NetNews Usenet Archive 1992 #31/NN_1992_31.iso/spool/alt/activism/19966

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From: [e-mail] (John Covici)
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Subject: EIR Talks to Lyndon LaRouche: 12/28/92
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Date: 2 Jan 93 0:30:21 GMT
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The following interview with Lyndon LaRouche was taken from Executive
Intelligence Review V20, #2 and was originally broadcast on the radio
show EIR Talks With Lyndon LaRouche which is available by satellite.

Interview: Lyndon LaRouche

Return to the fundamentals of production-based economics

{The following interview was conducted with U.S.  economist
and statesman Lyndon LaRouche from his prison cell in Rochester,
Minnesota on Dec. 28, 1992. The interview was conducted by Mel
Klenetsky for }EIR'{s radio show ``Talks With Lyndon LaRouche.''}

EIR: We're coming up to the one-year anniversary of the formation
of Commonwealth of Independent States, and of the Yegor Gaidar
and Jeffrey Sachs ``shock therapy'' program, which has given
the former Soviet Union 2,000% inflation. Can any country survive
that kind of policy?

LaRouche: No, absolutely not. It's a rather complicated but
important point, important not only for eastern Europe, but
also for the United States, that no nation, including our own,
can survive the kinds of so-called free market deregulation
policies which are currently advocated by the U.S. government,
by people at the Harvard University economics department, and
so forth.  It just cannot be done. It is a radical form of monetarist
policy, absolutely wild, which is guaranteed to destroy any
economy which is foolish enough to accept such policies.

In the case of the so-called shock therapy, this little fellow
Sachs, educated in the modern fads in economics, that is, in
totally incompetent economics, has proposed to use the shock
therapy {to destroy} the structures of economy which were associated
with the former communist economies, in order to clear the way
for the gradual mushrooming, beginning with little peddlers,
of a new so-called free market economy. And what he gets, is
a combination, on the one side, of a total destruction of the
economy, piece by piece; zooming inflation as a result of a
collapse of the economy--for no other reason--and then a host
of speculators playing upon the shortages thus created to make
superprofits.

The image of the Mercedes Benz 600 vehicles in Moscow amid the
relative hunger, is an example of that, or the virtual total
collapse of the economy of Poland relative to what it was before
Sachs got in there. And the same thing is true in the United
States. Britain is destroyed as an economy, and the United States
is destroying itself as an economy, all as a result of the same
kind of philosophy of economics.

EIR: What is shock therapy, and what is a free market system
and free market policies?

LaRouche: The free market system is insanity. We fought our
[American] Revolution for independence against the policies
of what were then called Adam Smith's doctrine of wealth of
nations, which was a milder, less radical version of free market
than is being pushed by Sachs and others today.

These fellows look only at buying cheaply, from the cheapest
source, and destroying every part of the world economy which
does not meet that price of cheapness. This, in its milder form,
the Adam Smith form of the British East India Co., destroyed
many economies. Every time we tried this model in the United
States, as we did under Presidents Jefferson, Madison, Jackson,
Polk, Buchanan, or Pierce, we destroyed our economy and went
into a deep depression. The United States never had a depression
which was not caused by our submission to some version of this
so-called free market economy. And the only way we ever got
out of a depression, was by rejecting that free market economy,
as it's called now.

EIR: What are the principles of shock therapy?  LaRouche: There's
no principle at all. You simply

allow no protection for your economy. You drop prices below
replacement costs; you pile up debt--it looks like a leveraged
takeover.

What happened in Poland, for example, as shock therapy, is not
much different than what happened to Northwest Airlines, which
is not yet bankrupt, and to a lot of other airlines, which did
go bankrupt. Somebody moved in with a leveraged buyout; they
took over the economy, or the company in this case. They piled
on a lot of debt to cost of acquisition which was piled on the
company. They sold off and otherwise looted parts of the company,
cut wages, and so forth and so on--all in the name of paying
off this debt, which had been created in the process of the
takeover.

In the United States, there are a bunch of sharks that do this.
They'll take somebody, set him up, invest in him, build up his
company; he'll buy a lot of assets. And then at one point they
pull the string and artificially drive him into bankruptcy,
and then, one of the creditors ends up buying out the other
creditors, taking over the whole company at 20-30@ct on the
dollar. That's what shock therapy is in practice, as applied
in Poland.

EIR: Free market and free trade policies are what everyone learns
when they go to school; they're told that protectionism is bad.
And yet, what you're telling us is that protectionism is the
system that built this country.

LaRouche: Yes, precisely. There is the case of Prof. Robert
Reich, who's been designated by President-elect Clinton to become
the secretary of labor.  Now prior to that announcement, there
was much mooting of the possibility that Reich, who presumably
had been one of the leading advisers to the governor on economic
policies for his presidential campaign, might become the so-called
economics czar. There was a great protest from various people,
saying, well, Professor Reich does admittedly write a great
deal on economic policy and teach on it, but remember, he's
not accredited as a tenured professor where he's teaching, because
he has not qualified himself in the requisite academic courses
in economics. Now, I laughed about that, and I said, that's
the very reason he might be qualified.

Anybody who has been educated in the college level, for example,
in what is called microeconomics and macroeconomics, is unqualified
to be hired for an administrative position in any branch of
government or any company firm today.

What is taught as economics in universities today is wretchedly
incompetent. And the person who has successfully passed the
courses in those subjects, {is a failure.} If you turn them
loose in a corporation, they'll ruin it. If you turn them loose
in a national economy, they'll ruin it.

Economy has nothing to do with this free market nonsense. Economy
is the relationship of the individual and the society to nature.
It's a matter of how we, as human beings, manage to produce
enough and increase our productivity to the point that we as
a nation, as a people, are able to survive. And we look at the
nation, and we look also at the individual in that connection.
We also look at the family, because the family after all is
the unit which reproduces the individual; and therefore the
development of the individual within the family, up to the point
of maturity at least, is the crucial point of the development
of economy.

Now, you don't develop an economy just simply by producing enough.
In order to produce, you must have what we call infrastructure.
You must have water management, land improvements, transportation,
energy supplies, and so forth, which are all infrastructure.
You must also have in a modern economy an educational system
which teaches something which is not the so-called current fad
in economics. You must also have a health delivery system; otherwise
your population may be dying of lack of sanitation or lack of
care.

So, these ingredients called infrastructure, which include the
local city library for example, are {absolutely indispensable}
to the functioning of productivity of society. They are the
first cost of investment in maintaining a modern society. And
today, we have a collapse in the United States of infrastructure.
We have a water crisis, which is going to kill us--we're beginning
to look like Africa, not as bad, but we're headed in that direction.
We have an energy crisis. We're going to brownouts and blackouts
with no energy supplies to replace it. We have no transportation
system; the rail system is collapsed, and rail is still the
cheapest and best way of long-distance freight movement, apart
from the bulk freight which we move by water.

We don't have a health care system, our health-care capacity
is 20% below the needs of the population. We have no educational
system to speak of.

For example, even Stanford University, which is a highly respected
university formerly, is one of those which has gone into the
policy of not teaching students the writings of what are called
``dead white European males.'' Now it happens that the {bulk}
of all human knowledge to date involves dead white European
males of the past 2,500 years, beginning with people like Solon,
Homer, Plato, Pythagoras, and so forth. All of our knowledge
is based on the development of the ideas developed by these
people. And a university which is not teaching the work of dead
white European males, has no physical science, no music department,
virtually no literary department--nothing! On the high school
level, we have again the political correctness program spilling
down. The ``World of Difference'' program, for example, put
in by the Anti-Defamation League, is destroying much education
in parts of the country. But one thing I agree with the {Wall
Street Journal} on, is that ``political correctness'' on the
university level is destroying it.

So we have no infrastructure. We don't have a labor force which
is as qualified to produce as it was 20 years ago, and all as
a result of these kinds of crazy ideas associated with the current
fads in economics.

EIR: If you go to an economics class today on the university,
the main philosophy is the law of supply and demand. Why does
the law of supply and demand not solve these problems? Why does
it fail?

LaRouche: It always did. Supply and demand is a piece of idiocy.
It was dreamed up during the 18th century in particular. It
was revised in the 19th century.

It's nonsense. If you don't produce the supply, you can demand
all you want, you're not going to get it. If you don't have
infrastructure, you won't get it. This is a long and more complicated
problem, which goes to the axiomatic roots of the incompetence
of what is taught as economics. Its advocates argue that you
start with a fund of money. Where this fund comes from, is a
big mystery.  Then, they argue that there are consumers, who
buy, and that producers are merely people who go out and work
as cheaply as possible to satisfy the demands of the consumers.
And when the consumers don't have anything, the consumers are
willing to pay a higher price; and when they do have something
in abundance, they will pay only a lower price. That's essentially
the whole theory.

The fact of the matter is, that society is based not on consumption--obviously,
we have to consume. But society is not driven by consumption.
Society, economies, are driven by production. They're driven
by the productivity of labor. They are determined by how much
of the physical needs of mankind can we get from an average
square mile of land area, by aid of human production. Supply
and demand has nothing to do with that.

For example, the belief in supply and demand, and the use of
that as an argument in policy-shaping, is the reason why the
British economy is the useless rust bucket today, and why the
United States is headed in the same direction.

We're not being cheated by Japan. We're not being cheated by
Europe. They're not unfair with us, we're unfair with ourselves.
We shut down our infrastructure investment, which Japan did
not do, which Europe has not done to the degree we have. We
shut down our investment in technology, which they did not do
to that degree. We did all these crazy things, and we ruined
our economy.  Everything that transformed us from the world's
envy in economy at the beginning of the 1960s, to virtually
becoming a Third World nation today, is the result of our own
doing, our own stupidity, and what is taught as economics is
largely responsible for shaping the policies which have turned
us from a proud, prosperous nation into a junkheap today.

EIR: If the law of supply and demand and free trade policies
do not lead to infrastructure development, how do you get it
going?

LaRouche: It has to be done by the state. First of all, you
have to start with this question of money.  According to our
federal Constitution, the creation of money and the circulation
and regulation thereof, is a monopolistic responsibility of
the federal government.  Under Alexander Hamilton, and under
all sensible presidencies, the way we've gotten money is not
to have a Federal Reserve System or any central banking system,
not to allow it. That's how we're looted.

The way we're supposed to get money, is, as the Constitution
says, the President goes to the Congress and asks the Congress
for a bill, which authorizes the Executive branch to print and
circulate money or to create specie. Acting upon the authorization
of that congressional bill, the President instructs the secretary
of the Treasury to proceed. And the proper procedure is that
the secretary of the Treasury {issues the money,} paper money,
specie, and so forth, or authorizes someone else to do it on
the Treasury's behalf, like a printing company or a mint, for
example.

This money is then properly placed in a national bank. It's
not spent usually for government expenditures directly. It's
not paid out by the government. But it's put in a bank. When
it gets to the bank, it is loaned.  U.S. government money is
loaned at a low interest rate to governmental agencies such
as state governments, state projects, or federal corporations,
that is, corporations which are authorized by the federal government,
like water project companies or the Tennessee Valley Authority,
for example. These companies use that money to create wealth
in the form of infrastructure. The money is also to be loaned,
mixed with private savings and loans, to private companies for
worthwhile categories of private investments to build up the
economy generally. And that's normally the way a healthy economy
will grow. If it's investing in technological progress, capital-intensive,
energy-intensive technological progress, such investment of
federally created money will cause full employment (relatively),
and prosperity and continued economic growth. And it will not
cause any federal debt, except the imputed debt of balance sheet
liability of the federal government to back up its own currency.
And if the currency is properly invested, there won't be any
problem on that account.

Our problems today are essentially centered on the operations
of the Federal Reserve System. That is the key to our economic
problems.

EIR: What is the basic difference between the Federal Reserve
and the kind of national bank that you're talking about setting
up? Who controls it?

LaRouche: The Federal Reserve is a private corporation, licensed,
franchised by the federal government. A group of private bankers,
domestic as well as foreign (but through domestic banking channels),
sets up a bank called the Federal Reserve bank. They run it.

Now, they create money. For example, today, the Federal Reserve
System will issue money at less than 3% to New York bankers
and similar people. They print it by discount mechanisms. These
banks in turn will loan that money to the federal government
by buying federal debt at 5.5%, or something like that, or on
long bonds they'll go as much as a 5% spread.

So what we have is the spectacle of money which is created out
of thin air, loaned at 3% or less to banks and others who in
turn loan that fiat money to the federal government at up to
a 5% spread. So the debt is being created, the federal debt
is being built up to bail out the private banks. And the federal
government, in order to conduct its own operations, in order
to pay the debt service that it already owes to the banks and
similar people, borrows money, federal debt, which it pays for
by this means. And so the federal debt is built up precisely
because of this Federal Reserve System.

EIR: Assume that we get our infrastructure going again, we create
a national bank. How does the United States compete with countries
like Japan and Germany, who are so far ahead at this point in
terms of infrastructure?

LaRouche: We really don't have to worry about competing, except
in the sense of realizing that the level of technology in these
countries represents a standard with which we must have parity.
We don't have to have exactly the same industries, or the same
complex of industries they have; but we have to meet that technological
standard. That means a change in our policies presently; our
tax policy, our credit policy--all have to change.

For example, let's start with the farmers--agriculture. Most
people don't know it and most wouldn't even believe it, but
the United States is a net food importing country. True, we
export grains, but we are wiping out the American farmer. Why?

The American farmer is being paid far less than it costs the
farmer to produce. For example, about 90-95% of parity is the
price the average farmer must have in order to maintain farming,
that is, to meet the costs of production. We have been for years
forcing the price paid to the farmer down below 60%, to as low
as 30%. Obviously, farmers go bankrupt as a result of trying
to meet those prices.

The agriculture department of the U.S. government for years
has been run by the grain cartels, chiefly the Cargill firm.
For example, under President Reagan, we had a fellow called
Daniel Amstutz in there, who was originally the foreign trading
executive for Cargill, the largest grain-trading operation,
running the agriculture department's foreign trade. We have
people who were former Cargill officials, former Cargill attorneys,
Cargill assets, running the agriculture department. These guys
have been looting the farmer. People like Dwayne Andreas have
been looting the farmer.

So, farmers are going out of business. They didn't go out of
business all at once; they got into government debt. Then the
government turned the screws, often illegally, violating the
law, to put the farmers out of business, even put them in jail,
for doing nothing other than trying to keep the farm going and
supplying food to the United States and the world {at below
the cost of production.}

So obviously, we have to build up the agricultural sector again,
to the point that we can produce enough food so we're not dependent
upon foreign countries for our food supply, which is what we've
done by sinking the American farmer. We have to do the same
thing in the manufacturing sector. We have to create more jobs
in manufacturing and transportation and so forth. We have to
have a larger percentile of the total labor force involved in
producing wealth and a much smaller percentile of the labor
force involved in low-grade service industries, or in financial
services and outright parasitism. We have to have more people
in production, more people employed in science, and fewer in,
shall we say, low-grade social services. We have to have a policy
of capital intensity, that is, a lot of investment in production,
in machinery, in equipment, and a relatively shrinking percentile
of investments in the simple direct cost of production. And
we have to have an emphasis on scientific and technological
progress. We have to supply the infrastructure, including the
transportation systems, the energy systems and the water systems
which are necessary to allow industry and agriculture to function.
Those should be our objectives.

EIR: Why do farmers need parity to survive?  LaRouche: A high-quality
farmer will run a family

farm of maybe 400 acres of land. He's a small businessman--actually,
farmers are among the best small businessmen in the United States.
They were better at managing the farm than probably 80% of the
businessmen, including some large corporations, were at managing
their companies, in terms of efficiency, everything considered.
They worked harder, they had a higher degree of competence for
their work, and their product was relatively superior.

Now, parity reflects the average paid-out cost of production
for these farmers, plus a small margin of return on investment,
to cover borrowing costs and profits. That's all it is.

So when you say ``parity,'' you're not saying some magic term
or some made-up term. Parity is simply the average cost of production
plus a small percentage for borrowing costs and profit. That's
all it represents. Some farmers are much more productive; therefore,
that means a fairly substantial profit to them. Other farmers
are less productive, but we need all of these farmers to produce
an adequate food supply, and that's the way we calculate parity.
So when you force prices of commodities {below} parity, you
are bankrupting farmers.

EIR: Who's forcing them to produce below parity?  LaRouche:
The U.S. government is backing up the

grain cartel. The grain cartel comes in, cuts a contract, and
says we'll buy at this price. And they use their monopolistic
power against the relatively small businessman, the farmer,
taking him on one at a time, and they crush him. And if the
U.S. government does not intervene against these monopolies,
these oligopolies--they're actually violating the anti-trust
laws, in principle--to prevent them from abusing the farmer,
then the farmer will be crushed, because the farmer is a small
businessman up against a giant like Cargill. How is a small
farmer, grossing a couple of hundred thousand dollars year,
going to compete in the so-called free market against a $40-billion-a-year
giant, which, with its friends, the Union-Pacific crowd in Omaha,
controls the Chicago market, controls the grain trade deals
in Minnesota? How is that individual farmer going to compete
in the marketplace, which is rigged by these powerful grain
cartels, with the assistance of a complicit agriculture department?

The U.S. government creates double talk. They call parity a
``subsidy'' for the farmer, and say that's coming out of the
mouths of babies. Bunk. What we're subsidizing, by not maintaining
a parity policy, is these cartels which are looting the farmer.

EIR: Farmers are being driven off their land. Who's buying up
the land?

LaRouche: Sometimes they're not even buying the land; they're
taking the land for a song. There are many people involved;
it's a complicated question as to what's happening. But we are
ruining the land. We're forcing the farmer down to dustbowl
conditions, or something similar, by forcing him to produce
from stored-up values in the land and in capital goods, until
the point that the whole machine essentially breaks down. He's
out of business, saying, ``I just can't do it any more.'' It's
a cruel story, but the point is, the whole thing is based on
the lie that parity is a violation of free market; and if Americans
want to sustain that lie, they're going to find themselves going
very hungry--because of a shortage of supplies and because we
can't afford to import them. And the dumb American, who thinks
that cheap food prices based on a bankrupt farmer is somehow
good for the consumer budget, who thinks that he or she gets
his or her food from the supermarket and doesn't have to be
concerned with the farmer, is going to be punished by his or
her own stupidity.

We are now in a grievous worldwide food shortage, an acute one.
People are dying of famine all over the place, for many reasons.
But essentially the reason that we're having this food shortage,
is because of the very policies of the U.S. government, which
many foolish consumers in the United States think are good for
the consumer budget.

EIR: If the United States is going to restore itself as an economic
power, it will have to deal with the educational level in this
country, which, according to statistics, has fallen behind the
level in other industrialized countries such as Germany and
Japan. How does it do that?

LaRouche: First of all, look at how we went down.  Forget the
statistics. They're bunk. Yes, we are falling way behind these
other countries, no question about it.  That's obvious. But
we're falling behind ourselves. If we look at the content of
education in the 1950s and 1960s, the first half of the 1960s
in particular, when the National Science Foundation grants to
education were still in progress, for example, the average graduate
of a university today, including many with doctoral degrees
in social sciences, {could not pass} a competent high school
standard of education from that period.

Similar things are occurring in Europe. For example, between
1968 and 1972, German education was collapsed by the so-called
Brandt reforms of the late Willy Brandt, who was then chancellor.
The German who is coming out of a high school in Germany today
is virtually a barbarian compared with his older brother or
parent who came out of an equivalent high school in 1966-68.
So, comparing the United States with other countries masks the
problem. The problem is worldwide. Generally, the level of education,
the competence of people graduating from high schools and universities,
is such that often the university graduate of today would not
be qualified for a high school diploma in a respectable high
school, say, of 25 years ago. And that's where the problem lies.

The key to this, which is why I find myself in this uncomfortable
alliance with the {Wall Street Journal} against political correctness,
is that if we allow these thugs, the so-called deconstructionists
(the name they use for themselves), these modern Nietzscheans,
to use the Modern Language Association and other vehicles in
colleges and high schools to introduce this political correctness
program where truthfulness is no longer a standard of teaching,
but rather sensitivity as they define it, is that we're going
to find that we have a bunch of barbarians.

I refer people to Jonathan Swift's {Gulliver's Travels,} which
many people think is simply a children's book; it is not. It's
a very powerful satire on the condition of England at that time.
And I refer them to the famous story about the Houyhnhnms--Houyhnhnms
being horses. Poor Gulliver lands in the land of the Houyhnhnms,
and he finds that horses, i.e., a parody of the British aristocracy,
are running the place, and that human beings exist only in the
form of baboon-like immoral, disgusting, ignorant, speechless
specimens called Yahoos. And that's what's happening.

Our high schools and universities, and our general cultural
system over the past 25 years, has been turning the American
from a proud human being into an illiterate, drugged, ignorant,
babbling, disgusting Yahoo. And if we want to have a civilization,
let alone compete, we better start attending to remedying this
sickness. Do you want your children and grandchildren to be
a species of Yahoos who are unfit, unqualified, to survive?
Or do you want grandchildren left behind you who amount to something?
I think if we focused on that moral question, we would find
that the economic questions would fall into place for us.

EIR: If we look at the cabinet which is being chosen by Bill
Clinton, it seems to be a paradigm of political correctness.
We have a certain number of women, a certain number of minority
groups. Is this going to present a problem for this country?

LaRouche: Absolutely. One shouldn't look at it too simplistically.
In framing a government, at least in terms of nominations so
far, what the Clinton team has done, is to provide an assortment
of representation to every geographic area of the country, and
every part generally of the spectrum of the so-called political,
sociological rainbow. Now, what's been created by doing so,
in economics, for example, is at least four different mutually
conflicting points of view on economic policy, all equally represented.

Sooner or later, those conflicts are going to have to be sorted
out, and something, either one of the four or something else,
is going to have to take the place of most of the policies coming
in there.

What you have is really the beginning of a rough-and-tumble;
not a policy. In this rough-and-tumble, admittedly, we have
some very bad things. We have this rainbow political correctness
idea--it's going to be a disaster. None of it's going to work.
The U.S. economy is going to become worse until it changes.
So therefore, whatever happens, if the political correctness
prevails, to that degree you will have a failure. The administration
is going to have to choose policies, or tilt toward policies,
which are against failure, which will tend to be against political
correctness.

EIR: The backdrop of the incoming Clinton administration is
a world in turmoil--the former Soviet Union, Europe, the developing
sector. How do we restore some direction to the world strategic
situation?

LaRouche: I see things becoming much worse than that. The former
Soviet Union is not going to disappear; at present, it's being
reconsolidated. What's happened is that the Russian {nomenklatura}
(some of the old communists, of course, are in it) is sitting
back and saying, ``Okay, these fellows want independence from
us.  Let them have it for a while, let them try to swim on their
own. They'll sink, and they'll beg for us to come back in.''
If you look at what's happening, you will find that the communists,
with the blessing of Lawrence Eagleburger and others, especially
the British government, that the Serbian fascists of Slobodan
Milosevic are committing genocidal atrocities, with concentration
camps and genocide, which are beyond those even of World War
II.  It's unbelievable. It's the worst extremes of the Nazis
and beyond that. These are communists. And that's destroying
that part of the world, threatening a Balkan war there.

The Russians are going to come back as an imperial power very
rapidly, partly through agreements with forces in China, but
otherwise, the United States will be disintegrating--while willing
to play the role of world policeman, we'll collapse on the basis
of our economic collapse here at home, which is now ongoing.
So, we're in a terrible mess, and we have to recognize first
of all that we're in a terrible mess.

EIR: The former President of the former Soviet Union, Mikhail
Gorbachov, recently said that he expects to see a return to
some of the integration that existed in the former Soviet Union.
What is going to happen in terms of the Soviet Union, and what
will this mean for the world strategic situation?

LaRouche: It's hard to say exactly what will happen. Gorbachov
is correct in seeing the shift back in that direction. That
was obvious to me from what I've seen from various sources.
Some of the thinking among the leading Russian {nomenklatura,}
back when Gorbachov fell, was that they said, ``Okay, we'll
go through this period of deconstruction. We'll go through a
period of placating Jeffery Sachs and the International Monetary
Fund. We'll go through hell, but we're going to let our people
see what it looks like. They think that they want the American
system. Well, let them see what it's like these days. And when
they get enough of the American system, they'll come back to
us.''

That is generally the thinking in some sections of the old apparatus,
the {nomenklatura.} And you'll see that expressed among military
voices more clearly than anywhere else, but the military voices
are speaking for a broader group of people. This is true in
Central Asia. The Russian troops will sit back, let the people
shoot each other; when they get tired of shooting each other,
and call for the Russian troops to come in and save them, the
Russian troops will come in and save them--maybe not promptly,
but slowly. So that process is going on.

To develop these areas, to render them stable, requires fairly
large-scale infrastructure projects. The problem of the Soviet
economy, up to the point of the dissolution, was a rapid disintegration
of infrastructure.  And this occurred for many reasons. But
this disintegration of infrastructure will prevent any economic
development from occurring on a large scale. So they're going
to have to tackle this infrastructure problem. That will require,
from their standpoint, some sort of integrated effort, and Moscow,
naturally, would like to have this integrated effort occur under
Moscow's dominance. And that's what Gorbachov is reflecting
when he makes those kinds of observations. I'd say that's a
fairly good estimate of the direction of things. And remember,
the former Soviets have about 30,000 warheads and a strategic
naval fleet which is very impressive, so they still are a superpower,
whereas the United States and Britain and so forth collapsed,
partly because of this crazy Balkan war which the Anglo-Americans
started and have kept going. We're going to find that the Russians,
even though they've gone back a great deal, will be relatively
stronger, relative to the United States and Britain, than they
were in '89. Very soon, they'll be ahead, the way things are
going now.

EIR: In terms of the strategic situation, is there any policy
that can be quickly pushed in motion in terms of Europe and
the former Soviet Union, that the United States should be looking
toward?

LaRouche: Yes. Forget the military policies as such; that's
a longer subject. Go back to fundamentals.  Fundamentals are
economics. We need to scrap every economic policy which was
introduced as an innovation during the past 25-odd years, and
go back to the kind of thinking in economic policy which was
characteristic of the period of the John Kennedy administration.
This is the right policy for the world as well as the United
States.  That's the fundamental thing we have to do, and that's
what they're blocking on in Washington these days.



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         John Covici
          [e-mail]