The Schiller Institute Testifies before the Danish Parliament about the European Bank-and-Euro Crisis and for a Glass-Steagall Law
The following is the text of the 15-minute testimony Schiller Institute chairman Tom Gillesberg gave to the Danish Parliament’s Committee on Europe, on January 28, 2011. Gillesberg addressed 7-8 members of the committee, and was accompanied by three other Schiller activists. The speech was also televised direct on the Danish Parliament’s TV channel, which may also be viewed afterwards. (http://www.ft.dk/webtv/video/20101/euu/17.aspx) The link to the broadcast, and the powerpoint show for the speech may be found at: www.schillerinstitut.dk/drupal/node/426.
Let Us Abandon the Doomed Euro:
Can Be Stopped with Glass-Steagall!
Hello. I am Tom Gillesberg, chairman of the Schiller Institute in Denmark. Thank you for allowing us to come here.
Right now, in a desperate attempt to save the doomed Euro, the European Union (EU) is desperately trying to force its member countries, including Denmark, to provide still more gigantic contributions and loans to distressed banks, and the euro countries. This must be stopped immediately. This is starting to create a hyperinflationary process worse than what was seen in Weimar Germany in 1923. We must no longer be intimidated by the generally accepted delusions and incompetent dogmas, which have dominated the financial community during the past three decades. We must introduce a Glass-Steagall law, and put the financial world under the control of sovereign nations.
The necessity of doing this should be evident to everyone after the Angelides Commission, established by the U.S. Congress in May 2009, to shed light on what actually went wrong with the financial crisis, published its report yesterday. It concluded that, “The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire.” According to the report, the crisis was attributed to a change of values in the financial and political world, over the past three decades, which resulted in deregulation and the removal of government control - above all, the repeal of the Glass-Steagall Banking Act in 1999, and a 2000 law that allowed the creation of trillions of dollars of derivatives.
According to the report, the highest economic authorities in the U.S. Federal Reserve Bank, the financial world, and the U.S. government, have shown a total lack of understanding of the economic process. This resulted in the crisis, and the hopelessly incompetent handling of it. The commission’s conclusion was, "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again.”
But as we have seen in Denmark and the EU, it is unfortunately not only in the U.S. that thousands of billions of dollars were incompetently thrown as a lifebuoy to the financial community, while the regular economy was allowed to be destroyed. The same policy has been followed here. When the ongoing collapse of the international financial system accelerated in 2008 to become a crisis of confidence facing the world's banks, the European Central Bank (ECB), together with the Federal Reserve in the lead, assisted by various governments, provided emergency first aid and plenty of liquidity for both banks and the financial markets. Countries were indebted through the issuance of gigantic financial bail-out packages, which, instead of solving the problem, only made the problem bigger. The financial world got even more money to speculate with, and we are now seeing a dramatic increase in the inflation of the prices of specific commodities and food, something that, again in 2011, has created a global food crisis, which leads to hunger, poverty and political upheaval, as we are now seeing in North Africa. At the same time, we now have a sovereign debt crisis, and a euro crisis.
The financial world, with its center in the City of London and the Inter-Alpha-banking group, imposed stopgap measures contrary to the Lisbon Treaty, which were supposed to create a financial safety net, first for Greece, then a new bail-out package for Ireland, and soon for Portugal. But nobody in the financial community can imagine how the EU will be able to raise the money to rescue the much larger Spain, with the current EU structure. It will require that the more creditworthy countries, such as Germany and Denmark, agree to sacrifice even more on the altar of the euro.
However, it is important to emphasize, that this EU policy is of no help to the vulnerable countries and their populations. Quite the contrary. The aid has been given to prevent foreign banks and investors from suffering losses, while the price of the bail-out must be paid for by the people through draconian austerity. It is therefore not with the good will of the public, that Greece and Ireland accepted this help. It is occurring in an undemocratic way, through a dictate from the EU to the national governments, which then brutally enforce it. The austerity policy will dramatically increase the mortality rate in the population. Democratic nations can soon descend into chaos and civil war-like conditions – and afterwards into overt fascism.
But even the inhumane cuts that are demanded will not by themselves save the euro. Therefore, either the European populations are forced to unconditionally submit to the financial dictates of the EU, the formation of a European empire with individual countries as impotent vassals, or we must accept the dissolution of the euro. That discussion is already in full swing in Germany, where there is strong popular support for breaking out of the euro, and returning to the Deutschmark. A dissolution of the European empire, and a return to cooperation between sovereign nations, will open the door for the alternative that Lyndon LaRouche and the Schiller Institute have presented.
First, a Glass-Steagall-like banking law must be adopted, that makes it possible to separate the wheat from the chaff in the financial world. Banks must choose whether they will be normal commercial banks, with government guarantees, or investment banks, that are allowed to go under. Vital bank functions, such as normal deposit and lending activities, are protected and can continue, while all the gambling debt, all the enormous speculative gains, derivatives and other intricate financial instruments, are written off. At the same time, national credit is created for economic development, similar to what Alexander Hamilton, America's first finance minister, did when he created America's first National Bank.
Money is not just money. There is bad debt and there is good debt. The bad debt is the gambling debts that are now oppressing the world. The good debt is the credit we will create for investment in the physical economy, such as for a Kattegat bridge, a maglev train network, and for health and education. Investments that ensure increased productivity and value creation in the future economy. Only such investments in our future physical economy, and not cuts in the welfare state, can get us out of the crisis. There must also be cooperation on international projects that enhance humanity's ability to have an increase in population, with a higher standard of living, such as the North American Water and Power Alliance (NAWAPA), the largest construction project in human history, which will transform all of North America; the Transaqua project, which will bring water to Lake Chad, and make a large part of Africa green; a tunnel under the Bering Strait; and a global infrastructure network for the benefit all of mankind.
But all this can only happen if we take the control of the financial and economic policy out of the hands of supranational institutions and the financial markets, and give it back to elected governments, which fight for the general welfare. Globalization has not made the people of the world richer, but has destroyed the national regulations and controls, which made it possible, during the postwar era, to secure a permanent increase in welfare for the entire population, through national investments based on achieving scientific and technological progress. Only by returning to national sovereignty, and cooperation between sovereign nations for mutual benefit, based on the principles of the Peace of Westphalia in 1648, will a Glass-Steagall law, national credit creation, and the other necessary measures, be possible, that will give all countries a decent future.
One thing the Angelides commission forgot to mention, is that if the American statesman Lyndon LaRouche, who is the only economist who has been right in his economic predictions during the past 50 years, including the prediction of the current crisis, and his collaborators in Schiller Institute, had been listened to, then the financial crisis would never have occurred. We warned about the crises and catastrophes, which the generally accepted way of thinking would lead to. In connection with elections here in Denmark, The Friends of the Schiller Institute, and I ran for office with such slogans as: "When the bubble bursts - a New Bretton Woods," "After the Financial Crash – Maglev across the Kattegat," and, "Only a new credit system can save Denmark." We have extensively warned Members of Parliament, including through numerous testimonies in the parliament. It is therefore time that Members of Parliament, and the Danish government, instead of blindly, like lemmings, leading Denmark over the cliff, along with the euro countries, listen to the solutions The Schiller Institute has presented, which will not only safely bring us through the current crisis, but also give us an exciting and fascinating future.
And, as we thankfully are not part of the euro, but still have our own currency, we don ’t need to run after the EU, but can instead lead the way.
Thank you for this opportunity to address you.
As there were no questions from the members of parliament who were present, Tom Gillesberg made the following statement after his speech:
The problem we have is that nobody dares to take up the real discussion. As I just said, we now have an explosion around the world because of soaring food prices, because of an increasing hyperinflation that has been created by the policy which is now also officially recognized as being totally incompetent. Therefore, it is crucial that also here in the parliament, there begin to be representatives who stand up, rather than just going along with the current, and say, ‘The experts have said this, so we should just accept that, and do as they say.’ And instead, be willing to think for themselves, think of the future generations who are now left abandoned by the current lack of policy, lack of leadership, and lack of vision.
And who, here in Denmark, but of course in cooperation with other leaders around the world, therefore, say, "Fine. Now we will now reorganize the international system, now we make sure ... Now we will stop this giant speculative orgy. Now we change the policy. Now we will create a platform from which humanity can move forward. And it's not good enough to just follow along. We are also obliged to have representatives, elected representatives, who now have the courage to step forward and take this discussion publically.
Committee Chairman Anne-Marie Meldgaard (Social Democrat):
"Now, we're so lucky that there soon will be an election, and people will have the opportunity here at home, I assume, to vote for the Schiller Institute. But I shall refrain from commenting further about that. But thank you for coming and orienting us about your views. "