now, that doesn't mean the economy is necessarily bankrupt. With proper programs, we could rebuild the economy, as Franklin Roosevelt led in rebuilding the economy after the disaster of Mellon, Coolidge, and Hoover. We could do it again. But in order to make those economic improvements, in order to start that growth, we would first have to change laws. We would have to change most of the laws which were "reforms" in our monetary and economic system, over the past period, since about 1964, since the beginning of the Indo-China War, and especially since about 1971-72, when Nixon destroyed, arbitrarily, the pre-existing international monetary system, and put in an irresponsible floating-exchange-rate system.
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this week in history

December 9-14, 1790

December 13, 1790 was the day on which First Treasury Secretary Alexander Hamilton wrote the second of his seminal documents establishing the institutional framework for the American System of Economics. It was entitled The Second Report on the Further Provision Necessary for Establishing Public Credit (Report on a National Bank). The first Report on Public Credit had established a sinking fund and the assumption of debts incurred during the war; the third, to be issued approximately one year later, was the celebrated Report on Manufactures.

These three documents must be understood as being of a piece, that piece being the establishment of a sovereign republic, with sound finances and public credit, and with the means for expanding its industry and commerce for the benefit of its population. They can only be understood from the standpoint of Hamilton's intention, the intention of implementing a Leibnizian nation able to provide for the nation's necessities, and to "procure the true happiness" of its people. Hamilton was willing to borrow forms of organization from anyone, as long as they could be used to reach this goal.

That said, we shall focus this report on the National Bank, which was indeed established, pursuant to Hamilton's recommendation, and which became, as a concept, a cornerstone of the American System tradition, that was continued up through Abraham Lincoln's Presidency.

Hamilton began by outlining three major "advantages" to be gained from the creation of a National Bank. Most important was: "the augmentation of the active or productive capital of a country." "It is a well established fact, that Banks in good credit can circulate a far greater sum than the actual quantum of their capital in Gold & Silver," Hamilton wrote. Thus, "by contributing to enlarge the mass of industrious and commercial enterprise, banks become nurseries of national wealth: a consequence, as satisfactorily verified by experience, as it is clearly deducible in theory."

As the remainder of the report makes clear, the National Bank is not intended to help the government, as much as it is to help the citizens in their private, productive enterprise. Indeed, the use of government debts in providing the initial capital for the Bank, made it even more obvious that the Bank was at the service of the economy as a whole.

Only after emphasizing this, does Hamilton mention the other two advantages of a National Bank: first, greater facility to the government in obtaining pecuniary aids, in the case of emergency; and second, the facilitation of the payment of taxes.

The rest of Hamilton's Report on a National Bank is devoted to answering the critics of the plan, and to laying out the principles of organization of the bank itself. From studying history, we know that the major domestic opponents who were making these criticisms, came from the two groupings who opposed Hamilton's intention of turning the United States into an industrial nation. These were, on the one hand, the New England merchants, who followed Adam Smith's dictum of making money, not wealth, by buying cheap, and selling dear. The other opponents were the Southern plantation oligarchy, or their spokesmen, who, while often putting their objections in populist language, were seeking to hang on to their aristocratic way of life.

The criticisms Hamilton dealt with, boiled down, essentially, to charges of usury, over-lending, and the impact such a bank, which would establish a national paper currency, would have on the accumulation of gold and silver. What the young Treasury Secretary showed was that, in fact, a sound national banking system would reduce usury, because it would ensure there was no dearth of credit, and would tend to reduce rates of interest. He also argued that over-lending was unlikely. Most important, he insisted that the bank would actually increase the amount of gold and silver available, because it would improve the actual wealth of the economy, which depends upon the production of labor and industry.
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Latest From LaRouche

Attacks on Brazil's Enéas Carneiro Come from Desperadoes Trying To Preserve the Bankrupt World Financial System
This statement was released on Dec. 3 by Lyndon H. LaRouche, Jr.'s Presidential pre-candidate political committee, LaRouche in 2004.

Why Parliaments and Popular Opinion Can't Solve the Global Crisis
Lyndon LaRouche's opening remarks to the cadre school of the International LaRouche Youth Movement, meeting in Copenhagen on Nov. 30, and a selection from the questions and answers.

Transform the Bankrupt Monetary System
This e-mail interchange between a reader and 2004 Presidential pre-candidate Lyndon H. LaRouche, Jr. was made available to EIR on Dec. 1 by the LaRouche in 2004 campaign committee.

Franklin Roosevelt and The American System
"
Q: First I wanted to remind you about Plato, saying in a dialogue, that the worst destiny you can have, is having a leader who's less capable than yourself; and that you have to enforce the people who are more capable than yourself, to become leaders..."

In Depth Coverage From Executive Intelligence Review
Links to articles from Executive Intelligence Review*.
*Requires Adobe Reader®.


Feature:

United Joins the Scrap Pile; Air Travel Gone Without LaRouche Plan
by Anita Gallagher
United Airlines, the second-largest airline in the United States, is on the brink of a savage Wall Street asset-stripping bankruptcy, with the Airline Transportation Stablization Board's 2-1 vote on Dec. 4 to deny United a $1.8 billion Federal loan guarantee.

Amtrak Is Barely Hanging On
by Marcia Merry-Baker
Amtrak, the American national rail passenger system, is barely surviving on stop-gap infusions from a $300 million bailout package wrested from Congress and the Bush Administration over the Summer.

Economics:

Eurasian Cooperation Offers Future to World Economy
by Mary Burdman
Russian President Vladimir Putin made an extraordinary diplomatic trip on Dec. 1-5, to China, and from there, directly to India. What was remarkable about these state visits is that they brought the three biggest nations of Eurasia into coherent diplomatic initiatives on the critical security and economic development problems they all face.

Koreas Finish Rails and Roads; Opposition to War Talk Builds
by Kathy Wolfe
South and North Korea in late November opened new venues for peace through economic development in Eurasia, continuing brisk work on the Trans-Korean Railroads, which are the linchpin of the 'Tokyo/Pusan to Paris' New Silk Road.

LaRouche: U.S. Food for Peace to North Korea
by Kathy Wolfe and Marcia Merry Baker
Lyndon LaRouche, Democratic Party Presidential pre-candidate in the 2004 elections, called on President Bush on Nov. 29 'to conduct an immediate food-relief effort into North Korea, with absolutely no political strings attached. . . .

Global Economic Crisis Hits Food Production
by Paul Gallagher
Worldwide food production, falling per capita for several years, is likely sinking in absolute terms as of 2002, stricken by the global economic depression in the form of severely depressed commodity prices, which have been dropping for the last seven years.

Philippines Confronts 'Argentine' Crisis
by Martin Chew Wooi Keat
The denial of economic reality is paving the wayfor an Argentina-style economic crisis to come to the Philippines—the result of years of looting by the International Monetary Fund.

International:

Exposed: DirtyMoney Schemes To Steal Election for Sharon
by Jeffrey Steinberg, Anton Chaitkin, and Scott Thompson
The One Jerusalem Foundation posted a press release on its website (www.onejerusalem.org) in June, reporting on the visit to Irving, Texas by Jerusalem's Mayor Ehud Olmert. ...The One Jerusalem release failed to mention that almost all of the Christian Zionists who joined in the bonding exercise with the Likud, have also teamed up, since the mid-1990s, with Rev. Sun Myung Moon's dirty-money and sex cult, the Unification Church.

Kenya Terror: Where Will Sharon Retaliate?
by Dean Andromidas
Following the twin attacks targetting Israeli tourists and an Israeli airliner in Kenya on Nov. 28, calls for retaliation using "options that up until now have been unacceptable to public opinion," are being made by leading members of the government of Israeli Prime Minister Ariel Sharon.

Britain: The Case of Desperado Michael Gove
by Mark Burdman
A good clinical example has come to light, during the past days, of the unhinged state of mind of those Anglo-American figures whom Lyndon LaRouche has characterized as 'desperadoes.'

Uribe and the Specter of Fujimori in Colombia
by Maximiliano Londono Penilla

Despite the brutal austerity programs decreed by the International Monetary Fund (IMF) for Colombia, thus far with the consent and cooperation of President Alvaro Uribe Ve´lez's economic cabinet, the Colombian population still maintains the hope that President Uribe represents a phase change for the history of the country—at least in so far as beginning the process of overturning the narco-terrorist empire that has reigned in Colombia for nearly 25 years.

Pressure on Germany To Join War Increases
by Rainer Apel
German Chancellor Gerhard Schro¨der's repeated statements against the Rumsfeld-Cheney drive for war against Iraq, during the last three weeks of the German election campaign in September, were not well-received (to put it mildly) at the Pentagon, nor were they forgotten in the meantime.

Southeast Asia Rejects Australia Strike Policy
by Mike Billington
U.S. Deputy Sheriff-wannabe John Howard, otherwise serving as the Prime Minister of Australia, triggered a firestorm of protest among his Asian neighbors with his Dec. 1 televised call for the modification of the UN Charter to allow pre-emptive attacks against terrorists in other nations.

An Electoral Shake-Up
LaRouche's associates in the Citizens Electoral Council scored a breakthrough in the Victoria state elections.

Aminor earthquake erupted in Australian politics on Nov. 30, in the Victoria state parliament elections.

National:

Ashcroft, Bush Administration Trash Constitutional Protections
by Edward Spannaus
The Bush Administration, with help from its allies in Congress and in the Federal courts, is systematically dismantling Constitutional protections and the limitations on domestic intelligence operations which have been built up over the past quarter-century and, in some cases, for over 50 years.

Interview: Christopher Pyle
Threat of the 'Total Information Project'
Christopher H. Pyle is a former Captain in U.S. Army Intelligence, who in 1970 first exposed the existence of the Army's domestic surveillance program directed at American citizens.

Military Transformation
The Future of Warfare, or Recipe for Disaster?
by Carl Osgood
The current direction of U.S. military strategy was signaled by a September 1999 campaign speech that George Bush delivered at The Citadel military school in South Carolina.

View This week's Almanac Section*, as a long .pdf file.


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