Helga Zepp-LaRouche: The Trade Unions Must Defend the General Welfare!
November 26, 2007 • 12:50PM

Below is an Open Letter on Nov. 17, from the Chairwoman of the Civil Rights Movement Solidarity (German abbreviation, "Bueso"), Helga Zepp-LaRouche, to the striking members of the German Locomotive Engineers Union (GDL).

Dear Locomotive Engineers and Conductors,

The GDL is justified in striking, and that is the reason for the initial sympathy for the locomotive engineers on the part of the great majority of the rail travelers. Why should you be put off with a take-home pay of 1500 euros ($2,250/mon.), when every small stock exchange speculator puts several times that into his pocket? You are entrusted with hundreds of human lives with each train ride, and in your occupation you know many kinds of stress, which one can only begin to fathom, when the train stops once again on open track. And why should the conductors themselves listen to an almost daily cannonade of insults from rail travelers for 1500 euros? The rail travelers have a much worse opinion of the railroad than earlier, because they are continuing to miss their connections, due to late arrivals. This is only happening because the railroad management has so tightly balanced the train-connection system, in order to maximize profits, that delays cannot be made up.

But despite the unqualified sympathy for the locomotive engineers and conductors, there is a problem. Even though their demand for a separate collective agreement and an appreciable wage increase is understandable in view of what they have experienced, it still remains an individual demand. The problem, however, is that the whole international financial system is in the process of disintegrating. The whole world-wide casino-economy is in a systemic collapse, not caused by the collapse of the U.S. mortgage and real estate market, but triggered by it.

Many hedge funds and venture capital companies, the so-called locusts, are right now in the process of going bankrupt. The investment banks, and unfortunately also some of the public banks, which have engaged in these high-risk transactions, are hesitantly acknowledging their losses and are beginning to write off amounts in the billions. In reality, these banks are sitting on trillions of worthless and by now unsaleable "commercial paper" from so-called SIVs (structured investment vehicles). Outstanding payment obligations exceed the Gross Domestic Product of the global real economy several times over.

The Fed, the U.S. central bank, has cranked up the money supply, in order an attempt to mitigate the collapse of the mortgage and real estate market. This has led to an historically low dollar and to inflation. That in turn threatens the exports of Europe and Asia. In an effort to mitigate the consequences of the dollar collapse, the European Central Bank (ECB) is refraining from raising interest rates, even though they would prefer to raise them in order to combat inflation. The Asians, on the other hand, are lowering interest rates (because higher rates threaten to bring about a further decline of the dollar), and that also drives up inflation. The reality is: Within the current system there is no way out of the Catch-22 between the imminent collapse of the casino bubble and hyperinflation.

At the beginning of August, when the IKB Bank came under increasing pressure, Jochen Sanio, the head of the German Bank Supervisory Authority (BaFin), said that we were in the most serious banking crisis since 1931. In truth, the situation is much worse, because today, due to globalization, it is a worldwide problem. But the comparison is nonetheless useful, because today, once more, no other alternatives exist, than the two which were available then. Either the governments react with an austerity policy as they did then, from the Mueller government through Bruening and Hjalmar Schacht and Hitler — or we do what Franklin D. Roosevelt did in the U.S.A., namely, overcome the depression with a New Deal.

And here lies the key for the GDL. The oldest trade union in Germany — and that is the GDL, which was founded in 1867 — must be the advocate for the General Welfare of all! Who else besides the trade unions should stand up for the General Welfare in Germany? The parties represented in the Bundestag (Lower House of the German Parliament) prefer to maintain a low profile. Former SPD Party Chairman Franz Muentefering dared to refer to the hedge funds as "locusts" once — but afterwards never again.

The first step is to end the tiresome debate about the privatization of the German National Railways. It is simply not acceptable, that, for example, in the state of Saxony-Anhalt, 54 percent of the railway lines have been shut down. In some of the states of former East Germany, whole municipalities are now to be "shut down," because supposedly it is no longer economical to maintain electricity, water and sewage lines. If we continue in this way, the Cologne Cathedral will soon be on exhibit in Mongolia as a fossil of a lost civilization.

In contrast, Russia plans to build 14,000 miles of new railroad lines, 1,000 miles of which will be for high-speed trains. In the next five years, China will build 12,400 miles of new railroad lines, and modernize 10,000 miles of track by replacing them with high-speed railroads with speeds of more than 200 mph. We recall that "Commander Wu" needed only 22 months to build the maglev from Pudong to Shanghai!

We developed the maglev in Germany, but apparently we are not able to build it here. That must change! China, the Gulf States, Ibero-America, even tiny Denmark, all want the maglev. Don't we? In Germany, we don't need hedge funds and the privatization of the railroad in order to build the maglev. According to the Basic Law (German Constitution), Articles 1, 20, 56 and 115, and according to the Stability and Growth Law of 1967, the state has the right and the duty to counteract the current economic disequilibrium, and itself to invest in projects like the maglev through the productive credit generation!

In reality, the crisis of the world financial system is much worse than in 1931. However, if we are already talking about 1931, then we should remember, that at that time there was also a discussion about a kind of "New Deal." In September 1931, there was a secret conference of the Friedrich List Society in Berlin on the premises of the Reichsbank. At that conference the economist Dr. Wilhelm Lautenbach presented the plan named after him, to return to full employment through productive credit generation (www.solidaritaet.com/neusol/2003/1/zepp-lar2.htm).

In December 1931, a similar plan was submitted by the trade unions. This was the WTB-Plan, named after its authors Woytinsky, Tarnow and Baade. It was supported by the General Federation of German Trade Unions (ADGB), but rejected by the Social Democratic Party (SPD). In the U.S., on the other hand, after 1933, Roosevelt successfully implemented the same policy with the New Deal, and led his nation out of the depression. If the Lautenbach/WTB Plan of 1931 been implemented in Germany, the social conditions would have been overcome, which permitted Hitler's seizure of power two years later.

Once again: The demands of the GDL are absolutely justified. But in the current world financial and economic crisis, the problems can only be solved if we radically change the economic policy: Away from speculation, to production. We need a new financial architecture, a New Bretton Woods and a New Deal. If the GDL now becomes the advocate for the General Welfare, it will be undertaking an historical mission for all of Germany!

Helga Zepp-LaRouche, Chairwoman of the BueSo