LaRouche was right: U.S. inquiry finds financial crisis avoidable and unnecessary

America’s official inquiry into the global financial crisis has sharply contradicted Julia Gillard and all of the other politicians, journalists and “experts” in Australia, the U.S. and around the world who all claim nobody could have foreseen the financial crisis which erupted in September 2008.

The Financial Crisis Inquiry Commission (FCIC), appointed in May 2009 to “examine the causes, domestic and global, of the current financial and economic crisis in the United States”, and chaired by former California State Treasurer Phil Angelides, released its report on 27^th January, with the clear finding that the crisis known as the “GFC” was avoidable and unnecessary; or, to put it another way—Lyndon LaRouche was right! As Angelides stated, “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.”

The Angelides Commission identified two major Wall Street initiatives which contributed to the collapse. The first was the repeal in November 1999 of what remained of the Glass-Steagall Act. In that month The Congress passed, and President Clinton signed, the Gramm-Leach-Bliley Act (GLBA).

Secondly, on 15^th December, 2000 the Commodity Futures Modernization Act of 2000 was passed, which legalised over-the-counter derivatives in the trillions. Global turnover in derivatives skyrocketed from around $100 trillion in 2000, to $1,400 trillion, or $1.4 quadrillion, by 2008. (Australia’s banks racked up derivatives obligations of $14 trillion by this time.)

While the Commission after the fact importantly identifies the cause, Lyndon LaRouche and his global movement, including the Citizens Electoral Council (CEC) in Australia, fought these speculative moves by U.S. Federal Reserve Chairman Alan Greenspan and Treasury Secretary Larry Summers at the time.

Specifically, in 1999 in the pages of EIR magazine, the Gramm-Leach-Bliley Act was denounced as a “disaster”. The announcement in April 1998 by the chairmen of Travelers Group and Citicorp of their intended merger, which violated the Glass-Steagall Act was characterized by EIR as a violation of Federal conspiracy statutes.

LaRouche’s EIR also characterised the Commodity Futures Modernization Act of 2000 as the “Derivatives Decriminalization Act”.

These actions in 1999-2000, both fiercely opposed by Lyndon LaRouche, then set off the chain of events which by 2007 triggered the collapse of the world financial system.

Contrary to those who lie that nobody did or could forecast that this would happen, on 25^th July, 2007, Lyndon LaRouche gave an international webcast during which he correctly forecast the financial crisis which was to break out within weeks. In that webcast LaRouche stated the following:

“The world monetary financial system is actually now currently in the process of disintegrating. There’s nothing mysterious about this: I’ve talked about it for some time, it’s been in progress, it’s not abating. What’s listed as stock values and market values in the financial markets internationally is bunk! There are purely fictitious beliefs. There’s no truth to it: the fakery is enormous. There is no possibility of a non-collapse of the present financial system—none! It is finished, now! The present financial system cannot continue to exist under any circumstances, under any Presidency, under any leadership, or any leadership of nations. Only a fundamental and sudden change in the world monetary financial system will prevent a general, immediate chain-reaction type of collapse.”

Immediately thereafter in August 2007 LaRouche called for a Homeowners and Bank Protection Act (HBPA) to deal with the popping of the housing bubble, and the subsequent explosion of home foreclosures and the blowout of the mortgage-backed securities market and a chain reaction collapse of the world’s biggest investment houses; the CEC proposed a Homeowners and Bank Protection Bill for Australia in November 2007.

Greeting last week’s release of the Angelides Commission report, CEC leader Craig Isherwood said, “Those who ignored LaRouche before 2007 had better pay attention now—and act. Only his solution of a global Glass-Steagall, national banking, and grand infrastructure development such as the North American Water and Power Alliance (NAWAPA), will avert a new Dark Age.”