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News Releases on the New Bretton Woods

Felix Rohatyn Must Not Duck the Issue
LaRouche Issues Challenge To Banker Felix Rohatyn

As the global financial crash rushes in, more institutions and governments are looking toward LaRouche's New Bretton Woods as the solution to the monetary crises worsen. On August 18, 2001, a phony-baloney "New Bretton Woods" was "proposed" by a Mr. Felix Rohatyn, in a report published in the London Financial Times.

This is a delphic proposal, coming from this banker of Lazard Frères, one of the most influential New York-London investment banking houses, and a controlling influence in the Washington Post. It was penned in the vain hope of stopping the momentum for LaRouche's New Bretton Woods inside the United States and Internationally.

Related pages:
New Bretton Woods Page
Physical Economy Page
How to Survive the Onrushing Global Financial Crash
LaRouche Speech to Mexian Accountants

Felix Rohatyn Must Not Duck the Issue

by Lyndon H. LaRouche, Jr.
August 24, 2001

This statement by Lyndon H. LaRouche, Jr. was released on Aug. 24, 2001 after Felix Rohatyn had been reported internationally calling for a New Bretton Woods monetary conference. For further background, see "LaRouche Issues Challenge to Banker Rohatyn."

During recent years, all substantive forms of proposals for holding a New Bretton Woods conference have been associated, increasingly, internationally, with my name. Institutions of governments have taken preliminary action in furtherance of the discussion and adoption of my proposals.

Now, Felix Rohatyn has claimed that he is proposing a "New Bretton Woods" conference; but, he makes no reference to the proposal by that name already on the international agenda. The implied question is, whether Felix is claiming to have invented the wheel, or does he intend to suggest that he is supporting the proposal already on the table, the one made famous internationally by me and by groups of elected parliamentarians who have circulated resolutions internationally in support of my proposal? The obviously urgent question is, therefore: Does he accept my definition, or is his statement intended to function as yet another delphic deception of the credulous?

Since the present international monetary system is currently in the process of disintegrating, the question whether Felix means to support my proposal, or something different, must be clarified, urgently. We can not have two brands of medicine circulating under the same brand name, the one therapeutic and the other deadly poison. Therefore, Felix must respond to my challenge on this matter, and publicly.

Challenge of Facts and Questions

To simplify the problem, I challenge Felix to answer the following questions publicly.

Fact: "New Bretton Woods" has come to be understood in relevant official and other international circles, as signifying a replacement for the catastrophically and cruelly unjust, failed, present International Monetary Fund system. By the presently failed international monetary system, is meant the change from the original, protectionist form of fixed-exchange-rate system, to the floating-exchange-rate system introduced in August 1971. Therefore, the proposal for a New Bretton Woods, signifies abandoning a presently failed system, in favor of building upon a preceding Bretton Woods System which worked very well, despite the abuses within it.

Question: Does Felix Rohatyn accept that widely accepted definition of the term "New Bretton Woods"? If so, he should say so publicly. If not, then, he should change the name of his proposal, to avoid misleading the public. (This might be regarded as tantamount to a "truth in lending" clause.)

Fact: During the 1995-2000 interval, U.S. investors, alone, lost trillions of dollars in one of the great financial chain-letter swindles of modern history, the so-called "New Economy" bubble. Many national leaders, including leading Presidential candidates, continued to promote that "New Economy" swindle as late as the Year 2000 U.S. Presidential campaign. During that campaign, I warned against being duped by that "New Economy" propaganda, and warned of a new general financial crisis facing the world, either during or immediately after the 2000 campaign. From about the time of the inauguration of President George W. Bush, the "New Economy" bubble has burst, investors duped into supporting it have lost trillions of dollars, and the role of the U.S. as the world's "importer of last resort" has collapsed.

Question: I have been warning investors and others internationally, of the danger of this financial bubble, and related blunders of our own and other governments, over years to date. When did financial expert Felix Rohatyn first issue a public warning against this gigantic hoax? Did he publicly warn Democratic candidate Al Gore, to cease misleading the public on this issue? Did he ever publicly endorse my specific warnings on this account, at a time when his support might have helped prevent millions of Americans from being duped into investing in that bubble? Now, that the "New Economy" hoax has exposed itself, the foremost financial crisis in the U.S. now, is a gigantic real-estate bubble, being constructed under the pretext of consumer-credit generation, but for the deeper and darker purpose of inflating real-estate values temporarily to cover for the looming embarrassment of leading banks; this was already well known to experts of Felix Rohatyn's experience and rank during the Year 2000 U.S. Presidential campaign.

Fact: Since about the time of the inauguration of the administration of President Jimmy Carter, there has been a persistent, catastrophic collapse of the share of national income of the lower 80% of family-income brackets. Combined with the collapse of neglected and looted U.S. basic economic infrastructure, and the looting of our nation's physical productive capacity by exporting U.S. job-places to cheap-labor markets, the net effect of U.S. policies under the 1971-2001 floating-exchange-rate monetary system, has been an accelerating collapse of the physical productive potential and welfare of the U.S. and its people, especially those in the lower-80 percentile of family-income brackets.

Question: Does Felix Rohatyn recognize these facts? Does he recognize that the U.S. and world economies have suffered an accumulation of changes in policies—from those of the 1945-1963 period—which have now proven themselves to have been systemic follies? Does he recognize the need to return to the policy-making matrix which was characteristic of the Franklin Roosevelt Presidency and post-war U.S. practice, prior to Richard Nixon's pro-Nashville Agrarian, "Southern Strategy" campaign of 1966-68? Is Felix prepared to admit and state openly, that we must fix what misguided post-1966 U.S. leadership, such as that under Presidents Nixon and Carter, broke?

Fact: Felix Rohatyn is sufficiently well-informed and intelligent to know, as many in high public office today do not, that there were several features of the original 1945-1963 functioning of the Bretton Woods System which were essential to the post-war reconstruction of the economies of the U.S.A., western Europe, and elsewhere. We may be certain that he knows, that these conditions included a system of administratively fixed exchange-rates, without which, low-interest rates in medium- to long-term international loans and investments were impossible to defend. We may be certain that he knows, that the creation of the mass of public and other credit required for post-war reconstruction and growth, could not have been defended without a system of regulation essential for long-term investments in basic economic infrastructure and productive capital of agriculture, industry, housing, and urban infrastructure generally. We may be certain that he knows, that these measures included protectionist forms of medium-term to long-term trade and tariff protection of productive investments, and also capital controls, exchange controls, and financial regulation. We may be certain that he knows, that reinstituting such measures is indispensable for recovery from the presently onrushing, chain-reaction collapse of the world's present financial and monetary system.

Question: Is he prepared to state publicly his commitment to restore those features as the foundation on which a New Bretton Woods agreement would be premised from the start?

Fact: The only durable source of real profit of a national economy as a whole, is from the employment of labor in scientific and technological progress, and in increasingly energy-intensive, capital-intensive modes. Otherwise, the generation of any average apparent rate of profit in a national economy, will occur either through looting of natural and other preexisting resources, or as the purely fictitious financial gains of the type associated with the recent and current stock-market and real-estate bubbles. The current U.S. energy crisis, the currently accelerating U.S. health-care crisis, and the galloping of the U.S. national current accounts deficit, are merely typical of the inevitable results of trying to substitute various forms of so-called "post-industrial economy," for the old-fashioned, "blue collar"-centered real economy. It is impossible that Felix Rohatyn does not know this.

Question: Will he say it?

Essential Steps to New Bretton Woods

Otherwise, I think that Felix Rohatyn would not have any formal disagreement with the following elements of my proposal for immediate emergency action, as I outlined some of these essential points in my recent address to Mexico's accounting profession.

It is obvious to me, and to a significant number of other relevant persons from various nations, that there are three essential steps to be taken to bring the urgently needed form of New Bretton Woods into being.

First, there must be intensive discussion of the required terms of a New Bretton Woods among those who have both the professional and related competence to discuss such technical matters of global and national policy-making. These layers must not only design the set of specifications on whose adoption the success of the mission will depend absolutely; they must distinguish between requirements which do not admit of competent compromise, and those choices which are in fact available to the political and related institutions which must adopt the draft New Bretton Woods reforms.

Second, this first group must educate the relevant political institutions, who, today, do not have any predetermined competence in the technical side of these matters. The issues must be laid on the table, clearly setting forth to the political and related institutions of relevance, what choices are available to them, as distinct from certain elements which can not be compromised, if the system is not to fail from the outset.

Third, this must be accompanied by an energetic, therapeutic reeducation of the general public in the rudiments of the difference between the awfully failed system now collapsing around their ears, and the principles of the new system which they must support, and in which they must find their opportunities for productive participation.

Let us cut through the usual "spin" and other delphic propaganda, and have some clear answers on the matter of the facts and questions I have set before Felix Rohatyn.

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Press Release:

LaRouche Issues Challenge To Banker Felix Rohatyn

by Mark Burdman

Lyndon H. LaRouche, Jr. issued a world-wide challenge to former U.S. Ambassador to France, banker Felix Rohatyn, to state whether his use of LaRouche's widely circulated proposal for "A New Bretton Woods" means that he is supporting LaRouche's proposal, or attempting to make a delphic end-run against LaRouche's growing influence world-wide on this matter.

To understand the significance of Rohatyn's action, the reader will need to know the following essential facts about Rohatyn himself.

As the global economic system careens out of control in a systemic breakdown crisis, a paradoxical, but most lawful phenomenon has begun to occur. Leading figures in the Anglo-American establishment have determined, that they must steal some of the fundamental policies put forward by Lyndon LaRouche, and put the policies forward publicly, in a twisted and delphic form, while excluding LaRouche from active participation in relevant deliberations. LaRouche is the one man who had forecast this systemic crisis, more than seven years ago. His policies would work, solving the crisis in the interest of the General Welfare as outlined in the U.S. Constitution, but his personal involvement in such deliberations will be critical to their ultimate success.

On Aug. 4, 2001, an insightful figure in the British institutional establishment, had tipped off EIR, the weekly new magazine founded and edited by Lyndon LaRouche, that precisely this would happen. According to this figure, the highest levels of the Anglo-American establishment are resolved that "LaRouche must be traduced, traduced, and traduced again," since he "represents the reality of the economic situation which they are determined to deny. They cannot afford to praise even the slightest thing LaRouche does, because then the totality of what he is doing, might become credible." Yet at the same time, he went on, "they will have no problem in stealing this or that item from LaRouche, while denying him any credit. Paradoxically, this will increase his influence."

So, on Aug. 18, 2001,top Wall Street banker Felix Rohatyn, Clinton's Ambassador to France, authored a commentary, in the City of London's main daily, the Financial Times, entitled "Back to Bretton Woods." In it, he called for "a new Bretton Woods, convened by the President of the U.S.," the which would be "a serious response to real issues." Any informed reader would have known, that Lyndon LaRouche has been intensively organizing precisely for such an initiative, even naming his Year 2000 Presidential campaign organization, "LaRouche's Committee for a New Bretton Woods." The LaRouche "New Bretton Woods" has been formally backed by leading national legislators in Italy, by state legislatures in several American states, and by prominent economists and political figures in countries around the world.See New Bretton Woods Page

Since Rohatyn is undoubtedly such an informed reader, and is aware of LaRouche's global impact, his omission of the name "LaRouche" from his commentary is perhaps more important than the text itself, and a sure indication that what Rohatyn is intending is something less than kosher.

That Felix Rohatyn himself would be doing this, is a most telling sign of the desperation in Wall Street-City of London circles, who can no longer deny the extent of the global collapse. This is a time when it is being openly acknowledged in the transatlantic establishment press, that today's economic crisis is simultaneously engulfing the three "trilateral" components of the "advanced sector"—the United States, Japan, and Europe. Furthermore, the hottest subject under discussion in the financial pages throughout much of the European continent, as well as among policy elites in Russia, is that the world is on the verge of a giant crisis of the American dollar. In fact, the dollar has already lost almost 10% of its value against major currencies since early July.

Rohatyn Knows LaRouche Well

For decades, Rohatyn has been a senior figure in Lazard Frères, one of the most influential New York-London investment banking houses. Lazard has been the controlling influence in the Washington Post, which laid down the law, in 1976, that no coverage of LaRouche's activities would ever be allowed, and that the only thing that would be written about LaRouche, would be slanderous characterizations. (click for documentation)

During the 1970s, Rohatyn personally oversaw a financiers' austerity dictatorship over New York City, the so-called "Big MAC," from which New York has never recovered. As EIR has amply documented, LaRouche and his political movement were leading a resistance movement against Rohatyn and his banker friends, centered around the declaration by the city, of a moratorium on its debt (see Richard Freeman, "How LaRouche Fought New York's Fascist Financial Dictatorship, 1975-82," EIR, July 27, 2001). Rohatyn, indeed, knows LaRouche well.

Rohatyn is also very cozy with Henry Kissinger, the man who initiated the extra-legal efforts to have LaRouche incarcerated, in the 1980s. As EIR has reported, it was Rohatyn who effectively authored what is perhaps the only chapter of Kissinger's latest book, Does America Need a Foreign Policy? Toward a Diplomacy for the 21st Century that shows any connection to the real world. That is the chapter, in which Kissinger expresses panic about a possible global financial collapse. Rohatyn, like Kissinger, is a creature out of the lower depths of Dante's Inferno, but unlike Kissinger, he is not stupid.

Undoubtedly, Rohatyn, a key influence in the U.S. Democratic Party, comprehends that, under the direction, or non-direction, of the Bush Administration policy team, "the game is up" for him and his friends, and that LaRouche's influence can, at any moment, take off, in all sorts of non-linear directions. First of all, the insane denial, by Treasury Secretary Paul O'Neill, that there even exists a fundamental crisis in Argentina and in the American economy itself, represents a clear and present danger to those banks that Rohatyn represents. But on a deeper plane, Rohatyn clearly recognizes that under George W. Bush, U.S. global influence is being massively undermined, and that this itself is a giant threat to what he understands to be "the system."

Notably, in his last weeks as American Ambassador in France, Rohatyn made a number of public statements attacking the pro-death penalty policies of Bush, and reporting his direct experience, in France and in other countries, with Europeans who were aghast at the drift of American policies. Rohatyn stated, in interviews or articles in the French press, that he was genuinely astonished by how deep these sentiments were in Europe.

What Rohatyn Said

Rohatyn's antennae are very sensitive; hence the Aug. 18, 2001 Financial Times article, where he stated:

"I have believed for some time, that the time has come for a new Bretton Woods conference. The role of institutions created 50 years ago needs to be updated, to suit the needs of a world that has changed beyond all recognition....

"In spite of strenuous efforts over the years by the international financial institutions and the leading industrialized countries, poverty and disease are still rampant among most of the world's population, and wealth differentials seem to be increasing rather than decreasing. I strongly believe in the benefits of globalization and of modern capitalism, but I also believe these are not obvious to everyone....

"A new Bretton Woods, convened by the President of the U.S. with the Secretary General of the United Nations, would include representatives of the developing world, as of the developed world; it would also include representatives of non-governmental organizations [NGOs] and private sector leaders....

"A new Bretton Woods conference, with broad participation of the private sector and NGOs, would help stop a trend that will surely get worse, if no action is taken. True, such a meeting would be controversial, but it would be a serious response to real issues. It would also challenge the [anti-globalization] protesters to be constructive.

"That is very different from holding ever-smaller meetings in ever-remoter locations, while insisting that what we are doing, is best for everyone. Historically, such an ivory-tower mentality has invariably led to the most serious consequences."

See also:

New Bretton Woods Page
Physical Economy Page
How to Survive the Onrushing Global Financial Crash
LaRouche Speech to Mexian Accountants
Who is Lyndon LaRouche?
About the Schiller Institute

For information on the consequences of the policies of Lazard Frères and the Washington Post, as they have been implemeted in Washington DC, see the Death toll on the DC General Hospital Page.

For more information on the Rohaytn policies in NewYork City, see the EIR article on the website of Executive Intelligence Review, http://www.larouchepub.com

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