How to Shape the Future: Glass-Steagall is the Lever
November 9th, 2012 • 12:04pm •


Lyndon LaRouche and Jeffrey Steinberg made the following remarks to a private gathering in Washington, D.C. on Nov. 8, 2012.

LYNDON LAROUCHE: Well, people are talking about what happened recently, and certainly what has happened recently is significant, but I want to emphasize something which is much more important than what has happened so far.

I'll speak of the future. Because we're now plowing in the direction of thermonuclear warfare. We've been hovering on the edge of that since the developments in Libya, the close of that, and it has been a threat in which certain forces, including especially in Russia, with some people in the United States—the Joint Chiefs of Staff—have been collaborating to try to prevent madmen from launching thermonuclear warfare. Because as some of you know, from your expertise, that in thermonuclear warfare today, with what it means today, it means at the beginning of a launch by any party, every other party of significance will relaunch within minutes of the launch of the first party. And that will lead within a space of an hour and a half, or less, into a threatened extermination of much of the human species, if we know how the aftermath of a thermonuclear war goes, and the killing of this whole area of existence is possible.

We've come to the point that actually thermonuclear warfare, among major parties, is something that cannot be fought, but you have to fight off the threat of it. And that's where we are now.

The United States is not actually in a good position in this respect, because we, with our forces, especially our submarine forces and so forth, are the principal assailants in any thermonuclear war! Because of the decay of the European economies, the decay of other economies, that Europe no longer has the relative military capacity in depth, that it once had before, except outside of Russia itself, whereas, otherwise, the human race is in jeopardy.

So the question is, is, how are we going to shape the future? Because the past is not worth much living, except memories, and good memories and useful experience. But the past has not been a guide to the future, at least not recently. And therefore, the challenge is, how do reap that?

Now there's a peculiar feature of this, which is not an accident, but it's a failing of the development of the human species generally. The human species is the only species we know of, which is capable of seeing the future. No other species can actually see the future. They will tend to project what they hope is the future from things like statistical forecasting. And we're coming into a period where statistical forecasting is absolutely useless. And therefore governments, nations, and peoples have to start thinking in terms of what they mean, or what they should mean, by the idea of the ability to forecast the future.

I've had some experience in this. It's been my specialty since my reach into this area in the 1950s, and I've often been successful, but it doesn't work the way most people think it does. But the idea of insight into the future, as opposed to an extrapolation, like a statistical extrapolation of the past, is feasible, and that's where we are.

For example, right now you have in the United States, as a result of this election, you have a Republican Party which took the defeat normally, in the process, and the Democratic Party, both of whom approached the whole issue of now with total incompetence. What was said in the campaign generally, by both parties, was absolutely incompetent nonsense, and breeds a potential disaster for that reason. So the important thing now is to get ideas across in various circles which do represent a true way of discovering what the future is.

Now, what I mean by the future is: One sees people from statistical methods saying, well, the trend is, and therefore as a result of this trend, events will go in a certain direction, and they will not go in another direction. And there's sometimes a debate about that, but in my experience, most of these estimates have been incompetent. That the world is taken by surprise most often, compared to what they had forecast beforehand.

What's the problem now? Take the typical problem of the United States right now. Both parties approached this crisis, not just as a strategic crisis, not just as a military crisis, but as an economic crisis. Both parties uttered, with absolute incompetence, about the future. Their ideas are worthless and they will be proven worthless very rapidly. And the changes are going to come very rapidly.

Because, for example, you have both the Democratic Party, with its President of the United States, and the Republican Party, have a policy which is completely idiotic. It's a statistical process, which they are saying they're going to cut everything, except certain things they decide are the things that should be invested in, which they consider useful. Now, what they will do, by this great program of forecasting, what they will do is actually destroy everything. Because this whole system is coming down. The only way you can do it is have a change in the nature of the system. And the changes are possible. But the problem is that the minds of people who think they're geniuses and leaders of society, have no competence whatsoever in defining the actual problems of the future. That is, things which are not projections of past trend, but are a new development which intervenes to change the course of history.

This happens all the time. Most people miss it most of the time. I've overlooked it a number of times, but generally that's what we're looking for: the ability to forecast the future.

For example: Let's take the key thing of the United States and Russia today. There's a crisis there, isn't there? We have the Joint Chiefs of Staff of the United States, which are committed to avoiding thermonuclear war, and have gone to great lengths, and their chief partner in this discussion, as in the Russian case, has been that: is the attempt to prevent the imminence of a thermonuclear conflict from breaking out.

We're very close to this with the Turkey issue. Turkey's intervention in the Middle East was actually a very serious threat, of a casus belli, for thermonuclear war. Because once the United States, together with a retinue of European states, were to move in in support, under NATO agreement, with the intervention into the Middle East, you are on the verge of a thermonuclear confrontation. It's that close, it's that possible. And therefore, our ability to understand not only this, but our ability to understand what the alternatives are, in terms of economic and related policies, which will neutralize this problem. And it's not an easy one, as I think most people from relevant countries know. It's a very dangerous situation, but the problem basically is idiocy. I mean by idiocy, the inability to foresee the consequences of the present for the future, in a turning point in history. That's the problem. And that's where the least competence occurs, because governments tend to grab onto...

For example, take the history of modern warfare. The history of modern warfare began with the ouster of the Minister of Germany (Bismarck) and they got rid of him in 1890, Bismarck, and Bismarck had made an arrangement with Russia, with the two Czars successively, one after the other. And the two Czars had agreed with Bismarck that they would not permit the British to use that old fool, the Austrian Emperor, in order to start a Balkan War! Because the intention was to use a Balkan war as a trigger for world war, and as long as Bismarck was sitting on top of things, with an agreement with Russia, there was not going to be that kind of war.

So, the British, who wanted the war, simply did the obvious thing: They got rid of Bismarck, through the British Royal Family's connections. And the war began in 1893. Bismarck was kicked out in 1890, the war began with the agreement between Britain and Japan to conduct the war on China. That was the beginning of a long period of warfare, which has been going on continuously from that time, to the present day. Different expressions of wars, recurrence of wars, new recurrences of wars, and things of that nature.

So the problem today is to open our minds to the fact that statistical forecasting is not only intrinsically incompetent, as forecasting, but it can be also a death sentence, imposed by people who make fools of themselves. And therefore, the important thing is, those of us who can understand, or bring themselves to understand, the principles of the future... Remember, mankind is the only species which has an organic capability of foreseeing the future.

And this doesn't work in the simple projection, but it sees a change in direction is boiling underneath the surface. Like this case of the Bismarck. Bismarck was a forecaster. Another great forecaster was MacArthur, General MacArthur. He was one of the most brilliant forecasters in existence, and he showed that when he was a colonel, being promoted to General officer, in France, in the First World War. He was, as in Inchon, and the Inchon event in Korea, he was the greatest genius in warfare, because he didn't like warfare. He tried to avoid it. He tried to anticipate the warfare before it happened, and then try to avert it. He opposed the dropping of the nuclear bombs on Japan.

Why? What was his argument? First of all, it's not necessary, and secondly, you're introducing a factor into history which is going to kick you in the face sooner or later. So, there was never any need, actually, for use of nuclear weapons.

Roosevelt would not have done it, but Truman, who was a fool, did. And it did it under British direction. Because the British wanted the war.

Well, we've been in a period of warfare, of international warfare, since Bismarck was kicked out of the Chancellory. And that's a long process.

Like now. What's the situation with the Turkey situation? We've got a situation now in the Middle East, Near East, which is extremely dangerous. And a foolish move can lead to a disaster. Fortunately we have in the case of the negotiation between Russia and some other forces, and the United States, in particular, we have an agreement, with some people in the United States, with the Joint Chiefs of Staff, but not all of the ruling forces in the United States agree with the Joint Chiefs of Staff on this policy.

The President of the United States, the current one, was inclined to go to world war. The Joint Chiefs intervened to prevent us from going to world war by going into the Middle East in a way that would've triggered World War III. So, a complete lack of understanding of the future.

And the fact is, again, I say, that it is possible to know the future. That's my specialty, and it's perfectly possible. Mankind is the only known species, which has been able to get an accurate estimate, a feeling, of what is coming down on the future. And any human being is potentially capable of doing that. It's the characteristic of the human species. It's the thing that makes the difference—the human intellect makes the difference between man and beast, and that's the fundamental difference. And that difference is the ability, if you develop the capability, and respond to it, to sense the future. For example, to sense that another battle can lead to a general war. That sort of thing.

And you take the cases of studies of warfare, especially modern warfare since 1890, you see in that time this has been over and over again. They start the incendiary process of conflict, and the incendiary process of conflict then takes over and becomes the general warfare.

Now the other side of it is, economics. And I can tell you that both the Democratic and Republican Party leaders are idiots on economics. What they're proposing, both parties, will not work. There has to be a complete change. They're going with what they call an austerity program. They're saying they're going to select certain parts of the economy, which they're going to maintain. Other parts they're not going to maintain—that's their argument. And they're going to lead it for a period, and what will happen, actually, is they will trigger, as of now, under the present system if they do that, there'll be a runaway hyperinflation.

Because they assume that money itself—that's their presumption—that money itself determines the future. But it's not money itself; it's production. It's the development of new technologies. These are the factors which determine history in a positive way. And what they're doing now, if they continue this process, they will go very quickly, in both Europe and in the United States and elsewhere, into a hyperinflation, an hyperinflationary explosion.

Because if they try to cut, you cut production, if you limit the number of people working, if you lower the standards of technology, that is not going to be an austerity measure which saves the economy. Every nation has to fight like the devil, so to speak, to make sure that they're having the technological progress, the realized technological progress, which allows us to cope with the future.

And that's where we stand. That's where I stand. And I see the only hope for mankind, in general, is that we must: First of all, we have to deal with this question of threat of general warfare, thermonuclear warfare. That threat exists. It's more acute today than it ever was. Because the economic situation, the economic crisis, especially in Europe, and in the United States, that economic crisis is a bomb. It can set off general warfare. And it will be thermonuclear warfare.

Under this President? Thermonuclear warfare.

So therefore, our problem is to understand this, to foresee not only what is coming, but to foresee what the alternative could be. Which means that certain kinds of understandings and agreements are preciously important for all of us. And it's those who come to an understanding of this problem, who will be able to contribute to solutions to this threat. And that's my specialty. That's what I'm concerned about.

I have other things I'm concerned about as well. But this is my specialty, and the point is that the human species, contrary to rumor, contrary to the many traditions—the human species is different from all other living creatures we've ever known in the whole history of biology. And that is human creativity, the ability of the mind to foresee its ability to make a change in the course of economy, or similar kinds of things.

And which therefore, inspires the people who understand this, inspires them to take the action which they know exists. Whereas the typical person, who's doing statistical forecasting, cannot foresee the alternative. They see a deductive result, and therefore to them it becomes the inevitable, and the more foolish people, and foolish leaders, always think about the condition is the inevitable. And anyone who's a real leader, a capable leader, is always the person who says, this must not happen, and therefore, this is what we must do, to avoid this.

We have the same thing right now between Russia, in this area, and the United States, in terms of Dempsey and company. They are defining the problem as MacArthur would have done. Look for the alternative. Don't try to treat the present as inevitable. Change the agenda. And understand what the change is that's available to be made. It requires what is called an imagination, and what we have among most governments today, in Western and central Europe, in the United States, is a paucity of insight into reality.

And it's that very stubborn stupidity, of clinging to traditions, or clinging to what they think are their commitments, which can lead mankind to its own self-destruction. And that's the challenge.

Now we have some things, Jeff has been working on this thing, particularly the Benghazi development as looked at from the standpoint of the United States policy. We recently had a discussion of this publicly in the press, and he has the same information that he used before in the presentation with the press here. And also, he and I are also available to you to answer questions.

JEFFREY STEINBERG: Thank you. A lot of very foolish leaders, particularly in Western Europe, cracked open the champagne on Tuesday night, when they saw that President Obama was re-elected. And the principal reason for this, especially in Western Europe, was that the European leadership is desperate to assure the continuation of the very destructive hyperinflationary policies that Mr. LaRouche just mentioned. And the continuation of Obama, along with Bernanke and whoever replaces Geithner sometime in the next few months, was seen as the guarantee that the United States, through the Federal Reserve, will continue to pump massive amounts of money—most of it covertly—into the European Central Bank, to continue the policy of bailing out the European private banks, the European government debt, without doing anything to address the fact that they're creating, on a trans-Atlantic and probably global scale, a replay of the Weimar hyperinflation of 1923.

And so, to the extent that that policy continues, it's fair to estimate that sometime in the very near future, perhaps even before the end of this year, that you're going to have some kind of major hyperinflationary explosion that's going to hit the trans-Atlantic region.

The European bailout has been so centrally carried out through the United States, that something as minor as Greece announcing a default, which could happen within the next week, and at that point, moving to leave the Eurozone, could have massive and immediate repercussions across the Atlantic, here into the United States.

Now, one of the things that Governor Romney said during his campaign, that was actually correct—although he never presented any alternative policy—was, at a few points during the debates, he blurted out that the United States is going in the direction of Greece. Now, that's not because President Obama is some closet socialist or something like that, but it's because of this hyperinflationary bailout policy. The projection is that by the end of this year, without a radical change in policy, the U.S. government debt is going to reach $16.8 trillion, which means that every single individual in the United States is carrying in the range of $250,000 in debt, without considering any of their own personal indebtedness. This is 35% greater than the debt in Greece, and is even a more significant increase over the indebtedness of Spain, Portugal, Italy, Ireland, and even France. So the whole trans-Atlantic region is really right now, not down the road, but right at this moment, on the cusp of that kind of a hyperinflationary blowout, which will have massive repercussions around the globe.

Instead of investing in even the most basic infrastructure, the plans of which have been on the books for decades, trillions and trillions of dollars in the last four years went into bailing out bankrupt financial institutions, not just in the U.S., but on both sides of the Atlantic. So, you get an event like the hurricane that hit the East Coast of the United States, rather than implementing plans that had been designed years ago, had been discussed at conferences in New York City to build a barrier against flooding, because the storm that happened had been long anticipated as almost certain event—a $6 billion development program instead is now going to require $50-$100 billion in reconstruction. And that money is not there and it won't happen, because of the commitment to the austerity policies.

Now, back in 1972, during a Presidential election that bears a lot of similarity to the current one, Richard Nixon was re-elected President by a landslide against Senator George McGovern, and at that point, nobody foresaw the events that would happen almost immediately after that, leading to Nixon's removal from office. It's an understatement to say that the crimes that have already been committed by the current administration, go far beyond those that were ever committed by President Nixon. And these issues, now that President Obama has been re-elected, are not going to be swept under the table. They're going to come up very prominently, and I think one of the major of those developments that I'll go through in some detail right now, are the events that occurred on Sept. 11th, 2012 in Benghazi, Libya.

This was the second 9/11 attack, and there's no other way to describe it, and effectively, two things happened that rise to the threshold of high crimes and misdemeanors under the U.S. Constitution, involving President Obama. One of them is the fact that there were massive warnings well in advance, and those warnings were ignored and therefore even minimal improvements in security at those facilities in Benghazi were outright rejected. It was never carried out. Who made that decision precisely, how high up in the Administration it went, we don't know at this moment, because there was an absolute silence at the White House on what in fact happened.

But we do know certain things on the basis of documents that are not leaks, that are not rumors, that are not media spin or speculation, but are government documents that were made available from the State Department, and then made public by the House Government Oversight Committee, posted on their website, available for anybody who cares to look at them. I've selected a handful of those documents, to just give an idea of two critical aspects of this Benghazi issue. Number one, the knowledge in advance that was ignored, and therefore there was no security. And then the decision to systematically, repeatedly lie to the American people afterwards, for reasons tied to the elections primarily. ...

[Steinberg reviews documents that were also in the Nov. 2 press conference,]

Now the misrepresentation of the events on the ground was not something that was confusion, or fog of war, or anything of the sort. It was a critical moment in the campaign, and there was a conscious decision at the White House not to send Secretary of State Clinton on TV, because, of course, the State Department had the most detailed profile of what had happened. But they sent Ambassador Rice, and then the President followed afterwards, and made similar comments on his own.

So, this issue is not going to go away, particularly now with the President's re-election. The issue of the policies related to the global war on terrorism will not go away. The issues of the drone assassinations, the issues of the Tuesday afternoon weekly meetings setting assassination targets. All of these things now are going to be issues that are going to be on the table, and they will be on the table because we are heading into major strategic crises, what Mr. LaRouche identified earlier in terms of the hyperinflationary blowout, and even more immediately, the war danger.

Yesterday, the major news coming out of the Middle East was that now that the President has been re-elected, plans are being promoted by Prime Minister Cameron of Britain, and by some people in the Administration here, to immediately escalate to provide heavy weaponry to the Syrian opposition, and perhaps set up a safe zone, perhaps even a no-fly zone, around part of Syrian territory.

What happens if the Russians respond to certain treaty agreements they have with Syria, and provide advanced air defense systems as the U.S. and NATO are creating a no-fly zone, which obviously means an act of war, as we saw in the case of Libya?

So the issue of a strategic confrontation, the choice of whether to go in that direction or to break from this pattern, and go in a direction of a strategic cooperation to deal with both the hyperinflationary crisis, and to once and for all put down the war danger, is on the table right now. It's a moment of critical choices in the immediate weeks ahead. This is not something that can be postponed into next year, or into the year after.

And so, this is the state of the world right now.

LAROUCHE: Let me put a point on this event.

The option here, in light of what I said earlier, is that if there is an economic solution made clear on this basis, particularly within Europe and also in the United States.... Remember what the Administration is doing, what the Republican Party was doing before, is an absolute folly.

Now, the best way to spread a war is to spread desperation. And a state of economic desperation has often been the pretext for the spread of major wars. This is the danger. Therefore, if the economic solution is put on the table—and there is an economic solution—then we lessen the danger of war. That has often been a principle. If you want to drive a nation to war, drive it to desperation. You want to drive a nation to war? Take the government of the nation, and drive them to desperation, where war is the only way they can see of covering their butt. And that's the kind of situation we face.

Therefore the crucial issue—you cannot separate these events that occurred and the process they represent, from the economic issue now. Now you know, in particular, that both the Republican Party and the Democratic Party, in going out of the election process, emphasized that they each had an economic policy which was going to be enforced immediately on the future. The Republican version is different from the Democratic version, but they're both the same kind of nonsense, because they're talking about austerity. Now austerity is a very dangerous word, in terms of a nation, the United States, where we have a great number of people are desperately unemployed!

We have the situation in New York and New Jersey. These cause desperation. Governments sometimes act with desperation, because they want to cover and distract from a problem that they haven't been able to deal with.

So, we're in a situation where the factor of distraction becomes a tendency.

The increase of the intensity in terms of Syria, the Syria situation is, again, is a potential cockpit, because the Israeli situation was somewhat brought under relative control, but it's not under control, and therefore, we're still in a hot-box.

So, the crucial thing, from my standpoint, is, is there an economic solution? Well, there is, if they cut the nonsense out. Because, if, for example, there's a policy which is very popular now among leading circles in Europe, especially in England, of all places, for going to Glass-Steagall, a Glass-Steagall policy. The revival of a Glass-Steagall policy, which was initially founded by President Roosevelt, that policy would again lead to a solution for the economic crisis. That means you would simply shut down a certain kind of bank, or put them into a different category; you would go back to those banks which qualify as Glass-Steagall banks, and the other banks would be on their own. They would either fall or survive, it's up to them.

But then, the U.S. government would have a responsibility, to issue credit, in order to revive the U.S. economy. The revival of the U.S. economy, by programs which are really available right now, they're large-scale projects and other projects, if they were put into operation, if Glass-Steagall were put into place, other things were put into place which are part of that same program, we could stop the problem!

Because the problem in the world today, is you have a big hyperinflationary program in the trans-Atlantic region, a hyperinflationary program which has spread throughout much of the world, from Europe and from the United States itself. And this hyperinflation is actually the tinderbox, which can lead to thermonuclear war, because of desperation factors.

And therefore, the importance of changing the policy of the United States, into going back to a Franklin Roosevelt type of policy, which is the only thing that would work, you have leading circles in the United Kingdom, for example, who are pushing this very strongly; they recognize the importance of doing it.

You have people in Europe, the situation in Spain, the situation in Portugal, the situation in Greece, the situation in Italy, these are all dangerous situations because they are sparks, which can ignite the kind of crisis that can spread to war. And thus, the economic solution, and seeing the economic solution, and seeing what the the danger is, of a lack of an economic solution, means that we are still hanging, on the verge, of a threat of a thermonuclear war.

And the point is, that you have to change the political leadership, then, and sometimes the political leadership is changed by a very subtle methods, not by changing people, and dumping some out and pulling some in, but rather by simply changing the policy. And when the policy is recognized as an alternative to desperation, you can often quiet down a serious situation. Which is exactly what Bismarck was doing, until he was ousted in 1890, where he had actually delayed the attempt of the British, to organize the foolish old Kaiser of Austria, who was going to start a Balkan War. And because Bismarck made an agreement with the Czar, both Czars, actually, in succession, the war was held off.

When Bismarck was thrown out of office, under the British Monarchy did that, actually, in Germany, and that changed everything, and then we had what became known as the Great War, which was actually fought as battles, from 1893 on, into the present day.

There is only one real war, of this type. It started when Bismarck was thrown out of office, and it's continued off and on, again and again, to the present day: Different characters, different scenarios, different things, but the same thing, of an imperial sense of trying to drive the world, into submission, to a new world system. And, it's useful that we try to prevent this. We have to prevent this kind of thing, there's no question. But you have to do it successfully. And to do it successfully, means, you've got to change the economic picture. The economic picture is the lever, by which to control these kinds of processes.