by Dennis Small
Other than LaRouche PAC, no signs of sanity have emerged in Washington, D.C. over the last 24 hours on the government shutdown. If anything, the two sides are more entrenched, reaching new heights of sophistry, and with no serious discussion of economic policy underway. Moreover, the shutdown crisis, now in its second day, is currently leading seamlessly towards a U.S. government default crisis as early as Oct. 17, when the debt ceiling will be reached. Judging by his actions, President Obama seems perfectly content to let the shutdown continue, and to bring on a default as well.
But, as Lyndon LaRouche emphasized in discussions on Tuesday evening, this is not simply a budgetary crisis, or a debt crisis, or a political crisis. "It's inherently a breakdown crisis. There is no way this is going to be solved in a normal sense." The only "easy" solution is to implement LaRouche's full Glass-Steagall program, to pave the way towards a global renaissance around a fusion economy. Nothing else will work.
And yet, stopping Glass-Steagall and continuing the unworkable (and deadly) bail-out/bail-in policy of the British Empire, is the single-minded obsession of the City of London and Wall Street. Today, Obama met at the White House for an hour with a dozen top representatives of Wall Street's criminal plutocracy—including Goldman Sachs's Lloyd Blankfein, Bank of America's Brian Moynihan, and JPMorgan Chase's Jamie Dimon—who used the threat of an imminent default to bark out their orders to the White House and Congress: Raise the debt ceiling without drama or delay, in order to keep bailing us out, or face the apocalypse. "We told Mr. Obama exactly how bad it would be," the thuggish Blankfein told the press afterwards.
The banksters also met Treasury Secretary Jack Lew, House Financial Services Committee chairman Jeb Hensarling, and Senate Banking Committee ranking member Mike Crapo. Other than Hensarling, whose views on the matter are still opaque, this White House-Republican combination consists of active opponents of Congress restoring Glass-Steagall—and they control the gates of the two key committees for introducing Glass-Steagall to the floor of the two houses of Congress.
What will happen if Wall Street doesn't get its way? A newsletter issued by Standard Chartered bank in New York was blunt: "A default would likely lead to a renewed sharp economic downturn, pushing the economy back into severe recession and probably another serious banking crisis." So was the London Financial Times: "Oct. 17 looms as a potentially far more dangerous moment, as it could trigger a technical default on US debt and turn America's domestic political stand-off into a global crisis."
The irony, of course, is that that is also exactly what will happen if Wall Street and the British do get their way. Either way, the trans-Atlantic financial system is irreversibly disintegrating, and the only way to prevent full rigor mortis is with Glass-Steagall and the full LaRouche program. The American people are universally, understandably enraged at the destructive clown show going on in Washington. But unless they make that precise point clear to their representatives, and demand that they implement Glass-Steagall now, their fury will come to nought.