|This transcript appears in the January 21, 2000 issue of Executive Intelligence Review.
Return to Roosevelt's Concept
of the Bretton Woods System
The following is the transcript of a live Internet video webcast, conducted by Democratic Party Presidential pre-candidate Lyndon H. LaRouche, Jr. on Jan. 11 from the Westin Copley Place Hotel in Boston, Massachusetts. (See www.larouchespeaks.com.) Subheads have been added.
Video clip from the 1944 Bretton Woods Conference, held at
the Mount Washington Hotel, Bretton Woods, New Hampshire: "Today, men and
women of different races and creeds are here assembled together, determined to
work out by mutual cooperation a plan for a permanent contribution for the
benefit of the people of the world. The specific task assigned to us is to
formulate a practical plan for the establishment of a world fund, and for the
stabilization of exchange. This is our immediate and essential
Lyndon LaRouche: What you looked at, of course, was
Mount Washington. It's a local land-site in New England which I climbed a number
of times, from the west, and from the east, and from the north. In my younger
days, I used to do that regularly as sort of an annual, once- or twice-a-year
workout, just to keep myself in some kind of condition, which I understand is
something my opponents regret very much, that I did that.
But in any case, the point being that this Mount Washington
is, at this point, perhaps the most memorable place in New England, in the sense
that it is the place from which a monetary system was created which served the
United States very well, and some of the world very well, from 1944, when this
conference occurred at the Bretton Woods hotel--under there, Mount
Washington--and until, actually, the middle of the 1960s, we had continued
benefit of it.
Today, that conference, in 1944, is the most important issue
which should be on the agenda of any candidate for President of the United
States at this time. Any candidate who does not have that vision of Mount
Washington and Bretton Woods on his mind, and on his lips, is not serious about
politics. He may be serious about being elected, but not about doing any good
for the country and the world.
There is no `economic boom'
We'll get down to this Bretton Woods thing in just a moment,
as such. But first, I want to indicate to you, contrary to the kinds of
statements you're getting as propaganda--and I say lying propaganda--the United
States economy is not better than ever, the United States economy is not
growing at the fastest rate in its history, or anything of the sort. There are
some people, in the upper 20% of the family-income brackets, who have more money
today, than they did in recent past. But if you look at the conditions of life,
and the communities for the lower 80% of the family-income brackets of the
United States; if you look at health care, if you look at education; if you look
at energy supplies; if you look at other basic economic infrastructure; if you
look at Social Security, and all these kinds of things of importance; if you
look at family relations; if you look at violence in the society, particularly
among teenagers, among so-called middle-class teenagers; in all of these
respects, everything today has been becoming worse, factually, since
about 1971, when Nixon pulled the system down in mid-August of that
Under Carter, it became worse. At the end of the Carter
administration, at the end of the first years of the Reagan administration, the
United States economy, as we'd known it, as a successful economy, began to
disintegrate. We had legislation such as Garn-St Germain in 1982, we had the
ripoff of the savings and loan associations, under Garn-St Germain. We had, at
the same time, the Kemp-Roth legislation, which started this process: junk
bonds, derivatives. The economy today is not only worse than it ever was, in
physical terms; we don't produce much any more.
Some of you remember, for example, 1966-67. Under the
influence of the aerospace program, which had been launched by Kennedy, or, in
an accelerated form by Kennedy, we had, around Route 128--here, around
Boston--we had a fairly vigorous high-tech growth, real high-tech, not imaginary
high-tech. In 1967, we had a disaster in employment among those firms in the
Route 128 area. Later, we had an expansion of some degree around the 495 route,
then gradually, at the end of the 1970s, we had some spread into the cheap labor
markets in southern New Hampshire--Portsmouth, Nashua, so forth. Western
Massachusetts survived, but the conditions of life, the opportunities, the
future of the area was going downhill.
Around the whole country, it was worse. We produce less and less. We import more and more, chiefly produced by slave labor from South America, from Asia, different parts of Asia, by very cheap labor. We can not afford to buy the quality goods we used to have, and we don't get them any more. If you go to the malls, you get junk, at high prices--not fit to use, wear, or buy. But at high prices. But the stores you used to rely upon, the brands you used to rely upon, they're not as good any more. We don't do a machine-tool quality testing of products before they go on the market. You don't know whether it's going to work or not. This economy is going down.
The United States seems to be in fairly strong
position because we and the United Kingdom and some other countries, like
Australia, Canada, and so forth have a great military power, muscle. And through
that military power and other political muscle, especially since the Soviet
system collapsed, the United States is able to bully other parts of the world
into giving us credit, to giving us goods produced by slave labor. We also are
able to borrow, at the point of a gun, virtually, from other countries; for
example, we're ripping off the entire former Soviet Union. We're stealing the
raw materials there, at bargain prices. That's been propping up parts of the
world economy. But people of the former Soviet Union, Asia, East Asia, South
Asia, are the principal markets for Europe. They're also the principal export
markets, in the future, for the United States, together with South America,
Central America, which we're bankrupting, and therefore by muscle, by forcing
them to reduce the value of their currency, by swindling them, by forcing slave
labor on them, by looting them, and by forcing credit from them, the United
States economy is being kept up in a giant bubble.
A parasite economy
Now, think back. Think back to 1974-75, before Carter was
elected. We didn't have a perpetual Federal debt crisis in that year. It didn't
exist. Yes, we had a national debt. It was large, it was considerable. But we
didn't have a cancer of a prevalent, growing, incurable debt crisis. Under
Carter, we got an incurable debt crisis, which has been growing cancerously ever
since. And then, what did they do? Carter, the Trilateral Commission--Bush was
part of the same thing at that time--the Trilateral Commission destroyed
regulation. What happened to our transportation systems? All parts of the
country that used to get under regulated transportation, regulated freight
rates; they could get parity in getting goods delivered into the town on time,
and goods delivered out. They had access to the United States as a total market
in the world market.
When they deregulated, rails, to a large degree, and
trucking, began to deregulate other things, the whole system, which had been
built up to make the United States the most powerful economy in the world, was
destroyed. The savings and loan system went down first. Volcker, who managed the
Federal Reserve System into the ground until he was succeeded by Greenspan,
who's a worse wrecker than Volcker, destroyed the housing industry as we used to
We became a parasite economy; the debts kept growing, growing, growing. The United States today, lives on borrowing money, which it can never repay under present conditions, at the rate of between $300 and $400 billion a year, in what's called a current accounts deficit, borrowing this from other countries to enable Americans to borrow debts they could never pay, to buy goods which ain't fit to take home, to keep this economy going--and some call it "financial growth."
In the meantime, since 1986-87, the United States has lived,
financially, on looting other countries financially. For example, Japan: There
was a meeting called at the Plaza Hotel in New York City, and Japan agreed to
jack up the price of the yen, in order to support the dollar, because the United
States, at that point, in the '80s, could no longer compete with Japan, dollar
for yen, in quality of automobiles and other things. We couldn't compete any
more, because we were looting our industrial economy. So, we imported from
Japan, which had better technology than we had. We forced the Japanese to raise
their prices of their exports, in order to subsidize a relatively backward U.S.
automobile and other industries.
Look at all the products of the type that you used to get
from U.S. companies, that, beginning in the 1970s and early '80s, you began to
get from Japan companies. Think of how many products have a Japan origin that
used to be made by companies based around, say, Boston here. You began to get
Japan products. Then, we turned around and looted Japan. We say, "Now you will
raise the price of your yen, so that you can no longer compete in the U.S.
market, at least in the same way. You, then, will loan money to the United
States at bargain rates. You'll bail out and subsidize the Federal Reserve
System and our banking system."
We continue to do that.
Recently, beginning 1997, the Japan system began to collapse.
It collapsed in the so-called 1997 Asia crisis. Now at that point, Japan had a
bunch of bankrupt banks; as a matter of fact, the whole banking system of Japan
was essentially bankrupt in 1997, as a result of this policy which had started
in 1986-87. The system was bankrupt. What did Japan do, under the gun of Paul
Volcker and other people? Japan began printing money, as credit, overnight, at
one-quarter of one percent interest rate per annum! What happened to that
money? Well, people from the United States, people from Europe, bankers,
borrowed those yen, at borrowing costs of as low as one-quarter of one percent.
They used the yen they'd borrowed to buy dollars, deutschemarks, francs, and so
forth. They then brought those dollars, which they'd bought with yen, brought
them back into the United States, to pump into the Wall Street speculative
market. What did they invest in? They don't invest in industry any more. Oh,
this investment in real estate--we've got a real estate bubble, the zooming real
estate prices, for houses you would call a tar-paper shack, with a little bit
glorified treatment, a few years ago. We have people all through the United
States in these areas, who are taking on mortgages at a minimum of $300,000,
usually in the higher-rent areas, up to $600,000 per house, or equivalent unit,
and up to a million or more. These things are essentially shacks, if people
didn't live in them to keep them maintained. They seem to be made of the same
paper that was used to write the mortgages on. A strong windstorm or something
might bring them down.
Now, these houses are being bought by people who have a $50-,
$60-, $70,000-a-year income as middle management in some of these so-called
Nasdaq firms. These guys--how are they buying at those prices, how do they buy a
house carrying a mortgage price of $600,000 to $1 million? How is this possible,
in these so-called suburban areas? Well, they have stock options, and as long as
the money market continues to go up, the Nasdaq, the so-called Internet
speculative stock market bubble goes up, then their stock options appreciate in
value, now they can convert their stock options into assets to go into hock to
buy the mortgages on these houses.
The coming market collapse
What happens when this market collapses, as it will
Many of the people in the upper 20% of family-income brackets
will instantly lose their employment. Their stock-option values will collapse,
their salaries will disappear, but their mortgages will persist, while the
houses are crumbling. Which means, that, as in the 1929-1931 period, but on a
worse level, you will have mortgage companies and banks in bankruptcy, because
they're controlling uncollectable paper on mortgages on these houses, and
similar kinds of things.
Think of the malls that are springing up in some parts of the
country. They're going to collapse too, these so-called suburban development
What's going to happen to our power supply? We don't have the
electrical power and other power needed any more. These things are going out of
business. The prices are going up. If they continue to pump money into the
system, print money the way they are, to try to keep this financial bubble
afloat, we are already in the beginning of a hyperinflationary spiral like that
which hit Germany in 1923.
If Japan goes, the United States goes. If Russia goes, who
knows what happens? Europe is in the process of going. Ecuador has gone. Brazil
is ready to blow. Argentina has gone. Mexico is ready to blow. Africa, most of
southern Africa, is gone. Much of East Asia. Indonesia is disintegrating as a
nation, under the conditions imposed upon it in 1997 by the IMF. It may stop
disintegrating, but that's the condition now; its debt is climbing, and that's
the fourth-largest-population nation in the world. And similar things throughout
So, the whole world is disintegrating. It's about to come
If you look carefully behind the propaganda, which comes from
the Federal government, which comes from the leading candidates, generally,
which comes from most of the press, if you look behind the lies to the reality
of the situation of banks, financial institutions, and other relevant
institutions around the world, people that I talk to in these circles, in Europe
and elsewhere, agree--and they agree with me, and not with these jokers--they
agree that the world financial system is in the worst, not a cyclical crisis,
the worst systemic financial, monetary and economic crisis of this past hundred
years, and longer. And it's coming down fast now. No one can say, predict, what
day is the market going to collapse. It's collapsing already, in one sense or
the other. It's caught between deflationary threats, hyperinflationary threats,
wars spreading all over the world, a new war every month or so, which doesn't
seem to quit. A new scandal, a new destabilization. We're in a crisis worse than
that of the 1930s. We're in a crisis of the type, which, in terms of worldwide
strategic implications, is the kind of thing that gave us Adolf Hitler in World
And you have, in Washington, they're playing as if reality
would never come. But it's going to come.
When this thing hits, with stronger force, when the illusions
among the American population collapse--and it probably will be fairly
soon--then you're going to have an effect upon the American population like that
which some of us remember from December 1941. Those of us who are old enough to
remember the mood of the U.S. population in most parts of the United States in
1941, will remember that the general feeling was: There is a war in Europe, it's
spreading around other parts of the world, but it's not going to come
here. Even when the Barbarossa attack on the Soviet Union occurred, people
still believed here, "Yes, it's awful, but it will be handled; you'll see, it
will not come here."
They'll say the American people will never support such a
war, will never support getting into such a war. Then, suddenly, on one Sunday
morning, Dec. 7, 1941, the American people changed, because suddenly, they had
to face the reality that we were in World War II.
Now, many people didn't believe what we could do then.
Roosevelt knew what we could do. He said it, and we did it. We had a great
economic revival; we did what everyone thought was impossible. We produced more
warplanes than Roosevelt had ever promised we'd be able to do; we took people
off the streets, we put them back into industries, using skills they had almost
lost after ten years of depression.
For example, up north of here, you have a city called Lynn,
Massachusetts, where I lived, for a while. And in the central square in that
city, you had a cafeteria, called Hunt's Cafeteria. It was the popular-priced,
large cafeteria in the central square, which adjoined what had been the Boston
& Maine railway terminal there at that time, with the local newspaper, the
Lynn Item on the other side, and so forth, and so on. Now, in that period
of time, on almost any given day in the late afternoon, you would see grown men
standing in front of Hunt's Cafeteria, leaning against the wall, often picking
their teeth with a toothpick, when they hadn't eaten that day. Such were the
conditions at that time. These were often broken men, who had not had any decent
employment at their trade, which they had had some skills at earlier, since the
Depression hit. And there they were, trying to keep up the illusion, keep up
their dignity, by picking their teeth with a toothpick, in front of the
cafeteria, when they had not eaten a meal that day.
That was our condition. And out of such conditions, we
mobilized, and we changed it. Oh, it took a year or so before people in that
condition, going back into the factories, were able to develop the skills to
produce a quality product. We produced a lot of junk, and a lot of scrap in
those factories in those first 12 months. But we got it going.
We're in a situation which is, for us--that experience is
important. And for those of you who remember that experience as I do, it's
important that you tell people about it, so they will understand that this is
the way that things sometimes happen. Because I don't think we're going to be
hit by nuclear weapons right away, but we're going to be hit by a financial
crisis, which for many Americans will be just like being hit with nuclear
weapons--the shock effect. What people believe now could not possibly happen,
screaming people in the upper 20% of the income brackets: "It couldn't happen! I
don't believe you. The press all tells me it's not going to happen. Wall Street
tells me. The President says it's not going to happen. Everyone says it's going
to get better and better. Globalization and Glory Forever!"
Illusions: worse than the 1930s
Well, that's the illusion. This is worse than the illusion we
had back among people in the late 1930s. Much worse! People today are more
insane than they were in the late 1930s, at the beginning of the 1940s,
because then we had a sense of physical reality. We still believed that the
secret to solving problems was to produce wealth. To produce agricultural
goods. To produce industrial product. To produce things that worked. To fix up
infrastructure, to build power lines, to clean up water systems. All the things
that make physical life possible on a higher level. We believed in that.
We just believed that we weren't getting it, the way we should. But we still had
those values. And, when the war mobilization occurred, we were prepared to
accept the mobilization, because it coincided with what we knew was the right
thing to do. And we just did it. We said, "Why didn't we do it earlier? Why
did we have to have a war to get us to mobilize to do what we should have done
Well, Roosevelt did want to do it. But he was not able
politically to do what he could have done until the war created a crisis where
the American people would mobilize, and say, "Yes, don't get in our way. We're
going to do it."
We're now at a situation where the upper 20% does not
generally believe in this any more. Oh, you may have a few machine-tool
operators and people like that still running around, who still believe in
production. They're a vanishing feature these days. Even competent engineers are
becoming a vanishing species. They all want to sit down and design at the
computer. Nobody wants to go out and see if this mathematical model will
actually work, so they produce--That's why our space program failed. That's why
this Mars exploration goofed. This is why we don't get satellites up regularly
anymore, and many of the engineering and other people involved in implementing
the programs are incompetent. Because they believe you can sit back, at a
computer, play out a mathematical model, give an order to somebody who is not
properly trained, and hope that the thing will work. It may not work.
In the old days, we would test the product, competently,
before we would put it out in design, or at least we'd make a test model and see
if that would run before we got into production. Now, we're actually lofting
planes before the design people even find out about it. And who knows what's
going to happen next?
So, that's our situation.
Yes, we have a population which is in worse condition,
psychologically, than it was in the end of the 1930s and the beginning of the
1940s. But we must survive, the nation must survive, the people must survive,
and the world must survive.
And therefore, given the difficulties, given the insanity and
the illusions that prevail among many people in the upper 20% of the income
brackets, the fanatics, the "Third Way" people, the Gore lovers, the Bush
lovers--or people coming out of the Bushes, or rolling in Gore--these people are
based on a constituency which dominates party politics and elections these
If you look at the elections, you'll find that 30% of the
possible voters, that is, citizens who should vote--either are voters or should
be voters--that about 30% of this part of the population dominates and
determines the outcome of elections. That 30% is usually dominated by people
from the upper 20%, the so-called suburban level of income brackets,
family-income brackets. Those upper brackets used to be, significantly, people
who were involved producing things, or in the management or engineering, or
something, of a firm which made a decent product, or maintained a utility, or
did something of that nature--construction, what not.
Now, we don't have those kinds of jobs. We're in a so-called
How do people make incomes in the upper 20% of income
brackets unless they're Wall Street tycoons? They make it by working in a
service area, as middle-management or more, producing something which we
probably would get along quite well if weren't produced at all, performing a
service we'd rather perform for ourselves. I mean, wouldn't you rather have a
meal at home than go out and get a fast food by some poor guy who's working at a
McDonald's or something? We pay a premium for getting our food cooked for us. We
don't cook our own food. We don't have our own children at home any more. And we
wonder why things don't turn out so well. You don't have family meals. You don't
have a family culture. You're afraid to send the children to school, the way the
conditions are in these schools.
And that's the life, the change in life, of this dominant
layer of many of us, but especially this upper 20%, who believe that they've
got it made. They haven't. They're living on the threshold of disaster.
They're like people in Germany in 1922-23, who had all their income tied up in
financial assets, and then the Weimar inflation in Reichsmarks, about the spring
and summer of 1923, began to become a creeping hyperinflation, like we're
experiencing in real estate in the United States today, and other things. Then,
by the autumn of 1923, the Reichsmark had evaporated in a
hyperinflationary explosion. They couldn't print money at prices to keep up with
the rate of inflation. It broke down. And the United States gold, with the Dawes
Plan, stepped in to provide a new currency for Germany.
But in that process, those German families who had their
assets entirely in savings, financial savings, things like that, were wiped out,
and their shirts turned from white to brown. And Hitler, who was an
also-ran, the Nazis were an also-ran in that period, in the fall of 1923, became
for the first time, a significant political force in Germany.
So, you have a population here in the United States--they may
not wear white shirts, or you may not be able to see what they've got under
their beard--but they're middle-income families, the so-called upper 20%,
middle-management, living in a world of illusions, counting on their
money-management account, counting on their mutual funds to retire, not
realizing, and not willing to think about the fact that when this system blows,
as it will blow, one way or the other, very soon, that's wiped
Now, if we do not, as a nation, recognize that factor, if we
do not solve this problem, when the Pearl Harbor effect of crisis starts, then
their shirts are going to turn brown. And the George Bushes and the Al Gores,
who are the prototypes of the kind of fascist leader that leads to new Hitlers,
will be the leadership. And where the world goes from there is hard to say. But
we don't want to go there.
Lies, and more lies
So we have two problems: We have a population which is--80%
of the population fears that they have no voice in politics. The press gives you
a list of the so-called issues: "Where do you stand on the issue? Plus,
minus, or maybe? Up, down? What's your percentile change in your opinion today?
Which candidate do you like the best? This one, because of his nose, or this one
because of his chin?" And so forth.
So the people in the lower 80% are disgusted, because they
know that nobody wants to discuss with them what the issues are, because the
leading political machines, and the major press, which is either controlled by
Wall Street or by foreign press syndicates such as Murdoch and Hollinger, tells
you what the issues are! You don't tell them what the issues are, they tell
you what the issues are. And you can comment on the issues.
So people go along with that. Most people in the lower 80%
are still reading things like USA Today, or something, which tells you,
"Here's today's discussion point. Here's what you're permitted to discuss with
your neighbor. Here's what the pollsters tell you the issues are. Here's what
these fabricated candidates tell you what the issues are." And the lower 80%
say, "I guess we've got to go along with it." Or they just turn away from
politics with disgust.
We don't have political parties any more. We have political
machines which are run from the top down by bureaucrats.
Then you have the upper 20% income brackets, which are much
more involved in politics, but they're brainwashed by their own illusions. They
think that Al Gore is human. They think that George Bush can think. Therefore,
you have a situation in which, given the current trend in popular opinion, this
country hasn't got a chance, is going to Hell.
Only a crisis of a Pearl Harbor type which will awaken the
American people to an illusion, the fact of an illusion, which will prompt them
to start thinking again, can save this nation, and possibly the world as a
whole, because this nation is very important to the world as a
Now, you don't do that spontaneously. People in the lower
80%, who haven't been doing much thinking lately, who have had no optimism, and
no confidence that they could do anything, except choose their options--like
going into a mall, and choosing, "Which piece of junk am I going to buy?" They
don't control what they're going to buy, they control what they can select from
what's offered to them. Cheap-labor junk from some strange part of the world
they never heard of.
In that situation, with a leadership--look at the leadership
of the parties: They're typified by the candidates. Well, George Bush, don't
count him, he can't think. Gore? Gore is just mean, he's a mean thug, who
changes opinion three or four times a day; I wish he'd change his shirt, his
underwear, that often. Bradley's sort of a warm-hearted guy, relatively
speaking, but he hasn't had a thing to say about any of the real issues that
will determine whether this nation lives or dies. And what he says on real
issues, such as health or welfare, or health care generally, and social
security, that won't work.
How are you going to find the money to maintain programs, if
you're not producing enough to maintain the tax revenue base, and the private
income base, to do the things in the first place? You're trying to divide a cake
that no longer exists.
The question is all these issues. Yes, I'm dealing with the
health problem, which is one of the most important social issues in the United
States today. We can no longer afford the health care we used to be able to
afford. And, they tell us the country is getting more prosperous: We no longer
have the Social Security that we once had guaranteed. And, they're telling us
the country is getting more prosperous: We no longer have the education we used
to have. And, they tell us, "The country is getting better and more prosperous,
the education system is getting better." It's all lies.
Leadership: the case of the 1930s
In this situation, with the population inundated with lies,
not accustomed to thinking, because they weren't permitted to think, either they
were deluded by illusions, the upper 20%, or deluded by pessimism--"there's
nothing I can do about it" kind of pessimism--by the lower 80%, how are you
going to get, in a crisis, a reaction which is actually going to solve the
problem? So in that point in history, in all crises, the question of leadership
I'll give this example from Germany, the Hitler case, because
it's relevant today.
In January 1933: Remember, Franklin Roosevelt had been
elected in November 1932, elected on a program to address the issue which should
be familiar to us here today in this room: the "forgotten man." Roosevelt's
campaign for the Presidency began with a campaign to address the problem of the
forgotten man of American politics.
And when he came in, in 1933, he began to work on that
problem. He restored the concept of the General Welfare, promotion of the
General Welfare as a principle of government. He may not have done it as well as
he should have, maybe he couldn't, but he did it. But he was not going to be
installed in office until the third week of March 1933.
In the meantime, Hitler had been defeated electorally in
Germany, in the recent election. A new Chancellor had been elected, Kurt von
Schleicher. The program of von Schleicher was based on a program which was not
too much unlike my own. It was developed by the so-called Friedrich List
Society, and if this program had been continued, which had a resemblance to
the Roosevelt program, then Hitler would have never come to power. The
Hitler movement would have been finished at that point.
But on the 28th of January 1933, London bankers, and their
New York partners, including Prescott Bush, the father of President George Bush,
who was then the chief executive officer for Brown Brothers Harriman, and a
partner of the former head of the Bank of England, put Hitler into power in
Germany, and brought von Schleicher down, and Hitler into power.
Hell broke loose.
Then, less than a year later, in July 1934, von Schleicher
and others were assassinated by the Nazis in Germany, and Hitler, after the
death of Hindenburg in August of that year, consolidated power as dictator of
Germany. At that point, World War II was inevitable. Nobody could have stopped
Now, in that period, in January 1933, had von Schleicher
stayed as Chancellor, had he not been toppled, had leading forces in Germany
rallied to ensure that he were not toppled, then his program would have been
implemented. Under his program, you would have had, in the third week of March
1933, about eight weeks later, you would have had Roosevelt as President of the
United States, with a policy which was similar to that of the economic policy of
von Schleicher, the so-called Lautenbach policy. Had that occurred, World War II
would never have occurred.
So, it's in these moments, and there are many such moments in
all history, in moments of crisis, when a people have been corrupted by
illusions or pessimism over a long period of time, and the society is drifting
in the direction of destruction, somewhere in these processes, there's always a
point of crisis, something analogous to "the Pearl Harbor effect," at which a
nation and a people have the opportunity to come to their senses and change the
policies to change themselves.
For this, people require leadership which is qualified to
rally them around the conceptions which they need to get the job started. That
is history. Every major event in the history of European civilization, back from
the time of ancient Greece, has always been that.
The problem is, right now, tonight, I'm the only person who
is either a candidate for President, or who might become a candidate for
President in this time, who is qualified to handle the problem this crisis
represents. And I haven't got a chance, unless the crisis hits. And we don't
have a chance, unless we prepare for this development. That's what this is
What we must do
Now, what do we do?
All right, we're going to scrap every change in policy
bearing on economics which the United States has adopted since August 1971. It
goes. Now, under our government, under our Constitution, the Presidency of the
United States is a unique institution in the world--contrary to Kenneth Starr
and other people who don't understand these things. They're more interested in
girls and peeking under skirts and things, than finding out the truth of
But the President of the United States is the only true chief
executive, elected chief executive, in the world. And the executive power of the
United States is unique. It's controlled by the Supreme Court, by the Federal
court system, by the voters, by the population, and by the Congress.
But in an emergency, the power of the President to act in
an emergency, for the nation, within the bounds of checks and balances, is
unique on this planet. The President has the power of a dictator under those
circumstances, but he's not a dictator. He's still responsible and
And only such a President, has the capability of initiating,
on a global scale, the kind of thing which has to be done, not only in the
United States, but in cooperation with other nations.
What has to be done? Scrap all these mistakes. We go back
Now, here we are. Imagine that the crisis has struck, and I'm
President. And there's general confusion and mayhem of an intellectual type, all
over the place: confusion, screaming, terror, fear. Someone has to say: "Calm.
Be calm. We're going to fix this. Unite. Stop screaming. We're going to fix it
If the President of the United States is going to say
something, what is he going to say? He's not going to say, "I've got a grand
plan that's going to solve everything." That's not going to work, not with these
people we have today, not with the condition of mind of the lower 80% today, not
with the condition of our educational system today, and not with our
entertainment system today; not with the 20% today. No, it won't
In politics, in all real politics, you have to rely upon the
fact that there's a continuity of proven precedents of things that did
work, in the past, which are appropriate to the problem of the
So, what you do in an emergency, is you adopt measures which
people can recognize were proven precedents that worked.
Now, what's the proven precedent that worked?
We went through the Depression, we went through World War II.
We came out of the World War II period, with still a lot of mistakes made, but
we survived, until about the middle of the 1960s. We were still going along as a
viable, leading nation, and apparently on the surface, our prospects were
Then, in the middle of the 1960s--'66, '67--we began to
change. 1971: the acceleration of change, downhill. Under Carter, a catastrophe.
Under Reagan-Bush, we had a succession of catastrophes. Under George Bush as
President, a horrible catastrophe. He and Thatcher ruined the world.
And Clinton really has done nothing to stop the avalanche
since, because he's afraid. He compromises all the time. He's afraid. So he has
done a number of things, he tried some things that were actually good. But he's
done nothing to stop this avalanche of Hell, which keeps coming on.
So, in our history, and in the history of Western Europe, and
in the history of other parts of the world, if you want to say to someone, "We
know something that did work, that we stopped doing, which worked very well, and
everything since then has been a failure, because we stopped doing what worked.
So, we're going to go back now, to where we made the wrong turn in the
road, and make the right turn in the road, by continuing the way we were going.
We will make some changes, but we will make changes which are consistent with a
That takes us back to Mount Washington, to Bretton Woods.
Now, what we got out of Bretton Woods wasn't exactly what Roosevelt had
intended, because Roosevelt died in 1945, and the minute he was dead, before
they could get him fully buried, Truman, under the direction of London, was
beginning to take out as much as they could of Roosevelt's program. You would
just think Roosevelt had never existed, the way they were going. They were
trying to rip up everything Roosevelt did, including the UN.
The UN was never implemented the way he intended. The
problems of the UN was, his plan was not installed. Truman went along with
people like Acheson, and so forth, and did something different.
The same thing was true of the Bretton Woods system. Truman
sank the economy in 1946. As a result of sinking the economy in 1946--the
take-down of the so-called war economy--instead of making a transition to a
recovery program based on conversion, we shut the economy down. There were mass
lay-offs among people returning as veterans from service overseas, the
You got a reactionary Congress, the one that Truman cursed
about, in 1946 into 1948, the 1948 election. It was a terrible time.
But nonetheless, over the course of the late 1940s, the
beginning of the 1950s, we began to get back a bit on track, particularly with
the Marshall Plan. And we used the Bretton Woods system, in order to organize a
recovery of Western Europe and some other parts of the world. The program went
the best in Germany, where they had the best banking system, the best design of
Britain was very inefficient. They didn't use the U.S.
Marshall Plan money efficiently at all. The Germans used it very
efficiently. And the French a little in-between.
But it worked. There was a general recovery of Europe, of the
United States. We began to produce on a large scale, exporting to Europe, for
Europe's recovery. The Marshall Plan boom in the United States of exports, is
what rebuilt our industry into the 1950s. And this system went along until 1958,
with all kinds of regulation.
You had tariffs--a totally protectionist system. Fixed
currency-exchange rates, a gold reserve system, a tightly regulated economy, a
tax policy designed to foster production, investment in production and
agriculture, industry, and so forth. Growth of school systems. They weren't too
good in quality, but they grew. We raised the level of education--school-leaving
age, through the veterans programs, for example, and other programs.
More people began going into university grades,
college/university grades for more advanced skills. Things began to
Now, there were some things that should have been done, that
weren't done. Roosevelt had intended, that when the war had been won, that the
United States was going to use the power of its friends around the world, and
its own power, to shut down immediately, every legacy of Portuguese, Dutch,
British, and French colonialism and imperialism, and to shut down the free-trade
system. And to bring in countries, the new countries freed from colonialism, as
partners of the United States and of European countries, full partners, to
create a policy of growth, world growth, which would be mutually beneficial to
We didn't do that. There were some good things done in
respect to our special relationship to countries in Central and South America.
But overall, U.S. policy after Roosevelt's death stunk, in these
But we had a Bretton Woods system, the old IMF monetary
system, and our regulated system here, which, with all its faults and
shortcomings, moral shortcomings, and others, worked.
What we have to do, essentially, is in the moment of crisis,
have mobilized enough people among the core of the population, the natural
organic layers of the population, to be prepared for this around the things I'm
And when the moment of the crisis strikes, we're going to
have to move fast, before the white shirts begin turning into brown shirts.
Because if you don't deal with swarms of people from the middle class,
so-called, pouring around the country in madness and desperation, losing their
homes, hopelessly, with no prospect of employment, you're going to have
something awful in this country. You look at the execution rates in Virginia and
Texas, it gives you a sense. There's something very bad in this population right
now. You turn this loose, you're going to get something very nasty.
Introduce an optimistic outlook
So we must intervene, very quickly, to introduce an
optimistic outlook in the U.S. population, which is not going to be based on
conversation. It's going to be based on doing things which give people good
reason to become optimistic. And that's what this is about.
So therefore, what we have to do, is we have to take this
image of Mount Washington, which is about the only thing New Hampshire has
left--I mean, they used to have farms, they used to have some industries, they
used to have some other things. Now they've got tourism, and who knows what's
going to happen to that next?
So, give New Hampshire back something. Show respect for Mount
Washington, my friend that I used to climb. The hotel up there, the Bretton
Woods hotel, is probably not as fancy as it used to be, but it's a place you can
remember at least, and maybe you might want to visit some time. And take the
guts of the workable features of the old Bretton Woods system, the model up to
1958 or perhaps into 1966, and say, we're going to go back to that
How are we going to do it? What we're going to do, obviously:
The President of the United States must call an emergency conference among a
group of nations, which represents, in effect, the majority of the human race.
This means nations in Asia, Europe, and elsewhere; nations that agree to do
this. Those nations, on the period of not longer than a weekend, essentially,
must agree to revive the form of the old Bretton Woods system, with one
fundamental improvement. And that is to bring in major nations of the world,
such as China, India, and so forth, as full partners of the United States and
Europe, in managing this new system.
We must adopt immediately a long-term economic policy--I'm
talking about a thirty-year perspective: long-term credit, where these nations
will put the old financial system immediately, by agreement among themselves,
into government-supervised bankruptcy reorganization.
By doing so, that means we freeze all financial accounts. And
then, as you do in a bankruptcy, certain categories of accounts you release
money from. For example, all the big money stuff: Freeze it.
But then, we've got to take care of the citizens in their
communities. So therefore, people with savings, they've got to be able to have
their savings secured, be able to draw against those savings, things like that.
Pensions have to be paid; salaries, payrolls, have to be met to keep employment
going. Infrastructure has to be maintained. So therefore, we have to regulate
the way in which the reorganized financial capital is leaked back into the
Under those conditions, with full guarantees for the debt of
the United States Treasury, for reasons Hamilton cited earlier, we then have to,
by agreement with these nations, create this kind of fixed parity system, which
allows us to issue credit at 1% per annum; by being able to issue credit at 1%
per annum, without fluctuations in values in currencies, you can make long-term
loans inside the United States, and abroad, of up from five to thirty
Under those conditions, we can issue the loans, for what? In
the United States, we have people who are unemployed, unemployable, or poorly
employed. We have a power shortage that's going to kill us. We have a medical
facility process which is actually killing us, as in the Boston area right now.
We've got a health crisis here, as in many other parts of the United States and
in the world. We've got to rebuild those facilities, rebuild that
We've got to rebuild the power system. Our national
water-management system is in a crisis. We've got to rebuild it. Our
transportation system, including our rail system, is in a crisis. We've got to
rebuild it. We have whole sections of the urban structure, infrastructure of the
United States, which is a junk shop. We've got to rebuild it. So, we have very
much work to do.
If we put credit, through public and private channels, into
infrastructure-rebuilding programs, not only will we employ people who otherwise
will be on the streets, at useful work, but by employing them, we will generate
a market in the communities where this work is going on, which will help to
reinvigorate private businesses, and lay the foundations for general
The international dimension
On an international scale, however, there's something much
more fundamental, involving orientation.
For example, take the case of China, as a case in point.
China's over--well over 1.2 billion people, and Macao has just joined it again,
so that makes it even larger. And then India will soon be 1 billion people, if
it hasn't already reached that level. And then, so forth, the countries of
All of this area of Asia is in that condition. Africa,
particularly Sub-Saharan Africa, is in a much worse condition. It's beyond
How can these areas of the world develop? Take China, for
example. China has a growth rate, probably, in the vicinity of 8% per year.
That's gross. But China has an internal problem. China's higher productive
layers of the population, are situated traditionally along the coastlines. In
the interior of China, going westward toward Central Asia, China is
underdeveloped, and the people are poor. If there is going to be political and
social stability in China, and peace in the region for a period to come, there
must be a high rate of growth, of technological growth, in the interior of
China, bringing people up from absolutely poverty-stricken levels, up to higher
levels, and so forth. This can not occur, without the infusion of machine-tool
and similar kinds of high technology.
We have a similar problem throughout all of this area of East
and South Asia. We have a much worse problem in Africa. We have built up similar
problems in Central and South America. Some of them used to be fairly decent
areas, but now they've been ruined by recent developments.
Therefore, we have a thirty-year mission, to say that nations
which have scientific and machine-tool capability, and can revive it: nations
such as the United States, nations such as the nations of Central Europe,
central continental Europe; Russia, which does have a machine-tool capability
buried in its former scientific machine--military-industrial complex;
These nations, which have a machine-tool export potential, to
provide technology to countries which need technology, to enable them to raise
their level of productivity per capita, including South and Central America:
that we must adopt a mission, saying that we in the United States and other
countries, which have the capability, must orient our economy for a period of
twenty-five to thirty years to come, to envisage that over this period, our
immediate business, our principal export business, will be exporting technology
to those areas of the world which need it, in order to improve their own
standard of living, their own powers of productivity.
Because they won't really be able to repay the loans we make
on credit to them for ten, twenty, thirty years, so that's a long-term
agreement. We need a system which can absorb the commitment to that kind of
Then we in the United States, must reorient our health-care
system, our educational system, our urban policies, our investment policies, in
order to steer our potential in areas where we will not try to compete with the
world in producing things that they can also produce. We are going to
concentrate on the areas where we are needed. And we are going to export what is
needed, within the bounds of our national economic security, to those countries
which need it, to build up a new arrangement on this planet, an alliance, of
cooperation, among sovereign, perfectly sovereign nation-states.
End globalization! Develop a true partnership among
nation-states, cooperating nation-states, based on this conception, which was
already Franklin Roosevelt's conception back in 1942 through 1944.
I have to make this clear to the American people: That was
the vision of Roosevelt. Not because I'm endorsing Roosevelt. I'm not
endorsing his mind, everything he said, everything he thought. But he had a
conception, and an effort, and a policy, which was valid as a policy of the
He had a policy of economic recovery from the greatest
depression up to then, which was valid. He had a vision of how to build a
postwar monetary system, which would get us through the reconstruction of the
postwar period, which was valid.
So, the mission is to educate our fellow-citizens about these
things, make comprehensible what these precedents are, and say, "We're not
coming to you with any fly-by-night funny ideas. We're coming to you, not with a
wild scheme, not with some gimmick. We're saying, we were wrong. In
1966-1971, we made mistakes, bad mistakes. We didn't correct our mistakes, and
we should have recognized them. And things got worse."
Now, things are bad and practically impossible. Now, let us
stop travelling the road to doom. Let us turn around, go back to where we turned
off the road, go back in the right direction, and pick up on ideas that worked,
and figure out how to make them work today, and reach out to our neighbors in
various parts of the world--those that wish to cooperate with us. And say, "Let
us, as sovereign nation-states work together, and bring this planet finally back
to some kind of peaceful, durable order."