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For More Information: Frank Bell, Press Staff. Galaxy 2, 74 Degrees W Trans 3 74.9 mHz NB, SCPC 3:1 Companding, Flat or Satcom C-1, 137 Degrees W Trans 2 7.5 mHz Wide Band Video Subcarrier EIR TALKS WITH LYNDON LaROUCHE Interviewer: Mel Klenetsky MEL KLENETSKY: Welcome to ``{Executive Intelligence Review'}s Talks With Lyndon LaRouche.'' World Trade Center Bombing: Terrorism Has Come to the United States Mr. LaRouche, before we get to President Clinton's fiscal package, I want to bring up the World Trade Center explosion. Has the specter of terrorism reached the United States? MR. LAROUCHE: Yes, it has, in two ways. First of all, there is very little doubt that this is a terrorist incident, and for some of the listeners who may not know this, I am and have been in the past an expert in this area, and have usually been right when the FBI, for example, has been wrong, back during the 1970s and early 1980s. This has all the qualifications, to any expert, of a terrorist incident. It is directed against the psychology of the peeople of the United States. It is correlated as a terrorist incident with developments in the Balkans, and it is correlated with such manifestations as Lord Owen's recent blast against the United States government for Mr. Clinton's indications that he might do something creative in respect to the relief of the victims of Serbian aggression and terror in the Balkans. What is not clear, is exactly who did it. It could be either the Serbians themselves, or it could be someone {exploiting} this conflict to introduce terrorism in the United States. Let me just explain. When terrorism was run in Germany and Italy in particular, taking the period of especially 1977-1978, which is the high point of my experience, when I had some successes relative to official agencies at that time, the terrorism was actually run, though in part with agencies in East Germany and Czechoslovakia, usually through NATO and often by certain Israeli assets who were running the terrorism in the name of left-wing operations, as in the case of the Moro kidnapping/assassination in Italy, but were run under a NATO policy called ``strategy of tension.'' What is going on now, in the manner in which this thing was done, the choice of target--the nature of the operation, the circumstances, the pre-calculable effect upon the U.S. population and political process--this is a strategy-of-tension operation against the population and government of the United States. And so it says this past weekend in the London Sunday {Telegraph} in Great Britain, which gloats over this terrorist incident, as terrorism finally coming to the United States, the United States is getting its come-uppance. {This is a strategy-of-tension operation.} Q: You mentioned an earlier strategy of tension in the 1970s. What was the purpose of this NATO strategy of tension then, and what is the purpose of the NATO strategy of tension today? MR. LAROUCHE: In the middle of the 1960s and thereafter, and particularly at the point that Henry Kissinger was stuck by the Establishment into a key position in the Nixon administration, an attempt to change the global political process was unleashed. And this meant the destruction of the institutions of the sovereign nation-state, bringing to an end the emphasis on technological progress, breaking off the larger remnants of the policy of development of European countries, for example, for development of the developing nations, and that sort of thing. And also against technological progress in Europe and in the United States. These were the purposes of the strategy of tension. It was an attempt to do social engineering and psychological engineering of strata of the population, particularly governing strata, to terrify the ruling strata of Italy and Germany and other countries, into submission to these new policies. The example of that is the case of the kidnapping and assassination of former Italian prime minister Aldo Moro on the initiative of repeated threats by Henry Kissinger against Aldo Moro, because Kissinger and Kissinger's British masters did not like Moro's policy for Italy. Moro was threatening to make an arrangement with the base and other circles of the Communist Party [of Italy] in order to eliminate the postwar arrangement under which the Christian Democratic governments were destabilized by small parties, groups like Ugo LaMalfa, Giorgio LaMalfa's father, and things like that. NATO and the United States and Britain did not want Italy to get that kind of stability of government and therefore they told Moro to cut it out, and when he didn't, they killed him. [commercial break] 19th-Century Terrorism: Britain's Geopolitical Strategy and the New Strategy of Tension Today Q: We have been discussing the World Trade Center explosions and the source of terrorism back in the 1970s and currently. Mr. LaRouche, in terms of the source of this terrorism, can we reiterate what the basic premises and purposes of this kind of NATO strategy of tension, as you call it are? MR. LAROUCHE: Go back to the nineteenth century. People think that terrorism is something that was invented in the 1960s and 1970s. It was not. We are very familiar with the experience also inside the United States back in the nineteenth century, in which terrorism was of the following form. Terrorism had hit the United States. It came from a circle which was very close to Britain's Lord Palmerston. Palmerston, by the way, of course, was the chief figure associated with Britain's Opium Wars against China, that is, cramming dope down China's throat. Also, he was very close to an asset of his, Giuseppe Mazzini. Giuseppe Mazzini was the head of a Freemasonic organization called Young Europe. He was also (which is less known), the head of an American organization, called ``Young America,'' an American Freemasonic organization, whose head, in 1859, became Albert Pike, who was later a Confederate general who ran terrorist operations against the United States from Canada and the Confederacy in the Western borders of the United States. For example, Pike was responsible for the massacre of about 300 citizens, mostly women, children, and old men, in Mankato, Minnesota, during the period of the Civil War. That was an act of terrorism very much like what the Serbs have been running in Bosnia and Croatia today under the direction of Pike. For his terrorism, Pike was actually indicted, in effect, according to the manner of the time, by the Confederate Army as a war criminal, then by the United States for treason. The assassination of Lincoln was a terrorist operation which involved the friends of Pike and of the Washington, D.C., head of the Confederate intelligence service and a leading member of the B'nai B'rith at the time, Simon Wolf. Simon Wolf was also involved in the creation of the second wave of the Ku Klux Klan in 1915. The way that President Theodore Roosevelt became President, is that admirers of President Roosevelt around the Henry Street Settlement House, deployed a terrorist against then-President William McKinley, which caused Teddy Roosevelt to become President. Once you understand the roots of terrorism in Europe and the United States around the Mazzinian Freemasonic network, then you understand more quickly exactly how this stuff was put together today. I'll just point out one thing about this, when you say going back to the nineteenth century. I was born in 1922. During the 1920s, I knew one of my maternal grandfathers. His father, or his generation before him, my great-great-grandfather, who was a common dinner-table figure for me in the 1920s, when I was a child and later when I was an adolescent, was a great-great-grandfather who was born in 1809, the same year as Abraham Lincoln. From my own experience, and from anyone else who thinks similarly on these things, family traditions and connections span 3, 4, and 5 generations; and that is the way it is with terrorism in Europe. If you want to understand terrorism in Europe, how it is structured, you have to look at these Mazzinian and related types of organizations, such as the Black Hand society of Serbia, which go back to the beginning of the nineteenth century, particularly to the middle of the nineteenth century. Q: Currently, there is a political destabilization taking place in Italy, which is affecting all political parties and threatens to transform the entire political scene in Italy. Many people in the United States may not know about it, but it has tremendous implications for politics in Italy. You mentioned Mazzini, you mentioned Aldo Moro; what are we looking at, in terms of the current situation in Italy? MR. LAROUCHE: The first thing the American people have to understand, is that what is popularly believed by most Americans, who think they are literate, who read newspapers, follow television reports and so forth and so on rather than read books; what most of them believe is absolutely nonsense, from the standpoint of reality. Because that is what they have been indoctrinated to believe. Beginning in the 1880s, Britain had a policy called geopolitics. Geopolitics was simply the notion that if France, Germany, and Russia and other states cooperated economically to develop Eurasia, that the economic development of Eurasia and the political effects of that, would mean that the British Empire could not remain the dominant force in the world. Therefore, the British developed policies to destroy the Eurasian heartland by setting France, Germany, Austro-Hungary, and Russia at each other's throats, together with what was left of Turkey at that time. That is the geopolitical character of the situation, which continues to the present day. There are people in New York, for example, in the financial community, close to London, who have shared that. We have had two world wars in this century over the issue of geopolitics--that is, over the fear that France would cooperate with Germany and Russia to develop rail networks and things of that sort, which would mean this threat to Britain's empire. With the election of a Confederate--that is, spiritually a Confederate, and a sponsor of the refounding of the Ku Klux Klan in 1915, who was President at the time, Woodroow Wilson, the United States was nudged into a commitment to support Britain in a war in Europe. Then the Second World War was caused a little more indirectly but the same way, when the von Schleicher government of 1933, proposed a recovery program for Germany, which actually did work, as far as it went. The U.S. and British interests supported Hitler, put Hitler into power, to overthrow von Schleicher. This was done, for example, together with some leading Social Democrats in Germany. They continued to support Hitler through Munich in 1938; and only when Hitler launched his {Kristallnacht,} his open atrocities against the Jews in Germany, did the Western powers decide that it was time to get rid of Hitler. As a result of that, we had two world wars in this century: one starting with the Balkans as a result of this geopolitical situation. That is the way to understand the Balkans and the destabilization of Italy today. Italy and the Balkan region are considered by geopoliticians the Southern Flank of Central Europe--i.e., Germany, so forth. If Germany is destabilized, then cooperation among France, Russia, Germany, and other countries, is impossible. A conflict has been generated. What they are doing in addition, and coincident with the Balkan destabilization with the Serbian forces under Milosevic (who are nothing but assets of British interests and interests allied to the British, such as Eagleburger or Brent Scowcroft under Bush, who are Kissinger allies who actually started this war or helped to start it for the British); while they did the Balkan destabilization, they also tried to break Italy. What they are doing is using a law which was imposed by Anglo-American postwar influence, the so-called election and party law in Italy, which forced the Italian parties essentially to be bribed as a way of conducting election campaigns. They are using the history of this ongoing, under-the-table funding of political parties, which was the system set up by the United States and Britain as a way of scandalizing all of the political parties. Of course, it did corrupt them somewhat, but nonetheless they started it, in order to split Italy into five parts and set these five parts of Italy potentially against each other's throats. That is what is going on there. President Clinton: ``Slick Willie'' or Trying to Do Good? Q: You mentioned earlier that President Clinton's plan for the Balkans is somewhat different than Lord Owen's plan. This news service has been involved in many, many different interviews with Croatian and Bosnian patriots who have claimed and asserted that James Baker III and Lord Owen are responsible for the conflict currently taking place in the Balkans. How does Mr. Clinton's current policy of airdrops conflict with Lord Owen? MR. LAROUCHE: Let me say something very plainly about President Clinton. President Clinton has got to look at himself in a mirror some day very soon, if he wants to become successful as a President. He has to say, ``Willie, you've been `Slick Willie' too long. You're now President. You are not the Governor of Arkansas any more. You've got to become President Clinton, not `Slick Willie' from Arkansas.'' That is, often President Clinton, as Governor Clinton and as President to date, seems to have more of a political weathervane functioning up there on top of his head, than a conscience. That is, he goes with the political winds and considers the smart thing to do politically, and says, well, if you are in power, and you have the power, then you have the power to do some good. But the problem is that the political weathervane says, well, to get power and keep power you have to have this thing mixed, and you just don't get around to doing good or doing it for very long. Bill is going to have to look at himself in that way and say, ``It is a tough way to go, Bill, but if you want to do something good for this country or the world, you are going to have to stop being `Slick Willie.' And you are going to have to good, firm positions--moral positions-- on the basis of conscience and stick to them.'' Bill Clinton had a moral, shall we say, impulse toward the Balkans situation. At least that is what he put forward. Then, under pressure from Britain and New York financial circles and others, he backed down and he supported the Owen-Vance plan critically, not fully, but critically. In order to retain some semblance of a conscience-guided idea to assist the Bosnian victims of this Serbian fascist aggression, he decided on this airdrop business. He was going to give an armed escort and he was told he couldn't do that, so he didn't do that. It is an unarmed escort. So there you see an impulse in the right direction--a humanitarian impulse, which is commendable in itself--but it is so diluted and so ineffective that it does not really address the situation. Therefore, while it might do some good for some desperately hungry Bosnian here or there in East Bosnia, in the long run it will not solve, or contribute to solving the fundamental problem which has to be addressed. Genocide In the Balkans: ``The Ultimate Continuation of U.S. Policy in Vietnam'' Q: We are seeing a new type of warfare, perhaps. Maybe it is not new, maybe it is old: this ``ethnic cleansing'' approach of the Serbians. You have received in Rochester several journalists from Croatia, and they have given you reports on this. How do you characterize this form of warfare? MR. LAROUCHE: This is an extension of what [former Secretary of Defense Robert] McNamara and Kissinger and similar people did in Vietnam. This is an extension of what Oliver North, the Marine, and his sidekick, Donny Moore, of ``Kidnappers, Inc.,'' did in Vietnam. In Operation Phoenix, people went in and cleaned out villages. I know some of the people who did it. I am not talking about news reports. I knew Admiral Payton Magruder, now deceased, who was working under Bill Colby to get a thousand-a-day body count, under Phoenix. And Magruder, who was a naval officer from a distinguished family of service to the United States over many generations, became a drunk and died as a result of drunkenness and alcoholism brought on largely by this experience, this disgust every day, with this body count. I have known other people who were involved in this body count business who were in the Special Forces and things like that, officers who were stuck with this thing. At a later stage, they had the kind of operation which Donny Moore as a U.S. Special Marshal and Deputy Sheriff planned to do to me in 1986, which is called a spike team operation. Go into a village, pinpoint some targets, people who are influential in that village, and sneak up one night and kill them. Or drag them off and torture them to death--for pleasure as well as for political effect. That is the kind of mentality. You have people like Karadjic, who is notorious there, a bunch of psychiatrists, who were originally based around Croatia, who are part of the old Yugoslav Federal Army, guerrilla warfare/psychological warfare division and counterintelligence section. These people were trained by Tavistock [Institute], they were trained by the friends of Hannah Arendt, people like Martin Heidegger, her lover, and they simply came up with this kind of terror, which I can explain a little bit more. [commercial break] Q: We were just discussing ethnic cleansing and you brought up the similarities between the Serbian policy and Operation Phoenix. Can you please develop that a little bit more? MR. LAROUCHE: Well, I said something, and I had better clarify it, so that some listener does not think that I might be exaggerating or off the wall or something. In October 6-7, 1986, the U.S. government, under pressure from Moscow to commit itself to my imprisonment, launched a 400-plus man armed raid against my associates in Leesburg, Virginia. Under the cover of that raid, according to his own bragging and corroborating information, Don Moore, who had been a U.S. Special Marshal in operations against me, and who was still, and who was also a Deputy Sheriff in Loudoun County, was part of the team which was committed to killing me, really assassinating me under that cover. Recently, there were tapes from the summer of 1992, in which Don Moore was bragging (unwittingly, however), into FBI tape recordings. And Don Moore bragged about what he was going to do to me [on Oct. 6-7, 1986]. He was coming in with a small team, a spike team, as he described it, to take out the guards around the place where I was located, and to move in and to personally put a couple of slugs into me--to kill me. That was part of the operation which, from the paperwork we have from recent discovery or the past couple of years' discovery, the government had to talk the sheriff's department and Mary Sue Terry, who was then Attorney General of the Commonwealth of Virginia, out of doing this operation. But Moore and company were determined to go ahead with it anyway, under some pretext. There were some people on the Federal side, who were also obviously involved in that. Moore was operating, all this time, as an enemy of mine, as a friend of his buddy, Ollie North, and Ollie North says he was part of the operations against me because of our exposure of his dope-running, his drug-running, into the United States through a special operation which was centered in Room 2C840 in the Pentagon and down in the Kennedy Center at Fort Bragg. So this operation was continued, of that type. It's an example of this kind of terrorist operation. Now back to the Yugoslav situation. The reason for this rape operation against the Islamic population, the women and children--little boys, too--of Bosnia by Karadjic, a psychiatrist, and his killers, is that in that particular culture, if a woman is raped, she is disowned by her family. This perverted Freudian psychiatrist, Karadjic, trained by the friends of Hannah Arendt and by people in the United States, this swine, has used this operation to demoralize and discredit the families of the population of Bosnia. Cutting off the heads of children--babies--in front of their mothers, then raping the mother. This is typical, which many eyewitnesses, including official eyewitnesses, official agencies, or NGOs on the scene have recorded. This is a hideous operation. But this is the {ultimate continuation} of what we did in Vietnam, and a continuation of the kind of terrorism which was done with NATO consent and then conveniently blamed on the Soviets in every case back in the 1970s and early 1980s. ``The American People Have a Right to Know What the Scottish Rite of Freemasons Is'' Q: Just one point of clarification: You mentioned that there were tapes of this discussion by Don Moore. Where were these tapes revealed? Also I would like to bring in another point at this point, which is the recent attack against you and your efforts to bring down the statue of Albert Pike by the Supreme Commander of the Scottish Rite Freemasons in Washington, D.C., [C. Fred] Kleinknecht. MR. LAROUCHE: The tapes in the Donny Moore case: Moore was part of a group including the Cult Awareness Network organization, according to his own and Galen Kelly's and other testimony (or rather, statements on tape), to kidnap and torture and brainwash a friend of mine, Lewis du Pont Smith. They tried to solicit two police officers into cooperation--Donny Moore did this. On the basis of that, the two police officers went to the FBI and said, these guys are planning a kidnapping, which, as most people should know, is against the law. A very serious crime. One of the officers agreed to carry tape, to get evidence on the kidnapping. As evidence was developed, then the FBI got, through the Washington and Philadelphia offices, telephone surveillance of the phone of Donny Moore and of the father of Lewis du Pont Smith, E. Newbold Smith. There were 60 hours of consensual tape, which finally landed in the possession of the Federal court proceedings in Alexandria, Virginia. We secured the copies of the original tapes and the transcripts, which we corrected by listening to the tapes from that Federal Court after the conclusion of the trial in Alexandria. That is where we got this particular information. This Kleinknecht operation is, in a sense, related. As a part of my campaign, together with my vice-presidential candidate, Rev. James Bevel, who was an associate of Martin Luther King back in those days, we ran a targeting of the founder of the Ku Klux Klan's statue, which is based on Labor Department territory in Washington, D.C. Pike is the only Confederate military figure who is so honored. He was the founder of the Ku Klux Klan, he committed acts of terrorism and war crimes against citizens of the United States in Minnesota, Iowa, and in Arkansas during the Civil War, was wanted by the Confederacy for war crimes, was going to be tried for war crimes, and fled to Canada to escape a Confederate trial for war crimes. And this guy's statue is plunked there--the founder of the Ku Klux Klan--in Washington, D.C., on Federal government property, maintained at government expense, and looking right into the face of largest concentration of African-American citizens in the United States. We thought that was a pretty disgusting thing, and someone ought to remove it. Well, we just moved to have it removed; and all kinds of fuss hit, first of all, from the Freemasons, who had put the thing up, the Southern Jurisdiction of the Scottish Rite, which is the Confederacy, it was the Confederacy. The Confederacy was not a group of Southern states; the Confederacy was the Southern Jurisdiction of the Scottish Rite of Freemasonry. So, the Southern Jurisdiction, which is responsible for putting that statue up there in 1901, used its brother organization, another Confederate-founded organization, which was part of the intelligence service for the Confederacy, the B'nai B'rith, but used specifically the Anti-Defamation League office of B'nai B'rith, and said they will get involved in this, and they will fight LaRouche on the statue issue, to help defend the statue. But the ADL could not handle the job. The ADL is trying to campaign around the country, that it is the big fighter against the Ku Klux Klan, and here we have the ADL out there {defending} the Ku Klux Klan. Well, the ADL was getting into a lot of trouble with that kind of assignment. So most recently, the Supreme Commander of the Scottish Rite, C. Fred Kleinknecht, wrote a letter with an accompanying report addressed to all officials of the Scottish Rite throughout the United States urging them to use the enclosed material for a campaign against me, to save the statue of General Pike. It is out in the open. Pike is probably the most evil man in U.S. history. He was a Satanist by his own writings, including those which are in the library of the Scottish Rite in the Washington, D.C., area. He corresponded with Mazzini--a collection of letters which is published now. He shows himself to have been an agent of the British Crown, i.e., Lord Palmerston, together with Mazzini, in trying to destroy half the world. He shows himself to be a racist, a traitor, every imaginable kind of scoundrel, and he is also treated by Kleinknecht and so forth as the spiritual leader or paragon to this day, of the Southern Jurisdiction. In fact, in the 16th Street headquarters, the Temple of the Scottish Rite, in Washington, there are two people who are honored by what is the pagan equivalent of what would be called a chapel in a Christian church. One of them is Pike--this scoundrel! The other one is the man recently known to the American public as ``Gay'' Edgar Hoover, the former head of the FBI. So I simply say: The American people have a right to know what Pike was, and what it is that this fellow, C. Fred Kleinknecht, thinks it is that he must defend, that as spiritual values, he must defend one of the greatest abominations and scoundrels, Satanist, ever to slither across the landscape of the United States. Q: Most of the American population think of the Freemasons just as a simple club, that a bunch of people get together and socialize. It seems that you are describing them in much different terms. What are some of the thing that they are involved in? MR. LAROUCHE: The local Freemasonic association often appears to be what it does most of the time. It is just a ``good ol' boy'' association, which engages in certain charities and has some secret handshakes and other kinds of conspiratorial paraphernalia. They are people who, by being together, can be the big frogs in a small puddle in their local community. It is good for business, it is good for the profession. It gets your wife into the right social settings, it might make her happy if you are a Babbit and so forth. That sort of thing. But at the top, it is quite different. At the top, the local Freemason has no conception of what he is part of, and even thirty-second degree Masons I know really odn't know what is going on. If you go back in history, however, it is rather transparent. The Scottish Rite of Freemasonry was established in England in the 1640s by a fellow called Elias Ashmole. It was a homosexual cult, actually, of so-called self-styled Rosicrucians. It centered around Francis Bacon, his lover and secretary Thomas Hobbes, John Locke, and people like that. So this thing was called the Scottish Rite, because the King of England, who was part of the same circle of these funny people, was Scottish. He was a descendant, in fact, of Robert Bruce, the Bruce dynasty: the Bruces, the Elgins, and the Stuarts. So they called it the Scottish Rite. Then one must remember that Bruce came to power in Scotland as a King with the backing of a group of [Knights] Templars, who were fleeing from France, where they were wanted for Satanist practices. Thus we have the Templar Order within the Scottish Rite, with all this mumbo-jumbo, what was a Rosicrucian cult which was founded in the late sixteenth century and became influential for a while until it disappeared down the maw of Freemasonry in the seventeenth century. This has been used over the years by the British Crown, which owns it, as a channel of influence. In the case of the United States, [George] Washington and [Benjamin] Franklin, of course, were Freemasons. They were not really part of this Scottish Rite operation, though, of course, the Scottish Rite has claimed them opportunistically. They were on the other side. The Scottish Rite, both the Northern and Southern Jurisdiction, were products of a group which were called the ``stay-behind Tories'' during the American Revolution. That is, they were sympathetic to Britain. They wore the green uniform, the Tory uniform, were fighting with the British against the American patriots during the Revolutionary War. Because of a feature, an agreement in the 1783 Treaty of Paris which officially ended the Revolutionary War and recognized our independence, we were stuck with these characters. And they formed this form of Freemasonry and they became the slave traders, the drug pushers of the 1790s and later, the friends of Palmerston, they became the treasonous Hartford Convention of 1814. They were the scoundrels like Aaron Burr, Andy Jackson, Presidents Pierce and Buchanan and Van Buren, that sort of thing. They became the scoundrels who subverted the United States on the interests of Britain, and who were responsible for creating, in the interests of Britain, particularly in the direction of Lord Palmerston, an effort to divide the United States among slaveholding, abolitionist, and other states, to destroy the United States as a force and essentially to place it under British control again. While on the bottom level they are sort of nice, good fellows, you would be happy to shake their hands as long as you don't get the secret handshake; as neighbors, they are generally pretty clean, they behave themselves, they are respectable, and all that sort of thing; but at the top, this is a device for controlling an influential section of people all over the United States to the advantage of the British Imperial Crown. Pres. Clinton's Economic Package: Unless He Takes on the Fed, He Will Make the Problem Worse Q: This is ``{Executive Intelligence Review'}s Talks With Lyndon LaRouche.'' If listeners wish to write to Mr. LaRouche and ask him questions, you can write to ``{EIR} Talks with LaRouche,'' P.O. Box 17390, Washington, D.C., 20041-0390. Mr. LaRouche, what about President Clinton's economic policy package? Budget cuts, a stimulus package. They are now saying that budget cuts have to come first. Where is this going to get Mr. Clinton? MR. LAROUCHE: It is going to get him no place. This is not going to work. He has compromised-- There was a certain viable element within the initial Clinton package, which was the job-creating and tax-incentive policy. It was not quite the right thing, it was certainly not adequate, it was only a toe-in-the-water, it was not jumping in to doing what we have to do, but it was a step in that direction. But now, he has pretty much sacrificed it most of the way, under the pressure of a crew typified by the Ross Perot/Tsongas group and that sort. And by the New York bondholders and financial interests. So at present, Clinton is simply setting himself up for disaster, and he has no chance of being re-elected President, unless he changes his course radically on precisely this point. He has to do exactly what I proposed, or something which is very close to that, in effect. Otherwise he is not going to get re-elected; as a matter of fact, at the present rate, by the middle of 1994, he will be one of the most unpopular sitting presidents we have ever had--{unless} he makes the necessary changes. But this package cannot work. He has to take on the Fed [the Federal Reserve], he has to take on the debt-creating mechanism of the Fed. You cannot attack the debt, you cannot attack the deficits, unless you attack the {cause} of the debt and the cause of the deficits. The cause of the debt, the cause of the deficits, are the policies of the Federal Reserve System--essentially. If you do not take that on, if you are not going to change that, you are going to make the problem worse and not cure it. Q: Briefly, what is the main problem at this point with Federal Reserve policy? MR. LAROUCHE: Two things. The exemplification of how the United States was ruined, is the Volcker policy, which was launched in October 1979 under [President] Carter, which Carter fully supported at that time, so Democrats have to remember that, that Carter started this current depression. It started before him, but he was the one who set it in motion. With the high-interest rate policy, of up to 18 percent and so forth, under Volcker, U.S. farms and industries were ruined. The savings banks were ruined, the S&Ls were ruined by Volcker, by the Federal Reserve system. Essentially it is a system of generating the monetary suppply, the credit supply of the United States, by going into hock to the Fed, which makes up the money out of thin air, and then the Fed turns around and the banks loan us some of that Fed money, debt-created money, and loan it to the Federal government at a profit of four-and-a-half, say, to eight percent or seven and a half percent. [commercial break] Q: Mr. LaRouche, we were just discussing the problems with the Federal Reserve policy. How does this compare with your policy? MR. LAROUCHE: We need to get the United States out of the present spiralling depression, which is going to become much worse. There never was a recovery, by the way, as most people know who are following the layoff reports from major corporations and the bankruptcy of local businesses. What we need is about between $600 billion to $1 trillion a year of new credit injection into the U.S. economy in order to build up employment and business to the effect of increasing the tax-revenue base, without any net increase in the tax rates, that is, per-dollar in income. That can be done by going to the Constitution, shutting down the Federal Reserve's creation of money in order to prevent inflation, and issuing new money by a bill which is passed by the Congress, which authorizes the Secretary of the Treasury to print money. This money is not spent by the Federal government directly; it is {loaned} by the Federal government through a national bank, to other banks, and to large state organizations or certain Federal authorities, like the T[ennessee] V[alley] Authority back in the 1930s, which are projects to build infrastructure like rail and other kinds of projects, which then turn around and give out bids to General Motors or Boeing and other companies, which will supply some of the materials we require to build railroads and so forth. This money will be used to fund the credit to create these specific wealth-creating jobs. Not for real estate speculation and not to increase Wall Street speculation of any kind, but simply for that purpose. We will loan, properly at about 2 percent for ten-year loans, that would be about the basic rate we would charge. For small firms, we would loan through local banks, which would help to revive the banking industry, and permit local banks to get back on their feet and to get back in the business of lending to business, which they are supposed to be doing. This works just fine; there is no inflationary danger as long as you are loaning to the right kinds of things, loaning to the things which increase productivity. Obviously, you are not creating inflation when you increase productivity. But if you go the other way, what happens? The Fed presently loans money on a discount basis at about three percent to preferred borrowers. What it does, is to issue a check to these borrowers--an electronic check or other form of check--and the check is processed in the usual manner for collection back to the Fed. The Fed prints money and issues it to the banking system. This money: where does it come from? It is made up out of thin air. It is a complete fiction, for which they charge up to three percent to preferred borrowers. These preferred borrowers are afraid of investing in the economy unless they get very high interest rates, as many credit card borrowers know; or they prefer to invest in Federal government bonds, which are secured, which are more highly negotiable. So they will buy bonds at four and a half to, say, seven and a half percent, depending upon maturities, which increases the Federal debt. The problem today is, that you cannot get any money into the economy, except by that kind of Federal Reserve debt-creating mechanism--which means that, as long as you do that, that what the Federal government can do is very limited. You really cannot get the economy moving, because every buck you put into the system, tends to cause galloping inflation. It does not cause much benefit to the economy,. So that is Mr. Clinton's Sword of Damocles or whatever hanging over him. He has to go my way on credit creation, which is the American way, the way the Constitution prescribes; or, if he continues with the Federal Reserve system, which is what he is doing so far, his entire package will be the biggest failure in history. Q: Thank you very much, Mr. LaRouche, we will return next week with ``{EIR} Talks With Lyndon LaRouche.''