From: covici@ccs.covici.com (John Covici)
Reply-To: covici@ccs.covici.com
Newsgroups: alt.activism
Subject: EIR Talks to Lyndon LaRouche: 12/28/92
Date: 2 Jan 93 0:30:21 GMT
Organization: Covici Computer Systems

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.



----
         John Covici
          covici@ccs.covici.com

Newsgroups: alt.activism,talk.politics.misc,ca.politics