This week will mark the Aug. 15 anniversary of the day in 1971 when President Nixon was induced to destroy Franklin Roosevelt’s Bretton Woods monetary and credit system, sending the industrial world into rampant speculation and wage austerity for half a century. Lyndon LaRouche denounced that move by Richard “I am now a Keynesian in economics” Nixon and said it opened the door to fascist austerity and economic depression, unless reversed. LaRouche defeated one of the world’s leading Keynesians on the subject in a December 1971 campus debate and set out to reverse the terrible mistake, by reviving FDR’s original intention at Bretton Woods — credit for technological and industrial development of Eurasia, Africa, Latin America.
This was his life’s work for the next 45 years, making him the hated adversary of the financial empire of London and of the Wall Street crowd, especially — as Roger Stone emphasized in a LaRouche Political Action Committee webcast Aug. 2 — the Bushes.
This week, as if to mark the Aug. 15 date, Foreign Affairs featured an article entitled “The Pandemic Depression: The Global Economy Will Never Be the Same”; a profoundly pessimistic piece by two of the United States’ “leading economists,” Carmen Reinhart (Harvard Kennedy School) and Vincent Reinhart (Bank of New York-Mellon chief economist). Their idea of the crucial actors in this crisis is “the central banks” to try to maintain lending, and “fiscal authorities” to dole out money to households to spend; and they expect years and years just to return to the broken-down early-2020 level of the world economy. They don’t take the rising economy of China, nor its Belt and Road Initiative infrastructure projects, into account at all.
As for the developing countries, two quotes from the Reinharts demonstrate the futility of the now-conventional economics of the world of the big central banks. “The G20 has already postponed debt-service payments for 76 of the poorest countries,” they write. But, “More sovereign borrowers have been downgraded by rating agencies this year than in any year since 1980.” And their concluding sentence, the “solution” such as they allow for it, for these nations made desperate by the Pandemic Depression? “Officials need to press on with fiscal and monetary stimulus.” https://www.foreignaffairs.com/articles/united-states/2020-08-06/coronavirus-depression-global-economy
Back in that other Aug. 15, 1971, LaRouche, by contrast, began to organize towards a summit — then, of the Non-Aligned Movement nations — which in 1976 adopted his proposed International Development Bank, only to have it sabotaged by Henry Kissinger on behalf of City of London finance. Economies could be not just revived, as LaRouche’s development plans showed, but remade by great projects of economic infrastructure such as world land-bridges of transport, power and communications as the spine for what he dubbed “development corridors” spanning the continents.
At this marking of the day when London ended FDR’s Bretton Woods system, and recalling Lyndon LaRouche’s prophetic warning about what would result, another summit process is urgent.
Schiller Institute Chairwoman Helga Zepp-LaRouche has since January called for summits involving at least the leaders of America, China and Russia, to replace those powers’ dangerous confrontations with cooperation for a New Bretton Woods on FDR’s model. Russian President Vladimir Putin has been organizing for an in-person summit soon, of the leaders of the Five Permanent UN Security Council members. Lyndon LaRouche’s design for such a summit process were laid out 40 years ago in a document written for a Mexican President, Operación Juárez: debt reorganization on Alexander Hamilton’s principles; national bank credit institutions in each nation; joint credit issuance by those major nations intending to export the capital goods of development; the employment of space exploration and science crash programs as drivers of rapid technological progress. https://larouchepub.com/eiw/public/1998/eirv25n10-19980306/eirv25n10-19980306_029-operation_juarez_reorganize_the-lar.pdf
Apply these LaRouche principles in such a summit process now: The threat of major-power nuclear war can be averted, and the “Pandemic Depression” quickly ended — both in the only way possible.
