Breakdown crisis out of control: Helga Zepp-LaRouche issues urgent appeal for a global Glass-Steagall system

Germany’s BüSo Party leader Helga Zepp-LaRouche intervened into the global economic turmoil on 15^th August, with an appeal for international support for the Glass-Steagall solution to the crisis.

Mrs LaRouche is the wife of U.S. statesman and physical economist Lyndon LaRouche, the world’s most accurate economic forecaster, who uniquely forecast the current crisis, and is leading the fight for a global Glass-Steagall reorganisation of the international monetary system.

Mrs LaRouche’s written appeal details the Glass-Steagall solution:

The Glass-Steagall Solution

Faced with this existential threat, there is only one way out: a global, two-tier banking system in the tradition of the U.S. Glass-Steagall Act of 1933. The bill for a new Glass-Steagall Act, H.R. 1489, which was introduced by Democratic Rep. Marcy Kaptur (D-Ohio) in the U.S. House of Representatives, is now being cosponsored by 32 other Congressmen, and supported by the national trade union federation, the AFL-CIO; the National Farmers’ Union (NFU); and numerous regional and local trade union and party institutions, city councils, etc.

I enumerate the necessary emergency measure:

1. All the countries of the trans-Atlantic region must adopt legislation for a two-tier banking system, based on Franklin D. Roosevelt’s Glass-Steagall Act of June 16, 1933, the principles of which also existed in European countries until the early 1980s, with strict regulations under which the banking sector primarily had the character of industrial banks, and private savings could not be used for risky speculative operations.
   As was the case before the repeal of Glass-Steagall in 1999 by the Gramm-Leach-Bliley Act, commercial banks, investment banks, and the insurance sector will have to be completely separated from each other.
2. The commercial banks will have to be placed under state protection; the investment banks will have to bring their balance sheets into order on their own, without the help of taxpayers’ money, which in practice means that toxic paper in the trillions will have to be written off, even if it leads to the insolvency of the banks.
3. Those legitimate areas from the old system that deal with the real economy or the productive lives of working people will be identified, and be held valid in the new system. Some categories of these claims will have to be frozen at first, because of complex interdependencies, and then analyzed by a state institution, valued, and honored.
4. A national banking system in the tradition of Alexander Hamilton must then issue long-term loans, within the new credit system, with low interest rates for productive investment purposes, which, by an emphasis on increasing energy-flux density and scientific and technical progress, will raise economic productivity.
5. The participating nations must immediately establish a system of fixed exchange rates.
6. For the reconstruction of the global economy, long-term cooperation agreements will have to be concluded among sovereign states, whose purpose will be to build well-defined infrastructure and development projects. These agreements represent de facto a new credit system, a New Bretton Woods system, in the tradition of Roosevelt.
7. Given the decades-long destruction of industrial and agricultural capacities as a result of the monetarist dogma, beneath the level required for decent living conditions for the world’s current population of around 7 billion, the goal must be to achieve, through a science-driver, the next, higher platform of economic development, as Lyndon LaRouche has formulated this from the standpoint of physical economy. As an historical example, the increase in productivity achieved by President John F. Kennedy’s Apollo program has lasted to the present day.

Join me in directing an urgent appeal to parliaments and governments to fulfill their constitutional duty and to protect the common good of those they represent, by adopting a two-tier banking system immediately.

Citizens Electoral Council leader and National Secretary Craig Isherwood, and National Chairman Ann Lawler, endorse Mrs LaRouche’s appeal. To add your support, contact the CEC.