by Harley Schlanger, LaRouche Organization:
The chaos unleashed in financial markets in April by Donald Trump’s temporary imposition of a broad regime of tariffs on virtually all U.S. trade partners has left heads spinning worldwide. The explanations, pro-and-com, offered by the majority of government officials, analysts and pundits, have only added to the confusion, as they operate under an ideological bubble, dominated by axiomatic beliefs shaped by adherence to the idea that economies are primarily about monetary policy, and the goal is maximizing monetary profit.
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This mistaken outlook became increasingly hegemonic after the August 15, 1971 decision imposed on President Richard Nixon by his foolish advisers — which included Paul Volcker, George Shultz and Henry Kissinger — who acted in concert with imperial oligarchs in the City of London. On that day, Nixon ended the post-World War II Bretton Woods system, in favor of what became a casino economy, offering a bonanza for speculative financial operators taking advantage of a floating exchange-rate system run by private central banks, while systematically looting the real, physical economy, which is the real source of wealth.
Overlooked at the time was the forecast from economist Lyndon LaRouche, who warned that the end of the Bretton Woods agreement opened the door for a global system modeled on that of murderous, predatory looting imposed by Hitler’s Finance Minister, Hjalmar Schacht, with the backing of London and Wall Street financiers who had that intent in mind.
The chaos of the last weeks is the direct result of this fundamental shift which occurred more than five decades ago, made worse by related policy changes over subsequent decades. These included the deregulation of banking, which produced a Too Big to Fail bailout operation for the largest privaate banks and financial institutions, and a process called “globalization”, which led to deindustrialization of western economies and outsourcing of productive industries, under the control of the World Trade Organization and the International Monetary fund, among other global institutions, which served the Davos establishment.
The peaceful dissolution of the Soviet Union at the end of December 1991 triggered a flood of further delusions in TransAtlantic policy circles about the economic implications of the end of the Cold War, centered around pillaging the abundant raw materials of Russia, through a doctrine of “shock therapy”. Most destructive was the belief put forward by proponents of “liberal democracy”, who declared that “democratic capitalism” triumphed over “authoritarianism” of the “left” and “right.” This theme fed into the utopian hegemonism of Francis Fukuyama, who declared in his influential1992 book, “The End of History and the Last Man”, that “free market” economic theory, backed by military power, is the pinnacle of human history, with all other economic models consigned to the dustbin of history. This has been the justification for the wars and regime changes run by the west under the “Wolfowitz Doctrine”, which posited the emergence of a “Rules-Based Order” policed by the U.S. as a “Sole Superpower.”
The Schiller Institute has provided extensive documentation of this process in a special document, “What Each and Every Nation Must Do Now — Wall Street Gave us this Crisis: LaRouche Has the Solution.” It opens by declaring, “The Western financial system is now teetering at the edge of a general, systemic blowout which is about to usher in a new global Great Depression, far worse than that of the 1930s.” The report explains that, contrary to the claim made by President Trump, that the U.S. has been a victim of looting by unfair trade practices of all nations, it is “the neoliberal financial system of Wall Street and the City of London,,,that created a mechanism to loot productive capacities in all countries, including the U.S.”
In contrast to the ubiquitous incompetent analysis of the crisis one hears today, the report presents LaRouche’s 1971 forecast that the breakdown of the post-1971 economy is inevitable if the retreat from the American System of physical economy were not reversed.
THE LAROUCHE SOLUTION
In contrast to the mess unfolding, which results from the incompetence of economists today, he proposed a return to the principles of physical economy, which could be implemented through a cooperative agreement among four powers. He presented this idea in a speech he delivered in Moscow in December 2009.
As he campaigned tirelessly for such an agreement, as a “New Bretton Woods”, he drafted a specific set of principles required for overdue reform of an increasingly bankrupt financial system, with his June 2014 proposal of his Four Economic laws.
This break with the collapsing neo-imperial system has been the subject of the global organizing effort spearheaded by LaRouche’s wife, Helga Zepp-LaRouche, following his death in February 2019. To guide this transformation, to a new security and development architecture, Zepp-LaRouche, through her role as founder of the Schiller Institute, drafted a widely-discussed document on the principles behind this transformation.
AN IMPLOSION OF A “DEBT BOMB”
The urgency of this transformation is evident, given the unwillingness of establishment policy circles to move toward adoption of the “LaRouche solution.”. The media is filled with unsourced stories of battles raging within Trump’s circle of advisers, including reports of shouting matches inside the White House. The immediate driver of such arguments is the growing recognition of a potential meltdown of the financial system, which is now being described as a likely result due to the “crisis of confidence” in the U.S. dollar.
While this is indeed felt as an “emergency” by the billionaires engaged in the debate — who are panicked over the evaporation of their “wealth” due to losses of more than $10 trillion in stock valuations in less than two months — and their fears of the consequences of an explosion of what some are calling the “Yellen debt bomb” of a potential default on more than $9 trillion of short-term debt coming due before the 2026 midterm Congressional elections, the “solutions” presented reflect their unwillingness to face the “big picture”, of the meltdown of the post-Bretton Woods system.
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