The Glass Steagall Principle is a War Between British and US Interests

May 10, 2010 (LPAC)—Sunday saw a worsening of the collapse-crisis of the euro, with the British euro-bailout policy apparently claiming the government of German Chancellor Angela Merkel. The 27 fools of "Ecofin" — the finance ministers of the the so-called Eurozone countries, which have all bankrupted themselves by bailing out their banks while their revenues plunged in the crash — met all day in a race to announce as many as three new bank bailouts before the Asian markets opened on Monday, when a new stage of collapse is expected. Both British still-Prime Minister Gordon Brown, and British puppet Barack Obama, spent the weekend calling and pressuring Merkel for the new bailouts — which British Chancellor Alistair Darling said the UK intends to stay out of! The international rate for overnight lending among banks known as LIBOR, which had not changed by as much as one-hundredth of a point for eight months, suddenly doubled, and all the bank-money conditions of the early 2009 debt freezeup rose again from where they had been lurking just under the surface.

One action can suddenly and dramatically change the course of this disaster — an action by the United States, not Europe, and by Obama's adversaries, not Obama. That is the adoption of the Glass-Steagall policy long demanded by the most important of Obama's adversaries, economist and statesman Lyndon LaRouche.

LaRouche specified yesterday, as in Saturday's webcast, that the Glass-Steagall principle is virtually a matter of war between Britain and U.S. constitutional interest: "The clear threat to the United States of this British crisis, goes away if the U.S. adopts the Glass-Steagall policy put forward by Senators McCain and Cantwell. If it were to adopt the Glass-Steagall principle, then the British policy evaporates. If we go with my proposal, all of the crap is off the table: The United States is saved, the Brits go to Hell, and the Europeans are off the present hook. Their problem is still there, but now the problem can have a solution.

"It's now clear that some people were confused about this. Some people in the Democratic Party have opposed this, and the infection was spread from there. That's over. Nobody should be confused. The Glass-Steagall proposal from McCain and Cantwell is fully consistent with my intention and my policy over a long period of time.

"The U.S. adopting or coming close to adopting the Glass- Steagall policy would mean the sinking of the British pound. If we don't sink this British policy, we lose civilization."

"There's a virtual landslide for this, out in the mass strike among the American people. Get it through!"

Lyndon LaRouche Discusses 'The Secret Economy'

May 18, 2010 (LPAC)-- The recorded audio remarks below are excerpted from a discussion Lyndon LaRouche had to day with associates, detailing the prospect for the immediate period ahead, and the coming of "The Secret Economy."

 

Listen to Audio MP3

LaRouche's EIR Puts White House Against the Wall on Glass-Steagall Legislation

May 18, 2010 (LPAC)-- White House Spokesman Robert Gibbs received a one-two punch at the May 17 White House Briefing, over the White House's sabotage of the Glass-Steagall legislation now pending before the Senate. EIR founder Lyndon LaRouche is leading a national mobilization demanding the passage of the McCain-Cantwell amendment (calling for a return to FDR's Glass-Steagall) to the Dodd bill, which is now being debated by the Senate, as vital to the survival of the U.S. and international economy under current conditions of global breakdown crisis.

The interchange with Gibbs, which featured EIR's Bill Jones and the Dean of the White House press corps Helen Thomas, has already been picked up by numerous blogs.

Jones started off the exchange from the moment Gibbs entered the room. Not finding a seat in the "questions answered" section of the Press Room, Jones, from the side of the room, started in on Gibbs right when he got to the podium.

GIBBS: Good afternoon. Chuck, take us away.

CHUCK TODD (ABC): Okay, thank you --

EIR: (breaking in on Todd) Robert, why is the White House pressuring Democrats to back off from the Cantwell-McCain attempt to bring back Glass-Steagall?

GIBBS: I don't have anything on that.

EIR: Why is it opposed to Glass-Steagall?

TODD: (somewhat crestfallen) Robert --

EIR: Why is the White House opposed to it?

GIBBS: I'm sorry?

EIR: Is the White House opposed to reestablishing Glass-Steagall?

GIBBS: I don't have any information on the amendment. I'm happy to look at it.

Gibbs recovered his composure somewhat from this unwanted intrusion of reality, after a few questions, until he came to Helen Thomas, the Dean of White House Press Corps, who was well aware of the fight going on over the Glass-Steagall bill. After a back-and-forth with Gibbs on how Obama's foreign policy differed from Bush's in Afghanistan, Thomas lit into him for his non- response to EIR's question.

THOMAS: And one other question. Why don't you know your position on Glass-Steagall, in view of the economy?

GIBBS: I don't have any information on the amendment that might come up.

THOMAS: That's to take care of all the bankers in the Treasury Department.

GIBBS: I'm sorry?

THOMAS: I said, why do they have such a dominance of bankers in the Treasury?

GIBBS: Well, I think, based on what the Treasury Department is doing on financial reform and the way that banks are fighting us, I'm not sure that the two -- I'm not sure that statement actually lines up with what's going on in terms of financial reform right now.

Blondet on LaRouche and Tremonti

Blair Murdered Glass-Steagall, Charges French Society of Financial Analysts

May 18, 2010 (LPAC) PARIS — Nicolas J. Firzli, the chair of the Paris-based Canadian European Economic Council (CEEC) and former officer of Axa Investment Managers, wrote a long article in defense of Glass-Steagall called "Financial orthodoxy and Banking Regulation: The Lessons of the Glass-Steagall Act," Published in the first quarter issue of Analyse Financiere, the magazine of the French Society of Financial Analysts (SFAF).

Firzli starts by blaming the current mess by the "complacency" of national governments towards large financial corporations and their acceptance of the "progressive phasing out of control mechanisms presented as necessary for the 'modernization' of national economies." After an accurate description of Carter Glass and Henry Steagall's drive for the 1933 bill, Firzli, in a clear reference to today, notes that "the law stopped abuse for over six decades... from 1933 on, 'sellers will no longer be evaluators' and 'lenders ceased to be advisors.'" [backtranslated from the French]

Most interestingly, Firzli notes Tony Blair's personal role in rolling back the Glass-Steagall standards. "In the middle of the 1990s, Bill Clinton and Tony Blair develop and put into practice a 'new way of doing politics' on the center-left which became a model for many European leaders whatever their political tendencies: to impose so-called inevitable reforms, always aimed at weakening the state, taking down public services and full-fledged deregulation, Clinton and Blair called on the advice of 'impartial' experts from New York investment banks and Boston consultancies. Tony Blair even hired McKinsey and 'farmed' to them entire sectors of the British government's policy."

The Blair policy continued under Bush. Despite the Enron scandal, Bush's entourage, according to Bush's Secretary of the Treasury Paul O'Neill who tried to impose regulation, expressed nothing but disdain for the Treasury Department experts whom they branded "sterile academics" generally "lost in their thoughts."

"The disdain for academics and economic experts of the Treasury Department (who were precisely the ones consulted by Senator Carter Glass in 1932-33) is the sign of a dangerous civilian and intellectual decline... We are witnessing at a progressive weakening of the rational-humanist paradigm of the Renaissance and the Enlightenment, and together with that, we see the emergence of a new political paradigm founded on the permanent manipulation of national cultural symbols and the use of media announcement effects."

To conclude, Firzli notes that today, "the situation is far different in post-Communist China which adopted two major laws largely inspired by Glass-Steagall: the law on commercial banks of 1995, completed with the law on stock market traders of 1998 (brought into force at the very moment the U.S. started to consider scrapping Glass-Steagall). Concerned above all with their economic efficacy, the Chinese political elites decided in favor of a strict separation between depository banks and investment banks: of all industrial countries, China is the country whose financial system has best survived the crisis."

Muscardini Introduces Interrogatory To European Commission on Glass-Steagall

May 18, 2010 (LPAC)—Member of the European Parliament Cristina Muscardini of Italy, submitted the following interrogatory to the European Commission regarding the McCain-Cantwell Amendment, and its appropriateness for adoption as a EU policy. Muscardini is the vice-president of the European Parliament Committee on International Commerce, and a former Italian Deputy. Here is the translation of her interrogatory. The Italian original is posted on her website.

European Parliament Written Question to the European Commission

May 13, 2010

Cristina Muscardini

- A Glass-Steagall Standard? -

On May 6, Democratic Senator Maria Cantwell and Republican Senator John McCain introduced an amendment to the "financial reform" bill before the U.S. Senate presented by the White House, which has led to a groundswell of support. According to EIR News Service, the amendment, which is modeled on the Glass-Steagall law of 1933 that protected bank deposits from the attack of speculation at the time of the Great Depression, had the support of 78% of the population in the initial polls taken in the ensuing 48 hours, and has triggered numerous initiatives in the Congress to limit the power of banks and hedge funds. Among other things, the 1933 law separated commercial banks from financial entities, preventing the latter from using depositors' money for their business. Senator McCain stated: "I want to ensure that we never stick the American taxpayer with another $700 billion — or even larger — tab to bail out the financial industry. If big Wall Street institutions want to take part in risky transactions — fine. But we should not allow them to do so with federally insured deposits. It is time to put a stop to the taxpayer-financed excesses of Wall Street."

Some will say that the European Union is different from the U.S., but the financial crisis has been defined as systemic, and thus global. Therefore, the measures that could be taken in the U.S. to deal with the crisis would also be valid in Europe, which has independently decided on significant defensive measures against problems with the public debt and speculation, in order to protect the euro. All fine and good! But

1. Does the Commission have an opinion on Glass-Steagall?

2. Would the Commission not consider it appropriate for the EU and the U.S. to restore the principles of the Glass-Steagall Act, which by separating commercial and investment banks de facto also prohibited the issue of risky and speculative securities like those which caused the speculative bubble and the resulting financial crisis?

3. Does the Commission not believe that such measures would represent effective actions to safeguard small investors and to combat the excessive circulation of virtual money, a significant cause of the crisis of the system?

4. By imposing innovative regulations on finance, would it not be easier to find investment for the development of the real economy, which by producing wealth, would be more effective in combatting debt?

We Can Win the Glass-Steagall Reform, But We Can't Let Up

May 18, 2010 (LPAC)-- In Boston, Senator Kerry's office is telling callers that they have been "flooded with" calls in support of Glass-Steagall. In Washington State, Senator Patty Murray's office reports the "phone ringing off the hook" with calls demanding she support Glass-Steagall. In both cases, the Senators have not yet committed themselves publicly to vote for the McCain-Cantwell amendment, however, so there is a lot of work left to do—in addition to creating a similar fire under the rears of every other sentient Senator we can find.

In other words, our mobilization has set thousands of supporters into motion, and its impact is being felt. Yet, there is no question but that the White House is still marching to the tune played by the British drummer, with the intent to bury McCain-Cantwell, as well as other aspects of the bill which the British-Wall Street crowd want to get rid of. We have it on good authority that the White House is seeking to get supporters of the bill to "compromise." To make the point even stronger, on Monday afternoon, a passel of bankers, representing all the five major banks (Citi, Wells Fargo, Goldman, JPMorgan, and Bank of America) left standing, descended upon Washington, D.C., to lobby ferociously against Glass-Steagall etc.

As Lyndon LaRouche has emphasized, for the British, and their traitorous hangers-on in the U.S., this is a matter of life or death.

So, too, is it a matter of life or death for the American population, as more and more are beginning to realize.

We are coming to the first deadline point, as Senator Reid invoked cloture on Monday night, without having heard the McCain-Cantwell amendment. Will he try to ram the bill through without hearing the amendment, which he has twice publicly put on the agenda? We don't know, but perhaps, if he can get away with it. If he doublecrosses the sponsors, he runs a serious risk of not winning his cloture vote, for which he needs 60 votes. Wednesday thus becomes a D-Day of sorts—but it will by no means be the last.

Our job is to do everything we can to force McCain-Cantwell onto the agenda within the next 24 hours; nothing but victory is acceptable.

We made a considerable impact Monday. In addition to the mobilization into Senators' offices, we released Helga's appeal for urgent action on Glass-Steagall, which is now on the LPAC website, while its transcript is posted on the EIR site, and linked to LPAC. EIR's correspondent also put the White House perfidy on Glass-Steagall onto the national agenda at the White House press briefing, and was followed up by the dean of the White House press corps, Helen Thomas! Shockwaves have already begun to be felt.

Meanwhile, the global dimensions of the U.S. Glass-Steagall mobilization are being felt. Yesterday, Italian MEP Cristiana Muscardini introduced an interrogatory into the European Parliament, for the EU to respond to the Glass-Steagall question, which she posed in terms presented by EIR. Over the weekend, our nascent Belgian organization mass-leafleted for a Glass-Steagall solution, as has the Argentine LYM. We are seeing further breakout potential in Germany, through extraordinary coverage of the BueSo's N.R.W. campaign, and a glimpse of the behind-the-scenes impact of Lyn's ideas in Italy, with the publication of an extraordinary article on the 2007 joint appearance of LaRouche and current Italian Economics Minister Tremonti.

We are in the midst of a sea change, created by the intersection of LaRouche's solution-ideas, our mobilization, and the breakdown crisis which is inevitable if Lyn's ideas are not taken up. Fulfilling the promise of this dynamic requires that we drive through to win the Glass-Steagall, and use it to transform political-economic practice in this country, and the world—from launching mass life-saving infrastructure projects, to developing the workable program to colonize Mars.

This is no time to admire what we've done. The future depends upon our driving to win.

Was Iceland a Target for Economic Hit Men? - John Perkins

Was Iceland a Target for Economic Hit Men? -

John Perkins

Push the Glass-Steagall Reform Through, Ruthlessly

May 17, 2010 (LPAC)—LPAC-TV has posted a new 13-minute video on the website, "LaRouche on the Record: Glass-Steagall or Die," which succinctly reviews Lyndon LaRouche's unique, leading role in the decisive battle to reimpose the Glass-Steagall standard in the U.S. and internationally. In its concluding section, it presents Lyn's call, delivered at his May 8 webcast, for an all-out mobilization to ram the policy through:

"Go with this Glass-Steagall reform, now! Push it through, ruthlessly... If we do it, we can win. The potential is there. But we have to do it. We have to insist that everybody goes and supports this. As far as we're concerned, every patriotic American will support this Glass-Steagall reform. If they don't do it, if they're not full-bent on doing it, then they're not really patriots. Because we need this strategically, to save the United States! We need this to save the world. If we are saved by this action, we will save the world. As poor and miserable as we are, as a factor in world history, when the other side is much poorer than we are, in terms of resources and capability, we can win. So, let's go out there and win. And beat these bastards."

The bastards—Obama's British masters—have delivered an explicit threat to the United States, that they consider Glass-Steagall an act of "hostility" against them. And Obama is, lawfully, set to fight against Glass-Steagall to the death. But Obama, Lyn elaborated in discussions yesterday, is now being swamped by a problem which even he is probably smart enough to realize has him boxed in. Things that were meant to work, and in the past have worked, are not working now. As a result, there is real desperation in their camp. The whole situation can backfire on them, because the usual methods just don't work anymore. And they are running out of time to produce results, as the Cantwell- McCain Glass-Steagall amendment moves towards a vote on the Senate floor, in the early part of this coming week.

Their problem is that the usual tactics of terrifying people into line, are now just getting people angry, and can produce a backfire effect—as (soon to be former) Sen. Bob Bennett of Utah can tell you all about. Normal things just don't work anymore. Just how successful that "not working" will be, Lyn said, remains to be seen. We will have to find out the hard way, by our focussed mobilization to ram through the Glass-Steagall bill.

The coming weeks will be critical—perhaps the most decisive that any of us have ever lived through. Last week's rapid-paced developments saw Lyn's May 8 webcast, at exactly the point that the Eurozone was melting down; the lunatic super-TARP attempted bailout with $1 trillion-plus in funny-money, accompanied by fascist austerity; and the placement of the Cantwell-McCain amendment on the Senate agenda, forced by a growing mass strike uproar that is reflected in 78% popular support for the measure.

Our mobilization this past week has now begun to create a national outpouring in support of the Glass-Steagall amendment. This week, we must ram it through, ruthlessly.

LaRouche on the Record: Glass-Steagall or Die

Glass-Steagall or Die

EUROPE IS GONE

 

German Establishment Hysterical About Anti-Euro Ferment

May 16, 2010 (LPAC)—The main story in Germany's leading mass-tabloid Bildzeitung on Saturday, deals with the question of whether the deutschmark has to return—which the tabloid spends quite some space to counter, with assurances that there is no alternative to the euro, that the d-mark would be the ruin of Germany and its economy, etc. This matches with an absolutely hysterical statement by Chancellor Angela Merkel Thursday night, May 13, saying that Europe was faced with its greatest existential crisis since the threat once posed by communism, that the euro was without any alternative—it simply has to survive no matter what the cost. Merkel also declared full support for ECB President Jean-Claude Trichet, who returned the favor when praising the German government for its "debt brake" policy and called on the rest of Europe to follow the German example and go for a "quantum leap" in fiscal consolidation and EU integration.

Related are also remarks by German President Horst Koehler, when he officially introduced the new president of the Constitutional Court Andreas Vosskuhle, at a ceremony in Karlsruhe May 14: Koehler went out of his way to denounce the fact that politicians and others who failed in blocking the integration of Europe (i.e., the euro), are taking their case to the Court, which Koehler said was a road to paralysis. Although he did not name names, it was generally read as an attack on the five anti-euro plaintiffs. Koehler then also defended the ECB's super-bailout as wise and necessary, and without any alternative. A rather blatant attempt to arm-twist the new court President Vosskuhle into ruling against the plaintiffs.