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Schiller Institute-ICLC
Labor Day Conference

"The Crash You Were Hoping For is Here"
September 4-5, 2004

Panel 3:
Animating Dead Economics
Presentation of Marcia Merry Baker

EIRNS/Stuart Lewis
Marcia Baker Merry, with Paul Gallagher looking on.

Schiller Institute/ICLC Cadre School
September 6-7, 2004

Audio-Video Files

Spherics Panel
(Audio/Video Coming Soon)

Helga Zepp-LaRouche Address
(Audio) (Windows Media Video)

Bruce Director on Gauss
(Audio) (Windows Media Video)

Panel: Congress of Cultural
Freedom (Fascism):
(Windows Media Video)

Pedagogical Musem Photos

Link To Conference Program
and Webcast Audio-Video


Panel 1: Keynote (below)
Introduction: Amelia B. Robinson
Keynote: Lyndon H. LaRouche, Jr.
Discussion: Question and Answers

Panel 2: Keynote II
Introduction: Amelia B.Robinson
Keynote 2: Helga Zepp-LaRouche Discussion

Panel 2A: Drama: West Coast Drama with Robert Beltran (Video)

Panel 3: A War Plan for November
Debra Freeman
Harley Schlanger
Lyndon H. LaRouche, Jr.

Panel 4: Animating Dead Economics
Intoduction: Paul Gallagher
Part 1: Marcia Merry Baker
(text only , for PDF with Graphics)
Part 2: John Hoefle

Panel 5: Tribute to Sylvia Olden Lee
Introduction: Dennis Speed
Remarks: Lyndon H. LaRouche, Jr.
An Die Freude Words and Music

(This panel is mostly audio-video.)

Panel 5A: Music (West Coast Panell)
LaRouche Jubilee Singers


Photo Album

Related Pages

This report is adapted from a panel discussion that took place on Sept. 5, at the Labor Day Conference of the Schiller Institute, whose theme was, "The Crash You Were Hoping For Is Here!" The panel featured EIR Economics Editor Marcia Merry-Baker and EIR Economics researchers John Hoefle and Paul Gallagher, who also served as moderator.

Click to get PDF version with Graphics

If the United States is to survive the coming onslaught of financial and economic storms, the people of the United States must not only evict the Bush-Cheney gang, and their fasicst economic policies, from the White House on election day, but must also ensure that the incoming John Kerry Administration carries out the emergency economic recovery policies of Lyndon LaRouche. In order to rally both the Kerry campaign and the American electorate around these urgent measures, we must first induce them to confront the reality of the economic crisis we face, by demonstrating the disastrous, long-term, fundamental changes in U.S. physical economic processes over the past 40 years. Marcia Merry-Baker addresses the buildup, beginning in the early 1930s, with FDR's policies, while John Hoefle documents the deconstruction of America's infrastructure and industrial might, that took place after the 1960s.
This is the beginning of work in progress, Gallagher declared, for the campaign and beyond, ordered by LaRouche before the Boston Democratic convention. In his introduction to "What EIR's Economic Charts Will Show You," in the Sept. 3 EIR, LaRouche said:

"Henceforth, the core of EIR's reporting on the U.S. economy, will be a graphic portrayal of the way in which the physical health of that economy is measurable as changes in comparative physical, as distinct from monetary-financial values. This will include such treatment of physical changes, as these are to be measured county by county, for the entirety of the U.S.A., over a base-line period for comparisons, from approximately 1926 to the present. These measurements will not be made as mere comparisons; they will be measured, where appropriate, by aid of animations, as ongoing processes."

The Build-Up - - Of U.S. Economic Geography

by Marcia Merry Baker

To look at the process of the build-up of the economic geography of the United States over the past century, we begin with the year 1926, designated by Mr. LaRouche as a good starting-point, as it was the peak of rail density in the U.S.

Rail Density. A map of U.S. rail lines in the 1920s shows the high-density in the Northeastern states, and the Great Lakes/Upper Midwestern states; and the low density overall in the West. But the many developing regional webs and centers are very evident.

Barely two generations earlier, in 1883, the first Atlantic-to-Pacific link-ups were made. Significant branching out points are in the making—especially around Pacific harbors in California, and Puget Sound; and along river passage points—for example, St. Paul/Minneapolis, on the upper Mississippi; Kansas City, on the Missouri River; Louisville, on the Ohio. And there were important innovations that tied regions closely together, for example, the first refrigerated railcar in 1868.

Also keep in mind that, already by 1910, some of the new lines in the East were inter-urban electrified rail routes. For example, Baltimore to Washington, D.C.; Baltimore to Annapolis. There was the 76-mile Hagerstown-Frederick Maryland system. Grandest of all—the New York Subway, which opened in the 1910s.

Western Pennsylvania/Ohio River Locks And Dams. Staying on the matter of surface transport networks, there were the waterways, and their interconnections with rail. Here is shown the upper Ohio River, and the tributaries that form it—the Allegheny, and the Monongahela, and in turn, their tributaries, the Youghiogheny and others (Figure 1).

Already by the 1920s, extensive improvements existed. The Ohio was the second biggest cargo-carrier in the nation after the Mississippi (and remains so to this day). The year 1929 was the completion date for a series of 46 locks and dams on Ohio system, some of which you see here. They were done by the Army Corps of Engineers, which had been commissioned in the 1800s, to do just such domestic improvements, in the military logistics tradition of West Point.

Besides navigability, flood control was a major goal, especially in the Ohio and Tennessee Basins. Appalachian spring run-off can be sudden and heavy.

In 1927, on the lower Mississippi, an epic flood swept away whole towns. The Army Corps was mandated to work on major water control systems—levees, diversion channels, embankments, etc.

As of the 1920s, there were transportation (and flood control) developments of note in many locations—not systemwide for the most part. For example, two locks and dams had been built on the upper Mississippi between 1913 and 1917. In 1925, the Wilson Dam was completed on the Tennessee, at Muscle Shoals, in Alabama, and so on.

In sum, the combined networks of rail—both steam locomotive, and electrified inter-urban—and waterways amounted to a tremendous web of corridors for development. The gaps stand out; but the process is clear. There were plans and hopes for hemispheric development corridors into Mexico, Central America, and South America; and to the Canadian Northern Territories.

Land and Water Resources Base

Now to the underlying resource base of land and water. Figure 2 shows continents, whose regions are delineated by relative soil moisture—a basic land-use characteristic, bearing on agriculture especially.

What stands out in North America, is the presence of one of the world's largest deserts—known historically as, the Great American Desert. The dividing line for this arid land region, is whether it gets at least 20 inches of rainfall a year. This isoline runs north-south down through the High Plains, showing the red zones to the west.

So the eastern and central states have plentiful water, high soil moisture ratios, and many river networks (and rail).

The West: scarce water; the only major rivers arising out of the high Rocky Mountain chain, are the Colorado, flowing to the southwest, and the much smaller, Rio Grande (Rio Bravo in Mexico), to the southeast. Neither are navigable channels. Farther north, the Columbia—westward, and the Missouri eastward, have comparatively much more water, and navigation potential as well.

Cultivated Area. Figure 3 shows the pattern of cultivated land, one of the major features of land use, along with forest, permanent pasture, etc.

The cropland area corresponds to what we just saw about the western drylands regions. There is a void in the West; extensive croplands are in the central regions, the eastern Piedmont, the Gulf Coast, where drainage permits, etc.

As of the 1920s and later mid-20th Century, a total area, ranging from 350 million acres to over 450 million acres of land were in use for cropping in the U.S. This land-use pattern was already established as of the 1920s, and although its area goes up and down, it has not changed drastically to the present. This is equivalent to over 500,000 sqare miles, or more than twice the entire area of France; or half of Argentina.

What was the question in the '20s, and all along, is how productive can the land be made to be. Water is fundamental, with one's first thought being, irrigation. As of 1900, some 3.7 million acres in the western lands had been irrigated. The vision and work for what later became California's great Imperial Valley project, was underway as of the 1860s, to divert some of the lower Colorado River flow, to create a situation for growing two to three crops a year in the favorable climate.

But provisions for drainage were far more extensive nationally, and vital to agriculture output.

Drainage. By drainage, you can mean ditches, canals, or even underground pipes. Miles and miles of clay pipes, about 1 foot long and 4 inches across, commonly called tiles, were laid underground by 3 or 4 feet, every 60 feet, in large areas.

Figure 4) shows where things stand as of the end of the 1920s. By then, nearly 50 million acres had been drained, including large parts of the swampy upper Mississippi Basin, and lower Ohio, and southward.

Just a generation earlier, much of southern Illinois, Indiana, and parts of Ohio, were still marshlands, with cat-tails, frogs, and mosquitoes in abundance. But 9 million acres were drained, as of 1900.

The 1902 Land Reclamation Act pushed forward this whole process, calling for land improvements through irrigation and drainage.

In 1920, a "Census of Drainage" was begun, to map progress. Irrigation area also continued to expand, amounting to 19.5 million acres by 1930.

Patterns of Agriculture. Consider what this all meant for patterns of agriculture—given the combined presence of fertile lands, water and transportation. We take one staple crop—wheat. The Agriculture Department has done 100-year animations of 10-year changes in relative output by state.

Keep in mind one thing about wheat. There's "winter wheat"—planted in the fall, and harvested in the early summer, where the climate is warm enough; or planted in the spring and harvested later in the northern latitudes. Winter wheat is the bread wheat; and spring wheat, or durum, is essential for good pasta.

Delineation of various specialty regions that came to emerge over the decades is shown in Figure 5. Look, for example, at the dairying and hay region. It was closely settled, very interrelated with cities. Milk went to cities by train.

Power. In agriculture, as of the 1920s, windpower was still common. And horsepower. (If you visualize an oats output map, by state, you will see it grown all over the country as of 1920s through the 1930s, and then fade out to next to nothing by 2000). The critical question, apart from the shift to the internal combustion engine, was electricity.

A map of high-power electricity transmission lines c. 1918 would show a pattern of need in the West, in California and the Northwest, to transmit power from relatively remote place to place. There would be next to no electricity in the farmbelt; electricity is concentrated in urban areas.

During the 1920s, we find significant growth of high-voltage lines, but the rural areas were conspicuously left out. In most rural states, only maybe 2% of farms were electrified, those that happened to be near towns, for example, in Ohio, near Cleveland. Remember, that the Morgan and related financial cartel interests who owned electric companies, bitterly refused to supply outlying areas, and fought any government regulation that would mandate this kind of public service.

If we focus on the patterns of high-density electricity areas, and overlay this in your mind, with rail, waterways, and other factors, including human skills and urban culture—you will see the industrial concentrations. Growth of industry occurs in tandem with agriculture and infrastructure-building generally.

Manufacturing Concentrations. The region shown in Figure 6 is not, of course, continuously industrialized, but the boundaries indicate the area in which the largest manufacturing centers and belts are concentrated, from light-processing, to heavy metals and machine-buidling. For example, the Birmingham, Ala. steel complex; the textile centers at the fall lines along the eastern seaboard; and the heavy manufacturing centers, such as Pittsburgh, through Wheeling, through Cleveland, and upwards into Detroit, etc.

Figure 7 shows relative size of annual raw steel output. As of 1914, this one triangle region—from Pittsburgh to Cleveland and Wheeling, W. Va. supplied two-thirds of all U.S. steel output produced.

Population Density. As of 1926, the U.S. population was in the range of 117 millions. The Pacific West has settlement density, but otherwise, the eastern states are most populated, with the dry and mountainous Western states very little settled.

Some of the dynamics:

Population Change, 1910-1920. The Pacific West and certain centers in the West are growing, but also evident, are population increases in both the Great Plains counties, and in the industrialized belts, where immigrants were streaming in. For example, many Scandinavians were coming to the Dakotas and Minnesota; and mass waves came to the steel belt from Poland, Serbia, and other parts of Europe, etc.

Population Change, 1920-1930. Farm counties were growing on the Plains; cities were increasing; the Pacific Coast region was growing. Immigration continued.

We keep in mind that there were deep problems. President McKinley had been assassinated in 1900, and a string of evildoers came into office, like Teddy Roosevelt, and the KKK-loving Woodrow Wilson. But the advance in infrastructure is evident; the characteristic was growth.

1929 Hospitals, by county. We've been looking at hard infrastructure; now we will begin to examine soft infrastructure. In 1929, there are 1,292 counties, out of a total of 3,076, which have no community hospital at all. 1,784 counties did, most in the industrialized region, and there were many Jim Crow-segregated hospitals in the South, so there was still much work to be done.

Recall that this decade we have talked about was not called the "Roaring Twenties" for nothing. Speculation of all kinds was growing to the break point, hitting agriculture counties hard all through the '20s, then erupting in a 1929 crash and Depression process.

The FDR Response

We now look at the FDR response: unprecedented, deliberate development of infrastructure. We begin again with the terrain and rivers.

Much work had already been done on the central core of the nation—flood control on the lower Mississippi; the Ohio system was in use already, etc. Huge drainage of the river lowlands. See how this all formed a wide central corridor.

But what happened now, was an unprecedented effort to carry out these improvements in a coordinated way, and from the principle of man-created "natural" resources.

In 1936, the Flood Control Act, mandated the Army Corps of Engineers to act nationally.

Four Corners Map. FDR campaigned on the idea, in 1932, of developing the major rivers in the four quadrants of the nation (Figure 8). The river projects were to be multi-purpose: water supply and power, in the case of the Colorado, not navigation. Water supply, navigation, and power, in the case of the Columbia and Snake River Basins. The St. Lawrence—fabulous navigation, and power; the TVA—everything, plus, literally the creation of terrain—farmland; and homebase to nuclear power.

The Upper Mississippi. A system of 36 locks and dams got underway in the 1930s. From 1933 to 1939, seven locks and dams were built on the Illinois River. From 1930 to 1950, 29 locks and dams were completed on the Upper Mississippi.

Figure 9 shows the Lower Snake and Columbia River projects, providing irrigation inland; vast new power. Grand Coulee and Bonneville and other dams. Irrigated wheat in the eastern parts of the state produced very high yields.

One marker of this upgrade process was the new aluminum industry, which is highly electricity-dependent. Eventually 35% of the entire U.S. aluminum output came to be centered in the Bonneville area, because of the electricity from hydro-power. In the TVA region, Alcoa Corp. (Aluminum Corporation of America) built four dams.

Not shown here, but the Colorado River Basin was also fully harnessed. The Hoover Dam had been started in 1931, but the Basin system-wide development was carried forward under FDR.

Rural Electrification. In 1935, the Rural Electrification Administration (REA) began, and over a little more than one generation, from 1936 to 1969, the percent of farms with electricity went from 2% to 98% in nearly every county in the nation (Figure 10).

Population 1930-1940. A map of population shifts would show counties that were growing, or losing, population. There was Dustbowl migration—exodus from counties struck by Roaring Twenties speculation, and then drought. People left Oklahoma for California. Cities too were were stricken by unemployment and impoverishment. Only the West, New York and some locations continued to see population growth.

But the FDR policy impact not only countered all this kind of dislocation, it created literally new resources—new water, new lands, new river channels, for vast population growth potential in the near future.

World War II Mobilization. The results of the FDR policies are to be seen in the vast output increases during the War. Industrial output doubled from 1939-1944. Unprecedented output of materiel. Aluminum industry tripled; steel likewise; farm output too. Some markers: In 1938, 34,000 machine tools were produced; in 1942, there were 307,000. Workers in manufacturing plants, grew from 10 million to 16 million, even while troops were in military service.

Then, 1945, following FDR's death, came open and intense opposition to the very principle of national-interest economic development. One example, occuring over the summer of 1945. A bill was drafted called the "Industrialization of the South," by a grouping including Sen. Lister Hill (D), one of the fathers of the TVA, and Henry Wallace, in 1945 Secretary of Commerce (previously FDR's Vice President, and two-term Agriculture Secretary). The bill was blocked, and was never submitted in Congress.

So, what you could call the continuation of the New Deal, and the already mapped-out improvement projects, were contested, and only partial. We take a short look at the situation, as of mid-century.

Staying with Sen. Lister Hill, there was the 1946 Hospital Survey and Construction Act, co-sponsored with Sen. Harold Burton (R) of Ohio. Only a nine-page act, Hill-Burton saw to the provision of a public hospital in every county, at set ratios of beds per thousand persons.

Continuation of water improvements. Upper Mississippi; Upper Missouri; and plans to upgrade the 50-year-old Ohio system, which by the 1950s, was showing some age-fatigue in its structures, and also had locks that were too small for the larger barge tows coming into use.

Land and Water

After the war was the time to get back to basics—in terms of the challenge of the continent—the Great American Desert. Over the course of the War, and from returning soldiers, people streamed into California. There was the aircraft industry, agriculture and food processing, and many more activities.

The North American Water and Power Alliance concept (NAWAPA). (Figure 11). Even with full harnessing of Colorado River, there was not enough water for expected growth and to share with Mexico. Under FDR, a 1944 treaty was arranged to share the Colorado and the Rio Grande (Rio Bravo) with Mexico. But it was obvious that there was a need to create new resources.

Looking at the continent as a whole, where there were vast potentials from gains from river impoundment were to the north. With inter-basin transfers, more water could be provided. It was anticipated that there would be well over 300 million people in the USA as of year 2000; and a need for over 550 billion gallons of water a day. Whereas, only some 515 billion was the "natural" resource base of what hydologists call, "reliable available" water. Energy is key.

Atoms for Peace was furthered under President Eisenhower. Not only internationally—with Detroit Edison engineers visiting Iran and Egypt, to discuss vast new electricity for Southwest Asia and Africa; but domestically there were great plans. In 1956 in Shippingport, Pa., the first commercial, utility-owned nuclear power plant was opened by [Allegheny Power or Duquesne Power]. The prospect of nuclear power opened up the national map for vast population expansion in second half of the century.

In tandem with this, is the technology for nuclear-powered desalination. A Federal Office of Saline Water was created in the Interior Department, to conduct R&D in the Southwest to desalt seawater and brackish inland waters.

10,000 Small Dams. Meantime, the entire national land inventory was being changed. Two laws, 1944 and 1954, for reclamation, furthered 10,000 smaller scale dams and related improvements in the upper, smaller watersheds. This was done under the aegis of the U.S. Agriculture Department, in partnership with local entities of all kinds. Vast improvements in flood control, drainage; terracing; creating natural resource base.

By 1980, some 110 million acres—just under one-third of the cultivated area, was drained. (45 million acres irrigated—mostly in the West). California came to lead the nation in miles of drains and irrigation systems; rice areas in Arkansas and along the Mississippi.

But for total area under cultivation, the state of Iowa is a phenomenon. Between 75% and 90% of its total area is cropland today. Some translate its Indian name to mean, "Land between the rivers." The state is bounded on the west by the Missouri, and the Mississippi on the east. In some northwestern counties, 30% have underground pipes, called tiles.

Overall, the yields from the existing land-area saw fabulous improvements post-war, due to fertilizers (the TVA was very involved in R&D), improved seeds, tillage, etc. Wheat yields went from 13 to 30 bushels per acre, in 1920, to 42 today.

Agricultural population patterns. Overall, there were 26 persons living on farms per every 100 U.S. households in 1960. (Today, there are only three.) On-farm people were not just "sowing and reaping," but were tending to improvements in the land and water base, and the productive potential of rural counties, etc.

Transportation. The Tennessee-Tombigbee waterway system (Figure 12), which opened in 1985, connected the TVA to the Gulf of Mexico through Mississippi and Alabama, out through Mobile.

The Ohio River waterway was upgraded to a system of 20 mainstem dams; some with 1,200 foot-long modern lock chambers, as at Louisville, Ky., replacing the outmoded 600 foot-long locks.

The 1960s Paradigm-Shift. President John F. Kennedy, elected in 1960, spoke of the next decade, on May 25, 1961, to a Joint Session of Congress.

"I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to Earth." (July 20, 1969, Neil Armstrong was the first human being to set foot on the Moon).

On Aug. 17, 1962, President Kennedy dedicated the new Missouri River Oahe Dam in South Dakota. He said at the ceremony:

"And this dam and others like it are as essential to our national strength and security as any military alliance or missile complex...."

On Aug. 20, 1962, at the 25th anniversary of the Bonneville Power Authority on the Columbia Basin, Kennedy said, "When you help build a region, you help build your nation."

In May 1963, Kennedy attended the celebration of the TVA's 30th birthday.

In September 1963, the President was in Washington State, for the groundbreaking of the Hanford nuclear plant. He used the expression, "Nuclear plowshare," for the economic development to come.

On Nov. 22, 1963, President Kennedy was assassinated.

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