Directed Credit and the Science-Driver Principle Emerge In Russian Economic Policy DebatesOct. 21, 2008 (EIRNS)This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).
A potentially productive discussion is percolating throughout Moscow economic policy-shaping layers, as economists and political figures from different quarters grapple with the problem of saving the national economy, in the face of the global crisis. One of today's highlights was an interview by former Central Bank chairman Victor Gerashchenko on Radio Ekho Moskvy, in which he advocated a directed-credit policy toward industry, and cited the science-driver effect of successful such programs in the United States in the past.
During the 1990s rampage of monetarism, many of those engaged in these discussions were opposition figures, including some who studied the writings of American economist Lyndon LaRouche. Thus, it is no surprise that "LaRouche has become a very popular thinker here in the most recent period," as one long-time Moscow reader of EIR remarked today.
Interviewed about the roots of today's crisis, Gerashchenko gave a refreshingly accurate account. For more than 25 years after 1944, he said, there was the Bretton Woods system, with the dollar pegged to gold. "In 1971, the U.S.A. gave that up," he said, and from then on, "their growth was essentially inflation-driven."
Gerashchenko was asked about the recent crisis plan put forward by Academician Sergei Glazyev, who proposes that the Central Bank issue rubles based on credit applications from Russian producers, rather than on the current basis, where the Russian money supply is increased through the conversion of dollar-denominated export earnings. Gerashchenko expanded this idea with a highly interesting reference to "the example of the U.S.A.not the consequences today, but at how they did develop a huge country for over 50 years, and keep their level high for a long time." Yes, there was military spending as a driver, but "that very military spending also means, as a rule, technological breakthroughs in various areas simultaneously." If the USA enjoyed success by issuing "treasury bonds, and even simply currency," for such earmarked purposes, said Gerashchenko, "why can't we do that?" It should work, he added, "as long as the money goes for productive purposes."
At an October 2002 conference in Moscow on the global financial system, where a report was presented on one of the first versions of LaRouche's New Bretton Woods recovery proposal, as promoted by Italian parliamentarians, Gerashchenko welcomed that approach. Investment must be an instrument for mobilizing capital for real development Gerashchenko said at that time, and he called for launching major economic programs, such as transport infrastructure development in Russia.