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The depression of the 1990s: America's life and death crisis


by Lyndon H. LaRouche, Jr.

As of this point, the world has officially entered into the second and greatest worldwide depression of the 20th century. Ironically, this new depression began in London, 61 years to the week after the collapse of the pound in September 1931 unleashed what is called, in memory of us older folk of the present day, the Great Depression. Ironically, it also occurred about 650 years after the greatest financial crash in medieval or modern European history. This occurred in 1342, when the king of England repudiated England's debts to the banking houses of Bardi and Peruzzi and so forth, the usurious banking houses which had caused the plunge of Europe into a New Dark Age, as it was called, as a result of their practice of usury 1, or, shall we say, their practice of the measures introduced in our own recent history by former Federal Reserve Chairman Paul A. Volcker. 2
You don't hear much about that depression from the political campaigns. The Bush campaign and the Clinton campaign are ducking the issue. Oh yes, they are all talking about economic recovery. One is worse than the other. Bush, Clinton, and Perot, thus far, are proposing nothing but what we know from the 1920s and 1930s as Mussolini-style fascism. 3 Underlying the fact that these gentlemen, so far, have apparently not the slightest idea of what to do about the new Great Depression, is the fact that they are all thinking in terms of increasing taxes, (although George says he won't do it), and cutting entitlements and other federal expenditures and state expenditures savagely. What they're proposing -- increasing taxes and cutting budgets -- will not work. In fact, it will make the problem worse.
The reason we have budget crises is not that we have spent too much. We may have spent on things we shouldn't have spent for. But it's not that we're spending too much money. The problem is that there is not enough tax revenue, and not because we are not taxing people enough. We could tax the speculative capital gains sector much more heavily, but in general we're already overtaxing ordinary households of ordinary families. The problem is that we don't have enough tax revenues because the economy is collapsing, because too many people are either unemployed, underemployed, or employed at such low incomes that they can't even support their families with the miserable pittance they receive for some terrible service job.
Obviously the only way this problem is going to be solved is to increase the number of people who are working and to increase the level of productive technology employed by our labor force.4 In other words, we have to increase the tax revenue base of state and federal governments without increasing the tax rates, particularly the tax rates on ordinary productive businesses or on ordinary family households. Yes, tax the speculators as much as you choose; dry speculation into extinction. That would not be a bad thing. But don't tax industry, don't tax farms, don't tax infrastructure, and don't tax the normal family household any more than they are already being taxed. In fact, in some cases we should have reductions on the lower end and tax incentives to certain businesses. That is the only way we're going to bring the economy into balance and get out of the depression.5

What's the problem?

The problem with Bush's program, the problem with Clinton's program, the problem with Perot's program, is that they are all playing into the hands of parasites. For example, Felix Rohatyn of New York's Lazards Frères investment banking house. He's the fellow who gave you the Big MAC bankers' dictatorship in New York. He's smart, but he represents the parasites. Each one of these fellows is more or less capitulating to the proposals of these parasites as expressed through the mouth of their resident philosopher, Felix Rohatyn. They are unwilling to address the problem.
The problem is essentially this: First of all, a long time ago, the United States moved away from what we used to call the American System of Political-Economy, which was premised on the fact that the U.S. government, as we see in Article 1, Section 8 of our federal Constitution, has a monopoly over the issuance and control of its own currency.6 Under the Federal Reserve Act, in particular, a scheme involving the backers of Teddy Roosevelt and Woodrow Wilson, the U.S.A. surrendered its sovereignty, illegally and unconstitutionally, to a private corporation created by the Warburg interests and chartered by the federal government -- the so-called Federal Reserve System. Under this arrangement, a group of financial bankers, international financial bankers, to put a fine point on it, actually controls the currency and credit of the United States, not the government of the people of the United States.7 That is what these fellows -- Bush, Clinton, and Perot -- are refusing to face. That is the first problem.
The second problem is that since the death of President John F. Kennedy, the U.S.A. has adopted a new set of axioms for policymaking. The name for this set of axioms is the rock-drug-sex counterculture. The rock-drug-sex counterculture was invented by an avowedly satanic cult, the cult of Aleister Crowley in Britain, and imported from Britain into the U.S.A. That's a fact.8 Family values are out the window. We have new sexes, we have new this, we have new that. A diminishing number of children are living in families with their own parents. The number of step-children, the number of children with single parents is rising catastrophically in the United States, and that's a big part of our cultural and social problems.
At the same time that the counterculture was introduced, about the middle of the 1960s, the U.S. government, under the rubric of the so-called Great Society, adopted what was known by the ideologues as a neo-Malthusian post-industrial policy -- that is, a move toward a utopia called a post-industrial society. 9 It's a lunatic utopia, but it's the one we're moving toward.
The combination of neo-Malthusian and rock-drug-sex counterculture morals and assumptions in shaping policy have brought the U.S.A. into the decade of greed -- the decade from 1982 to 1992, the decade of the yuppie, the decade of the person who makes a million on Wall Street -- unearned income, doing nothing -- while the industries, the farms, and the local communities collapse. Many people are fascinated with Wall Street income, but it is nothing more than pure speculation, unearned money, nothing to do with production of food, nothing to do with production of things we use from industry. This outlook has dominated our policy, and it came as it must to an end. The whole system has collapsed. The system which had been praised, the system of deregulation, the system of so-called free trade, has collapsed.
What we have today around the globe in foreign policy and domestically is a growing World War III. This World War III did not break out in the form of an exchange in nuclear weapons. It could have, but it didn't. Instead, the Berlin Wall came down, because the Russian economy collapsed itself in the effort to prepare to launch war against the United States. The economic collapse imposed upon the Russian economy and the eastern European economies by looting to sustain this war effort brought about the conditions which led to the 1989-1990 collapse of the Soviet imperial system. 10 So the war didn't come with nuclear weapons. The war came in the Balkans, the war came in the Middle East, the war came in Central Asia, the war threatens in Southeast Asia. What we have is a spread of little
wars, of revolutions, of murderous riots, and so forth, such as the Sendero Luminoso terrorists in Peru or the similar narco-terrorists in Colombia and Brazil and so forth.
War is spreading around the planet. The underlying reason it is spreading is that the economy is collapsed. There is nothing to hold nations together. Therefore, they are splitting up into little micro-nations. There is no common interest, because of the cultural and economic policy changes which have occurred over the past 25 years.
You must recognize that something has gone wrong -- that the policies of the post-Kennedy period, except a few early things under Johnson in the direction of civil rights, were generally wrong. The philosophy of policy-making was and is wrong, and you have to take it and throw it out the window. It's the utopian experiment that failed. And we have to go back to the values we had no later than the time of President John F. Kennedy. I'm not holding up John F. Kennedy as an angel or a saint or something of that sort. I'm simply indicating that under his administration, we had the kind of policies which have really kept the nation going, which would have avoided the crisis to which we have come today. That's an historical fact! This is all underlined by the fact that it was about 61 years ago, prior to this week's collapse of the pound, allowing the British pound to begin to float, plunging the entire world into chaos, that in September 1931, the British goverment also set the pound to float, plunging the world into a Great Depression, and that in the year 1342, 650 years ago, there was a decision by the British king, at that time a good decision, to repudiate London's debts to the Bardi, Peruzzi, and other Venetian bankers, which launched the great financial collapse of the fourteenth century. The point is that we didn't get into this mess accidentally. We got into it through policies which were wrong, policies which every administration over the past 25 years has supported, and policies which the majority of the voting Americans have supported.

Rochester, Minnesota
September 18, 1992
1. LaRouche, Lyndon H., "The Pestilence of Usury," New York: National Democratic Policy Committee, 1981.
2. "LaRouche Warns: Volcker's Measures Will Lead to Disaster," reprinted in A Program for America. Washington, D.C.: LaRouche Democratic Campaign, 1985.
3. "Project Democracy's Program: The Fascist Corporate State," in Project Democracy: The Parallel Government Behind the Iran-Contra Affair, EIR Special Report, Washington, D.C.: Executive Intelligence Review, 1987.
4. Hamilton, Alexander, "A Report to the Congress on the Subject of Manufactures," (1791) reprinted in Spannaus, Nancy and White, Christopher, Political Economy of the American Revolution, New York: University Editions, 1977.
LaRouche, Lyndon H., "The World Economic Depression in Progress: Why It Happened, and How Recovery Must Be Organized," Leesburg, Virginia: LaRouche Democratic Campaign, 1986.
5. LaRouche, Lyndon, "Summary of Federal Loan Measures to StabiIize State and Local Tax Revenue Bases," published in New Federalist, Dec. 16, 1987.
6. Hamilton, Alexander, "Report on a National Bank," (1790) reprinted in Spannaus, Nancy and White, Christopher, Political Economy of the American Revolution, New York: University Editions, 1977.
7. Salisbury, W. Allen, The Civil War and the American System, New York: University Editions, 1978.
8. Satanism: Crime Wave of the '90s, Executive Intelligence Review Special Report, Washington, D.C.: Executive Intelligence Review, 1990.
"Is Satanism in Your Schoolyard?" Leesburg, Virginia: New Federalist pamphlet, 1990.
9. LaRouche, Lyndon H., There Are No Limits to Growth, New York: New Benjamin Franklin Publishing Company, 1983.
10. "Global Showdown: The Russian imperial War Plan for 1988," Executive Intelligence Review Special Report, Washington, D.C.: Executive Intelligence Review, July 1985.

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