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Schiller Institute-ICLC
Labor Day Conference

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

Panel I: Keynote
Discussion Period
A Moment of Epic Decision
Lyndon H. LaRouche, Jr

EIRNS/Stuart Lewis

Lyndon LaRouche Keynotes
The 2004 Labor Day Conference.

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)

Congress of Cultural Freedom (Fascism) Panel : (Audio) (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: Click Here or Scroll Below

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
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

Here is the discussion following Lyndon LaRouche's keynote, “A Moment of Epic Decision,” on Sept. 4, 2004, to the ICLC/Schiller Institute's semi-annual conference. The dialogue was moderated by Debra Freeman.

Before turning over the podium to Ms. Freeman, Nancy Spannaus announced that EIR has reprinted How the Nation Was Won by the late H. Graham Lowry, which she characterized as “indispensable reading for the long view of history, which Lyn was reviewing,” and the new issue of the Schiller Institute publication Fidelio, which contains LaRouche's “fascinating article about the U.S. Presidency, ‘Those Populist Fools Who Would Seek a Contract Even With God.’”

Questions came from the floor microphones in both Virginia and California, e-mail, and phone.

DEBRA FREEMAN: Before I actually begin to entertain questions ... with Lyn's permission, I think it's actually appropriate, and we can do it by affirmation, that we send wishes for a speedy recovery to former President Clinton, who is in New York at this time, awaiting heart surgery. And we'd like to wish him a speedy recovery, because we could use his help over the next 60 days. [applause]

At the close of the Boston [Democratic] Convention we did a pretty sober assessment of where we stood here in the United States. And of course, within hours of the close of that convention, Lyn launched LaRouche PAC. In the period since the close of that convention, in those 30 days, I think that we've shown exactly what kind of an effect Lyn's personal leadership has. And I think that that is going to be reflected, in many ways, in a really radical transformation that we can expect over the period immediately ahead, in the campaign and candidacy of John Kerry. But, you'll hear a lot more about that tomorrow, and over the course of the proceedings.

What I will say, and I think it's the most important thing for everyone here and for all of the people who are listening over the Internet to understand, is that, one of the things that we said at the close of the Democratic National Convention in Boston—and I think that it was true then, and it's more emphatically true today: After the kind of incredible personal intervention, that Lyn made at that convention, and the parallel intervention by the LaRouche Youth Movement, which was absolutely brilliant, we left Boston with a very clear idea that while John Kerry and Mr. Edwards walked away from Boston with the Democratic nomination, that Lyn walked away holding the conscience of the party. And that continues to be the case. [applause]

And with that said, and with 59 days to change history, we can start to take some questions.

Lyn, the first question comes from someone who is right now responsible for the foreign policy strategy of an aspect of John Kerry's campaign. He's somewhat new to the post, and he's submitted the question, actually, even before you made your remarks. He said:

"Mr. LaRouche, you've referred to the current Israeli spy scandal, where Cheney's boys clearly got caught, as an institutional reflex to throw a monkey wrench into what was a planned, pre-emptive strike against Iran. That action was to be prepared by a public campaign, that was to commence, as I understood it, on Sept. 1, by a combination of AIPAC and forces inside the Cheney-Bush administration.

"Right now, two things worry me greatly.

"Number 1, is that it's the general view in Washington, and I think that it's a qualified view, that Attorney General John Ashcroft intervened to stop arrests that could have actually led to a lot more information coming forward. He did it clearly to try to protect the administration, to protect Cheney, and to protect the policy.

"Number 2, despite the public scandal around the passing of documents to Israel, Under Secretary of State Bolton nevertheless held a press conference on Sept. 1, villifying the nation of Iran.

"My immediate fear, is that the Cheneyacs are crazy enough to plunge ahead, nevertheless, with this policy, and probably to also find enough fanatics here and abroad to go along with it. I believe that this is part of their re-election strategy, and I would even argue that, if they're defeated in November, and it's not a stinging defeat, I fear it'll be part of the strategy to avoid relinquishing power.

"I'd really like your thoughts on this, and how far you think we could take this?"

LYNDON LAROUCHE: This is the first question to come in, of course, in this session, and therefore I shall devote a little more time to answering this than I would to other questions, because it implicitly addresses a great number of questions which I know are in people's minds. I'll get to the core of what the questioner deals with, but let me situate the ground:

The great mistake, in a small-minded, under-educated society today, in which the prevalent opinion is that of people who have never studied history; who interpret tragedy, but they don't know history, therefore, they don't know what they're talking about when they're talking about tragedy, Classical tragedy. Therefore, they don't know how society works. They assume that society is sort of like a pinball machine—one ball bumps into the other, and you explain everything accordingly, by this ball-bouncing thing.

Human society is not like that. As a matter of fact, no physical process is actually like that, contrary to empiricist dogma. That, the way we are often totally unconscious of the reasons we do what we do. People give explanations of their behavior. And other people nod in agreement, that that's acceptable—but it's not true. This is a rationalization for why they behave the way they do.

See, most people stumble through society, having accepted certain axioms, definitions, postulates, like those of a schoolbook geometry. Most of these assumptions are not true, but people believe them. Therefore, they interpret what they do, they interpret cause and effect in society, according to these rules that they believe are true—like free trade. Someone believes in free trade, they will behave in a clinically insane manner, and I can prove that it's clinically insane. Because, they assume that free trade is a law under the floorboards of reality, that's somehow controlling reality.

They don't understand how capital formation works, and the issue involved is not free trade—that's not a principle. Capital formation is a matter of principle: It is capital formation and its use, including the capital formation of raising a generation as a unit of capital formation, which determines what humanity can do. And the way you respond to this idea of capital formation will determine, in large degree, what governments and people do, and the way they react in politics.

So, what you're in, you're in a kind of fishbowl ideology in society today. Now, look at it, there are two levels. One says, “Cheney's a bad guy.” Well, Cheney is a very bad guy. But, he's not a self-evident creation. He's actually something that dropped from something—probably the rear-end of it. [laughter] Droppings from the rear-end of history. You have to say what produced this dropping!

I mean, this is crucial. And you have to use irony. You have to use humor. You have to use metaphor, or you can not explain things clearly! Because, you say, “Cheney is something that dropped from the rear-end of history"—now you say, “Well, what dropped him? What was the beast that did it?” Well, the beast was partly George Shultz. George Shultz was the man who set up Cheney to become the Vice President of the United States. Because, he composed the proposed composition of the Bush “43,” George W. Bush Administration.

He was also put into the position by similar financial interests, to that organization for grand theft, known as Halliburton. That's how he got his money.

His wife, already, his wife picked him out of the garbage pail—literally. He was a complete failure, academically and otherwise. Had no future. And was going down into the dumps, as a sort of a worn-down, burned-out jock, when his wife got him an education, or the girlfriend, got him an education; given to him as a protected entity. She was the smart one of the family. She had the connections. But she didn't own the connections. She was owned by people around Chicago University, who owned her.

Then, the money interests that created him, owned him.

So, he behaves accordingly. And he behaves as a part of a structure in society, which is largely centered, in this case, around groups of financier interests—which are political groups. They're not banks, as such. They're finance oligarchs: individuals, or family groups, which control vast amounts of credit, which actually as syndicates control banks and control economies. We are now living in a world which is dominated, in the shaping of politics of major nations, by this kind of process.

All right. So, now we come to the point, as happened in 1931, with the formation of the Bank for International Settlements, and the setting up of the international financier cartel, that the system that these guys have created, the free-trade, post-1971, floating-exchange-rate system, the globalization system, has destroyed the physical economy of the planet in the search for money, or money control, to a degree that the system has now reached a boundary layer where it's going to come down: very much like what happened at the end of the 1920s, 1931 to 1933.

This is a phenomenon, which had been set into process at the Versailles Treaty, in what Keynes, with tongue in cheek, ridiculed as an unworkable Versailles system. But Keynes was an evil fellow who was part of the system. And so, he was sort of a superior version of Alan Greenspan, prophesying what he himself, and his crowd, were creating. They knew it wasn't working.

So, these financiers, who were called the Synarchist International, intended to create what we call today “fascism,” “world empire", a world fascist empire. It was they, typified by the banker Volpi di Misurata, who put Mussolini into power in Italy, from the top down. And it was Misurata who devised the Fascist policy of Italy! Not Mussolini—Mussolini was the Cheney of his time. A dumb thug, who would rape anything that came into his office, and then discover what the sex was later. This was not a great genius.

But behind the scenes there was something controlling it. And, over 1922-1945, continental Europe was dominated by fascist regimes created by these syndicates!

At the end of the war, through the intervention of General Draper and others, as actions—and by Allen Dulles and others, by their actions—the hard-core of the Nazi system itself, the security system, was taken into what became the NATO system under the pretext that these guys were the best anti- Communist fighters.

They were brought back into the Americas. They were brought into the United States. They were an integral part, with their philosophy and influence, in the security system associated with names like John Foster and Allen Dulles. This is what Eisenhower called “the military-industrial complex.” This is the enemy.

The minute that—Roosevelt's body was not cold!—until the instant came, when the clearance was made, for Allen Dulles to dump Max Corvo, who was the OSS chief for Italy at that time—had been the architect of the OSS campaign in Italy from the beginning: He was suddenly dumped, in order to clear the way, to bring in SS General Karl Wolff's SalÃö Republic contingent, to become a part of the Italian life, secret intelligence life, called the Gladio system, which is an extension of NATO, which ran the terrorist operations in Italy in the 1970s. Including specifically, the murder of Aldo Moro, which was done by the right- wing, associated with these Nazis, which Angleton and Dulles brought into the Italian system.

And the order for the murder of Aldo Moro—I know, personally—came from the United States!

That's the nature of the system. That's what we're dealing with.

So, you come the point that this system is now collapsing. We've got this rotten element in it, a very dangerous element. A continuation of the tradition of the Synarchist International, which gave us fascism during the 1922 to 1945 period in Europe: what we fought World War II against; what committed the crime at Buchenwald; what committed the crime at Auschwitz: These are the guys who are the authors of Auschwitz!

There was no reason for Germany to kill Jews. The German Jew, and the Eastern European Jew of the Yiddish Renaissance, was one of the greatest economic assets of the development of Germany since the work of the great Classical reform of Moses Mendelssohn and company during the middle and latter part of the 18th Century. The rise of Jews, who came from families who had been tinkers and peddlers, without status, roaming from place to place, without a right to live or to be married, or anything else: These Jews' children suddenly became, in the image of Moses Mendelssohn, from Moses Desau, the son of a poor religious Jewish figure—one of the greatest geniuses of the 18th Century: These Jews became physicians, scientists and so forth, inventors.

Like the Rathenau family. Emil Rathenau, who was a leader in introducing electrification from the United States into Germany! Walther Rathenau, his son, a similar person. Albert Einstein, a similar person, who worshipped regularly at the Berlin synagogue. Who wants to kill them?

Then, you have in Eastern Europe: Many people of this country of Jewish ancestry come from the Yiddish Renaissance, who fled from Russia and Poland, and so forth, into the United States. Who were a bulwark of the civil rights movement's support, during the 1960s in particular.

So, why would anyone want to kill these useful people—these are very skilled, useful people. Why kill them? It's to commit an act of obscenity, to terrify the universe into what these people are capable of doing! The idea is to use the sense of great power, of terror, intimidation, to cause populations to submit. “We did it to them. We can do it to you."

All right. So that's the kind of ugly world we're living in. So therefore, we come to the point that this system, which was set up in the post-war period, or evolved in the post-war period—especially the past 40 years—that this system has reached the point that is collapsing.

Now, heretofore, in the United States and in Western Europe, and some other places, the idea of so-called political democracy, has been the recognized, established, accredited institution. But, when you come to the time that their financial system collapses, then you reach the point at which the bankers of this type say, “Either we eat the people, or they take our money. We're going to collect on our debts” as Freddy Kruger's mother, Annie Krueger of the IMF, proposes in the case of Argentina.

This is what Hitler did. This is what Hoover did.

Hoover is not innocent in the Great Depression. Yes, the crash occurred, was in process, in 1927 before he became President. It happened after he'd been inaugurated in March of that year. But what did he do in response to that crash? What he did is, he imposed fiscal austerity of the type that Bush is imposing today; the fiscal austerity which is being imposed by the Maastricht agreement in Europe, which is being imposed upon Germany; the fiscal austerity which has provoked the circumstances which are being responded to by the Monday revolts, the Monday demonstrations in Germany. This is what Tremonti has said, recently, in saying that he had considered and used my policies, my policy recommendations. But, he was thrown out of government by Berlusconi, the Prime Minister, who is on the other side—the side of the bankers.

So, we come to the time that the very existence of institutions, now as in the 1930s, that under the pressure of financial crisis, financier interests of the Synarchist type, using their fascist or related types of instruments, moved with financial fiscal austerity to crush, and bleed, and break the back of the institutions of political democracy; as we have with the HMO process since the 1973, which is the process of mass murder, which is actually a form of fiscal austerity practiced against the bodies of human beings. We've now come to the point that that system, which conducts that kind of policy, is on the verge of collapse.

And therefore, the reactions we're getting now, and the problem in the United States in politics, is those who think we have to submit to that kind of pressure for “fiscal austerity.” And one form of fiscal austerity is free trade: You tear down the structure of productivity by lowering the price of things below the price at which capital formation, necessary for that production, can be maintained.

You apply fiscal austerity to cut health care in the name of balancing the budget. You don't give a damn in the name of balancing the budget: You let the dams break. You let the water systems pollute, collapse. You let the cities decay. You let people die at accelerated rates in order to balance your budget. We're at that time.

So, now we've come to the point at which people have been behaving on the basis of adapting to what they thought was a meliorative approach to the pressures on society, on political institutions, on democratic institutions, from these financier circles. They say, “We are not going to challenge the system. We're going to work within the system.” And working within the system has come to the point it no longer means eating one of your children, it means eating all of them.

And this is where the breaking-point comes: Either we're going to say, as Roosevelt said in 1933, “We're going to put the banks through reorganization. We're not going put the people through the gas ovens.” [applause]

What has happened, that these issues which are not generally thought about by the ordinary citizen, or even high-ranking politicians, are the actual political forces at work in the minds of these politicians and cause the behavior within political organizations. And that's what the answer is.

The crucial question here is, when the banks say, or the bankers— because the banks are all bankrupt. Every bank in the United States, I tell you openly, is bankrupt today; every leading bank. Every leading bank of Europe is bankrupt today. And I say that without qualification. They're bankrupt. It's just a matter of when they're caught. That's the only difference. They're already bankrupt. You don't have safe banks. They don't exist. You don't even have a safe U.S. Treasury, except for the Constitutional provision, as defined by Alexander Hamilton as Treasury Secretary, that the Federal debt will be honored—the direct Federal debt. But not the Federal Reserve debt. Constitutional—that's the conflict.

So therefore, the task that faces us today is, how do we put the United States through bankruptcy? Now, we don't go charging forth to say, “Put the United States through bankruptcy.” Because, Europe has to go through bankruptcy too. The whole world has to go through bankruptcy. Now.

We have to prepare to react. You know, and Kerry's good at this. Kerry is essentially what we call a “counterpuncher": He's more likely to react strongly, in reaction to something, which he reacts against, as he reacted against that clown Cheney and Zealot Miller. He reacted. Remember exactly what he did: He'd been pummeled around by this Shrum, and so forth, who had been misadvising him, pressuring him to duck, bob and weave, and not punch back, at all the things that were being thrown. The citizens of the United States were becoming discouraged with Kerry, because he wasn't fighting. They were saying, “He's a nice guy, but what's he doing? He doesn't fight. He going to champion? He's going to win the world championship in boxing, and he's not going to fight? What's wrong here? Is this our candidate? Is this our champion? Will you bet on him? Would you bet your life on him?"

So, that was the disturbing factor. We knew that Kerry was not that kind of person. He does tend to be a Hamlet. He does tend to be a good swordsman, he goes out and fights the wars, does all that sort of thing. But, when it comes to facing the system, and changing the system, he tends to be a Hamlet.

But, we can fix that: We can make him a better man than he thinks he is now. Because, we can start with good material, we can do something with it. If you don't have good material, you've got a problem.

So, the challenge is now, that we have to be prepared to react. The bankruptcy is going to occur. It's on the way. It can happen any day, any week, any month, in the near future. It will happen, in some form or the other. Fifty-dollar-a-barrel oil could do it. A hundred-dollar-a-barrel oil would certainly do it. The whole thing would come down, immediately.

Look at the real estate situation: Do you believe, that people out there, who are going into $400,000, $450,000 shacks, Hollywood-style shacks, with the nails sticking out, boards that are not boards, beams that are not beams; if some moisture gets into this thing, this thing's going to disintegrate. And some poor people, all the members of the family are working, and probably spending 60-70% of their family-income to maintain a place of residence in one of these shacks, that's going up around here. Hollywood- style-construction shacks. You know, the type of construction you used to use in Hollywood, to make something to be destroyed for the purpose of a film? Huh?

Now, these are out there. These are people. These are people living in these shacks, you know, in the range of $400-$600,000 a shot. Sitting on cow pastures, with no essential infrastructure; with dubious power resources, and all kinds of insecurity. They depend upon—if three or four members of the family are all working, they might be able to meet 60% of that total income to maintain possession and occupancy of that shack, as a mortgagee. They're all now sitting on the point of becoming either homeless people, or squatters. And the only reason they'd be squatters, is because the mortgage holders would rather have them in the place, and keeping it functioning, than leave it alone for the other squatters to come in.

And this is true in pockets all over the country. Around greater Washington, D.C., that's the characteristic situation. That's the situation in pockets in other parts of the country. The spread of these suburban areas of this type, of these project types, these guys keep building—why? Because, they invested in speculative investments in the land. Banks, and other people, speculated on this investment process. They've now got a thing called “lots": They can't get their money out, unless they can sell them. Well, they can't sell the lots, they've got to put the houses up. They've got to go, again, into debt.

So, you have this mountain of debt. So, you get a tin shack, which is comparable in this time, technologically, to a cardboard, tarpaper shack, back in the 1930s, and this shack is now going at $400-$600,000 a shot in mortgages. Why? To bail out this financial bubble!

And the financial bubble is organized by Alan Greenspan, through his operation out of his bathtub (where he kisses his rubber ducky, or something). This thing is organized through a fraud, through financial derivatives, which is a fraud, intrinsically—by its very nature; it ought to be illegal—and through mortgage-based securities, such as Fannie Mae and Freddie Mac. And that's how the bubble is orchestrated, to keep the impression of wealth.

In Britain, they have a worse bubble, which is about to pop. A slight change in the system, like $100-a-barrel oil, which somebody is trying to do in the Middle East, particularly with the attack on Russia, in Transcaucasia— that is all that would be required to trip, and pop, these financial housing bubbles, around the world. If those bubbles go, guess what? The bankruptcy of the banks can no longer be concealed, and the crash comes.

So therefore, as a President, like a President who's fighting a war, or facing a threatened war, the President must be prepared—not to go to war, preventively. You don't do that. That's a mistake. Don't start a war, unnecessarily! But, you have to be prepared, in your mind, for the toughest issue you may have to face. And you have to be prepared. You have to have your action prepared, you can not just make a reaction, a sloppy reaction.

But, to do that you must have the kind of Presidential mind, in the United States, who is prepared to react as a counterpuncher, knowing what kind of a punch he has to deliver at this time. And, that's what the issue is, behind all of these actions.

Now, what's happening here? If you're willing to admit that Cheney is a fascist, and the people behind him are fascists; that the neo-conservatives are fascists, that Marc Rich is a fascist; that Kalmanowitch was a fascist; that Lewis Libby is a fascist—and I know that from personal experience, with his operations. If you're willing to admit—now you can begin to understand what they're doing.

And, when you understand why they're fascists, because they are tools of financier interests, of the same type that put Mussolini, Franco, Hitler, and so forth into power in Europe. What are they doing now, with preventive nuclear warfare? What they're doing is, they say, they're going to control the world, which is out of control, from a financial standpoint, by sheer military terror.

They're going to destroy every nation, or the sovereignty of every nation, which might resist what they plan to do. How're they going to do it? They went into Afghanistan. Afghanistan is worse today than when they went in there. You have the poor government, which is sitting there in the so-called nominal nation's capital, protected by foreign troops, while the mass of drugs being produced for the world market is increased more than ever; the Taliban are closer to power than ever before; and the whole thing is worse than ever.

In Iraq: What do you got? Worse than ever. In the Middle East, so-called, what do you have? Worse than ever. We're now on the verge of Turkish invasion of Northern Iraq, against a terrorist operation against Turkey from Northern Iraq.

The whole Transcaucasian [region] is blowing up. What happened in Russia, in south Russia, coming across the border with this killing of children, is an extension of this process. It is not an isolated thing. It's a part, not of international terrorism, but of what Cheney represents! These guys, the guys for whom he works, the guys for whom he's an instrument—these are the causes of this problem.

And therefore, we have to understand that this is the enemy!

Now then! Now, look at the Franklin case. What is the nest inside our government? Which is typified by what Cheney also represents: a nest of corruption and rot. Which is not only rotten because it steals, which it does; because it's wrong, because of what it does. Because it's insane, as the Attorney General is. But, it's something which is an instrument of a policy: That is, we have to now look at the fishbowl,to understand the fishbowl, not try to explain things, who's knocking on what.

My knowledge in this case, and the reason I've acted as I have, is, I counterpunch. I've never led a war. If I were President, I might have to. But, I've never led one. I've never struck the first blow. I've always only counterpunched, and often not punched at all, to avoid starting the war, I didn't want to fight. And reserving myself for fighting those things, which had to be fought—things of the type, which I've just spoken here.

I'm a World War II veteran. I came back from a world, which had been Franklin Roosevelt's world, to a Truman world, which is not Franklin Roosevelt's world. I came back to a right-wing United States, where I saw my friends who had been in service, who had been heroes overseas, who were cowards at home, when their wives intimidate them about concern for their family interest, under the right-wing turn. I saw our nation corrupted. And I've known since then, that this kind of force, which I then associated with a continuation of Nazism, that that kind of force was the greatest threat. And, I've always, whenever I saw the clarion call out there, I've generally responded, and tended to fight, knowing, that this is the nature of the enemy.

And therefore, what we're going to have to do, is, we're going to have to make that kind of change. We're going to have to say, at the time that the crisis hits, how is the United States government going to respond to the crisis? The United States government should respond to the crisis in the manner which precedent was set by Franklin Roosevelt: Of going to the American people. Having first caused the American people to understand, that the President of the United States was their man, the defender of the “forgotten man.” A President who had earned their trust, who said, “I am your President. I'm not your boss. I'm your President. I'm acting for you, as your President must act for you, to save you, and to save this country, and to deal with this evil before us."

And therefore, we must state clearly, about what we are prepared to do, when the crash comes. What our President must be prepared to do. And what the practical considerations are, and how it will be made a workable response to what happens. We're going to go back to our Constitution. We're not going to invent some new system. We're simply going to use the inherent notion of sovereignty of the United States, its general welfare, and the concerns of posterity, as the overriding natural law, which is our Constitutional law. The President of the United States, or the Presidency, must act, with support of the Congress, to ensure that those actions occur, which are necessary to defend this nation against that threat.

And that's what the issue is. And, what we're seeing here, and the reason I reacted to it the way I did, when it became apparent as “the Franklin case"—it's a case I was very familiar with, because this thing has deep roots to me. I know these roots, I know where they come from. I reacted as I did, because I know: We have to counterpunch. The enemy, the Franklin case, typifies an attack on the United States far worse than the Pollard case; attack on us, which threatens the security of the United States, which threatens to bring us into wars which could destroy the United States. Therefore, we must stop it! We must put our finger in the dike, or something else if you prefer to do so, but we must stop it.

And we must not do so, by saying, “How should we react to this development?” We must first of all see this development in its context. We must see the reaction is determined by the fishbowl character of politics in the United States today. We must step outside the fishbowl, and look at the reality, not what popular opinion thinks the reality is. We must be prepared to act for people. We must be lead people to understand what the problem is, not try to fit our reaction to their prejudices.

Thank you. [applause]

FREEMAN: It's precisely because Lyn answers questions that way, that I'm here today.

I have some really good news for people. I have bad news and good news: The bad news is, we have a technical problem with California, and we're not going to be able to the switch back and forth, because we can't get clean sound. But, they'll submit questions by phone and by internet.

The good news, is that unlike the situation with Lyn's Presidential campaign, LaRouche in 2004, where you could only contribute $2,000, the really good news, is that for LPAC, you can give $5,000....

I'm going to take a question from here, then I'm going to take a question from the youth movement in Argentina. And then, if there's a question from California, I'll take that.... Who's the first question? Laurie Dobson, first question.

Q: Lyn, I just want to thank you for your fine, exemplary, lovely, and sublime 2004 race for Democratic Presidential candidate of this country. [applause] I'd also like to thank all the people that have worked in this organization, to bring you forward, and to have done such a marvelous job. And I also want to thank you personally, for the inspiration you gave me in my race in 2002, and for the transformative effect it had.

My question is—I wrote you recently, and you gave me a wonderful response, and very timely. And, it was about John Kerry, and I was concerned about believing that he has this character issue, and that he can rise forward. And you had said—and I hope to paraphrase you correctly—but, you said not to concentrate so much on personally brokering for you, but that you have key and code, and you need doors opened. You need us to provide direct means for you to get to the people, that can get you in there, to make these discussions that must happen, happen. And I'm just wondering, which doors do you particularly want to open? How do you want us to help you there?

Thank you.

LAROUCHE: I can say, without saying too much, that the doors are all open. I mean, there are some doors that are closed, but don't worry about that. The doors are open, at the relevant highest level. There are no titles, or names yet, given to these doorways. Don't worry about it. We're talking to the people who we should be talking to. And we're talking to more and more of them.

There are people around the United States, who are political leaders, in various parts of the country, who want to talk with me now, as fast as they can. And things are in the works. So, we're doing the job.

I think the point, we were involved in the environment, of the influence which persuaded Kerry to dump his previous campaign policy, and to go with a new campaign policy, and to build a new campaign organization of advisors around him.

And the new policy you saw, on Thursday night, on the television set, in his campaign in Illinois [Ohio?], where he made this statement reacting to these charges by Cheney and Co. He said: I served two tours. I served voluntarily in military service in Vietnam. I committed two tours of duty, while Cheney sat out five deferments! And that I'm better, he said, obviously to handle military questions than this draft dodger.

I mean, that response is an appropriate response, to get away from this Swift Boat debate, which was miring him in. And this is characteristic of the change. And I'm sure, that we're going to see much more.

And, I know what I'm doing. I know what we're doing. It's flexible, because we're in response mode. We have a route that we're taking in what we're going to do with our resources. We're going at things which we're particularly good at that others may not be good at, to fill the hole in the total picture. We are in touch with and cooperating with a growing number of people who are doing their part. We are working with candidates who are appropriate for us to work with, to help them win elections, and so forth. And we are out to try to organize a landslide victory.

It can be done. If you get off this kind of petty politics, which we were upset about. Bill Clinton was upset about. Others were upset about, by the Kerry campaign. When he came out of New Hampshire, the whole thing fell apart, from that point on. In New Hampshire, he was talking to people. After that, his campaign was not an issue-oriented campaign in a real sense. Now it is. Well, that's not because he was opposed to that. It was because he was strongly advised not to do it.

So now, the name is “go.” We're going for an absolute victory, not a marginal victory in Nov. 2—an absolute one, which will override all vote frauds. And the way to do that, is to get the youth and to get the lower 80% out. And we have to create a mass movement of this added type, as a new factor in the situation.

And now he's performing well. And now that he's performing well, where people believe he'll fight, a great number of people have told me, directly or indirectly, and gotten to me, how relieved they are! How vastly relieved they are, by the fact that he's started to fight!

Now, if he's a fighting candidate, that we can work with. And we can keep in touch and coordinate with relevant people in the party. And also with certain Republicans, who are also concerned about, on policy questions, how this goes. They don't like Cheney and so forth, themselves.

So, we can play our role. We have a crucial role to play.

On the economics, it's going to be crucial: This thing on physical economy—nobody else can do it, but me, and my associates. We're the only ones that can do it. Nobody else knows how to do it. They know how to imitate it—that's fine. But we have to do it first, and then they'll imitate it.

FREEMAN: We have a question from a gathering of young people in Argentina, Lyn. They say:

"Good afternoon, Mr. LaRouche, we are from the LYM in NeuquÃàn, Argentina, and we are gathered with a group of people at the Economics Department of the National University of Comahue. We've gotten a very good response from people, regarding what we're doing, and they've congratulated us, repeatedly.

However, there are others, that say that what we're trying to achieve is utopian. Can you please say something, especially to the youth, about how it is, that our project is far from utopian, and that, in fact, it can be achieved, if we take up our role in intervening in history. Thank you."

LAROUCHE: There are two ways in which this idea that I'm utopian, will come about. One thing, from people who are themselves utopians, and they're determined to cling to an unworkable system. They are themselves utopians: That is, they believe that a system, which does not work, is the system which you must adhere to. They call it “tradition.” It's like the guy, you know, who has gone through 15 marriages, and he's looking for another wife! Obviously, he's clinging to the wrong tradition. So, that's the problem there.

The other thing is that there people who don't even believe that. They're people who happen to hate me, because they're fascists. And they are, literally, fascist.

Remember, that the organization, in the Americas—as in Argentina—the fascist organization that exists in Argentina today, was created out of the office of the Nazi Party, in Berlin, in 1937, '35 to '37. The area of Argentina was one of the major targets, for the creation of the fascist movement there. But, the hard core of the fascist movement in the Americas, was planted in Mexico around the forces of the Cristeros, the leaders of the Cristero War, which was centered largely in Guadalajara in Mexico. And these were the people who were actually, literally Nazis. Who used clerical covers, to call themselves “Christians.” But, they were Nazis.

They were involved, with Japan, in planning an attack on the United States, which was to occur in southern California from Mexico, if the Japanese had not suffered a defeat at, a success [?] at Midway, in the Battle of Midway, that summer. They were planned to come over the border; they were mobilized.

The Nazi organization in Mexico, which was called the Synarchist organization there, and which is buried in certain corrupt Church connections, like those connected to Buckley in the United States—explicitly Buckley; connected to the fascists in Spain around the Banco Santander, which is linked to the bank, a partner of the Bank of Scotland in England, which is part of the British monarchy: This crowd is still very much in continuous existence and mobilization to the present day.

These guys are afraid of me, particularly because I know their score. I am a good counterintelligence enemy of theirs. And they will sometimes, and often do, try to use ridicule to cover their hatred and fears, to try to discourage people. And they will use the word “utopian."

But, there are also many others, who are literally utopians. They believe that the free trade system, or the existing system of government, the existing habits and practices, will work, when they've come into a time, where they're trying to cling to the tradition of the Titanic, as opposed to those who want to get off the boat. And, they would like to have us stay on the Titanic.

FREEMAN: Okay, the next question is from California—I think.

Q: Can you hear me? [applause] I guess so. My name is Joelle Wright; I'm from Oakland, and I'm very excited to be here today. And my question for you, Lyn, is: What is al-Qaeda, and why does al-Qaeda keep coming up in almost every terrorist attack that's happening around the world. Most recently with the holdup of children in Russia, and the murder of those children in Russia. And, is there really a threat coming from Afghanistan, from this al-Qaeda faction, or leaning, or whatever it is?

LAROUCHE: Well, let's start with the hard side: The truth is, that if somebody hires a hit-man to kill you, and he doesn't know who sent him to kill you. [audio problems] Sorry? Okay.

If somebody sends a hit-man to kill you, and the hit-man doesn't know who sent him, but took it under contract, he is a danger to you. But, he's not the source of the danger.

Now, al-Qaeda is a offshoot of what the British Intelligence Service, out of the India Office, established as the Muslim Brotherhood in the aftermath of World War I. They took the India Office, which used to run these things, and which was the source of the Muslim Brotherhood, but established it formally as the Muslim Brotherhood in Egypt, as part of the setting up of the so-called Arab Bureau by British intelligence, in the immediate period following World War I.

This has been around, and has been used as a provocateur operation, of various kinds—part of the chess-play. In other words, the way you manage countries, as an imperial power, you don't just go in and do the killing yourself, you get them to kill each other. And that's the way it's done. You create fights among people on false issues, and play them against each other, so they become impotent in resisting you.

For example, that's the way the British established their empire, through the Seven Years' War on Europe. They got the powers of Europe, to engage in a massive fight with each other, where the British were giving financial backing, up to a point, to Frederick of Prussia, and supporting all the other powers of Europe, in making war against Prussia, and in quarrels among themselves.

While the continent of Europe was engaged in these wars, the British snuck in, and stole India, from the French, and stole Canada from the French. And, coming out of that treaty, after all these people who had been bled in fighting the Seven Years' War, now suddenly the British Empire, in the form of the British East India Company of Lord Shelburne, became the leading imperial power on this planet.

That's the way the method works: Is to get people to fight each other. In other words, if you're a cop, and the barkeeper in a certain saloon is not paying his payoff to the corrupt cop, the cop will send in a guy, to start a fight in the saloon. And then, the cop will send his troops in, to break up the saloon, and close down the saloon as a disorderly place. The next time, the guy will learn, to pay the cop off in timely fashion. Those simple imitations of typical British foreign policy, in these matters.

So, al-Qaeda is that. It was a factor of destabilization. And the British Intelligence Service specialized in its imperial operations, on religious warfare. If you want to study British intelligence, you go to Oxford; to some degree Cambridge, but especially Oxford. You look at the studies of religion, done by the British in this area. This is how they come up with ways to design religious plots, based on religious issues, to cause all kinds of strange religious sects to appear. These are then used, and motivated, on some kind of absolutist thing—they're sort of like Tom DeLay sects, you know, that kind of thing. To cause war without DeLay, or whatever. Without his having to fight it. And these kinds of things are used as forces of manipulation. So, they have an ideological form.

Now, the Muslim Brotherhood was a significant form, especially in Egypt and elsewhere. And the Arab Bureau plays it, certainly. But, then comes the more relevant issue, is that during the 1979, when Brzezinski was in charge of Carter, Brzezinski and Co., with his friend Samuel Huntington, set into motion the idea of a asymmetric warfare, conducted against the Soviet Union, by drawing it into Afghanistan, by a provocation. And then, launching a massive Muslim religious movement, directed by people such as Vice President George Bush Sr., and Jimmy Goldsmith, who were running the Afghanistan war.

They created what we call—this group of people—created what we call, today, al-Qaeda. Now, they are the people who, for example, created Osama bin Laden, as part of the Goldsmith, Bush, etc., operation back during the 1980s, from 1981-82, when Bush, as Vice President also had this other office, involving people such as Ollie North. And they created this operation, involving drug money and things like that, as in Central America. They ran the operation.

Now, at a certain point, they cut off Osama bin Laden, and parts of al-Qaeda, dropped them as protÃàgÃàs and began to treat them as adversaries, and thus, having set them into motion, once the Soviet troops withdrew from Afghanistan, at that point, they became a factor of destabilization, in the Middle East, for people like the neo-conservatives, who wished to use them to destroy the Middle East, as a part of effectively setting forth a destruction of the sovereign powers of states of Europe, and even the United States itself.

So, this is a special kind of warfare. In fact, it's called “special warfare.” The methods are those which are called “asymmetric warfare."

So, we do not have a problem with al-Qaeda as such. Al-Qaeda is a problem. It's like one of the loose hit-men, on the terrain, which can be sent against somebody. But the main thing, what is happening now—forget the news inversion; forget the Cheney official version of what's going on. What's going on now, is a global destabilization, conducted under the auspices of the preventive nuclear war doctrine, which was introduced through Cheney, into the first Bush Administration, when Cheney was Secretary of Defense. This is the policy.

The launching of terrorism and destabilization, including the new Iraq war, the attack on Afghanistan, the targetting of Syria, the targetting of Iran, the targetting of Transcaucasia, the targetting of Turkey through the effort of the Iraq war; the intent to destroy Jordan, the intent to destroy Egypt by destroying Sudan, and by destroying Sudan and controlling its water supplies through their U.S. asset Garang, then they would shut off the water to Egypt, and that would cause Egypt to collapse or go into a wild state. And the entire area, the entire area which I outlined in my 1999 program, “Storm Over Asia,” would become a reality.

The effect would be, in fact, the equivalent of $100-a-barrel oil, very quickly. We're on the verge, right now, of $100-a-barrel oil. We're just barely skimming, underneath the lid of $50-a-barrel oil, which is twice what the world can stand, on a durable scale. At $100-a-barrel oil, the whole system blows.

So, what's at stake is not this thing that people talk about: What's at stake is the deployment of bombs, like hand grenades, stink bombs, deployed into areas of the world—on a global basis! I mean, for example, this plays Russia. This plays the entire Middle East. This plays Japan. It plays Pakistan; it plays India; it plays Southeast Asia; it plays all of continental Europe. It plays Africa. It's all one thing. It's one policy.

We're fighting a war. Not a war against terrorism, unless you want to call Cheney a terrorist. We're fighting a war, a special kind of war, which was known before. It's asymmetric warfare, with a global purpose, by global powers! In other words, it's not an entity, springing from an al-Qaeda—that's not your source of terrorism. Cheney typifies your source of terrorism. And it's these forces playing this long-term strategic game—what the British used to call a “Great Game,” orchestrating events in various parts of the world, using small forces, in asymmetric warfare mode.

How do you know that the guy's coming in? You don't even know that he existed: A group that you didn't know existed, comes in tomorrow, to your school, takes over the school, and slaughters many of the children, teachers, and others. You didn't even know the group existed. It was created by something, but you didn't know it existed—how are you going to defend yourself against that? There is no absolute defense against that, in the sense of reactive going against organizations. Because the organization you have to fight tomorrow, may be one you didn't know existed, the day before.

So therefore, you have to take a global view, of the problem. You have to say, “Who are the swine who are creating this problem? Let's eliminate the source of the disease from the planet.” And the source of the disease is the Synarchist International. The people behind this are the same people who killed the Jews at Auschwitz. And when you understand that, you understand what you're dealing with.

FREEMAN: Okay, I'm going to take another question from the audience, and then I'll take one of the questions that's been submitted electronically. [station id] The next question from here in Northern Virginia, will be from Lewis Whilden.

Q: Hello Lyn. I got a question that came up, during the ride here from Detroit, that's bothering the hell outta me. How the hell, can you conclusively prove, that human ideas existed before human beings?

LAROUCHE: Oh! Oh-ho-ho-ho-ho, hohohoho!

Q: Yeah! Help me out!

LAROUCHE: Ha-ha-ha. Well, a little cosmology and theology, in here, huh?

The proof is very simple, once you have understood how you make a discovery of universal principle. A universal principle is, by definition, if you understand it— and a requirement before you call it a universal principle, you have to be able to prove experimentally— that it's universally true throughout the universe.

Now, how that kind of proof is developed, is a more sophisticated question. And some people spend a lot of time, never learning how to solve that, answer that, question. But, that's the question.

We can prove, by methods which were demonstrated by Bernhard Riemann, in a number of his principal works, from the 1850s in particular; particularly, his initial habilitation dissertation, and his work on Abelian functions. That these two areas show you exactly how you can conduct a physical proof, a so-called mathematical-physical proof, experimentally, which will demonstrate the universality of a principle that you discover. And that's the only way that this is, actually, rigorously proved.

Implicitly, the knowledge of how to define a principle, in our first trace of it, comes from Egypt, and it comes to us, by way of Greece, by way of the Pythagoreans and Plato; and including examples such as Thales, in the notion of powers as a characteristic of what the Greeks called “spherics.” And spherics referred to, essentially, physical astronomy. That is, not merely observing astronomical phenomena, but looking to discover principles which govern the apparent anomalies, which were persistent in astrophysical phenomena. This knowledge was transmitted to Greece, in various ways, and is best known for its association with the Pythagoreans, the associates of Pythagoras, including Archytas, who was the Syracusan, who was the personal friend and collaborator of Plato.

So that, in those methods— which you find also expanded upon in these ancient Greek sources in certain discoveries, but also in the works of Plato— if you take the corpus of Plato's dialogues and The Laws as a whole, and you work through these as drama, using these methods of spherics to understand what is being said in this whole set of writings, this whole set of works; now you understand exactly how the ancients understood this idea of individual universal principle; and how, through the influence of the Classical Greeks, especially in 15th-Century Renaissance, how the Classical Greek knowledge of science and culture superseded the corruption of the Latin Roman tradition in Italy at that time, in Europe at that time.

So, the struggle has been, in modern society, the Latin culture is the wicked culture; it's the culture that debases people to a kind of reductionist conception of man. Whereas the contrary thinking is the Classical Greek culture in European history (as typified by this) is the source of the Classical art, Classical European art; it's the source of Classical effective science. And it's in that context, that we understand what a universal principle is.

You will find, in other parts of the world, such as in traces we have in India, that the same kind of knowledge is demonstrated in the history of India's culture. That there are traces of the same kind of thinking, mixed with other things. There obviously were things like this, also, in Chinese culture, at one point, when you look at some of the things which are reported as residual, from ancient Chinese science culture, and astronomy in particular.

So, this phenomenon occurs. Obviously, it occurred in Ice Age times, in pre-Ice Age times, among trans-oceanic mariners. There were whole cultures, during the period that this great mound of ice cubes was sitting on northern Europe and northern United States. And during this period, culture progressed largely, not in the middle of the inland: Culture progressed (even though many people may have lived inland), culture progressed where there was water! And since land-areas were largely covered with ice, to the north, it was in those areas which were not covered with ice, which was the oceans, and certain people, like say, the Subcontinent of Asia, where cultures tended to develop.

Because, remember, ice ages, have gone on on this planet, for that matter, for 2 million years or so. And they keep cycling, about every 100,000-200,000 years. And there are sub-cycles of glaciation in between.

So, we can trace, as the Greeks do, most of the source of roots of this kind of knowledge is traced back to trans-oceanic cultures, that is, whole cultures who would migrate over vast distances of ocean, over long periods of time. And who developed methods of astrogation to do so. We have traces, in some of the ancient Vedic and pre-Vedic sources, of measurements of the migration, of the periodic migration, of the magnetic North Pole. Now, the only way that any culture would have, in its system of astronomy, knowledge of the regular migration of the magnetic North Pole, would be a sea-going culture, using compasses or lodestones, for navigation—using the stars and lodestones for navigation. And obviously, they were in Northern Europe and the Transatlantic culture, many such cultures.

FREEMAN: Lyn, you've answered this question in part, but we're getting a huge number of questions in, on the events in Russia. This one actually comes from a fellow who is on loan from the Department of Defense to the Senate Intelligence Committee. He says:

"Mr. LaRouche, I find the recent terrorist incident in Russia, to be, by far, one of the most hideous and barbaric that we've witnessed to date. Current news reports are saying that, among the dead terrorists, are Arabs, presuming an al-Qaeda presence in the Chechen rebel movement. I must say, that I'm somewhat amazed that an operation of this magnitude could be pulled off, in a region like this one, without any detection.

"But, regardless of that, I'd like to know your view of what actually occurred there, and what you think is an appropriate American response to this terrible atrocity?"

LAROUCHE: A very important question, I must say.

As I say, I refer again to this—I think somebody may know here what we still have available, the “Storm Over Asia"? I think the point is, that what people should do, who want to get into this kind of question, we should make available the “Storm Over Asia” tape, which I did in 1999. I did it in connection with my Presidential campaign at that time.

And this lays out, as of that time, my general perspective, as to what the danger was. And, what we're seeing now, is essentially, in the entire region—a region, which includes all of Southwest Asia, includes Transcaucasia, includes Central Asia, and includes Southern Russia—includes an operation, which is what I was talking about, and warning against in that “Storm Over Asia” production which I did, as a personal report, back in 1999.

Many things have changed since then, but the essential matrix—. The problem that, often, I find in intelligence work of otherwise respectable and competent intelligence agencies, is the same one referred to in response to the first question: Is that, we have to realize, we must look at the context, the larger context, in which local events occur. Rather than trying to explain these by Sherlock Holmes methods, we should probably prefer the method of that great counterintelligence specialist Edgar Allan Poe. Who actually dropped out of West Point, as a cadet, because he was epileptic, and therefore was not fit for regular military duties or training.

And because of epilepsy—he was a member of the Society of Cincinnatus. His grandfather, or uncle, was a member, a Quartermaster General for the Union Army, in the Baltimore area. And he was orphaned. And he served for a while as a first sergeant in the military, but since he was a member of the Society of Cincinnatus, he was appointed to West Point. And during the latter part of the first year of his service at West Point, his training at West Point, this epileptic problem showed up, and he was released from service. But he was not released from the Society of Cincinnatus, which was the U.S. international intelligence agency of that time, established jointly by Lafayette and George Washington.

So, he worked in the United States, chiefly, as a counter-intelligence spy, for the United States, against principally, the British Empire. And, did make, however, one excursion, at least, into France, of a prolonged excursion, under Lafayette, in collaboration with James Fenimore Cooper, who was also a leading spy, intelligence specialist, who wrote many novels, which actually pertained to actual history or to matters of concern for intelligence operatives. Well, anyway—that's the nature of the thing

So, we don't look at things in a historical context, and therefore, we try to explain things from the detailed facts up, rather than defining what the context of the problem is. You have to find out what part of the universe you're living in, before you try to interpret the events in that part of the universe, not try it the other way around. And this is the problem in this case.

The problem is, if you want to go the hard nut on this one, you have to say, “What is the issue?"

Look, I've been at the center of this thing, for a long time. When I discovered, in 1975-76, that James R. Schlesinger was involved in a revival of the Committee on the Present Danger, which had originally been the nuclear-planning, or -promoting agency, in the Truman years, I went to work, and exposed the fact that these guys, from their own correspondence, which I had the good luck to intercept, in a certain way—that they were actually planning this kind of nuclear confrontation with the Soviet Union, under the Carter Administration. So, I conducted a Presidential campaign, in which, the first time I went on nationwide television—NBC—virtually on election eve, with a half-hour broadcast, showing the thermonuclear explosion and saying, “This is what is being brought into the Carter Administration.” And I succeeded in stopping that policy, because the effect of that film, was such, they said, they dropped it as a “hot potato."

But, at that point, I became involved with, what are we going to do about this loose tendency inside U.S. and other institutions, toward going toward a nuclear confrontation? And so, I worked on the question of how could we develop a political approach, to a military design of system, which we can negotiate with the Soviet Union, to get the world out of the danger of such confrontations.

When Ronald Reagan accepted, or his administration through his National Security Council, accepted that idea as a working idea, for exploration, and I conducted a back-channel discussion with the Soviet government on behalf of the Reagan Administration, on that thing, we were in the middle of the problem. And it's the same problem that I faced then, that we face now.

President Reagan, among his other qualities, was a product of the Franklin Roosevelt era. And on military-security questions, was touched to the heart on this issue, where he may not have been touched to heart on some other issues. But, on this issue, he was not a right-winger. On the survival of the United States, on the Roosevelt perspective, he was not.

So, his administration went to the point of accepting my tentative proposal, for agreement between the United States and Soviet Union and other nations, called the SDI. President Reagan accepted that proposal, which tells you what President Reagan's character was—as opposed to much of the mythology. We proposed it to the Soviet Union. The President went ahead on March 23 and proposed it. Now, I said, at that point, in my final meeting with the Soviet representative, in the dialogue, who reported to me of what their opinion was: that they realized that I was right in what I proposed, technologically. That it was perfectly feasible. But said, “We're not going to do it, because you, the United States, will beat us, in the domain of economy. Therefore, we're going to let our hardline guys go at you, with weapons systems you don't even know about."

And I told him, at that time, I said, “If your government continues that policy, and openly rejects this proposal, if Reagan makes it, then I can assure you, that your economy will collapse for economic reasons within about five years.” It collapsed in six.

Then, in Berlin, in October, Columbus Day 1988, I foretold that what was going to happen next year, beginning in Poland—in the immediate period ahead, beginning in Poland—that the Comecon system was going to disintegrate, and ultimately the Soviet system in its present form. And I laid out the idea of a principled collaboration, between the United States and other nations and the Soviet Union, and the system, to bail out the problem, under a new arrangement. Many people in Europe accepted my proposal. Some in Germany, including Kohl, implicitly accepted that proposal. But, Mitterrand and so forth, objected. So, they allowed Germany to be reunified, but then, under pressure from Britain—Margaret Thatcher, for example—and through a Germany- hating President François Mitterrand of France, they imposed the Maastricht system on Europe, to prevent, and order Germany to begin destroying itself! Which it obediently did! Which is why you have the mass strikes, on Monday, in Germany today.

So, you have to look at what is the mind behind this pattern of events! We, in the United States, with our patriots, do not want a world war. We wish to bring about a world order, not to go into other countries, and change their systems. But, to bring them into an international system of cooperation, consistent with the Treaty of Westphalia, under which we can have a community of nations, under international law, principles of international law consistent with the Treaty of Westphalia, under which we can live together on the planet, and let our differences be resolved by evolution.

That is my approach. That was my approach. That is the American way. That's the Roosevelt way, the Franklin Roosevelt way.

So, now, therefore, there's somebody who doesn't want that. And that somebody is in the United States, in terms of those who oppose me, and sought to have me killed and other things, over this SDI issue. When the U.S. government came with 400-odd people to kill me on Oct. 6 and 7, 1986, it was done on the issue of the SDI! Which Reagan was negotiating with Gorbachov, in that period in Reykjavik.

So, this is the hot issue. This is the issue of why I'm hated by certain people in the United States—on this issue. I'm hated as a continuation, of what otherwise, would be defined as the Roosevelt tradition.

And therefore, they want to do what? They wish to create a world empire, of globalization, a single-world empire, dominated by English-speaking fascists, such as Cheney. And they want to create chaos, and use chaos as a weapon, to destroy existing governments and systems. To reduce the world to a state of putty, in which they, with a few troops like Roman legions, can go in, and run the world, and kill off parts of the population they don't like.

As they're killing off Africa, deliberately! Henry Kissinger, in 1975, said that! In his National Security Study Memorandum 200. That the population of Africa, in particular, it was explained, is sitting on top of natural resources, which we want for our future! Therefore, we must not allow the population of Africa to grow, because they will use up natural resources, which are ours—even though it happens to lie in their country. We will not let them have technology, because then they would use up natural resources more rapidly: Therefore, we're going to prevent that from happening. And we're going to kill, reduce the population of Africa, to a supply of bootblacks for the imperial shoes. And that's what's going on in Africa.

Don't talk about Africa, “this is the issue, in Africa.” That's the issue, in Africa! The Anglo-Americans, and the right-wing Israeli forces are up to their ears, in doing exactly that. You want to know what's going on in Africa? That's why it's being done. That's why the son of Margaret Thatcher was just caught in another coup in Africa—that's what it's all about! Don't try to explain it all with “who hit whom."

Look at the context: The context is, there are forces, which are the Synarchist forces, the same ones that organized fascism on continental Europe between 1922 and 1945. These forces, which are financier-oligarchical forces, with political means, are determined to destroy the system of the modern nation-state, by aid of globalization, by aid of terrorism, by aid of other methods. And, when you're looking at this problem as an intelligence option, you have to look at that way: What they're doing in Russia, they are determined to destroy Russia! That's one of their objectives—as a nation-state. They're also determined to destroy China! We have the proof of it, now. They're out to destroy Korea! They're out to destroy India. They're out to destroy Pakistan. They're out to destroy Europe, as a collection of sovereign nation-states.

Don't look for the “who hit whom” Dick Tracy solution for this thing. Understand, we're dealing—and you must deal, not at the sense of the little man, looking up at the big guys in the neighborhood: What you're looking at, is a process, an old process of evil, of this planet, called oligarchism. Or imperialism. And there are some people who are tied to that. And they have a long-range memory of their objectives.

The whole history of mankind, since, in particular, since Solon of Athens—the whole history of European civilization, since that time, has been this! It has not changed! The emergence of the nation-state is a threat to that whole system. It has not changed. When you're looking for a culprit, or a cause, look at the context. Don't try to find the cheap-shot explanation.

Yes, what's happening in Russia—what do we have to do about it? That's the question? Pose the question: Are you going to stop the horror that went on in Russia, now, by some kind of ad hoc methods? You won't. How about crushing the authors of that policy? [great applause]

FREEMAN: Thank you, Lyn. I'm told by our staff, by the way, that there are “Storm Over Asia” videotapes available at the literature table outside....

As we meet here in Northern Virginia, we do have 500 people gathered on the West Coast, and those 500 people are complaining that they're not getting their share of the questions! So, what I'm going to do is, the next two questions, Harley, will come from you.

Q: My name is Armik Craft from L.A. And I want to know how do HMOs work, and what are some of the social-economic policies that Bush passed, which make it harder for families to have children, and health care?

LAROUCHE: Okay. Well, at the end of the war, as I've said before many times—but it bears repeating, because I don't think enough people understand this yet: At the end of the war, we had come out of the war, with about 16-17 million people in service, military service. We had a military medical system, which we developed to provide care, without triage if we could avoid it, for all of the people engaged in that military establishment. And anything in their environment, as well. Because, if you're taking care of your own people, in military people, you have to also take care of the people in the environment of your military forces. So, you also will supply assistance, for example, especially in occupied territories. You must take responsibility for health care in those territories, in organizing it, and also by providing supplementary, direct assistance.

So, we came back. We had this good system, of caring for people in the military service, or contiguous to military service.

So, we had a bill that was enacted, with a few pages, about seven pages, in Congress and it's a good bill. A bill that runs ten pages, is a lousy bill—it's already stretching the imagination of the average Congressman. So, you want a clean statement of principle, then, let the supplementary legislation come in afterward, on implementation, once you have agreed on the principle of law. So, you establish by law, a principle of law, for practice of law. Then, you come in later and you find out what you have to do, in terms of specific legislation, to facilitate the furtherance of that principle, which you're committed to adopt.

So, we set up a system, which is now disintegrating—deliberately. In 1973, as part of the fascist characteristics of the Nixon Administration, we rammed through a bill, called the HMO bill, which was intended to repeal the Hill-Burton legislation. And since that time, we have not only systematically destroyed the medical institutions—that is, a certain inertia occurred beyond 1973—but from 1975 on, with Big MAC, the medical health care system of New York City, which happened to be about one of the best in the world, was collapsing. The hospitals began to disappear; health care began to disappear. And it went on.

But, the general trend was to eliminate it. Now, it became worse, about the time Brzezinski was in power, and immediately afterward, with various kinds of radical monetarist legislation. And so, what they did, in the same way they looted the savings & loan associations, what they did is said, “Medical practice is no longer the province of the decisions of the medical professional. Medical practice is now a commodity. And first of all, we must privatize the system in a way, in which Wall Street will use medicine as a cow, from which to milk profits for Wall Street.” So therefore, you had accountants working for firms, stock firms, which had bought out medical institutions, controlling medical institutions. And now, an accountant, not a physician was determining whether you lived or died! As to what they thought you should get.

Take, for example, the key case, is preventive medicine. Now, preventive medicine is something which is extremely important today, as people become older. Because, about the age of 50 or so, you begin to get the diseases you're potentially going to get. And the important thing is to try to prevent those diseases from becoming terminal. And by taking preventive care, and this occurs largely because a physician—if he's available, or somebody else—is looking at your case, as you, not your disease! In other words, the physician looks at you, as a person. And says, “Okay, Mrs. Jones, you're 50, I think we ought to run this test. Mrs. Jones, you're a little bit overweight, and you're 50, I think we ought to run this test.” Or, “Mr. Jones, you've got this problem. I think we should look at this."

So, preventive medicine was essentially the discretion of the physician or the institution, relevant institution, to look at people, and to look at it en masse in terms of what might happen to them, in the future, if indications of present trends were not attended to. So therefore, if you could get people's lives organized, or community's life organized, so that something which threatens the member of that community as a disease or pattern of disease—if that behavior can be corrected, in such a way as to prolong life and live in it, you find that preventive health care will save more lives much more cheaply, than having to wait until the thing hits with full stroke, when the maximum price comes in.

So, under an HMO, where the amount of time the physician is allowed to spend, in working with the patient, as a person, not as a bearer of diseases, is virtually eliminated. Because, a question of judgment by a physician, on a case, may require some thinking and some repeated investigation by that physician. Where there may not be anything on the “list” provided by accountants, for what is authorized investigation or treatment.

So therefore, what's happened is, the medical system has collapsed. We do not have the facilities for protection against disease, epidemics and so forth, we once had. We shut it down. All in the interest of HMO.

My law is: You do not allow an accountant to practice medicine. [applause] And people get the care they need, as the best judgment of medical science says they need that care.

Q: Good afternoon. Lyn, we've been working on the West Coast, on the nature of the calculus, to get a better sense of the science of physical economy, and the characteristics of physical space. And, we've been making some progress. It's a little slippery, though. It's an elusive subject: I mean, you try to grasp at it, and as soon as you do, it's gone—like the infinitesimal.

So, my question is, what is number, that it can be transcendental?

LAROUCHE: Ah-ha-ha. Well! There are all kinds of numbers! Including some, you date! [laughter]

You have to determine what kind of number you're talking about. A transcendental number is not a number. A transcendental number is reality—something an accountant couldn't understand. Especially one that works for HMOs.

See, the question is, what is reality? As I say—I'll try to make this as short as possible. You guys sometimes come along—young guys—I appreciate it very much, but sometimes the older guys get tired of it.

We're talking about a matter of principle here. A complex domain—there's no such thing as a complex number. There's a complex function. Don't call it a complex number—it is not a number. There are numbers involved, but it's a complex function.

What does it do? It does two things: First of all, you're dealing with sense-perception, and you're dealing with a principle, which has an efficient effect on the perceived world. You can't see the principle, but you've discovered it by hypothesis, and experimental proof of hypothesis. Now, it exists. It's out there. You can't see it, but you can see its effects on your sense-perception.

Now, you have certain data, which it refers, a counting of things which pertain to objects you perceive, and effects you perceive. But you can not explain, you can not project adequately, what this process is you are sensually observing, in terms of this kind of number counting. So therefore, you come around and say, “Now how can we understand the relationship between the thing out there we can't see, which is controlling a process, and the shadows we're measuring, which are our sense-perceptual effects?"

So therefore, a complex domain measures in spherical terms, spherics terms, the same spherics method of physical geometry used by Archytas and other Pythagoreans, and by Plato. We're taking this aspect of the process, and we're now correlating this with observable data, which come in the simple numbers, in order to project what the effect will be of a situation in which the operative power is this principle which you can't see, and which the data is this. So now, you make a calculation based on this method of spherics to determine what the effect will be, the measurable, observable effect, of the operation which this relationship defines. That's called the complex function.

Don't call it a “complex number.” People do. That's where the mistake lies. There is no complex number. There's a complex function, not a number. And this involves precisely this difference.

The reason the term “complex number” comes up, is someone will take, say, a logarithmic number, as such, and misinterpret what a logarithmic number means. And therefore, they call it a number. But, it's not really a number, the way it's generated. It's generated as a complex function, and involves the existence of the notion of principle and hypothesis, that is, hypothesis as experimentally proved principle, in relationship to observed phenomena. And you want to know what the effect is of the relationship of an operating, efficient principle you can't see, upon an array of data [for which] you do have sense-perceptual aspect, and you want to see what the result is, in terms of something you can observe, as the end product of this relationship: That is called a “complex function.” There is no complex number.

FREEMAN: Okay, we're going to take a question that's been transmitted by the internet. This is a question from a Congressional candidate from the Midwest. You have to wait one second, because I forgot my glasses.

"Mr. LaRouche, there's a lot of discussion in the black community, that the election is going to be stolen. This discussion's around two principal topics, one I'm familiar with, and one I'm not quite as familiar with. One is the obvious possibility of vote fraud, and I think there are a number of people who are working on this, and who are working on exposing the scandal around the Diebold contract for election voting machines.

But, my second question is one that I'm a little bit more confused about, and that is, the fact that, I'm told that the GOP is heavily involved, in what my friends are calling a 'voter suppression' operation, that they're running through a combination of the Moonies and the Faith-Based Initiative. I understand why they would intend to suppress the black vote, but I don't understand how they would do it. And I don't understand why the Moonies would have any stronghold in the black community, at all. Could you please comment on this?"

LAROUCHE: The Moonies have a history, and the history is the Buchmanites, the origin of this. And the Buchmanites were, at one point, a pro-Hitler operation, which gives you an idea—it was created in England. And therefore, you get some idea of what's going on.

And what they did, is they took a situation in Korea, in the relation between North and South Korea, and they created a branch, essentially, of the Buchmanite movement. And used that as a weapon, through certain corrupt channels of the U.S. Allen Dulles intelligence service. And brought it into the United States, and used it here, and elsewhere. So, it's a typical kind of operation: It is not a religion, it's an operation. And when you have this thing, in which you got Senator Warner quite upset, about finding himself involved in sponsoring one of these things, where the guy proclaimed he was practically a god, is not exactly what we want running loose around here.

But, the key thing here is, don't bother worrying about the details of the Moonies. Or other groups, much more dangerous, is the cult that Tony Chaitkin keeps talking about, which in Washington, D.C., which includes this crazy “Zealot” Miller, this fanatic you heard babbling about his “precious bodily fluids” on Wednesday night on television, just preceding Dick Cheney.

The thing to look at is, what is the nature of the operation? Now, let's look at very focussed: In this case, we're talking about the operations against the Americans of African descent, or Americans of perceived African descent. Either way, you want to have it.

The point is: We also have, in the Department of Justice, we have a system, extending into the state systems, in which we are disenfranchising large masses of, especially, young black men. Or, who are no longer young, when they come out of prison. We are, by using this against them—in other words, the issue of habilitating the voting rights of a convicted person, is a first line of defense against this aspect of fraud. Because, if a person once had they completed their penalty, their service of penalty, have been discharged from supervision after incarceration, or after any other term, the object should be to get that person back on the voting rolls, as soon as possible— [interrupted by applause].

Because, if you do that, if you follow that policy, then you can not do the purging, that is being done now, in the state of Florida and elsewhere, by the Republican machine.

We have this in Louisiana, for example, concrete case, we're discussing with a political official down there. It's going on. You have also a similar case, like Cynthia McKinney won her position back in the Congress, at least on the primary level, by overcoming this kind of problem—not just the purging of the rolls. But, by having a serious voter mobilization, to get herself re-elected, after a period of being tossed out.

So, the key thing, is we're defending the rights of everybody, defending the rights of communities to a fair vote, by eliminating a factor of exclusion which is being used now, where similar-name identification on the voting rolls, is being used to take away voter registration. And this is especially targetting the communities of perceived African descent. So, that's one aspect of it.

The other aspect is this: What has happened since Newt Gingrich, the fascist, became the head of the House of Representatives in that campaign, the immediate effect of the Gingrich election was to throw the Black Congressional Caucus out of the Congress effectively, as a functioning entity, and to do similar things to spread this into state areas, with Justice Department frame-ups and the old kind of thing usually done. The “usual sort of thing” that the racists do, hmm?

What has happened is, with the Democratic Party policy, of going for a base in the upper 20% of suburban voters, as opposed to the general electorate, is, what happened is that you have a complete period of ousting of key elected officials, of perceived African descent. That is, you know, sometimes, they missed people who passed, that sort of thing.

And also, you have this process of discouraging people, who were militants, to such a degree, that somebody comes along, and gives them an idea of a way to get some money for themselves. The usual way, that the manipulation of the typical political person, of apparent African descent, the way they get at them, if you try corruption, get them to believe that some money is going to be given to them personally, or to their favorite cause, their church for example, which will not be given to them, unless they “behave themselves."

Then, what happens, is the people who are not in on that deal, around them, begin to want it. And they are controlled, as if in a Malaysian monkey trap. You know how the Malaysian farmer catches a monkey: He takes a narrow-mouthed simple vase, or pot; he puts a nut in the pot. Now, the mouth of the pot is not so small that the monkey can't get his paw in. But, when the monkey gets his paw around the nut, and tries to pull the nut out, he could pull his paw out, but not with the nut in it. And, since he isn't willing to give up the nut, the farmer's family eats monkey for dinner that night.

And that's what's being done to a lot of the population in the United States. It's a typical tactic: You try a combination of intimidation and corruption, intimidation and corruption. The remedy for this thing—of course, all remedies that are legitimate, are legitimate: We have to fight against this purging. It's wrong. We have to fight for habilitation of voting rights, as universal. We do that. It's necessary! Otherwise, you're not going to protect anybody's vote, unless you protect everybody's vote. [applause]

But, the one thing we have to do, and we have to do it as part of the campaign organization: We must aim at creating a landslide victory in November, 59 days from now. We must have that victory! The only way we'll get it, is #1) mobilize the youth 18 to 25, the way we've demonstrated with our youth movement, so far. We've demonstrated a principle. The way we organize and operate with the youth movement, even sometimes against the advice of people associated with me, the adult, older people who have funny ideas, they shouldn't be trying the youth. But, when it's done properly, a youth movement is the most effective political force, per capita, in the world today! Because the world is giving the youth a no-future society, and they've got enough spunk to want to do something about! [applause]

And therefore, activating them, will mobilize the older generation, which have grown pessimistic under the circumstances of the corrosion, which have hit this society, so far.

By those methods, by aiming at the lower 80% of family-income brackets, in that way, to say, “We, like Franklin Roosevelt in 1932, are campaigning for the victory of the interests of the common man, the 'forgotten man.'” Conveying that idea clearly, not merely as an argument, but as exemplified by a course of practice.

For example: You go into a demoralized community, as you're going to see here tomorrow. When you go into a demoralized community, where people have given up on life. They're just plodding along, trying to make ends meet. Waiting to die. Waiting to be carted off. In those communities, go in, and sing, a trained choral singing, of a Bach motet, and similar kinds of things. Sing with some aptitude, a Classical Negro spiritual, as part of the mix. I don't care whether it's white or black or whatever audience—do it! Do it, as a group. Don't do it, as just an individual or a couple of people. Do it as a group. Go in, create an intellectual force, a moral force, on the door-step of the poor. They come out. The children come out. Someone to sing with. It makes their day bright. Don't stop there. And they ask you, “Why're you doing this? Why're you here?” And you tell them why you're there!

Now, it doesn't mean you're going to recruit them, necessarily. It does mean, you're going to have an impact on them: That somebody good, a stranger, came into their community, and did something that they perceived to be beautiful. And it was done for them. This is what they don't get, from the political establishment in the United States, today. The parties don't give that to them!

They try to recruit youth—it doesn't work! They don't know how to do it. They're thinking in their fixed bureaucratic terms. They're not thinking about that person, in that ghetto, that poor, frightened, torn-out, worn-out, frightened person—as a human being! Who has a human potential inside them.

Your object is to bring forth within them, a sense of optimism, not based on promises. Not by buying them; not by bribing them. But, the sense that you are now treating them as a human being, which they are—not somebody who you use.

And, if we do that, and approach that this way, we can mobilize a mass movement. The world, which is horrified by the Republican Convention, and its reverberations, is looking for an alternative. Republicans are looking for such an alternative. They look in the direction of the only credible alternative to the Republican Party, the Democratic Party. They look at the nominated candidate for President of the Democratic Party. What's the action? What's the action?

We have to add this factor of action to that work. And, just as our work with youth works in touching people who are otherwise left untouched, so, if we can infect the Democratic machine, or more viable parts of it, of doing the same thing, we can create, very rapidly, in a frightened population, looking for answers—we can create the basis, as Roosevelt did in 1932, for a mass movement of the “forgotten man.” If we do that, we can achieve a landslide victory. [thunderous applause]

FREEMAN: We have time for one more question from here, and one more question from California, and then we will close this session.

But, before I do that, I do want to say one thing, particularly in light of what Lyn just said. You know, there are people in this country, people in the Democratic Party, who do want to win this election. But, they're willing to be satisfied with winning the election by a single vote. And that is not our view. And one of the things that Lyn has said, repeatedly and emphatically, is that, what we need to do in this election campaign, and what we intend to do, is to deliver a resounding defeat to those Synarchist fascists, who have virtually effected a cold coup in this republic.

And I think that Lyn's Presidential campaign gave people something of a model of how that would be done. It was different that any other Presidential campaign that we've run, and certainly was different from any other Presidential campaign that anybody else has ever run: in that it was fueled by an army of young people. And, it was an army of young people who were out there, not campaigning in what many people would consider the “traditional way.” They were people who campaigned—and I saw the effectiveness of this in Washington, D.C., during the primary there; I saw it in Philadelphia; I saw it in Boston, and we certainly saw it in California. These were young people, who were driven by a fundamental confidence, that the power of a beautiful idea, fostered more optimism, than the power of the dollar.

And the fact of the matter, is that we can inspire this entire nation, over the course of the next 60 days. It's also the case, that people of my generation have delivered these youth, up to now, no future. And it really is up to us, because we are not willing—and I leave myself and some of the full-time organizers here out of that “we"—but, for the most part, the people who we organize, who are supporters of Mr. LaRouche and this movement, who are 30 years old and above, either lack the energy, the time, or the simple optimism, to get out there and do, what these young people are prepared to do.

I can guarantee you, and I know this personally, because I know what Lyn's intention is: Every dollar that you contribute to LPAC, will go for only one of two purposes. It will either go to produce material written by Mr. LaRouche, for this campaign; or it will go to support the movement of these young people across the country. So, before we take the last two questions of this panel, I really do want to encourage people here, people who can't find the time, or the energy, or the optimism, to get out there and do what these young people are doing, to make sure that you support this effort. And, if you do that, I can virtually guarantee that they will do their job, and we will deliver a stinging defeat to these fascists in November.

The next question from here is from Montreal, from Rico Bastien.

Q: [translated from French] Hi, my name is Rico. I am very happy with what he said. It greatly touched me.

I have a question to ask you. What is the financial market, specifically about Nortel, the technology company. But, how does the market function?

LAROUCHE: Well, the market is actually a myth. There are bazaars, and there are bizarres. But, the idea of the market, as a determinant of the economy, is in a sense, a myth. Because, in a well ordered society, the government creates the market. How does it do that?

Take now. In every part of the United States, and I think probably Canada, too, the country is operating below breakeven. That is, if we take the things that we are spending, as people—of resources—ourselves, to do what we're doing, we find that the income we're getting as nations, in return for what we are expending, is, we are using up resources. So, we're in negative profit, physically. Forget financially. Financially will follow physically.

So, in physical economic terms, we're losing on business. We're getting less in return for what we do, than it would take to produce and sustain what we're doing.

Now, most of this, the immediate shock of this, comes largely in the area of large-scale infrastructure. For example, we have, across the North American continent, in particular, we have a vast shortage—as you will see a little bit, in tomorrow morning's presentation—we have a vast shortage of essential infrastructure, on which the continuation of production and normal life depends. For example, the collapse of locks and dams, and water systems, generally, is a threat to life. The collapse of reliable energy, that is, power generation and distribution, is a threat to life. Jamming up superhighways, to turn them into parking lots at rush hour, is not mass transportation. At least it's a very strange idea of mass transportation. We have destroyed the railroad system. What you'll see, in even the charts which will be presented tomorrow, is typical.

We are losing basic economic infrastructure. We are going back to the Stone Age—or worse! We've used up a lot of the resources we depended upon, and now we're back to the Stone Age level, we don't have the resources the Stone Age had, because we used up some of them.

So, it's not a very good business. So, the first thing to do, is, we must reverse the trend toward depletion of society, in this way. Especially capital depreciation. Not merely people doing work, and being sustained, at less than they require to continue living. That's one part. But, destroying capital resources, is also the same thing. So, we have to reverse that.

And government can not run private businesses. And to get the economy moving, to create the market, we must act through government. And what does government do, on the Federal, state, and local level in the United States? Government undertakes projects, infrastructure projects: the police, the schools, the hospitals, are projects—they're capital projects—with an investment life, a specific kind of investment life. Now, building these projects takes a lot of money up front: You have to buy and invest in creating these things upfront. You don't get the payback that year. You get the payback over coming years. And the thing is, to match the payback society gets, with what it takes to provide these facilities.

But, these projects thus give you a means, if you create credit by government to do these things, it gives you the means in which to increase employment, even when the purchasing power available would not apparently justify that employment. In other words, people say, “There's not enough work to go around, therefore people have to be laid off."

That's what you want to reverse! You say, “We're not going to lay people off, because there's not enough work. We're going to create more work, but it has to be useful work,” which, in the language of the economist is “fungible.” It has to be something, in the main, which will pay us back, over coming years, and therefore we can feel free in going into debt, to create something where the debt will be paid in a physical sense.

So therefore, we have to organize prices of structure, in this way to do this, and credit systems to do this.

So now, what we do, is, we put people back to work. The program is, to have more people going back to work, in useful capital investment, in the public sector, in the [], in order to ensure that the total level of output of society, is greater than the required input to maintain that society. In other words, the long-term capital budget, the combination of long-term capital budget and current operating budget, are in combined, in balance. They're not in balance on the basis of the same year, the same short term, but they're put into balance by looking at both the current operating budgets, and the capital budget, in a combined way, and making sure that you know what you're doing.

If you have planned in the proper way, for things you know are necessary, such as water systems, power generation and distribution, necessary health care facilities and so forth; or simply science-driver programs which will give you the technology which will be useful both to government functions and to private business functions.

So, you're trying to get technological progress, increase the productive powers of labor, maintain an operating budget, in physical terms, in balance, when you take the current operating budget and long-term capital budget into account, and put them together.

So, the state then creates this added growth. In order to do this, the state turns to the private sector, employs people from the private sector in these projects, employs companies, firms in the private sector to facilitate building these projects, like highway projects for example. Thus, you create a stimulus from the public sector into the private sector.

Now, what you must do, you must turn around and go to your banking system. How do you let the private sector increase its capacity, in employment and so forth, in order to do the work for these public projects? Well, you go to the banking system and you set up a system of laws, of the type we used to have, where the central banking system of the United States, the Hamiltonian type of system, now decides by approval of act of Congress, or by approval of local legislatures or local governments, to authorize a credit through the banking system for special loans, on terms which are suitable to people who the local community and experts think are good investments—they're competent people; they know how to do their business. And giving them some advice, as well as some supervision, to enable them to borrow money to be able to employ the people, buy the materials, make the investments, and so forth, to participate in government projects.

The way the Tennessee Valley project worked in transforming that area over a long period. There was not a miracle immediately—there was a certain miracle, immediately with the TVA project; but the long-term effect, in the area of Tennessee and the adjoining states, was slower. It took time to “kick in,” as they say.

So, that's the way we approach these things. This creates the market. And government creates the market. It creates the market by an obvious way: You have government responsibilities, which are government responsibilities at the Federal, state, and local level respectively. Bond issues by state government, bond issues by municipalities, are typical of this. And government must encourage these things, in the private sector and the banking sector, to make sure things work.

You must have an overall view, which is by economic intelligence, to see how the whole system of the nation is going. To make slight adjustments, here and there, to make sure the thing works. You have to learn lessons from experience, and absorb them into the system, without stopping the system. This is what we've done in the past; this is what we did for recovery. We made a lot of mistakes. We made a lot of messes, under Roosevelt. We had to get the job done. We will make messes in the future.

But remember, when you get through all the messes that the Roosevelt Administration made, before the war, during the war, and that we made in the post-war period, nonetheless, from 1932 to 1964, this nation progressed in net effect as had never been seen on this planet before! And it was done by that system. It was done with that kind of thinking—and we simply go back to it: That kind of thinking, by a sort of demographic, democratic process of relations among the private sector, local interests, lobbying groups, local interest groups, all these kinds of things, which are screaming, “We need this! We need this! We need this!” And government tries to use judgment, as to how to balance the accounts, in the private sector, in the public sector, in order to get a net result, which means that, even if some people are dissastisfied with not getting what they wanted, they have confidence that that community is going to make it through and grow and improve over the coming period. And when you have to deal with them, as a politician, you say, “Look, you're not getting everything you want. It's still on the table. If we think it has merit, if you think it has merit, it's going to stay on the table. You didn't get it now. But don't give up. We're still talking to you. And we'll consider putting you on the agenda.”

But, the main thing of government, is to make sure the balance is working. And where the country is operating on a self-defeating spiral of deficit, you have to use government and the power of the government to create credit, by utterance, in order to provide the margin, to go at the areas where government can put money into the system. Created money, created credit, into the system: to get the public sector going, and use the public sector as the driver for the stimulation of the private sector. And then, in turn, assist in providing or organizing the credit in the private sector, through financial institutions such as banks, so that, with local committees of review in local areas, you can determine, who should get the loan, who should get the credit. And you watch it, from year to year. And you manage it, that way.

It's simple! We used to do things that way, we used to think that way. We didn't always act competently on an overall way, that way, but that was the way we thought, prior to the change that came 40 years ago, when a lot of young people, rich kids from suburbia, went onto the leading campuses of the United States, took their clothes off, raped telephone poles, and slept on LSD. [applause]

FREEMAN: I had said that we would take a question from the West Coast, but we're out of time. We will start the next panel with a question from the West Coast, and we'll relieve the balance that way. Will all of you please join me in thanking Lyn?

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