Schmidt's economic warning to Reagan The Jesuit architects of Basque terrorism Why has the U.S. made genocide respectable? LaRouche presents four steps to halt the 1982 depression EIR Executive Intelligence Review Special Reports

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1. Prospects for Instability in the Arabian Gulf 5. The Significance of the Shakeup at Pemex A comprehensive review of the danger of instabil­ EIR correctly forecast the political troubles of ity in Saudi Arabia in the coming period. Includes former Pemex director Jorge Diaz Serrano, and analysis of the Saudi military forces, and the in­ this report provides the full story of the recent fluence of left-wing forces, and pro-Khomeini net­ shakeup at Pemex.lncludes profile of new Pemex works in the country. $250. director Julio Rodolfo Moctezuma Cid, implica­ tions of the Pemex shakeup for the upcoming 2. Energy and Economy: Mexico in the Year 2000 presidential race, and consequences for Mexico's A development program for Mexico compiled energy policy. $200. jointly by Mexican and American scientists.Con­ cludes Mexico can grow at12 percent annually for 6. What is the Trilateral Commission? the next decade, creating a $100 billion capital­ The most complete analysis of the background, goods export market for the United States. De­ origins, and goals of this much-talked-about tailed analysis of key economic sectors; ideal for organization. Demonstrates the role of the com­ planning and marketing purposes. $250. mission in the Carter administration's Global 2000 report on mass population reduction; in the 3. Who Controls Environmentalism P-2 scandal that collapsed the Italian government A history and detailed grid of the environmental­ this year; and in the Federal Reserve's high ist movement in the United States. Analyzes interest-rate policy. Includes complete member­ sources of funding, political command structure, ship list. $100. and future plans. $50. 7. Near-Term Prospects for Gold Price Increase 4. Prospects for Instability in Nigeria A political guide to the reasons for the recent A full analysis of Nigeria's economic develop­ decline in the price of gold, and likely price move: ment program from a political standpoint. In­ ments in the future. Includes analysis of control cludes review of federal-state regulations, analy­ over international private gold stocks, ongoing ef­ sis of major regional power blocs, and the en­ forts to corner the market, and review of scenar· vironment for foreign investors. $250 ios now in circulation for remonetizing gold.$500.

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�X.:�:I:��n::e:e::e:.���::::�t�s:::::::�:=:::.:�1���:8�: ______1 L ______Founder and Contributing Editor: Lyndon H. LaRouche. Jr. Editor-in-chief: Criton Zoakos Editors: Nora Hamerman. Robyn Quijano Managing Editor: Susan Johnson Art Director: Martha Zoller Contributing Editors: Uwe Parpart. Christopher White. Nancy Spannaus From the ManagingEditor Special Services: Peter Ennis

INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot Agriculture: Susan B. Cohen Asia: Daniel Sneider Counterintelligence: Jeffrey Steinberg Economics,: David Goldman European Economics: Laurent Murawiec Energy: William Engdahl Europe: Vivian Freyre Zoakos Latin America: Dennis Small Law: Edward Spannaus Middle East: Robert Dreyfoss Military Strategy: Steven Bardwell Science and Technology: Marsha Freeman Soviet Sector: Rachel Douglas United States: Graham Lowry

INTERNATIONAL BUREAUS: Bogota: Carlos Cota Meza Bonn: George Gregory. Rainer Apel Chicago: Paul Greenberg Copenhagen: Vincent Robson Houston: Harley Schlanger. Nicholas F. Benton Los Angeles: Theodore Andromidas Mexico City: Josefina Menendez Milan: Stefania Sacchi. Marco Fanini Monterrey: M. Luisa de Castro New Delhi: Paul Zykofsky Paris: Katherine Kanter. ineteen eighty-two is the year that will witness Sophie Tanapura N whether the u.s. Rome: Leonardo Servadio economy reaches a financial and physical "point of no return," or Stockholm: Clifford Gaddy whether an informed and aroused citizenry will take responsibility for United Nations: Nancy Coker Washington D.C.: Richard Cohen. reversing depression conditions. Laura Chasen. Susan Kokinda In this issue, we present three statements by EIR founder Lyndon Wiesbaden: Philip Golub, Mary Lalew!e, Thierry Lalevee. Barbara Spahn H. LaRouche to that end: an outline of the policy measures required; an urgent reminder that Americans are at this moment allowing mass Executive Intelligence Review (ISSN 0273-6314) murder to proceed globally, having left strategic decisions to a is published weekly (50 issues) except [or the second week o[Julyandjirstweek ofJanuary by pathetic but genocide-minded 'gaggle of would-be patricians; and, in New Solidaritv InternationalPress Service 304 W.5l1thSireet. New York. N. Y. 100/9. the final part of his series of articles on systems analysis, a specification In Europe: Executive I ntelligence Review, of the scien tific basis of adequate economic theory. Nachrichten Agentur GmbH, Postfach 2308, 0.6200 Wiesbaden Tel: 30-70-35 Credit, as Mr. LaRouche has often commented, is simply a means Executive Directors: Anno Hellenbroich, Michael Liebig to an end, a subordinate artifact for the purpose of mediating techno­ In Mexico: EIR, Francisco Diaz Covarrubias 54 A-3 logical and educational progress. To allow the Federal Reserve to Colonia San Rafael, Mexico OF.Tel: 592-0424. Japan subscription sales: determine what may and may not be produced, instead of making O.T.O. Research Corporation Takeuchi Bldg. credit volume and flows a function of the needs of increasing produc­ 1-34-12 Takatanobaba Shinjuku-Ku, Tokyo 160 tivity, is an insane dictatorship from which we must rid ourselves in Tel: (03) 208-7821 1982 with all due joy and urgency. Copyright © 1981 New Solidarity International Press Service All rights reserved. Reproduction in whole or in part without permission strictly prohibited. Second-class postage paid at New York, New York and at additional mailing offices. Subscription by mail for the U.S.: 3 months-$125, 6 months-$225, I year-$396, Single issue-$ IO Academic library rate: $245 per year ITillContents

Departments Economics

11 Science & Technology 4 Four steps to get out of NASA vs. Stockman: the the new depression XV-IS potential. By Lyndon H. LaRouche, Jr.

12 Interview 6 Paul Volcker unveils his Jean-Claude Martini, a warfare agenda for leading Paris gold trader. 1982

16 Energy Insider 8 Mitterrand's economic A plan to dismantle energy. policies: galloping toward a disaster 35 Interview Akbar Ehemad, former 10 Currency Rates chief of Iran's nuclear power program. 14 Foreign Exchange Rollercoaster for the dollar. 42 Middle East Report Menachem Begin's 15 Banking calculations. Paul Volcker to the rescue.

43 Dateline Mexico 17 W orid Trade An end-of-the-year economic package. 18 Business Briefs

Many of you are continuing to for which Lyndon LaRouche and this receive telephone solicitation from an publication stand, and have thrown in unsavory group operating out of De­ their lot with the evil forces of Dope, troit which were formerly distributors Inc. and the Global 2000 genocide of EIR. These people are seeking sub­ lobby. scriptions to a newsletter called Pro­ The Detroit group operates under ducers & Investors, and in some cases the name of Inform America, Inc. If they are soliciting business invest­ you are contacted by this group and ments of a questionable nature. you are asked to subscribe to Produc­ In many cases these people are ers & Investors, Parity Newsletter, representing themselves as EIR, or American Labor Beacon, or to invest are telling you that they have pur­ money in businesses such as Renais­ chased EIR's subscription list. This is sance Printing or Computype, please a lie. These people have no affiliation advise us immediately. And do not whatsoever with EIR or with EIR's allow any charges for EIR to be made founder Lyndon LaRouche. They payable to Inform America or any have in fact abandoned the principles Detroit-based entity. Volume 9 Number 2 January 12, 1982

Special Report International National

28 Economic dangers 46 Why genocide is now worst, Schmidt respectable in the U.S. warns Reagan Selections fr om Mr. An analysis of the U .S.- LaRouche's Dec. 31 speech West German summit in to the ICLC conference. Washington, the extraordinary press climate 52 AAAS meeting backs surrounding it, and the Global 2000 premises potential Reagan The American Association administration shifts in for the Advancement of EIR the aftermath. ing the New ork conference of the Interna­ Science conference in tional Caucus of Labor Committees on Dec. 31, Washington, D.C. 1981. PhilipUJanowsky/NSJPS Documentation: Excerpts from U.S. press 54 Pratt decision aimed to commentary, from a throw Senate vote Schmidt interview, and from the official communique. Last month's federal court 20 Systems analysis is ruling against Sen. Harrison white-collar genocide 32 Drug overlords tied to Williams's due-process motions in the Abscam case. Part Three of LaRouche's the Dozier case? dissection of econometric The Mafia,Red Brigades, fraud turns to the geometric 55 Sheridan's operations and NATO angles. and philosphical principles against Teamsters underlying an economic The third and finalpart approach that corresponds 34 The fight for nuclear of EIR 's dossier. to the scientificlaws of the technology imports universe. Future EIR A report on an international 58 Princeton and tht! contributions on this subject conference in Mexico. will include Economics Chris Schmid case Editor David Goldman's 38 ETA: a case study in Former Attorney General Nicholas Katzenbach, in a history of "statistical" the Jesuit control economics from William Supreme Court case which of terrorism Petty to the Whaiton has drawn wide attention, School. Part One of an argues that Princeton historical expose. University has unlimited rights to hire terrorist 44 International Intelligence supporters and exclude their critics, like the ICLC's Schmid.

62 National News

64 Civilian laser fusion slated for scrap heap Fiscal austerity threatens an essential program. �ITillEconomics

Four steps to get out of the new depression

by Lyndon H. LaRouche. Jr.

Th e following statement was issued Jan. 5 by the National gold to defend the dollar internationally, and to bring Democratic Policy Committee, a U.S. political action our allies into a new gold-reserve system, to replace the committee, whose advisory board Mr. LaRouche chairs. bankrupt International Monetary Fund and hyperinfla­ tionary offshore, unregulated financial system. The simple fact is, about October 1981, the U.S. economy The Congress has the power to issue gold-reserve­ slid into the first phases of an actual depression. A lot of denominated U.S. currency notes. These notes should people share the blame fo r this depression: President not be used for government spending, but for govern­ Jimmy Carter, who started it back in October 1979; ment lending. They should be lent through the private Federal Reserve Chairman Paul A. Volcker, who has banking system to farms, industries, and fo r transpor­ directed the collapse; California banker Charles T. Man­ tation improvements, at interest rates not in excess of 4 aU, who mobilized the Democratic National Committee percent charged by the government. in defense of Volcker; the mis-advisers of President Ron­ Through lending of such notes as from 10 percent to ald Reagan, who have engineereo a budget deficit in the 50 percent or higher of the total lending by private range of $150 billion; and a very great number of other banks to farms, industries, and other selected categories, persons, who rejected foolishly what have proven to be the basic goods-producing capacity of the United States this writer's precisely accurate predictions of the results can be saved from waves of bankruptcies. A large of foolish "tight-money" policies. portion of the unemployed can be automatically reem­ The practical question is not, who is to blame? The ployed, and the fe deral, state, and local tax-revenue practical question is, can we get ourselves out of it? There base can be expanded. are fo ur basic, emergency actions which must be taken That is the basic solution to our problems. There is immediately. Otherwise, without these steps, the present no alternative solution in sight. depression will become worse than that of the 1930s. If these fo ur steps are taken, the United States-and the Step two : nuclear energy world, generally-can move rather quickly out of this The domestic U.S. economy requires two basic depression, back toward general prosperity. stimulants, to stimulate goods-producing employment It is not necessary fo r you, as a citizen, to accept my and investment. The first of these is nuclear-energy proposal. You have the right to reject my analysis: you construction. have the free will right to starve. Nuclear is the safest, cleanest, and cheapest form of energy available. Since it is the cheapest, using nuclear Step one: monetary action energy instead of more costly forms of industrial pro­ The first step is to supply low-interest credit to cess-heat and electricity means an increase in the. pro­ essential goods-producing industries and farms. The ductivity and competitiveness of the U.S. economy as a federal government has the power to monetize U.S. whole. It means a very large saving in the present costs gold reserves at a price of about $500 an ounce, using of production.

4 Economics EIR January 12, 1982 We need immediately, the construction of over 100 Improved transportation al�o means the ability to billion watts of nuclear electricity-producing capacity develop competitive goods-producing investments In completed between now and about 1986-87, plus an the greatest range of geographic sections. additional 50 billion watts completed by about 1990. So, like nuclear-energy investment, investment in This will not cost us a penny, since this energy will water-management and transportation improvements represent a major saving to the ec onomy. It is a cost­ represents cost-saving as well as other forms of im­ reduction, productivity-increasing investment. provement fo r the economy as a whole. It also means This will create a level of about two and a half that we use the advantage of such cost-savings to create million work-places in the private sector. This increase substantial amounts of productive employment. will come partially in the fo rm of putting skilled pro­ duction trades back to work. The largest increase will Step four: world trade and investment come in steel and other industries which supply con­ If developing nations' debt-structures were reorga­ struction materials for nuclear investments. nized in a sensible fashion, nations such as India, Brazil, This will also stimulate investment in the most and Mexico represent magnificent investments in mod­ modern kinds of specialty-steel and other technologies, ern goods-producing capacity through proper infusions meaning that our Midwestern states' economies can be of capital goods from industrialized nations. Between rescued from the economic disaster they are presently $200 and $400 billion annually in increased world-trade suffering. can be readily generated. The federal government must facilitate completion President Jimmy Carter's Global 2000 proposal for of nuclear investments in progress and planned to go. It worldwide genocide was not only a violation of the must direct a fl ow of cheap credit into the construction Nuremberg Code; it is also economic imbecility. phases of such projects, with private utilities taking The great need of developing nations is fo r rapid financial responsibility for the completed plants. infusions of modern agricultural technology-not con­ sumer-goods industries. These nations require the local Step three : water and transportation capital-goods industries and transportation systems Next to the danger of a crippling energy-shortage, needed to apply the American System so successful in the U.S. economy's most critical problems are shortages our own experience to overcoming their own wants. of fresh-water supplies and a broken-down transporta­ These local industries must concentrate on the needs of tion system. Since rivers, canals, and ports are a key agricultural development first, and gradually expand to part of the transportation complex, fresh-water man­ meet the needs of urban life as the problems of low agement and transportation must be treated as an agricultural productivity are overcome. integrated single effort. This is the great market for capital goods of the The biggest single chunk of the needed programs of industrialized nation� over the coming 50 years. It is fresh-water management is the long-projected effort to time we acted to make that market a reality. bring water from Canada and Alaska into the states west of the Mississippi and into the Great Lakes System. Combined effects This is necessary to save large chunks of our nation's The United States is probably spending more today fo od supplies from threatened disaster. For the north­ on just two items-illegal drugs and pornography­ eastern portion of the nation, the Delaware water than on national defense. It is spending far more on project is urgently needed for even the simple household turning the nation into a new Sodom and Gomorrah needs of the populations of New Jersey, eastern Penn­ than upon capital investments of the sort which make sylvania, and lower New York State; this project will us productive and prosperous. also improve the industrial potential of that region. Our toleration of this immorality, this drift to be­ The United States also needs a rebuilding of a coming a new Sodom and Gomorrah, is key to our decrepit rail system, and requires a maritime fleet for fa ilure as a nation-both in terms of nominal leaders both economic and national-security reasons. and the electorate-to find effective solutions to eco­ The time has come to develop an integrated contain­ nomic as well as national security and social problems. er system, and to design a compatible system of rail, The four steps outlined will not solve all of our truck, air, and water transportation about such adopted important problems. They are merely fo ur necessary standards. We can increase our economic capacities and steps which will point our nation's efforts in a positive effect great saving in costs of goods through such and moral new direction, to give ourselves as a nation a improvements. The savings are chiefly two. We save on sense of moral purpose, and to restore rationality-as materials-handling costs throughout the economy, and opposed to the immorality of a Tom Hayden, to the reduce in-transport inventory-costs and related capital nation and to the mass of wreckage presently known as costs of production. the Democratic Party .

EIR January 12, 1982 Economics 5 Paul Volcker unveils his warfare agenda for 1982 by Richard Freeman

After months of a steady, if slow and marginal, decline, In this review, Kaufman stated that the task of Federal Reserve Board chairman Paul Volcker has fu nding a projected $100 billion-plus federal govern­ sharply jerked the federal funds rate upward, setting a ment deficit in fiscal years 1982 and 1983 would cause floor under all interest rates. While Volcker's action is "interest rates [to] start to trend irregularly upward unlikely to send interest rates soaring, as long as the again before mid-year," and that "long-term interest economy is plunging into recession, what he is doing is rates will probably be threatening their 1981 highs." preventing interest rates from following their natural After making this dire prediction, Kaufman solemn­ path downward-forcing a tightness that will be felt ly noted that, "high interest rates particularly hamper throughout the economy. the financial rehabilitation of business corporations, By taking this action, Volcker, joined by allies in the and state and local governments." As fo r the housing Wall Street as well as academic economists, is putting industry, Kaufman said, "scarce credit means that the into effect a program specially designed for the battered housing industry is at an end of an era." economy as it enters 1982: crushing the labor movement, The credit markets reacted to the combination of attempting to force additional budget cuts and tax in­ Volcker's moves and Kaufman's statements predictably: creases, and moving toward imposition of credit and the long-term U.S. Treasury bond market fell by 4.5 wage-price controls. points by mid-afternoon Jan. 5, and the Dow Jones In doing this, Volcker is carrying out the marching industrial stock average shed more than 20 points by orders delivered him by the Bank fo r International Settle­ the end of Jan. 6. ments, the central bank for central banks, and the head­ With the credit markets thus fo undering, Volcker quarters for international finance for the European oli­ and his' underlings at the Fed unleashed an armamen­ garchy. Jelle Zijlstra, the outgoing head of the BIS, in a tarium of plans to further permanently transform the major speech delivered during the International Mone­ U.S. economy into a shrunken, depleted shell of its tary Fund meeting in Washington, D.C. in late Septem­ fo rmer self. ber, called for the imposition of both credit and wage· In this regard, much of what the Fed wants to see price Controls in order to implement a program of world done was unveiled at the annual conference of the deflationary austerity. American Economics Association in Washington, D.C. Dec. 28-31. There the leading wizards and prostitutes of Credit-market the American economics profession gathered. manipulation The suddenness with which Volcker moved startled AEA formulas many of the market participants. On Jan. 1, federal At the meeting, Anthony Solomon, the head of the funds were trading in a range around 12.5 percent. By New York Federal Reserve Bank, dropped a bombshell. mid.afternoon Jan. 5, federal funds were up to 13.5 Solomon, a member of the Fed's exclusive Open Market percent, a sharp increase when it is considered that Committee, which sets Fed monetary policy, revealed in fe deral fu nds had fa llen fr om nearly 17 percent since one of the AEA panel discussions that the Fed no Septem ber, a 4.5 percentage point drop. But this action longer feels competent to define what money is, nor had been well prepared for. Henry Kaufmann, the chief what relationship money supply has to the actual economist of Salomon Brothers investment bank, and, amount of credit extended. While many of the confer­ some would swear, the alter-ego of Volcker, released' a ence participants scratched their heads, a Federal Re· yearly capital market review Jan.4. serve Board official explained Jan. 6 the devious issue.

6 Economics EIR January 12, 1982 "We are saying at the Fed that neither monetarism's sheer chaos on the credit markets for the first six management of the amount of money, nor setting the months of1982 . fe deral fu nds rate to set monetary policy, works. We are Every attempt by the President to get the economy trying to focus people on a third way." The Fed started again will be countermanded by the actions of spokesman would not specify what this third way is, volcker. He will repeatedly harp on the problems of although he said, "we are trying to get the fi nancial greater-than-$ 100 billion federal budget deficits. At the commu nity discussing this." very least, volcker will get greater tax increases and However, other statements make it clear that the steeper budget cuts, including cutting defense spending, Fed is duplicitously laying the ground-work "for intro­ from Reagan. The latter is a point that Reagan is ducing a permanent fo rm of credit controls, which known to oppose. would replace the episodic venture of credit controls But it is possible, that with the right combination of that volcker undertook in March through July 1980. disloyal advisers around Reagan, volcker could succeed (Even that form of credit controls sent industrial pro­ in blackmailing Reagan into a controls policy. duction fa lling by 9.0 percent during that period.) Salomon's Henry Kaufman told the press Jan. 6 that Plans for breaking labor a fo rm of loose capital controls is needed. Often called But this is not all. volcker has his eyes firmly set on the "Swiss method of credit rationing," this means that breaking labor unions, using his created depression to banks are assigned upper limits to lending based on crush the contracts of the Teamsters, rubber, and auto their capital levels. Adding weight to this view is the workers, and many smaller labor contracts that come fact that the Federal Reserve Board has released a new up in 19 82 . "volcker has been saying, and writing in directive which is designed to "stop the rate of asset the Federal Open Market Committee minutes that he is growth and eventually turn around the capital-to-asset using credit policy to affect l abor contracts," stated ratio," by reducing banks' total loans, according to a Gert von der Linde, chief economist of Donaldson, Federal Reserve official interviewed Dec. 29 . Although Lufkin, Jenrette investment firm, on Jan. 6. "Look at the guidelines do not specify a specific capital-to-assets what volcker's policy has already done in the trucking ratio for large commercial banks, the Federal Reserve industry," von der Linde continued. "The recession and spokesman made clear that the intent is to reduce bank the deregulation of trucking have put the Teamsters lending, period. and the trucking industry in disarray. Truck haulage is At the same time, various spokesmen at the AEA down, and many Teamsters have lost their jobs. The conference also renewed a pitch for a thinly disguised Teamsters will have to make enormous concessions of fo rm of wage-price controls, called the Tax-based In­ work rules and give up concessions on wages." Von der comes Program (TIP). As explained at the AEA confer­ Linde predicts that the Teamsters will get a three year ence by Charles Schultze, the fo rmer head of the contract with only 15 percent wage increase over 3 Counci l of Economic Advisers under President Carter, years, versus the 40 percent increase negotiated the last the TIP program rewards employers who hold wages contract. He also pointed to the outright wage cuts that down with tax breaks, while increasing taxes fo r em­ have been taken by the airlines industry, as well in ployers who give workers wages above a nationally set selected cases in the rubber, steel, and auto industries. average level. This wage-gouging offensive will mean the elimina­ tion of one last obstacle�trade-union resistance-to Implications of controls volcker's restructuring of the economy into a post­ Were both credit controls and wage-price' controls industrial economy, as well as cutting the earning power to be simultaneously instituted, volcker would have a and labor productivity available to the economy. Ini­ tremendous amount of power to use against both labor tially, the volcker move might appear smart to busi­ and industry, and a capacity fo r wreaking havoc against. nessmen, who, deluged by devastating recession, but the economy fa r greater than anything he has done so unwilling to take on volcker, directly see wage gouging fa r. Already, through his high interest rates, volcker as a way out of their current cash squeeze. has fo rced a rate of industrial collapse between July and But ultimately. such a sacrifice of the living stand­ November of 1981 of 15 percent on an ann ualized basis, ards of the labor movement will not appease volcker, the steepest level of decline since the 1929-32 period. nor will it end inflation, which, in the 30 months he has While it is known that President Reagan opposes been in office. is at the highest level in the last 35 years. both credit and wage-price controls on strict ideological Rather, this is one more part of the volcker agenda, gro unds, and that the President's approval is necessary incll'lding, finally, wage-price and credit controls, in to institute either of these programs in fu ll, volcker is which the economy wi ll be laid to rest permanently in creating a situation in which the President will face 1982.

EIR January 12 , 1982 Economics 7 Mitterrand's economic policies: galloping toward a disaster by Laurent Murawiec, European Economics Editor

The Socialist government of French President Fran�ois export drive and trade-credit funding is launched which Mitterrand has lost no time in squandering the reserves Mitterrand is far from proposing. accumulated under preceeding administrations, both in The machine-tool project, for example, starts from the state's own vaults, and in the corporate sector. This the obvious necessity of remedying the huge sectoral will give way to panicky re-evaluations of policy, due to deficit historically suffered by France, and boosting the external and internal disasters, by September. ailing "big three" machine-tool manufacturers, slated Former President Giscard's 1981 budget deficit was to be merged in the Minister's plan. The hitch lies with a very low 31 billion francs; 1982 projections calculated the money:",while Dreyfus announced in Parliament a 2 by Mitterrand's Budget Minister Laurent Fabius call for billion franc state funding, insiders privy to the negoti­ a 75 billion franc deficit, and the fiscal 1983 budget is ations report a probable cost of 7 to 8 billion francs for being planned on the basis of a deficit as high as 150 the national budget. billion. This trebling of the deficit is calculated by the The typical Socialist mania of "budgetizing" every Minister's experts on the basis of a 14.3 percent rate of expenditure incurred by society and the economy thus annual inflation, although the 1982 figure is expected to leads to a gi�antic swelling of the public deficit, at a be closer to 20 percent. time when the savings rate pursues a downturn started in 1976 , when it stood at 18 percent, and landing at a Spending the dowry low 14 percent level last year. Thus far, the Socialist government has succeeded in keeping a substantial part of the electorate happy, by How will Mitterrand means of budgetary handouts, pressu�e exerted on finance deficits? industrialists to increase wages, and so forth. A vast Who will finance the soaring deficits? In the post­ number of government ministries have been given a go­ election euphoria, quite a few demagogic rob-Peter-to­ ahead by both the Elysee and the Prime Minister's office pay-Paul measures wereindulged in. Higher tax-bracket to push forward costly pet projects, each of which, such incomes were targeted while significant new taxes were as the national machine-tool restructuring plan of In­ exacted from the corporate sector. dustry Minister Pierre Dreyfus, may have independent Income-tax squeezing may be presented once as a merit, but whose total cost exceeds by far the state measure of social justice. The second year, it will simply budget's funding capabilities. accelerate capital flight and fail to return sizeable The reason why these projects do not add up to a revenue for the Treasury. The corporate sector has genuine industrial-development plan is twofold. First, suffered a dangerous erosion of its profit margins, as the Mitterrand government remains opposed to former after-tax, pre-amortization profits slumped from 20 Presiden t Giscard's ambitious nuclear-power program, percent to 13 percent of value added from 1974 to 1981. whose cheap and secure energy supply is a prerequisite Investment will suffer. for economic productivity. The money will have to come from some other Second, there is no way to finance those projects source. The only way the corporate sector could gener­ without further disrupting the domestic energy and ate enough tax revenue under present circumstances France's external financial position, unless the kind of would be by way of large price increases, worsening an

8 Economics EIR January 12, 1982 already precariously high rate of inflation. Either the At first, the Mitterrand government has accepted an Socialist government will have to resort to politically initial across-the-board increase in interest rates granted disastrous tax increases (which would dispel all the Third World and Eastern European borrowers in tied illusions generated by the "neo-Keynesian" socialist trade deals, under the OECD's so-called "gentlemen's experiment of Mitterrand) and similar "revenue-en­ agreement" (also known as the "consensus rate"). hancement" devices; or financial manipulation will have Then, Finance Ministry circles and Paris financiers to become the priority. report the new administration's intent to weaken and Domestic resort to the printing presses would have partially dismantle the export-credit and insurance ma­ to start from the current 15 percent "inflation floor," or chinery centered around the COFACE, the foreign­ massive external borrowings will have to be incurred­ trade credit-insurance corporation. Under this system, which bankers and civil servants are already privately over 100 billion francs worth of capital goods and discussing. In which case leading Paris bankers predict advanced weaponry were sold last year, largely to that French public-sector entities (the preferred vehicle developing countries and Comecon nations. for external debt-taking) will only find lenders at ex­ In this system, the Banque de France issues credit to tremely high margins over the interbank rate on the banks at rate of 4 to 5 percent, which the banks then Euro-currency markets; talk of I percent margins is not blend with commercial rates and lend either as suppliers' unusual. or purchasers' credit. The procedure, even if costly to The difficulties involved in such a large use of the Treasury, has made French exports of a crucial external borrowing are compounded by the dangerous category of high-technology goods virtually indepen­ trends on the trade account. While the trade deficit for dent of erratic upward fluctuations of the dollar sector 1981 has been contained to a projected total of 58 interest rates. billion francs, the monthly deficit has now reached 7 Undermining this procedure under the twice falla­ billion. The annualized figure calls for a 1982 deficit of cious pretext that it "feeds inflation" (which it does only 84 billion-a 62 percent year-to-year increase-and in the very short term, while securing a disinflationary respected experts expect the annual rate to reach a rise of productivity in the medium and long term) and stupendous 100 billion francs by mid-year. that "the priority should go to recovering the domestic market," the Mitterrand regime is preparing a disaster Destruction of the franc for the French economy. The effects on the parity of the French franc would be devastating. The 8.5 percent parity shift of the franc Perspectives for 1982 and the D-mark of last summer would need to be hugely If the panicstricken forecasts of ousted French right­ accentuated, leading to inevitable rises in import prices. wing politicians have not immediately concretized, the What generated this brutal rise of the trade deficit is a complacent predictions of Socialist Finance Minister deeply embedded structural feature of the economy, Jacques Delors are way out of line with reality. The whereby in any period of production pick-up, imports extreme dependency of the country's financing on the rise over-proportionately with respect to production. level of U.S. and German interest rates, underscored by The principal effect of the government's economic the fragility of the franc's parity, will impose a new J­ and fiscal policy since last June has been to boost shaped twist by the spring, as the Federal Reserve consumption (which is growing at a 10 percent annual tightens again, ·while the corporate sector's abilities to rate in real terms) while investment has remained flat finance its requirements through the banking system since then. Investment is not expected to perk up before will be severely constrained by the fiscal situation. A December 1982. Due to the fact that consumer goods is wave of bankruptcies should be expected, particularly a sector more affected than others by that structural for small-and medium-sized entrepreneurs overbur­ defect, huge exports would be the only means of cor­ dened by Socialist tax and social reforms. The targets recting the imbalance-and saving the currency. for growth of the monetary aggregates set by the But exports are not going to play that role. Not only Treasury at 12.5 to 13.5 percent will result in a sharp is the impetus from world demand undermined and net deflationary curbing of real credit issuance to the turned negative by the depressive effects of U.S. Federal economy. Reserve Chairman Paul VoJcker's high interest rate Consumer spending, the government's darling, has policies, but also the Socialist government has started already abated, with October and November failing to to yield to external pressure on the most controversial­ continue the upward trend of the summer. Public de­ but also the most fundamental-instrument of "Colber­ mand-i.e., budget deficits-will be the main, if not the tiste" economic policy at the disposal of the French sole prop to economic activity. The rate of growth of administration, which is the export-credit machinery. unemployment, which a 100,OOO-plus government jobs

EIR January 12, 1982 Economics 9 creation program has recently flattened, will then pow­ erfully restart, bringing the current 2 million unem­ ployed figure one unit ahead. Currency Rates Social consequences will hit. While it is widely expected that farmers will be rioting on countryside roads and at local government buildings by the spring, laid-off workers will join the ranks of the discontented at the latest by next September, when the government's 1983 budget project fails to deliver any of the hoped-for Thedollar in Swiss francs handouts. Most observers in Paris expect a "left-wing" New York late afternoon fixing version of Raymond Barre's austerity policy-with a 1.90 peculiar, anti-industrial twist. The incoherent government policy in the field of 1.85 nuclear energy has given a foretaste of its general 1.80 - ./�- industrial planning: after a hectic and disorderly debate ...... � ... that streteched throughout the summer and fall, the 1.75 Mitterrand regime ordered three nuclear plant projects 1.70 shut down, while the future of the breeder reactor 11/18 11/25 _ 12/2 12/9 12/16 12/23 12/30 1/6 Super-Phenix at Creys-Malville is uncertain. The national utility, EDF, may encounter nasty problems in reimbursing Euro-dollar debt incurred on The British pound in dollars New York late afternoon fixing the basis of cash-flow projections expected from the nuclear electricity generating program the government 1.95 - has cut down. EDF is one of the largest single borrow­ V .... ers on the Euro-markets. �""" ./ """'II\. -- "" Worse, the vast mUltiplier effect of that program 1.85 � being undermined, and the uncertainty cast over the industry as a whole, will further slow down high-tech­ 1.80 nology investment. Specious pretexts are advanced by 1.75 Socialist officials, such as the clearly Club of Rome­ 11/18 11/25 12/2 12/9 12/16 12/23 12/30 1/6 inspired motto of "it is beneficial that we cut down on the nuclear program, since the stagnation of industrial The dollar in deutschemarks production will lessen the demand for energy. " The New York late afternoon fixing Malthusian Socialists seem particularly apt at issuing self-fulfilling prophecies. 2.35 The fundamental orientations of the Mitterrand 12.30 regime's economic policies were sketched to this report­ I - er last June by the government's number one economic 2.25 .- -" , - policy "brains," Club of Rome member Jean Saint­ ..... 2.20 Geours, now the administration's "employment czar." I Saint-Geours, a founder of the extreme futurology anti­ 2.151 11/18 11/25 12/2 12/9 12/16 12/23 12/30 1/6 growth cult known as the Futuribles, explained that nuclear energy would have to be reined in to make way for soft-energy, soft-technology types of employment; Thedollar in yen the planned dismantling of other energy-intensive heavy New York late afternoon fixing ---- industries such as steel, shipyards, and other "regressive ! 230 branch�s" such as textiles, would lessen energy demand, and pave the way for the "informatization" of the 220 '"-' r -- economy and s9ciety. - � 210 What 'is meant by "informatization" are the so­ r called progressive, post-industrial forms of employment 200 '---� based on computers and telecommunications. Empha­ 190' sizing these types of "industry" is coherent with the 11/18 11/25 12/2 12/9 12/16 12/23 12/30 1/6 Socialist policy of total decentralization and regression of society.

10 Economics EIR January 12, 1982 military advantages, but manifold possibilities for ex­ Science & Technology panding the use of helicopters in civil aviation by allowing the vehicles to ascend to heights required to avoid air traffic congestion. According to a number of industry analysts, the XV -15 has the potential of devel­ oping into a whole new industry. One XV -15 test vehicle already exists. But the ques­ tion of whether the technology will be realized on a broad scale is still up in the air. "We need to document its precise performance, handling qualities, vibration NASA vs. Stockman: characteristics, and aerodynamic stability." Shipboard tests are needed, as is 'map of the earth' flight testing; the XV-I5 potential where the army flies the plane at low altitude between trees, and we need tests of its qualities in the way of by Robert Zubrin electronic countermeasures," a NASA spokesman said. "But this will require another $6 million over the next three years, in government money, in addition to the It is ironic that, in its bid to impose greater "cost-effec­ support we are getting from Bell Helicopter. If the tiveness" on the U.S. government, the Heritage Foun­ aeronautics budget is zeroed, the XV.15 will go into the -dation-controlled Office of Management and Budget Aeronautics Museum and that will be the end of it." (OMB) of David Stockman has singled out for elimina­ tion the aeronautics research budget of the National The X-wing Aeronautics and Space Administration. In fact, NASA's An even more revolutionary concept is being devel­ aeronautics program probably offers the best cost-bene­ oped by NASA aeronautics at NASA's Lewis Research fit ratio of any investment program in the world, public Center in Cleveland, Ohio. This i� the convertible jet or private. An examination of just two of the many small engine for use in a so-called X-wing aircraft. In this programs conducted under the purview of NASA's $296 design, a conventional TF-34 turbofan jet engine is million aeronautics budget, that for the XV-15 tilt-rotor modified to use its power to turn a large rotor, allowing convertible helicopter-airplane, and the more advanced the craft to take off and perform as a helicopter. Once it X-wing convertible jet-helicopter illustrate this most reaches an appropriate height, however, the jet power is strikingly. diverted from the rotor to an ordinary jet forward thrusting mode, while the rotor locks into place and The advantages becomes a wing. (The craft has no other fixed wings.) Developed at a cost of $22 million as a combined The X-wing then shoots forward, flying as a jet plane at effort by NASA and the armed forces, the XV-15 speeds of 600 knots or more, a performance equalling promises to revolutionize military and civil aviation. that of a fast military jet transport or a B-52 bomber. Looking much like an ordinary two-engine propeller­ Moreover, because it lacks both thick fixed wings and a driven aircraft, its two engines may tilt upwards, allow­ large revolving rotor, the X-wing is an ideal candidate ing it to take off, manuever, and land like a helicopter. for Stealth technology, since it has a very small radar However, once in flight, its propellers may tilt foward cross section. While not equalling the XV -15 tilt rotor allowing it to fly as a fixed-wing aircraft at speeds up to in fuel economy, the X-wing jet still surpasses that of 350 knots. This compares to a maximum speed of about ordinary helicopters by a wide margin. If NASA's 160 knots for the fastest helicopters. As one Army aeronautics budget is not zeroed, and the project re­ colonel at the Pentagon put it, "The gunships we had in ceives the $9 million it needs over the next 5 years, the Vietnam could do a maximum of 140 knots. We haven't first convertible engine should be ready to be tested at done any detailed studies on it, but it's obvious that if the Lewis labs by late 1983. we had ships which could travel as fast as that [the XV- The above are just two of the many programs 15], it would have saved many lives." conducted by NASA's aeronautics division since the In addition, the XV-15 gets twice the fuel mileage as Agency's predecessor was set up in 19 15. Other current an ordinary helicopter. Since the U.S. Army spends research includes investigation of hypersonic and super­ over $100 million a month on helicopter fuel, the sonic jets, as well as basic research into aerodynamics, potential cost-benefit even in peacetime would be enor­ materials, and propulsion. As Assistant Secretary of the mous. Finally, the XV-15 has the capability of ascend­ Army for Research Development and Acquisition J.R. ing to a height of 30,000 feet, compared to a typical Shuley recently testified: "Some of these capabilities ceiling of 10-14,000 for a helicopter. This offers not only could not be replaced by the U.S. Army at any cost."

1':1 R January 12, 1982 Economics II Interview

Jean-Claude Martini discusses the new French gold policy and future options

On Nov. 30. two months after the government's announced be some di sadvantages. The danger of a parallel black abolishing of anonymous transactions on the French gold market developing is evident.Th ere will always be people market. Paris EIR correspondent Sophie Tanapura inter­ who prefer to pay a higher price, run a higher risk, for viewed one of the top gold dealers in the French capital. the sake of withholding their names. Jean-Claude Martini. of the Compagnie Parisienne de It has now been months since the new law went into Reescompte (CPR). effect and the French people are beginning to get used to Founded in 1948. the CPR specializes in discounting. the new situation.A certain number of people now accept and now controls around 70 percent of the French gold revealing their identities, or have found others to lend market. Its main shareholders are Compagnie de Suez (20 them their names. Contrary to the sharp drop in clients percent). Banque N eujlize-Schlumberger-Mallet (17 per­ immediately following the government's decision, more cent). and a group of pension funds (27 percent). Rene and more people are coming back every day.... Cassou. former director of the money-market department of the Banque de France. has presided over the company Tanapura : Can you give us any figures or patterns of for the past 10 years. Until 15 years ago. the CPR also this movement? acted as the intermediary of the Banque de France on the Martini : In the first days following the government's French gold market. Now the CPR operates mainly on the decision, transactions had dropped by 80 percent.By the Paris. Lyons. and Marseilles exchanges. end of two weeks, the percentage moved up to 50 percent. I would say that now it is quite normal. I should also add that there was a strong buying pattern this summer. Tanapura: Mr. Martini, perhaps you can describe to our People spoke a lot about the devaluation of the French American readers some of the peculiarities of the French franc. Once the shock of devaluation was over, people gold market. were not so worried about it any more, at least for a Martini: In France, the gold market has always been while. Therefore, it is perfectly normal that there are active. Over the past 50 years, the French franc was presently fewer buyers.More over, the international mar­ constantly, and still is, eroded by inflation and many ket price has also gone down.The irony is that because devaluations. The reason that makes Frenchmen such there is less business, the government is going to reap in lovers of gold is that they have never really trusted any less tax money. government to come to the roots of these problem s. It is generally estimated that Frenchmen hold somewhere Tanapura : People say that by abolishing anonymity in between 4,000 and 5,000 tons of gold. I myself would gold transactions, the government will now be able to estimate it easily between 6,000 and 10,000 tons, closer to keep tabs on gold owners with eventually the possibility 10,000 than 5,000. This is because we must not forget to to shore up the future budget deficit by buying up the add to the gold bullion gold in the form ofjewelr y. privately owned gold at a cheaper price, a sort of "na­ tionalization." Tl\napura : What do you think the government was aim­ Martini: That is pehaps going a bit too far. Up to now ing at by abolishing anonymity in buying and selling the names are written in a ledger and nobody has yet gold? asked to see them. I t will not be the case for the mo­ Martini: The government must certainly have its rea­ ment.... sons. Perhaps they hoped to discourage the French from hoarding gold and to direct savings into other invest­ Tanapura: Following the creation of the gold commis­ ments, perhaps into bonds. Although this decision may sion by the Reagan government, discussion of a return represent some advantages for the government's pro­ to a certain gold pegging of the dollar is in the air. What gram in the future, there is definitely a risk that there will do you think of it?

12 Economics EIR January 12, 1982 Martini: There are pros and cons to this. I think that it is going to be quite difficult to index a currency to a certain level of gold production or gold price. If we come back to the convertibility of the dollar to gold, we must first find the price of this convertibility. If the price of con­ vertibility into gold is too low, the U.S. will find itself emptied of its gold. If the price is too high, there is a high risk of inflation, increase of the American money supply. On the other hand, it would be a marvelous scheme, if one could be sure that it would stop inflation-maybe not world inflation, but at least the inflation in the U:S., because if we were to come back to a system ofin dexation of a currency to gold, we would have to consider a floating indexation. However, what I think would be eventually interest­ ing for the world in order to launch business, to create cash fl ow, is a scheme to get out a portion of the priv ately owned pool of gold worldwide, get this portion mobi­ lized.To do this, you must first give people confidence in the currency that you will use to buy their gold. If you give them a currency-even if it is called the U.S.dollar­ which constantly loses its value because of inflation, people will refuse to play along, and what's more, they will continue to buy more gold, perhaps also diamonds. I am convinced that the American individual is going to continue to buy more and more gold in the near future. De Gaulle returns to power in 1958. So we need to find a way to mobilize this gold, create confidence and stop inflation. Up to now, nobody has been able to stop inflation.Th ey have been able to slow Martini: Let me put it this way. If you go to any country it down, but never stop it ... for the moment, there is with your dollar, people would buy it. If you go with the nothing one can do. French tranc, no one will buy it. Even the deutschem ark We would have to set up a new monetary system. is not known in certain countries, in spite of the devel­ Why not come back to the gold standard system often opment of tourism. The U.S. dollar is the means of mentioned by General de Gaulle? If we come back to this payment worldwide and serves as a reference-point for system, we must also keep in mind that there will be a all other countries.The U.S.must serve as an example. It wider gap still between the haves and the have-nots.... is they who can impose their 'decision on the world. Personally, sooner or later, I think gold will play some However, if the U.S. takes insufficient measures to de­ kind of role in a new monetary system. At that moment, fe nd their dollar, other currencies would devalue.At that gold will probably be at a higher price than it is now. point, having lost all confidence in practically every Once again, I am not saying that I am favorable or not to currency, people would begin to buy gold massively. An such a solution.Th at is not my role.... initiative to create a new monetary system must, there­ Why not-in order to create confidence-mint gold fo re, come from the United States. coins? Why tolerate bank notes, nickel, or other coins? Why not gold coins to regain confidence? Tanapura : You have read about the LaRouche gold proposal in the Oct. 13 issue of EIR. What do you think Tanapura : Why not come back to the idea of the Euro­ of it? pean Monetary System, extrapolated onto the interna­ Martini: I think that this proposal-among other pro­ tional system? After all, the EMS implies a second phase, posals-is certainly worth considering. Tlie problem, the creation ofa gold-based fund. however, is the ti me lag between the discussion ofpo licies Martini : There you are bringing up a problem. Political by politicians and governments, and their implementa­ circumstances have changed with the change of govern­ tion. Often when it comes to implementing policies, the ment.... givens of the problem have already changed, and the intended solution is already out of step with reality. Tanapura : I suppose it is now up to the Americans to Therefore, decisions must take into account this time-lag make the initiatives. factor.

EI R January 12, 1982 Economics I3 ForeignExchange by David Goldman

Rollercoaster for the dollar tiona I Affairs chief, who now runs TheUn ited States has caught the British disease. Short-term the German Marshall Fund's Inter­ national Institute for Economics in dollar gains won't help the economy' Washington, had been predicting a "dollar collapse" for early 1982 , since September. This week, aides to Bergsten told a reporter that, "Maybe we were wrong." Com­ despread fe ar of a third sky­ rates began to rise as predicted. The menting on the fe ars expressed this � · rocketing rise in V.S.in terest rates dollar strengthened to 2.26 deutsche­ week in Washington by Chancellor due to the policies of Paul VolCker's marks from 2.24 the week before, Helmut Schmidt about "world Federal Reserve has prompted a as V olcker pushed the federal funds depression" and high V.S. interest new belief that the V.S. dollar may rate up from its December average rates, Bergsten's aide was hopeful: be a great deal stronger than any­ of 12.4 percent to over 13.5percent . "Maybe it will be the German econ­ one expected. The Polish crisis also benefits the omy and the deutchemark that will First with the line on the dollar's dollar, as European "scare" money collapse, and not the dollar. Maybe new lease on life was the Organiza­ flowsint o the V nited States. that's what Schmidt was afraid of." tion for Economic Cooperation But Like the geriatric British Only in the short or medium and Development (OECD), ,the pound sterling, which ended its term. The dollar's prospects may economic think tank which runs days as a world reserve currency now be compared to the state of the NATO and created the Club of some time ago, the V.S. dollar can­ British pound just before its mas­ Rome to promote negative eco­ not long be kept afloat merely by sive devaluation from $2.50 to be­ nomic growth. At a Paris meeting high interest rates. Given that low $1.70 in 1976, an event which of OECD's Working Party Three Volcker is destroying the V.S. effectively removed sterling as a on money and financial markets the economy as fast as the Bank of world currency.This happened even first week of January, OECD Chief England did Britain's earlier this though British interest rates were Economist Dr. Sylvia Ostry an­ century, at a certain point in the not then rising sharply. nounced that the NATO group now too distant future the dollar may The fact was, the pound had sees only a gradual weakening of snap. Rising interest rates may hit been kept high artificially for years the dollar as the V .S .eco nomy falls. the V.S. economy so hard that by high interest rates. Meanwhile, In fact, Ostry stated, there may be a bankruptcies and other economic the British industrial economy was "perverse lift" in the value of the crises cause panic runs. being shut down by a fatal combi­ dollar during 1982. No New York bank economist nation of high rates and huge gov­ The Fed, Dr. Ostry announced, will tell you this, fo r most believe ernment deficit borrowing, which will at all costs stick to its tight firmly that Volcker's tight money crowded all industrial borrowers money policy, even as the V.S. plan to fight inflation can keep the from the markets. The demand for slides into recession. This means paper dollar attractive as long as British Treasury debt and for ster­ that recession won't slacken credit interest rates are high enough.Even ling on the part of fo reigners creat­ demand much, though normally it Rimmer de Vries, the chief econo­ ed an artificially high currency., would lower V.S.in terest rates and mist of Morgan Guaranty Bank in This is precisely what is happen­ thus weaken the dollar. Further, New York, who had thought a ing in the V.S. today-down to the she stated, the huge V.S. budget growing V.S. trade deficit would last detail of industrial closure and deficit will mean that "any upturn topple the dollar in 1982, now be­ government borrowings on the or­ in the V.S. economy will set off lieves that, "It is not at all unlikely der of over $100 billion a year. The another interest rate explosion, that interest rate differentials will V.S. economy is on the edge, and perversely lifting the dollar." again move favorably for the dollar investors are beginning to realize So far this has indeed occurred, during 1982." this. One more interest rate shock as the dollar got a lift in the first Similarly, Dr.C. Fred Bergsten, could send the dollar over with the week of January when Fed interest Jimmy Carter's Treasury Interna- rest of the economy.

14 Economics EIR January 12, 1982 Banking by Kathy Burdman

Paul V olcker to the rescue ory of "absorbable shocks," the Th e Fed Chairman is using impending S&L wipe-outs to public can take unlimited reports abo ut bank fa ilures and refuse to cartelize U. s. banking on behalfof "insurance solvency. " panic into a mass run on the banks, provided they "believe the Fed stands ready to save the day. Volcker and the FDIC first leaked the bankruptcy of New No small panic state among sav­ hundred big-city banks, as in Brit­ York's Greenwich Savings Bank, ers and bank analysts was created ain, where five commercials and a and of several other large savings by a front page lead in the Wall dozen savings banks maintain a institutions, late last year. Then Street Journal Dec. 29 which "re­ tight rein on credit to industry. they warned that the federal insur­ vealed" that some 1,400 of the na­ V olcker moved without Congress, ance kitties may soon be ex hausted tion's savings and loan institutions under the vague "emergency" pow­ by the pending failures. The are either already bankrupt or on ers of the Fed, despite the fact that FHLBB computer printout shows the verge offailure. Congress has repeatedly killed the that S&Ls worth $35 billion are on According to a semi-secret "Volcker" or "Regulators" bill, the edge, which would rapidly ex­ computer data printout by the Fed­ which would formally authorize haust the Federal Savings and Loan eral Home Loan Bank Board just such banking deregulation. Insurance Corporation; the Federal (FHLBB), over 200 S&Ls are now Volcker has deliberately created Deposit Insurance Corporation on a "disaster list" at the Board, the S&L crisis, to impose his sort of faces similar threats. Small deposi­ classified as legally bankrupt with rescue operation. First of all it is tors began to sweat. their capital totally wiped out. The Volcker personally who has seen to It was then that FDIC President same computer study shows an ad­ it that the S&Ls are in fact bank­ William Isaac wrote to Volcker ditional 300 S&Ls close to failure, rupt. During the past two years, Dec. 23 asking for "emergency ac­ and indicates that yet another 900 Volcker has fo rced S&Ls to pay 15 tion" to "save the federal deposit S&Ls will go under in 1982. That's to 17 percent on their deposits, insurance system." Volcker re­ a total of 1,400, or almost a quarter while they could only earn an aver­ sponded with his new policy. He of the nation's 5,000 S&Ls, on the age 8 percent on their mortgage announced to Isaac that the Fed is edge of extinction. loans. The gaping diffe rence has now "prepared to consider merger Federal Reserve Chairman Paul caused huge real losses, the Home of a failing S&L into a commercial Volcker duly announced days later Loan Bank Board announced pub­ bank" in order to "reduce the costs that he is moving to rescue the hap­ licly last week: over $10 billion dur­ and risks involved" to the federal less S&Ls from this calamity. In a ing 1981. Much of this has come ins urance system'. letter to the Federal Deposit Insur­ directly out of some S&Ls' capital; Volcker's action will create an ance Corporation, Volcker re­ over $4.3 billion in "net worth" instant bank cartel by fiat. It not vealed that the Fed will now allow (capital) has been lost during 1982. only circumvents anti-trust law, the big commercial banks to buy up Volcker's policy has been delib­ which now prevents big commer­ fa iling S&Ls a nickel on the dollar erately aimed at "triage" of S&Ls cial banks from owning S&Ls and on a national level. aimed ultimately at reducing U.S. their home-mortgage business. It Volcket has declared Fed dicta­ population growth by destroying also vio lates the McFadden Act, torship over the U.S. banking sys­ the home-mortgage market fi­ which now prohibits big banks tem, which will impose upon the nanced by S&Ls. Fewer homes from moving across state lines to United States an Anglo-Canadian­ available mean fe wer babies born. grab control over banking deposits style bank cartel. The idea is to Second, Volcker has deliberate­ and loans in other states. reduce the huge U.S. banking sys­ ly made a series of "controlled There is a real solution to the tem of ov er 15,000 commercial leaks" to the financial press, to cre­ real crisis: get interest rates down banks and 5,000 savings institu­ ate a public clamor for action on the fast, and get Volcker out. That is tions to a cartel of a mere fe w crisis. According to the Fed's the- the question now facing Congress.

EIR January 12, 1982 Economics 15 EnergyIn sider by William Engdahl

A plan to dismantle energy At this point, the entire issue Essential nuclear programs will probably be disrupted if becomes clear. It would be simple the DOE is relegated to the Commerce Department. to reorganize the Energy Depart­ ment to restore the prominence of nuclear and advanced-energy R&D programs around breeder-reactor development, MHO generation, and high-temperature reactor de­ The proposal by the Reagan Ad­ of recent history is relevant here. velopment. To take the cabinet-lev­ ministration to dismantle the De­ The most significant energy­ el department and reduce its priori­ partment of Energy is a monstrous policy initiative in this century is the ty to a unit within Commerce co uld mistake at this point in history. It is governmental mandate, concre­ ensure the final destruction of this still possible, however, that Con­ tized in the 1954 Atomic Power Act, nation's nuclear program. . gress could block the move after it to develop a civilian agency with I recently spoke with someone receives the detailed proposal later the man date to realize commercial who had served as an employee of this month. nuclear power. The Atomic Energy the AEC, ER DA and DOE. Each The proposal, as it stands, is to Commission's mandate was explic­ change was tremendously disrup­ eliminate the cabinet-level energy itly this. The history of governmen­ tive, he stressed. Committed gov­ agency and scatter certain parts to tal "energy policy" over the past ernment scientists and public serv­ Interior and Commerce. Interior decade is in part the history of fac­ ants departed at each stage of the would regain its pre-Carter juris­ tional attempts to destroy this insti­ nuclear wind-down. Today, he pre� diction over the hydroelectric dams tutionalized mandate. Ironically, dicts that if the dismantling suc­ operated by governmental market­ the firstma jor step was taken by the ceeds, the most talented mid-level ing bodies such as BonneviIle Pow­ Republican Nixon administration people will go into private industry, er Administration (BPA) and the at the suggestion of his energy ad­ most never to return. national petroleum reserves. More viser, S. David Freeman of the Of­ The call this month by White significantly, Commerce Secretary fice of Science and Technology, House Science Adviser George Malcolm Baldridge is slated to get along with Trilateral Commission Keyworth to kill the Clinch River the vast part of the DOE, which energy strategist John C. Sawhill of Breeder program adds chilling evi­ would become a sub-unit of the the Aspen Institute, and such Trila­ dence of the danger of further buri­ Commerce bureaucracy responsi­ teral towel-boys as Gerald Parsky, al of our nuclear program into any ble for basic energy research. Com­ then an aide to Bill Simon. new agency, let alone Commerce. merce will also take over the vast Their proposal, which was A major fight on Capitol Hill is and vital DOE nuclear weapons adopted by a foolish Congress dur­ in the works. One thing buried so program which administers our na­ ing the Ford administration, took far fr om the public view, and per­ tional research labs at Los Alamos, the AEC and made it one of six haps from that of the President, is Sandia, Lawrence Livermore, and a "equal" departments of a new En­ the fact that the $6 billion U.S. complex of related production and ergy Research and Development nuclear weapons program will be­ monitoring facilities. Administration (ERDA) in 1974. come an appendage of the $2 billion I call the new proposal a catas­ Within three years, RAND wrecker Commerce Department. Many sci­ trophe, though I am well aware of James Rodney Schlesinger, who entists in the nation's weapons pro­ many of the reasons motivating it, had already undermined the AEC grams fear relocation to a civilian including Reagan's campaign from within as Nixon's AEC Com­ agency without experience in nucle­ pledge to abolish the Department missioner, was able to create the ar weaponry. Critics accurately em­ of Energy because of its special present Department of Energy. Es­ phasize that since the 1974 disman­ character as a creation of the Car­ pecially under the Carter planners, tling ofthe AEC, our nuclear weap­ ter-Schlesinger policy of using en­ nuclear policy was treated at best ons program has been unable to ergy as a chokepoint to force indus­ on a par with solar and "environ­ fund modernization of its World trial disintegration. A brief review ment" issues. War II faci lities .

16 Economics EIR January 12, 1982 Wo rldTr ade by Mark Sonnenblick

Cost Principals Project/Nature of Deal Comment

NEW DEALS ' $540 mn. U.S.A. from Great Northern Nekoosa is joining with Finland's Great Northern, which Finland Kymi Kymmene to build a paper pulp mill on Leaf owns II% of state of River in Mississippi. Mill will turn out 350,000 tpy Maine, is betting on bleached kraft pulp, the highest quality paper pulp. The sharp rise in pulp prices Scandinavians, beset by cutting restrictions because in a few years and on their fo rests are reportedly being depleted, are anxious lower interest rates to secure pulp supplies from southeastern U.S.A., where which will permit con­ fo rest growth is faster than cutting and wood costs liJ version of $200 mn. in less. Finns will provide management and technological short-tern borrowing expertise and take 80,000 tpy from mill. needed for plant into long term bonds.

Israel/ Egypt Egypt and Israel have agreed to install telephone cables Until cable installation from West connecting the two countries across the northern Sinai completed around June, Germany and cables across the southern Sinai connecting Israel phone calls between Is­ and Egypt with military bases in that area. Egypt will rael and Egypt will con­ pay most of the costs, but Israel will provide much of the tinue via underwater ca­ equipment. It has already been agreed that remaining bles connecting each to equipment will be bought from Siemens of West Ger­ Rome. many, a frequent partici' pant in strategic multi-national arrangements.

$2.3 bn. Brazil fro m Brazil's state steel company, Siderbras, signed contracts Brazil steel expansion U .S.A./Cana­ for a total of 42 .1 mn. tons metallurigcal coal with II and plans to mix import­ da coal producers in eastern U.S.A. and Canada. Contracts ed coal with high-ash are fo r 3-1 0 yrs. Brazilian coal will boost coal imports from 5 mn. tpy this year to 6.5 mn. in 1985.

$233 mn. Canada/ Japan Canadian govt. signed contract for investing U.S. $233 Terminals and mine-port mn. in infrastructure for exporting British Columbian railroads require $1 .9 coking coal from new port near Prince Rupert. Port bn. investment. charges will be C$3 plus 80% of inflation. 12 Japanese companies plan to import 6.7 mn. tpy coking coal.

$1 bn. Kuwait from Kuwait National Petroleum Co. has awarded Japan's JGC won first-phase ex­ Japan JGC Corp. an estimated $1 bn. contract for second­ pansion contract worth phase expansion of Mina AI Ahmadi oil refinery. Ex­ $700 mn. in Oct. 1980. pansion will raise capacity to 270,000 bpd. Cost-plus-fee basis.

India from Kirloskar Oil Engines will collaborate with Ambac Indian govt. encourag­ U.S.A. Industries subsidiary of United Technologies to make ing competition for fuel injection systems in India. Bosch of Germany which holds 80% of fuel injector market.

$280 mn. Libya from Libya gave contract for Misurata fishing port expansion Partial payment in Li­ Yugoslavia to Ivan Milutinovic-PIM, which did first phase of byan oil. Libyans prefer expansion. barter.

CANCELED DEALS Yugoslavia I'nternational over-capacity in olefines is reason given All resources will go to from U.S.A. for indefinite postponement of second phase of $1 .2 bn. finishing plants for "Dina" petrochemical complex being built on Krk 70,000 tpy low-density Island, Yugoslavia. Plans triaged include ethylene polyethylene, 200,000 cracker and aromatics and styrene facilities. Dina is tpy vinyl chloride mon­ joint venture of Yugoslav INA and Dow Chemical omer and infrastructure. Europe.

EIR January 12, 1982 Economics 17 Business Briefs

Energy u.S. and, in striking testimony of West Research Corporation during 1978 and German policies of developing the Third presented by then-Prime Minister Takeo McClure tries to restrain World, a 22 percent increase of exports Fukuda. The plan emphasizes agricul­ to non-oil developing countries. ture and energy infrastructure. In mak­ Stockman on DO E The trade surplus was obtained ing the announcement, former Keidan­ against a huge DM 370 billion energy­ ren (business federation) chief Toshio According to reliable Capitol Hill import bill, with oil prices increasing by Doko stressed that the proposal in the sources, Senate Energy Committee one-third from January to October. The view of the Suzuki government is the Chairman James McClure (R-Id.) has current-account balance, which meas- , alternative to building up Japan and sent a letter to President Reagan urging ures the combined trade and financial other countries' armaments. him to restrain Office of Management flows, was only in a 20 billion mark The plan proposes a $1 3 billion an­ and Budget head David Stockman from deficit as compared to 1980's 30 billion, nual fu nd to be provided by the advanced de facto abolishing the Department be­ and is expected to sink further to 10 countries and OPEC, which would pro­ fo re Congress even gets a chance to de­ billion this year. The situation in 1982 is duce directly and indirectly a $25 billion liberate on the final proposal from the nevertheless far from acceptable. Unem­ annual boost in global infrastructural White House to dismantle that agency . ployment is expected to exceed 1.5 mil­ investment and production. The propos­ One congressional source reports lion early this year, while a severe sQ.ort­ al focuses on such plans as greening of that the OMB intends to submit to Con­ age in investment will do nothing to al­ the Sahara, Sinai, and Arabian deserts; gress its funding budget for FY83 with leviate the mass layoffs and bankrup�cies creating a giant African lake in the Con­ no DOE. This would mean that pro­ hitting particularly the construction in­ go and Chad to improve agricultural grams such as the Clinch River Breeder dustry, which is "in its worst crisis since potential; constructing new canals across Reactor or other items would be buried the war," the branch organization re­ Nicaragua and Thailand to shorten and in the budgets of Commerce, Interior or ports. cheapen sea transport; and launching eliminated altogether. Corporate profit margins, cut by 10 vast energy projects such as Himalayan ' On Dec. 17, the President announced percent in 1980, sank by a combined two­ hydroelectric proj ects and specific sea­ his intent to submit a specific legislative year 25 percent, mainly as a result of the current energy projects. It also includes proposal to Congress to fulfill his cam­ very high interest rates maintained by the more dubious ideas, such as giant solar paign pledge to abolish the cabinet-level Bundesbank. The strong flow of foreign heat collectors. Over the years the pro­ agency. A final proposal specifying ex­ orders to West German corporations gram would invest $500 billion. actly the administration proposal has yet may not be able to offset the slump in Mitsubishi Research noted that to be submitted to Congress for study. domestic orders, itself badly aggravated Keynesian economics had fa iled, and by the "investment freeze" enforced by that it was World War II which actually environmentalist sabotage. German ex­ ended the 1930s depression; but the perts put the amount of such investment world could not survive another war. at no less than DM 100 billion, as EIR Mitsubishi also insisted that the plan be will elaborate next week in a report from implemented outside the aegis of the Trade and In vestment our Bonn bureau. IMF and World Bank.

West German export surge shown for 1981 Industrial Strategy Domestic Credit In spite of a generalized slump in world trade last year, the fact that West Ger­ Japan to propose $500 The numbers many emerged with a huge trade surplus of 26.5 billion marks for the year is billion development plan don't add up striking example of fundamental eco­ nomic realities asserting themselves, The Japanese government intends to As a result of Fed Chairman Paul Volck­ whatever monetary manipulations are propose to the United States and Europe er's determination to continue tightening being played. that the advanced sector cooperate on a credit even as America falls into deep The German trade surplus, three $500 billion, 20-year global development recession, Federal economists are pre­ times as large as the 19�0 figures, was plan. According to Jiji press service, dur­ dicting "highly unstable markets" and based on a 13 percent growth of exports, ing the planned mid-January, trade meet­ "possible massive failures of savings and spearheaded by a more than 50 percent ing among the three sectors, Tokyo will loans" during early 1982. increase of deliveries to OPEC, a more propose carrying out the "Global Infra­ . The basic reason is that Fed Chair­ than 17 percent increase of exports to the structure Plan" developed by Mitsubishi man Volcker "won't give an inch" and

18 Economics EIR January 12, 1982 Briefly

• JA'CQUES VAN YPERSELE, Belgian Economics Minister, is promoting an expansion of the Eu­ ropean Monetary System to in­ clude Britain. The plan would intends to keep tightening credit "no true even after Argentina's· 120 percent mean British leadership of the matter what happens to the rest of gov­ inflation during 1981 and the peso's EMS, and top-down enforcement ernment policy," Fed economist Dale overvaluation by up to 50 percent at the in all member nations of British­ Henderson told EIR . "If the Fed stays beginning of 1981 are taken into account. style monetarist austerity: M. Yp­ ti ht, and Reagan refuses to raise taxes, The overvaluation came from then Fi­ g ersele in a recent London speech and Congress refuses to cut spending, nance Minister Jose Martinez de Hoz's called not only for immediate Brit­ then we'll have a $100 billion budget crazy policy of subsidizing speculators ish membership in the EMS, but deficit and highly unstable financial mar­ who were playing the peso arbitrage for the creation of a "permanent kets," he stated. market. Alemann's undervaluation poli­ board" of EMS officials which According to a top economist in cy is designed to facilitate selling off would begin to set European-wide Stockman's OMB, the President's bud­ ownership of Argentina's natural re­ monetary policy . getary options have been almost totally sources and enterprises, to international circumscribed by Volcker; and there will speculators at a dime on the dollar. • SOVIET GOLD sales have be · economic crisis. "Most technicians The state-owned telephone company, been extensive recently, but EIR here in Washi ngton believe that unless ENTEL, is at the top of the list. doesn't believe rumors in the fi­ something gives, interest rates are head­ nancial press that this is causing ed up through the ceiling very soon, past any great weakness in the price of their 1982 high of 21 .5 percent," the gold. Soviet sales rose in 1981 to OMB official stated. "But I don't see some 200 metric tons, most of it in either Volcker or the administration giv­ International Credit the last quarter of the year, up ing in." from 90 tons during 1980, David "If interest rates do rise a third time, Soviets squeezed out Potts of Consolidated Goldfields I foresee major small-business bankrupt­ in London estimates. However, cies ahead," he continued. "Bank­ of Eurodollar market most of the Soviet sales have been ruptcies will accelerate across the board. made off the open market, to To­ Ifrates rise very fa st, there will be massive Using events in Poland as a pretext, kyo gold dealers anxious to ex­ fa ilures of savings and loans. Unemploy­ French, British and American banks pand Japanese gold stocks, EIR ment may rise far above predictions, and have drastically reduced lending to Sovi­ believes. could hit 10 percent. I'm pessimistic. et bloc nations as well as to the Soviet Union itself. In the last four months of • C. TODD CONOVER was con­ 1981 , total Eurodollar lending to East firmed by the Senate as Comptrol­ bloc nations totaled a mere $170 million, ler of the Currency in late Decem­ considerably below the level of the year ber, the Treasury office responsi­ Currency Policy before. Numerous loans have been can­ ble for regulation of the nation's celled, the largest being an · $80 million banking system. Mr. Conover told credit scheduled for Romania. the Senate as expected that he sup­ Argentina devalues its ' According to one British banker, ports full British-style banking de­ way to the 1M F Western commercial banks are demand­ regulation, including allowing ing that the Soviets pay an interest rate large banks to go national, and to Argentina's new government is prepar­ one full point above the London Inter­ buy up savings and loans. ing to request a standby credit from the bank Borrowing Rate (LIBOR), while International Monetary Fund. On Dec. such countries as Malaysia can borrow at • HELMUT SCHMIDT faces 28, the new Finance Minister, Roberto three-eighths of a percent above LIBOR. growing domestic outcry not so Alemann, announced the elimination of "The Soviets would fight like hell to much against nuclear weapons, the two-tier exchange system through avoid borrowing at an embarrassing but against the threat of economic which the government has shielded the margin," the banker told the New York depression, Germ any watchers peso used in international trade from the Tim es. say. "People are marching in the wild speculative ups and downs of the While Eurodollar lenders are de­ streets of Germany against rece&­ "financial" or free market peso. The ef­ manding a high premium fo r Eurodollar sion and the threat of mass unem­ fect was that the trade peso lost 42.8 credits, possibly to force the Soviets to ployment," said Dr. Thomas percent of its value against the dollar sell large amounts of gold, which would Hughes, President of the Carnegie during the firstweek of free float. Having fu rther depress the gold price, they admit Endowment. "That's why Schmidt begun 1981 at under 2,000 to the dollar, that the U.S.S.R.'s need for credits to be is warning President Reagan it began 1982 at over 10,000. used as fo reign exchange is rising, since against looming world depres­ It is now obvious that the peso has the Soviets are assisting the Polish econ­ sion." become seriously undervalued. This is omy substantially.

EIR January 12, 1982 Economics 19 TIillSpecia1Report

PartThree

Systems analysis is white-collar genocide

by Lyndon H. LaRouche. Jr.

We have' reserved the most challenging conception fo r this concluding portion of our report. Although what we report now does not violate our policy of limiting this report's contents to the intellectual capacities of intelligent 'graduates of proper secondary-school education, what we must report now is admittedly more difficult fo r many among those readers than what we have outlined so far. It is by no means beyond the comprehension of ,such a reader, and much of what we report now will appear quite elementary to that reader, at least in afterthought. Yet, the crucial points included here do, we admit, represent some cause for culture-shock. Therefore, as we have just noted, we have scheduled the culture-shock for the concluding portion of this report, after the general principles of our argument have been made clear. The core of what we must outline here is elaborated more fu lly in a recent report outlining a policy fo r teaching of geometry in public schools. I The reader who desires to explore these matters more deeply will fi nd that publication useful. Negatively, our argument so fa r is elementary, rigorous and conclusive. The argument setting forth the application of potential relative population­ density is also elem entary and conclusive, at least as fa r as we have taken that so far in this report. Yet, if the average reader were to attempt to elaborate this proven approach to develop an actual economic analysis, the reader would soon fi nd, in most cases, that the attempted application guides one to further conceptions whose initial impact is perhaps best described as "dizzy­ ing"-like the first time the reader, as a youth, jumped from the high diving­ board into a swimming-pool. (It is delightful, once one has done it a few times.) The analogy is appropriate. Most people, including some presumably well-educated professionals, who have confronted these conceptions retreat fr om them in the manner like the anguished youth who walks to the edge of the high diving-board, hesitates fo r a while, and then retreats, blushing with shame, and perhaps shaking slightly: "I can't do it." In confrontation with

20 Special Report EIR January 12. 1982 Th e Golden Mean relationship exhibited in living processes: every seashell's logarithmic spiral is determined by the Golden Mean ratio.

such conceptions, many have said: "I just can't accept that. I would have to give up most of what I have been trained to believe, if I were to accept the impl ications of that proof." Yet, despite what most were once "trained to believe," the earth is not fl at, and the planets orbit around the sun in visual space. (Often, psychological cowardice is a more powerful fo rce than physical cow­ In Parts One andTwo ardice. So, by means of playing upon a recruit's psycho­ logical coward ice, military commands fo rce soldiers to charge against rifleand artil lery-fire.) The first two installments of this series. published The mental cowardice which prevents students and in the Dec. 22 and Dec. 29, 1981 issues of EIR . professionals from begi nning to master a competent identified systems analysis as an ec.onomic meth­ variety of mathem atical economics is best identified as odology that is viciously inapplicable to macro­ the fraudulent representation of the universe by Rene economics over periods longer than a fe w years, Descartes's and Isaac Newton's parodies of Descartes's because it axiomatically denies the prim acy of tech­ error. Once the reader recognizes that these views are not n ological innovation in determining the course of only erroneous but pathologically fa llacious, mastery of those economies. mathematical economics becomes fe asible. The author identitied potential relative popUla­ All modern mathematical physics, and the mathe­ tion density (i.e., the number of persons who can be matical methods applicable to econom ic science, origi­ sustained on an average square-mile of habitable nates with the three principal published writings of Jo­ territory by means solely of that population's pro­ hannes Kepler at the beginning of the 17th century. ductive efforts) as the key metric in that respect. Unfortunately, the interpretation of Kepler's work The ratio of net work to virtual work, expressed as a fo und in most undergraduate textbooks, classrooms, and series, determines the increase in that potential related sources today is incompetent. It is either inten­ relative popUlation density. Linear models. by con­ tionally fr audulent, or merely a credulous regurgitation trast, rationalize a political policy of rentier eco­ of what the dupe has been taught to recite on this topic. nomics. industrial contraction , and extermination. Kepler's accomplishment, especially when employed to This installment is the final portion of this expose the sheer fraud of Descartes's and Newton's article. physics, is the most efficient reference-point fo r introduc­ ing competent m athematical economics to graduates of

EIR January 12, 1982 Special Report 21 secondary schools (or higher institutions). a definition fo r mathematical economics. What Kepler proved was not merely that the solar The starting-point of the work leading into Kepler's orbits are defined as a harmonic series of possible or­ discoveries, as Kepler himself details rigorously in step­ bits-independent of the masses of the bodies. What by-step fashion, is the great problem of geometry posed Kepler proved empirically, and conclusively, was that beginning the Tenth Book of Euclid. It was proven, at Euclidean space is not physical space. Euclidean space­ the Cyrenaic temple of Amon, during the fo urth century the space of the geometry of vision-exists in reality, but B.C., that only fi ve regular polyhedra can be constructed it does not contain within it the larger reality of which it in Euclidean space. In other words, all of the postulates is only a part. Kepler proved this, by proving that the of proof by construction which lead into the topics of the ordering of physical events in solar space is wholly Tenth through Thirteenth Books of Euclid lead mankind governed by principles of a nature which can not be rigorously to the result that the internal ordering of all contained within the geometry of visual space (Euclidean such geometry-the geometry of visual space-is gov­ space): the principle of the Golden Mean (X2 - x - I = 0, erned by some principle which does not lie contained in algebraic terms). within the geometry of visual space. The characteristic It was earlier established, by the work of Nicholas of quantifiable (determinate) expression of this "external Cusa, of the circle of Leonardo da Vinci and Luca principle" for visual (Euclidian) space is the Golden­ Pacioli, and others, including Albrecht Durer, that all Mean proportion. living processes tended to exhibit principles of geometric This principle, that visual space is merely a subspace ordering consistent with the principle of the Golden of physical space, but in projective congruence with the Mean . Kepler applied this to the most-conclusive body whole of physical space, was elaborated inathematically of empirical evidence available for a decisive (crucial. fo r geometric physics generally by the work of Riemann, unique) experimental test of the principle at that time: the leading, chiefly by way of Riemann's infl uence among solar orbits. He proved that the entire solar system was Italy's scientists, to A. Einstein's fl awed but useful dis­ ordered according to principles of proportioning for coveries concerning a Riemannian universe. which the Golden Mean is paradigmatic. Elementary particles do not exist as onto logically Later, Isaac Newton and Newton's admirers have self-subsisting substances, and physical processes are lied outright, attempting to deny, for example, that absolutely not governed by action-at-a-distance among Kepler actually succeeded in discovering elliptical orbits, particles in aprioristic empty space. Nor, as has been and that Kepler had not seen a connection between his repeatedly demonstrated empirically, is empty space con­ laws and earthly gravitation. Both statements were out­ veniently fi lled with an ether of the sort which James C. right lies, which could not have been kept in circulation Maxwell contemplated as the key to making Newton's in English-speaking countries if publication of English incompetent mechanical scheme credible to the 19th translations of Kepler's principal writings had not been century. suppressed up to the present time. What we see in visual space is the reality of a larger, The truth of the matter is simply this. Kepler proved physical space, projected as images into visual space. The a number of fundamentals, sufficient to es tablish all principle governing such projective relationships must modern mathematical physics as a coherent discipline. be, as Kepler proved conclusively, and as spiral nebulae There were some things he did not complete, but it was affirm Kepler's proof today, based on harmonic propor­ his genius to define the need for discovery of such things tionings of a sort which subsume the Golden-Mean pro­ as the calculus, establishing the guide-lines Leibniz em­ portioning. ployed to effect the development of the calculus before What we must observe and measure in visual space, if 1676. From the successive work of Kepler and Leibniz, we are to infer rigoro usly processes in physical space, is most emphatically, all competent strains of mod ern not things, but the ordering of transformations. mathematical physics flow. True, Kepler did not perfect We are greatly aided in beginning to understand this the theory of eliptical functions; it was the enemies of point by adopting the viewpoint of elementary (Euler, et Newton and Cauchy who did develop the theory of al.) topology. In elementary topology, as in physical elliptical fu nctions, up through the essential completion reality, two points do not determine a line; rather, the of that work by Bernhard Riemann in the late 1850s and intersection of two lines determines a point; the intersec­ early 1860s. However, Kepler defined the importance of tion of surfaces determines lines; the intersection of solids developing a theory of el\iptical fu nctions, and set science determines surfaces; the intersection of higher-order pro­ along the pathway of successive developments which led cesses determines solids. A point, a line, a surface, a to its fruitful realization in later times. solid, is a zone of ambiguity, of overlap of the intersect­ Enough ofthat aspect of the matter. We turn directly, ing, geometrically high-order fo rms which define that that background identified, to the problem of defining a point, line, surface, solid. These ambiguities, or bounda­ physical space and the indispensable contribution of such ries of overlap, are termed singularities.

22 Special Report EIR January 12, 1982 -�...... P k--+---I

I I I I I I , D �-- J�/-->or'r-t-+-'�-----; I \ I \ I \ I \- - - -�-+------'�Mti I X \

At left is Kepler's 1596 demonstration of the harmonious relations among the five Platonic solids. A bove is a diagram demonstrating his 1609 Second Law. which paved the way for elliptical functions. It states that the radius vector of an elliptical planetary orbit covers equal areas of the orbital plane in equal time periods. explaining why the planets move fastest when they are closest to the sun.

By definition, a singularity has no ontologically inde­ space solely in terms of adducible characteristic features pendent existence in visual space, and does not corre­ of transformations-geometrical transformations-re­ spond to any elementary existence in physical space. specting whole, coherent assemblies constituting such Thus, if it is sometimes convenient for calculations, to processes. It is only when events defined in terms of the suppose that a "point-mass" exists, it is ignorant super­ "language of visual space" (geometry) are treated as stition to presume because of the usefulness of such crude processes in this fa shion, that our interpretation of phe­ calculations that such a mythological being as a point­ nomena of processes in visual space is in projective mass actually exists in the universe apart fr om fictions of congruence with the ordering of processes in physical intellectually lazy mathematicians. space. As fo r numbers, the integers arise in geometry and physics as an associated feature of the counting of sin­ Economics and physics gularities, which demonstrates the geometric origin of . This is key to what we outlined in defining work in the integers as well as all other numbers. Similarly, the "economic space." We generalize the notion of alterna­ idea of a "straight lipe" as a self-evidence, or necessarily tive transformation-funct ions, by the yardstick of in­ self-evident asssumption, is another superstitious ab­ creases in the potential relative population-density of surdity. In topology. a straight line is definedby folding society. It is in this transformation of entire societies as a circle against itself, just as a circle is definedtopologi­ self-subsisting processes , which defines the efficient cally by fo lding closed areas against themselves. reality of alI activities occurring within an economy. As we generalize from Euler's fo unding theo rems in In science, this writer is responsible for discovery of topology to higher-order physical geometries, we are two important conceptions. First, this writer, beginning shown that the fo rmulas governing coefficients of topol­ with a 1952 discovery, discovered that the characteristic og ical fo rm ulas respecting singularities work to aid us in fu nction required to define a competent mathematical discovering what order of physical space is req uired to economics is a negentropic fu nction. alternately to be yield a combination of si ngularities corresponding to a defined most appropriately as a Riemann fu nction. Sec­ fo rmula. ond. this writer developed, as a by-product of the At that point, we are obliged to reject as numerolog­ elaboration of that fi rst discovery, an important, im­ ical superstitution all attempts to construct algebra on proved proof of the validity of scientific knowledge, by any basis but the geometric basis fo r elaboration of locating the basis on which that proof is properly physical topology (e.g., Riemann's topology) from the premised. The latter is now summarized here, so that reference-poi nt of Kepler's work. we may appreciate the conclusions to which the fo rego­ We must interpret processes seen in terms of visual ing references to Kepler and topo logy lead us in eco-

EIR January 12, 1982 Special Report 23 nomic science. adequately: there is the only basis fo r measuring scien­ The ordering of socIetIes in such a way as to tific revolutions. represent societies of higher potential relative popula­ From this method of inquiry we adduce principles tion-density emerging from the development of societies (policies) of scien tific discovery, of scientific progress of relatively lower such potential, provides us a series of which correlate directly with increasing the average per­ a form outlined earlier: capita power of mankind over the universe. It is only through means of the metric of potential relative popu­ lation-density that this could be determined empirically. What, then, does it mean to generate a series of The developments in technology which are responsible technological developments, such that the power of the fo r this progress correlate with an actual or at least average person over the universe is successively in­ implicit body of scientific knowledge. Therefore, we creased? may treat the indicated series as defining an ordered series of phase-changes in progress of scientific knowl­ Negentropy edge. The same tactic, of adducing the transformation­ To increase man's average power over the universe fu nctions ordering successive members of such a series, means to increase man's command of the lawful com­ applies. position of the universe. This means that the generator I t is the ambiguity of any particular body of current­ which orders such a succession of phase-changes in ly established scientific opinions in particular that the technology is in implicit congruence with the lawful prevailing scientific knowledge today is superior to the composition of the universe as a whole. It means that knowledge of the previous epoch, and yet the best that generator is implicitly a statement of principles fo rmulations of today may become the fa vorite profes­ congruent with the underlying, lawful ordering of the sor's classroom jokes of the future. For reason of this universe. ambiguity, we can not premise any absolute authority This conception is not fu ndamentally -new to this fo r scientific opinion, such as that prevailing in univers­ writer. It is Plato's notion of the hypothesis of the ities today, on the putative experimental proofs cited in higher hypothesis. It is the Logos conception in the support of such opinions. An isolated experiment proves Nicene-Filioque doctrine of Apostolic Christianity. It is nothing fundamental; no mere accumulation of induc­ the approach of St. Augustine and his fo llowers to the tive judgments from a mass of such isolated experiments ordering of secular society . What is-new to th is writer's proves anything fundamental respecting the lawful or­ conception is to situate that Logos-conception with dering of the universe. respect to the implications of a Riemannian approach Wherein, then, does the possible authority of science to the fu ndamenta l fu nction of economic science. lie? Look again at our approach to this series we have Yet, this very notion defines the o rdering-principle outlined. In the first approximation, the transformation­ of scientific (technological) progress as negentropy; we fu nction which is shown to define an ordered series of shall clari fy this in a moment. Therefore, the lawfu l successive scientific revolutions is of a higher order of composition of the universe as a whole is negentropic. knowledge than any of the particular bodies of scientific By negentropic, we mean, in terms of physical topol­ opinions it subsumes as a generator. Yet, as fo r the ogy, that the principle (n+m/n defines a generative general fu nction of economic science, we require a yet­ principle, as this notion is reflected in Bernhard Rie­ higher notion of transformation, which subsumes all mann's 1854 On Th e Hypotheses Which Underlie Geome­ fi rst-order transformations. This latter, higher notion, try. It means that the economy defines a series, of the we can rightly term the principle of "scientific prog­ form: ress." (n+a)/n; (n+ a + b)/(n+ a); It is the principle of discovery underlying all success­ (n+ a + b+c)/(n+a+b); ... fu l scientific revolutions which is the sole absolute authority fo r scientificknow ledge. It also has a simple economic interpretation: How do we measure scientific revolutions, so that If the total outp ut of a society is W, and if the we may determine which are actually advances, which ' fo llowing subdivisions, as distribution, ofW, prevail, are retrogressions, nonproductive detours, and to com­ pare the implied degree of power of progress and C = Cost of maintaining goods-producing and retrogression relative to other cases? The implicit poten­ physical-distribution capacity status quo ante; tial relative population-density, as variously expressed

by application of the technological benefits of such a V = Cost of maintaining at a current level of cul­ revolution, or, if realization of scientific progress is ture, etc., all of the households from which the constrained by social policy, what the contribution goods-producing sector of the labor-force is would be if the benefits of science were promoted recruited;

24 Special Report EIR January 12, 1982 d = The cost of all household and other costs fo r scientific progress, and that latter mediated through non-goods-producing labor-force activities; technological progress. Thus, the ordering principle which causes a successful economic process to be negen­ and if tropic is scientific progress, which scientificprog ress is nothing but those principles of discovery which, as a S = W - (C+V); generative principle, is congruent with the underlying lawful ordering of the principle as a whole. S' = (S - d) = Net Operating Profit of the society Imago viva Dei? Is it man's power to reach atonement as a whole; with the Logos, which, as an activity, is the self-mediat­ then the ratio S' /(C+ V) correlates with (n +m)/n, on ed activity, through work, which defines man as in the condition that S' is chiefly converted into "reinvest­ image of God, above the beasts? Is it, then, through ment" in technological-progress-oriented expansion of exerting increasing dominion over the universe in ways the economy in scale and productivity. expressed by increase of the potential relative popula­ In this case, the ratio of S/(C+V) increases. Unless tion-density of society, that mankind expresses through the policies of practice of the society are mismanage­ technological progress in work, the activity of atone­ ment of the society, the increase of S/(C+ V) correlates ment with the Logos? Is it, then, therefore the case, that with increases in S' /(C+ V). the function of material progress, mediated through However, the "objective content" of average real technological progres� in work, is not material progress wages and per-capita goods-producing investment in­ in itself, but that material progress is indispensable to creases, at the same time that the social cost (per perfect the development of man's potential, individual average total of members of the labor-force) decreases . man's potential, as imago viva Dei? In other words, both C and V increase in objective All human history, all evidence adducible fro m content, relative to preceding epochs of the production­ science, informs us that the answer to each and all of distribution cycle, but the average cost of C and V these questions is "Yes, it is so." combined decreases as a percentile of total activity of Whether or not the reader prefers to embrace, the labor-force. ecumenically or otherwise, the Judaism of Philo of

This growth of the function, P = F[S'/(C + V)], is Alexandria, the Apostolic Christianity of St. Augustine, · negentropic. The source of the negentropy is the prin­ or not, there is no competent dispute against the ciple of scientific progress, mediated through actual scientific authority of the Filioque principle as reflected

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EIR January 12, 1982 Special Report 25 in the principle of imago viva Dei. universe cannot be measured competently in units anal­ ogous to calories or watts-a procedure admittedly to The enemies of science be recommended to actual public utilities' billing de­ Equally to the point, all fo rces which have rejected partments. What we call "energy" is not an independent those principles-whether the Delphi cult of Apollo, the existence, but a reflection of negentropy, the work Mesopotamian Mobads (Magi), the cult of Isis, the reflected in raising processes fro m lower to higher gnostic pseudo-Christians of Justinian Eastern Ortho­ degrees of organization, in the sense of organization doxy, Jesuitry, and Anglicanism, or simply atheistic implicit in the notions of physical topology. Malthusians-have proven themselves to be evil in social practice. Central to the difference between the General conclusion evil Justinian gnostics of the Eastern Church and Ap­ We have shown why any superimposition of linear, ostolic Christianity, as between the Sadducees and Philo en tropic "economic models" upon policy-making must of Alexandria, is the issue whether the universe is linear necessarily lower the potential relative population-den­ and entropic, or a continuing creation which is negen­ sity of societies . If this sort of policy is continued, the tropic. The evil agent of the Delphi cult of Apollo is potential relative population-density must fa ll below the exemplary of the arguments for linearity and entropy. existing level of populatio n-as is occurri ng today in The universe is not composed of aggregates of very that most evil of all relics of ancient cults, the Peking small, onto logically self-eviden t particles, each variously regime of China, whose nation is now undergoing one combining with other particles, and generally otherwise of those classical yin-yang, genocidal collapse-phases acting upon one another, "at a distance," across empty, intrinsic to the Taoist-mandarin heritage of the ancient aprioristic space. What ignorant opinion sees as "con­ Han dynasty. crete existence" in empty space-points, lines, surfaces, Thus, all application of linear, entropic modelling to solids, and so forth-are in fa ct merely singularities, economies is intrinsically genocidal. eminently countable singularities, of a current epoch of Worse, we have emphasized, today's Malthusians a process of transformations. Contrary to Descartes and are fu lly conscious of the genocidal implications of their Spinoza, as also Schelling, the discrete existences are adopted economic policies ("systems analysis"), so that real, if nonetheless, like mere mortal human persons, their capital offenses against the Nuremberg Code are only ephemera Is in the course of the unfolding of the not unwitting, but fu lly-conscious-on both the Western determining process of successive transformations. and Soviet side among Malthusians today . The discrete existences are real. The discrete exist­ We have situated that proof within the context of ences called human beings are real, above all others. introducing the rudiments of a competent mathematical ' Only human beings possess the divine potential ex­ economics, exposing, fo r those who may require this to pressed as the activity of scientific progress, the power be stated here, the implications to which our mathemat­ to master those laws of the universe with which men ical economics leads in practice. and women, among all other existences, are brought The simple fact which is outstandi ng is that any into existence and pass away. Only man, among all elected or appointed official of any government, or of existences of that sort, can supersede his thing-like any supranational institution, such as the International ephemera lity, to become a real, active part of the Monetary Fund, World Bank, or International Institute process of continuing creation. fo r Applied Systems Analysis (IIASA), who supports The notion of linearity, of entropy, is introduced to the policies of the Club of Rome, of IIASA, of the credulous fo lk by such wretches as the sophist Aristotle Draper Fund, the Aspen Institute, or President Carter's thro ugh the sophist huckster's pointing to things: "See, genocidal Global 2000 and Global Futures proposals this thing is tangible. Only it is real." So, a kind of deserves to be indicted and removed from office into analogy fo r an optical illusion occurs, in which a public outlawry on grounds of complicity in capital sophist's hypnotism so intently focuses the credulous, offenses, "crimes against human ity" (genocide) of the deluded individual upon the abstract existence of the Nuremberg Code. ephemeral thing (the mere singularity of the process), That fact is concl usively established without what that the victim's mental power to wrap his mind around we have written here. What we have done in this report the quite observable and efficient process of transfor­ is to strip away the apology offe red by mass-murderers mation is destroyed. From that sort of sophist's brain­ such as Aurelio Peccei, Robert S. McN am ara, et aI., washing of the credulous arises the dogma of "reduc­ that it is economics, not malice, which makes them tionism," the delusion that the universe is entropic. instruments of a greater mass-murder than Adolf Hitler From a higher standpoint than we propose to intro­ perpetrated. duce to the readers selected for this report, we could I. See "How the United States Could Still Surpass the Soviets in show that God is not the chief accountant of the Science." by Lyndon H. LaRouche, Jr., scheduled for publication universe's largest public utility. The activity of the in the Campaigner magazine, volume 14, number 8.

26 Special Report EIR January 12, 1982 presents A National Conferenceon Water FrontAlaska

Saturday, February 27, 1982 Houston Marriott Hotel - Greenspoint 255 East North Belt Drive, Houston, Texas at Intercontinental Airport $50 registration: includes luncheon For more information, call Nicholas Benton (713) 266-5445

For the firsttime since the mid-1960s, a serious revival of interest in tapping the enormous water and hydroelectric potential of Alaska and Canada is occurring. The dramatic threat of shortages facing major agricultural and growth areas of the nation are well known. Overcoming the fiscal and ideological con­ straints that have doomed regional water development plans in recent years will be the subject of this con­ ference. It will demonstrate both the economic necessity and engineering feasibility of water from Alaska, which would cost less to the national economy than the effects of scarcity and shortages will.

9:00-10:00 a.m. Welcome and opening statements

10:00- 12:00 noon Panel: "The Engineering Feasibility of Delivering Water From Alaska." Experts on plans developed in the 1960s and before, including the Ralph M. Parsons Company's "North American Water and Power Alliance;' will detail the feasibility and enormous water and hydroelectric yield potential of water from Alaska to Canada, Mexico and the United States.

12:00-2:30 p.m. Luncheon and address: ''The Moral and Economic Necessity of Developing Population Growth Potential" by EIR founder Lyndon H. LaRouche J r.

2:30-4:30 p.m. Panel: "The Economic Feasibility of Water From Alaska:' Proofs will be presented that the nation will spend more in increased costs due to scarcity if it doesn't transfer water from Alaska than if it does. Panelists: EIR Economics Editor David Goldman; California Democrat Will Wertz, chall­ enging Jerry Brown for the U.S. Senate; and Kansas State Rep. Keith Farrar (R-Hugoton), a member of the High Plains Study Council.

4:30-6:00 p.m. Closing remarks and reception.

Mail to EIR, P. O. Box 740191, Houston, Texas 77274 A National Conference on Water From Alaska

Name ______Address ____��------

City ______State/Zip ______Phone ______

Check one: o Enclosed is $,______in check or money order (made out to EIR) for registrations at $50 each. o Charge $ for registrations at $50 each to my (check one) 0 Mastercard 0 Visa. Account # Expiration Date ______

Signature ______(If registering for more than one person, please list additional names on back.) Economic dangers worst, Schmidt warns Reagan

by Nora Hamerman, Editor, and GrahamLow ry, U.S. Editor

West German Chancellor Helmut Schmidt won a tactical portray the West German leader as having made sub­ victory for the principle of reality over the fantasy-ridden stantial concessions to the confrontationist line of the U .S. media and State Department during his visit to Haig State Department. But most signs in the immedi�te Washington Jan. 5 and 6, when he emphasized that the aftermath of his visit point to Schmidt's success in using root ofthe deepening international crisis is not the events his pivotal position as a Western European ally of the of Poland, but the threatened depression of the world United States to play a mediating role between Washing­ economy. ton and Moscow. Secretary of Stat� Alexander Haig, in Combined with the public commitment of the Rea­ a public demonstration of "eating crow" that fl abber­ gan administration not to invoke a grain embargo gasted many seasoned Washington observers, was fo rced against the Soviets-precisely the measure that Secretary to admit that his own State Departmen t together with of State Alexander Haig had been vehemently urging as the media had been the institutional center of a campaign ' a tough-guy response to the Polish clampdown-the to discredit and undermine the Chancellor. Schmidt visit with President Reagan potentially opens And two days after Schmidt's talks with President the way fo r a shift in U.S. fo reign policy into the realm of Reagan, Haig announced through a page one New York joint efforts with America's allies to stabilize the inter­ Times article that the President was actively considering national situation. In this context, recent shakeups, in­ a meeting with Soviet President Brezhnev. Chancellor cluding the appointment of William Clark as national Schmidt, who met with Brezhnev six weeks �arlier in security adviser in the White House, might provide Pres­ Bonn, "urged Mr. Reagan during their meeting on ident Reagan with a buffer against efforts to determine Tuesday to see Mr. Brezhnev," according to the New fo reign policy by Haig, Henry Kissinger, and their media York Times report. allies. Schmidt's trip to Washington, which included meet­ Schmidt faced a barrage of hostile U.S. press cover­ ings on Capitol Hill as well as with the President and age which first tried to pajnt him as about to break out of Cabinet members, had been scheduled before martial law the Western alliance (the New York Daily News Jan. 5 was declared in Poland last Dec. 13, precipitating that called him "a pillar ofjelly" toward the Soviets, and the Eastern European country into the headlines. In Wash­ Jan. 5 New York Post railed against "a new Rapallo," ington, Schmidt reiterated the West German refusal to for example). During his Jan. 5 appearance with Mr. join the United States in imposing sanctions against the Reagan, as the Chancellor referred to "the sad events in Soviet Union fo r the Polish crisis, a refusal that had been Poland," the press corps burst into derisive laughter. made the previous week to Undersecretary of State Law­ Later, the press shifted to an eq ually absurd effort to rence Eagleburger in Bonn.

28 International EIR January 12, 1982 " Schmidt's refusal to accede to suicidal economic Poland was a better policy course than imposi ng sanc­ sanctions against the Soviet Union was linked to a tions. perception of the economic roots of the crisis of Western Schmidt's maneuvering room was enhanced by the fo reign policy which he underlined duri ng the Washing- fact that President Reagan has so far ruled out the only 'ton visit. He demanded and personally inserted into the economic sanction of serious conseq uence to the joint communique with Mr. Reagan a clause stating U.S.S.R.-the reimposition of a grain embargo. that "the Chancellor referred to the danger of a world­ Their joint communique (see below) described an wide depression and ensuing fa r-reaching political haz­ exchange of views on economic sanctions and came up ards that may arise if the industri al countries fa il to with a fo rmulation identical to the one adopted at the agree on a common strategy to combat unemploy­ European Community'S foreign ministers meeting Jan. ment." Schmidt also "emphasized the strategic signifi­ 4, over the sputtering objections of the British. It gives cance of social and economic stability in the ind ustrial broad latitude to Chancellor Schmidt to determine how countries of the West as an important element in the to "avoid any step which could undermine [the] respec­ maintenance of a stable East-West balance." tive actions" of members of the alliance with regard to The agreement between Schmidt and Reagan was the Soviet Union. substantial enough to fo rce Secretary of State Haig to Both Chancellor Schmidt and President Reagan chastise the press and his own State Department offi­ then made personal statements to the press. Schmidt's cials for their high-handed treatment of the West Ger­ remarks underscored his concern for world peace and man leader. Speaking to the press Jan. 6-only a day for preventing a new depression. President Reagan after his second-in-com�and at State, William Clark, a stressed the importance of continuing the Geneva ne­ long-time confidant of President Reagan, had been gotiations with the Soviets on arms control, despite upgraded to National Security Adviser-Haig had to Reagan's chl!-rge-concurred with by Schmidt-that the admit that "as was sharply pointed out to us, some of Soviets be�r responsibility for events in Poland. Schmidt the differences" between Reagan and Schmidt "specu­ also stressed "what the President has said about overrid­ lated upon by the press did not exist at all." ing importance of the Geneva talks on arms control." Haig reported Schmidt's complaints that his state­ "I will not hide from you the fact that we are ments on the Soviets and Poland had been distorted or worried about the high rate of interest all over the blacked out by the press, and described them as having globe, in the middle of a deep recession," Schmidt fa llen into a "deafening cloud in the American and declared , "and both of us feel that joint effort is Western press." Forced to make a public apology, Haig necessary to jointly get out of that recession in order said that "j ust criticism" should be accepted, "not only not to plunge into a worldwide depression." by the media, but in the State Department as well," where officials speaking to the press were often "over­ Where's Kissinger now� eager." Disarmed on the flank of trying to prove that While describing Schmidt's position on Poland as Schmidt was about to break with NATO and fly into "robnst," Haig also acknowledged that "he would not the arms of Moscow, the Haig-Kissinger crowd and expect a unified action" regarding any sanctions-even their press allies have now been trying to manufacture though Haig's subordinate Eagleburger had just been the claim that Schmidt had significantly hardened his in Bonn the previous week demanding precisely such position against Moscow as a result of his meetings in "unified action." Washington. The object of such claims would be to weaken Message to the Senate Schmidt on his domestic German flank, where the Schmidt took his message on the economic crisis to genuine preoccupation of the citizenry over the danger Capitol Hill Jan. 5, where staffers fo r the Senate Foreign of nuclear war has been wielded by a spurious "peace" Relations Committee report that he denounced U.S. movement to attempt to overthrow Schmidt as Chan­ economic policy as a strategic threat to world stability . cellor, arguing that he has become a puppet of the Schmidt was particularly critical, as he has been Anglo-American cOflfrontationists. frequently in the past, of the U.S. high interest rate Even though Schmidt made it clear that he has policy, the bludgeon wielded by Federal Reserve Chair­ always said "it was obvious the Soviet Union played a man Paul Volcker against the domestic U.S. economy role in the Polish events," another "background" brief-I' with devastating effects internationally. While stating ing was hastily assembled after the two government that the United States was not solely to blame, Schmidt heads made their statements, to characterize Schmidt's denounced high interest rates as threatening to cause a acknowledgement of the Soviet role as a shift toward a catastrophe far worse than anything occurring in Po­ tougher line. A senior national security official who land. He also declared that offeri ng economic aid to fo rmerly served under �bigniew Brzezinski told report-

EIR January 12, 1982 International 29 ers that "we discern a much greater degree of explicit­ ness" in Schmidt's acknowledgement of Soviet complic­ ity. By Jan. 7 the press had developed yet another u. s. press takes aim wrinkle on its efforts to discredit Schmidt: according to the Baltimore Sun and Washington Post, the Schmidt­ at Chancellor Schmidt Reagan meetings were extremely "tense" and the West German Chancellor was fo rced to change his position The Wall Street Journal editorialized on Jan. 4: due to U.S. recalcitrance . In a deft manipulation of editorial scissors, the Wall Street Journal managed to Mr. Reagan should ask how on earth Mr. Schmidt report on Alexander Haig's press conference without has arrived at the Orwellian pretense ...that the Soviets mentioning any attacks on the American press! aren't largely to blame for what's taking place in Poland. All of this come s amid new indications that the He might inquire why ... he has so deliberately and Kissinger-loving media could be in for a disappoint­ publicly sought to embarrass and undercut his mostvital ment over the direction of Reagan administration for­ ally .... Chancellor Schmidt's performance of late has eign policy. Henry Kissinger and company (including been truly appalling, even apart from undercutting mis­ Alexander Haig, Kis singer's policy ally and fo rmer sile deployments he himself asked for. First there was the protege) have been pushing for a major shakeup to November love-in with Leonid Brezhnev, in which accompany the unseating of Richard Allen as National Schmidt took it upon himself to vouch for the Russians' Security Adviser, in or der to increase the power of peaceful intentions and to act as "interpreter" between Haig. They have part icularly sought the removal of the two superpowers rather than as ally. Then there was presidential cou nselor and Reagan loyalist Edwin the fruitless journey to East Germany to beg for better Meese III from any role in fo reign policy . relations, during which the Polish crackdown began .... William Clark, appointed Jan. 4 to replace Allen, Mr. Schmidt's stance toward Moscow speaks of a de­ comes to his new position from his present job as moralized leadership whose best vision of West Ger­ number two man at State under Haig, after the White many's future is as a Finlandized industrial vassal of a House decided in fa vor of upgrading the national totalitarian empire. security post to bypass Meese, including direct briefing of the President at least once a day. Referring to the West German position that martial The Kissinger- Haig strategy will be to surround law was "an autonomous Polish decision, " Jess Lukomski Clark, who has limited experience in national security wrote on the front page of the Jan. 5 Journal of Commerce: or fo reign affairs, with Haig-aligned advisers, such as Kissinger's Geo rgetown crony Amos Jordan, who is In adopting this convenient premise, which is bla­ mooted to beco me Clark's top deputy. tantly at odds not only with Washington's point of view Although Kissinger recommended the restructuring, but also with the position of other European govern­ his noisy celebration of it on national television Jan. 4 ments and the majority of editorials in the German press, may have been premature. Chancellor Schmidt is obviously trying to save his de­ It is not merely the fact that William Clark is a long­ tente policy and to protect West Germany's commercial time personal fr iend of Ronald Reagan who recruited interests. This attitude has won Bonn much praise in Ed Meese to the Reagan team back in the 1960s, or that Moscow and from the Polis� military regime. he was persuaded by Meese to assume his post at State Times correspondent John Vinocur wrote on Jan. 5: reportedly to place a check on Haig, after having turned down Reagan offers of cabinet positions and the CIA Mr. Schmidt talked about China. Mr. Schmidt talked directorship. Clark is said by West German press about economics. Mr. Schmidt told someone that his sources to maintain close connections to the Vatican, walking stick reminded him of Frederick the Great of and a close fr iend of Haig reports that Clark thinks Prussia. And Mr. Schmidt talked about Leonid I. Brezh­ "that AI Haig is this city's biggest fool." nev, a man he described as one deeply concerned about The Washington Post on Jan. 8 announced that peace. .. Meese would be gotten out of the way by elevating him It was difficult to break in. The Chancellor held the to the position of attorney general. But again, the stage .... crowing may be premature. In an unusually strong But the clear straight message about American dis­ reaction, President Reagan in person attacked the Post satisfaction was there at another level. It was given to on the same · day and flatly denied any such report of . ..men who report directly to Mr. Schmidt. Meese's removal from the White House. "America n public opinion could not fathom," they

30 International EIR January 12, 1982 were told, "how for weeks the Italian Communist Party Americans are suckers . West Europeans have treated had adopted a more critical attitude toward the situation them like cowboys who don't understand the intricacies in Poland than the Government of the Federal Republic of European diplomacy and deaJings with the Soviets. of Germany." Well, these diplomats have caused two world wars, and the bodies of 500,000 American casualties now stand Th e Washington Post greeted Schmidt with a similar over the land of Europe .... Schmidt can only carp on message fr om syndicated columnist Joseph Kraft : interest rates, and ignore Poland ....The Poles are not the last to feel the Soviet boot; yet there is no danger The alliance is at a turning point, and even NATO from the West which justifies their Warsaw Pact concen­ Firsters must now wonder whether it wouldn't be better trations. These Europeans want to live like eunuchs in for the United States and Europe to drift apart. ... Far the Soviet palace. fro m nerving the British and French to a stronger stand against Soviet pressure, Chancellor Helmut Schmidt now leads the way to accommodation with the East.

From a New York Post piece by Joseph Sobran on Jan. 7: A Schmidt interview and communique excerpts When Helmut Schmidt denounced the Reagan ad­ ministration's sanctions against Poland, I thought brief­ ly that a dirty little secret was going to emerge. It didn't. Excerpts from Chancellor Schmidt 's interview with The It's left to me toexpose it. New York Times, publish ed on Jan. 3: West Germany is up to its ears in Soviet-bloc trade, somewhere in the neighborhood of $10 billion annually. Historically, some almost 40 years ago the powers Everyone knows that. What isn't so widely known is decided in a meeting in Yalta to practically divide Europe why. What can socialism offer capitalist West Germany into spheres of influence. I think that many in the mean­ ' when the Germans are so notoriously efficient, and time have come to deplore this, but ... never did any­ socialism is so notoriously not? body try to intervene by force. And I hope nobody will, Labor. Technologically, the Communis� bloc is because that would mean war. primitive. Its trade advantages occur in labor-intensive We have tried to influence spiritually. We have tried industries, where tyranny's superiority is absolute .... to influence by economic exchanges, by scientific ex­ In such circumstances, the socialist and the capitalist changes. We have tried to influence by human contacts, have a shared interest in avoiding calling the thing by and by financial help as well. . .. [I]t is questionable its right name. They speak of "detente" and "interna­ whether one is doing oneself a favor in the long-run tional cooperation" rather than the ugly reality of aspect if one voluntarily limits such possibilities of influ­ massive involuntary servitude .... ence .... It may be true that East and West are converging. If I consider Jaruzelski, first of all, to act out of what he so that is no cause for ecumenical celebration. It means believes to be in the best interest of the Polish nation, in

that the worst elements of both are discovering methods • the first instance as a Pole. In the second instance, he of -coluding in oppression to produce what Hilaire appears as a military man. And only in the third instance, Belloc called the Servile State: a bureaucratized, indus­ I think, he comes as a Communist. ... trialized serfdom. This [Poland] is a routine type of difficulty, and a 1 routine type of controversy within the alliance. It has From a Jan. 8 Chicago Tribune editorial: never played a really big role, and I hope will riotpl ay a big role in the future as well ....[W]e would find it very Do we really need these selfish venal allies? Must we difficult to apply sanctions ourselves against Poland .... expend more blood, more wealth, and lives for these I think that public opinion in Europe and in America Europeans? ...Th e recent Brussels meeting of the Eu­ as well as published opinion in the Northern Hemisphere ropean Community is a bitter pill to swallow when these as well as governments more or less have not understood people announced they would not support sanctions! the nature and implicit dangers of the economic situa­ These people have demonstrated callous incivility and tion. acted like passersby who notice a woman being mugged You have a higher unemployment in the Western on the street and do nothing .... world today than at any time since the early years after

EIR January 12, 1982 International 31 the war. If that situation should last it will make for v ast disarray, dissatisfaction, unrest, especially among the Italy young if they cannot fitd jobs and opportunities. At the same time we have a higher amount of inflation than is sensible; we have a much higher rate of interest than what should be permitted in the present situation of investment and fixed capital. The present rate of interest Drug overlords tied in the Western world is ridiculous. So one has to bring down the interest rates ....If th ere is a specificAm erican to the Dozier case? responsibility, it derives from the fact that ... where America goes, there goes the rest of the Western econo­ by Nora Hamerman my. I would not say that one has to choose between Poland or the Middle East or the economy as the first priority. But one has to act in the one field in order to act Information that has recently surfaced in the Italian press in the other. ... As regards myself, this, I guess, is my implicates Dope, Inc. in the Red Brigades kidnapping of 45th or 50th trip to the United States in my lifetime, and NATO General Dozier and other terrorist actions in almost all your cities ....I have many relatives here and Verona, the headquarters of the NATO Command Land many friends here . I cannot think of a future of my South. The city of Verona also happens to have the country without a close friendship with the American highest per capita rate of heroin addiction in Italy, and nation. is situated at the crossroads of illegal drug traffic from the Middle East via Yugoslavia and Bulgaria and Excerptsfrom the text of the joint statement by Ronald northward into Germany. Reagan and Helmut Schmidt on Jan. 5: A top Mafiaboss arrested in northern Italy in Decem­ ber has been revealed to be a kingpin in the collaboration ... The President and the Chancellor call again on between the Red Brigades, organized crime, and unsa­ the Polish authorities to end the state of martial law, to vory international networks involved in the U.S. "Billy­ release those arrested and to restore the dialogue with the gate" scandal. Italian investigator Umberto Pascali, in a Church and Solidarity ....The President and the Chan­ forthcoming Wa r on Drugs magazine article, shows that cellor reiterated their p osition that any military interven­ Italian terrorism of both the left variety-the Red Bri­ tion in Poland would have the gravest consequences fo r gades that kidnapped Dozier-and the right variety are international relations .... run by the same fo rces that run the dope underworld. The President explained the economic measures tak­ These trails lead back to the conspiratorial nexus exposed en by the United States with regard to the Soviet Union. last May in the scandal concerning the Propaganda-2 The Chancellor informed the President that the Federal Freemasonic Lodge, which was plotting to overthrow Republic, together with its partners in the European the Italian republican government and restore the de­ Community, will undertake close and positive consulta­ posed Savoy monarchy. tions in this regard with the United States and with other The P-2 "lodge" controls a vast financial network Western states in order to definewha t decisions will best with tentacles throughout the Western hemisphere, serve their common objectives and avoid any step which through which the fa mily fu nds of the old Venetian­ could undermine their respective actions ....The Presi­ centered oligarchy are preserved and deployed. dent and the Chancellor expressed their hope that the course of developments in Poland would permit their Further P-2 links countries to review these decisions [to withhold official On Dec. 20 the Milan newspaper II Giornale report­ economic aid to Poland.] ed on the background of the recent arrest in Turin of The President and the Chancellor also stressed the M afia boss Gaetano Fidanzati. Fidanzati was consid­ great importance of current economic issues . In this ered the successor of the notorious Gerlando Alberti, context, the Chancellor referred to the danger of a wo rld­ the kingpin of the "Sicilian Connection" arrested in the wide depression and ensuing far-reaching political haz­ summer of 1981 after Italian tax police had raided a ards that may arise if the industrial countries fa il to agree gigantic heroin refinery under his control. Alberti's U.S. ' on a common strategy to combat unemployment. The contacts included some of the biggest heroin traffickers Chancellor emphasized in particular the strategic signif­ arrested in the past two years, and they in turn were icance of social and economic stability in the industrial connected to the powerful P-2 lodge through banker countries of the West as an important element in the Michele Sindona, who is now serving a jail sentence in maintenance of a stable East-West balance.... New York.

32 International EIR January 12, 1982 Another important connection of Fidanzati is the zati's direction. late gangster Francis Turatello, who was killed in jail in Italy last August. At the time, II Giornale pointed out International ties that Turatello, who ran the heavy-drug net work in "From the Costa Brava came heroin," reports II Northern Italy, had a political patron-Bettina Craxi, Giornalejo urnalist Beppe Fossa. "From Central Europe the leader of the Italian Socialist Party. came weapons (pistols and Kalashnikov machine guns). Craxi is a key link between these drug networks and The Sicilian Mafia had the job of delivering these the "utopian" wing of NATO, including fo rmer NATO commodities into Africa and the Middle East." A commander-in-chief Alexander Haig, who worked ac­ magistrate in the case is quoted: "The Mafia's ships tively through 1981 to win Reagan administration ap­ were often escorted at sea by motorboats of a fo reign proval fo r a potential Craxi premiership in Italy. More­ police. For the moment I cannot reveal the name of this over, when the P-2 scandal exploded, a "Haig dossier" country. I do not want to provoke, at this point in the linking the U.S. Secretary of State to the plot was investigations, international complications ....The case widely mentioned in the Italian press-until the lid went is very serious, and I don't want to embarrass the on last June. fo reign minister.�' Italian Prime Min ister Spadolini is now beginning Two countries have been suggested by intelligence to point the finger at NATO . Speaking on Jan. 5, he said analysts in Italy as likely candidates for the unnamed that it was NATO and not the Italian government that fo reign country-Libya, and Israel. Arms traffic to was responsible fo r protecting General Dozier. Spadoli­ Libya in exchange for illegal drugs originating in the ni's statement was issued on the same day that his office Mideast is a well-known phenomenon. The Israeli drug also repudiated the latest trumped-Up charges that he mafia is documented to be working with Muslim Broth­ was involved with the Propaganda-2 Freemasonic lodge. erhood ins urgents in Egypt in this "business." The P-2 lodge had numerous and well-documented II Giornale explicitly stated that gangster Gaetano links to the "right" variety of Italian terrorism, includ­ Fidanzati had links to terrorism-the Italian Red Bri­ ing repeated coup attempts in the early 1970s by fo rmer gades and West Germany's Red Army Fraction (Baad­ M ussolini terrorists led by Prince Junia Valerio er-Meinhof gang). Borghese. In addition, P-2 worked with Libyan dictator This network may also account for the extraordinary Muammar Qaddafi, himself a creature of P-2 Grand ease with which convicted assassin Ali Agca eluded Master Licio Gelli, to supply the Red Brigades and the arrest prior to his attempt on the Pope's life. According entire spectrum of "red," and "black" terro rists with to a recent article in the French periodical Le Point, sophisticated weapons. Libya's Qaddafi and Iran's Khomeini backed Agca and This leads to P-2's' role in "Billygate." Billy Carter's are now trying to kill both the Pope and his Secretary fa mous 1979 trip to Libya was organized by a Socialist of State, Casaro li. lawyer from Sicily, Michele Papa, who is closely tied An intriguing angle on the case of General Dozier into the heroin-running clan of Gerlando Alberti and himself is a report from French intelligence circles, Gaetano Fidanzati. With the arrest of Fida.nzati, the tax i mpossible to confirm, that the Reagan White House police and Turin magistrates discovered a big network and the Soviets had agreed on overthrowing Qaddafi. of drugs, weapons, and terrorism extending through the According to this story, Dozier would have been in Spanish Costa Brava, Italy, and Belgium under Fidan- charge of logistics.

General Dozier in the photograph transmitted by the Red Brigades aft er his kidnapping, reminiscent of Aldo Moro before his murder.

EIR January 12, 1982 International 33 this year were Edward Teller of the United States; Homi Third Wo rld Sethna, director of the Indian nuclear program; and a large group of the French nuclear elite, including nuclear pioneer Bertrand Goldschmidt. However, this year neo-Malthusian fo rces were able

to mount a strong challengeA to the dominant tenor ofthe conference, due in large part to the nature of the chief sponsoring group in Mexico, the Colegio de Mexico. The Colegio de Mexico is, in American terms of refer­ ence, something of a cross between the Institute fo r The fight for nuclear Policy Studies (IPS) and the Brookings Institution. Its director, Victor Urquidi , is Mexico's coordinator for the technology imports Club of Rome and his office represents the most signifi­ cant command post of environmentalism and Malthu­ siar.anti -growth ideology in the country. by Timothy Rush Colegio de Mexico researcher Miguel Wionczek not only used his chairmanship of one of the conference's Only a handful of Third World countries-among them panels to assail Mexico's nuclear development plans, but India, Iran, Iraq, Argentina, Brazil, and Mexico-have bro ught in an Ivy League Khomeini apologist, Bijan had both the economic resources and scientific-cadre M assavar-Rahmani, to attack Iran's nuclear program capabilities to develop large-scale nuclear-energy pro­ under the Shah. With pointed reference to Mexico's grams. program, Massavar-Rahmani charged that a nuclear For the international Malthusian forces operating program makes no sense fo r oil-rich developing nations, behind the Club of Rome "limits to growth" ideology, and therefore the only way to explain the decisions of these nuclear programs have represented a special target. such nations to go nuclear is corruptio n of government Dr. Akbar Etemad, former director of Iran's nuclear officials. development program, touches on one of the most im­ The bulk of the participants from all countries were portant reasons below in an l:xclusive interview with outraged by this perversion of the purposes of the confer­ EIR: "What frightened everyb ldy in the world was not ence. Offici al protests against the Urquidi-Wionczek that we were building nucler plants; everybody knew manipulations were raised by U.S., French, and other that. What frightened the world was that we were train­ Mexican representatives. ing people [working on] research and development." Indicative of the tenor the clashes was the exchange That is, major nuclear programs are more than a between Wionczek and Cecilia Soto de Estevez, the cheap, vital energy source in the Third World; they are director of the Mexican Association fo r Fusion Energy. what Lyndon LaRouche calkd recently "science-driver" After Wionczek expressed satisfaction that Three Mile efforts which pull the entire cation forward along a high­ Island had "finished off' nuclear energy worldwide, technology path. Mrs. Estevez rdse from the floor to ask how many The zero-growth forces which overthrew the Shah in Mexicans Mr. Wionczek believed should be eliminated Iran saw to it that that nation's pace-setting nuclear in order to give Mexico the luxury of not having nuclear program was demolished as one of the first acts of energy. Wionczek dismissed the "stupid" question as Khomeini's Dark Ages regime. beneath him. Amidst cries from the floor of "Not at all The chief battleground has now shifted to Mexico . . ..no t at all ...that's not a stupid question," the session There, -t he government's official goal of building 20,000 almost broke up, and Wionczek was obliged to back off MWe nuclear generating capacity by the year 2000 is from any fu rther comments. now moving into its first significant implementation Reflecting the strength of this pro-nuclear sentiment, phase. Bidding for the next 2400 MWe of capacity was the fi nal document included a call fo r the United States opened in October 1981, and seven firms from four to shed the exaggerated strictures of the Carter era and countries jumped into the competition. return to the Atoms fo r Peace philosophy of the Eisen­ The Fifth International ScientificForum on Changes hower years . in Energy was held in Mexico City Nov. 9- 13, 1981. The On hand to specifically refute the attacks on the Forum revealed in microcosm how the Mexico battle is Iranian program was the director of that program, Dr. shaping up-. Etemad . In the fo llowing interview with EIR made on This forum in the past has served as a vehicle for the scene, he explains why nuclear was the real option for generally pro-nuclear and pro-growth scientificelements Iran in the pre-Khomeini era-and why it remains so to meet and plan strategy. Representative of such strata today for the rest of the Third World.

34 International EIR January Ii, 1982 Interview

Iran's former atomic power chief talks about energy and development policy

Th e fo llowing interview with A kbar Etemad, fo rmer Pres­ By th e end of the century, the intention was that wh en ident of Iran's Atomic Energy Organization, was conduct­ the oil reserv es would be exhausted, or diminished, at ed on Nov. 13, 1981 by Ceceilia Soto de Estevez, Director least to the level of ou r internal consumption (the forecast of the Mexican Fusion Energy Association (AMEF). was that Iranian oil production would drop after th e 1990s and would meet only the level of our internal Estevez : At yesterday's forum the Iranians' program consumption), nuclear energy would hav e to come into was challenged as a waste of money and something the picture of the energy development program of Iran. useless for the Iranian economy. What are your thoughts This fact did not exclude gas, which exists as a resource about that? in Iran, but we thought that after oil we would have to Etemad: I think the program is best assessed through rely on gas and nuclear, and both would be necessary for the global approach of a society. If a society decides not the Iranian pattern of development. to have any progressive activities, not to conform to the The other rationale behind the Iranian nuclear power increasing needs of the population, and not to go into a program is that a nuclear program is at the beginning a process of dev elopment and modernization, of course very time-consuming and capital- consuming problem . they do not need too much energy, and in that case I One of the problems that most developing countries are would say that the nuclear program of lran is not needed. facing now is that they do not have the capital for But this was not the choice of the Iranian people investment possibilities. In fact, the running cost of before th e uprising. We were striving very strongly to get nuclear power plants is very low, but the capital inv est­ developed, to develo p our industry, our social services, ment is very high. Now, we thought that at a time when and our capabilities to face our future needs, in the field Iran was in a position to provide for the capital formation of energy and in the field of industry. of the energy sector, the best choice was to go for nuclear. I would say that by the time the storm was gathering Later, we would nev er have been in a position to do it, or in Iran for an uprising, the economy of that country was it might have been more difficult. I can use th e example one of the soundest in the world. We had a high rate of of Pakistan, or Turkey or other countries, which are growth; our internal industry had an output of $20 willing to go for nuclear, but wh ich are stuck by th e fact billion of goods, which is very high. I don't think that that they are not in a position to provide for the invest­ this is the case in 95 percent of the developing countries. ment. We had a relativ ely high standard of living in Iran. The The other point is that the development of industrial continuation of that needed energy. Now some people activities in Iran had brough t the sophistication of tech­ argue that Iran is a resource-rich country in energy and nology in the co untry to such a level that we though t we that the nuclear program was not quite justifi ed. could afford to have nuclear technology without too The justification is very easy. First of all, if you want much fear of not being able to face th e problems of to go into massiv e production of energy, and you get nuclear energy. The four or five years during which we into the dev elopment of new technologies, everybody were activ e in this field had given th e evidence that this agrees that these technologies hav e a long lead time. It was the kind of problem that the Iranian economy and takes at least a few decades to bring it to real fruition and our capital could manage. to make a credible contribution to the needs of the These are the rationales behind th e nuclear option of country. The nuclear program of Iran was not intended the Iranian government of that time. I th ink this was a just to bring nuclear energy inside the country in the very very wise option and I think that if we had to do it again, near future, although this was a part of the program. The we would. main intention was to prepare the country to hav e access to nuclear technology with a large nuclear power pro­ Estevez: There are views that the Iranian nuclear pro­ gram. gram intended to use the nuclear plants as a vector for

EIR January 12 ,1982 International 35 couple a very large nuclear desalination plant with the nuclear power plant in order to get steam from the nuclear power plant fo r desalination purposes. This de­ salination plant was under construction when the upris­ ing came. The capacity of the desalination plant was 200,000 cubic meters per day , of drinking water. That makes a river, in fa ct, at a very low cost, because the power which was being taken from the nuclear power plant was a degraded power, in steam. The contribution of that steam to the other power of that nuclear plant was not important. I would say probably something in the order o f 13 megawatts would have been taken fr om the nuclear plant in order to go through the process o f desalination. With abundant energy (electrical) and water, we tried to visualize other industries we would have to bring in. Fisheries, fo r example, would be of great importance because in the Persian Gulf we have a lot of seafood­ shrimp, fish, and so on. A large organization co uld be established in order to exploit the possibilities of the sea. Agricultural activities could be promoted because the soil is fe rtile and the only problem was the shortage of water. Of course, agricultural activities based on desalinated water are not the normal kind of agriculture; it has to be Cecelia Soto de Estevez a very intensive kind of agriculture in order to have an economic yield of credible measure. Plans were being fo rming new industrial regions, and helping agriculture. prepared to establish integrated agricultural/industrial Have you any thoughts on that? activity in that part of Iran mostly related to fo od prod­ Etemad: Yes, of course. One of the particular aspects of ucts, as I have mentioned in the case of fi sheries, in the Iran is that we have a very large country, and that case of cash crops, and a great many other activities. One country is not developed all over. There are regions in of them would have been the establishmen t of an alumi­ Iran which have not been developed due to lack of energy num smelter in the south of Iran. We were importing and water. Most of the time these two constraints go aluminum at that time and the cost of importing alumi­ together in Iran. Most of the regions around the Persian num is very high. With a population of 600,000 people Gulf are regions where water does not exist, and popu­ well taken care of in problems of energy and water, this lation is very scarce, and there was no development could have been one of the best examples of a daring and during the last 20 years. One of these interesting places is courageous development in a part of the country where Bushir where we started to build the first nuclear powel ten years ago there was nearly nothing. plants. The capacity of these two nuclear power plants is 2,400 megawatts. It was designed so that the whole Estevez: Can you develop some more about the desalin­ region would receive electricity from these nuclear ization process itself?What was the technique to be used? plants . Then, we realized that electricity alone would not Etemad: This was a normal fl ash distil lation of water, be enough to develop that region. with the input of steam from the nuclear power plant, We came into a larger program, which was to create and intake of water fr om the sea, the Persian Gulf, and a complex organization fo r the development of that the evaporation of water. and then condensation. This is region. The population at that time was 100,000 people, a well-know technology now, but this was the first time and it was intended to get it up to 600,000.The se 600,000 that we tried to couple it with a nuclear power plant. people were needed for agricultural activity, to provide food, industrial activity, and also the normal activity of Estevez: The cost per meter, you said, was 50 cents? a city, social activity and so on. All ofthat needed nuclear Etemad: According to what I remember now, the var­ energy, water and a lot of imagination. ious evaluations at that time showed that the cost of a Then we decided that we have got to provide this cubic meter of water would have been less than 50 cents region with water. As we were going to have a tremen­ (American), which would have been much less than the dous amount of power at our disposal, we decided to cost of water right now in the southern area.

36 International EIR January 12, 1982 Estevez: It was challenged today that in yesterday's for­ according to this energy proj ect, in the fieldsof research um the Iranian nuclear power program was something on atomic energy, maybe plasma physics, the fields of that was going to subject the country ideologically and science are the key points of the dependency of the promote dependency. What are your thoughts on that? developing countries, also the training or educational Etemad: I think that for any country that is going fo r aspects of these research plans. technological development, of course there is a certain Frankly speaking, I have to tell you that what fright­ degree of dependency. I can give you the example of ened everybody in the world was not that we were Japan and Germany, which have been very dependent on building nuclear plants; everybody knew that. But the technology since the war. In fact, Japan has imported all training of people, research and development, that was its technology . In the beginning, as everybody knows, what frightened the world, because we were really taking Japanese-made products on the market were copied from care of that very seriously. More than 2,500 people were what existed in other countries. Then they learned little in the process of getting some kind of training in Septem­ by little and they made better things, and now they have ber 1978. This training was from the highest level of the market. scientific research, down to training of operators for the Germany, a very highly industrialized country, was nuclear power plant and so on. This program was getting not active in the field of nuclear energy until the late more and more developed; we had our own school in the 1950s, and when they started to go into that field, they organization for training operators and technicians. were fa r behind the other countries. But, they started to In the field of research and development, we had a transfer the technology, they entered into agreements research center in Teheran where something like 700 with other countries, and little by little they became more people worked. Of these probably 150 were professional or less independent in that field. scientists. The figures are approximate. That center was But still, neither Germany nor Japan is independent mostly devoted to fundamental research in nuclear reac­ in the sense that these people mean. They have to import tor physics; we had a very good program in fu sion, which fuel fo r their nuclear plants. The enrichment services for was going on very successfully . We had various pro­ both Japan and Germany are being done outside their grams on laser development. The program in Teheran countries. These countries are not scared of having that was going on in a research facility that was very well degree of dependence regarding other countries, because established and equipped. I think that the only part of we are right now going into the age of interdependency. the program which is [still] going on is that research As the economy of a country gets more and more com­ center. I say it is going on because the equipment is there plicated, I think the idea of self-sufficiencyand complete and the people are there. The other center which was independence is becoming irrelevant. needed was mostly tied to the problems of technology Countries should be in a position to have a good transfer, more power development and development of bargaining position with these other countries, and the techniques for manufacturing of fu el and so on. We had bargaining position means that you have to give some­ planned to establish this center in Isfahan and that center thing. I think this fear of not being in a position to was half finished. But after the uprising I heard that the bargain with these other countries is a lack of confidence center was transferred to Teheran where it was temporar­ on the part of a nation. Closing the door to new technol­ ily established, in order for the buildings to be fi nished in ogies does not enhance that situation. I think Iran was Isfahan. But if it is working, I do not know. getting dependent on technology not only in the nuclear The objective of creating that center was that it would field, but in all fields we were to some extent dependent have at least 1,000 people there with 300 professionals on other countries. All the developing countries are working in Teheran or getting training outside Iran in dependent. I can give you the example of South Korea various countries. The most important part of their task and Taiwan, two small countries with no reasources. would have been maintenance of nuclear power plants, They have also fo llowed the line of Japan, bringing in interventions when there was something wrong, and technology while still remaining dependent on large mostly the nuclear fuel cycle. We would have taken care technologies coming from outside. Nevertheless, they of the problems of the nuclear fuel cycle fr om the begin­ manage to have a very high standard ofliving, and a very ning to the end. fr uitful and extensive industry and they are exporting a That would have been a technological center. The lot of goods. first one was a scientific center. We think that with all that infrastructure we could have taken care of the Estevez: What were the training plans that you had? problems of creating a certain know-how within the Etemad: From my last answer we can conclude that real country, not to be very, very dependent which is, in fact, dependence of poor or developing countries is the lack of not good. To be always in a bargaining position, you knowledge of basic research, of the basic matters neces­ have to yourself know enough about the technology. sary to develop their countries. So in making plans That was going to be achieved.

EIR January 12, 1982 International 37 PA RT ONE

ETA: a case study in the Jesuit control of terrorism

by Richard Schulman

Spain's ETA Basque organization is a textbook case of national party, based upon doctrines imbibed at a Jesuit Jesuit-sponsored and controlled terrorism: ETA was uni versity . launched at a Jesuit university in the early 1950s and has This civil�war-provoking tradition was continued been protected by the Society of Jesus ever since. into the 20th century in the dual fo rm of the Carlist The Jesuits' motive fo r creating and maintaing ETA requetes, a Jesuit and Mussolini-backed rural Basque has been to prevent Spain from buildi ng a modern, paramilitary fo rce, without whom General Franco's fas­ centralized nation-state. During the fo ur and a half cist uprising against the Spanish Republic would have centuries since its fo unding, nation-busting has always been quickly crushed; and the short-lived, fa rcical Bas­ been the preoccupation of the order, not only in Spain que republic, which collaborated with M ussolini to sab­ but throughout the world. otage the Spanish republic from within. Then ETA was The Jesuits have a special relationship to Spain's launched in the 1950s, the newest of Jesuit experiments Basque region, however, and this fact has been of great against the Spanish nation. significance not only fo r Spain's history, but that of the During this past decade, ETA has murdered impor­ entire world. The Basque region has been used by the tant national political leaders, such as the Spanish presi­ Jesuits as a laboratory for experimentation in witchcraft, dent, Admiral Carrero Blanco. It has kidnapped for cult-creation, synthetic nationalism and local community ransom pro-development businessmen and assassinated control, linguistic brainwashing, and terrorism. The police and army officers-in an effort to provoke a Frankenstein monsters produced in this laboratory have bloody, right-versus-Ieft, Central American-style civil then been exported by the Society to all corners of the war in Spain. It has shut down Spain's once-ambitious earth. nuclear program through bombings, kidnappings, and Jesuit use of the Basque region as a proprietary murder. And ETA has openly called for the destruction laboratory fo r Satan ism dates back to the fo unding of of the Spanish and French nations by Basque and other the Society of Jesus in the late 15308. The two· fo unders separatist uprisings, out of which the destroyed nations of the Society, Ignatius de Loyola and Francis Xavier, are to be replaced by tiny ethnic duchies belonging to a were both Basques. Since then, Jesuits have regarded the fe udal "Europe of the Regions." Basque country as their "home turf." These policies cohere closely with the population­ Jesuit tiesto the Basque region are notju st historical. reduction and anti-nation-state perspectives of the Club To this day, a surpri sing number of Jesuits are Basque, of Rome, the Global 2000 group, and both organiza- , and Father Arrupe, commanding general of the Society tions' Venetian and British aristocratic backers. It is on until his recent ouster by Pope John Paul II, is also behalf of these elites that the Society of Jesus in Spain Basque. So proprietary are the Jesuits toward Spain's has been sponsoring ETA. fo ur Basque provinces that in the order's official publi­ Already during the past century and a half, Jesuit­ cations, Spain's Basque provinces are referred to not by created Basque-separatist ins urgencies have been instru­ any customary geographical name, but as the Provincia mental in three bloody civil wars in Spain-two Carlist de Loyola. wars during the 19th century, and the Spanish Civil War Basque nationalism, of which ETA is the terrorist during the 1930s, which was a prelude to the 100 million expression, was itself the 18th-century invention of a dead :of World War II. Jesuit fostering of ETA Basque Jesuit priest. Duri ng the 19th century, this priest's con­ terrorism, which threatens a fo urth Spanish civil war, is cocti,on was cultivated at first predominantly in the form thus by no means a purely Spanish concern. of Carlism, a Jesuit-backed royalist movement that Of course, it would be misleading to depict the brought Spain two 19th-century civil wars; then, toward Society of Jesus as the only malevolent fo rce with its the end of the century, in the guise of a racialist Basque fi nger on the ETA trigger; Spanish police and security

38 International EIR January 12, 1982 fo rces have long had evidence and documentation con­ Were led by the Society of Jesus. cerning high-level foreign sponsorship of ETA Basque • In the 1960s, ETA began committing robberies, terrorism . One of the key suspects in President Carrero kidnappings, bombings, and murders. Pope Paul VI, Blanco's assassination was ETA executive committee aware of the aid ETA was receiving from Catholic member Pedro Ignacio Perez Beoteg ui, who was also clergy, ordered priests to stay out of politics. Within known as "Wilson" because of all the years he had days of this edict, the Pope was denounced by numerous spent in England. Before he died at the hands of the Jesuits in France and Spain. ETA , President Carrero Blanco had written a letter to • The assassinations targeted police, army, busi­ the late Spanish dictator Francisco Franco complaining nessmen, and key political leaders. The most notorious that it was Spain's "allies," the British, who were of these was the 1973 assassination of Spain's new promoting ETA . Carrero Blanco wrote that Spain president, Admiral Carrero Blanco, killed when the would probably not be able to do anything about this, ETA detonated high explosives in a tunnel under the however, lest the British cause Spain greater damage in street over which Carrero Blanco's automobile passed retaliation. daily en route to and from mass at a Madrid Jesuit Church. The murder was based on inside information The green Union Jack on the Admiral's comings and goings to services, Carrero Blanco was not alone in these observations. backed by months of excavations under the Jesuit­ Other Spaniards had remarked upon the curious iden­ quarter street over which Carrero Blanco's automobile tity of the Basque nationalist fl ag to the British one, passed-excavations which curiously escaped being no­ with the single diffe rence of colors-the Basque nation­ ticed or reported by the quarter's residents. alist flag is a green Union Jack! Jesuit sponsorship and control over ETA is more The not unimportant connections of ETA to foreign extensive and historically based than even the events intelligence centers such as Britain, far from deflecting from the 1950s on might indicate, however. The Jesuits from the significance of Jesuit sponsorship of ETA , not only created ETA; they also concocted the Basque underline that the Jesuits function principally as the nationalism of which it is an outgrowth. A relatively second-level profiJers of and controllers of ETA Basque recent creation, Basque nationalism only appeared as terrorism, with the highest policy directives coming an organized political movement in the early 1880s. Key from the leading Venetian, British, and Hapsburg no­ to the new movement were the efforts of the Arana y bility and their anti-centralist allies among Spain's Goiri family, a fa mily which made and spent its fo rtune nobility, especially the Carlist nobility centered around running guns during Spain's 19th-century Carlist wars. Hugo de Borban. One of the Arana y Goiri fa mily's sons spent a year at a The case against the Jesuits as sponsors and control­ Jesuit college and came out a Basque nationalist. He lers of. ETA terrorism is well documented. Spanish then recruited his brother Sabino Anlna y Goiri, the police fi les, from ETA's fo unding in the 1950s on, are official fo under of the Basque Nationalist Party. filled with dossiers of Jesuit priests either arrested for The cultural basis of Basque nationalism itself was activity in or on behalf of ETA or whom the police created by the Jesuits a century earlier. It was the sought to arrest but were prevented from doing so by Basque Jesuit priest Manuel de Larramendi who con­ higher-ups, for fe ar of opening the "can of worms" of cocted, in the 18th century, the absurd racial theories Spanish church-state relations. upon which Basque nationalism came to be based .

The ETA dossier Assassination of kings, Popes, and scientists Without taking into consideration unpublished ma­ It should surprise no one that the Soci ety of Jesus terial on Jesuit activism in ETA in Spanish police files, should be running so heinous an institution as Basque that already in the public domain is itself damning. This terrorism. For four hundred years now the Jesuit order material indicates that: has been notorious as a haven fo r terrorists and assas­ • ETA was officially fo unded in 1959 as the out­ sins. It was already during the closing years of the 16th growth of a radical Basque nationalist project begun at century that the order became infamous as Europe's Spain's Jesuit-run University of Deusto in 1953. leading advocate of regicide. Father Mariana, S.J., and • The radical proj ect was allowed to incubate from the 1598 work De Rege et Regis Institutione (On Kings 1953-1 959 as a tolerated faction within the cleric-domi­ and the Monarchy), openly advocated the murder of nated Basque Nationalist Party (PNV) . In the Basque kings unpopular with the order, namely, those engaged region, the c1�rgy is dominated by the Jesuits. in nation-building. In keeping with this doctrine, a • Encouraging the growth of both Basque nation­ Jesuit agent murdered the French humanist king Henry alism and ETA within it were the Basque language and IV in 1610. cultural schools run by the region's clergy, which in turn Nor have Popes been safe from Jesuit assassins. The

EIR January 12, 1982 International 39 A riot in the Basque province between police and separatists.

Jesuits murdered Pope Sixtus V in 1590 and Pope Accordingly, the Jesuits were active in the murder of Clemen t XIV in 1774, the latter being the Pope who Bruno and the persecution of Galileo. They harassed dissolved the order. Leibniz. They encouraged Aristotelian nominalism and Basque priests Ignatius de Loyola and Francis Xav­ fo rmalism in their schools, in opposition to the creative ier founded the Society of Jesus during the 1530s on hypothesis-forming activities of actual scientists. behalf of a handful of Italian black nobility fa milies In keeping with this anti-science tradition, contem­ determined to crush the scientific and nation-building porary Jesuits have been active in the environmentalist movements set into motion by the Renaissance. These movement, militantly opposing nuclear reactors and Renaissance movements were having the effect of rais­ other advanced technologies that threaten to increase ing the cultural and intellectual levels of Europe's standards of living and man's power over nature. In this populace, creating a citizenry no longer willing to respect, it is no coincidence that California's anti-nucle­ tolerate the looting practices of the black nobility. To ar, "greenie" governor Jerry Brown was trained by the stop this, leading oligarchical fam ilies deployed Father Jesuits and keeps their manual on his desk in Sacramen­ Loyola to create an anti-Renaissance "thought police," to . In Spain, ETA has been the Jesuits' mechanism for just as the Dominicans had been deployed duri ng the simply murdering the supporters of nuclear energy. 13th century to crush Platonic-apostolic currents in the Determined to halt the completion of Iberduero's Le­ Church. moniz nuclear reactor, which promised to bring a

40 International EIR January 12, 1982 significant rise in standard of living to Basques and The Jesuit order, however , hostile to a centralized Spain, ETA kidnapped the reactor's chief engineer, Jose nation-state in principle as threatening to the overlord­ Marfa Ryan, on January 29, 198 1 and then murdered ship of its Basque fiefdom, sought to sabotage this him a week later when the government hesitated to halt nation-building. In 1766, the Jesuits organized Madrid's construction on the reactor as ETA demanded. Scandal­ lumpen ized majo caste into the notorious Esquilache ously, the government subsequently capitulated to· the revolt, which kept King Carlos III of Spain out· of his m urderers by cancelling the project, with the result that, own capital city fo r nine months. The king survived the to date, Senor Ryan not only died on behalf of science, destabilization, however, and the following year ex­ but died in vain. pelled the Jesuit order from Spain, followi ng the exam­ ple set by his Portuguese neighbors in 1759, his French Sponsors of witchcraft cousins in 1764, and �he Kingdom of Naples in 1767. Hatred of science is something of a tradition among By 1773 the Papacy itself had agreed to dissolve the the Basque Jesuits . Since the early 17th century, Basque hated order. Jesuits have secretly enco uraged witchcraft among the peasantry of the region and then profiled the results. A Maoist war This was done to derive belief structures fo r spawning Banned utterly from Spain and much of the rest of cults and terrorist organizations elsewhere in the world, the world until revived by ultra-reactionaries at the end and to justify Inq uisitions in Spain against the order' s of the Napoleonic wars, the Jesuits by the 1830s had opponents in the name of fighting the very Satanism nevertheless sufficiently re-established themselves in the order itself had nurtured! As a result. the Basque Spain to play a major role in organizing the first Carlist , region soon became notorious throughout Europe as a w ar. When King Ferdinand VII of Spain died in witchcraft capital. That notoriety has continued down September 1833, the Jesuits seized the opportunity to to the present day among a more restricted audience. organize the secessionist-prone Catalan and Basque "Son of Sam" cult murderer David Berkowitz, in regions to rebel against Ferdinand's designated succes­ recounting details of the witchcraft group he had been sor, and instead rally around a Basque-region-based a member of, emphasized his cult's affiliations to "the Carlist pretender. As a result, Spain was rent fo r seven Basque witches of Spain." years by the first Carlist war. It would not be fa r-fetched to regard ETA as a left­ The war had a Maoist flavor, as the Jesuits focused veneered successor to the Jesuits' fo ur-century-old work on organizing the primitive, withcraft and superstition­ as witchcraft organizers, noting that ETA's escape ridden Basque-Catholic countryside, as well as related routes and safehouse networks are situated in the rug­ social layers elsewhere in Spain. This left the Queen ged Pyrennean couhtryside of the earlier witchcraft Regent to seek urb�n and liberal backing . It was a war covens. of the countryside against the cities. During the 17th century the Jesuits not only ran The Carlists lost the first of these dynastic wars, but witchcni ft experiments in northern Spain; their order they were not crushed. In consequence, from 1873 to virtually ran Spain through its control over education 1876 Spain was rent by a second Carlist civil war, with and the Church. With the Jesuits acting as ideological the rebellion's base even more blatantly seated in the fo otsoldiers fo r the Venetian and Genoese fa milies who Jesuit's Basque fiefdom. Despite the international sup­ controlled Spain's finance and politics, the country was port the Carlists received-such as the weapons the looted and depopulated-a destruction it has not entire­ Polish-born British novelist and intelligence agent Jo­ ly recovered from to this day. It was in this context that seph Conrad ran to the CarIists-the Carlists again the great Spanish author Miguel de Cervantes wrote his were beaten and the special political concessions the novel Don Quijote as among other things an ironic, region had hitherto enjoyed from the national govern­ thinly disguised attack on the Jesuits' Basque fo under, ment withdrawn, except for some special tax advan­ Loyola. tages. During the 18th century, however, Spain began to It now began to dawn on the Jesuits that neither recover fr om that Venetian-H apsburg looting. Under a witchcraft nor Carlist royalism were credible any longer Bourbon dynasty installed by Louis XIV at the cost of to any but the most backward peasant and lumpen a European-wide eleven-year war-'-England had repre­ masses. Had the American Revolution not ushered in sented the major opposition to this change-Spai n fo r an era of repUblican nationalist movements? The Jesuits the first time began to emerge as a strong, centralized and their patrons realized that to maintain credibility nation-state. Especially in the second half of the 18th while disrupting nation-building, they would have to century, Spain enjoyed a notable economic expansion. them selves caricature the national-republican move­ The Basques shared in this prosperity, and many ments they sought to destroy. worked as administrators fo r the central government. To be continued.

EIR January 12, 1982 International 41 MiddleEast Report by Robert Dreyfuss

Menachem Begin's calculations 1982 deadline. Israel's Prime Minister, Ariel Sharon, is playing with fire in A leading British aristocrat and new brinkmanship over the Sinai, over Sy ria, and over Iraq. supporter of Israel fl atly told a re­ porter in the first week in January, "Israelwill not pull out of Sinai." General Sharon is leading the effort to wreck Camp David in that manner. Israeli cult leader Menachem Be­ UII. Some Israelis believe that ulti­ gin, having already succeeded in In a document entitled "Israel's mately Israel will be forced to with­ alienating almost all of Israel's Strategic Problems in the '80s," draw from Sinai by the overwhelm­ friends and incensing all of her ene- Sharon writes that in the coming ing force of world opinion and that . mies, is now playing with a new decade Israel will find itself with a Sharon is merely making a grand­ . holoca ust in his policy on the occu­ "sphere of strategic and security stand political gesture by support­ pied Sinai peninsula and toward his interests" extending from Pakistan, ing extremist settlers �here; but a eastern neighbors. The stakes are Iran, and Turkey down into East very real danger exists that Begin high. Africa . will be unable to avoid using fo rce As one experienced Israeli poli­ Along with setting up itself as a to remove the settlers . tician told EIR , "If Begin refuses to gendarme for the "arc of crisis," In such a scenario of potential give up the Sinai in April, it could Israel also intends, according to civil war, Begin might resign or be very well be the end of Israel." Sharon, to act to prevent Arab toppled, with Sharon coming on The unstable Begin, already be­ states from acq uiring nuclear ener­ top. Already, a handful of Israeli set by coalition difficulties and gy in any fo rm, including for peace­ Cabinet ministers, including Trans­ pressures froll)General Ariel Shar­ ful purposes. port Min ister Mordechai Zippori, on and Dr. Yuval Neeman's extre­ Concluded Sharon, the strate­ have bitterly accused Sharon of mist Tehiya Party, is entirely capa­ gist who pushed the now-defunct trying to sabotage Israeli policy on ble of ignoring world reality and U. S.-Israeli Strategic Memorandum Sinai. plunging ahead on a cou rse that of Understanding, Israel would be­ Meanwhile, allies of Sharon and could eventually trigger World come a "surrogate rapid deploy­ Begin in the radical Gush Emunim War III. ment fo rce." settlers' movement are sending per­ According to both Arab and In the last days of 1981, Israel sonnel and arms to Yamit, the chief American intelligence sources, Be­ put that idea into practice, sending Sinai settlement. A hard core of gin is planning to escalate the situa­ its air fo rce into the skies of Leba­ settlers there, manipulated by gov­ tion in the region toward a "limited non, Saudi Arabia, and Iraq. In ernment circles, has been mobilized war" on the occupied Syrian Golan Iraq, the Israelis penetrated some to prevent the ultimate withdrawal. Heights . 40 miles into Iraqi territory befo re On Jan. 7, the Israeli Cabinet The war, sources say, could be­ being driven off by Iraqi jet fight­ decided to grant about $300 million come a means to strengthen Syrian ers. Israel's actions reflect the fee l­ in aid to the Sinai settlers to co m­ President Hafez Assad's influence ing in the Israeli command since the pensate them fo r abandoning their i n the Arab world and, at the same June 1981 bombing of Baghdad's homes and settlements. That deci­ time, provide Syria with a pretext to nuclear reactor that Israel has the sion may, in fa ct, ease some of the come to the bargaining table with right to utilize its air superiority in anger in Yamit and help facilitate Israel. any manner it deems fit. the withdrawal. But such a war could easily In addition to heating tensions But, as one Israeli put it, "The lurch out of control, setting off an along the eastern fr ont, the Israelis choice facing Begin is clear. Either unpredictable chain of events lead­ are giving out signals that they do he will be remembered in history as ing to a much wider conflict. not intend to withdraw on sched­ a terrorist, or as a man of peace, The architect of Israel's war uled from what remains of the oc­ depending on what he does in the strategy is Defense Min ister Shar- cupied Egyptian Sinai by the April nex t few weeks."

42 International EIR January 12, 1982 DatelineMexico by Josefina Menendez

An end-of-the-year economic package period. Several pieces of the government strategy fo r 1982 are in place. Most important fo r Mexican but new oil-related pressures are intensifying. officials is that, for the current peri­ od, Mexico is out from under the "food weapon" threat that U.S. in­ fl uentials such as Henry Kissinger have so openly promoted. But the New Year has brought On the evening of Dec. 21, 1981, which wage hikes merely compen­ new pressure on another front: Industry Minister de Oteyza an­ sated fo r inflation but didn't sur­ Mexico's oil revenues. The Volck­ nounced an unwelcome but long­ pass it, is over. er-induced collapse of U.S. indus­ expected Christmas gift fo r the StiU up in the air, however, is a try has been so rapid that use of country. Internal gasoline prices third element in the new package: heavy, residual oil in the United were hiked almost 100 percent exchange rate policy. Mexico's States is running some 25-30 per­ across the board . "floating" peso, after three years of cent below last year's levels. Con­ The cost of the top-grade gaso­ unchanged value, began a marked sumption is sharply down in several line "Extra," rose from 6.00 pesos downward slippage last year, at a other advanced sector nations. per liter to 10.00 pesos; the popular 12 percent per year rate. Will that Half of Mexico's oil exports are grade "Nova" from 2.90 pesos to rate be maintained or will it speed heavy Maya crude. The resulting 6.00 pesos; and diesel fr om 1.00 up? Will there be some kind of one­ new slack gave the multinationals, pesos to 2.70 pesos. Mexican prices shot larger adjustment and then a who had targeted Mexico last sum­ thus remain below U.S. prices (the resumed slower float? mer fo r a reverse "oil shock," room average price works out at a little There is no saying at this point to force a new price rollback. As of over 90 cents a gallon), but the which track will be taken . President Jan. I, Pemex Maya crude dropped differential is markedly reduced. Lopez Portillo has repeated ly stat­ $2.00/bbl in price, to $26.50, thus The gasoline hikes were accom­ ed that he is flexible on exchange lowering average price for all its oil panied shortly after by a second rate policy-at the same time he has by $ I.OO. economic measure in the current bitterly assailed those international Though not nearly of the severi­ package of readjustments. The press outlets and speculators who ty of last summer's troubles, this minimum wage rose 34.5 percent as have attempted to fo rce Mexico new measure will tend to revive of Jan. 1, 1982. into a devaluation in circumstances some of the atmosphere ofeconom­ In late 1980-partially through that would wreck the economy. ic insecurity which helped feed deferring gasoline price hikes slated One pressure point relieved dur­ broader economic warfare scena­ for that time-the government kept ing the year was the agricultural rios in the June-August period. the inflation rate a hair under 30 situation and no new shifts in agri­ One of the bellweather indica­ percent and decreed a rise in the cultural policy are expected. Due to tions of the toll the international minimum wage pegged precisely to unusually good weather conditions Volcker / Bank fo r International the inflation rate. and the new investments of govern­ Settlements regime has taken was This year's larger increase, de­ ment's SAM program, harvests the revelation at the end of the year spite a slight improvem ent in the leaped to some 28 million tons of that Monterrey's Alfa Group had 1981 inflation figures, is due to two basic grains in 1981-up from 23.3 cancelled its plans to build a 13- factors. First, the gasoline hikes million tons the year before and the plant petrochemical complex at the builds a January surge in inflation, largest harvest in Mexican history. new industrial port of Altamira, on and it was politically wise to pro­ The leap from fam ine to feast the Gulf coast. Alfa was forc"ed into vide anticipated compensation fo r was so rapid that Mexico is scram­ the measure by the soaring interest workers. Equally important, the of­ bling fo r storage space and at ... it is paying on its large debt. This is ficialwork ers' movement under Fi­ tempting to postpone delivery of a significant blow to one of the del Velasquez has been giving some shipments from the United government's premier development abundant signals that the time in States contracted in the previous projects.

EIR January 12, 1982 International 43 International InteWgence

tonio Guzman, accompanied by U.S. This occurred just after a trial of one of Benazir Bhutto fr eed ambassador David Yost. Kissinger also Egypt's leading businessmen, Rashad promised that he would intervene in the Osman, on corruption charges, a trial fr om Zia 's prison United States on behalf of Dominican which implicated a prominent Egyptian sugar producers who are being hurt by member of the fascist Propaganda-2 An international effort has forced Paki­ U.S. tariff policies. Immediately follow­ lodge, Osman Ahmed Osman. stan's Muslim Brotherhood regime to ing the visit, Dominican Foreign Minis­ The same ministers ousted in M ubar­ release the leader of the opposition Paki­ ter Terazas de Espaillet announced that ak's cabinet purge were also implicated stan Peoples Party, Benazir Bhutto, from his country "would benefit greatly" from in the trial, along with leading lights of prison. The daughter of fo rmer Pakistani the Caribbean Basin program. the corrupt Venetian-allied Alexandrian leader Zulfikar Ali Bhutto, the fo under Also backing the administration's mafia, the center of dirty-money launder­ of the party she heads who was "legally" Caribbean policy is the Agency for Inter­ ing for drug trade. Alexandria governor assassinated by the Zia regime in 1979, national Development, a long-time co­ Abu Taleb, a leader of the Egyptian en­ had been incarcerated in Karachi for nine ordinator of depopulation programs. vironmentalist lobby against nuclear en­ months and was reportedly tortured and AID director Peter McPherson an­ ergy, was targeted during the legal pro­ subjected to horrendous prison condi­ nounced Jan. 4 that while the U.S. is ceedings. tions. reducing overall development assistance Although she is now being kept under by 12 percent, assistance to the Caribbe­ house arrest in her fa mily home, Bhutto's an region will only be cut by 5 percent. release is considered a victory for Zia's Jamaica, which just received a $38 mil­ international opponents who had circu­ lion loan from the Inter-American De­ lated a call for her release. The call was velopment Bank to cover balance of pay­ issued through the increasingly influen­ ments problems, is expected to receive tial Pakistan Peoples Newsletter, pub­ additional aid during fiscal 1982. lished by Bhuttq's party in North Amer­ Propaganda-2 on the ica. Despite Zia's ban on the newsletter rampage in Italy in Pakistan, the call was widely circulated there clandestinely. In response to moves guided by the Pope Benazir Bhutto's father had earned to stabilize Italian politics, terrorist con­ the enmity of Henry Kissinger for his trollers are on a full mobilization which industrialization policies for Pakistan, resembles the period prior to the 1978 prior to his hanging by the Zia regime in assassination of Prime Minister Aldo 1979. at Kissinger's instigation. Egyp t's Mubarak Moro. Licio Gelli, one of the leaders of attacks Dope Inc. the fascist P-2 lodge, is currently at­ tempting to coordinate an operation to Egyptian President Hosni Mubarak has implicate Prime Minister Spadolini in the put priority on rooting out the corrup­ P-2 scandal. The operation involves the tion which has plagued Egypt's economy submission to the parliamentary com­ and in particular shutting down the ac­ mission investigating P-2 of a tape in Kissinger does leg- work companying drug trafficking. According which Gelli speaks of then-Senator Spa­ to knowledgable European sources, since dolini as wishing to join the secret con­ fo r Ca ribbean program Mubarak was elected, the price of hash­ spiratorial lodge. Working with Gelli is ish in Egypt has tripled thanks to the the head of the Rizzoli publishing house, Henry Kissinger traveled to the Domini­ clamp down on illegal hashish trade. As who has announced that he delivered the can Republic Jan. 2 and 3, anticipating a combined feature of the clampdown on tapes to Parliament to demonstrate his the announcement of the Reagan ad­ the Muslim Brotherhood, Mubarak has "willingness to cooperate with justice." ministration's official Caribbean Basin successfully "dried out" sections of Cairo Even anti-Spadolini press outlets such as program later this mont.h-a program known as centers of the drug trade. La Repubblica are forced to comment intended to turn the area into a Hong Mubarak is also trying to recast the that the entire affair smells of an attempt­ Kong-style "free enterprise zone." organized-crime "free enterprise" eco­ ed setup ofSpadolini. Spadolini has thus ' Kissinger traveled at the invitation of nomic policy known as the Open Door far responded by issuing a harsh denun­ designer Oscar de la Renta, a member of policy which accompanied Egypt's ac­ ciation of the slander, in which he says the drug-tainted jet set. quiescence to the Camp David accords. that his only connection with P-2 is his Emphasizing that he was only visiting Mubarak's recent sudden move to shake well-known attempts to stamp it out once as a "private citizen," Kissinger held up his cabinet eliminated all the ministers and fo r all. meetings with Dominican President An- responsible for the open door policy. P-2 gangs have meanwhile been set

44 Intern ational EIR January 12, 1982 Briefly

• PEKING authorities denied the U.S. Seventh Fleet access to the port of Dalian at the beginning of January because of Washington's loose for a series of terrorist operations. that the Americans were lukewarm to­ recent decision to sell some $97 In Verona, the Red Brigades have kid­ ward Israel and were also looking to Italy million in military spare parts to napped the 15-year-old son of an Italian as their instrument in the Mediterra­ the Nationalist regime on Taiwan. NATO colonel who works in the same nean .... The Israelis wanted to change The report, carried in the Japanese sector as Red Brigades prisoner General this situation by contributing to the de­ press, has fueled speculation that a Dozier. On· Jan. 7, a corrupt faction of stabilization of our country." secret deal had been worked out the Rome magistracy decided to free two during Alexander Haig's China neo-fascist terrorists; on the same day, visit last sum mer that would allow the Red Brigades attempted in Rome to U.S. naval vessels to call at Chi­ kidnap the executive director of Fiat. nese ports.

• NAHUM GOLDMANN and Richard Loewenthal, writing in Link established between the Jan. 6 issue of the West Ger- . attacks on Pope, Reagan man weekly Die Zeit, both insist that there can be no Mideast peace without Soviet involvement. Gold­ Information now made public confirms mann, a spokesman for a moderate what EIR reported months ago: that Bare Mossadfunding Zionist faction, adds that the pre­ there is a solid connection between the requisite for peace is U.S. pressure fo r Italian terrorists fa iled assassination attempts against the on Israel for a rational policy. lives of the Pope and of President Rea­ Loewenthal also calls fo r rational­ The Italian weekly Panorama published gan. ity in the classical Western tradi­ devastating material at the beginning of According to the editors of the Turk­ tion. Their views appear to cohere January on the Socialist International's ish newspaper Milliyet, a picture of a with those of a group within Brit­ role in international terrorism. In ex­ man running from Saint Peter's square ish intelligence which opposes a cerpts from the testimony of the impris­ taken by a Detroit journalist immediately "flight-forward" confrontation in oned co-founder of the Red Brigades, after the shooting of the Pope positively the Mideast and Poland. Alfredo Buonavita, Panorama charges correlates with one of the five figures in that the Israeli Mossad intelligence ser­ the U.S government's composite photo­ vice financed and nurtured the terrorist graphs of members of a Libyan hit squad • THE J-IONDURAS govern­ gang. The mediator for this link, Buon­ which entered the U.S. to kill Reagan ment officially charged Jan. 4 that avita told Italian magistrates, was a and other government officials toward some 200 Nicaraguan Indian exiles prominent member of the Italian Social­ the end of 1981. were massacred by Sandinista sol­ ist Party (PSI). As international investigation into diers during military raids into Panorama excerpts Buonavita's con­ the assassination attempt on the Pope's Honduras between Dec. 26 and fession to the magistrates: "In 1973, life continues, the Turkish government Dec. 31 . An escalating border war some representatives of the Israeli secret has also reported to Italian authorities between the two countries is being services succeeded in getting in contact that another man photographed stand­ promoted by Canadian missionar­ with the Red Brigades in Milan. They ing next to captured hitman Mehmet ies, who use Indian exiles from the proposed to supply weapons, money, Agca at the time of the attempt has been old British-run "Misquito Coast" cover inside some sectors of the state identified as a known close associate of area of Nicaragua, as cannon fod­ apparatus, and military training. They Agca's for many years, and one who was der. As the Sandinistas launched asked in exchange for a major and more involved with Agca in the murder of a their raid, the head of the Misquito ' accentuated engagement in destabilizing Milliyet editor. Indians, Steadman Fagoth, was the Italian political situation .... In a The investigations into the P-2 lodge caught last month in collaboration meeting of the Red Brigades executive, of Italy-the controller of terrorism on with the Honduran military. Mara Cagol let people understand that left and right-continue to bring to light the link with the Israelis was someone new connections between P-2 and the • CORRECTION In our Jan. 5 fr om the PSI. ..." The Israeli proposal, Italian Socialist Party of Bettino Craxi. article on the Vatican's political Panorama continued, was discussed by Tapes handed over to the parliamentary initiatives, Emilio Colombo was the leadership of the Red Brigades .... committee investigating P-2 now reveal named as a leading anti-nuclear The terrorists didn't want to make an that P-2 leader Gelli was trying to get the advocate. The advocate in ques­ immediate decision; they contacted the publishers of the daily Corriere della Sera tion is Umberto Colombo. Emilio Israeli spies to ask why they would help to sell that newspaper to a Milanese busi­ Colombo is the Foreign Minister the Red Brigades. nessman who operates a front for the of Italy. "Buonavita said that they answered PSI .

EIR January 12, 1982 International 45 �ITillNational

Why genocide is now respectable in the U. S.

by Lyndon H. LaRouche. Jr.

The fo llowing is excerpted fr om the keynote speech of institutions considered generally respectable, to propose chairman Lyndon H. LaRouche. Jr. at the conference of that we accomplish genocide on a scale 100 times greater the International Caucus of Labor Committees held in New than that perpetrated by Adolf Hitler. York. Dec. 31. 1981. In fa ct, this genocide is being perpetrated not as the re-eruption of something which is unconnected to the We seem to be all safely here, despite a massive past, but rather, the forces behind today's genocide were campaign of vilification and dirty tricks aimed at pre­ the fo rces behind Ado lf Hitler. venting this speech and this conference from ever occur­ Consider the case of Averell Harriman's circle. A v­ ring. I understand that at last report there were ten erell Harriman is presumably a respectable former gov­ distressed individuals marching around making animal ernor of New York State, a dignified man of 90 years of noises of protest across the street, and charging me, age. But look at the reality of what squats on Averell among other things, with threatening to take away their Harriman's periphery. Consider his Churchillian wife, drugs. They have charged me in other leaflets with who spawned Winston Churchill III, Pamela Churchill planning to destroy them with atomic, bacteri ological, Harriman , who is consci ously part of this proposa l fo r and chemical warfare. That's the first time I have ever genocide, as well as for the destruction of the United heard soap referred to in such terms. States. She is the leader of an organization, presumably Turning to the matter that shall occupy our attention associated with the Democratic Party, called the "87 today, it is now a generation and a half since, at the end Committee," which is determined to eliminate the con­ of World War II, the full horror of the Nazi concentra­ stitutional order of government in the United States, tion camps were opened up to public opinion. It is now a preferably by 1987. generation and a half since the Nuremberg trials, which Senato r Edward Kennedy is a sponsor of this propos­ dealt, although in a superficial way, with some of the al to destroy the United States Constitution, although I things that the Allied forces chose to examine, while thought he had taken an oath once or twice. ignoring others. Look back to 1932. There was a conference held at And yet, today, when those of us who were adults or that time in New York City, an international conference young adults during the last war, are now only becoming on eugenics. It was sponsored by persons associated with grandfathers, and when our children represent the con­ a New York institution called the American Museum of sciousness of nations, we findthat not only is it public Natural History. The conference sponsors included the policy of a number of institutions, public and private, distinguished mother of Averell Harriman. international as well as national, but also the policy of The conference sponsors also included a gentleman

46 National EIR January 12, 1982 At the JCLC international conference.

who today provides a link between the fo rces behind Hitler-like ideas. However, Mr. Draper didn't re-educate Hitler then, from the American side, and the forces himself, because in the postwar period this gentleman, a behind the new genocide today . His name is William "patrician" long associated with the investment banking Draper. fi rm of Dillon Read in New York, has continued his This conference, a conference on eugenics, was held genocidal activities without shame and even, indeed, on the eve of putting Adolf Hitler into power. Hitler was with greater arrogance. H� established an entity called not put into power by Germans. He was put into power the Draper Fund as a vehicle for genocide proposals on orders fr om London and New York City; by the today. And was it not William Draper III who was Morgan interests incl usively. The celebrated foreign vis­ appointed by the Reagan administration to head the itors and speakers at this eugenics conference in New Export-Import Bank, a very crucial institution for pro­ York City included Nazis and others, peddling their moting genocide? racial theories. The point is that the distinguished mother of Averell The Draper Fund Harriman and William Draper thought this was all very The Draper Fund is dedicated to committing geno­ nice. Eugenics means "raci al purification." They praised cide, primarily in Latin America, Africa, and Asia. It this movemen t. Draper specifically praised Adolf Hitler retains ,on its staff General Maxwell Taylor, the body­ for his spokesman ship fo r genocide directed at racial count collector fo r Robert S. McNamara. McN amara purification, which was then called eugenics. reminds us that the worst murderers in the world are And who is behind the genocide proposals of today not people with guns, but accountants . Taylor demand­ but the same crowd, the same unnatural Museum of ed a thousand bodies a day, men, women, and children Natural History. This is a gang of so-called "patricians." in Vietnam, because Robert S. McNamara, the accoun­ American patricians are cheap imitations of the British tant whiz-kid, demanded a thousand bodies a day. aristocracy. William Draper, during the war, distin­ General Maxwell Taylor is still engaged in the body­ guished himself as an American general. The American count: not a thousand bodies a day as in Vietnam, but military in its wisdom understood his natural talent. now, the murder of billions. They put him in charge of the division for bombing Maxwell Taylor, the official of the Draper Fund, civilians. publicly states that there are only' 20 developing nations Then in the t>ostwar period, General William Draper of the world which are to survive. The others are to die. was sent to Germany, fo "re-educate" the Germans and He proposes that Nigeria will be one of the more free them of the taint of support for Adolf Hitler and fortunate nations of Africa; it is permitted to retain half

EIR January 12, 1982 National 47 its present population. The rest, says Maxwell Taylor, of people that died because of decisions taken by Jimmy are to die. Carter's administration. Think of a nation that would vote to renominate a Carter fo r the Democratic Party State Department policy leadership. There are lessons to be drawn . Consider the Delphi project out of Connecticut Just so, euthanasia is already in process inside the which we have uncovered, which has a consulting United States of America. What does this mean? It relationship to the U.S. State Department as well as to means pull the plug. "We have too many old people. the Pentagon. The Delphi project created a computer They cost too much, don't you know?" This is already trick, which is nothing but a trick, to convince people, in progress as a policy, in New York City, fo r example. including heads of developing-nation governments, that It is very simple to kill a perso n who is vulnerable: they had to support population policies which represent, euthanasia. Withdraw medical services. Use medical in fa ct, genocide among the developing nations of the science to determine what kind of care people get, and world. what kind they don't get. In 1969, that unspeakable creature, Henry Kissinger, But at Nuremberg, we recognized that the first step secured an official position at the National Security to mass murder by the Nazi machine was the introduc­ Council and later went on to make an already-bad state tion of euthanasia in the 1930s. There was a famous at the State Department even worse. He made official a Nazi doctor trial at Nuremberg, in which the featured, number of institutions in the U.S. State Department indicted figure was Dr. Karl Brandt (whose relationship which are officially committed to genocide. to Willy Brandt is only spiritual). Dr. Karl Brandt was In the National Security Council, the Ad Hoc Com­ indicted and committed to death fo r committing that mittee on Population Affairs is committed to planning cnme. genocide as a strategic objective of the United States. In But do you know that those in this state who defend the State Department, the Office of Population Affairs euthanasia include leading reform rabbis! They say that under the direction of James Buckley of New York is they will not oppose euthanasia. The same rabbis who committed to genocide on this scale. The Bureau of are out there cheering a holocaust protest against some Oceans, Environment, and ScientificAf fairs is commit­ of the people that were murdered by the Nazis, are ted to genocide on a global scale. condoning euthanasi a today. By the standards of the We are talking about billions of people. Sometimes Nuremberg Code, they are themselves indictable. these people are modest: those who aren't so radical The Nuremberg Code was explicit, and as far as it talk only of hundreds of millions. The Global 2000 went, was wise. It recognized that officials of govern­ Report to the President, that great humanitarian Jimmy ment who "knew or should have known," including Carter, proposed only to eliminate about 200 million. judges, newspaper officials, professors, and others who But that is cosmetics . The policy, in the minds of those "knew or should have known" that the consequence of who wrote the report and authored the policy, is to kill their advocacy or crimes of omission was to promote 2 billion people at minimum. And the policies they genocide, were there fore guilty of genoci de. propose will kill at least 2 billion people. This is correct, because without the in fr astructure of Jimmy Carter's seco nd Secretary of State, the fo rmer support represented by such persons, the little SS man Senator Edmund Muskie, stood at a State Department who did the dirty work could not have functioned. It is press conference to present Global 2000 and to acknowl­ the professors, the judges, the officials, the accountants, edge it meant population reduction by the end of this the doctors'who make genoci de policy. We judged it so , century on the order of billions. And he, Edmund at Nuremberg, and we were right. Muskie, praised the report on that account. According to the terms of the Nuremberg Code, Ed M uskie should 'Respectable' institutions have been hauled off to Nuremberg then and there, Among the institutions which are implementing indicted, tried, and duly hanged. genocide today is the Club of Rome. A person who is a member of or supporter of the Club of Rome is by the Euthanasia: now in process standard of the Nuremberg Code indictable fo r crimes There is another level to this policy. It is called against humanity, an d, in the Club of Rome's case, for euthanasia; you may call it pulling the plug. Like the capital crimes against humanity. But who created the policy of genoci de in general, euthanasia is already going Club of Rome'? The Club of Rome was created by on. Genocide is already in process. NATO, as an officialact of NATO and its Organization President Jimmy Carter set in motion more genocide for Economic Cooperation and Development. than Adolf Hitler in his fo ur years in office-we just In a recent period, the NATO official responsible fo r don't count the bodies. You have to look into Latin creati ng the Club of Rome, Dr. Alexander King, out­ America, into Africa, into Asia, and count the number lined in detail how he took a fascist refugee from Italy,

48 National EIR January 12, 1982 Aurelio Peccei, who had been hiding in Argentina as South policy which intends to perpetrate genocide, and the official representative fo r several Venetian-con­ which will and is perpetrating genocide through the trolled firms, laundered him thro ugh the United Na­ Socialist International's influence today. tions (which is a nest of genoci dalists), and made him The Socialist International is an institution that the leading fi gure of the entity called the Club of Rome. contains some of the worst mass murderers in the world. It is not just a club. Leading people and institutions Olof Palme, a figure of the Socialist International from of the world are part of the Club of Rome. In Germany, Sweden, is a raving genocidalist. a section of the Christian Democracy around Edouard In America, the Aspen Institute is committed to Pestel are openly Club of Rome advocates . Sections of genocide. The Ford Foundation is committed to geno­ the Free Democratic Party of Germany are advocates cide. In Westchester County, New York, we have Rep. of either the Club of Rome or Global 2000, which is Richard Ottinger, who is a fa natical genocidalist. Sena­ merely Carter's version of genocide as opposed to tor Packwood of Oregon is committed to genocide. Run Peccei's. In the German Social Democratic Party, there down the list of the U.S. Congress on both Senate and are factions sponsori ng with Willy Brandt a North- House sides, and you will find people who are openly

languages was the subject of a panel on Jan. I which covered English, classical Greek, Latin, Italian, and Sanskrit. The second session began with a report on ' The ICLC conference "Who's Who in the Fight Against the Malthusian Genocidalist Takeover of the Democratic Party To­ day," by Warren Hamerman, an ICLC executive com­ The accompanying statement by EIR fo under La­ mittee member as well as chairman of the National Rouche is excerpted from his keynote. address at the Democratic Policy Committee, fo llowed by a speech Dec. 31 session of the International Caucus of Labor on the California situation by Will Wertz, candidate Committees' year-en d conference in New York City. for the California Democratic senatorial nomination LaRouche is the chairman of the ICLC, which com­ there. prises Labor Committees i n North America, Western The use of computer simulations, television, and Europe, and Latin America. The conference brought "consensus" techniques to brainwash both policy­ together almost every member ofthe North American makers and the population was the first topic in the organization, with invited guests, as well as delegates Jan. 2 panel. fr om Mexico, Colombia, West Germany, and Italy, Mrs. Zepp-LaRouche that afternoon delivered a including Hega Zepp-LaRouche, Chairman of the major speech on the chief mental block Americans European Labor Party. and others have in understanding the current resurg­ Presentations to the audience of 600-800 focused ence of fascism: the belief that fascism was a strictly o n two dimensions of the ongoing war to secure German or Italian phenomenon. The fundamental human progress and civilization: identification of the characteristics, she said, are a program for genocide international sponsors of genocide, and the means justified on racialist or Malthusian motives; economic they have used to brainwash the American population austerity and looting; and a fascist mass movement into passive acceptance of national decay and global controlled by an oligarchic elite that uses violence to mass murder; and revival of classical culture and impose its irrational Nietzschean will. The counter­ pedagogy in music, art, science, and language, as a position to the philosophy of cultural pessimism and political weapon for reversing the advent of a new bestiality is the tradition of Augustinian Christianity Dark Age. and Neoplatonic Judaism, formulated in scientific The Dec. 31 presentations began with an address terms by Cardinal Nicholas of Cusa, and reaffirmed by E1R Editor-in-Chief Criton Zoakos on "How Ven­ by the papal encyclical Laborem Exercens. Mrs. Zepp­ ice Organized the Mutual Destruction of the Ottoman LaRouche concluded by proposing the rapid found­ and Russian Empires" in paraliel with current British ing of a "Club of Life" to counter the Club of Rome. manipulation of a no-win conflict between the United That evening the ICLC chorus and orchestra per­ Slates and Soviet Union. The sessio� fo llowing La­ fo rmed Bach's Jesu Meine Freude and selections from Rouche's speech was devoted to Kepler and the Gold­ Haydn's Creation and Beethoven's Fifih Symphony. en Mean principle as the basis for science education. The fin al report came Jan. 3 on Dope, Incorporat­ Discussions of the development and degeneracy of ed's international and domestic operations.

EIR January 12, 1982 National 49 committed to genocide, who have proposed policies to means that if their theories are co rrect, they wouldn't be murder more people than Hitler's regime did-only one alive to spout them. generation and a half after the horrors were uncovered If only we could ignore them on that account. at the end of World War II. How do we actually measure human population­ potential? How do we defeat and neutralize this non­ The economics of genocide sense which economists, our Malthusians and our mass First, on the economics of genocide: Recently, I murderers advocate? have written a number of papers, some published and We measure population-potential of human beings some to be published in the early months of 1982, in terms of what we might best term potential relative dealing with a concoction brewed at a place where many population density. This term signifies that to measure evil things are brewed, Cambridge University. It was the popUlation potential of any species, you measure the brewed by a group of liberals around delightful ladies ability of that species to sustain itself by its own efforts such as Mrs. Joan Robinson. It is called "systems on a certain concentration of land as inhabitable terrain. analysis. " Man, at the point that he resembled Margaret Mead, Systems analysis is usually the preferred term of had the population potential of a gifted., or degenerated genocide around the United Nations. There are so bab00n. Mead and the baboon are about the same. She many Third World, developing nations around the is one of the mass murderers, that really ugly, evil old U.N. that you cannot go around saying we plan to have witch who stomped around the halls of the Museum of mass murder of developing nations' populations. Natural History with an Isis cane, thinking herself the Systems analysis is to the present day what the word high priestess of Isis, who, I am happy to report, finally "eugenics" meant in the time that Cecil Rhodes planned did the much belated service to humanity of dying-and to depopulate Africa of its black people in order to without dignity. recolonize it with Anglo-Saxons. It is just another name But apart from Mead, that we have achieved a for the same policy . population-density on the order of 4 billion people It should be stressed that, in point of fact, according already signifies that there is something about mankind to Dr. Alexander King and his fr iends of British intelli­ that is fundamentally diffe rent than the baboon. I will gence, the real purpose of genocide, the real target is to admit that there are some political fo rces on the left eliminate people whose skins are a little bit too dark who don't believe it, and who consider it macho arrog­ down in those developing cou lltries, and to anticipate ance to try to place ourselves above the baboon. But that white Anglo-Saxon fo lk j. om the north will move apart fro m them, mankind has demonstrated the ability in and re-populate these areas dfterthis is all over. to willfully increase mankind's potential relative popu- . Virtually every university-trained economist today is lation density. implicitly a mass murderer. because if you apply to How? The word technology was discovered by Gott­ today's situation the kind uf economics that every fr ied Wilhelm Leibniz in the 1670s. But if we understand Nobel Prize winner in econ('mics advocates, you must the term, we can apply it retrospectively to all ages, and commit mass murder. . say in general that if we generalize Leibniz's notion of technology to account for the transformation in the way Population-potenti�1 th at we produce our own means of existence, mankind If we were to apply to the question of human has improved his technology . We measure the improve­ popUlation the same criteria we use to measure the ment of technology not by any other terms of reference popUlation of plant-life 01 beasts-at least, what the than that increase in potential relative popUlation den­ British use to measure these things-then we would sity. distinguish only those fe awres of human behavior in Admittedly, mankind has not always done this. which man resembles a somewhat gifted baboon. If we Many civilizations have died. Many peoples which were use such criteria to determine what the maximum once populous relative to their age, collapsed, and a population of such a species might be on this planet, we remnant of that population returned to savagery . would be most generous to say that the highest level of Even so, insofar as we have risen above the level of living population of such a species would be several a few baboon-like hominids chasing around the African million individuals, living pretty much with the speech savannah to have fo ur and a half billion people today, level of the baboons or of members of the linguistics we have achieved that because of those civilizations profession. which have progressed, which have contributed greater In point of fa ct, the same people who employ these knowledge, scientific knowledge, to advance the tech­ kinds of statistical methods to determine what the limits nology of human existence . to growth ought to be, these Malthusian calculations, 'What that has accomplished is to increase the power also say we have a crisis today because we have about of the average individual to command the lawful order­ 4.5 billion people living on this planet . That already ing of the universe. It has increased the density of the

50 National EIR January 12, 1982 agreement between man's will and the la-.yful ordering person to maintain our level of material culture . In the of the universe. It has produced progress and develop­ developing sector, the level of energy available to ment of the powers of mind, not in an abstract or reproduce the population is about one order of magni­ genera l sense, but as a purposeful development of those tude less, about one-tenth that amount. powers o f mind. It is impossible to solve the problems of food, let alone other problems of developing nations without The world needs more people increasing the number of kilowatt hours available per This leads to two things. First, it leads to developing individual in those cultures to the order of magnitude our people to be able to create the new inventions of the of 40-50,000 kilowatts over the next period. next generation, and to be able to assimilate those We do not have to do it all at once, but we have to inventions productively. Second, it leads, in that pro­ get moving very rapidly; to make land fertile requires cess, to the true objective of this process, the objective energy, energy in the form of fertilizers, energy in the of the reproduction of man in larger populations which production of trace elements, energy for irrigation, are better populations. The objective of human repro­ energy fo r mechanization, energy fo r transportation. It duction is not simply to produce more people, but to will require 35,000-40,000 kilowatts per person, and if produce a higher, more perfected quality of individual. we are not proposing that, we are not serious. But to do that, to develop a greater individual, a better Where's the energy to come from-if we want to do individual with higher moral capacities, an individual . this without polluting the atmosphere or destroying the whose acts are in increased conformity with the lawful fo rests as James Schlesinger wanted to do? We have a ordering of this universe, we have to produce more certain amount of hydroelectric power of significant people. potential, and we should use it. But the bulk of the energy As we advance technology, we increase the complex­ needed to enable the human race to live decently, survive, ity of the division of labor in society in two ways: and prevent genocide, must be nuclear energy, This First and most simply, labor itself becomes more means the full spectrum of nuclear energy, notj ust fission complex, more specialized. Therefore, to fulfill all the reactors of any one type. Nuclear energy is the only specialties that are required to maintain the develop­ source we have available to meet this requirement. ment of society, and its progress, we must have more Let us consider this for a moment. We know the kinds of work done. Therefore, a greater diversity in the parameters for constructing a nuclear plant of one giga­ range of skills or activities of human beings is required. watt. We know the labor required to construct it. You Second, as we develop the machine, particularly the can calculate very accurately for policy purposes how powered machine, we begin to introduce a new dimen­ many people will be required simply to do all these sion of complexity to the division of labor. The simplest different kinds of jobs-to produce, maintain , and oper­ way to develop a machine is to examine the motions ate those plants . that are done by hand or animal labor. Then , build a We also know the ratio or relationship between the machine which reproduces the necessary motion, put­ amount of effort society puts into producing energy, and ting power behind it. Thus the power to produce is the amount ofef fort represented in production using that shifted fr om dependency upon the human muscle to energy. We know this as a ratio of people. dependency on the powered tool. The fo rm of labor Therefore, if you tell us, for any level of a culture, shifts from the bestial aspect of labor to emphasize the how many man-years by Western European or North creative aspect of labor, which is the human mind's American standards are required to meet the energy ability to devise and direct these tools. That produces requirements of a nation, we can tell you what the total the need fo r a greater population. labor fo rce of that nation should be. What does this indicate as requirements if we wish By these kinds of calculations and related calcula­ to raise the standard of living for the entire world's tions, we know with absolute certainty that somewhere population today, or for the 6.5 to 7 billion people between the years 2020 and 2030, the human race cannot antici pated from the end of this century? Under normal make it unless we have 10 billion people, because we conditions that would be the world's population at that won't have the labor force to do all the kinds of work point. If we wish to achieve a standard of living such necessary to sustain the complexity of production. that every person in the world could have the standard Even today, most of the problems in the developed of living which we consider normal in the United States countries, the so-called industrial nations, are due to or Western Europe today, we would require a popula­ underpopulation. tion of at least 10 billion people worldwide. More people creates the precondition for creating a In the advanced sector, although we are really very better quality of single individual by this process of poor relative to what should be, given our resources, technological progress. Therefore, in terms of people because we don't produce much anymore, still we who are against population growth, there must be some co nsume an average of about 35,000 kilowatt hours per very strange kind of motivation behind it.

EIR January 12, 1982 National 51 its scientificfr audulence was generally admitted. The tenor of the conference was typified by AAAS National President Dr. Allen Bromley of Yale, in his "President' s Address" to 1500 members. Bromley began by endorsing the earlier claim of White House Science Advisor Dr. George Keyworth to the same conference, that "economic constraints" require the restructuring of American science, with cutbacks throughout the na­ AAAS meetingfal ls ' tion's research and development capabilities, and that America could no longer be number-one in science and behindGlobal 2000 technology. Then Bromley's voice became more shrill, and he continued:

by Paul Gallagher, Executive Director, Population growth is the most deadly danger Fusion Energy Foundation looming over us. Turning off human fe rtility is necessary, even though that will be very difficult and chaotic. Then there is high-technology medi­ The annual convention of the American Associati on fo r cal care; it's a real problem . We can't keep trying the Advancement of Science, bringing 6,000 academic to provide it fo r everyone. Take kidney dialysis. professionals to Washington, D.C. the week of Jan. 4-8, We have the technology, but we can't afford it. was a warning to the American people and the world that We have to decide who will get it. the onset of a Second Great Depression during 198 1 has prepared the way for the rise of conscious, genocidal A small Fusion Energy Foundation delegation had fascism among the educated elite ofthe United States. saturated the conference with printed denunciations of While the AAAS represents for the most part aca­ the Global 2000 Report as a "useless-eaters policy," and demics, rather than laboratory or industry scientists and specifically highlighting the revival of legalized euthan­ technicians, it is the largest U.S. science association. asia under its influence, including the passage of a law Regarded as a virtual branch of the British Association mandating euthanasia in Washington, D.C., in certain for the Advancement of Science, it is the most tightly cases. At the close of Bromley's speech, an FEF repre­ dominated by British science institutions currently de­ sentative rose to inform him and the audience that he manding a Malthusian restructuring of U.S. scien<;e, to had endorsed euthanasia, specifically banned as a crime cut it off fr om all connection to large scale technology against humanity by the 1946 Nuremberg Trials, and engineering in the nuclear, agricultural, and space colo­ demanded that he renounce Global 2000. As Bromley nization fields, transportation, water development, etc. moved to respond, he was pushed away from the Its conference agenda was completely controlled by the microphone by the moderator who said, "Dr. Bromley "depopulatioh lobby": Gerald Barney and other authors will not respond to that question," and the plenary and sponsors of the Global 2000 Report. who were fea­ session broke up in an uproar. tured speakers; the Global Tomorrow Coalition of Rus­ The previous day, Bell Laborato ries President Ian sell Peterson and Donald Lesh; the Population Research , Ross had told another plenary session that only certain Institute, and similar Malthusian agencies. fields of scientific work would survive in the coming economic retrenchment, and that a panel of "leaders of Premises accepted science," presumably such as himself, should be consti­ The five largest conference sessions were all organ­ tuted to decide which fields were stimulated and which ized explicitly as discussions of the implications of the cut off from funding. Ross, whose remarks were fea­ Global 2000 Report. Significantly, however, all were tured in the East Coast press the next day, had his own couched as "re-examinations" of the report itself, and priorities set: 'he told the AAAS that "the information almost no one of the leading genocidalists present was society must survive," the means of mass control of willing to endorse it after a year of concerted discredit­ public perceptions and decisions through telecommuni­ ing of the report, throughout Washington, D.C. circles cations and so fo rth. and fo reign embassies, by Lyndon LaRouche and his Ross was in turn echoing White House Science associates at EIR and the Fusion Energy Foundation. Adviser Dr. George Keyworth, who had given an The grim reality visible at the conference, however, opening-night lecture on "economic constraints" as the is that the Global 2000 Report's conclusion, the demand determining criteria fo r all scientific and technological to respond to planned permanent economic depression investment. Keyworth claimed that in the coming years and scarcity conditions by .cutting world population. was only research with a relatively near-term economic accepted by virtually all conference attendees, even as payoff and 'no large engineering development costs

52 National EIR January 12, 1982 could be funded-a complete reversal of the entire basis tion and Committee for the Year 2000, had already of American pre-eminence in science and technology. begun formation of "our unit in the govern ment" (an inter-departmental Global 2000 scenario committee), Targets of attack and that fr om now on, "we will say what choices we At the large conference sessions, the Malthusian have to cope with the problem of nuclear waste." "new, restructured science," appropriate to permanent Another fe atured speaker was Gov. James B. Hunt of economic depression, was laid out in an atmosphere North Carolina, an "expert in government" on the verging on pure Nietzschean irrationality. Three targets nuclear waste problem who recently joined the U.S. were singled out for special attack: nuclear energy Association for the Club of Rome, Aurelio Peccei's development and nuclear physics; American agricultur­ international Malthusian thinktank. al science and technology; and science education. Among the fi ve major Global 2000 sessions, drawing Audubon Society head Russell Peterson and Donald 300 to 500 each, only one possessed even the appearance Lesh, Peterson's co-director of the Global Tomorrow of a planned debate rather than simple endorsement of Coalition (formed last year to promote the Global 2000 population control and ecological kookery. This was Report), ran a large conference session on the transfor­ the debat� between hard-core Malthusian Garrett Har­ mation of American education to fit the demands of din of the University of California, an advocate of population reduction. At this session they encountered reducing the U.S. population to 75 million, and Dr. fierce opposition from FEF representatives who caused Julian Simon, University of Illi nois professor, whose the meeting to break up in disarray, so blatant were the books and articles debunking the obvious frauds of the crimes against humanity discussed and proposed. Global 2000 Report have been widely reviewed. Simon A group of Peterson's Global Tomorrow proteges won the debate, to the satisfaction even of the AAAS from the University of North Carolina and University audience. of Wisconsin at Madison, designers of the zero popula­ When a Fusion Energy Foundation representative tion growth curricula for elementary schools now being intervened at length to demonstrate that Global 2000 is introduced in Baltimore and other cities, described their not a prediction but a policy of suppressing technologi­ literal brainwashing of teacher-training students at cal investment fo r 20 years, to force genocidal reduc­ North Carolina Colleges. Dr. Mary Jenner explained tions in popUlation, and that this could only be averted that their goal was to "rid every school in America �f by the worldwide rapid spread of thousands of giga­ the idea that exponential population growth is not watts of nuclear energy, there were repeated demands occurring, that it is not destroying our resources, that it from Global 2000 backers that the FEF be prevented doesn't have to be stopped." Jenner admitted that the from ·speaking and ej ected ! majority of students in their "pop ed" programs fall into depressive states as a result, and that both they and Irrationality promoted the professors require psychological counseling to deal The broad area of nuclear physics came under with this "depression and trauma." The effect on the repeated attack as an overly conceptual as well as overly elementary-school students was left to the imagination expensive discipline. One large session featured Scientif­ of the audience. ic American editor Peter Flanagan, and top AAAS Peterson, Garrett Hardin, and others directly asso­ official John Rutherford, in repeated attacks on nuclear ciated with Global 2000 all demanded an immediate war physics itself (not simply conventional nuclear energy), against American agricultural methods, claiming wildly as epitomizing overly conceptual education. Flanagan that modern agriculture is evil because it raises food claimed, in a lengthy discourse on education, that supplies for expanding popUlations "at the expense of students should not be taught any "concepts" through the land and natural resources." Peterson and ecology the seventh or eighth grades, and particularly not kook Dr. Wes Jackson of Kansas attacked mc,dern anything about nuclear power or nuclear physics. agriculture as, "as dangerous as nuclear war," and This session was finally subjected to ridicule and targeted the "Agriculture Department as more danger­ ended in repeated bursts of laughter from most of the ous than the Department of the Interior." At a point 250 in attendance. An FEF representative contrasted when net fa rm income has fa llen by 40 percent in two the "outright quackery" of the speakers with the science yeats, Peterson, Lesh, Hardin, Global 2000 author Ger­ education proj ect being conducted aro und the FEF's ald Barney, and others, called for the elimination of Young Scientist magazine, focussed on the nuclear subsidies to agricultural research and farm production. sciences. The Foundation displayed at its exhibit booth Peterson was most aggressively lunatic on nuclear at the conference, part of a "Pedagogical Museum" power, raving that "we already have mountains of demonstrating Johannes Kepler's method of geometri­ nuclear waste everywhere." He claimed that ,the Global cal construction, and its application to conceptual de­ 2000 networks including the Global Tomorrow Coali- velopment in science, music, and Renaissance art.

EIR January 12, 1982 National 53 Abscam Secretary Raymond Donovan. Pratt's peculiar view The keystone of Williams's due-process motion was the suppression by Puccio and Pratt during the trial of Pratt decision aimed an FBI memo dated Nov. 27, in which the investigators against Williams admitted that they had no evidence to. throw Senate vote against him-after more than IO months of attempting to entrap Williams in wrong-doing. When the document was later shown to Williams's juror Salvatore Ottavino, by Mary Jane Freeman Ottavino wrote a sworn affidavit to the effect that he would no� have voted for a guilty charge against Judge George C. Pratt of the Federal District Court in Williams if the document had been presented in trial. Uniondale, N.Y., denied on Dec. 21 all due process Pratt continues: "Merely because some government motions submitted by Sen. Harrison Williams of New employees were not overly implessed with the strength Jersey in his fight to stop his frame-up by the Abscam of the Williams case as of November 27, 1979, does not witch-hunt of the Carter Justice Department. Within 24 mean that the government was precluded from testing hours, Pratt's decision became the rallying point for the sufficiency of its evidence before a grand jury ... renewed demands that Williams be immediately expelled "The court concludes that the existence of the fr om the Senate, in which h�as served for 23 years. November 27, 1979, memorandum suggesting that fur­ Williams had won a po tponement of proceedings ther specific proof be adduced of Williams's criminal against him in the Senate u til January, when he intends propensity before seeking an indictment against him to place before the Senate the suppressed documents of does not preclude the government from proceeding even the FBI and the Justice Department proving his inno­ when the additional evidence is not fo rthcoming" (empha­ cence of all charges brought against him by U.S. Prose­ sis added). cutor Thomas Puccio in a trial before Pratt that ended Not only was there no "evidence forthcoming," but May I, 1981. when "recontacted" by Abscam sting man Mel Wein­ Now that Judge George Pratt has ruled against Wil­ berg and offe red a bribe, Williams, as shown in the liams-denying the significance of the evidence Williams Justice Department's own videotape records, stated has brought fo rth since his trial-the liberal press is distinctly, "No, no, no." demanding his speedy expulsion. "The excuse the Senate But Williams was indicted and convicted on charges has used to postpone the day of judgment for Harrison of "influence-peddling." This was also a result of en­ Williams is no longer available," drummed the New York trapment from the J ustice Department, since Weinberg Times Dec. 22. "Even a ruling for the defense would not had instructed Williams to impress the FBI's "Arab have changed the Senators' duty: to judge their col­ sheik" with his influence. Pratt dismissed the entrap­ league's conduct by ethical standards far stricter than the ment by stating: "Williams' fi ne educational back­ criminal law." ground, his long political experience, the heights to It was the same New York Times that on the basis of which he had risen in the councils of government, all information supplied by Thomas Puccio hat! broken the argue overwhelmingly against any claim that people Abscam story on Feb. 2, 1980, a fu ll 24 hours before the such as [Camden , N.J. Mayor] Errichetti and Weinberg news of the investigations of U.S. Congressmen was even could 'put words in his mouth' or make him say things released by the FBI. that he did not mean or did not want to say." In every point of his 62-page document, Judge Pratt Pratt, however, does not question why a member of acted to confirm the charges brought by Williams's such long-standing in the "councils of government" defenders: namely, that if he can be framed up in such a should ever have been targeted by the Justice Depart­ blatant way with impunity then American democracy is ment for a "sting operation ." in clear and present danger. The Williams case has so fa r, in the words of fo rmer U.S. Solicitor General Erwin False claims Griswold, set the precedent for "the police state, which Pratt also upheld Puccio's attempt to introduce we have always shunned." evidence that would taint Senator Williams with corrup­ In his decision, Pratt not only dismissed the evidence tion. Puccio insinuated that Williams had tried to make of Williams's innocence, but used the same formulations a deal with New Jersey Casino Control Commission as U.S. Prosecutor Thomas Puccio, a man whose ethical Chairman Joseph Lordi on behalf of a particular com­ standards have now openly been called into question in pany, dU,e to a presumed relationship between the his conduct of the Justice Department case against Labor company and the Senato r's wife.

54 National EIR January 12, 1982 But an FBI document dated April 25, 1980, shows that Puccio's "evidence" did not exist. The FBI memo Part Three stated: "To date, the investigation has determined that it is common for a political officeholder to make inquiries on status of requests for expeditious action to the Casino Control Commission. In this instance, however, there is no evidence that Williams made such inquiry or recommendation to Lordi" (emphasis added) . The casino issue was not part of the indictment, but Puccio continually referenced it during the trial to "taint" Williams-with no objection from Pratt. In his decision, Pratt ruled on this question as fo llows: "L�gically, such evidence [albeit nonexistent] is relevant to Williams' state of mind; absent a claim that somehow the Abscam investigators also induced defendant William s's overtures to members of New Jersey's Casino Control Commission, a claim not made SheridaIi's operations here, such conduct is legally admissable to show defen­ dants' motive, ...in tent, ...an d method of operation." against Teamsters Williams had also complained in his due-process motion that the Justice Department had used as evi­ by Richard McGraw dence against him a letter-written and fo rged by Camden Mayor Errichetti in Williams' name-claiming to guarantee government contracts for the titanium We enter 1982 with the expectation that publication of mine that was the subject of Williams's meeting with dossiers like this one, and our just-completed Sp ecial Re­ the FBI's Arab sheik. Pratt dismisses Williams's com­ port on "Permindex: Britain's International Assassination plaint, stating that fo rgery is "merely a technique" Bureau, " will play a role in preventing a repeat of the which "furthered the overall investigation." preceding " Year of the Assassins. " Walter Sheridan is one Pratt concludes his decision with the statement that of the most important, iflea st-known, operatives fo r Per­ while he fo und some of Williams's charges of outra­ mindex. He is currently Minority Chief Investigator fo r geous conduct on the part of the prosecution supported, the Senate Labor Committee. "other instances that did occur did not prejUdice any Th e first two parts of our Sheridan dossier excerpts rights of the defendants." Therefore, Williams's convic­ outlined the 30-year history of the covert intimidator both tion is upheld, and the United States Senator must inside and outside the U. S. government, who became known appear before him for sentenci ng. fo r his behind-the-scenes power as "the !OJ st Senator. " Given Pratt's strange interpretation of the evidence Part Two paid particular attention to the methods of or lack thereof, it is not difficult to see why Puccio blackmail and dirty tricks used by Sheridan to wreck New demanded a change in venue for Williams's and other Orleans District A ttorney Jim Garrison's investigation into Abscam victims' cases to Pratt's Eastern District Court. the assassination of John F. Kennedy. We then took a look at a 1962 House Un-American Activities Committee inves­ Down to the wire tigation of Sheridan's activities at the National Security Senator Williams now has one more forum remain­ Agency (NSA j, where he granted security clearance to two ing to pn,we his innocence: the U.S. Senate. No Senator NSA employees who were known sexual perverts and who has been expelled fr om that legislative body since the later defected to the U.S.S.R. Civil War, when the charge was treason against the Part Th ree, which concludes the series, offe rs HUAC's nation. conclusions, before moving on to explore Mr. Sheridan's If the Senate now votes against Williams, it will have unique role and resources in the Kennedy Justice Depart­ voted for its own dissolution. The outcome in the Senate ment's war on Teamster leader Jimmy Hoffa . will not only depend upon the evidence which Williams is permitted to put before the Congress, but the degree The Mitchell-Martin case was not an isolated incident of of pressure that the American people place upon their lax security involving personnel practices. Investigators Senators to uphold the U.S. Constitution and vote fr om other agencies contracted by NSA to conduct against the Abscam-Justice Department political witch­ background checks had repeatedly fo und that informa­ hunt. tion which they had provided to the NSA on its current

EIR January 12, 1982 National 55 or prospect personnel went unheeded and in conclusion, The purpose of the Sheridan unit was to inves­ the HUAC report read: tigate, coordinate other investigations (FBI, local, Congressional, other agencies of the government, Officials of the National Security Agency , ...op­ like the Labor Department), assist in preparing erated this most sensitive organization over a peri­ presentments' to grand juries, serve as special od of many years without proper regard for the prosecutors, conduct whatever guerrilla warfare Department of Defense security regulation pertain­ and counterguerrilla warfare were necessary with­ ing to appointment of personnel. .. in the law to "Get Hoffa ," as Shaffe r put it or . Past efforts by the Defense Department to in­ more accurately, to convict him of crimes and vestigate NSA were ineffective fo r the most part clean up the Teamsters Union. because, when matters involving irregularities at the Agency were brought to the attention of the Sheridan brought into his Terrible Twenty a number Department it more often than not appointed as of spooks who had worked with him at the National the investigators of the irregularities the very NSA Security Agency, including Robert Peloquin (who han­ officials responsible for their existence. dled Hoffa prosecution witness Edward Grady Partin) and Tom McKeon, formerly Chief of Special Projects Target, the Teamsters Division at NSA, and a friend of Sheridan's. In 1958 Walter Sheridan joined the witch-hunt This tightly knit group continued to work together against the labor movement, shifting from his post at after the Kennedy Justice Department was disbanded. NSA to becoming the chief investigator for the Mc­ Peloquin, who went on to set up the fi rst Organized Clellan Committee's "Rackets Hearings," where he Crime Strike Force in 1966 in Buffa lo, and then went to worked for Bobby Kennedy, then General Counsel to work for Resorts International, fo unded Intertel togeth­ the McClellan Committee. er with Sheridan's boss at the Justice Department, According to Kennedy Justice author Victor Navas­ William Hundley, then chief of the Organized Crime ky, "A church fr iend then put him in touch with the and Racketeering Section DoJ . Tom McKeon, who Rackets Committee and 'Bob hired me walking up the fo llowed Sheridan fr om NSA to "Get Hoffa," became General Counsel and Vice President of Intertel. (Mc­ stairs-which is where we had most of our conversa­ ' tions.' " It was here that Sheridan developed his partic­ Keon handled Robert Vesco's investment into Intertel ular specialty of trial-by-media slander. and drafted plans fo r firing Robert Maheu and moving After Bobby Kennedy was appointed Attorney Gen­ Howard Hughes to the Bahamas). eral, Walter Sheridan soon fo llowed and was appointed Besides bringing in his own spooks, Sheridan was "Confidential Assistant" with a secret office adjacent to able to access the resources of virtually any intelligence the Oval Office in the White House. Bobby named or law en forcement agency in his pursuit of Hoffa, a Sheridan to head up his "Get Hoffa Squad," the Labor totally unprecendented arrangement. It was an arrange­ and Racketeering subdivision of the Organized Crime ment which outraged the jurisdictionally jealous agen­ Section of the Justice Department. cies, and indicated the degree of influence which Sheri­ Sheridan's "Get Hoffa Squad" (or the "Terrible dan wielded with the Attorney General Bobby Kennedy Twenty" as they came to be known) was run as a and his brother, the President. straight intelligence operation, with the sole purpose of Navasky describes that Sheridan's relationships with destroying the Teamsters union and putting James the FBI and other government agencies "were highly Hoffa in jail. Kennedy apologist N avasky wrote that its irregular in that they received Ii�tle or no cooperation "modus operandi was cloak and dagger." Navasky from the top, yet Sheridan, an ex-FBI man, had a described its purpose: degree of line cooperation in the fieldthat was, in some respects, unparalleled. He actually coordinated FBI The Sheridan unit was, primarily, a carryover agents with his own men-told them where to go, and from the legislature. A McClellan Committee in­ they went." This went on despite the fact that J. Edgar vestigator served as its chief; the McClellan Com­ Hoover hated the Kennedys and Sheridan. Sheridan mittee files were available to and used by it; the said, "Hoover hates my guts .... I heard that a Bureau McClellan Committee findings were the basis of letter went out saying agents in their contact with me many of the major lawsuits that Robert Kennedy should be 'extremely circumspect' which is their way of brought against Hoffa and the Teamsters; Mc­ saying, 'Don't work with Sheridan.' " Clellan Committee insights into Teamster life Even within the Justice Department itself, Sheridan's styles dictated the Sheridan squad's strategy; and chain-of-command was unprecendented. He reported it was the business of the Sheridan unit to finish directly to Robert Kennedy, and the two were in the anti-Hoffa job that the McClellan Committee constant phone contact, even during the Cuban Missile h ad started. Crisis.

56 National EIR January 12, 1982 Meanwhile, while Sheridan was running the above­ Sheridan's role in this private intelligence operation ground Get Hoffa apparatus, he was simultaneously while running the "Get Hoffa Squad" has been de­ running another track of dirty tricks and surveillance scribed as "the chief contact" between Bobby Kennedy against Hoffa and the Teamsters through private intel­ and Five Eyes. As we delve further into the workings of ligence operations and security fi rms, such as the "Five Five Eyes, the nature of the operation and Sheridan's Eyes" and later, Intertel, the "security firm" run by role becomes clear. Hougan writes: Sheridan's former NSA and Get Hoffa buddies. "As it happens, the 'Three Eyes' stood for I nter­ Jim Hougan, in his book Sp ooks. outlined the national Investigators, Incorporated. Chartered in arrangement: Indianapolis, Indiana, its home office was referred According to a fo rmer Senate investigator who to as the Five Eyes. The firm's formal incorpora­ worked with Senator Long's committee on eaves­ tion took place on October 3, 1966. But files in the dropping, 'Bobby Kennedy had a lot of problems Indiana Secretary of State's office show that, more with Hoover. There were things Hoover simply than five years earlier, three retiri ng FBI agents wouldn't do fo r him-usually because they were were granted licenses to work as private investi­ illegal. So Bobby created I-don't-know-how-many gators for International Investigators, Inc. This propriataries, including a couple of detective seems strange in view of the fact that in February, agencies .... Anyway, they were the Kennedy's 1961, when the licenses were granted, the firmhad babies, and they did what they were told .... no legal existence. The three detectives were Actually, they're supposed to have been set up George C. Miller, treasurer; George W. Ryan, with discretionary funds fr om the White House, president; ancl Thomas A. Everson, secretary . but there's no way to be sure. You had a unique Among them, they had 34 years of F�I experience. situation back in 'sixty and 'sixty-one. You had "Within two years the still imaginary firms one brother controlling the Presidency, and the expanded throughout the Midwest, opening of­ other brother, Bobby, wearing a couple of hats. fices in Chicago, Detroit, Louisville, Nashville, He was Attorney General, sure, but he was also Memphis, and Min neapolis-coincidentally the overseeing the CIA: I mean he ran it. What I never same cities in which Hoffa experienced intensive understood was all that stuff about Jack's suppos­ surveillance, including a great deal of illegal wire­ edly wanting 'to smash the CIA into a thousand tapping. In 1965 the firm was taken over by a pieces'.' Hell, it was his brother's operation ! Any­ mysterious former CIA officer named Beurt Ser how, they had a thing called 'the Five Eyes' or Vaas (later to become owner and publisher of the 'the Three Eyes'-I swear it was owned lock, stock Saturday Evening Post). By this time the branch and barrel by the CIA. And it was a Kennedy offices were deemed unnecessary (perhaps because enterprise-not legally, but in fact. They got their Hoffa 's legal situation had moved beyond the orders from Bobby, and they carried them out. investigative stage to that of an appeals ' They were all over Hoffa and Spin dell." phase) .... Two of the firm's original managers, however, had left for other work. George Miller . Navasky described the surveillance of Hoffa : "WaI­ became a safety officer for the Agency for Inter­ ter Sheridan personally kept track of the round-the­ national Development in Saigon, and George clock movements of Hoffa . 'I knew where he was Ryan became an executive of the Creole Petrole­ twenty-four hours a day,' Sheridan recalls." um Company in Venezuela. Both organizations The story gets ' more interesting when the relation­ have provided cover for the CIA. ship between Sheridan, Kennedy, the CIA and Five " ... Ser Vaas claimed that the firm(which had Eyes was reported on by Sidney Goldberg who ran a yet to be chartered) was virtually 'defunct' by the small newspaper, Th e Government Employees Exchange. middle of 1965. Indeed, it consisted only of Ser whose primary readership was on Capitol Hill. Vaas himself and another ex-CIA officer, James Goldberg ran the story in 1968. He was immediately Hannon Meyer, formerly district commander of forced out of business through a series of legal harass­ the CIA's Office of Special Intelligence on For­ ments and dirty tricks. The Federal Trade Commission mosa ....Finally receiving its charter in 1966, Ser fi led suit against him; all of his advertisers pulled out Vaas's investigative agency was liquidated in the virtually overnight; he was personally surveilled; and he fo llowing year. The timing is suggestive: created was shot at and run off the road. only a few weeks after JFK's inauguration, the At that point Sidney Goldberg decided to retire. firm was finally dissolved the year Hoffa entered Interestingly, the microfilm records of the Exchange the pen." which published fro m 1947 through 1968, have been "misplaced" by the Library of Congress. The dissolution of "Five Eyes" coincides with the

EIR January 12, 1982 National 57 setting up of another "Three Eyes" set-up which also • happens to have a large number of "retirees" from the NSA an d the "Get Hoffa Squad," International Intelli­ Law gence, Incorporated, otherwise k nown as Intertel. Hou­ gan notes:

"The pattern emerges that from a study of Robert Kennedy's relationship to Hoffa , Spindel, the CIA, and the press is one in which illicil electronic Princeton andthe eavesdropping and surveillance carried out by private apparatus is everywhere alleged. If there is Chris Schmid case any consistent thread running through it all, it is the Kennedy's reliance upon intelligence commu­ nity veterans, most notably those from the Nation­ by Sanford Roberts al Security Agency (NSA). Robert Peloquin, Tom McKeon, and David Belisle, all of them top On Nov. 10, 1981, Princeton University, represented by executives with International Intelligence, Incor­ the fo rmer U.S. Attorney General Nicholas de B. Kat­ porated (Intertel), are three such graduates. WaI­ zen bach, asked the U.S. Supreme Court to make one of ter Sheridan is a fo urth NSA grad and considers the most Orwellian interpretations of the First Amend­ himself a good friend of the others." ment in its nearly two-hundred"year history. Katzenbach The so urce Sidney Goldberg used for his stories in petitioned the Court to grant Princeton a First Amend­ , the Exchange said that Walter Sheridan "disposed over ment right to exclude Chris Schmid, a political organizer the personnel and currency of whole units of the Central fo r the International Caucus of Labor Committees Intelligence Agency .... Wiretap tapes including ... (lCLC), from its campus. Mr. Schmid's offense was to 'voice profiles' made at the White House by the Secret tell the truth about a nest of Muslim Brotherhood terror­ Service ... were passed on to him and maintained in a ist controllers given sanctuary by Princeton. Princeton's separate faci lity." Supreme Court argument rested on the fo llowing re­ In May 1964 Sheridan and his Terrible Twenty were markable claims: I) its own First Amendment right to designated Special Marshalls (giving them a concealed give a fo rum to any idea or individual it chooses had weapons capability). Along with John Doar they went been violated by Schmid's distribution of charges against to Mississippi as part of the Kennedy Justice Civil Professor Falk; but 2) under the First Amendment, it has Rights' effort to push the FBI into the middle of the the right to exclude any unwelcome person fro m the racial problems in the South. Sheridan and his unit were campus, although the area in which ICLC organizers specifically assigned to deal with the Ku Klux Klan were leafletting is traditionally open to the public. along with other white extremist groups. The KKK is ' notorious fo r its corrupt intelligence connections, and The Falk question as such, has repeatedly been used, to the present day, The New York Times in a Nov. 17, 1981 feature for social disruptions. In July 1964 the FBI opened its article called the case "ironic" and "self-contradictory ." first office in Jackson, Mississippi, staffed with 150 . However in typica l Times fashion, the real irony is agents. completely omitted. Chris Schmid was arrested for During Fall 1964, Sheridan left the Justice Depart­ distributing leaflets attacking one of the puppetmasters ment, at approximately the same time as did Bobby of Ayatollah Khomeini, Prof. Richard Falk; now Kennedy. Sheridan maintained an office in the Wash­ Princeton is invoking the First Amendment to protect ington, D.C. law fi rm of Miller, Cassidy, Larroca and its resident Khomeiniacs from public exposure, and Lewin. Jack Miller was Sheridan's Justice Department ensure Princeton's continued role in shaping the Middle superior, the head of the Criminal Division. Cassidy East policy of the United States along lines drafted by was a member of the Labor and Racketeering Section, the British Foreign Office. which worked in tandem with the Get Hoffa Squad. The Oct. 22, 1981 edition of the New Scientist. a Courtney Evans, also with the firm,was fo rmerly an British-intelligence outlet, lamented the substantial ef­ FBI agent who worked with the McClellan Committee. fects of the efforts of the ICLC and this publication Evans had been the FBI liaison with the "Get Hoffa" (whose fo under, Lyndon H. LaRouche, Jr. chairs the squad . ICLC), to curtail the Brotherhood's activities . The To this day, Sheridan has maintained his "private successful ICLC campaign threatens to dismantle the networks" and carried on wrecking operations aimed in terrorist Brotherhood, a political instrument which has particular at the labor movement. been developed by British intelligence, with assistahce

58 National EIR January 12, 1982 from elements in the Soviet KGB, over several decades. First Amendment free speech and assem bly rights. The The New Scientist was particularly incensed about the Pruneyard decision punctured this strategy. When the ICLC's spotlighting of the links between the Muslim New Jersey Supreme Court finally reached its decision Brotherhood and population control think tanks like on Nov. 25, 1980, it held in favor of defendant Schmid, the Club of Rome and the Aspen Institute. resting the verdict on the precedent supplied in Prune­ Princeton has been a major target of the ICLC's yard. In essence, the New Jersey tribunal decided that anti-Brotherhood mobilization. This campus harbors although Schmid had no First Amendment rights to not only Falk, but also affords asylum for Prof. Bernard enter a private campus, the broader free-speech and Lewis, Britain's public spokesman for the policy of assembly clauses of the New Jersey state constitution turning the Middle East into an inferno of warring furnished sufficient legal protection. satrapies. The New Jersey decision flabbergasted the Princeton Princeton University has borne a particular grudge administration and the Muslim Brotherhood coterie on against the ICLC at least since LaRouche identified the campus. Their subsequent appeal to the U.S. Supreme treasonous activities of some of Princeton's most prom­ Court appears to have stemmed from sheer hysteria, as inent graduates, in his 1977 Th e Case of Wa lter Lipp­ suggested by their shaky legal arguments. man. There LaRouche emphasized Princeton's connec­ tions to enemies of the United States directly deployed Legal issues by British intelligence. When the ICLC held a series of There are both technical and constitutional issues at fo rums at Princeton University this past spring on the stake, and it will be important which ones the Supreme question of Plato versus Aristotle, a group of students Court chooses to emphasize. First, Princeton University was deployed to make trouble. is a private party with dubious standing to appeal a criminal action. As Schmid's lawyer pointed out befo re The court case the Court, the only real party that Princeton could On April 5, 1978, Chris Schmid of the ICLC was possibly appeal the case against was the State of New arrested at Princeton ' for handing out leaflets that Jersey, not Chris Schmid. exposed the activities of the perfidious Professor It was the State of New Jersey, acting through its Falk. Schmid was convicted in municipal court and fined highest court, who held that trespass laws could not be $15. When the matter was brought before the New invoked to prohibit Schmid from engaging in political Jersey State Supreme Court on appeal, Princeton Uni­ activity on campus. Defendant Schmid was certainly versity and its counsel, Mr. Katzenbach (Class of '43), not an agent of the State of New Jersey. Even if entered the case as intervenors. The New Jersey Su­ Princeton's convoluted argument were true, i.e. that preme Court heard arguments on Feb. 4, 1980. somehow its First Amendment rights were violated, During the interval between argument and decision, Defendant Schmid could not have been the violator. the U.S. Supreme Court delivered an opinion which Another technical point working against Princeton profoundly affects the Schmid case and free speech is the issue of mootness. In the aftermath of the Schmid rights generally. In Pruneyard Shopping Center v. Ro­ case, the university changed its rules to permit political bins, the Supreme Court ruled that the constitutions of outsiders on campus. Therefore, as Schmid's attorney the several states could establish free speech and assem­ argued, the Pri nceton case against Schmid is moot bly clauses with broader legal application than the First because there is no longer any controversy. Princeton's Amendment. evasion of the mootness question certainly calls into The Pruneyard doctrine was especially applicable in question the genuineness of its new "liberal" regula­ free-speech versus private-property cases where the First tions. If the university obtained a favorable decision Amendment was held to be inadequate to protect free from the Supreme Court, it would certainly move pell­ speech. In this type of litigation, the free-speech party mell to boot ICLC organizers from the campus. might fi nd the needed constitutional protection in the On the substantive question of fundamental rights, constitution of the jurisdictional state. The federal Con­ Princeton clearly manufactured its argument. Knowing stitution simply fo rbids Congress to pass laws abridging that under the Pruneyard precedent its Fifth Amend­ free speech, and private entities are therefore rarely ment argument would not stand a ghost of a chance, charged under the First Amendment. Some state consti­ the university contrived an Orwellian construction of tutions, however, specify more broadly that "the right the First Amendment, arguing that academic freedom of free speech shall not be abridged," and require no is the right to exclude every point of view the uniyersity finding of "state action" for litigation to proceed. disagrees with. Yet in their brief, Princeton also argues The State of New Jersey and Princeton University for the right to indoctrinate students "in virtually any counted heavily on a recent line of cases which fo und set of beliefs." that Fifth Amendment property rights are superior to The American Association of University Profe�sors

EIR January 12, 1982 National 59 submitted an amicus brief on the side of Schmid, ust of the First Amendment, the constitutional provi­ arguing that Princeton confuses academic freedom with sion guaranteeing America's republican citizenry the a private university's need fo r internal autonomy. The right to participate in any discussion of public policy, in AAUP correct ly notes that academic freedom is appro­ order to bring down an iron curtain on its campus. The priate to individuals, not institutions. First Amendment was inspired by the most eloquent For a private university to cloak its administrative treatise on free speech ever written, John Milton's fu nctions in the garb of free speech is dangerous public Areopagitica. (This impassioned defense of what we policy and certainly not within the scope of the First now regard as our precious First Amendment freedoms Amendment. The private university may be afforded a specifically denies legal protection to one category of relative degree of internal autonomy to carry out its persons; those who seek an end to civil society, a fu nctions, but this autonomy must not breach the description appropriate to Khomeini partisans.) inviolability which the U.S. Constitution establishes fo r . Observers at the Supreme Court reported that Jus­ free speech and associational activities. tice Byron White in particular was puzzled why a $15 To make a case fo r their absolute right to police trespass case was now in the lap of the U.S. Supreme their campus and indoctrinate the inhabitants, Pri nce­ Court. Justice White should have been tipped off when ton cy nically misuses the fa mous Dartmouth College Princeton's attorney Katzenbach argued Princeton case (see box). Chief Justice John Marshall would thought it had the First Amendment right to exclude scarcely recognize his Dartmouth ruling in the hands of "highly offensive" activity from the campus. The con­ Princeton's lawyers. The content of Marshall's opinion, stitutional questions involved in the case are of great which kept the state of New Hampshire from altering importance; fr om Princeton's point of view, the overrid­ the charter of Dartmouth College because the charter ing question is political-whether the university can embodied a manifestly public purpose, is totally gutted. continue to harbor sponsors of the Iranian hostage­ The greatest irony in the Schmid case is Princeton's holders and their terrorist associates without challenge.

therefore the state cannot turn around and alter these The Dartmouth purposes by revoking or impairing the charter. The case pUrpose of charters is to protect the objects of reli­ gious, charitable, and educational institutions. Proponents of Princeton's position in the Chris "The framers of the constitution did not deem Schmid case have hearkened back to the 1819 Su­ [these objects1 unworthy of its care and protection. preme Court case Trustees of Dartmouth College v. They have, through a different mode, manifested their Woodward to justify their arguments that a private respect for science, by reserving to the government of university can operate independently of "the will of the Union the power 'to promote the progress of the state." Dartmouth College was one of the land­ science and useful arts, by securing forlim ited times, mark cases which confirmed the Constitution's pro­ to authors and inventors, the exclusive right to their hibition against the impai rm ent of contracts by a state respective writings and discoveries.' They have so far government. In the Princeton case, this is taken to withdrawn science, and the useful arts, fromthe action mean that the State of New Jersey cannot " i mpose " a of the State governments. Why then should they be First-Amendment right on a " p rivate" university. supposed so regardless of contracts made for the This "laissez-faire" interpretation does not square advancement of literature, as to intend to exclude at all with the reasoning presented by Chief Justice them from provisions, made torthe security of ordi· John Marshall in Dartmouth College. Marshall indeed nary contracts between man and man? (4 Wheaton holds that the state of New Hampshire could not 646-47)." revoke the original charter of the college, but he does The logic of Marshall's ruling in Dartmouth Col­ so from the stanQPoint that the corporate charter of lege is therefore that a state cannot impose purposes the col lege serves public purposes, and that this is why which conflict with the purposes of the institution. the government can create corporations: they are Princeton University's own stated purposes include "instruments of government, created for its purposes. "the maximum possible freedom of thought and (4 Wheaton 518 [1819])." expression for each . individual student and faculty The state grants a charter because the purposes of member." To claim that it can therefore restrict polit� the corporation serve the interests of the state, and ical speech is the height of hypocri sy .

60 National EIR January 12, 1982 Eye on Wa shington by Stanley Ezrol

pean Affairs Lawrence Eaglebur­ Camp David accords. In the last ger to fill the gap left by William month Riyadh has won support Clark as number two man at State, from the Syrians, who had boycot� the appointme1 of either Scow­ ted the November Arab summit croft or Sisco would consolidate a meeting whose top agenda item was Kissingerian crIsis-management the Fahd plan. team which could set off a fifth The latest sabotage of Saudi in­ Mideast war. itiatives occurred on Jan. 4: Haig assured Israeli Ambassador Ephraim Evron that the United States would not heed the Saudi proposal for the United States to author a resolution reprimanding Israel's Golan grab. The resolution would have called on UN members to impose ' voluntary sanctions against Israel. Following Haig's formula, Kissinger clone to Kirkpatrick and the U.S. delega­ ride Mideast shuttle? tion have shown little willingness to compromise with the Arab delega­ Two Kissinger cronies, fo rmer tion led by Syria. Following what State Department Undersecretary was called a "turbulent" Jan. 5 Joseph Sisco and former National meeting between Kirkpatrick and Security Adviser Brent Scowcro ft, the Syrian Ambassador, Dia Allah are top candidates for the special el-Fattal, the Syrians released their Mideast emissary post that Al Haig own resolution which demands that is lobbying for in the Oval Office. the United States impose total eco­ My sources emphasize that the plan nomic and military sanctions on ' to use a shuttle-bug to resurrect the Israel. Camp David Palestinian autonomy Pushing the moderate Such a resolution, which it would be impossible for the U.S. to talks "is aimed at pleasing Israel Arabs toward war . .. which has always benefited support; is precisely the kind of fr om Kissinger's policies." Haig and Kirkpatrick, meanwhile, hardline polarization that Haig and Haig and U.N. Ambassador have lost no time in their efforts to Kirkpatrick are seeking. Jeane Kirkpatrick want to help undermine the tentative alliance be­ The mood at the United Na­ Kissinger's faction take over poli­ tween the United States and the tions is "increasingly militant," say cy-making for the Middle East. So moderate Arab states. This is par­ Arab diplomats, raising the danger say Washington insiders, com­ ticularly true of Saudi Arabia, that renewed Arab unity could be­ menting on Haig's maneuvering whose Prince Fahd presented an come a vehicle for war rather than for a White House Mideast policy eight-point Mideast peace plan last peace. Failure to discipline the ren­ re-evaluation in favor of Kissinger­ fa ll. Under the plan, the Arab world egade Israeli regime could produce brand step-by-step diplomacy. would recognize Israel in exchange a catastrophe in the Mideast, Saudi Haig's latest machinations fo. Israel's withdrawal fr om the oc­ Foreign Minister Saud al Faisal could move fat Henry closer to pol­ cupied territories and recognition warned the United States in a Jan. icy-making than he has been in this of Palestinian rights. 2 New York Times interview. Troop administration. Combined with a Reagan and his closest advisers mobi lizations of both the Israelis Haig success in moving up one favor the Fahd plan as the basis for and Syrians during the first weekof notch both current Undersecretary a new Mideast policy once Israel January indicate that another war for Political Affairs Walter Stoessel returns the remainder of the occu­ may be in the offing, a la Kissinger and Assistant Secretary for Euro- pied Sinai in April, completing the and Haig.

EIR January 12, 1982 National 61 National News

expires. The other members of the coun­ repeatedly identified by EIR 's counter­ cil are co-chairman John Joyce, President intelligence staff as involved in assassi­ of the International Union of Bricklay­ nation and related operations against Reagan appoints ers, and 18 other members of the AFL­ LaRouche. CIO Executive Board. The Roosevelt Hotel was acquired in space task fo rce The establishment of a mechanism 1980 by PIA. Col.umnist Jack Anderson President Ronald Reagan has formed a for herding union votes into a Club of last year published classified State De­ special task force which will draw up a Rome-controlled Democratic Party partment and CIA doc.uments showing program to guide the American space conforms to the scenario laid out in De­ that the government-owned PIA "is a program for the next 10 years. Within the cember 1980 at the Socialist Internation­ major conduit for illicit narcotics from administration the effort is being com­ al conference in Washington, D.C. Pakistan to Western Europe, the Far pared to the review which led to the East, Canada, and the United States." historic 1969 NASA program for The hotel was previously owned by manned exploration of the solar "Letoh Associates," a partnership of the system-a program later sabotaged by Milstein fa mily which includes Seymour fiscal-conservative elements in the Nixon LaRouche wins injunction and Paul Milstein, who are both on the administration. However, it is thought Board of Directors of United Brands. unlikely that the Reagan group will against Roosevelt Hotel Not only is Chadbourne the chief drawn up a set of recommendations any­ A New York court issued an injunction outside firm for United Brands, but three where near as ambitious as those of the Dec. 31 barring the Roosevelt Hotel of UB's nine in-house lawyers are also 1969 plan. from stripping private security protec­ "graduates" of Chadbourne. Chad­ The study is being conducted by a tion for economist and political leader bourne is also the law firm of U.S. Judge top-level Steering Group, headed by Lyndon H. LaRouche, Jr. who was the Edward Neaher, who launched the career White House Science adviser George keynote speaker at the year-end confer­ of Abscam prosecutor Thomas Puccio. Keyworth, and a lower-level Working ence of the International Caucus of La­ Group chaired by. White House Space bor Committees held at the hotel. The advisor Victor Re is. Their proposals are ruling by New York State Supreme expected to concentrate on expanded Court Justice Richard Price held that uses for the Space Shuttle, with little LaRouche has the same right to armed AFL-CIO demonstrates emphasis on new or more far-reaching security protection as does a fo reign dip­ interplanetary missions and exploration. lomat or an elected government official. against Helmut Schmidt LaRouche's attorneys applied for the A coalition of 14 right-wing social dem­ injunction after the hotel attempted to ocratic unions and "captive-nations" cancel the conference, and then agreed to groups demonstrated in Washington Trilateral Democrats form allow it to proceed on the condition that Jan. 5 against the refusal by West Ger­ LaRouche's security guards be disarmed man Chancellor Helmut Schmidt to go national labor group and subordinated' to the hotel's own se­ along with Alexander Haig's policies of Democratic National Committee (DNC) curity fo rce. sanctions and confrontation with the So­ chairman Charles Manatt joined with 20 The Roosevelt Hotel is controlled viet Union over Poland. The groups, ' leading labor officials on Jan. 5 at a through ownership and fi nancing by which collectively managed to assemble meeting in Washington, D.C. to fo rm a forces who have been directly identified a crowd of only about 150 AFL-CIO DNC Labor Council. The goal is to give as linked to assassination operations office workers, incl uded the American the Trilateral Commission-controlled against LaRouche. The hotel is owned Federation of Teachers, the United Steel echelons of the AFL-CIO bureaucracy by Pakistani International Airlines Workers; and other unions, the Coalition greater control over the policy and can­ (PIA), and an ownership and fi nancial for a Democratic Majority, the Commit­ didates of the party. interest is also held by the Milstein fa mily tee for the Free World, Polish and Chairing the new council will be of United Brands Company, the princi­ Ukranian groups, and the Abdela Cuban Glenn Watts, President of the Commu­ pal sponsor of drug trafficking and ter­ Movement, a group which has been ac­ nication Workers of America, who is also rorism in Central America. cused of involvement in training terror­ a member of the Trilateral Commission, The hotel was represented through­ ists. the Club of Rome, and the Aspen Insti­ out the negotiations and the court case Sources report that the key organizer tute. by the New York law fi rm of Chad borne, of the demonstration was Chris Gersten, According to Watts, one of the coun­ Park, Whiteside, and Wolff, which rep­ the assistant to Operating Engineers cil's initial goals will be to target Senate resents United Brands, the PIA, and the President J. C. Turner, and an organizer Labor Committee Chairman Orrin Bronfman fa mily. of the British-controlled political cam­ Hatch for ouster in 1983, when his term United Brands' Max Fisher has been paign to prevent the sale of U .S. AWACS

62 National EIR January 12, 1982 Briefly

• THE "RIGHT TO DIE" bill for the District of Columbia will to Saudi Arabia. While not officially a Fingerprints found on the car have go into effect on Feb. 18 unless a sponsor of the demonstration, AFL-CIO been traced to two terrorist fugitives, resolution of disapproval is intro­ president Lane Kirkland sent the dem­ Raymond Levasseur and Cameron Bish­ duced and passed in the House and onstrators a message expressing his soli­ op, both alleged members of the terrorist Senate. Officially termed the Nat­ darity with those present. Top AFL-CIO Sam Melville-Jonathan Jackson Unit, ural Death Act of 1981 , the legis­ sources have reliably reported that Kirk­ which was fo rmed from a radical pris­ lation includes penalties for physi­ land has been meeting regularly with oners network based around the fe deral cians who attempt to save lives of Haig on policy issues. prison in Thomaston, Maine, sponsored persons who signed a "please pull The organizations at the demonstra­ by the North East Prisoners Association the plug on me" document. tion co-signed a statement denouncing (NEPA). Bishop was giving radical polit­ Schmidt in the harshest terms. "Chancel­ ical indoctrination courses to inmates at • AURELIO PECCEI, President lor Schmidt today has come to America Thomaston under NEPA auspices from of the Club of Rome, will visit the to tell us why his government will not 1973 to 1975-at the same time he was on New York City Jan. 15-16 for pri­ support the United States actions against the FBI's ten most wanted list. vate meetings. His schedule is the Soviet repression of Solidarity," the being kept secret due in part to statement reads. "Pipeline}:lolitics leaves International Caucus of Labor the impression of complicity with Soviet Committee-organized protests brutality. We stand here today with a against him during his December simple message for Chancellor Schmidt: Energy panel report: trip to the United States. 'If communism is fi ne for Poland, why should America pay to defend West Ger­ kill advanced technology • FARM ECONOMISTS predict many from it?' ...For Germany to turn The Energy Research Advisory Board that U.S. farmers' net income will its backs on these values, particularly has recommended to the Secretary of turn out to have been only $13 to regarding Poland, raises questions about Energy de-emphasis of major energy­ $1 5 billion in the year just ended, the basic commitments of the German intensive technology development. The or half the pre-Volcker level of$27 Federal Republic." recommendation, in response to a re­ billion in 1979. The relative posi­ quest from Deputy Energy Secretary tion of farmers in October, or par­ Kenneth Davis, calls for reduction in ity position, was at only 57 percent nuclear fusion research, significant cuts of the 1913 benchmark, and the in funding for the Clinch River Breeder worst since May of 1933. Under High Times implicated in Reactor, and complete elimination of these conditions, mass farm bank­ funding for magnetohydrodynamics re­ ruptcies are already occurring and murder of police officer search. expected to continue through High Times magazine, the officialorgan Premised on "continuing pressure for 1982. American Agriculture of international drug traffic, has been further reductions in DOE's budget," the Movement president Marvin linked to the Dec. 21 murder of New panel also calls fo r significantly higher Meek estimates that 300,000fa rm­ Jersey State Trooper Philip Lamonaco. priority to be given funding of energy ers went out of business last year. According to police sources cited in conservation, acid rain and CO2 re­ Capital expenditures have col­ the New Jersey Daily Record of Dec. 22, search. lapsed meanwhile, with an abso­ High Times had singled out Lamonaco's The highly controversial recommen­ lute reduction of8 percent between Route 80 beat in a published warning to dations have been echoed by recent state­ 1979 and 1980, the first such fall in its readers not to carry drugs when driv­ ments by White House Science Adviser more than a decade. ing through his area. George Keyworth. Four members ofthe On the basis of evidence analyzed to panel took the unusual step of filing a • THE SALVATION ARMY in date, the High Times lead in the Lamon­ dissent criticizing the entire methodolo­ Philadelphia is preparing to revive aco case traces directly to the interna­ gy used to prioritize various technologies the soup kitchens of the depression tional assassination capability known as based on whether or not "they will signif­ days. Its Task Force has reported, Perm index. It is likely Lamonaco was icantly reduce the need for oil before the "The Salvation Army nationally proceeding on a tip from intelligence year 2000." should be prepared perhaps as ear­ community sources linking the car he The ERAB panel, which sounds to ly as spring '82, for either a nation­ stopped with the activation of various many like a Carter-era holdover, is head­ al or territorial campaign program terrorist groups connected to High ed by John Foster of TRW, and includes for the poor ...on the baSIS of a Times. the Yippies, and the Playboy such people as Thomas Cochran of the national emergency." It is not de­ Foundation fo llowing the Weatherun­ anti-nuclear NRDC, Charles Hitch of termined if Paul Volcker ever con­ derground shooting of two police offi­ RAND, and Hans Landsberg. of Re- tributed to the Salvation Army. cers in Nyack, New York last October. sources for the Future.

EIR January 12, 1982 National 63 shared within the U.S. plasma physics comm unity . The recent successes of the U.S. program have inspired the Japanese to pursue a very aggressive laser­ fusion program in parallel to their magnetic fusion program; the latter is today the world's largest in annual expenditures. By 1982, the Japanese program will have Civilian laser fu sion the world's largest laser in operation in laser-fusion research, since at that point, the comparable U.S. laser, slated for scrap heap the Shiva at Lawrence Livermore, will have been dis­ mantled for budgetary reasons-its parts are being salvaged fo r construction of the next larger laser, the by Steven Bardwell. Military Editor Nova, which as yet is unfunded! The Japanese laser, Gekko 12, will be 50 percent bigger than the biggest A policy decision has been made by the Reagan admin­ American laser in operation today. According to Dr. C. istration to completely destroy America's civilian laser­ Yamanaka, the Japanese fo resee a fu sion reactor fo r fusion research program over the next several years. A export by the year 2000. combination of budget cuts and reallocation of fu nds to At a conference held Dec. 10 in San Francisco with military research projects is in the process of leaving the Yamanaka were the heads of the French and Soviet United States, as a senior Energy Department official programs, the other large laser-fusion researc h pro­ said, with no civilian laser-fusion research program. grams. However, the other programs were oversha­ Laser fu sion is on,e of the fa mily of nuclear fu sion dowed by the demise of the U.S. program and the technologies which promise unlimited, creap, clean en­ astounding progress of the Japanese program. ergy from the fusion of light atoms (usually forms of An overview of the U.S. program was provided at hydrogen). The other techniques used to achieve the the conference by Dr. Richard Schreiver, Director of stellar temperatures and pressures required to ignite the the Office of Inertial Confinement Fusion in the De­ fusion reaction-magnetic fi elds and particle beams­ partment of Energy. For the first time in a public are, along with laser-induced fusion, being pursued inter­ meeting, Schreiver gave primary emphasis to the near­ nationally in research programs in the Soviet Union, term military application of the laser-fusion technology. Europe, Japan, and, with large government-funded pro­ The official position of the U.S. program had been, up grams, in the United States. Currently, the United States until this time, that the laser-fusion program had impor­ has the largest civilian laser-fusion research program in tant military applications, but was directed toward the the world, in fi scal 1981 spending $140 million dollars. long-term goal of civilian energy production. That this In addition to its applications to the production of policy change is on the verge of being official was electricity and process heat for civi lian applications, the signaled by another high Department of Energy official laser-fusion technique is used to simu late the explosion overseeing the program, who said off the record: "We of hydrogen bombs. Although the energy from the laser­ do not expect there to be an ongoing civilian laser­ fu sion reaction has no direct military use, the initial fusion program in the United States." inspiratio n of the program (and much of its subsequent The fiscal 1981 budget fo r civilian laser fu sion was fu nding) has come from military research devoted to $140 million. The fiscal 1982 budget, which has passed studying the high energy-density states that are created Congress, included an $18 million cut (in current dol­ by only two terrestial processes: the explosion of a hydro­ lars) in the laser-fusion budget, bringing the figure to gen (fusion) bomb, and the ignition of a laser-fusion $122 million. The OMB's FY83 budget, not yet publicly target. released, is rumored to include only $90 million fo r laser-fusion research fo r civilian application. These fi g­ The civilian program ures mean that the laser-fusion budget will have been In recent years, scientists in the laser fi eld program cut by more than 50 percent in real spending power had become more and more optimistic about the ulti­ within two years . If this budget allocation passes, the mate success of the application of laser fusion to energy Japanese will be spending more in absolute terms on production. At the prestigious awards banquet of the laser fusion than the United States. American Physical Society's Plasma Physics Division., Said one Japanese scientist at · the San Francisco the leader of the research effo rt on laser fusion at meeting: "I hope the Americans continue with their Lawrence Livermore Laboratory, Dr. John Nuckolls, civilian program-we benefit from international collab­ stated that recent results in laser fusion had been so oration. But if the United States is so short-sighted as promising that an Apollo-scale effo rt fo r the perfection to do only military research, our own program will of the technology was justified. His optimism is widely continue. We can do it by ourselves."

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