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Time Now for LaRouche's Economic Policies


(By Harley Schlanger) With all signs pointing toward increasing volatility in the Trans-Atlantic financial markets, President Donald Trump must decide in the next weeks whether he will return to his campaign pledge to move against the destructive speculative policies of Wall Street financiers and their neo-liberal theorists, who are urging him instead to "stick with what is working." They are referring to the run-up of stock markets to record levels, and official dishonest statistics which show a continuing decline of unemployment, which the President is touting as proof that his economic policies are working.

In reality, the record setting closes of the stock market are not the result of improved profitability or productivity of corporations. Instead, they have been fueled by nearly-interest-free credit, which banks and their blue chip clients have been spending on stock buybacks and speculative trading, rather than investing in physical economy. On unemployment, while the latest official unemployment rate is 4.1%, the labor participation rate shows that only 62.7% of the potential workforce is currently employed. Among those encouraging him to stay the course are the Goldman Sachs alumni in the administration, Treasury Secretary Mnuchin, who made huge profits cashing in on foreclosures resulting from the popping of the Mortgage-Backed Securities bubble in 2008, and Gary Cohn, the director of the National Economic Council.

Many of the Wall Street neo-liberals and speculators benefiting most from the increased flow of funds into the stock market not only opposed Trump during his campaign, but have played a leading role in disrupting his presidency, and limiting his ability to follow through with his campaign pledges, using the fraudulent narrative of Russiagate to constrain him. You might say they are betting the house that they can keep him on this course, and away from the anti-Wall Street insurgency that carried him into the White House. What they fear most is that Trump will not only engage in populist anti-Wall Street rhetoric, but will implement anti-Depression policies similar to those of Franklin D. Roosevelt, which have been revived by economist Lyndon LaRouche, in his Four Basic Laws.

During his presidential campaign, Trump was correctly critical of Hillary Clinton, who cited the same statistical trends, of stock appreciation and declining official unemployment, to claim that there had been a "remarkable, robust economic recovery" under Barack Obama, and that she would continue those policies. Trump, as a candidate, accused her of ignoring the plight of the "forgotten men and women", who lost jobs, homes, and savings in the 2008 crash, and have not benefited from the speculative bubble created by the Bush and Obama bailouts after the crash, which gave trillions of dollars to bankrupt banks and the "shadow banking system", while denying credit for investment in job-creating manufacturing, construction, and business enterprises.

The President will have an opportunity for an economic "re-set" on January 30, when he delivers the State of the Union address. Prior to that event, he will be holding meetings to finalize his long-awaited infrastructure plans. He is under enormous pressure from Wall Street speculators to limit infrastructure investment to Public-Private Partnerships (PPPs), which its promoters argue can generate profits for them, while avoiding the problem of deficit spending. PPPs focus primarily on investing in low-cost projects with existing technology, such as privatizing roadways and constructing toll booths, which involve little cost, but healthy returns. While Trump has disparaged PPPs, with an aide saying they are no "silver bullet," and do not reflect his desire for the most modern, high-tech infrastructure projects, he is being lobbied heavily by the Republican "deficit hawks" in Congress, led by Speaker of the House Paul Ryan and the "Freedom Caucus", to limit spending on infrastructure, to reduce government outlays. Ryan and his coterie are also pressuring Trump to renege on his campaign pledge to protect Social Security and Medicare, as part of their broad austerity assault against so-called entitlements.

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