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Category Archives: Statecraft

LaRouche Movement Breakout — Filipinos Rally To ‘Save the Nation’


LaRouche Movement Breakout — Filipinos Rally To ‘Save the Nation’
MAY 23RD, 2013

The attached article from this week’s EIR is a report on the extraordinary conference held in Manila on April 20 of the “Save the Nation” movement – a rapidly growing coalition of individuals and organization founded by Butch Valdes, the head of the Philippine LaRouche Society. Committed to restoring the nearly-lost hope of the Philippine nation, through a restoration of the nuclear power industry, a restoration of science-directed agriculture, and a moratorium on the illegitimate foreign debt, while collaborating with the international LaRouche movement to save civilization from the onrushing strategic and economic collapse..

Diane Sare, On the Radio in the Philippines, Is Recruiting the Philippine-American Population in Her District


Diane Sare, On the Radio in the Philippines, Is Recruiting the Philippine-American Population in Her District
May 14 (LPAC) — Diane Sare, the Democratic candidate from the LaRouchePAC slate in the 5th Congressional District of New Jersey, was interviewed by LaRouche Society leader Butch Valdes on the Radio Mindanao Network in Manila, Philippines last night night. [] The program was also carried on a New York-based radio show called Pinoy Radio. Diane gave a broad picture of the LaRouche Slate as the “presidential” leadership required to dump Obama and implement the required transformation of the U.S. and world economy, while stopping the British war drive.

Butch and his associates in the studio made note of the fact that Diane’s description of Obama’s insanity sounded very familiar in the Philippines, where President Aquino’s mental condition is very much in doubt – especially now that he is trying to turn his country into a military base for Obama’s insane war plans against China.

Asked about the future of the Philippines, Diane described the global NAWAPA concept, that the focus on Asia as the center of great project development will demand the contribution of skills and inovation from all the nations of Asia, noting that the current Philippines-China confrontation is totally a phenomenon of the Obama White House.

The large Filipino-American community in Diane’s district was both directly and indirectly reached by the program. While many listened to the show, many listeners in the Philippines have family and friends in Diane’s district (as well as the districts of the other candidates on the Slate). In two cases, the contact information was sent to Butch after the show and forwarded to Diane.

Diane’s impact on the Asian community in her district (aboout 14% of the population) includes also the Korean community, where she has addressed their local meeting, and will be further expanded tonight when she has been invited to attend a reception for the Asian-American association.

Can the Philippines Be Saved?


Can the Philippines Be Saved?
JANUARY 27TH, 2011

by Mike Billington
This article appears in the February 11, 2011 issue of Executive Intelligence Review.
PDF version of this article

Jan. 25—“There is a pervasive feeling of helplessness among our population as a series of price increases are being announced in nearly all sectors—i.e., food, transportation, electricity, tollways, water, fuel, and medicine.” Thus begins a memo from Antonio “Butch” Valdes, leader of the Philippines LaRouche Society (PLS) in Manila, reporting on the recent founding of a new national organization called Save the Nation, or SANA, which means “hope” in Tagalog. The Philippines, like every nation on Earth, is being hit with the full impact of hyperinflation, driven by the past three years of money printing in the U.S. and Europe to bail out the trillions of dollars in worthless gambling debts, known as derivatives, held by the major Western financial institutions.

The Philippines, however, unlike the other nations of Southeast Asia, was already at a point of social and economic breakdown, brought on by 25 years of leaderless submission to dictates from precisely these international financial institutions.

Before 1986, the Philippines was emerging as one of the rare success stories among former colonies, transforming itself into a modern nation-state, with self-sufficiency in agriculture, nuclear-power-driven industrialization, and the development of education and health care capable of transforming a poverty-stricken population. Most of that potential had been guided by Ferdinand Marcos, who served as President from 1965, until he was overthrown in a military coup in 1986, orchestrated from Washington by Secretary of State George Shultz and his Deputy Paul Wolfowitz—one of the early cases of “regime change” run by the neoconservative imperial interests in London and their allies in the U.S.

The destitution of the Philippines today must be viewed primarily as the intentional result of that coup. The country was an early trial-run of what became known as the “color revolutions” in the past decade—popular demonstrations against “authoritarian governments,” openly sponsored and financed by London and Washington, with the support of the Western press whores, who serve as a cover for “regime change” dictated from abroad. The “crime” for which Marcos was overthrown was not the corruption and human rights offenses which filled the world’s headlines, but the crime of freeing his nation through development, from the control of the London-centered financial oligarchy.
SANA: Food, Nuclear Power, Debt Moratorium

The Declaration of the Save the Nation movement (see calls for “Three Urgent Steps”: a new Green Revolution to restore food self-sufficiency; the restoration of the Bataan nuclear plant, and the rapid construction of other nuclear power facilities; and a moratorium on the usurious and illegitimate foreign debt of the nation, freeing resources for development.

Signing the Declaration, in addition to Valdes of the PLS, were the presidents of societies representing such diverse institutions as mechanical engineers, electrical engineers, inventors, radio broadcasters, and journalists.

The concept underlying SANA is the restoration of the historic mission of the Philippines, both for its own people, and as a nation which embraces both Eastern and Western culture, a crucial bridge in creating the alliance of sovereign nations, required to pull the world out of the current descent into a new dark age.

In a 2004 interview on Philippine radio station DZAR, Lyndon LaRouche expressed his own identification with this historic mission of the Philippines: “The Philippines has a very important pivotal role, some people would say geopolitically, in the entire region, of trying to bring together, on a global scale, for the first time, a world system, which is capable of accommodating both the European cultural heritage and Asian culture. This is the great barrier, the great frontier, of a hopeful future for this planet: to bring together the cultures of Asia—which are different than those of Western Europe generally—with European culture, to get a global culture based on a system of sovereign nation-states, which understands that this unresolved cultural question has to be addressed, with a long-term view, of several generations, of creating an integrated set of sovereign nation-states as the system of the planet. So the Philippines is a very special country, with a unique importance for the people of Asia, in particular, in playing a key role in bringing about this kind of general integration of Asian and European civilizations.”
The Three Urgent Steps

Each of SANA’s Three Urgent Steps also serves to identify a crucial aspect of the destruction of the Philippines, since the coup against Marcos. In regard to food, Marcos launched a Green Revolution in May 1973, under the name of Masagana 99. Masagana means “bountiful” in the Tagalog language, while 99 represented the goal of producing 99 sacks of rice (almost 5 tons) per hectare, which was necessary to make the Philippines self-sufficient in rice production. Working with the International Rice Research Institute in the Phillipines (IRRI, one of the global Green Revolution centers inspired by Franklin Roosevelt and his Vice President Henry Wallace), Marcos built irrigation systems, provided fertilizer, pesticides, and cheap agricultural credits, 85% guaranteed by the government, as well as a network of agriculture extension stations across the country, while introducing high-yield varieties of seed. Mechanization became widespread, replacing carabaos (water buffaloes). Fertilizer usage doubled, irrigation use tripled to one-half of the arable land, and 81% of the rice planted was so-called “miracle rice”—up from zero in the 1960s.

Productivity doubled, and by 1977, the Philippines was self-sufficient in rice for the first time in its modern history. Similar government support made the country self-sufficient in corn, and one of the world’s leading coconut oil producers.

In the early 1980s, the Third World debt crisis (largely created by manipulated spikes in oil and other commodity prices, as well as sky-high interest rates set in London and Washington) forced Marcos to sign agreements with the IMF, which included the slashing of agricultural subsidies and tariffs on imported food. When Marcos was deposed, this destructive assault on the nation’s sovereignty took off, such that, by the 1990s, food production was back to 1960s levels.
The Bataan Nuclear Power Plant

Without question, the primary target of the coup against Marcos was the nuclear power plant built by Westinghouse in Bataan—the first commercial nuclear power facility in Southeast Asia. Not only would this plant, together with two others scheduled to be completed by 1991, end the nation’s chronic energy shortages, but they also would have served as the driver for the 11 major industrial projects sponsored by Marcos, including steel, petro-chemicals, pulp and paper, copper smelting, aluminum, phosphate fertilizer, diesel engines, and gas and oil development. The Philippines was to be transformed, to stand as a model for the rest of Southeast Asia and the developing countries elsewhere.
One of the “Three Urgent Steps” proposed by the Philippines LaRouche Society and the Save the Nation Movement, is the restoration of the Bataan nuclear plant, initiated under President Ferdinand Marcos, and shut down by Corazon Aquino.

Shown: LaRouche Society leader Butch Valdes (third from right), with members of the Philippines LaRouche Youth Movement, at the Bataan nuclear plant, in May 2008.

The nuclear plant was completed in 1985, but Shultz and his allies wanted to make an ugly example of Marcos and the Philippines. Shultz represented the forces which systematically took over the United States following the assassination of John F. Kennedy—British- allied neoconservative interests, intent on keeping the former colonial nations of the world undeveloped, to serve only as a source of raw materials for the West. The first act of Corazon Aquino, who was placed in the Presidency to replace Marcos, was to permanently shut down the completed Bataan nuclear power plant, before it was even turned on. She then pledged to her controllers on Wall Street, that the Philippines would pay every penny of the inflated costs of the nuclear plant, despite the fact that it never produced a single watt of electricity.

The results can be seen clearly today, in this power-starved nation, nearly devoid of industry, with a population facing widespread hunger, and with almost no access to health care for the poor.
Debt, and the Export of Citizens

The third Urgent Step of the SANA Declaration, for a debt moratorium on the illegitimate foreign debt, is the most urgent of the three, for without ending the usury and financial looting, the revival of the nation’s historic mission is impossible. The debt accumulated under Marcos was primarily for the transformation of the productivity of the nation and its population, but once his development projects were scrapped, the debt could no longer be sustained through production. The looting of the population began in earnest.

The energy sector was turned over to Enron and related thieves by President Fidel Ramos in the 1990s. (Ramos, as head of the police in the 1980s, had been the proud agent of Shultz and his cohorts, in running the military coup against Marcos.) While the nuclear plant decayed, the cost of electricity quickly became the highest in all of Asia. As for food, the Philippines went from self-sufficiency in rice to becoming the largest importer of rice in the world.

Then, in the speculative binge against the Asian currencies in 1997-98 by George Soros and his hedge fund allies, the Philippine peso was driven down to less than half its 1997 value. In 2005, an EIR study of the effect of this looting process showed that the foreign debt in 1998 was $46 billion. Over the next six years, the government paid $47 billion in debt service, forced to exchange increasingly devalued pesos for dollars in order to pay that foreign debt. EIR calculated that, if the peso equivalent of the debt paid in those six years were calculated at the 1997 exchange rate, before the forced devaluation, the nation would have paid $89 billion in debt service—i.e., nearly twice the total debt owed. And yet the nation ended up owing more than it had in 2007!

This illegitimate debt has been paid, on time, by subservient governments right up to today, through two primary means: the virtual enslavement of the brightest of the Philippine youth, including many college graduates, as service workers for the imperial powers, doing 12-hour overnight shifts in “call centers,” serving the customers of Western banks, computer companies, and other corporate structures. In the past such persons were called “house slaves.”

The country’s second source of foreign exchange income is the export of its skilled and unskilled work force, in most cases forcing men and women to leave their families to work abroad as maids, nurses, drivers, and so on. Their remittances provide about $17 billion annually for servicing the foreign debt. While millions of nurses have been sent abroad (and even doctors who switch to nursing abroad to make enough money to support their families), over 100 hospitals have been closed in the Philippines due to lack of staff and adequate resources. Most poor Filipinos never see a doctor or a hospital in their entire lives.
The Future

The President elected last year, the son of Corazon Aquino, has given every indication that he will follow in the footsteps of his mother, following orders from the international financial powers. The existing political forces, clueless about how to deal with a crisis which is global, rather than local, are ignoring the crisis and making plans to re-arrange the deck chairs on the Titanic.

Valdes and a small number of youth who work with him in the LaRouche Society, have served as a lightning rod for the effort to restore the nation to its former noble mission, in cooperation with the international campaign led by LaRouche to break the back of the British imperial system, and launch an economic and cultural renaissance, based on a new global cultural paradigm. The founding of the Save the Nation movement provides a concrete platform for that effort.

The FDR Tradition in Philippines


Originally published by the Schiller Institute with the page title Salvador Araneta.

“ The following article was left unpublished when the author, John Morris (b. June 7, 1960), was tragically killed in an automobile accident on June 16, 2008. While John intended to add a few finishing touches, the conceptual framework was complete. I have added a few sentences to the last draft left by John, for clarity, without changing the content.

John is well known, including within the Philippines (see the obituary by the head of the Philippines LaRouche Movement Butch Valdes), for his groundbreaking essay on the founding father of the Philippines nation, Jose Rizal, focused on Rizal’s collaboration with Renaissance circles in Europe. John intended to follow this work with a study of another great leader in the republican tradition in post-World War II Philippines, Claro Recto. That study will have to be taken up by another, but the impulse and the intention is provided in this report.

The intense battle waged by the protagonist in this article, Philippine nationalist economist Salvador Araneta, against the ravages of neo-colonial “free trade” policies, are of singular importance today, as the free-trade ideologues of the British Imperial system have now succeeded in imposing their will upon the world under the guise of “globalization.” Araneta saw his nation, and the world, being dragged into hell by the globalizers of his day, and fought to revive the American System designed by Alexander Hamilton — which also guided the policies of President Franklin Roosevelt — as the only means to gain full independence for his nation, and establish productive relations with truly sovereign nations everywhere. Nothing less than such a dedication is required in the collapse of the world financial and strategic system facing us today. ”
—Mike Billington


The FDR Tradition in Philippines
by John D. Morris
June 2009


On July 4, 1946, in the immediate months following the defeat of the Japanese in the Pacific, the long awaited declaration of Philippine Independence was made. Nearly half a century of American government oversight and control was nominally coming to an end, fulfilling the dream of the Philippine people for nationial sovereignty. This historic event had also long been the personal concern of President Franklin D. Roosevelt, dating from at least the time in 1901, as a senior at Groton School in Massachussetts, when he argued in a public affairs debate that the Philippines, then under U.S. military government, should be given independence.
FDR’s life encompassed the era in which the United States confronted the role that it would play as a world power. Even before the Second World War, Roosevelt’s foreign policy as President was not isolationist, nor was it imperialist, but rather the anti-colonial orientation of the American system, as opposed to the British System of free trade, cheap labor and natural resource control. In the minds of Philippine patriots, FDR’s legacy lived on after his passing in their effort to fulfill his intention for Philippine independence. However, they learned quickly that national sovereignty and economic development do not come without a price.
Foremost among those Philippine patriots who understood and embraced the American System tradition represented by Franklin Roosevelt was Salvador Araneta. This report will trace Araneta’s fight for Philippine independence and for the adoption of the American System of Political Economy — but it will also show that Araneta recognized that American policy, especially after the death of FDR, was often the opposite of the American System — in fact, it was often closer to the British system of colonialism which FDR was committed to abolishing forever.
Roosevelt’s vision of an end to colonialism

Shortly after assuming the Presidency in 1933, Roosevelt appointed the Mayor of Detroit, Frank Murphy, a close collaborator in the New Deal struggle against depression conditions in the U.S., to be the Governor General of the Philippines. Reversing years of stagnation in U.S.-Philippine affairs during Republican administrations, Roosevelt and his allies in Congress organized the Hawes-Cutting Act to address the issue of Philippine independence. This was initially opposed by Philippine Nationalist Party leader, Manuel Queson, on the issues of the continued basing of U.S. forces and unjust tariffs, and was voted down by the Philippine Legislature.
On March 2, 1934, President Roosevelt communicated to Congress a request that the Hawes-Cutting Act be amended. His message characterized the history of U.S.-Philippine relations, and his perspective for the future.
“Over a third of a century ago, the United States, as a result of a war which had its origin in the Caribbean Sea, acquired sovereignty over the Philippine Islands, which lie many thousands of miles from our shores across the widest of oceans. Our Nation covets no territory; it desires to hold no people against their will over whom it has gained sovereignty through war.
“In keeping with the principles of justice and in keeping with our traditions and aims, our Government for many years has been committed by law to ultimate independence for the people of the Philippine Islands whenever they should establish a suitable Government capable of maintaining that independence among the Nations of the world. We believe that the time for such independence is at hand.
“A law passed by the seventy-second Congress over a year ago was the initial step, providing the methods, conditions and circumstances under which our promise was to be fulfilled. That Act provided that the United States would retain the option of keeping certain military and naval bases in the Islands after actual independence had been accomplished.
“As to the military bases, I recommend that this provision be eliminated from the law and that these bases be relinquished simultaneously with the accomplishment of final Philippine independence.
“As to the naval bases, I recommend that the law be so amended as to provide for the ultimate settlement of this matter on terms satisfactory to our own Government and that of the Philippine Islands.
“I do not believe that other provisions of the original law need be changed at this time. Where imperfections or inequalities exist, I am confident that they can be corrected after proper hearing and in fairness to both peoples.”
The U.S. Congress then successfully passed the Tydings-McDuffie Act, in March 1934 (known as the Philippine Independence Act), establishing a ten-year transition period beginning in 1936, with independence to be established in 1946. US naval bases were to be permitted only through 1947. The bill found favor among the Philippine leadership.
On Dec. 9, 1935, the University of Notre Dame sponsored a special convocation in honor of the new Commonwealth of the Philippines, and awarded President Roosevelt an honorary degree. During his acceptance speech, Roosevelt stated that America had “chosen the right course with respect to the Philippine Islands. Through our power we have not sought more power. Through our power we have sought to benefit others.”
War, Truman, and the Curse of British Colonial Thinking

The interval that followed the Tydings-McDuffie Act was meant to strengthen the institutions of government. “The prewar period was characterized by an effort to free ourselves from foreign domination, during which was born the Philippine National Bank that freed us from the dominance of such foreign banks as Bank of America, National City Bank and Hong Kong Shanghai Bank. Every effort was made to be economically self sufficient with the birth of the National Development Company and its subsidiaries — National Coconut Corp., National Food Corp., National Textile Corp., Rice and Corn administration, among others, liberating us from the monopoly of Proctor and Gamble, Unilever, and importers of food and clothing.” (Araneta)
Sadly, the clouds of war intervened. General Douglas MacArthur had been deployed to organize the defense of the islands, but only days after the Japanese attack on Pearl Harbor, Manila was under air attack, and shortly thereafter the Japanese invaded, and the Philippines were overrun.
On December 28, 1941, Franklin Roosevelt made a radio broadcast to the Filipino population:
“I give to the people of the Philippines my solemn pledge that their freedom will be redeemed and their independence established and protected. The entire resources, in men and in material, of the United States stand behind that pledge. It is not for me or for the people of this country to tell you where your duty lies. We are engaged in a great and common cause. I count on every Philippine man, woman, and child to do his duty. We will do ours.”
American and Philippine forces united over the next five years. Guerrilla forces from among the Filipinos under occupation resisted the Japanese and prepared for liberation. When the Allied military forces commanded by MacArthur returned to drive the Japanese out of the islands, the date for independence was quickly set. But, on April 12, 1945, Roosevelt died, replaced by Harry S Truman. Filipinos had good reason to be concerned that their independence would be in name only.
As Lyndon LaRouche has repeatedly stressed, FDR’s policies began to be reversed before his body was cold. While FDR had told Winston Churchill to his face that the US was not fighting the war to preserve the British Empire, and that the post war period would see sovereign states and US-led economic development in the former European colonies, Truman proved to be an asset of the Empire, helping the British, French, Dutch and Portugese colonial forces reassert their control over their former colonies in Asia and Africa.
With respect to the Philippines, Truman appointed Paul V. McNutt to take up the position that he had held before the war as U.S. High Commissioner to the Philippines. Many Filipinos questioned the wisdom of a new High Commissioner so near to the date of independence, especially McNutt, a factional adversary to Roosevelt and someone well known to be backed by American commercial interests in the Philippines.
The Truman Administration quickly set the stage for chaos with a series of official directives concerning the Philippines, intended to outline the conditions for aid and assistance to the American protectorate. The two most controversial of them related to agrarian unrest and collaboration with the Japanese during the war. “Agrarian unrest” was a reference to the indigenous guerrilla formation that fought the Japanese known as the Hukbalahap1. The Huks were based in the countryside and, along with other representatives of the rural populations, became effective advocates for the poor and disenfranchised.
The Truman directive stated: “During the war the tenants organized a guerrilla army which reportedly did good work against the enemy. After the enemy was defeated on their localities, they did not disband and today constitute a special problem which threatens the stability of government. On the other hand their legitimate claim to fair treatment and the assistance they rendered in the resistance to the enemy require that they be not dealt with in a ruthless manner.”
The preparations for the first post-war elections to be held in 1946 were seriously confused by the issue of rehabilitating Filipino leaders who had held positions in the Japanese occupation government. Both Roosevelt and Truman had made clear to Sergio Osmena, the successor to the deceased Manuel Queson as head of the exile Philippine government, that those persons shown to have aided the Japanese must not hold positions in the newly independent Philippines. However, the process by which collaboration was to be determined was contentious, especially because one of those under suspicion was Manuel Roxas, the leading candidate challenging Osmena in the race for president. Roxas had been involved with the Occupation government, but was unilaterally exculpated by General Douglas MacArthur when the Allied Forces regained control of the Philippines in 1945. This case created the legal ambiguity whereby the collaboration issue remained unresolved. Roxas went on to win the presidential elections, and become the first president of the new Philippine Republic.
Further policy problems were documented in a 1987 book length study by the Analysis Branch of the U.S. Army Center for Military History on counter-insurgency operations against Huk guerrillas in post-war Philippines:
“American insensitivity to internal Philippine problems continued into 1946 when the U.S. Congress passed two measures that strained Philippine relations and fueled Huk propaganda fires. In February, the Congress addressed the issue of Filipino veteran rights. In a move that shocked people across the Philippines, Congress, initially at least, denied them GI Bill benefits, breaking a promise made to them by General MacArthur as he retreated from Bataan. The American decision also denied back-pay, hospitalization, mustering-out pay, and burial benefits. In the Philippines, this decision met widespread opposition and anger. The U.S. Congress readdressed the veteran issue over the following five years, finally approving money for Philippine veteran hospitals in 1948, burial benefits in 1951, and later paid some Filipino veterans $473 million in backpay and allowances.” [note: Several categories of veterans were denied their promised benefits, however, and the battle to gain those benefits rages still today.2
“A second action that inadvertently aided Huk calls for a Philippines free of U.S. domination was the Philippine Trade Act (or Bell Act) of 1946. Introduced by Missouri Representative C. Jasper Bell in September 1945, the highly controversial act underwent five revisions before being passed in April 1946. Designed to stabilize economic ties with the United States and help Philippine recovery, the act formalized pre-war economic trading patterns and ensured U.S. economic hegemony over the country. Provisions of the 1946 act fixed the Philippine peso to the dollar and prevented the Philippine government from changing the value of the peso without U.S. consent. As a final insult, the act legislated a twenty-eight year extension for duty-free trade between the nations and mandated equal and free access to Philippine markets by American businessmen and companies. The Trade Act was the subject of hot debate in the Philippine legislature before being ratified on 18 September 1946, primarily due to the efforts of a coalition of local merchants, businessmen, and politicians (those most likely to benefit from a return to the old status quo). Huks seized upon this legislation as just another example of the United States acting through the Philippine government to maintain a neo-colonial relationship for the benefit of Filipino landlords, rich businessmen, and corrupt government officials.”
The Bell Trade reconfirmed the former relations between the two countries, under which independence would mean next to nothing. This was emphasized by the testimony of Assistant Secretary of State Will Clayton testifying in front of the Senate Finance Committee on April 5, 1946:
“Those provisions (on equal rights and others) are not reciprocal. We cannot give the same rights to the Filipinos. The Bell Bill would require that the Philippines permit Americans free access to enterprises. It would permit them to engage in many activities in the Philipine Islands from which Filipinos, as aliens, would be barred in the United States.”
Economic crisis came quickly to post-war Philippines. Earnings from exports of raw materials to the United States, along with modest development assistance and reparations for war damages did not provide enough capital for needed government operations, let alone investments to rebuild the war torn country. In the midst of this crisis, a public debate over the Bell Trade Act ensued that would capture the imaginations of postwar Filipinos, and rally the population toward a revival of President Franklin Roosevelt’s pro-growth, anti-colonial, nation building policies.
Salvador Araneta – Protectionist

A principal protagonist in this debate would be Salvador Araneta. He was the son of a Philippine founding father, Gregorio Araneta, and educated both in the Philippines (Ateneo, Santo Tomas) and in the United States (Harvard). Araneta’s political career began as an elected delegate to the convention that produced the 1935 Commonwealth Constitution. He was instrumental in organizing many governmental institutions in conjunction with circles that had grown up around the National Economic Council, an economic coordinating body established in the wake of the 1935 Commonwealth Constitution.
The mobilization against the Bell Trade Act was the beginning of Araneta’s clash with the financial establishment, those persons who had come under the influence of American vested interests in the Philippines, centered chiefly around the sugar industry. Araneta polemisized against the subserviant status in which the Bell Trade Act kept his country, while he advanced an aggressive program for the industrialization of the Philippines. The issue was Philippine sovereignty; the right to tariff protection, currency autonomy and taxing authority. This position placed Araneta in direct opposition to the newly elected President of the Philippines, Manuel Roxas.
In a study published in 1948, entitled, ‘Basic Problems of Philippine Economic Development’, Araneta is blunt in his assessment of Roxas. “On his election to the Philippine Presidency in April 1946, the late Manuel Roxas had to act one way or another in respect of the Trade Act. Partly because of pressure from the Island’s sugar interests, which saw in the Act their economic salvation, and partly because he wished both to obtain American financial assistance for his government and to retain the friendship of American officials who had helped to whitewash him of charges of wartime collaboration with the Japanese, President Roxas became the foremost Filipino champion of the Act.”
Araneta described the political environment of that period in a 1953 speech. “For my views on the Trade Agreement, I was referred to by Pres. Roxas as a prophet of disaster, and you well know how many of my American friends were rather disappointed at the attitude that I had taken…… To advocate then, a policy of protection for local production even as against imported American goods was anathema, was un-patriotic, was anti-American.”
But Salvador Araneta was far from being anti-American. In a speech before the Manila Rotary Club in January, 1947, entitled ‘Precepts We Can Not Surrender,’ he laid out a detailed critique of free trade, taking a few pages from U.S. history.
“There is no country (with the exception of England which was the first to turn to industrialization) which has been able to become industrialized without having had to protect its industries. The United States, with all its natural resources, had to protect its industries with high tariff barriers. From the time of its first Secretary of Treasury, the great Alexander Hamilton, to the present time, the United States has in fact consistently been a highly protectionist country.”
On the subject of National Banking. “In this connection, it will be interesting to note, that the financial problems that the United states of America had to face during the first years of its independence were quite similar to those of our present government. And to solve them, Alexander Hamilton created a National Bank, with a capital of $10,000,000….”
Araneta’s arguments were comprehensive and, in the end, he refers, as he does in many other speeches, to the ‘high ideals of President Roosevelt,’ by revisiting the famous passage from Eliot Roosevelt’s wartime memoir, “As He Saw It:”
“In the conversation between Roosevelt and Churchill that gave rise to the Atlantic Charter, Roosevelt indicted the colonial policies of the British Empire. He said: ‘Those Empire trade agreements are a case in point. It is because of them that the people of India and Africa, of all the colonial Near East and Far East, are still as backward as they are……’ Will America permit that the high ideals of President Roosevelt should be scuttled; that India should attain a more complete independence than the Philippines?“
Araneta’s courage and optimism were also clear in another 1947 address to visiting American Publishers. “The Filipino people have to be emancipated from the strait-jacket of colonial economy. The fetters and inhibitions to our industrialization programme must be removed, so that we may rapidly increase our national production, our per capita income, and thereby in the long run become among the best customers of the United States, to rank perhaps with Canada, a highly industrialized country, which is today America’s best customer. The economic problems of the world at this time will not be solved by the universal application of the formula of free trade, but through the application of a formula of diminishing protection for the industries of a country in proportion to her industrial development.”
“We hate to have to talk this language of the competitive man. We would rather prefer to talk the language of the cooperative international man, nay the language of the cooperative world citizen.”
“We expect that the United States, who ushered on August 6, 1945, the new atomic age, will soon harness its fabulous power for human progress and plenty, on a world scale, and that the clouds threatening a new world war, brought about by the fear of possible annihilation under an atomic bomb, will disappear once man discovers the fact that the atom power is humanity’s liberation from the fear of want, the fear of unequal competition, and the fear of war.”
Although there was decisive political opposition to the Bell Trade Act, it was ratified nonetheless under very disturbing circumstances. In the elections of 1947, a coalition known as the Democratic Alliance, which included leaders and supporters of the Hukbalahap, were elected to the Senate and the Legislature. They held the balance which would have prevented passage of the Trade Act. Brutal intervention was made by the newly elected President Roxas, with General MacArthur and Ambassador McNutt lending tacit support, to challenge the validity of the election of three senators and nine congressmen who rejected ratification. Criminial indictments claiming they had gained election through the intimidation of voters prevented the seating of these senators and congressmen long enough for the Act to be pushed through.
Public Credit

Exactly because of his outspoken views, Araneta was appointed as Secretary for Economic Coordination in the Cabinet of President Elpidio Quirino, who came to power with the death of Manuel Roxas. From this position, Araneta would be a visionary and prophetic voice for an FDR-style New Deal in the Philippines.
In 1950, he wrote a detailed study submitted to the annual meeting of the Philippine Economic Association entitled, ‘A Development and Financing Program For Our Total Economic Mobilization,’ in which he concluded, “…..To make rapid development possible through full employment, we need funds and credit, we need the invigorating effect of a generous blood transfusion of public credit to flow into the veins of our economic system, and we need new instrumentalities comparable in daring to the New Deal measures conceived and implemented during the so-called Third American Revolution under the great American President Franklin Delano Roosevelt.”
‘Total Economic Mobilization’ became the slogan of the Quirino Government, and Salvador Araneta worked tirelessly to educate and inform his fellow citizens about the principles of political economy so that this program might have a chance to be more than just a slogan.
As financial conditions worsened, Araneta faced strong resistance to his policies. His toughest critics were within the Quirino Cabinet itself, specifically Miguel Cuaderno, the Secretary of Finance, and later the Governor of the Philippine Central Bank. Both men had worked together to successfully organize the U.S. Truman administration to accept import controls, the establishment of a Central Bank, and for the application of a tax on foreign currency transactions. These measures did prevent chaos, but as Araneta made clear, they did not slow the growth of unemployment, nor meet the needs of a growing population.
Araneta and Cuaderno clashed over the methods by which to address the crisis, and thus revived the public war of ideas as to which direction the Philippine economy should take. Cuaderno, the central banker, preached conservative monetarist theory, and a limited role of government. His relationships with European and New York banking interests helped to advance the Philippines standing as a new nation, yet strengthened the international private financial institutions which sought to administer the Philippines economy.
In late 1950, the Bell Trade Mission issued a progress report, meant to redress the grievances unresolved from the Bell Trade Act of 1946. Araneta recieved the report favorably, but in a speech in January 1951 in front of the Economics Club of the University of the East, he appealed for effective and timely implementation:
“At this time, it is enough for me to say that if something along the lines of the two bills above-mentioned is enacted, we will be making a great headway in the solution of our age-old problem of lack of credit for the economic development of our country.
“…..My friends, we are indeed facing a grave crisis, although many of us do not seem to realize it. This crisis could only be solved by bold measures and great sacrifices. I fully agree with the Bell Mission when it counsels that positive measures must be undertaken ‘promptly’. This we have failed to do. This is no time for mutual recriminations. We are all guilty in this regard, both the people and the Governments of the Philippines and the United States.”
Araneta resigned from the Quirino Cabinet on January 18, 1952, primarily over disagreements with the administration’s sugar policy after Philippine sugar was sold to Japan despite his protests. Now free to voice his views as a private citizen again, Araneta lost no time in publicly confronting his philosophical adversary, Miguel Cuaderno, on the subject of the monetary, gold and foreign exchange policies of the Philippine Central Bank. In a series of articles in the Manila Times in late 1953, Araneta challenged Cuaderno to respond to his programatic alternatives. Cuaderno stated his objections in a lengthy written response, part of which follows:
“Mr. Araneta’s proposals, while they appear attractive, particularly to specific sectors which will benefit therefrom, are bound to lead the economy to a disastrous condition of inflation, high cost of living and speculative activities, and ultimately the total breakdown of our currency, and thus the cessation of all productive activities. This indictment holds true for all his proposals: deficit spending, multiple currency rates, dollar retention system, and the purchase of gold at premium prices. Although apparently different measures, there is one unifying principle behind all, viz., the progressive cheapening of the currency, and conversely, the spiraling of prices. Such a condition would give the illusion of progress, as witness the feverish commercial activity during the Japanese occupation, when it was not worth one’s while to hold his money even for one day. This may be desirable for speculators and profiteers, but never for genuine producers who need to plan their output, or for the masses of consumers whose incomes cannot keep pace with the mounting costs which cheap money policies inevitably generate.”
Araneta replied to Cuaderno’s letter in the form of a printed monograph which starkly presents the nature of the American System of protection and public credit against British free trade monetarism:
“These proposals of mine, have been branded by Gov. Cuaderno, as being at variance with the opinion of most monetary and economic authorities ‘as dangerous and irresponsible experimentations on the people’s livelihood…..’ It is true that there is one unifying principle behind my proposals. But Gov. Cuaderno is mistaken when he believes that they will lead to ‘the progressive cheapening of the currency,’ ‘the spiraling of prices,’ ‘to disastrous conditions of inflation, high cost of living and speculative activities,’ ‘the total breakdown of our economy, and thus the cessation of all productive activities.’
“My proposals may be ‘undesirable in principle’ much as protectionism is undesirable in principle to free traders. But protectionism and multiple rates are being practiced today by force of necessity, and the sooner we ceased dillydallying on this matter, and implement a genuine protectionist policy- protecting producers, with due regard for the needs of the public for essential commodities, the sooner we will be on the road to full employment, and higher standards of living.
“As long as we have a black market and an unconvertible currency, it is much too boastful to claim that we have a stable currency. A stable currency does not need exchange restrictions and can stand its own ground. It may be a long way before we achieve a balance of payments, without the help of restrictions and controls. But controls and restrictions alone and by themselves cannot attain it. In our case what we need, is the protection and the incentives of a selective devaluation of our currency, a more liberal credit policy, and great and wise leadership in the government to stimulate production, and more production and more production.”
To his credit, Miguel Cuaderno resisted pressure by New York and London interests to decontrol Philippine currency and financial markets in exchange for International Monetary Fund loans. Even more important, when the vice president of the Philippine National Bank Leon Fernandez brought the notorious former Nazi finance minister and Bank of England asset, Hjalmar Schacht, to advise Cuaderno, the Central Bank head firmly rebuffed Schacht, stating that his monetary schemes were hardly appropriate for an economy needing capital investment in basic industry and infrastructure.
Salvador Araneta went on to be the Secretary of Agriculture and Natural Resources for the Magsaysay Administration in 1953. He and a circle of government and business leaders, especially Alexander Lichauco and Hilarion Henares who associated with him, fought to gain momentum for Philippine industry and agriculture despite crippling trade and currency policies. These leaders continued to outline protectionist policies and deconstruct the free traders, referencing capital budgeting and the urgent need for productive economy vs. consumer society. Araneta castigated the naysayers and the self-appointed advisors amoung the high and mighty. His New Deal vision and planning is an indispensible insight into the mind of a Filipino patriot inspired by the global impact of Franklin Roosevelt’s leadership.
Jose Rizal
Philippine LaRouche Society
1. The Hukbalahap Insurrection: A Case Study of a Successful Anti-Insurgency Operation in the Philippines, 1946-1955. by Major Lawrence M. Greenberg. Analysis Branch, U.S. Army Center of Military History. Washington, D.C., 1987
2. The battle to get the US Congress to live up to President Roosevelt’s pledge to Philippione soldiers who responded to his call to arms in 1941 is not over. Roosevelt issued his executive order on July 26, 1941, bringing the Philippine Commonwealth Army into the service of the United States Armed Forces of the Far East under the command of Lieutenant General Douglas MacArthur; with Filipino soldiers toserve uner the US flag, entitled to full soldier and veterans benefits. A bill before the US Congress in July 2008, sponsored by Democrat Filner and Republican Issa, to finally live up to that pledge, is being undermined by Republican minority leader Boehner, and by sophistry from Democratic Leader Pelosi. The number of surviving Filipino veterans is dropping rapidly, to the disgrace of US. [MOB]

For Further Research:
‘Economic Re-Examination of the Philippines. A Collection of Speeches and Studies on the Subject 1947-1953’ By Salvador Araneta

LaRouche Speaks to the Philippines


LaRouche Speaks to the Philippines
JUNE 4TH, 2006

This article appears in the June 2, 2006 issue of Executive Intelligence Review.
PDF version of this article

Lyndon LaRouche was interviewed by Philippine radio host Butch Valdes, the head of the Philippine LaRouche Movement,and several members of the Philippine LaRouche Youth Movement, on nationwide “Radio Mindanao,” for one hour on Sunday, May 14, immediately preceding Mr.Valdes’s visit to the U.S. The following are excerpts from that interview. Subheads have been added.
The Philippines and Ibero-America

Butch Valdes: Mr. LaRouche, the Presidents of Argentina, Bolivia, Venezuela, and Chile have clearly taken steps to address their economic problems in various ways, from unilateral declaration of moratorium on foreign debt payment, re-nationalization of oil and natural gas expropriation, to outwardly defying the IMF and multinational corporations. Is this a correct move? Why have other leaders not done the same?

Lyndon LaRouche: Well, this is a very significant phenomenon. As you know, the Philippines is actually part of the same process, with different characteristics somewhat, from what happened in South and Central America. People moved from Europe during the time of the struggle for freedom in the 16th and 17th Centuries, into the Americas. And you had a similar development in the Philippines, where you had a previously existing population, as in Mexico and Peru, which had its own pre-existing level of culture, and you had an integration with people from European sources, who migrated into there and had an influence in there, from Spain, or later from the United States, in particular. So this is the characteristic of parts of the developing world, the Americas and the Philippines, which have great similarities—despite all the differences we know about.

And so, what there is, is a certain kind of optimism built into a certain stratum in South and Central America, which is not found in the same way in Europe. It moved into South America: You have the dictators, the thugs, the reactionaries, the Synarchists, people like that, but at the same time, you have a layer of cultural optimism, and a sense of oligarchy-free self-government, self-rule, which you do not have even yet in Europe. So, we have special characteristics, as opposed to other parts of the world. And therefore, despite the distance across the Pacific, we have certain affinities which can be easily adduced. You can see the similarities. And if you look from the Philippines at these developments in South America, and also to some degree Central America, in Mexico, for example, you see that there’s a similar degree of potential optimism.

With the breakdown and discrediting of the Bush Administration, and a general breakdown of everything, these tendencies in South America are tending to come together, as a united force in the hemisphere—at least the southern part of the hemisphere—and they’re more optimistic than you will find in other parts of the world. That’s what you’re seeing.

Otherwise, you have in Europe—it’s a much more oligarchical worldview, much more inclined to go along—you know, they still have this great respect for barons, and princesses, and dukes and duchesses, and kings and queens, that we don’t have in the United States, and we don’t have generally throughout the Americas. So that’s our advantage: We are the part of European civilization that escaped from Europe, in order to be free of the oligarchical tradition of feudal Europe. And therefore, we have certain advantages, cultural advantages, because of that. And that’s what you’re seeing, is the advantage.

We’re very close to these people, that is, our work is very close to people in South and Central America. We’re in touch with people who are representative leaders in the governments and so forth in that network. We’re very much in support of the efforts for unity of efforts and cooperation among these states. So, we’re part of it.

We sense that the Western Hemisphere, the Americas, is a special part of the planet, and we—myself and others—feel a special affinity from the United States with the history and with the people of the Americas as a whole.
Nuclear Power and Desalinization

Valdes: Well, for years now, you have emphasized the importance of nuclear-energy development, if countries are to survive and develop. Presently, leaders from all over are beginning to realize the need for an indigenous source of energy to alleviate their dependence on imported oil, or to forcibly take over oil fields. Would you like to comment on this critical problem?

LaRouche: Well, take it from the standpoint of the Philippines: You have a land area which is subsiding because of the draw-down of fresh water from subsurface sources. So, you have a sense of the threat there, that the land will sink below the level of the seas, because of the draw-down of the fresh water from beneath. We have, all over this planet, that similar kind of situation. For example, the Ogallala system in the central part of the Southwestern United States. We’re having a water crisis, a fresh water crisis. We have a water crisis, where we don’t have water to begin with. But, on the other hand, as in Australia, they’re drawing down fossil water; in southern India, they’re drawing down fossil water.

So we cannot continue to operate, managing for a growing world population or national populations, on the basis of existing approaches to water supplies. Therefore, the only solutions we have to this are two: One, in the first approximation, nuclear power. You don’t just measure nuclear power in watts or calories. You measure nuclear power, its output, in terms of energy-flux density—that is, the concentration of power per square kilometer as such. And therefore, this has a chemical significance: That is, in order to accomplish, economically, certain chemical processes, you have to have an intensity of power at the point of production, to apply to solve these problems.

So therefore, in dealing with the world water problems alone, without nuclear power, you cannot solve these critical problems of water, or a whole series of other, related problems. Therefore, there is no option but, right now, nuclear fission power, especially the high-temperature gas-cooled reactor. One example of that is India. India has a large store of radioactive thorium; it’s one of the principal stores of available radioactive thorium on this planet. And therefore, years ago, when Germany had developed the Julich model of high-temperature gas-cooled reactor, we emphasized the fact that the Julich model is especially well-adapted to a radioactive thorium power production process. India is now moving, at least some people in India, in that direction. What they need is one breeder reactor or more, a breeder-reactor program, in order to activate the thorium reserves. In that case, India will then have a possibility of having small nuclear plants of 100 MW or more capacity, and station them in various parts of India, as well as the larger plants for other areas. In this way, you can bring the application of nuclear power, as a source to solve the local problems in many parts of India, problems which otherwise would not be solved.

So, we’ve come to a phase, where in order to have replacement fuels for petroleum-based fuels, in order to have solutions for water problems, and also certain mineral problems, we need nuclear power. So everyone who understands what’s going on, is saying, “We’re going back to a high-tilt nuclear power program.” And we’re looking forward, within a quarter-century, 25 years from now, to supplementing the nuclear power installations we make in the meantime, with the development of operational thermonuclear fusion power sources, which will deal with other problems, chemical problems, that we have to solve on this planet.
Bridge between East and West

Valdes: Okay, we have a question from one of the LYM (LaRouche Youth Movement). His name is Ver.

LaRouche: Aha!

Q: Hi Lyn. Well, here’s the question: How do we organize the population, particularly in the Philippines, where you have, I think, quite a different culture. You have afraid Boomers, which wish us to do nothing, and youth which are timid, well, very timid. They know the problems, but wish to do nothing about the situation and rather keep quiet. How do we deal with that? And there’s not much time—we’re about to launch into a new dark age.

LaRouche: You’ve got two problems. First of all, as I said, the Philippines is a culture, which is in an Asian context. And there are distinctions as a result of the history of the development of the Philippines. The Philippines is much closer, culturally, in its dynamic, to the Americas than it is to Asia. It’s one of its peculiarities.

Therefore, the development of the Philippines has depended upon a sense of the affinity with the Americas. It sees it self as being somewhat like the Americas. The loss of much of the high-tech capability, which was formerly associated with the U.S. military bases in the Philippines, such as the naval base and the air base, that has essentially been undermined over the past quarter-century. So, there is that estrangement.

My view is that, similarly, because of the very principle, that if the young people of the young adult age in the Philippines feel themselves linked to the United States in some efficient way, as people in the United States who think the same way in general, can discuss and communicate with people in the United States, and also in some degree in Europe, that this will give a morale factor, of building the morale among the younger generation, the young adult people.

Also, what’s needed, as we do elsewhere in the world, we find that if you have a program which is based on two things: on Classical song, that is, Classical musical composition, which has an effect on the mind; and also the history of the development of science, especially starting from ancient Greece, from the Pythagoreans, Plato, and so forth—that these two factors will give you a selection, where you will get response from some people among the younger generation, and the reaction from some people among the younger generation will then be an attractive force for the larger generation. That’s the experience we’ve had in the United States; it’s what we have in Europe. But in the United States, of course, we have about six years of working on this particular approach. We now have some very rich results, very good results. We have young people who are now showing themselves to be actually emerging as actual political leaders and other leaders in society.

So that’s what’s needed—the sense of unity with the youth generation of their own age throughout the world, especially the Americas and parts of Europe; and a sense of their own development; a sense that there are emerging young leaders, leaders of the future emerging among the youth generation inside the Philippines; and some idea of what the programs are which would save the world, civilization, now threatened, and includes saving the Philippines, which, as we all know, has gone down considerably over the past 25 years. And bring them back, go back to the idea that existed still in the immediate postwar period—shall we say, the time from MacArthur’s return to the Philippines. That sense that there was progress ahead, there was development ahead. That the development of the economy of the Philippines, and the culture, was going to be successful. And over the past change in culture worldwide, in the 1970s, especially, and the 1980s, that sense of connection was lost.

So, therefore, my approach is to try to bring back an historical sense that there was something good, which has been to some degree lost. Let’s rebuild it, and that will start the Philippines back on the direction toward progress, which it was struggling for with some significant success in earlier decades.
Wait for the U.S.?

Valdes: Okay. Many, of course, here, will be wanting to get to know: What should countries like the Philippines do, in preparation for this global financial tsunami? Is there any move that an individual people like ours can make, in preparation for that? And do we have to wait for the U.S. to be able to solve it for us?

LaRouche: No, there are several levels on which you can respond to a thing like this. First of all, you know, the human mind is a wonderful thing, when properly used. And if a people is encouraged to take emergency measures to defend their culture, to maintain things, functioning more or less, then the worst crises can be resisted. You see examples of this, and the attempt to do that in Europe during the so-called Dark Age, in themiddle of the 14th Century, in which there were hold-outs, in which some are as were able to resist these conditions, because they fought.

And therefore, if a people is encouraged to use human ingenuity, creativity, and solidarity, they can take measures which will ameliorate the dangers of a great crisis. The worst thing is when a crisis hits a population which is totally demoralized and passive, and submits to whatever happens. But if there’s a determination to resist—for example: If there’s a determination to maintain food supplies, if there’s a determination to continue to fight disease, for sanitation, a determination to keep the morale of the people up, these qualities can mean that certain pockets in the world will be more resistant to the crisis than other parts.

I think the Philippines has a potential in that direction, because of its multicultural character. It has resources and a history to draw upon, in bringing unity. I think the sense of unity, of the defense of the nation and its people, among people within the Philippines population is the most important thing for the Philippines to think about now. Because just sitting around to wait for the United States to save them, is not the answer. The answer is, of course, the United States has to take the initiative, to get the world out of this mess. But in terms of: How do you deal with an oncoming crisis which the United States may not have stopped? Then, the solidarity of the people, their cooperation, their high degree of morale and mutual support, and their practical sense of what to do, is the key weapon of defense.
Technological Optimism

Valdes: Okay, another LYM question, Lyn, from Gayle.

Q: Hi Lyn. My question is: What is the unique role of the Philippines in the establishment of the New Bretton Woods system? Is there any? And how do you think this can be done by, first, the Philippine government; second, the ordinary people; and last, by the Philippine LYM?

LaRouche: Well, first of all, the peculiar characteristic of the Philippines is, number one, is that it is in a sense, an extension of European civilization: in the sense that like Mexico, and like Peru, in Central and South America, the population was based on an indigenous population which existed prior to the coming of the Spanish, prior to the coming of European civilization, but has adopted, because of the influence of Christianity and so forth, has adopted the characteristics of a European culture; in the same sense that Peru has, in the same sense that Mexico has. So therefore, it’s an outpost of that in Asia.

Now, it also has the potential for high-technology development, both in its cultural heritage, and also in some of the resources which are concentrated because of the way minerals are distributed in the planet. So there are many industries which are vital, as part of the world system, which would be quite naturally developed in the Philippines. There is also an agricultural potential of some significance, which is important. So therefore, the Philippines, if properly developed, if the opportunity for development is there, can become an outpost of a contributing role of European civilization in Asia. And the Asians, in a sense, need that. So there is a very important relationship, potentially, between the Philippines and the Asian continent, which many people, of course, in the past have recognized. I think it’s the case, now, too. It’s very important.

But the key thing for me, is that the people of the Philippines must have a sense of their own potential future. They must have a basis for optimism about their future. And then they will be able to see these things, these opportunities, these potentialities. Then they will be mobilized to act for them. I think the basic thing, problem that I’ve seen over the past 25 years or so, is a demoralization of the people of the Philippines, to feel they don’t have the option of going in this direction. If they do sense they have an option of going in this direction, if they believe in it, then I think you’ll see a very significant role of the Philippines in the total Asian hemisphere.
The Presidential System

Valdes: Okay, I have to ask these last questions that have been sent to us here, Lyn. “The people in our government, who want to push the shift of our government structure from the Presidential system to the European-inspired parliamentary system, can you comment on a move like this objectively?”

LaRouche: Yes, it’s a mistake. A terrible mistake. Of course, if you have a bad President once or twice, you may say, “Let’s get rid of the Presidential system.” But then, you have to think about the future and the past, and you have to think about what system works better.

Now a European parliamentary system, for this time in world history, is the worst possible decision you can choose, apart from pure anarchy. Because parliamentary systems, by their nature, tend to be controlled by higher-ranking private authorities called central banking systems. And therefore, you have a government which really doesn’t govern. Because the wealthy bankers, or wealthy banking system, is able to actually run the society, because it tells the government what it can do and can’t do. And a parliamentary system, by its very nature, is one which is impotent under the thumb of an independent, so-called, central banking system.

So, in the U.S. system, you have the best form of government which has ever been created on the planet, constitutionally—when we follow it! In our government, a monopoly on the creation of money is created by the Federal government, with the permission of the House of Representatives. Therefore, we are not a monetary system, we are a credit system. We create credit, which is the debt of government, we create that in order to promote long-term investments, chiefly long-term investments. In what? In things which are 25- to 50-year investments, in basic economic infrastructure, or in providing capital for capital-intensive development of agriculture, industry, and so forth.

But the government must regulate the banking system. It must not allow any corruption to come in, such as the hyperinflationary influence we have now. It must protect the people and their interest. And a President, who is functioning in that kind of system, the American System, the system of our Constitution—often violated, admittedly—that is the best system. So, our problem in the United States has been to rush to the defense of the Constitutional design of our government, because if we maintained the intention of that Constitutional design against all kinds of corruption, then we would have a government which would be fair, and it would be effective and could respond to its own errors by solving these problems. And that is the best kind of government.

And the Philippines has a reflection of a model of the American Constitutional system, which is the best kind of government in the world. Now, if you’ve got a problem with it, you have to fix the problems, without killing the form of government. That is, as they used to say, “Don’t throw out the baby with the bath water!” And the baby is the Presidency. Don’t throw the baby away. It’s the baby which is the assurance of your future.