Glass-Steagall or Die!: Trichet's Blunder

Glass-Steagall or Die!:

TRICHET'S BLUNDER

by Lyndon H. LaRouche, Jr.

April 9, 2010 (LPAC)— The introduction of the Glass- Steagall legislation under U.S. President Franklin D. Roosevelt, saved civilization from the looming threat of the global effects of a U.S.A. collapse, and went on to secure the United States and many nations of Europe and elsewhere from exactly that type of general, planet-wide catastrophe which is onrushing throughout the world considered as a whole today.

It was the termination of Glass-Steagall, under U.S. President Richard Nixon, by the incompetent counsel of Arthur Burns and others in mid-August 1971, which unleashed the chain-reaction sequence of economic catastrophes leading into the present, virtually hopeless situation under any effort to continue the present monetarist system throughout the world today.

It was this Glass-Steagall reform which rescued the war-time Europe of the 1940s, and for more than a decade later, against the ruin which would have been inevitable without the benefits of the fixed-exchange-rate system traceable to the implications of the original Glass-Steagall reform.

Jean-Claude Trichet should recognize the implications of those and related facts. In his reply to a question, in which he argued that Glass-Steagall was a U.S. matter not relevant for other nations today, he seems to show a strange indifference to the most essential of the historical facts of about eighty years of preceding world history. For, surely, today, unless reform of a Glass-Steagall type of fixed-exchange-rate system is introduced, there will never be an economic recovery anywhere in Europe for some generations yet to come.

Although the worst policies were introduced to the U.S.A. itself only under Federal Reserve Chairman Alan Greenspan, by legalization of what had been the criminal practice of use of "financial derivatives," the basis for the monstrously tragic reform perpetrated by Greenspan must be understood as a looming threat since the relevant events of August 1971.

I would therefore suggest, that Glass-Steagall is an urgently relevant issue of policy for each and every nation of Europe today. Since I have been the most successful economic forecaster of these recent decades, a skill which Alan Greenspan has recently admitted that he lacks, intelligent Europeans should review currently crucial matters of relevance accordingly.