dominickdesid's Blog | Talking Points Memo | February 22, 2009

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Week of February 22, 2009 - February 28, 2009

LaRouche Cites Hamilton And FDR In Call For New National Bank

February 28, 2009, 8:08PM

February 27, 2009 (LPAC) -- Lyndon LaRouche today further elaborated on his call, earlier this week, for the establishment of a new Hamiltonian National Bank, as part of the implementation of his Homeowners and Banks Protection Act (HBPA).

``We have the precedent of our first Treasury Secretary, Alexander Hamilton's takeover of all the Revolutionary War debts of the states,'' LaRouche explained. ``The Hamilton precedent is crucial today, because Hamilton set the foundations of our entire system of national banking and credit. Hamilton took over the debt obligations of the states, established the role of the Federal government as the sole source of national debt and
credit. This was, and still is, to this day, fundamental. The debt obligations of the states, once assumed by Hamilton, formed the basis for the issuance of new credit for national infrastructure investments, including roads, canals and bridges, that boosted the overall productivity of our new sovereign republic. This is why a new National Bank is vital for the
restructuring of the current, hopelessly bankrupt banking system, and the launching of an economic recovery.''

LaRouche also cited President Franklin Roosevelt's role in passing the Glass-Steagall Act of June 1933, which reconstituted a Federal and state-chartered commercial banking system, in the wake of his Bank Holiday bankruptcy reorganization of the nation's shuttered private banks, as the second precedent for his current call for a new Hamiltonian National Bank. ``President Roosevelt did not formally establish a new National Bank, but he achieved the same results, through his bankruptcy reorganization
of the commercial banking system, and his use of the Reconstruction Finance Corporation and other mechanisms to generate a flood of Federal government credit for job creation and massive infrastructure expansion. Programs like the Tennessee Valley Authority (TVA) transformed the United States, and FDR accomplished this, through the very same methods pioneered by Hamilton.

``From the time of the Peace of Paris in 1783, through the ratification of the Federal Constitution four years later,'' LaRouche elaborated, ``Hamilton laid down certain cornerstone principles of our national banking and credit system. We can use those Constitutional precedents to reorganize today.''

LaRouche explained. ``As I first stated in my HBPA proposal of the summer of 2007, we must freeze all foreclosures of owner-occupied homes, for the duration of the crisis. We must then put all of the commercial banks--the Federal Reserve System as a whole--through full audit, followed by a bankruptcy reorganization. The worthless debt on the books of the banks will simply be canceled. The legitimate debts will be honored, in bankruptcy reorganization. The whole bankrupt Federal Reserve System will be replaced, in reorganization, by a new National
Bank. We shall launch a massive capital budget investment in high-technology, science-driver infrastructure projects, using the Constitutionally specified method of Congressional and Presidential-authorized credit. These Federal government credits, for specified infrastructure investment, will be channeled through the reorganized Federal and state-chartered commercial banks. The recapitalization of the banks, through infrastructure investment, will restore our banking system, over time, to healthy condition.

``That is how Alexander Hamilton did it. That is how Franklin Roosevelt did it. That is how I hope to see President Obama do it. This is the American System tradition, and there is no legitimate alternative available,'' LaRouche concluded.

LPACTV: National Debt, A National Blessing: Hamilton's National Bank

http://www.larouchepac.com/node/9356

LaRouche: Panic and Consternation and Chaos of Indecision

February 28, 2009, 7:29PM

February 27, 2009 (LPAC)--The bank-bailout efforts led by Treasury Secretary Tim Geithner have been little more than a panic-spawned mass of chaos ever since even before they were first unveiled February 10, barely two weeks ago. It's now well-known, as we were the first to report, that Geithner scrapped the plan his staff had prepared mere days before its presentation, and substituted an improvisation based on the notion that hedge-funds could be encouraged by government handouts, to buy up worthless "assets" from banks.

"Bailout, panic, and bailout again," as John Hoefle wrote.

Changes, re-explanations and reshufflings have followed one another almost on a daily basis ever since. The "stress-tests" for banks which were featured in Geithner's Feb. 10 presentation soon had to be re-explained: banks which fail the test would not be placed in receivership; instead, they will be given federal money. Next re-explanation: the government will get common stock, but not majority interest. Next re-explanation: not immediately, but after six months!

"This is horrible," said Lyndon LaRouche.

"There seems to be complete panic and disarray behind the scenes," he continued. "Because no one, so far, has been willing to bite the bullet on reality. And we should say so. This is just more and more of the same old crap."

That six months' delay lasted about 24 hours for Citigroup, which got what is said to be its third bailout Friday. But that doesn't include the undisclosed bailouts through the many other money conduits set up by Paulson and Bernanke. AIG has been bailed out with $180 billion already, but yet another givaway will probably be made within days.

"There's panic and consternation and chaos of indecision," LaRouche said. "This has to be recognized. You can no longer continue with this business of futzing around and trying to wait for your problems to go away. They're not going to go away."

In his Tuesday evening speech to Congress, President Obama called on Congress to do "whatever is necessary" to fix the financial system, but didn't say what it was, indicating that he had no agreement on it. "This is the Pelosi thing," LaRouche said. "It's still a Pelosi jam-up. It appears that as long as she remains in the Congress, the United States is not going to take any steps towards survival."

http://www.larouchepac.com/

LaRouche: "A Hamiltonian National Bank Act Is Needed"

February 26, 2009, 6:18PM

February 26, 2009 (LPAC)-- It is reported that corporations are pulling money out of Citigroup, and perhaps some other banks, in the light of worries about those banks' survival and the fact that the FDIC generally only guarantees deposits up to a $250,000 limit. But, the report went on, Geither is formulating his shifting bail-out schemes with no regard to this reality.

"Geithner is focussed on special interests, which is Wall Street," LaRouche responded. "He's blinded to the reality of the national interest. We need the HBPA now. All reform of the system is built around the central theme of the HBPA. Say: `It always was the only solution. If you want to efficiently defend the American economy, this is how to do it.' Wall Street is dead; it should be given a decent burial."

Extension of the FDIC guarantee to all legitimate bank deposits is implicit in the HBPA. Nothing has to be added; you can simply explain to people that this is so. Although a minor clarification can be added to the text that the freeze on foreclosures applies to "owner occupied" homes, which was always the intention.

On the major institutions, including Citigroup and AIG, where more Federal bail-out money has already been put in than their entire value, and they've effectively been bought up by the Federal government, LaRouche said, "Yes, we have to introduce another element at this point, which is Hamilton's concept of a National Bank." In such situations, these shares or companies will be held as assets of the National Bank, until they're ready to once again become private entities. A Hamiltonian National Banking Act is needed. Some of these corporations will be placed in temporary receivership, to either be liquidated, or re-established. After we've written off all of the trash on the books of the banks, beginning with the derivatives, there will still be legitimate obligations on their books to the Federal government, that will now represent net assets on the books of the National Bank, until they are retired.

What we need is a National Banking Reform Act, to provide for these kinds of circumstances of receivership. Remove the crap, write it off, and then sort out the still-existing legitimate obligations, and put them on the balance sheets of a Federal government entity, which can use them against which to issue credit and otherwise, until they are retired.

http://www.larouchepac.com/node/9334

Regenerate the U.S. and World Economy "Top Down"

February 24, 2009, 7:25PM

February 19, 2009 (LPAC)--Lyndon LaRouche emphasized in discussions today that we have to correct the mistakes the Obama Administration is making with its stimulus plan. The machine tool part of the former auto sector is the crucial factor in this development. With the collapse of the auto sector now in Europe as well as in the U.S., we have to have the same policy in Europe as in the U.S. We need an international policy, not merely a national policy. We also have to get the Russians in on the same policy. Then you have it. Take the machine tool capacity of the former auto sector as the crucial factor. Save it. Save the employees of the former auto industry. Forget automobiles. Use the machine tool part of the former auto sector as the driver for recovery.

The only way to revive the expiring U.S. and world economies is to take a "top-down, physical science" approach in emergency measures to regenerate basic infrastructure, essential functions, and agro-industrial capacity. The `stimulus' plan must be revised on this principle. Lyndon LaRouche has discussed this in detail in three webcasts since mid-January. In his Jan. 16 webcast, he recounted the history of how the U.S. successfully built river management systems, rail systems, and accomplished other feats of production such as mass aircraft assembly in World War II. He said, "We did it on the top-down approach. We start from science at the top level, physical science! You go down from physical science to machine-tool design, as a by-product of science for production design, of production of the essential components which go into anything..."

The following list reviews in brief, indicative parameters of what is needed in three sectors of the U.S. economy. At present, at least 21 million persons--13 percent, of the total U.S. workforce--are out of work, or very under-employed. Multi-millions of new jobs will be created in the course of carrying out a real, science-based development program.

I. High Speed Rail and Maglev

Today's U.S. rail grid (about 99,250 miles of Class I track) is nearly 60 percent less than in 1929, with freight and passenger services almost non-existent for most parts of the country. The place to start to modernize and expand, is with electrifying 26,000 route-miles of the rail system. In the second stage, another 16,000 route-miles should be electrified, bringing the total up to 42,000 route-miles. This would cover all key passenger and freight rail corridors that transport more than 60 percent of all U.S. rail traffic. Maglev lines can run along strategic continental routes.

The requirements for this are worked out, including for building nuclear power plants, transmission lines, step-up and step-down transformers, and for what is "saved" in eliminated petroleum fuels. The impact would be tremendous in increasing manufacturing and economy-wide productivity.

This program will be re-published in the EIR online Feb. 24, from a 2005 article by Hal Cooper and Richard Freeman (June 10, 2005, Vol. 32, No. 23, "Congress's Mission for Bankrupt Auto: Build USA Electrified Rail Network.")

II. Nuclear Power

The threat and incidence of black-outs and brown-outs in the U.S. electricity system are now a constant feature. Whereas per capita electricity generation grew at a rate of 7 percent a year from FDR's 1930s until the late 1970s, then came the decline to where over the 1995 to 2000 period, overall U.S. capacity grew only 1.5 percent, and thus, it went negative per capita.

What is required is to resume an all-out nuclear power development program, along the lines originally planned for "2000 by 2000" U.S. nuclear plants for the 21st century. Worldwide, there are only some 400 nuclear plants in operation today.

In the U.S., applications have been filed for 28 new power plants, to be constructed on the "brownfield sites" where a generating plant or two may exist, but the full complex of several plants was never completed. This is a start. But additional sites need to be selected, in order to fill out the national "economic map" for the future, where new generation centers are in place to power intended industrial, agriculture, transportation and residential purposes. Accordingly, the transmission grid must be expanded, and employ such technologies as superconducting cable.

There are "off the shelf" designs for power plants, including the Westinghouse AP-600 and AP-1,000; the General Electric Advanced Boiling Water Reactor (ABWR); and others. In addition, "fourth generation" nuclear plant designs can be readied for mass production. These are advanced, high-temperature gas-cooled reactors.

To go nuclear, requires reconstituting the U.S. capacity for heavy industrial output, to produce the required components, especially pressure vessels; this is in line with the renewed manufacturing capacity needed for refurbishing the entire infrastructure base of the nation.

Some rough parameters of job creation: "Approximately 4,000 workers are needed at each site at the peak of construction, and each new plant requires 400-700 employees. To build about 35 new reactors, about 38,000 jobs will be created in the nuclear manufacturing industry." In addition, another 20,000 are needed over the next five years, to take the place of the estimated 35 percent of the current nuclear workforce who are retiring over this period. (From EIR, Feb. 13, 2009, Vol. 36, No. 6, by Marsha Freeman, "Do You Want to Stimulate the Economy? Then Build New Nuclear Power Plants").

III. Waterways and Ports

Much of the 12,000 mile U.S. waterway system, of inland and coastal channels, is long overdue for improvements in its critical infrastructure of 240 locks and dams, and flood control structures and related. "The average age of all federally owned or operated locks is nearly 60 years, well past their life planned design of 50 years," stated the report released Jan. 28 by the American Society of Civil Engineers. There are locks and dams on the Monongahela/Ohio System that are over 80 years old.

Of the 27 locks and dams on the Upper Mississippi, including the Illinois River, 26 need renovation/repair, due to age. Seven of these rehab projects were approved in the 2007 Water Resources and Development Act, but the just-passed "stimulus" bill excluded these projects from funding, because of a provision inserted by the House and Senate Appropriations Committees to prohibit allocations of funding for so-called "new starts," that is, projects that had not previously received construction monies!

What is required is the go-ahead for the across-the-board restoration of the 12,000 mile navigation system. The January ASCA "report card" stated, "The cost to replace the present system of locks is estimated at more than $125 billion."

Technologies exist that can expedite both renovation and new-starts of needed waterway infrastructure. E.g. "Hollow" dam walls can be built off-site and "floated" into place. These kinds of components required for locks, dams, gates, weirs, levees, port infrastructure (traffic tunnels, piers, breakwaters), plus dredging equipment and vessels, creates the necessity for re-establishing heavy industrial capacity to feed the supply lines.

A rough parameter of job-creation is that 35,000 jobs result from every $1 billion of funding for navigation projects, according to the Department of Transportation.

http://www.larouchepac.com/news/2009/02/19/regenerate-u-s-and-world-economy-top-down.html

Now Comes Economic Time

February 23, 2009, 1:23PM

This article appears in the February 20, 2009 issue of Executive Intelligence Review.

THE CONCLUDING DOCUMENT OF A SERIES:

by Lyndon H. LaRouche, Jr.

February 8, 2009

This is the third, and concluding document of an EIR series written in this author's supplementary response to a question submitted, with an eye to the subject of a new U.S. economic policy, during the course of an international webcast of January 22, 2009, on the current economic crisis. The titles of the preceding two documents of the series are "Nations as Dynamical" and "The Meaning of Physical Time." PDF version of this article.

Fascists, Then and Now, Stalk the FDR Legacy

February 23, 2009, 1:07AM

Fascists, Then and Now, Stalk the FDR Legacy

This article will appear in EIR #8, Feb. 27, 2009

by Jeffrey Steinberg and John Hoefle

On Oct. 31, 1936, President Franklin Delano Roosevelt, seeking a second term in office, delivered his final major campaign speech before the November elections, to a large, enthusiastic crowd at Madison Square Garden in New York City.

``For twelve years,'' the President declared, ``this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government, but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government, with its doctrine that that Government is best which is most indifferent.

``For nearly four years, you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

``We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.''

FDR stated proudly, ``Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hatred for me--and I welcome their hatred.''

- The American Liberty League -

FDR was not talking in abstract about some amorphous conspiracy of Wall Street bigshots. He was referring, specifically, to the American Liberty League (ALL), an organization founded in 1934 with the explicit objective of destroying the New Deal, defeating FDR in his 1936 reelection bid, and imposing an outright Fascist regime in America, through the ballot box if possible, through military coup or assassination, if necessary.

The leaders of the American Liberty League were not silver-shirted rabble, or Southern racists, although they unhesitatingly bankrolled those would-be-Fascist hooligans. They were the giants of Wall Street and America's major industrial and raw materials combines: the Morgans, the du Ponts, the Pews, the Harrimans, the Mellons, the Weirs, the Warburgs, the Rockefellers. Their hatred of FDR, and all he stood for, cast them as enemies of the American people, and the Federal Constitution, with its General Welfare clause.

By the time Roosevelt delivered his Madison Square Garden speech, the McCormack-Dickstein Committee (officially, the House of Representatives Special Committee To Investigate Nazi Activities in the United States), had delivered its final report. That February 1935 document, based largely on the testimony of Gen. Smedley Darlington Butler, concluded, ``Evidence was obtained showing that certain persons had made an attempt to establish a Fascist organization in this country. There is no question but that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.''

While the final McCormack-Dickstein Committee report did not mention the Liberty League by name--largely due to fears of retribution--one of the leading conspirators, named by Butler and other witnesses, in their much-publicized testimony before the Committee, was Grayson Mallet-Prevost Murphy, the treasurer of the League.

A director of the J.P. Morgan-controlled Guarantee Trust, Anaconda Copper, Goodyear, and Bethlehem Steel, Murphy had been in Paris in 1919 for the founding of the American Legion, and had poured $125,000 of his own money into the organization, several of whose leaders were later fingered by Butler as a pivotal part of the scheme to stage a Fascist coup in Washington, on behalf of the Morgan interests and allied Wall Street and industrialist circles.

As early as 1922-23, the National Commander of the American Legion, Col. Alvin Owsley, declared, ``If ever needed, the American Legion stands ready to protect our country's institutions and ideals, as the Fascisti dealt with the destructionists who menaced Italy. Do not forget that the Fascisti are to Italy what the American Legion is to the United States.''

One of the operatives deployed by Murphy and Robert Sterling Clark, heir to the Singer Sewing Machine fortune, who was assigned the task of recruiting the decorated General Butler to the Fascist coup plot, was Gerald MacGuire. In late August 1934, according to Butler's testimony before the McCormack-Dickstein Committee, he met with MacGuire at the Bellevue Hotel in Philadelphia, where MacGuire, just back from an extended trip to Europe, spelled out more details of the coup plot, and fully unfurled its overtly Fascist character. MacGuire told Butler that the ``veterans organization'' that they wanted him to head would be modeled on the French Croix de Feu (Cross of Fire), a notorious group of pro-Fascist French World War I veterans. ``Now, that is our idea here in America--to get up an organization of that kind,'' MacGuire told Butler.

To boost his credentials with the still-dubious general, MacGuire boasted that, while in Europe, searching for an organization upon which to model their own plan, he had operated out of the Paris headquarters of J.P. Morgan & Harjes, the French branch of the original Drexel Morgan bank, which had been established in the 19th Century.

While the Croix de Feu, which failed in several coup attempts in France in the 1930s, was the model that the Morgan interests attempted to emulate, their unambiguous goal was to establish a Mussolini-style Fascist financiers dictatorship over the United States. Pennsylvania Republican Sen. David A. Reed, a leading figure in the Liberty League, had delivered a speech on the floor of the U.S. Senate in May 1932, in which he declared, ``I do not often envy other countries their governments, but I say that if this country ever needed a Mussolini, it needs one now.''

For a period of time, the ALL was stigmatized for its links to the Fascist coup plot exposed by General Butler and the McCormack-Dickstein Committee. But, with the 1936 Presidential elections looming, the League launched a vicious propaganda campaign against FDR and the New Deal.

- Anti-Prohibition Roots -

The American Liberty League was ostensibly a new organization, when the founding press release was issued in August 1934, as President Roosevelt was returning from vacation in Hawaii. But, in fact, the ALL was merely a make-over of the Association Against the Prohibition Amendment (AAPA), a big business and Wall Street-sponsored organization, devoted to the repeal of the 18th Amendment, banning the production and sale of alcoholic beverages. The AAPA was a front for the same J.P. Morgan Wall Street and British interests that would later launch the Liberty League.

Why attack Prohibition? According to the AAPA's own literature and newspaper ads, and a U.S. Senate investigation, the banning of alcoholic beverages in the United States had caused a skyrocketing of corporate and personal income taxes, to make up for the lost tax revenues on legal booze. The Wall Street gang behind AAPA argued that liquor should once again be legalized, and highly taxed, allowing for the elimination of all corporate and income taxes.

The 21st Amendment to the Constitution was ratified on Dec. 5, 1933, repealing the 18th Amendment, which had established Prohibition in January 1919. The AAPA shut down a few months later, and soon after that, the American Liberty League, with virtually the same officers and the same Wall Street backers, opened up for business, occupying an entire floor of the National Press Building in Washington, D.C., and employing 200 full-time staff, at their peak of operations. This time, the target of the Morgan gang was not the repeal of corporate and personal income taxes, but the President of the United States and his hated New Deal policies.

- A Morgan Cabal -

Between 1934 and 1940, the American Liberty League waged a relentless smear campaign against Roosevelt. Financed by some of America's wealthiest Anglophile families, led by the du Ponts, the Mellons, the Pews, and the Morgans, the League raised a reported $1.2 million, largely in the initial years of operation. In 2008 dollars, as measured in nominal GDP per capita, that $1.2 million would today be worth over $1 billion.

Thirty percent of all the funds for the Liberty League came from Irénée, Lammot, and Pierre du Pont. The fourth big funder of the League was John Raskob, the executive of J.P. Morgan, General Motors, and DuPont, who had become the national chairman of the Democratic Party (1928-32) and had led the campaign to deny the Presidential nomination to FDR at the Chicago Convention in June-July 1932.

The president of the League was Raskob's proteégeé Jouett Shouse, who was Assistant Secretary of the Treasury under Woodrow Wilson, had been a leader of the Association Against the Prohibition Amendment, along with Raskob, and had led the floor fight in Chicago in 1932 against FDR. The secretary of the League was Capt. William H. Stayton, who had been the AAPA founder and president, and was an honorary president of J.P. Morgan. The treasurer was the already-mentioned Fascist coup bankroller, Grayson Mallet-Prevost Murphy.

The executive committee of the League included Ireéneée du Pont, and John W. Davis, the J.P. Morgan lawyer and 1924 Democratic Party Presidential nominee, whom the Harriman family's Eugenics News dubbed ``best adapted by heredity'' to be President.

Other directors were: Alfred E. Smith, former governor of New York, 1928 Democratic Party Presidential candidate, and, by then, a wholly-owned J.P. Morgan operative, who also led the campaign to block FDR from the 1932 nomination; Pauline Sabin, Morton Salt heiress and the wife of Charles Sabin, president of Guarantee Trust; and New York banker James Wolcott Wadsworth, Jr.

The National Advisory Board was led by Frederic Reneé Coudert, the founder of the J.P. Morgan law firm, Coudert Brothers; Edward Francis Hutton, founder of E.F. Hutton brokerage house, chairman of General Foods, and a director of Manufacturers Trust Company and Chrysler Motors; and Philadelphia attorney James Montgomery Beck, who was also implicated in the Fascist coup plot exposed by General Butler. A radical states-rights anti-Federalist, Beck was such a raving Anglophile that, in 1914, he was elected to the English bench at Gray's Inn, London--the first foreigner to be so honored in 600 years.

Coudert, Beck, and Davis would launch the American Liberty League's Lawyers' Vigilance Committee, along with Raoul Desvernine, general counsel to U.S. Steel, and later, the president of Crucible Steel. The Vigilance Committee was a group of 50-60 top Wall Street lawyers, who led the assault against the New Deal as unconstitutional--in what can only be described as a scandalous repudiation of the General Welfare clause in the Preamble to the U.S. Constitution.

- Manipulating the Opinion Shapers -

While financing an alphabet soup of states-rights, racist, and other populist anti-FDR ``grass roots'' hate groups, the American Liberty League focused most of its energies on black propaganda assaults against FDR, using its access to the media, powerful Wall Street law firms, and vast Congressional lobbying capabilities against the New Deal.

With a relatively bottomless pool of cash, ALL churned out 135 propaganda pamphlets between August 1934 and September 1936. The pamphlets were delivered to the Washington, D.C. bureaus of 350 newspapers, all of the press associations, key editors and editorial writers, every member of the House of Representatives and Senate, and 7,500 college and university libraries. Countless radio stations offered free air time to League spokesmen.

The assault on President Roosevelt reached a crescendo on Jan. 15, 1936, when, on the eve of that year's Presidential election campaign, the League sponsored a banquet at Washington's Mayflower Hotel. It was billed as the kick-off of a frontal attack on FDR and the New Deal, aimed at either denying Roosevelt the 1936 Democratic Party Presidential nomination, or assuring his defeat in the November elections. The keynote speaker was FDR's former close political ally, turned Morgan stooge, Al Smith. The ballroom of the Mayflower was sold out, overflow crowds, totaling 2,000 people, spilled into the hotel lobby, and the Smith diatribe was broadcast nationwide over the radio.

Smith launched into a vicious personal assault against FDR, accusing him of waging a Communist plot against America. ``There can only be one capital, Washington or Moscow,'' Smith ranted. ``There can be only the clear, pure, fresh air of free America, or the foul breath of communistic Russia. There can be only one flag, the Stars and Stripes, or the flag of the godless Union of the Soviets. There can be only one national anthem, The Star-Spangled Banner or the Internationale.''

The Smith speech threw down the gauntlet to FDR: The New Deal was a socialistic intervention to prevent the free markets from ``naturally'' solving the crisis. The new regulatory institutions, creating a social safety net for the general population, were in violation of the Constitution. The attacks ran the gamut, from accusing FDR of being a bigger Fascist than Mussolini or Hitler, to being a bigger Communist than Josef Stalin.

The archive of the American Liberty League's pamphlets and leaflets, speeches and radio broadcasts, shows them to be, to this day, the wellspring of every attack against Franklin Roosevelt and his New Deal/American System approach to political economy.

Roosevelt and his allies pushed back hard against Smith and the American Liberty League, assailing them as ``economic royalists'' and nailing Smith, Raskob, and Shouse as traitors to the new Democratic cause. FDR led the charge, continually boasting that he took pride in the fact that the pirates of Wall Street and international finance considered him their greatest enemy. When Democrats gathered in Philadelphia in the Summer of 1936, FDR was nominated for reelection by an overwhelming voice proclamation.

In November 1936, FDR defeated Republican candidate Alf Landon by the most lopsided margin in American history. FDR won 60.8% of the popular vote, won the Electoral College by 523-8, and only lost in two of the 48 states, Maine and Vermont.

Following the FDR victory, the Liberty League scions resorted to flat-out economic and political warfare against the New Deal, waging court fights, continuing the propaganda assault against New Deal spending, and maintaining the most vicious personal attacks against the President. Despite this, and despite a Wall Street assault on the FDR programs, which led to a scaling back and temporary fall-back in job-creation and economic recovery in 1937-38, by 1939, the Bureau of Labor Statistics estimated that, during the height of the New Deal, from 1933 to 1937, the Roosevelt policies had created an average of 7.1 million jobs per year, between Federal infrastructure projects, private sector jobs, producing the needed bills-of-materials, and consumer sector jobs, providing goods and services. The nation had been transformed, by such programs as the Tennessee Valley Authority, which had been a target of one of the Liberty League's most vicious tracts.

The League formally shut down operations in 1940. But, with the death of FDR five years later, it resurfaced through figures like Dean Acheson (who resigned from FDR's Treasury Department as part of the Liberty League's efforts to sink Roosevelt from inside the Democratic Party and his own administration), who would be a dominant figure in the Truman Administration, and a leader of a resurgent Morgan-du Pont cabal.

- Fast Forward ... -

The political heirs of the American Liberty League have come back from the grave, particularly since the November 2008 Presidential elections, and the departure of the Bush-Cheney regime. During the eight years of Bush-Cheney, the pro-Fascist faction of the American Establishment had enjoyed its greatest grip on power in decades. George W. Bush is, himself, the grandson of Prescott Bush, Harriman banker, one-time U.S. Senator, and leader of the Wall Street Anglophile faction that bankrolled Hitler's rise to power in Germany, and then financed Nazi Germany's rearmament for war.

Now, with the greatest financial crisis in history overtaking the Obama Administration, the latter-day American Liberty Leaguers are leading an assault against the legacy of Franklin Delano Roosevelt. The objective is clear: to make sure that President Obama does not go with an FDR solution to this even greater crisis.

The retooling of the Liberty League propaganda machinery did not begin on Jan. 20, 2009 with the Obama inauguration, however. A decade ago, when then-President Bill Clinton, along with his Secretary of the Treasury Robert Rubin, faced with a string of global financial shocks, began promoting the need for a ``new global financial architecture,'' to crack down on unbridled speculation, a vicious assault on the Presidency was mounted, unprecedented since the time of the Al Smith tirade against FDR. And as in the 1930s, turncoat Democrats, led by Vice President Al Gore and Connecticut Sen. Joseph Lieberman, tried to sink the Clinton Presidency from within.

- Liberty League Successors -

Beginning even before the Liberty League shut its doors, a new network of Wall Street think tanks came into being; they exist, to this day, to carry on the dirty work of the ALL. In 1938, the American Enterprise Association (AEA) was founded by top corporate executives from General Mills, Chemical Bank, and Bristol Meyers, along with a New Deal defector to the Liberty League cause, Raymond Moley. They soon set up a Washington, D.C. office, the American Enterprise Institute (AEI), to make sure that the New Deal and war-time Roosevelt mobilization and regulatory measures were rolled back in the postwar period.

Today, AEI, along with the Heritage Foundation and the Cato Institute, are the drivers of the campaign to pillory the FDR tradition through a revival of the very lies that filled the pages of the American Libery League pamphlets.

Exemplary of the current drive are two recent books, drawn heavily from the Liberty League propaganda archives, trashing FDR, and anyone alive today who might consider modeling a program upon the successes of the New Deal and the World War II Arsenal of Democracy mobilization.fn1

In 2003, Cato Institute libertarian propagandist Jim Powell penned FDR's Folly--How Roosevelt and His New Deal Prolonged the Great Depression. The book was the product of exhaustive direction from Milton Friedman and James Buchanan, two leading figures within the pro-Fascist Mont Pelerin Society, and was boosted by two top figures from the Cato Institute, David Boaz and Ed Crane.

In 2007, Amity Shlaes, then a fellow at the American Enterprise Institute, and a former London Financial Times and Wall Street Journal reporter, penned The Forgotten Man--A New History of the Great Depression, in which she, too, trashed FDR and the New Deal, for prolonging the Great Depression, by interfering in financial markets. Her arguments, like those of Powell, were taken, almost verbatim, from the Liberty League works. Her book was published by Lord Beaverbrook proteégeé Rupert Murdoch's company HarperCollins. Murdoch, along with Richard Mellon Scaife, of the Mellon family (Andrew Mellon, Treasury Secretary during the 1920s, was an American Liberty League member), bankroll AEI, Heritage, and Cato, along with the Pew Charitable Trust, the family trust of Sun Oil's J. Howard Pew, a member of the American Liberty League's Advisory Council and Executive Committee.

1. EIR has reviewed both these books. Powell's can be found in coverage of an event he held at the Cato Institute, in the Dec. 19, 2003 issue; Shlaes's book is reviewed in the Sept. 21, 2007 issue.

http://www.larouchepac.com/news/2009/02/22/fascists-then-and-now-stalk-fdr-legacy.html