Introduction: Mankind Is Better Than the Oligarchy Can Imagine
by Helga Zepp-LaRouche
EIRNS/Christopher Lewis .
Dear friends of the Schiller Institute, distinguished guests from many countries: We are coming here together at the fourth conference of the Schiller Institute within less than five months, because we are determined to inspire a new paradigm in the history of mankind, a paradigm which is reflected in the true identity of the human species, man as a cognitive being whose identity is that of a creative species, where each individual on the planet, in principle, has a limitless potential for self-perfection.
The sense of identity must be governed by that innate creative potential, not only to develop our own creative abilities, all the potential abilities innate in us, but to do so with the explicit desire to contribute one’s own life to the further development of the human species as a whole; so that, when our own life comes to an end, since we are all mortal beings, that we can die with the certainty that we have contributed with all our ability to the progress and progression of mankind, to the best of all our possibilities; that we have, with our life, added something to ennoble our species.
And it is with that vision, that in the new paradigm, the relations among human beings will be guided by agape;the relations among nations will be guided by the fact that we are happy about the development of the other nation, and that we understand that harmony, concordance on the planet, and in the future beyond that, is only possible through the development of all human beings and all nations, in a vice versa relationship.
Now the future paradigm has to be guided by love for mankind, by compassion, and joy in the realization of the creative potential of all other individuals. In the same way that we are joyful about the compositions of Beethoven, or the great poems and dramas of Schiller, or the discoveries of Leibniz and Einstein, or the elevated perspective of our astronauts and cosmonauts, when we as human beings relate to each other, as scientists do, discovering a new principle, discussing the hypothesis of how mankind can progress as artists, communicating metaphors about a better future condition of civilization.
This new paradigm must also be guided by a new method of thinking: It is the method which Beethoven has called “so streng wie frei,” “as rigorous as free.” It’s Schiller’s idea of achieving freedom through necessity, and the only condition in which this is possible is the beautiful soul, according to Schillerthe person who does what is necessary with joy, who finds his freedom in fulfilling necessity, and for whom duty and compassion are the same thing. And as Schiller correctly said, the only individual for whom this is possible, is the creative genius.
Now, this image of man must be the basis of the new paradigm if mankind is to survive. And it is only from this positive vision of the future that we will mobilize the moral strength and courageous energy to replace this present paradigm, which is completely based on depravity and evil.
The Present Road to Catastrophe
Now, with the present paradigm, it is very clear, that we are, as a civilization, on the direct road to a catastrophe. We are now experiencing the full disintegration of the trans-Atlantic financial system: between the quantitative easing, hyperinflation, and quantitative stealing, we see right now the most brutal expropriation scheme, expressed in what the new head of the Eurogroup, Dijsselbloem, called the “Cyprus template,” which means the total destruction of the real economy for the sake of maintaining the life expectancy of the casino economy, for just a few weeks or months. It is combined with a violent attack on the living standards and life-expectancy of the population. It is killing people by the millions!
The second fundamental danger, which is coming from the same source, is the danger of thermonuclear war. Because even if the crisis around the Korean Peninsula can be contained, which people on that peninsula hope very much, if you look at the totality, you have the Syria situation spinning out of control; you have the danger of a strike against Iran; and it could very well be that Southwest Asia develops into the cockpit for World War III. Now, it seems that in light of all of these dangers, which everybody can see, nevertheless, the governments of this world are not doing anything efficient to get the world on a different course. So, it seems that civilization is almost on autopilot toward self-destruction.
In light of this mortal danger, there is almost no public debate about what is really important. The public debates, as they’re raised by governments, politicians, the media, are completely trivial, in light of what we really are facing. In reality, we have a truly murderous expropriation scheme underway. We are threatened with a new fascism, we are losing democracy, we are losing our constitutions! The trade unions are losing all the labor rights which have been fought for, literally for centuries. We are losing the social welfare state. We are losing all accomplishments of civil and human rights, without there being any public outcry.
It is exactly the process which started, really, with the death of Franklin D. Roosevelt, and which was basically a fight, where the oligarchy was determined to eliminate the axioms which had made Franklin D. Roosevelt possible. And I must say that I’m very happy that Lyn is here, because, if you reflect over the last 40 or even 50 years, or in Lyn’s case even longer, he has been the one individual who has pointed to each change of the paradigm in the negative direction. It was Lyn, who on Aug. 15, 1971, in an absolutely visionary way, said, if this paradigm is continued, and if we continue on this road of monetarismthis was really the beginning, with Nixon’s decoupling the dollar from the gold reserve standard, by eliminating the fixed exchange rates, and by creating the casino bubble, or starting this money creation in offshore islandsit will lead to a new depression and a new danger of fascism.
Now, if you look at the series of deregulations which took place in the ’70s and the ’80s, ever more away from production, toward speculation, the next major blow was the repeal of Glass-Steagall in 1999. This was really the absolute escalation of this present bubble economy, the creation of the so-called “creative financial instruments,” the derivatives market. Then came the final blowout in July 2007, when Lyn made the famous webcast on July 25, one week before the crisis erupted, saying the system is hopelessly bankrupt and all that we are going to see now, is how the different elements of the destruction will come to the surface.
Lyn immediately introduced the Homeowners and Bank Protection Act, which would have stopped the disintegration right there. We had, at that point. tremendous support in the Congress, among the mayors and the state legislators in the United States; but you had the brutal intervention of such evil individuals as Felix Rohatyn and others representing Wall Street, and the Congress, at that point, capitulated.
Shortly thereafter, on Sept. 15, 2008, you had the Gau [worst-case scenario], the threat of a systemic collapse, from the collapse of Lehman Brothers and AIG. And for a very short period of time, the international governments and financial community and many others were so shocked, that they considered, for a very brief moment, to return to the Roosevelt idea of a Bretton Woods, in the form of a New Bretton Woods; but instead, at the next G8 meeting, they decided to go for the most gigantic bailout process ever. In the United States, and in Europe, they literally put in trillions of dollars and euros, maybe up to 30 trillion altogether. And I think some of you may still remember the famous words of Federal Chancellor Merkel, who said at some point: We don’t have to worry, because the EU has provided us with a magnificent toolbox. So we will take these tools as they are needed, and these tools will be sufficient to fix the problem.
The EU ‘Toolbox’
This EU toolbox was designed after the British example, and Merkel declared that you all can be confident, because your savings, at least up to EU100,000, will be absolutely safe. The first tool which was taken out of this toolbox was the bailout mechanism, which was essentially a scheme to transform the private debt of high-risk speculators, into public debt. It was the idea to turn the speculative gambling debt into state debt; so all of a sudden, the states were indebted, while the managers received big bonuses, and the banks, being saved this way, continued their speculation against the very states which had just bailed them out, impoverishing the population ever more, because now the state debt had to be compensated for with draconian austerity programs, in the tradition of Brüning, and for the sake of the sacred cow of balanced budgets, fiscal pactsand so, they proceeded with absolutely brutal cuts.
|The Glass-Steagall Act and accompanying legislation allowed FDR to reorganize the bankrupt banking system, put the legions of unemployed back to work, and (two years later) set up the Social Security System.|
So, as a result, the countries of Southern Europe are dying: Greece, Italy, Spain, Portugal, have experienced a complete destruction of their economies. And then came the Cyprus crisis, and the famous “Cyprus template,” as it was called by Dijsselbloem.
First, they had the proposal to tax the deposits of up to EU100,000 by 6.75% and almost 10% for those above, which was rejected by the Cyprus Parliament. Then, finally, they said the “Cyprus template” is what we mean by the “bail-in” tool.
Now, in investigating this more deeply, it turns out this tool was in preparation for a long period of time. It was discussed and worked out in a paper by the Bank of England and the FDIC in the United States. It was supposed to steal deposits on behalf of the so-called “G-SIFI,” the “global systemically important financial institutions.” And if you look at that paper of the BOE-FDIC, it has relatively tame language, as compared to a paper by the EU Commission already written in 2011, namely, the “Discussion Paper on Debt Write-Down ToolBail-In.”
What they basically prescribe there, is, rather than relying on the taxpayers for another round of bailouts, they came up with the scheme to stop the contagion by allowing the public authorities to spread the unmanageable debt of the banks to the shareholders and creditor-depositors. And they called this the “debt write-down tool.”
This tool, they say, should be “efficient and avoid any circumvention.” But the most scandalous formulation in this text is: “Liabilities originated on derivatives exposures should also, in principle, be included in the scope of the tool. However, the effective application of the tool to those exposures is not as legally straightforward as for other types of liabilities and it may raise some concerns in terms of financial stability.” Now, if you free that language from the usual bankers’ gobbledygook, what it actually says is: Burning the derivative debt might be legally too complex to carry out and have grave implications for financial stability; or it would blow out the system right away, so therefore, let’s pay the derivatives debt, and instead seize the depositors’ money, which is legally easier to take, because they cannot resist it, and it does not pose a grave risk to financial stability.
So theft from the depositors is easier, and it really gives new meaning to the famous phrase of Bertolt Brecht, who I (as an exception) want to quote, who says that it’s one thing to rob a bank to make a lot of money, but if you create a bank, you make a lot more money.
EIRNS/Christopher Lewis .
And everybody who brings their money into a bank from now on should know, that the moment you give your money to the bank, the bank owns the money de facto, and is at liberty to grab it. Because this is what the “Cyprus template” really means, where, in one case in Cyprus, they cut 40% of deposits in one bank, and all others, above EU100,000, were taxed. And EU100,000you know, you should not fall for the spin! Because, they say, “Finally we forced the banks to contribute to the bailout!” Well, EU100,000 is easily the operating capital of any small firm to pay wages, materials costs, and so forth. So it’s really a complete, deliberate destruction of the economy.
So this is one form, and the other form is, like in Spain, where they encouraged, or basically forced more or less, more than 1 million households into buying so-called “preferential stocks”the preferentesof banks, and then, in the case of one large bank, Bankia, they just said, “Sorry, we’re writing down the debt of this bankrupt bank, so all of you who have stock will lose more than 99%so, too bad!”
So that is just simple theft, it’s a crime, it’s robbery. And this is exactly what preceded the implementation of Glass-Steagall in 1933, when, in the case of National City Bank and National City Company, the depositors and employees were also forced to buy stocks, and then the National City Company speculated in these, and those who were insiders in these speculations made a lot of money out of it, and filled their pockets with it. Then, in the wake of the crash of 1929, and in the following years, 1930, 1931, these depositors lost most of their money, their life savings were gone, while National City Bank remained open. It was one case of “too big to fail.” So, this proceeded until the FDR came in, and the Pecora hearings.
Franklin D. Roosevelt closed all the banks, and declared a banking holiday for 11 days, and made, in that period, a thorough inspection of all 14,000 banks in the United States, forced them to write off worthless securities, and 4,000 of these banks were closed permanently. Other categories of banks that were sound, but lacked liquidity, were provided with that liquidity through the Reconstruction Finance Corp., and then the sounder banks were allowed to open again. Under the Glass-Steagall Act, the commercial banks from then on, were inspected quarterly by the Federal Reserve, to make sure that they would not return to the gambling procedure as before.
Ferdinand Pecora describes in great detail, in a very nice booklet called Wall Street Under Oath, how he interrogated all the CEOs of the big Wall Street banks and how amazing admissions came out that they didn’t even know the scope of their taxes, because they had never paid them in their whole life, and things like that.
The Cyprus Template
So, if you look at how the Glass-Steagall Act and the Pecora Commission ended the Depression in the United States, and if you compare what these EU guidelines are proposing, you can see that it is the exact opposite: That what the EU is now preparing, is a guideline, which was admitted by [European Commissioner for Economic and Monetary Affairs] Olli Rehn, to make the Cyprus template the new guideline for the entire EU, which can be applied whenever you have to save the so-called systemically relevant banks. That means that the derivatives speculation will be protected, and they want to have absolutely murderous austerity for the people and the nations.
And if you only look at the result this has caused so far, you have Greece, which has been turned into a Third World country, where young children and students are looking in the garbage cans for food; where children come to school and cannot follow the what the teachers are saying, because they’re malnourished, they’re hungry, and they can’t concentrate! In Italy, the suicide rate is going up. Greece and Spain have youth unemployment around 60%! Portugal is disintegrating.
In Great Britain, there is going on right now, the total slashing of the social system: 660,000 households which have received rent subsidies, have now had to move to smaller apartments or face reduction of their subsidies. But since there are not enough small flats, and since the free access to legal services has been cut, many of these people are ending up on the streets. The social payments are no longer indexed to inflation, and even the government admits that all these measures will send at least 200,000 children below the poverty line. At the same time, they have reduced the income tax for millionaires by 5%, which means they will earn £100,000 more per year.
Large categories of disabled people no longer are recognized as disabled, and have to pay for their care and transport themselves. In many cases, five or six services are being cut out at the same time. The needy are no longer receiving even a tiny amount of money: Instead, they get food stamps or coupons for the soup kitchens.
In the United States, the same thing is going on with the new Obama budget. Obama wants to cut $1.2 trillion over ten years: out of this, $400 billion from Medicare, which is killing old people; $200 billion from Social Security; $380 billion through the so-called chained CPI, which is behavioral economics gobbledygook, which says that if you have an increase in the price of beef, well, then just buy chicken and you won’t feel the inflation in the beef price! And this is only the beginning.
The Cyprus template gives people a very mild foretaste of things to come. Basically, after the Lehman Brothers crisis in 2008, nothing was done to write off the toxic waste, and nobody knows the exact figure, because all of these derivatives are traded in OTC arrangements, over the counter, so no central bank, no government, no authority knows the amount. Then you have the huge shadow banking sector, which is probably bigger than the official sector. And French economist Jacques Attali in 2010 said it may be as much as $1.4 quadrillion! And in Europe alone, the derivatives market is supposed to be $230 trillion of outstanding derivative contracts.
So if this derivatives bubble bursts, you will have a larger blowup than was threatened after Lehman Brothers, because the whole system is filled with much more hot air and virtual money than it was then. It could come then, to a complete systemic collapse.
One has to consider that the “template” remark by Dijsselbloem was not really an accident. It was part of a strategy to get the population used to the idea that their income will be stolen, because this is the only method which is left: to take the savings and deposits of the population. And it should be also clear that under these conditions, the deposits up to EU100,000 are not safe! Because they cannot be: If you calculate all the people who have up to EU100,000, the banks in no way can ever pay this, because you are looking at several trillion, which would have to be compensated for, in Germany alone, for people who have these savings. And this money is not there, except if you print it, which is actually happening already with the quantitative easing of Mario Draghi, Ben Bernanke, and now also the Bank of Japan.
So, if you look at these things together: You have the brutal, murderous Troika austerity, the bail-in bank robbery, and you have now the entire world financial system at a hopeless point of collapse.
Fight for Survival
So therefore, the only remedy, which we have to discuss at this conferenceand I want people, through the different presentations today and tomorrow, to go out of this conference with the absolute resolve that Glass-Steagall must be implemented, and it can be implemented, exactly as Franklin D. Roosevelt provided the example, because this is the absolute necessary first step, to prevent an unimaginable social explosion, which nobody can imagine the consequences of.
It is also obvious that the EU Commission, the Obama Administration, and the British oligarchy in general, want to use this crisis to go for a final dictatorship. When the new U.S. Secretary of the Treasury, Jack Lew, was in Europe and met with the EU Commission, they issued a joint statement that they want to use the new “resolution tools,” which is exactly the Cyprus template, and to go for a banking union, the collectivization of the debt, a full-fledged fiscal union, and a political unioni.e., a political dictatorship in Europe.
In Southern Europe, the people have already understood that this is a fight for their survival. The measures implemented increase the death rate; there is a complete destruction of the real economy. In Germany, there is discontent, supposedly only “fatigue” by the population at being the paymaster of the whole thing; and in the meantime, the media and the politicians are still successfully playing the different peoples against each other. So the media portray the Greeks as lazy, the Cyprus crisis as being caused by the “Russian oligarchs”; in Spain, Mrs. Merkel is pictured with a [Hitler] moustache, and if you look at all these things, it’s like the blind men and the elephant: One man says the elephant is a thick column, because he happens to be the man who touches the leg; the other one says, “Oh, no, the elephant is a flexible snake,” which is the one who touches the trunk; and the third one says, “No, the elephant is a thin cord”he happens to have the tail.
Now, it is high time that we throw off these blinders from our eyes. The monster which we are dealing with, which is threatening life on this planet, is the British Empire. The name of the game is population reduction. Every five seconds, a child under ten years of age dies, for no good reason! Because the present planet would have the potential to feed, easily, 12 billion people or more.
But the Queen of England and Prince Philip have stated repeatedly that their aim is to reduce the human population from 7 to 1 billion. And Hitler already gave the example, that through conscious starvation you can weaken groups of people up to the point of extinction. So what we are seeing right now, in terms of the Third World, and now increasingly, in terms of Europe and the United States, is exactly that kind of deliberate starving people to death.
The Threat of War
But the British Empire, which is really the combination of the financial institutions, the central banks, the investment banks, the hedge functions, the private equity funds, the insurance companies, that British Empire wants global domination, and wants to destroy, once and forever, the sovereign nation-state. And it is clear, that from that standpoint, Russia and China are the biggest obstacles.
The policy of regime-change, which, since it destroyed Iraq and Libya, is operating against Syria and Iran, really is aimed at confrontation with Russia and China. And if you look at the NATO and EU expansion after the collapse of the Soviet Union; the expansion and building of the U.S. anti-missile shield in Eastern Europe, with the Patriot deployment in Turkey; the development of the so-called “Asia pivot,” it is very, very clear that what is in preparation is a first-strike capability against Russia and China.
This was admitted in the official journal of the U.S. Air Force, Strategic Review Quarterly, about two months ago, where they claimed that the modernization of nuclear weapons, the delivery systems and targetting, in the meantime has become so precise, that it would be possible to take out, with a first strike, the nuclear arsenal of any nuclear opponent, without nuclear fallout.
Now, if you remember, both the UN Charter, but especially the Nuremberg Tribunal, clearly stated that not only a war of aggression, but the intention of a war of aggression, is committing a war crime, I think that what we are looking at is war crimes. And I mean, we have to bring these people to account. The war against Iraq, which was completely based on the lies of Tony Blair, who was the author of the famous memo which was used by Colin Powell in his speech in the United Nations, was all lies. Afghanistan, all based on lies.
Right now, there is a big motion by the families of the Sept. 11 World Trade Center victims, who demand that the 28 pages of the 9/11 Commission Report, which are still classified to the present day, have to be released, and you know, the truth will come out. Sept. 11 was not what the official line is, and therefore, the whole Afghanistan War was based on lies, because it was not an attack by an enemy force from Afghanistan, requiring the invoking of Article 5 of NATO.
The war against Libya was a war crime. What is going on in Syria right now, is a murderous policy against a legitimate government of Syria. And it is not even al-Qaeda and al-Nusra: The anti-drug czar of Russia, Viktor Ivanov, just made a statement saying that the rebels in Syria are financed by the transnational crime cartel, financed by the heroin from Afghanistan!
One of our speakers on the podium, Bruce Fein, made an argument in New York, that war legitimizes the killing of an enemy which, if it would not happen in the case of war, would be murder. Now, since all these wars are based on lies, that makes the initiators of these warsthat makes the British Empire, and it makes the present administration of the United Statesde facto war criminals. If it comes to a thermonuclear war, which is the immediate danger of the extinction of the entire human species, then the crime is a bigger one than at any time in history. And if we cannot change this paradigm, which is extremely close, then we are no smarter than the dinosaurs who became extinct, together with about 98% of all living species, 65 million years ago.
Organizing the Future
So therefore, let me come back to the beginning: We must have a new paradigm if mankind is to survive. The absolute, necessary, irreplaceable first step must be Glass-Steagall, where we implement the Glass-Steagall law in the United States first, and then in every European country and possibly other countries around the globe, and simply wipe out all these trillions, hundreds of trillions of derivatives debt and other toxic waste.
Glass-Steagall must then be followed by a credit system, the idea that a credit system is not based on money. Money has no intrinsic value and if you need proof for that, you just have to remember December of 1923, where people used the reichsmark bills for wallpaper, because that was the cheapest paper people could have.
A credit system, on the other side, is the means to organize the future, to organize the prolonged, continuous existence of society, with the only aim to unleash the creative potential of the population, to increase productivity for the common good. So what does the sustainable existence of civilization then mean? Well, I think we have to remember that on Feb. 15, the events at Chelyabinsk in the Uralswhere, not only did the asteroid pass by the Earth, which was known about in advance, but you had a meteor shower which was not detected by any agency in the West or in the Eastwas a very useful wakeup call: that our planet is not a self-evident phenomenon, sitting where you can only be concerned about life on the planet, but that we are situated at a very vulnerable moment in processes which are governed entirely by the Solar System and the galaxy.
Yesterday, Russian Deputy Prime Minister Rogozin made a proposal to make the meteorite danger a leading topic at the G20 conference which will take place in St. Petersburg: “The scope of the task of neutralizing the asteroid danger will require the concentration of global intellectual resources, and the scientific and technological capabilities of Russia, the United States and other countries, which will require collaboration. And that cooperation will promote trust among the countries and as a byproduct, the condition resolving the conflict over the ballistic-missile-defense crisis.”
Now, this is the option, because if we move civilization away from the present thinking of defending the past, defending the banking and monetary system, we can start thinking about how we can now invest in the kinds of things which we absolutely need as a civilization to survive. We have to think about the world from the lofty perspective of the astronauts, the cosmonauts, where several, after returning from space travel, reported that when you look from outer space at our blue planet, you don’t see borders, you don’t see military blocs, but you see, actually, one humanity.
I believe absolutely, that if we get rid of these present policies, through the combination of the policy measures which we proposeGlass-Steagall, credit system, global reconstructionthen the present paradigm, which is based entirely on depravity, on greed, on a complete lack of compassion for the suffering of billions of people, on finding pleasure in sadistic entertainment, that these will be overcome, as the childhood disease of mankind, and that we will outgrowth it. We will outgrow it, in the same way as little, nasty four-year-old boys who hit and kick their neighbors in the shins, eventually outgrow that nastiness, and become scientists and artists, and become human beings.
I believe that through the development of man, the idea of Nicolaus of Cusa, that sin is the lack of development, that evil can be overcome by intellectual development, and especially the aesthetical education of man; when we reach what Krafft Ehricke called the “extraterrestrial imperative,” namely that man becomes a species in space, that we will leave this behind us.
For those who are believers in the fact that there is a Creator, I think that the true identity of mankind is to be imago viva Dei, the living image of God, where we, as instruments of God, carry on the process of creation on the planet, and beyond. And for those who don’t believe that there is a Creator, well, you have to study the laws of the universe more deeply, and then come eventually to the same conclusion as Kepler, who said that the more you study the beauty of the laws of the universe, the more you come to the conclusion that there is a magnificent plan behind all of that.
So, with this optimism, let us proceed with this conference, and after this conference, go out with the absolute passionate love for mankind, that we are not going to allow this beautiful species, which is capable of such fantastic achievements, to die, just because we have now reached a low point. And that we will achieve, with the passion for mankind, with the love for mankind, a foretaste of what future generations will perfect.
 Press conference http://articles.marketwatch.com/keyword/merkel/recent/4 with British Prime Minister David Cameron, June 7, 2012.
 In The Threepenny Opera.