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2013: The Year of Glass-Steagall

January 2013

This article appears in the January 18, 2013 issue of Executive Intelligence Review and is reprinted with permission.

[PDF version of this article]

Jan. 10—As 2013 begins, humanity faces the worst economic breakdown crisis that the planet has seen since the 14th-Century New Dark Age. The mega-bailouts of the predatory banks and of the international speculative financial bubble, which began in earnest in 2008, and continue in crescendo up to the present, have only unleashed a hyperinflationary explosion in the entire trans-Atlantic sector, along with cutbacks and austerity imposed in Europe by the hated Troika, which are extinguishing the very existence of nations—as is seen clearly and painfully in the cases of Greece, Portugal, Spain, and others. If not stopped, these policies will only worsen the crisis, bringing Greek-like conditions to the United States and elsewhere.

All sensible and moral people admit that the current policies are a disaster, and that we cannot continue along the current path. But almost no one has any idea of the solution, of a rigorous program to solve the problem at its root.

President Franklin Delano Roosevelt signs Glass-Steagall Banking Act.

In this anguishing situation, a growing international movement has fortunately emerged in favor of the adoption in all countries of the Glass-Steagall law, which President Franklin D. Roosevelt established in the United States in 1933, and which imposes an absolute separation between commercial banking, which issues productive loans, and investment banking, which speculates with private and public funds alike. Initiated by American economist and statesman Lyndon LaRouche, the international calls for Glass-Steagall have spread from the United States, to Russia, to the United Kingdom, to the majority of countries of continental Europe, and to numerous nations in the developing sector, as we document in the attached memorandum and documentation.

Of particular importance is the fact that, on Jan. 3, 2013, the very day that the 113th Congress of the United States was sworn in, Rep. Marcy Kaptur (D-Ohio), and Rep. Walter Jones (R-N.C.), formally introduced to the House of Representatives H.R. 129, a bill which calls for the re-establishment of the Glass-Steagall law. Kaptur had introduced an identical bill, H.R. 1489, in the 112th Congress, which was sponsored by a total of 85 Congressmen, both Democrats and Republicans, although it was never brought to the floor for a vote. With the introduction of H.R. 129, the issue of Glass-Stegall has been placed front and center in the national and international debate.

U.S. Rep. Marcy Kaptur.

U.S. Rep. Walter Jones.

LaRouche has established that the adoption of Glass-Steagall, both in the United States and internationally, is the essential first step to save the international economy from a systemic breakdown. But although it is necessary to immediately implement Glass-Steagall in order to stop the bloodletting, additional measures are required to reactivate the productive economy and create productive employment. In the case of the United States, it is essential to return to a Hamiltonian credit system, with a National Bank that issues new productive credit (see EIR, Dec. 14, 2012); and great scientific and infrastructure projects must be set in motion, such as the North American Water and Power Alliance (NAWAPA XXI). These three programmatic points must go together to provide a solution to the current systemic crisis.

In Europe, in addition to Glass-Steagall, it is necessary to:

  1. Revoke the Maastricht, Lisbon, and related EU treaties, which have only served to impose the British Empire's supranational dictatorship;

  2. Leave the euro system and re-establish sovereign national currencies;

  3. Protect those currencies with exchange and capital controls;

  4. Establish in each nation a Credit System with its attendant National Bank, in the tradition of Alexander Hamilton, to issue long-term, low-interest credit for productive investment, especially in infrastructure;

  5. Re-establish a system of fixed exchange rates among nations, as existed under the original Bretton Woods system, in order to stop speculation and foster legitimate international trade and foreign investment;

  6. As stated by the document, "Appeal to Governments and Parliaments for Glass-Steagall Now!" initiated in June 2012 by Helga Zepp-LaRouche, president of Germany's Civil Rights Solidarity Movement (BüSo), and Jacques Cheminade, former French Presidential candidate and head of the Solidarité et Progrès party:

"The reconstruction of the real economy should be facilitated through long-term treaties of cooperation between sovereign nation-states, which would launch well-defined infrastructure and development projects in the context of the Mediterranean plan for an Economic Miracle, seen as a necessary extension of the Eurasian Land-Bridge. These contracts represent a de facto new credit system, a New Bretton Woods system, in the tradition of Franklin D. Roosevelt."

In the case of developing-sector countries, in addition to Glass-Steagall, additional steps are required which are similar to those mentioned above for Europe, with the exception of 1 and 2.

If you want to have a future for yourself, your children, and your nation, make sure that 2013 is the Year of Glass-Steagall.