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This transcript appears in the February 1, 2002 issue of Executive Intelligence Review.

Dialogue With LaRouche

[PDF version of the entire webcast]

We publish here excerpts of a two-hour question-and-answer dialogue between Lyndon LaRouche and the audience which followed his opening statement at his webcast on Jan. 24, 2002. It was moderated by Debra Hanania-Freeman, spokeswoman for LaRouche's Presidential campaign.

Freeman: I'd like to start with some questions that were submitted by Dr. Mustafa Ali. He is the economics editor of Al-Arab International, which is a newspaper that is published in London. He says, "First and foremost, that he would like to send greetings and express the admiration of his Arab readers of Mr. LaRouche's daring and courageous positions. And also his thoughts, especially as they relate to the Palestinian cause, and all other issues regarding the Arab world." He says, "First, Mr. LaRouche, you talked about the September 11th events, and their political-economic-strategic and historical background. But the question is still: What would have been the reaction of a Democratic U.S. Administration, rather than a Republican one? Would it have taken the same path against terrorism, that you now call a suicidal policy?"

LaRouche: I think that if Al Gore had been President, the reaction would have been far worse than it has been under Bush. The DLC crowd, Lieberman and so forth, on record, would have gone whole-hog where Bush has hesitated and dragged his feet, and resisted. We would probably have today, a full-scale clash of civilizations war in progress.

Now, the problem with that, is there's another side. If Bill Clinton had been President—but he wasn't eligible; he couldn't run for a third term, because of that amendment that was made, the anti-Roosevelt amendment made at the end of World War II. Bill Clinton, I think, would have been a different proposition, and would have been useful.

There are other—as I said, in the Democratic Party, there are many good people in it. The trouble is, they keep going along to get along, and that's the way you get along to hell. And Clinton's mistakes were, he kept capitulating. You know, Bill Clinton was probably among the most intelligent Presidents the United States has ever had. And that's not a statement of admiration; that's a statement of protest, because he never lived up to what I thought was his potential. He would compromise at points I thought he shouldn't compromise.

Power or Principle

As you may suspect, I'm strong on principle. Some people would like to do something with power for the good: I think Bill's one of them, but they would struggle to keep the power first, and serve the principle second. And I'm the kind of guy who would probably give up the power, risk the power for the sake of the principle. And I think that's what was needed. . . .

I think it's moot now. I think the thing to learn from this, is that the Democratic Party was a disaster. The reason that Bush was elected was that the Democratic Party candidate, and the coalition around him, was an unmitigated disaster. And people were not attracted. . . . The fact that people voted at all for the Democratic Party was because they somehow wished that maybe that would mean that Bill Clinton would still be there in Washington on the day after the next inauguration. But if Bill Clinton had not been, in a sense, behind the ticket of Al Gore, I think that Al Gore would have made [Alf] Landon look like a winner.

So, I think that's . . .—the Democratic Party is a mess. And I wouldn't put any confidence in the Democratic Party at this time, except by scolding it. As I scold it. And say, "If you're any good at all, change your ways! And do it now! Because you are the laziest, most good-for-nothing bums, collection of bums, I've seen in a long time." Unless I look over at DeLay and the other part of the Republican side—you've got a bigger bunch of bums over there. But these Democrats, by pretending to be something nice, they're worse than the worst Republicans. The worst Republicans at least admit they're dinosaurs! The Democrats pretend to be nice guys, and they're more evil than the dinosaurs.

So, I think my answer to the question is implicitly clear. It's not going to be a choice of existing institutions—on the Al Arab question. The question is: Can we in the United States and other countries organize a force to replace what is now that worthless collection of fools called the Democratic Party leadership? A bunch of fools among whom there are many good people, but as along as they continue to work with one another the way that they do, they act like a bunch of fools. And it's terrible. So, I think if the Democratic Party were to come to power now, under what is called the present leadership of the party, with people like Lieberman and Gore as leading contenders—and people who don't agree with them, but who are opportunists, supporting them—the Democratic Party would rush into war, where Bush and Powell and others would hesitate.

Freeman: A follow-up from Dr. Ali. He says, "Mr. LaRouche, you always emphasize that the American violent policies have British political minds behind them. Do you expect that there will be American independence soon, from the British intellectual and political pressure?

LaRouche: Well, that's what the fight is about in the United States. Now, I represent not something unique or really strange, from the American standpoint. I represent probably one of the last, important representatives, intellectually, of the American Intellectual Tradition. And on the other side, the people who disagreed with me in high places—like the major news media and so forth, the entertainment media, much of the banking community and so forth—they represent something which I call, which President Roosevelt, Franklin Roosevelt, called, the "American Tories." So, we have a treasonous pack of American Tories, which dominate our mass media, which dominate our financial system, which dominate now, through the utopians, the military arm of our power. But that group—that American Tory policy—has carried the United States down to destruction, through the crazy economic policies we've adopted, especially over the past 35 years.

So, we've come to a breaking point, where one of two things is going to happen: Either the United States is going to destroy itself, or it's going to dump that American Tory policy. Now, I can not guarantee either result. I can only guarantee that, if we don't get rid of the American Tory policy, we're not going to have the United States to worry about. So therefore, I would say that if the United States is going to survive, it's going to change. And my function is to try to bring about that change by setting an example and setting a pace for other people to join in on.

What Japan Must Do

Freeman: We have a question that was submitted by a retired Finance Ministry official from the nation of Japan. He says: "Japan has severe problems with its own economy. However, it also appears to be under political attack from external forces, located at places like the American Enterprise Institute and Goldman Sachs, who are trying to organize a run on our banking system. Some people in Tokyo are beginning to realize that such a foreign political attack cannot be defended against using domestic monetary measures. We were alarmed to read in the interview by Dr. Makin of the American Enterprise Institute, that the `Washington consensus' assumes that Japan has no guts. What are the measures that you recommend to Japan to resist this attack, both in the short term, and in the longer term?"

LaRouche: Well, Japan has to—I think there are senior people who would understand this. I think the problem is among the younger leaders in Japan—under 65, under 70, under 55—the younger leaders, because they've been educated in U.S. universities, have assimilated these ways of thinking, these Americanized ways of thinking, don't think the same way; and have a Japan version of the same kind of problem that we find commonly in the U.S. age groups, of the same type. . . .

That here you have—Japan faces an existential crisis. Japan's existence is on the edge, just as much as Argentina's is right now. Japan has been, for a long period of time—especially since the period of Kissinger, on the issue of Japan's Iran policy; Brzezinski on the issue of Japan's Mexico policy, and so forth—Japan has been destroyed in what had been its rich potential emerging in the 1960s, when Japan was engaged in exporting technology to developing countries, and actually making a very important contribution.

As for example: You have Professor Nakajima of the Mitsubishi Research Institute, [who] exemplified an entire stratum in Japan that I knew in the 1980s, who still had those values. That Japan's mission was to find—especially among its neighbors in Asia—was to find the possibility of doing good, and going into these countries and working with these countries to develop them: not simply as markets for Japan exports, but as Japan's defeat in World War II exemplifies this—Japan is an island-nation, with very limited natural resources, which has developed an excellent industrial potential—or had. Japan, therefore, depends upon finding ways of securing the raw materials and so forth, that it requires from outside, by exporting to countries things that they need that Japan can produce.

Now, Japan has available to it a vast amount of potential in northern Asia, in Russia. Japan has, throughout Eurasia, all kinds of opportunities to engage in long-term agreements of technology, or processed raw materials and so forth. So, Japan could have a future. Japan's major role is actually, properly, in Eurasia. And of course there are historical difficulties—a history of conflicts with neighboring countries, dating especially from 1894 on, as with China, Korea, and so forth. But these problems can be overcome; they should be overcome.

Defending Dollar System Has Bankrupted Japan

Now, the system is coming down. Japan has been used, during the 1980s—especially since the middle of the 1980s, and beyond—has been used as a towel-boy for Wall Street and London. Japan has been printing money, and doing all the things that the United States and Britain told it to do, in order to subsidize the Anglo-American system. Now, when the pumping system occurred, that is, the financial pumping system occurred, in the 1990s, Japan began using the creation of its currency to subsidize the U.S. financial markets. This is their big problem!

Japan has now reached the point that it is technically bankrupt. The banking system of Japan: technically bankrupt. It is implicitly in the same kind of situation as Argentina. If Japan goes under—and it can go under momentarily. It is in default, which may not be declared, but is there. Don't wait for the official declaration of a default in Japan. The default is now in process. It is now inevitable. It is not something that might happen. It will happen, unless there's a fundamental reorganization of the world financial system quickly.

So, Japan has really nothing to lose. Really. By facing that reality. There is no possibility for recovery or survival of Japan under present conditions. When Japan goes, the U.S. dollar goes, because without the support of Japan, the U.S. dollar would collapse very soon. Whether in weeks or months is not important. It would collapse. It would be doomed. And you get two or three more countries, like Japan and Argentina, going under—such as Poland or Turkey, a few others that are highly eligible on the list—they go under: The whole system is gone! . . .

I think the only solution is, we have to have, outside of, and parallel to government relations, we have to reach a closer understanding among people of influence in various countries, who can then jointly operate to bring their nations that they also represent, together around these things. See, the problem is: The people in the United States don't understand Japan. They don't understand Japan's problem as I just summarized it. They don't understand the problems of China; they don't understand the problems of Korea; they don't understand the problems of Southeast Asia; they don't understand what happened to Indonesia; they don't understand it at all. They have no understanding! They sit there; they copy opinions from these fools like the American Enterprise Institute and others—these babblers, these idiots, the State Department mouthpieces, mimeograph machines! They don't understand anything about it.

We have to make clear to the American people what the problem is. Because, I'll tell you—and there are others who can tell you: If Japan goes down, as it's on the edge of doing, right now, with these idiots like the American Enterprise Institute pushing it—if it goes down, tell me how many major banks in the United States are going to go down, and right away. And who's going to fix that, with O'Neill at Treasury, and an ideologue like Lindsey as the economic adviser to the President—and the Democratic Party, the pack of fools that it is in the Senate, and the pack of fools that is, largely, in the House of Representatives. . . .

More of us must say it jointly together, what the problem is. And maybe some of my foolish fellow Americans will wake up to realize that what we're saying is real: You keep pushing Japan the way it's being pushed now, with no discussion about options for avoiding this catastrophe, and you're going to find out—somebody sitting in New York or Washington saying: "Look Mama, America has, not no pants, but no banks"—and it might be no pants, too.

Clinton Impeachment, and Sept. 11 Coup

Freeman: I have a question from a former member of the Clinton Administration. This is a question from Washington, D.C.: "Mr. LaRouche, shortly after President Clinton began a discussion of a new financial architecture, his Presidency was destabilized. Was the apparatus that you've identified as behind the ongoing coup d'état against the Presidency, the same apparatus that was involved in the assault on the Clinton Presidency? What are your thoughts on this?

LaRouche: Yeah, sure. There's no question of that. For example, the major operations against President Clinton, from even before he was President—I think it dates from about August of 1992—but he was immediately targetted by circles associated with the Mellon Scaife Foundation. Now, the Mellon Scaife Foundation is the same thing as the H. Smith Richardson Foundation, which is on record as one of my enemies; the Olin Institute, and so forth and so on. So this pack—and also, if you look at the Israeli side, the same people on the Israeli side, who are operating against the President, are also an integral part, and allies of the same crowd that Smith Richardson, Olin, etc., Mellon Scaife, are part of. So, there's no question of that.

Look, what happened? Take the sequence of events: 1996, I warned, we're in the end-phase of the system—the collapse I've been talking about—we're in the end-phase, the last period. And there was a lot of talk in the Democratic Party, at the time, about what I said. And people said, "Well, no. Maybe you're exaggerating." Or they were saying, "Maybe there are ways to fix it. Maybe we don't have to do it your way. Maybe we can do it our way."

Then, you had what was falsely called the "Asia crisis," which was not an Asia crisis: When somebody comes up and shoots a guy with a bullet, the crisis is not caused by the guy who's taken the bullet, but rather by the guy who shot the bullet. And that was the nature of the Asia crisis. The Asians didn't cause it. The people like George Soros caused it. . . .

So then you had a follow-on: You had a swindle which was pulled by friends of Al Gore, which is the [Russian] GKO crisis of 1998, or the LTCM crisis, which almost blew out the entire U.S. financial system right then and there with the hedge-fund collapse.

Now, at that point, is the point that the President [Clinton] had indicated in September [1998] in New York, his indications about looking at a new financial architecture for the international system. And I believed at the time that he meant it. I believed that his Secretary of the Treasury was capable of dealing with that kind of issue in his official capacity. That that was the way to go. That simply, the U.S. Treasury Department, under the authority of its President, incumbent President, meeting with people in other countries, should enter into the kind of discussion which had been avoided in the 1975 meeting of the international leadership, G-7 group. And that something—we could start something then.

The President backed down. I don't know why he backed down. I rather suspect that he was frightened by some of the information he had about how serious the LTCM crisis really was. Then when it came to October, the President, after walking into Wall Street—the jungle, where lions and snakes and things roam—had gone in there and said, "Gentlemen, I'm going to change your system." And then he walked away and said, "I didn't mean it." That is the worst thing you can do in the face of that kind of enemy. If you threaten them, and then run away scared, they're gonna come and kill you! Particularly, if you're in a powerful position.

The Camp David Negotiations

And they did. They had the operation already set up, already in place, and they went ahead with this Lewinsky scandal. And the reason they did that, and the people who did that—. Look at the agency in the White House which controlled the White House internal communications. Who is that agency? What foreign power controls it? And what is the political interest behind that foreign power? And there's your answer.

Then you take the same thing with the question of the President's dealing with the Camp David negotiations. Now, that was a good idea. I think the President made a mistake in the way he handled the concluding part of the thing. I was afraid of the way the thing was going, because if you don't have an economic angle to this, the Oslo Accords could not work. And then, when Barak came in with his threat: "You give me," in effect, "you give Israel the [third] holiest place in Islam, as a place for a new temple, or else!" Arafat had no choice but to say "No, I can't buy that." I think the rest of the package was a good package. It was a good negotiation. It may not have been adequate, but it was a good negotiation, and could have been a step toward another, a follow-up implementation which might have provided the real solution.

But then, remember, what happened? You had, in the period of the Clinton Administration, you had Rabin, who had been key in the Oslo Accords—he was assassinated and nobody did anything about it. President Clinton tries to do this now with Barak, which I think turned out to be a mistake, but I wasn't really aware of how much of a mistake that was, so I can't take credit for that. But then, he was suckered by Barak. And then he said—he made a mistake. The President should have said, "We had a good agreement, but the Israelis made an unreasonable demand, and therefore, that's why it sunk." If the President had said that, I think we would have been able to manage the situation, and we would not have the present Sharon phenomenon in the Middle East.

But this Sharon phenomenon, and the friends of Sharon in New York, who are the financial angels behind Amdocs [Corp.], are part of the same thing. Exactly the same thing as this Sept. 11, the same thing as this present Israeli operation in the Middle East, and the clash of civilizations warfare. Look at the list of people who want a bombing of Iraq, who want a bombing of Iran, who want to go into Somalia, who want to do this, who want to do that, who want a clash of civilizations. So, what the President was faced with is the fact that he constituted a potential threat to these utopians' scheme, for their utopian future.

And as I know them—I've been there—remember, I did a couple of things in my life, on the SDI and so forth. I stuck my neck out on that and a few other questions, against exactly the same enemy: Smith Richardson, Mellon Scaife, Heritage Foundation, Mont Pelerin Society, Henry Kissinger, Brzezinski—the same mob. And the same mob came after me that went after Clinton. And they'll always do it. They were going to kill me. They didn't kill me; they threw me into prison instead. But that's the way the American political system works under the influence of these thugs. And under our present mass media. And they did the same thing to Clinton. And I was happy that I was able to make some contribution to prevent them succeeding in the impeachment effort they planned. They wanted to get Gore in there real quick. If they'd gotten Gore in there real quick in 1999, then you would have had hell on earth right away. . . .

Freeman: Lyn, we have a question from Wall Street. The question is: "Mr. LaRouche: Today, Alan Greenspan said that the U.S. economy is no longer in decline" [laughter]. "Mr. Greenspan said, that although unemployment is increasing, the rate of increase in unemployment is decreasing. Therefore, the Federal Reserve will no longer decrease interest rates. Nokia has reported earnings increases. My question is: Is the economy on the mend? Is Alan Greenspan lying? Or is he incompetent? Or both?"

LaRouche: Well, I think Alan Greenspan is, frankly, insane! But, he also is lying, and he's also telling the truth. But, this is what you expect from an insane person, this combination of things; you have to sort it out. In terms of, is he going to stop the decline in interest rates? I think that's true. I think the statement was issued, as a package, in order to make that announcement. Why? Well, you know what happened in Germany? What happened in Europe? On the first of the year, the German deutschemark went out of existence—according to law, permanently. Germany no longer has a currency. It has a share—or maybe so—in a currency called the "euro," or in Germany the euro [using German pronunciation]. The thing is sinking in value, by the day. The taxes have gone up, and prices are shooting up throughout Germany, simply as a coincidence of this change in the currency. If this process continues, Germany's going to be destroyed.

Now, recently, another fact: in the case of the German budget. The Eichel cut in the German government budget, was reported as causing a greater loss of tax revenue, than the amount conserved by the cuts in the budget.

We are in a situation, globally, since the Summer of the year 2000, approximately—2000-2001; 2000, in which the use of monetary aggregate to try to pump up financial markets, has reached a critical crossover point, corresponding to that reached in Weimar Germany in June-July of 1923: the point at which the attempt to bail out a financial market, by monetary pumping, costs more money in monetary emission, than you conserve in the debt you're protecting, by that bailout. Now, that's the situation the U.S. is in. What has been demonstrated, is that the Greenspan policy, of monetary pumping, to bail out a sinking U.S. economy, with this succession of cuts, has utterly failed. Not only has it utterly failed, but we're now entering a period of a potential hyperinflation—monetary hyperinflation—and a demand for increased tax rates, contrary to previous trends.

So, what we're looking at, is a point at which the interest rates will tend not to be cut, not because Greenspan had a stroke of genius, but because, his fault, his policy of cutting interest rates, has proven itself cumulatively, to be a disaster! It's also a period, in which the pressure will be on, in a period of tax cuts, to increase taxes greatly.

I have answers for that, but that goes into a longer kind of question, as to what should be done. But, the point is, I think the answer is: No, the economy is collapsing. That's a lie: It's not rebounding back. It will never bounce—dead bankers don't bounce. The Federal Reserve decision on interest rates, not to cut them any more? I think that's understandable; it's understandable, because we're now entering a period in which the hyperinflationary danger—monetary hyperinflation—is now a very major danger. Is there any sign of growth, in the economy? None whatsoever.. . .

So, we're in a situation, where the policies—there are possibilities for reviving the U.S. economy. But, none have been proposed so far, by government, or by Alan Greenspan. And, Alan Greenspan is, as I say—he's an interesting kind of nut; he's a follower, a disciple of Ayn Rand, and you know what kind of a nut that means. But, what is true, is that he's made a decision not to cut interest rates any more, because it was a bunch of foolishness in the first place.

Freeman: We have a question from Sen. Joe Neal, who is a senior member of the Nevada State Legislature; he is a Democrat. "Mr. LaRouche: How does the collapse of Enron display the position that you've taken on the U.S. economy and what should be done about it? Could you talk a little bit about what we face, as a result of the crash of Enron, and what caused it?"

LaRouche: I would go backwards, and go from the end-result of the crash of Enron, rather than trying to, say, re-write the history of what Enron's history should have been. First of all, we face a major energy crisis in the United States. The severity of this crisis is hidden by the fact of the collapse of our industries. . . . People don't realize that we have been exporting our industries: In shutting down whole sections of the functions of our economy, we have lowered the requirement of energy! If we were to try to restore the economy, to what it was at, say, 1980 or earlier, we would have to have a large amount of new energy.

So, therefore, we have the need for a national energy recovery program, which would cover, inclusively, the problems which are illustrated by and posed by Enron, and similar institutions. That means that we have to repeal deregulation; go back to the system of regulation we used to have. I think we'd just go back to that; that's adequate, because it would work: There are precedents; the machinery is all understood—it would work; just do it.

But, set, also, into motion—See, President Bush is trying to find out ways of stimulating the economy, and he doesn't know how to do it. Well, this is one of the ways of doing it. If you take Federal money, and use it, not just as Federal printed money, but Federal credit; and you put it into a national energy program, which is going to fix the national energy grid system, to make it more usable and to improve its performance: That, in itself, is a good way to make the economy grow. And, it's typical of the various measures which government can take, which are largely in the area of infrastructure and special projects; not in the private sector, as such, but in those areas alone, which will cause the economy to grow.

And, therefore, I think that what we need, at this point, is a conception, of going back—. Let me just shift gear, Joe, on this one. Look, one of the problems here, is this word "capitalism," which was almost invented by Karl Marx, ironically. Now, the United States is not, in inception, a capitalist economy. The United States was founded as the kind of economy described by the first Treasury Secretary, Alexander Hamilton, in a series of reports, on credit, debt, banking, and on manufactures. And, the model of the U.S. economy, as intended under our Constitution, is that described by Hamilton, in his Report on the Subject of Manufactures. That kind of economy defines a relationship between a public sector, which includes—today, in modern times, a government-backed sector, which is infrastructure; basic economic infrastructure, soft and hard: transportation, power generation and distribution, water management, education, health-care systems in support of the general health care. One area.

The other area, is the relationship between the urban and rural areas; the development, through the aid of infrastructure, of the means of promoting entrepreneurship in ingenuity of people—he called it, "artificial labor," essentially. This is the American System. It is not a capitalist system—that's a British idea; that's Marx's idea—that's not ours. The American System, as an American System: the conception that, we're a nation. We're committed to the promotion of the General Welfare, which requires several things: We promote public infrastructure, as necessary to develop and maintain the land-area and the population. At the same time, we promote and encourage entrepreneurial investment in applied ingenuities, to give us greater productivity and greater benefit in progress.

That's the American System. We construct laws, protectionist measures, which protect and support that policy.

So, if we look at it from that standpoint, we say, "We're going away from capitalism, as Marx defined it, back to the American System." And, I think, if Americans get that idea, of what the American System is, what the United States represents, historically, in terms of the way it was created; what its achievements were; what its betrayal of its own character has been; and how, every time we betrayed our natural inclination as a nation, we've suffered. And how we've come out of these crises, by returning to our national inclination, as typified by what Alexander Hamilton described as the "American System of political-economy."

So, I would say that, probably, what is needed, philosophically, is a discussion, of the distinction between capitalism, as defined by Karl Marx; and the American System of political-economy, as described by, among others, Alexander Hamilton.

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