An EIR Special Report Germany's Green Party and Terrorism Moscow's Irregular Warfare Against the West

• On May 17-18 of this year, the tiny Bavarian village of Wackersdorf was rocked by well organized, unprecentedly violent attacks on police guarding a local nuclear construction site. A first wave of 1,000-1,200 masked "demonstrators" drew police out from behind fences to make ar­ rests. Immediately the exposed police were hit by a second wave of masked attackers, wielding killer sling-shots, steel bolts, and sharp steel splinters. Then, a third wave came in for targeted attacks on individual policemen ..

• In Hanover, 350 miles away, the convention of the Green Party was taking place. Upon the news that police had been hospitalized by the 183 125 pages violence at Wackersdorf, the delegates cheered wildly. Rainer Trampert, Price: party executive committee member, denounced the planned construction $250 of a nuclear reprocessing plant in Wackersdorf as "a project to build a From German nuclear bomb." News Service • Only a few days earlier, Rainer Trampert had been in Moscow con­ EIR ferring with President Andrei Gromyko and other Kremlin officials. The P.O. Box 17390 Soviet officials and the Soviet press had been steadily denouncing the Washington, D.C. Wackersdort construction as-ua plot to build a German nuclear bomb." 20041-0390 Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editor-in-chief: Criton Zoakos Editor: Nora Hamerman Managing Editors: Vin {Jerg and Susan Welsh From the Editor Contributing Editors: Uwe Parpart-Henke, Nancy Spannaus, Webster Tarpley, Christopher White, Warren Hamerman, William Wertz, Gerald Rose, Mel Klenetsky, Antony Papert, Allen Salisbury Science and Technology: Carol White Special Services: Richard Freeman Advertising Director: Joseph Cohen Circulation Manager: Joseph Jennings T he fifth issue of Executive Intelligence Review to appear since the INTELLIGENCE DIRECTORS: unconstitutional shutdown of our Washington office features on the Africa: Douglas DeGroot, Mary Laln'ee cover the opposition between Lyndon H. LaRouche, Jf., the founder Agriculture: Marcia Merry Asia: Linda de Hoyos of EIR, and Soviet Marshal Ogarkov, author of the "Ogarkov Plan" Counterintelligence: Jeffrey Steinberg, to mobilize the Soviet Union for a nuclear first-strike capability Paul Goldstein Economics: David Goldman against the West. LaRouche's comprehensive policy statement on European Economics: William Engdahl, Soviet arms-control proposals appears on page Since this was Laurent Murawiec 34. Europe: Vivian Freyre Zoakos issued as a presidential campaign statement, we summarize other Ibero-America: Robyn Quijano, Dennis Small candidates' proposed responses to Soviet "arms control" initia­ Law: Edward Spannaus 1988 Medicine: John Grauerholz, M.D. tives, insofar as we could obtain them. Middle East: Thierry Lalevee Soviet Union and Eastern Europe: While the candidates' offices were pointedly reticent on this Rachel Douglas, Konstantin George subject, many of the candidates or closet candidates (such as Sam Special Projects: Mark Burdman United States: Kathleen Klenetsky Nunn of Georgia), were commiting blatant treason in Congress with

INTERNATIONAL BUREAUS: their sabotage of the Strategic Defense Initiative and the defense of Bangkok: Pakdee and Sophie Tanapura Western Europe. The tale of shame is recounted in Congressional Bogota: Javier Almario Bonn: George Gregory, Rainer Apel Closeup, page 68. Chicago: Paul Greenberg News developments reported in this issue back up the chilling Copenhagen: Poul Rasmussen Houston: Harley Schlanger LaRouche analysis. On page 48, East bloc analyst Konstantin George Lima: Sara Madueno reports on the open push forward of the Soviet "SDI." This is fol­ Los Angeles: Theodore Andromidas Mexico City: Josejina Menendez lowed by a report on the worsening Russian pressures on West Milan: Marco Fanini Berlin, a crisis still ignored by Westerngovernments and media (with New Delhi: Susan Maitra Paris: Christine Bierre the partial exception of France). Rio de Janeiro: Silvia Palacios The National section leads with a report on the Project Democ­ Rome: Leonardo Servadio, Stefania Sacchi Stockholm: William Jones racy crowd's brazen calls to overthrow the Constitution. Meanwhile, United Nations: Douglas DeGroot the same outfit's efforts to overturn elected governments in Mexico Washington, D.C.: Nicholas F. Benton Wiesbaden: Philip Golub, Goran Haglund and Panama, long exposed in this review, are coming under broad scrutiny (page 64). EIRIExecutive Intelligence Review (ISSN 0273-<;314) is The Ogarkov Plan can only be stopped by rooting out the means published weekly (50 issues) except for the second week of July and last week of December by New Solidarity by which wrong policies have been made, the illegal, secret govern­ International Press Service 1612 K St. N. W., Suite 300, Washington, D.C. 20006 (202) 955-5930 ment behind Project Democracy; and by instituting the sound eco­ EuropeanHeadquarters: Executive Intelligence Review Nachrichtenagentur GmbH, Postfach 2308, nomic policies to restore Western economic strength, without which Dotzheimerstrasse 166, D-6200 Wiesbaden, Federal Republic of Germany military strength is unthinkable. This week's economic coverage Tel: (06121) 8840. Executive Directors: Anno Hellenbroich, Michael Liebig includes aU.S. industrial survey exposing the threadbare "recovery" In Denmark: EIR, Rosenvaengets Aile 20, 2100 Copenhagen still touted by Wall Street; an analysis of how the Apollo space OE, Tel. (01) 42·15-00 In Mexico: EIR, Francisco Dias Covarrubias 54 A-3 program (and future defense and space spending) creates economic Colonia San Rafael, Mexico DF. Tel: 705-1295. wealth; and an in-depth look at the Indian economy, including ex­ JIIfHUI subscription sales: O.T.O. Research Corporation. Takeuchi Bldg., 1·34-12 Takatanobaba. Shinjuku-Ku. Tokyo posure of the follies of "liberalization." 160. Tel: (03) 208·7821. Copyright © 1987 New Solidarity International Press Service. All rights reserved. Reproduction in whole or in part without permission strictly prohibited. Second-c/ass postage paid at Washington D.C .. and at an additional mailing offices. 3 months-$125. 6 months-$225, I year-$396, Single issue-$lO Academic library rate: $245 per year Postmaster: Send all address changes to EIR, P.O. Box 17390, Washington, D.C. 20041-0390. (202) 955-5930 •

TImContents

Departments AIDSUpdate Economics

11 Report from Rio 12 AIDS' effect on brain 4 President Reagan dives No consensus for the IMF. studied into the budget trap The Trilateral Commission bankers 21 Africa Report 61 Bavaria cracks down on are steering the administration into 1978-79 Zambia breaks with the IMF. spread of AIDS a replay of the events that led to the present world economic 58 Andean Report 68 AIDS legislation blocked catastrophe, but with the in committee difference, that the dollar and Venezuelan "days of rage." bond-market crash now in preparation will destroy America's 70 Health service opposes 59 Northern Flank strategic position for all time . broadened AIDS testing New underwater activity in Stockholm. 6 Currency Rates 71 LaRouche AIDS policy 72 Editorial rocks New Hampshire 7 Myth of recovery lingers 'No' to a new constitutional on Wall Street, as convention. economy plunges An industrial survey of the United States.

Science & Technology 10 Argentina still hostage to debt 24 How the Apollo program produced economic wealth 12 Medicine Lyndon LaRouche has been AIDS' effect on brain studied. proven right about the relation between a defense build-up at the 13 The economy of India: it's frontiers of technology , and time to go back to basics economic recovery. By Robert Gallagher. The public sector has done poorly , the private sector even worse-the 30 America's space program fact is, the country lacks infrastructure . needs a shot in the arm

19 Malthusians plan to cut fertilizer use

22 Business Briefs Volume 14 Number 21. May 22. 1987

Feature International National

48 Gorbachov unveils new 62 Will 'Project Democracy' advances in space defense destroy the Constitution? The West has just been treated to The real issue of the Irangate a new equivalent of the 1957 scandal is whether the American "Sputnik Shock." republic will survive as a government of law . 50 Russians tighten the noose around West Berlin 64 Exposures of U.S. Contra The Soviets and their East German policy and PAN set off Lyndon H. LaRouche, Jr. and his principal adversary, proxies have launched shock waves in Mexico Soviet Marshal Nikolai Ogarlc.ov, at Ogarlc.ov's mem­ orable appearancein September1983 beforethe press, provocations against all three Revelations that the sole criterion when he justifiedthe shootingdown of civilian airliner Western allies in the city, while a for U.S. policy toward Ibero­ KAL-7. renewed anti-missile campaign is American nations was whether targeting the American troops in they supported the Contra policy 34 My policy on Soviet arms­ West Germany . for war in Central America. have exposed Mexico's opposition control proposals 52 Russian Church seeks leaders as traitors. By Lyndon H. LaRouche, If. German reunification Should the West be duped by the 66 Elephants & Donkeys new offers we can anticipate to come from Marshal Ogarkov 53 Nazi-communism on trial Who's on first? through Mikhail Gorbachov, in Barbie case 67 Eye on Washington Soviet troops could soon occupy 54 Project Democracy the entirety of Europe whenever imposes IMF dictator on Ogarkov promotion frightens Moscow might choose to do so . Abshire . the Philippines Documentation: What others have Cory Aquino's cronies, with full to say about Gorbachov's offers. 68 Congres�ional Closeup U.S. backing, have just perpetrated the most incredible 70 National News vote fraud in that nation's history-and pushed matters a giant step toward civil war.

56 Moscow orders civil war against Garcia As terrorism reaches unprecedented levels, the Peruvian communists are threatening a general strike .

60 International Intelligence ITillEconom.ics

President Reagan dives into the budget trap by DavidGoldman

The federal budget trap is yawning wide, and President Rea­ Paul Vo1cker will play the only trick he knows, and repeat gan has dived into it head-first. Whether the U.S. Treasury the credit -crunch of late 1979, inorder to blackmail Congress will default upon outstanding debt by the time subscribers into accepting such a policy. Sen. Phil Gramm (R-Texas) read this, due to the Senate's reluctance to approve an exten­ will play the role of the drunken deacon blessing a lynch sion of the federal debt ceiling, or whether the Senate will mob, threatening, or perhaps even forcing, default by the view the threat as mightier than the execution, and postpone U. S. Treasury, perhaps as early as May 25 , in order to batter thecrisis until July, remains unclear at deadline. Whether the the White House into acceptance. And President Reagan, trapsprings now or later, i.e., whether the dollar and govern­ mumbling the magic formula "108 in '88!" is attacking ment bond markets suffer their worst crash to date before or congressional Democrats for moving with insufficient speed after the June 6 industrial nations' summit in Venice, the against the deficit! outlines of the plan are unmistakable. "Things have not been so bad in Washington since that The deficit-reduction hoax clown Bill Miller was Treasury Secretary" in 1978, com­ It must be assumed that the Goldman Sachs, Salomon mented an adviser to the International Monetary Fund, and Brothers, MerrillLynch cabal of governmentsecurities-deal­ the remarkis not out of place: The financial institutionswhich ers playing out this scenario are not so stupid as to imagine first put in place the Carter administration, associated gen­ that this program will actually reduce the federal deficit, and erally with the Trilateral Commission, are steering the Rea­ that their intent is broader, strategic in content: to knock the gan administrationinto a horrible replayof the 1978-79 events United States out as a world power. Brazilian-style austerity that led to the present world economic catastrophe. will massively increase the budget deficit, rather than reduce The differences between today and 1979, however, mean it. that the dollar and bond-market crash now in preparation, The federal government's off-budget guarantees of the which is supposed to compelthe United States to adopt Third­ financial system include a trillion dollars' worth of home World-style budgetary austerity, will destroyAmerica's stra­ mortgages, a trillion dollars' worth of savings deposits, two tegic position for all time. trillion dollars' worth of commercial-bank deposits, half a The pre-programmed failure of the Venice economic trilliondollars' worthof pension obligations, and the assorted summit will trigger a flight from the dollar, at thesame time Exim Bank, shipbuilding, student, and similar loans. that the U.S. administration concludesthat a further drop of The insurance funds behind the $1 trillion in savings the dollar, by perhaps 30%, is required to bring down the deposits are exhausted, and the insurer, the Federal Savings U.S. trade deficit, still running (as of the $l3.63 billion and Loan Insurance Corporation (FSLIC), requires $45 bil­ March deficit) in the $160-170 billion annual range. The lion to sort out the problems now at hand; it will probably bankers' pack will howl that "fundamental solutions" to end up usurping the $18 billion now insuring the $2 trillion "structural problems" must be carved out of federal defense in commercial-bank deposits, leaving those unbacked. The and entitlements spending; and Federal Reserve chairman Pension Benefit Guarantee Board is similarly out of funds.

4 Economics EIR May 22, 1987 The agencies which guarantee the trillion dollars' worth of economic growth were to fall short of 2% this year. He home mortgages have funds amounting to barely 1 % of ex­ promised as little as Japanese Prime Minister YasuhiroNak­ posure, and a modest rise from the present home-mortgage asone promised to President Reagan during his Washington default rate will send them running to the Treasury. visit two weeks earlier. The federal deficit will balloon uncontrollably as these guarantees are brought to be honored at the Treasury. The The debt ceiling clifThanger self-feeding collapse of U.S. government finance, triggered On the same New York Times page as Dornbusch's de­ by a collapsing dollar and rising interest rates, will wipe out mand for an additional 30% dollar devaluation, former Carter America's already shaky commitment to spend money to economic official Robert Hormats, a Trilateral Commission defend itself and its allies. member now at Goldman Sachs, argued that a huge reduction in the federal deficit was the only solution. New currency A 30% dollar decline agreements between industrial nations can't "break the "The implication" of European views at the just-conclud­ logjam," and "credible revenue increases and federal spend­ ed ministerial meeting of the Organization for Economic ing cuts would make a larger portion of domestic savings Cooperation and Development (OECD) in Paris, wrote available to financenew investment. . .. United States budget Washington Post columnist Hobart Rowen on May 14, "is action should induce the Germans and Japanese, among oth­ that Baker and Co. quit too early in their effort to force the ers, to stimulate domestic demand." dollar lower-a judgment in which many financial analysts The conclusion was cited by the Washington Post's Hob­ concur." Among these are Rudiger Dornbusch of MIT, one art Rowen, from a paper presented recently at the Center for of the Trilateral Commission's stable since the Carter days. Strategic and International Studies (CSIS): "Little that the "Why the Dollar Must Fall Another 30%" was the headline principal Western partners can do in the short term will break of Dornbusch's commentary in the May 10 New York Times. the effect of the very serious imbalances that have been al­ "The dollar continues to be overvalued. In fact, it will have lowed to emerge over the last few years... . What most to decline as much as 30% to eliminate the remaining trade needs to be done will require not only time, but political deficit, create the conditions for cutting the federal budget perserverance of an exceptional order ....We would sug­ deficit, and force Europe and Japan into more reasonable gest that there is no short-term panacea for the currentills of economic policies." Dornbusch takes Treasury Secretary the Western world." James Baker Ill's discredited logic and pushes it to extreme This translates into a federal budget crisis, designed to conclusions: If bashing the dollar is the way to cut the deficit, break the back of any resistance to banana-republic economic it has another 30% to go, since, with the dollar collapse so prescriptions for the United States. A three-level national far, "the deficit by 1991 will be moving once again toward default crisis is in preparation for either May 25, mid-July, 1986 levels." or September.Despite House approvalof a 6O-dayextension Only two weeks before, the financialpress crucifiedBak­ of the federal debt ceiling May 13, and maneuvers for a er for bashing the dollar in order to reduce the trade deficit. "unanimous consent agreement" in the Senate for the same (At the OECD meeting, Baker actually argued that the policy extension, it is still doubtful that the Senate will act in time had shown success, because the volume of U.S. imports had to prevent the Treasury from defaulting upon maturing Trea­ declined-i.e., the United States is consuming less, but pay­ sury bills May 25. The last expansion of the federal debt ing more for it!) Precisely when Japanese and European ceiling contained a time-bomb, under which the ceiling re­ investors are considering whether to cut their massive losses verts back to $2.1 trillion from the "temporary" $2.3 trillion in the dollar-which has lost 45% of its value in two years level this month. Since the debt now stands at about $2.25 against their currencies, and particularlyin U. S. government trillion, the Treasury must, by law, pay back all maturing bonds, which have lost 13% of their value since April 1- debt. Baker is now being urged to knock the dollar down again. The scenario on Capitol Hill runs as follows: Sen.Phil The consensus in the London and other European finan­ Gramm is will introduce an amendment to the debt-ceiling cial centers says that the lack of agreement at the Venice extension, "strengthening" Gramm-Rudman-Hollings, by re­ summit will provoke a much worse crash of the dollar than introducing automatic sequestration of funds, struck down ever before. But after testing the waters in Venice, Baker last yearby the Supreme Court. Then the House will stripthe told reporters on May 13 that nothing should be expected Gramm amendment.Gr amm will either hold up approval of from the summit. After all, he shrugged, you can't expect a theextension in committeeuntil theSenate recesses May 22, major agreement among industrial nations every three weeks. making default inevitable; or he will withdraw his amend­ That goes especially when the last several rounds of "major ment, and strengthen his hand for the July re-emergence of agreements" have been demolished on the financialmarkets. the default crisis.Whether the showdown occurs in May or For all the talk of pushing the West Germans into a refiation­ July, depends entirely upon the tactical decisions of the forces ary course, Economics Minister Martin Bangemann prom­ that want to put the administration against thewall. ised an unspecified refiationary program, if West German The House and Senate have already proposed a "deficit

EIR May 22, 1987 Economics 5 reduction" program linking any increased defense spending to tax increases, putting the White House in a bind. Under the Senate version, a $7 billion increase in defense spending, Currency Rates already less than the rate of inflation, would be paid for by $7 billion of a total of $18.3 billion in new taxes. The dollar in deutschemarks The budget-cutting faction ridicules these proposals as New YorI< late afternoon fixinI inadequate in any event. The Committee for a Responsible Federal Budget wants much more. Susan Joy, executive di­ 1.10 rector of the group, notes that a large portion of the cuts, too small in any case, is to bederived from asset sales and similar 1.00 one-shot devices, including changes in accounting, which 1.90 "will not take the budget off its long-termglide." She predicts that the budget debate next September may "roll the debt � 1.88 � ,- ceiling, Gramm-Rudman, and deficitreduction all into one," - � in a final showdownwith the White House. 1.70

An internal White House analysis surfaced in press ac­ 3/24 3/31 4n 4114 4/21 41211 SIS 5/12 counts, showing that the Fiscal Year 1988 deficitwill be$13 5 billion, up $37 billion from previous projections. Neitherthis The dollar in yen nor previousprojections have much to do with the real world, New York late afternoon filling since the standard private estimate puts the FY 1988 deficit at $170 billion-without counting, say, $100 billion to bail 170 out FSLIC and other bankrupt agencies. Nonetheless, "Dis­ 160 closure of the analysis also will embarrass the administra­ tion," notes the May 14 Wall Street Journal. "President Rea­ 1511 gan has been criticizing Democratic lawmakers for drafting � ...... - budgets that fail to adhere to Gramm-Rudman, and Demo­ 140 .... crats have fired back by contending that the President's own -r- budget-which purports to hit the law's deficit target on the 130 nose-actually misses it by billions of dollars. " 3/24 3/31 4n 4/14 4/21 4/28 5/5 5/12 The British pound in dollars The consequences New York late anernoon fixing "Most people were able to take Peru's partial default in stride, and even Brazil's, but how would the world feel about 1.70 a U.S. default?" asked the May 8 Wall Street Journal. "The -� \.60 [federal debt] ceiling will be raised ultimately. The only -- question is whether some temporary delay will further dam­ 1.511 age the world's confidencein the ability of the U .S. Congress to manage its affairs. In other words, how much will Con­ lAO gress cost the country in higher interest rates and a further flight from the dollar?" 1.38

Recall that the dollar and the bond market survived the 3/24 3131 4n 4/14 4/21 4/28 5/5 5/12 May 6 Treasury debt auction, only because Japan's govern­ ment virtually assigned quotas to major Japanese institutions The dollar in Swiss francs purchasing U.S. government securities. City of London ob­ New York late afternoon fixing servers believe that a Treasury default would explode the 1.88 government securitiesmarket. At the point that the flight from the dollar runs out of 1.70 control, Paul Volcker will step into the breach, as he did in October 1979, and conduct a new "Columbus Day massa­ 1.60 cre." Wall Street wants a sharp rise in interest rates, not merely to stabilize the dollar, but to force the administration 1.51� � and Congress to adopt banana-republic measures. A sharp rise in U.S. interest rates following the Venice summit will 1.41 � coincide with either the aftermath, or preparations for, Trea­ 3/24 3/31 4/14 4/21 4/211 SIS S/l2 sury default.

6 Economics EIR May 22, 1987 U.S. Industrial Survey

Myth of recoverylingers on Wall Street, as economy plunges by MarciaMerry

The week of May 8, President Reagan told a group of GOP that concludes economic growth is under way. lawmakers that newly released government statistics "indi­ Consider, for example, the Wall Street Journal May 11 cate that economic expansion and creation of jobs continues survey of the first-quartercorporate profits. In this two-page at a strong pace." The Bureau of Labor Statistics figures feature, the Journal concluded, "First-Quarter Profits Up released May 8 showed the national jobless rate down to 11 %." Journalstaff surveyed 503 companies in 38 categories 6.3%-which the Commerce Department called the "best of activity they termedindustries, and in another group called since 1980." A survey by the Wall Street Journal. published "other." The first technique they used to affect the overall May 11, showed a picture of "Rebounding Profits" forU.S. picture, was to selectively include and omit industrial sectors corporations. They called it the "Best Gain Since '84." as they chose. Among the "industries" they included were Does this bear any resemblance to the "recovery" going service activities such as banking, media, and thrift institu­ on in your area? The truth is, that when the very same statis­ tions. Among those industries the Journal omitted, were tics and figures are analyzed from these government and trucking, shipbuilding, and other basic industry. business reports and surveys, a totally different picture The way the Journalgot an overall rate of an 11% rise in emerges. The "recovery" is killing the economy. Any other corporate profits, was simply to average the first-quarter conclusion is a deadly myth. earningsof the 503 companies they selected. The catch is, as The material below documents the dramatic decline in the Journal points out in small print, a profit shows up in selected U.S. industrial sectors now taking place. The EIR many cases because of one or more of the following reasons, Quarterly Economic Reports for the past year predicted that which do not indicate expanding capacity: 1) liberalized ac­ this disintegration would occur, if emergency monetary and counting methods; 2) one-time-only federal tax rebates; and economic mobilization measures were not implemented. And 3) drastic cost-cutting in the form of retirement, sale, or now the collapse-process is under way. The EIR fourthquart­ shutdown of output capacity. Despite this, the Journal ex­ er 1986 report showed that in 1986, the output potential of trapolatesthat the current, what they call "rosy," picture will the nation, in terms ofthe consumer's market basket of real continue. "Most analysts explain that the economy is clearly goods, fell about 20%. The report stressed, "That rate of expanding, with barometers generally signaling more decline cannot continue in 1987," because eventually you growth." reach the bottom. After just the first quarter of 1987, that Just one example is sufficient to show the fallacious warningis now coming true . thinking of the Journal survey. Bethlehem Steel-the third­ Before seeing the facts of this disaster-in-the-making, it largest steelmaker in the nation-showed a profit in the first is worth takinga brief look at the bogus argumentation em­ quarter this year, for only the second quarter since 1985, bodied in the governmentand business survey methodology entirely because of a governmentrebate of $32.5 million in

EIR May 22, 1987 Economics 7 tax credits. Meantime , Bethlehem has even put its corporate entire industrial infrastructure of the nation is disintegrating headquarters up for sale to cut costs, while it strives to sell because of the continuation of the Recovery. Here are some steel in a radically shrinking economy. of the facts, which even the J ourna!'s survey itself shows. Apart from the factor of cost-cutting, the Journal bases its forecast of economic expansion on the effects of general Decline in steel "modest economic growth" in the economy, a myth asserted This year, steel shipments are expected to be only 64 by current Commerce Department reports, in line with the million tons, down from 89.4 million tons ten years ago. Last ongoing policy of the White House to insist there is a "recov­ year the second-largest steelmaker, LTV , declared Chapter .. ery" under way. 11 bankruptcy, and has continued scaled-down operations, Again, just one example is sufficient to show the falla­ relying on such cost savings as non-payment of pensions. cious reasoning involved. The latest Bureau of Labor Statis­ The nation's largest steelmaker, USX (U.S. Steel Corp.), tics figures assert that there is "economic growth" under way contrived a record six-month long lock-out, to bring down simply because of the rise in service sector jobs. The BLS inventories. regards as unimportant the facts that the pay rate is falling, When it reopened Feb. 1, USX announced that four of its the average weekly hours worked per person is lower, and basic steel plants would remain closed indefinitely, to stay in the numbers of jobs in manufacturing, mining, and construc­ line with the falling market. tion are shrinking relative to the service sector. According to The third-largest steelmaket, Bethlehem Steel Co., put the BLS , non-farm-payroll employees increased a "robust its corporate headquarters building up for sale early in 1987, 316,000" in April, but even they say that most of the gain as part ofits program to sell off "non-steel assets." These are was in service sector jobs. For April, service sector employ­ the kinds of corporate strategiels which obtained when the ment increased 274,000, following a 189,000-job rise in Wall Street J ournal issued its glowing evaluation, "steelmak­ services in March. In contrast, goods-producing jobs-in­ ers rebounded into the black." Why? According to the Jour­ cluding mining and construction as well as manufacturing, nal, because the companies were "buoyed by hefty govern­ rose a reported 42,000, aftera drop of 34,000 amonth before. ment tax credits ," and because the USX lock-out gave the Construction jobs increased 23,000 after a drop of 35,000. other companies some temporary business. People are simply disappearing from the labor force. The In fact, Bethlehem Steel would be in the red were it not labor force increased 113,000 in April, after falling 127 ,000 for its tax credit, which gave it a positive balance for only the in March. This net loss, shown in the number of workers second quarter since 1985. Bethlehem received a cash rebate recorded as looking for work, has gone on for months since of $32.5 million on its federal tax credit allowance-a pro­ about the time Paul Volcker took office. Even the present gram that applies only for this y�ar. Other producers likewise "rosy" unemployment figures show no change in the number posted positive earnings because of receipt of their unused of people jobless for six months or longer, or in the number federal tax credits. of people working part-time for economic reasons. The un­ Last year Bethlehem was $� 1.8 million in the red in the employment rate for adult women is now the same as for first quarter; this year Bethlehem was $25.6 million in the men , because, although women have taken jobs to help sup­ black because of the tax cred.t. Armco received a $41.7 port the household, now even women cannot find supple­ million tax gain, after a negati)Ve $62.9 in the first quarter mentary work, and are unemployed themselves. The real rate 1986, because of eliminating certain capacity. Inland Steel of unemployed, is at least 20% . had a $50 million tax credit firs�quarter 1987, enabling it to However, the Bureau of Labor Statistics' latest figurefor post a $62.456 million profit, in contrast to a loss in the first the national jobless rate is 6.3% of the workforce-the best quarter 1986 of $22.031 million. they have reported since 1980, which the Wall Street Journal LTV was able to post profits on the basis, not only of uses as evidence for their view of an "economy that is grow­ avoiding pension payments, but renegotiating all interest ing steadily." payments, raw-materials contrllcts, and other costs, under The ulterior motive for the stupidity of the Journal is provisions of the Chapter 11 bankrupcty code. Earlier this revealed in their wishful thinking that the stock market will year, Sharon Steel-1 2th in the nation, declared Chapter 11. continue to function because of projections of continued cor­ Despite this prevailing picture of cutbacks and bankrupt­ porate profits. Regarding the 11% first-quarter profitrate, the cy, Journal analysts insist th�t the future looks good for Journal asks, "A Cheerful Omen for Stocks?" to which ques­ steelmakers. Why? They say, because steel prices have been tion they then answer, "yes," by asserting that, "strong profits raised, and, in addition, more tax credits are due this year. could help allay fears of a plunge in the high-flying stock The reality is, the Recovery is �illing the steel industry. market, which, for all its volatility, tends to move roughly in Steel is the measuring unit for modem industrial society. tandem with corporate earnings." By that metric, the country is in deep trouble. Demand for The real picture-when you look firmby firm, industry steel-the real determinant of tlile future of the steel industry, by industry-shows that earnings, production, jobs, and the is itself collapsing. The markets for steel in autos, farm equip-

8 Economics EIR May 22, 1987 ment, buildings and bridges, and ships are all in sharp de­ of January 1, 1987 , there were only six commercial vessels cline. of 1,000 tons or more under construction. On April 23, tes­ timony was presented to Congress on the crisis-nature of the Auto and equipment output slashed industry. The trade journal, Shipyard Weekly, later reported, Auto and equipment companies are manufacturing fewer "The collapse of the commercial shipbuilding market and the and fewer cars, in an attempt to "adjust" to the Recovery. resulting shrinkage of the industry appeared to surprise the Because of cost-cutting, Ford Motors posted a gain in earn­ members of the subcommittee." The shipbuilding trade coun­ ings; but the general picture is bleak in all respects. The group cil is now lobbying Congress for passage of legislation that of 10 major automakers and parts suppliers overall posted would guarantee them a few orders a year to construct some $2 . 795 billion in earnings compared with $2.315 billion in fish-processing vessels, just to ensure that the shipyards can the same quarter last year. However, the state of industry stay in existence. now is a desperate attempt to cut output to pull inventories down to the declining level of demand shown this year. There Electrical equipment and electronics were 15% fe wer autos produced in April. For the next two Not only the heavy industrial base of the nation is being months, the remainder of the quarter, more scaling down is "restructured" out of existence, but the so-called post-indus­ scheduled. All predictions are that second quarter earnings trial "high-tech" industries are now in the same declining will be down compared with both the first quarter and the situation because of the Recovery. According to the Ameri­ second quarter last year, down to less than $2.300 billion or can Electronics Association, 25,000jobs-a bout 9% of the less. total-disappeared from the semiconductor industry be­ In the first quarter, General Motors-the largest U.S. tween the beginning of 1985 and the present. Overall, em­ automaker-gained the benefit of liberalized accounting ployment fell in the electronics field by 1.6% last year, the methods for its leased vehicles, but sales for the giant com­ second year of decline. This shows clearly in the corporate pany are falling, and GM has scheduled a shutdown of 5 earnings picture. General Instrument, for example, showed plants, idling 30,000 workers , for the remainder of the sec­ a loss of $90.497 million the first quarter this year, because ond quarter. of a charge of $89.6 million relating to leaving the semi­ conductor fieldaltogether, and relating to some other invest­ Farm, industrial equipment stalled ment venture decisions. The Wall Street Journal glibly de­ Farmers are not buying equipment, and the demand for scribes as "favorable" the situation for semiconductor com­ machinery for large-scale projects has likewise declined panies, "whose overcapacity problems have been solved by sharply. Therefore , despite accounting tricks, down-scaling growing demand and plant closings." output, and every other maneuver, the combined firstquarter loss for 15 major companies was $199.288 million, com- . Industrial decline a defense issue pared with a net of $289.069 million the same time last year. Contrary to the glowing analyses by Wall Street, the John Deere-the world's largest equipment maker-posted degraded condition of the national industrial base has reached a record quarterly loss of $192 .6 million. Farm equipment the point of constituting a defense crisis. Norman R. Augus­ expenditures nationally last year fe ll to an estimated $4.5 tine, who chaired a Defense Science Board task force on billion, and continue to fall. In 1985 (the latest year of accu­ semiconductors for the Pentagon, and is president of the rate data) , there were only 2,912 four-wheel drive tractors defense contractor Martin Marietta, said, "The bottom line sold, compared with an annual average of 10 ,276 between is that we see a trend that we've all seen before in this country. 1978 and 1980; and an average of 7 ,188 each year from 1981 Semiconductors is on exactly the same glide slope as steel to 1988; then down to 3,975 units sold in 1984, as the Recov­ and automobiles and others have been before it." Similarly, ery set in. The sales of two-wheel drive tractors have fallen regarding shipbuilding, defense industry leaders from the from 62,818 ten years ago down to 30,600. Now John Deere Shipbuilding Council, said, according to Shipyard Weekly is trying hard to sell riding lawnmowers in the Maryland and (May 1) , "The question is the long-term impact on the finan­ Virginia suburbs of Washington, D.C., just for some cash cial health of the shipbuilders as a result of having only one flow.This is the great Recovery in action. customer, the Navy, in this period of declining markets." What even business statistics show-even those from the Merchant ship construction stopped Wall Street Journalitself, is that everysector of industry that National U.S. shipyard capacity is down by 30% in only is still in operation, has gone so far in eliminating "overca­ four years. The WaU Street Journal did not even list this pacity" that the very economy of the United States, and the industry as a category whose profits areto be analyzed. There Western alliance, is being dismantled in the name of"restruc­ have been no new orders at all for commercial vessels in the turing." What is required is an end to the rhetoric oflies about last two years, and no orders are on the horizon. The Navy is "Rebounding Profits ...Sha rp Earnings Increases" and the now the only customer placing new work in U.S. yards. As rest, and a call for emergency action before it is too late.

EIR May 22, 1987 Economics 9 Practically none of that money has been reinvested in useful production, During the 1978-82 period alone, about $21 bil. lion in capital was sucked out of the country into secret accounts abroad, Somos magazinereported April 29. One of the most profitable businesses conducted by the major mon­ ey-center banks during this period was lending to Argen­ tines-at ridiculously high interestrates and commissions­ dollars which they redeposited in other accounts at the same bank. The deposits soon disappeared, leaving the Argentine Argentina still people stuck with the debts. This looting process was orchestrated by British-oriented banker Jose Martinez de Hoz, the finance ministerduring the hostage to debt military dictatorship. The Peronist Renovators' document by Mark Sonnenblick names Martinez de Hoz as exemplary of "the serious symp­ toms of corruption which tainted the armed forces," and as the architect of the "dirty war," which torturedand murdered Argentina is on a debt treadmill. If current debt-payment not only to stop terrorism, but to intimidate anyone who policies are continued, "By the year 2000, we will have paid would challenge the looting of the nation. about $54 billion in interest and still owe more than $100 billion in an unending spiral," a Peronist Party faction called Alive, well, and living in Argentina "the Renovators" charged May 4. Argentina's debt today is While preferring not to resort to death squads and torture $51 billion. It spent60% of its export income paying interest centers, President Alfonsfn is committed to continuing de on debt last year and will pay over 70% this year, if its export Hoz's "free market" economic policies. He is lifting barriers prices continue to fall amid the world trade depression. on exportation of capital, while denationalizing industry and The Peronists alerted, "The only way out of this vicious keeping real wages even lower than they were during the circle is through growth; there is no stability withoutgrowth. dictatorship. Naturally, most Argentines think that Presi­ Here you have our essential difference with the government's dents like lIlia and Per6n were right not to subordinate the perspective. " nation to creditors. Alfonsfn responded to this in his May Day injunction: "There is no cure for the Argentine crisis in Debt vs. productive labor any Golden Age which is found· in the past." President Raul Alfonsfn has made a deal with foreign Alfonsfn is trying to lure the Peronist-controlled labor creditors to refinance $30billion in unpayable debt principal, movement into a "social pact" which would give token wage in return for Argentina applying the economic tourniquet increases in return for roping labor into helping preserve the prescribed by the International Monetary Fund. Alfonsfn status quo. He provokeda military rebellion in April to evoke promised to continue his suicidal course of economic stag­ images of a renewed cycle of repression to scare labor into nation, low wages, and relinquishing the productive sector such a pact. The Peronist General Confederation of Labor to foreign speculators. The Peronists charged that his policy (CGT) joined in "the Act of Democratic Commitment" in "condemns the country to permanent drainage of reserves." defense of the Constitution, but refused to give Alfonsfn the They call for "a new payment model which sees debt mora­ blank check he demanded for his IMF economic policies. torium as the only way to launch a new economic strategy The CGT insists that labor peace is conditional on measures whose central objective would be the growth of social justice. which will "enable us to mobilize domestic growth" and an Debt management must be subordinated. to the defense of end to "adjusting our economic growth to the foreign debt. " productive labor. " "Debtors' solidarity" is the only solution, the Peronist Ren­ The subordination of productive labor to financial spec­ ovators concluded. "Brazil's and Peru's isolation can only be ulators by the Alfonsfn governmentand the preceding mili­ attributed to the Argentine government's refusal to launch a tary dictatorshipwas documentedin a study released May 2 joint action with world debtors." Even the president of the by the Association of Christian Business Executives. The Latin American Association of Banks, Leonidas Ortega Tru­ study found that to bring real income back to the levels of the jillo, agreed: "There must be uniform continental action to 1964-66 governmentof Arturo lIlia, industrial wages would fight it [foreigndebt] and to protect the veryexistence of the have to be increased 60%. To bring themback to the level of American continent." Ortega called for an Ibero-American Juan and Isabel Per6n's presidency (1973-75) would require presidential summit to design such a "crusade" to defeat the a 76% increase in real wages. debt "enemy" without sacrificingeither the lbero-Americans' Since the 1976 military coup, there has been a savage "legitimate aspirations for economic and social develop­ redistribution of income from wages into financial profits. ment," or the stability of U . S. banks.

10 Economics EIR May 22, 1987 Report from Rio by Silvia Palacios

No consensus for the IMF with the ministry's determination to The Inter-American Dialogue offers Brazila "more democratic" rapidly tum Funaro's debt morato­ rium into a fading memory. IMF, but most Brazilians aren't buying. That homage, however, was in stark contrast to the reception offered the Inter-American Dialogue by Bra­ zil's political elite of congressmen, senators, and industrialists, who scorned the Dialogue's "altruism." Only days after the dismissal of dent Samey for his moratorium deci­ Nowadays in Brazil, anyone who dares Brazilian finance minister Dilson Fu­ sion, the Dialogue committee met with to speak favorably of the IMF is un­ naro, buzzards from the so-called In­ both Samey and his new finance min­ welcome, no matterwhat their origin. ter-American Dialogue, an organiza­ ister.Apparently buoyed by their of­ And this appears to be the preva­ tion headed by Sol Linowitz, descend­ fers of support, Bresser took the risk lent sentiment in Brazilian political ed on Brazil to offer their services in of publicly announcing-for the first circles everyWhere.When the IMF's mediating a deal with the International time-that the governmentwould ac­ South Atlantic division chief Thomas Monetary Fund (IMF).Not acciden­ cept the IMF were it to come bearing Reichmann arrived in Brazil with his tally, a delegation from the Fund itself "more reasonable proposals." Ob­ five-manteam, he was greetedby one arrived at the same time. The Dia­ servers were quick to point out that it of the PMDB's most powerful sena­ logue triedto sell the idea that the IMF would then not be the IMF. tors, Mario Covas: "The Brazilian was now a "more democratic" insti­ But Bresser's willingness to return economy will not be supervisedby the tution, and also pushed the Henry Kis­ to Fund servitude is far from the Bra­ IMF.At the swearing-in of minister singer policy of debt-for-equity. zilian consensus.A May 11-12 meet­ Luis Carlos Bresser Pereira, President However, things are not all that ing of David Rockefeller's Council of Samey made this very clear.. . . Bra­ simple for the Dialogue.Despite Fu­ the Americas in Washington, D.C. fo­ zil cannot negotiate its sovereignty naro's departure, the battle for control cused on Brazil. Undersecretary of with the IMF; the Fund will not dictate over Brazil's economic policy is by no State for Inter-American Affairs El­ what economic policies the country means resolved.Bankers ' man Bres­ liott Abrams took the opportunity to should adopt." ser Pereira, the replacement for Fu­ praise the newly-appointed Bresser, After a May 12 meeting between naro, triggered a furor of opposition but also noted that in the context of the Bresser Pereira and industrial leaders, when he announced his plans to re­ rather volatile political situation in an industrialist. remarked, "It seems duce economic growth from the 7% Brazil, the governmentof Jose Samey the minister is indirectly asking us to pledged in the ruling PMDB party's would not find it easy to impose the raise prices, invest in the financial platform, to a mere 3%. Powerful required "adjustments" on the econo­ market, to stop investing in produc­ forces within the party, and pro-growth my. tion, to fire personnel. It's like him industrialists, stand as an obstacle to Even more explicit was an execu­ telling the CUT [radical labor unions] the bankers' drive to recapture Ibero­ tive from the firmAnderson Clayton, that they should loot, because their America's largest nation. who declared during the Council of wages are going to lose their value." The executive committee of the the Americas meeting that, despite the Senator Albano Franco, president Inter-American Dialogue began its two largely conservative make-up of Bra­ of the National Confederation of In­ days of deliberations in Brasilia on zil's constituent assembly, "I don't dustries, said May 12, "There is no · May 4, with the stated intention of think there will ever again be an IMF business in the world that can be prof­ formulating a series of policy recom­ office in the presidential palace." itable paying real interest rates of 30% mendations for solving the "debt The Dialogue envoys were re­ or 35% a year.... We are really ex­ problem." One of its first pronounce­ ceived delightedly not only by Bres­ changing piles of goods for piles of ments, through Dialogue vice presi­ ser, but also by the ministry of foreign financial capital to the detriment of dent Peter Bell, was that the IMF now relations (Itamaraty). Secretary gen­ productive activity." accepted the concept of adjustment eral Paulo Tarso Flecha de Lima of­ Bresser Pereira countered, "Fi­ programs "compatible with growth." fered a gala luncheon for the Inter­ nance ministers should never be pop­ Claiming to give support to Presi- American crew, behavior consistent ular."

EIR May 22, 1987 Economics 11 • Medicine by John Grauerholz, M.D.

AIDS' effect on brain studied researchers at St. Mary's Hospital Newly published studies on AIDS shed light on connections Medical School in London describe the relationship of inherited variations between the brain and immune system. in a cell surface molecule to suscepti­ bility to HIV infection and the subse­ quent risk of developing AIDS . The surface molecule, known as group specificcomponent (GC) exists Progressive degeneration of the tween the cells which line the capillar­ as three genetically distinct forms central nervous system, with or with­ ies, and in the spaces between adja­ which can be distinguished by the out the presence of immune deficien­ cent brain cells. No virus was reported speed with which they migrate in an cy, is being seen in more and more in the neurones themselves. electric field. These are known as Gc individuals infected by the AIDS vi­ Infection of the glial cells would 1 fast (Gc 10, Cc 1 slow (Gc Is), and rus, HIV. Indeed, a growing number have a devastating impact on the brain Gc 2. Individuals can either be homo­ of cases are being seen in which brain even if the actual nerve cells were not zygous, i.e., they have two identical degeneration leading to death is the infected. The astroglial cells or astro­ molecules, or heterozygous, in which only manifestation of infection by the cytes, so called because of their star­ case they have two of the three types. virus. As in the case of immune dys­ shapedform , are intimately connected The study consisted of examining function, however, the mechanism of to the small capillary blood vessels of 203 homosexuals at risk of infection this process within the living patient the brain and formpart of the "blood­ or infected with HIV, 50 randomly is still obscure. brain" barrier which controls which selected homosexuals and 122 male Some of this obscurity was clari­ substances and nutrients in the blood heterosexual healthy seronegative fied by a recent report in the Journal will gain access to the nervous tissue. controls. Of patients with active AIDS, of Experimental Medicine by scien­ The microglial cells are responsi­ 30.2% were homozygous for Gc- If, tists at the Institute for Immunology in ble for producing the myelin sheath and patients with other manifestations Munich, West Germany. Using mon­ which surrounds the long processesof of HIV infection were also more likely oclonal antibodies, these scientists the neurones, known as axons. These to have Gc-lf. On the other hand ser­ were able to detect the CD4 molecule, axons are the equivalent of electrical onegative, symptomless homosexual the characteristic surface receptor of wires and the myelin sheath is the contacts of AIDS patients lacked Gc­ the so-called T-Iymphocytes, on the equivalent of the insulation which pre­ If and 25% of them were homozygous surface of brain cells. Not only was vents short-circuiting of the nervous for Gc 2. Not one AIDS patient was the molecule detected on the cells of impUlses. Destruction of the microg­ homozygous for Gc 2. Progression to the supporting network of the brain, lial cells would result in degeneration AIDS in infected individuals was known as glial cells, but also on the of the myelin sheaths of the nerves, strongly correlated with presence of actual neurones, or nerve cells. known as demyelinating disease, Gc If, and negatively correlated to Gc In a related study in the May 1987 which is one of the characteristic forms 2. issue of The Journal of Infectious Dis­ which AIDS encephalopathy takes. The group specific component is a eases, scientists at the Baylor College In the Houston study, the majority binding site, for vitamin D and is ap­ of Medicine in Houston, Texas, dem­ of virus replication appeared to take parently close to the CD4 molecule. onstrated HIV virus in the brain tissue place in the microglia, even though The difference between the various Gc of fiveof seven patients with progres­ astrocytes and neurones also appear to molecules is related to the presence or sive encephalopathy (brain degenera­ contain the CD4 receptor. This would absence of sialic acid, which appears tion). seem to indicate that something other to be related to viral binding and entry Using electron microscopy, the than the CD4 receptor may be neces­ into cells. One epidemiological sup­ researchers found the virusin two types sary for infection of a cell and produc­ portfor the role of this surface recep­ of glial cells, known as astroglia and tion of virus by that cell. tor in AIDS development is the fact microglia, as well as in brain capillar­ One indication that this is true is that in Central Africa the Gc If gene ies. Virus was found in the lumens of an article in the May 2 issue of the predominates in the indigenous pop­ the capillaries, as well as in gaps be- medicaljoumal Lancet. In this article, ulation.

12 Economics EIR May 22, 1987 Report from New Delhi

The economy of India: It's time to go back to basics by Susan and Ramtanu Maitra

Two years after the first salvoof "liberalization" was fired in version, to "socialism" among these layers indicates. 1985 , the Rajiv Gandhi government's application of econom­ The fact is that a restricted market, where only a tiny ic pragmatism has forced the underlying distortions in the fraction of the population has any buying capacity, cannot Indian economy to the surface. The elixir of a "quick fix"by begin to supportthe type of "boom" that was launched. And relaxing controls and regulations on private sector business­ meanwhile, the new investment only put more pressure on es, and infusing bloodinto the private sector, is now receding existing facilities which require fresh input of capital for into the distance. Once again, the necessity of taking tough modernization to keep pace. The lack of new capital in old and sustained policy measures in the areasof basic infrastruc­ facilities is turning them into "sick industries" -aquaint ture, including manpower development, and agriculture to economic terminology that could only be coined in a society raise the economy's productivity and efficiency is becoming where government is an all-pervasive nanny. To meet the more and more urgent. rash of "sickness," the government introduced legislation in While the public sector's performance has beenpoor, the 1986 to ensure that after the entire net worth (share capital private sector has done little better. In fact, a government plus reserves) of a unit is exhausted, that unit must apply to economic survey report raised alarm about the mounting a new Board for Industrial and Financial Reconstruction number of bankrupt companies and the sector's increasing (BIFR)for reorganization, a management change, or merger. debt to the commercial banks. In reality, the sorry state of The pre-budgetsurvey which Prime Minister Gandhi pre­ the private sector is part and parcel of the problem in the sented Feb. 25 before the Indian Parliament itself shows that public sector. In 1985 , the new administrationstarted lifting it is high time that the fundamentals of physical economy are the shackles of regulations from the private sector and eased given a heavy push. Energy, water, related infrastructure, the licensing procedures for expansion and diversification. and manpowerdevelopment continue to be the critical "weak The denizens of the private sector licked their chops and links" in the economic machine. A large amount of new dreamed of the spoils from areas from which they had been investment is required in these areas, but simply pouring in barred for so long by the licensing restrictions. money will not do the trick. Productivityand efficiencyis the More than 1,000 licenses to would-be television manu­ key to makinggood on such investments. facturers were issued; more than 80 brands of color television Since basic infrastructure and manpower development are now available in the market. Some 52 companies make will continue to dependmainly on public sector investments, telephone instruments. Over 80 companies are producing such investments should be specifically directed to solve computer hardware, and another 1()() hold licenses to produce complex macro-economic problems. Large projects associ­ the same. About 30 companies are selling photocopiers and ated with land and water development must be undertaken, another 20 are selling electronic typewriters . The same head­ with the benefit that available surplus manpower can be em­ long rush was visible in the auto and two-wheeler industries. ployed usefully, and receive training in the process. It was a rude awakening for Indian businessmen to find out that it is much easier to make profits when they are Good news, bad news protected by the government than when facing open compe­ The provisional statistics on the Indian economy for fiscal tition. The shoddy products which had been theprofit-leaders year 1986-87 show that while the economy is moving for­ were challenged by better products in the same price range, ward, there is little evidence that the ground has been stabi­ manufactured by unknown "upstarts ." Indian manufacturers, lized for sustained, rapid growth. The basic indicators, such who never bothered themselves with the notion of after-sales as growth rate of GNP, production increases in the agricul­ service, suddenly found their competitors offering some such tural and industrialsectors, performanceof the energy sector, facilities. The shock of liberation from licenses and regula­ trade performance, and others, show modest to satisfactory tions was indeed great, as the rate of conversion, or recon- growth (Table 1). But wholesale prices have risen sharply

EIR May 22, 1987 Economics 13 TABLE 1 TABLE 2 Selected economic indicators Principal imports & exports (percentage change over previous year) (in million U.S. dollars)

1983-84 1984-8519 85-86 1986-87" 197C)-71 1975-76 1980-81 1984-85

GNP (at 1970-71 prices) 8.0 3.7 5.1 4.5-5.0 Imports Agricultural production 13.7 -0.9 1.9 1.0 Food and cereals 202 1,163 31 7 579 Industrial production 5.4 6.8 6.3 6.4 Raw and intermediate mat'ls 741 2,328 8,133 10,747 (6.7) (8.6) (8.7) (7.8) (revised index)·· Capital goods 337 807 1,592 2,640 Electricity generation Exports (utilities only) 7.6 11.6 8.6 10.3 Agricultural products 407 1,245 1.713 2,498 Wholesale prices 8.2 7.6 3.8 5.9 Ore & minerals 137 247 345 532 Imports Manufactured goods 643 1,459 3,083 5,176 (at current prices) 10.8 8.5 15.1 1.4 Mineral fuels & Lubricants 11 32 24 1,519 Exports (at current prices) 11.0 21 .3 -7.1 17.3 Foreign exchange reserves Source: Economic Survey. 1986-87. government of India. (including gold and SDRs in $ billion) 4.98 6.04 6.52 6.4

The country's foreign exchange reserves have declined • Provisional or part year's figure. somewhat over the year, and areexpected to beat $5.9 billion .. Figuresin parenthesis basedon the revisedindustrial production index (bese: 1980-81). by the end of fiscal 1986-87. This is generally adequate as it Source:Economic Survey. 1986-87. government of India. covers about four months' worth of imports. But there is no doubt that pressure exists here also.Domestic oil production has begun to level off at a time when world market prices are and areexpected to be rising at a rate of 6.5% by the end of again firming.A bunching of loan repayments has pushed March.The consumer price index is now rising at a rate of debt servicing to 17% of India' s exportearnings, while surg­ 8% or more. ing protectionism and increasing chaos in international mon­ A 15 .7% increase in the M3 monetary base for 1986-87 ey markets complicate the prospects for trade and conces­ has prompted warnings about inflation.Such warnings may sional finance. have some basis in fact, but not for the reasons cited by the There is some good news on'the industrialfront. Accord­ Brand Z monetarists.In an economy that sports glaring inef­ ing to the newly revised Index of Industrial Production, in­ ficienciesin some of the major basic sectors, the in-any-case­ dustrial growth was 8.6% and 8.7% in the last two years, dubious idea of a one-to-one relationship between money respectively, and is expected to come close to 8% this year. growth and price rise is downright silly.It is not the amount The old index, which showed growth several percentage of capital running around but its use that has put pressure on points lower, did not include whole industries such as elec­ both the wholesale and consumer markets.For example, in tronics, petrochemicals, and garments, which have grown by 1986-87, a $765 million planned outlay has resulted in only leaps in recent years. But since the agricultural sector still 1 % growth in the agricultural sector. In earlier years, the accounts for more than 70% of the workforce, a majority of same sector showed much more encouraging growth at a whom are both underemployed I and underpaid, nothing less lesser investment. than a steady 10% growth of the industrial sector for more India's foreign trade deficit for the year is expected to than a decade will make a significant dent in the brutal and decline significantly, but it is a kind of monetary illusion in widespread poverty in the country. part.The April-November 1986 figure showed a decline of In this context, a study preparedby the National Council 18.3%, or about $900 million. A wide range of measures on Applied Economic Research (NCAER) is noteworthy. have been undertaken to encourage indigenous production of NCAER carriedout a longitudinal surveyof ruralhouseholds key bulk import items such as edible oils, sugar, and fertil­ in 1981-82, returning to households visited in 1970-71. The izers, but there is little indication that these have had any surveyors found that the incidence of poverty declined from materialeffect yet (Table 2). Therehas also been agreat deal nearly 57% in 1970-7 1 to 48.5% in 1981-82. But most sig­ of at least verbal emphasis on export expansion.What hap­ nificant, the survey also showed that had households above pened, it appears, is thatwhile exportsduring this period did the povertyline not descended below it over the same period, rise by 17 .3%, the decline of international oil prices kept the incidence of poverty would have declined much further, import costs to only a 1.4% rise. to about 29.5% by 1982.

14 Economics EIR May 22, 1987 The study concluded that the low rate at which poverty is alive. The government can, of course, generate income from being eradicated, and particularlythe descent below the pov­ public sector enterprises by raising the administered prices erty line of many who had not been poor before, can therefore of manufactured goods and services. But it will also have a be attributed in major partto the lag in industrial growth. The cumulative inflationaryeff ect. lag in industrial growth is linked in a kind of vicious circle In this context, the steady increase in non-plan, or non­ with the fact that India's agriculture, although it has achieved developmental, expenditure, by the government is rightly a significant amount of success over the decades, continues distressing. The corning year's non-plan expenditure, the to be highly unproductive. It is incapable of producing the biggest chunk of which goes into defense, interest payments, surpluses with which to expand industry. Nor can it absorb major subsidies such as for food, fertilizer, export promo­ the additional workforce coming onto the employment line. tion, etc., but which also includes services and the govern­ It is highly undesirable in any case that fully three-fourths of ment payroll in general, is expected to rise to $33 billion­ India's entire workforce continues to be agricultural. But more than one-third of the total budget. Though the govern­ failure to make the industrial sector grow at an appreciable ment constantly complains about "resource constraints," very rate has thrown this unemployed workforce back into the little result has been achieved in curbing the burgeoning land-based households and is pushing them below the pov­ bureaucracy and plugging the numerous government "sink­ ertylin e. holes." What is becoming increasingly evident is that the econ­ The 'resources' problem omy will have a tight money situation in the coming years, Overall, failure to generate surpluses from invested cap­ in spite of one of the highest rates of domestic savings in the ital is narrowing the government's chance of success in mo­ world anda respectable investment ratio overall. India's per­ bilizing additional resources. During the past year there was formance over the years in mobilizing resources has been no dearth of governmenteffort to tap private money or allow laudable. In the 1950s and 1960s, domestic savings contrib­ the private sector, through a large increase in capital issues, uted to less than 10% of the gross domestic product. Now, to soak upprivate savings. In 1985-86, permits for capital the contribution of domestic savings to the national exchec­ issues given by the Controller of Capital Issues reached $2.15 quer is more than 20%, one of the highest rates in the world billion-an 85% increase over the previous year. In fact, the and nearly as high as Japan had in the early phase of its boom in the capital market grew steadily over the last four development. There is nothing wrong with the investment years , and for a while, the amount of new capital issues share either, presently at around 25% of the gross domestic seemed much less than the market demand. product. A more efficient use of this capital could certainly A few public sector corporations, figuring it would be generate the needed increase in resources. worthwhileto draw upon the capital market as well as budg­ Indeed, it is the other side of the savings coin-the return etary support for mobilizing additional resources, also en­ on capital-that gives a disturbing picture. A slow-moving tered into the fray last year, but achieved limited success. juggernaut, known as the public enterprises and plan proj­ According to reports , the offersby the Mahanagar Telephone ects, is eating up billions of dollars of investment annually Nigam, Ltd. and the National Thermal Power Corporation and producingvery little new money in return. According to were oversubscribed only because of the massive support a recent estimate by India Today, a fortnightly magazine extended by the nationalized banking system and the finan­ published in New Delhi, 264 governmentpro jects with long cial institutions. In both cases, less than 10% of the funds time overruns are holding about $54 billion of invested cap­ came from private investors. ital to ransom today. The amount is more than the Seventh In addition, the government is getting heavily indebted Plan outlay for the entire organized sector of investment! The to the domestic banks. The interest burden on government cost overruns of these projects alone amount to a tidy sum of debt, which ate up 18.4% of revenue receipts in 1970-71, $21 billion-more than the total budget deficits of the last took away 27 .5% of these receipts in 1985-86, and eroded four years put together. about 30% of this year's revenue receipts. Meanwhile, the Slipshod operation by the entire gamut of government government's budget deficits are piling up and the govern­ projects is well known and on principle, as of now, has been ment has to borrow more money each year to fund the wid­ largelyoverlook ed. For politicalreasons (satisfyingthe local ening deficit. A large part of these loans has been obtained political bosses who are expected in turn to deliver votes), from the banking system, which, on the basis of holding starting new projects has always been more important than government securities, in tum became eligible for refinanc­ finishingthem . Moreover, prolonging the project is an easy ing facilities from the Reserve Bank of India, the country's way to guaranteethat cash continues to find its way into the central bank. pockets the political bosses want to line. Such abundant funds Since, in fact, most of the new money mobilized by the are not available, nor is such a lackadaisical approach in government has come from the bank, the lending rate has attending to the investment possible in the case of private been kept high and the potential for inflationarypressure stays capital. It is the government projects-the exemplars of "so-

EIR May 22, 1987 Economics 15 TABLE 3 Public sector contribution in total industrial production

National �roductlon Public sector �roductlon 1968-69 1985-86 1968-69 1985-86

Coal including lignite (million tons) 75.4 162.3 .16.6 158.5 Petroleum crude (million tons) 6.1 30.2 3.1 30.2

Steel ingot (million tons) 6.5 9.1 3.7 7.0 Saleable steel (million tons) 4.7 7.8 2.6 6.0

Aluminum (thousand tons) 125.3 264.8 Nil 96.5 Copper (thousand tons) 9.5 33.5 33.5 Nitrogenous fertilizers (thousand tons) 503 4,328.0 391 2,052.0 Phosphatic fertilizers (thousand tons) 213.0 1,428.0 304.0

cialism" -which are the victims of the political bosses. by lack of information, people became ignorant of the issues. But that is neither the beginning nor the end of Indian "Whatever is important for the nation is to be taken care of politicians' efforts to usher in "social justice. " Many projects by the government; I take careof myself," became the motto get into the planners' blueprint not because of their merit,but of millions who could otherwise:have contributed effectively simply because the political bosses want to create an "eco­ to nation-building. Petty local issues, religious issues, com­ nomic boom" in their area to snare future votes. Prime Min­ munal issues, and caste issues have remained the only sub­ ister Gandhi, fully aware of such hornets' nests, set up a jects with the grasp of these millions. ministry for program implementation in 1985 to monitor As the problems multiplied, Olore and more people dipped government projects. So far, it has yielded limited results­ their hands into the public fund to achieve "social justice. " not surprisingly, since projects are rarely delayed for lack of attention. The sacred cow The lack of concernabout public money is truly scandal­ From the outset, the public sector enterprises, concen­ ous in a country with such extensive poverty. But a deep­ trated in heavy industry and basic raw materials, were ware­ rooted belief that public money is meant simply for sustaining houses for employment-seekers. Necessary , as well as a large the population through day-to-day handouts has become a number of totally unnecessary , jobs were handed out as po­ trademark in India. During the last two decades, as the gov­ litical trade-offs . This might have worked had the decision ernment tookmore and more control over the nation's econ­ been made to use excess labor only in labor-intensive indus­ omy , two problems were created. First, a coalition was forged tries and in the execution of large land-based projects. Many between hundreds of thousands of government servants and such large projects still need to be undertaken, for which a horde of political bosses who often direct the government manual labor is appropriate and which could also be used to money to assure their own long-term political future . While imparttechnical skills to the laborforce so employed. both the government workers and politicians couch the per­ petuation of their respective self-interests in promotion of "social justice," private entrepreneurs have been institution­ alized as profit-hungry and anti-national-a phrase used TABLE 4 loosely in India. Profitability profile of public enterprises Second, big government became the big mother who (in billion dollars) plans, formulates, decides, and implements whatever is nec­ essary. The government made the public enterprises what 1976-n 1980-81 1985-86 they are today, just as it also provided a kind of blanket No. of enterprises 149.0 168.0 21 1.0 protection to the incompetent entrepreneurs whose sole aim Capital employed 10.0 15.2 35.9 was to make money and use that money to wield influencein Gross profit 0.9 1.1 4.4 a poor nation. Percentage of gross profit The people have been getting the worst from both ends. to capital employed 9.29 7.79 12.34 Caught in a vortex of collusion between big government and powerful petty traders-cum-industrialists and handicapped

16 Economics EIR May 22, 1987 cost, capital-intensivel p ants,which the first prime minister TABlE S of India called "the temples of modem India," have become Public enterprise employment and average perpetual loss-makers (Tables 3-6). Union Energy Minister annual wage Vasant Sathe, whohas been crusading against the wasteful (in dollars) nature of the public sector units for some time, has aptly described them "a sacredcow that produces neither milk nor No. of calves." Sathe points out that Indian steel costs twice the employees Average per capita (In millions) wage international price, and notes that while South Korea em­ ployed 14,000 people to produce9 million tons of steel, the 1976-n 1.58 750 Indian public sectore mploys 125 ,000people to produce 5.5 1981-82 1.94 1,346 million tons ! 1984-85 2.1 1 2,027 Big government has nOt ushered in "social justice" in 1985-86 2 . 16 2,172 India because the emphasis was never on effectively using thepu blic money. The Public EnterprisesSurvey (1985-8 6), an annual report on the industrial and commercial undertak­ ings of the central government, is a painful reminder of a For instance, millions of hectares of arable land remain problem which has grown 40 years old and accumulated non-productive due to inadequate command area develop­ awesome dimensions. The survey shows that a $42 billion ment. Millions of dollars are spent annually on flood-relief investment inthe public sector has netted a reinvestibleprofit while mighty rivers like the Brahmaputra remain uncon­ of less than $1 billion-a measly 2.5% return on capital. If trolledand highlythe fe rtileGanga River basin, which houses thetwo oil corporationsare excluded from the211 operating 150 million people, remains neglected and poor. The maj or enterprises, most of whichenjoy absolute monopoly control rivers of India, which all How east-west, remain to be con­ over pricing and tnal'keting, then the overall balance sheet nectedfrom north to south, thus opening an extensive inland runs slwply into thered. waterway system. These are only a few projects among many, Ironically, treatingthe public enterprises as employment but they are the type of projects that India must undertake troughs has had exactly the opposite of its intended effect. and complete if it is to realize its potential as an agro-indus­ The inefficient and wasteful use of capital that has resulted trial nation. has decisively undercut the country's capacity to produce a Insteadof investing manpoweron such projects, the cap­ growing economic surplus, the only basis for steadily ex­ ital-intensiveproduction centers that arethe core of thepublic panding meaningful employment. sector have become labor dumping grounds . Stuffed with What is necessary, andJapan can be cited as an example, hordes of non-working personnel, the public sector's wage is to develop lighter industries extensively as a back-up as expenditure has been pushed up steeply. In theprocess , bigh- well asa userfor thecapi tal-intensive coreunits. Thecapital-

TABlE 6 Employment in public and private sector industry (in millions)

PublIc aector PrIvate secIor 1176 1110 1985 11761980 1_

Agriculture,dairy, etc. 0.36 0.43 0.50 0.83 0.86 0.82 Mining & quarrying 0.72 0.80 0.97 · 0.13 0.13 0.1 1 Manufacturing 1.13 1.45 1 .76 4.16 4.42 4.43 Electricity, gas. & water 0.54 0.66 0.76 0.04 0.03 0.04 Construction 0.99 1.06 1.15 0.09 0.07 0.07 Wholesale & retail trade 0.06 0.1 1 0.13 0.29 0.27 0.28 'Transport, storage,& COf11I1U1icatio 2.42 2.65 2.91 0.07 0.07 0.06 Financing, insurance, etc. 0.49 0.69 0.99 0.18 0.21 0.22 Community &social services 6.64 7.22. 8.15 1 .06 1.17 1.31

Source: Economic Sutvey, govemment1986-87, ofIndia.

ElK May 22, 1987 Economics 17 intensive manufacturing units, on the other hand, must be and make them productive and to open new mines was not trimmed of their excess fat and modernized with the most forthcoming from the private sector. Left with little choice, efficient technology so that they can be highly productive, the governmentformed Coal India, Ltd . (CIL). producing both "milk and calves." Lighter industries, ex­ Since then, coal production has gone up significantly, panded and provided with financial incentives, will be the reaching 134 million tons in 1985-86. However, from the major employers. Large-scale projects where manual labor­ financial point of view, CIL is a chronically sick organiza­ ers can be trained and made economically useful, must be tion, having lost money every year since its formation. It is undertaken at the same time as the backbone of a nation­ one of the largest employers in Ipdia, with 668,000 employ­ building program. ees, and since its nationalization, more than $4 billion has been poured into CIL. This in itself is not the problem: The Power shortage problem is in the incredible assumptions the government is In all of this, the fundamentals have not changed a bit apparently making about the coal industry. By the tum of the over the years. In spite of repeated talk of catching up with century, according to government projections, Coal India's the technologically developed nations, the capability of In­ output will be over 300millio n tons annually. Looking at dia's basic sectors remains inadequate to the task. The short­ prevailing coal-mining technology, it is unlikt

Year Hydel Thermal Nuclear Total Water management

1970-71 6,383 7,906 420 14,709 Agricultural productivity has also continued to remain 1975-76 8,464 11,013 640 20,117 low-whether it is looked at from the standpoint of land 1980-81 11,791 17,563 860 30,214 productivity or labor productivity. This is one sector which 1985-86' 15,481 29,984 1,330 51,898 needs to be more productive than any other if India wants to generate new employment. Only a highly productive agri­ cultural sector can give momentum to the agro-industries,

• Tentative which have already shown some signs of life due to surplus Source: EconomiC Survey, 1986-87, government of India. food production in certain areas. Agro-industries can open

18 Economics EIR May 22, 1987 up a large employment potential both in the manufacturing and service sectors, and their proliferation would also create The European Community a demand surplus forthe basic industries. The constraints in enhancing agricultural productivity are few and basic. India has experienced a poor monsoon for the last four years. Lack of sufficient electrical power and the high cost of diesel has put a crimp on pumped-water use. Huge tracts of cultivated land still depend heavily on inade­ quate rainwater. Although fertilizer use among farmers is increasing-and the governmentprovides a tidy sum in sub­ sidy to this area-the crop productivity of land has not gone Malthusians plan to up. Another NCAER study points out that the problem lies in the mix of fertilizers. For instance, against a recommen­ cut fe rtilizer use dation to use (N) and phosphates (P203) in the ratio of 2: 1 , the average ratio in India is 5: 1. As a result, nitrogen's effec­ by WilliamEngdahl tiveness is reduced, and if the trend continues, productivity could become negative-for a double loss. Similar deficien­ cies can be pointed out in the case of other critical inputs­ The European Commission, the 12-nation bureaucracy of the irrigation, quality of seeds, use of pesticides, etc . European Community (EC), is preparing a secret plan which For example, water management-perhaps the most bas-. would force drastic cuts in the world's second-most-impor­ ic problem, and a matter of gross neglect for years. Dr. B.B. tant food-producing region. This would be implemented in Vohra, head of the government's Energy Advisory Board, the midst of the deepest depression in European farming since has highlighted India's water problems extensively in recent the 1930s. The cuts would be the result of centrally mandated papers , where he repeatedly points to the "tunnel vision" in cuts in fertilizer use, on the basis of the fraudulent claim that water management policy. Since independence, 20.8 million nitrates from animal and chemical fertilizers are "polluting" hectares of land have been developed for their irrigation European water. potential . Out of that, fully 5.2 million hectares still remain According to high-level EC sources who prefer to remain to be utilized. At the going cost of $3,000 per hectare to unnamed, the plan has already won the "green light" from develop, it would take another $16 billion to make the "po­ the office of the Director General for Agriculture DG VI, tential" utilizable! Due to lack of groundwater management, Guy Legras of France. The plan is considered so sensitive canal irrigation has resulted in water logging and salination politically, that its circulation is limited to six copies. "We that has already affected about 7 million hectares of land. In want the action to be as drastic as possible," confessed one some places canal irrigation has turnedinto a curse. senior EC planner. But potential "political problems" mean The ministry of irrigation limits its concept of ground­ that the measure is being carefully introduced first as an water management to pumping up the water for farm work. "environmental" issue for "sensitive land areas ." Pumped groundwater in fact accounts for irrigation of about The discovery of the new plan comes just as the finance 26 million hectares of land, about the same that the large ministers of the 24 OECD countries, meeting in Paris, ap­ dams and canals have achieved so far-and at a fraction of proved a resolution calling for elimination of some $100 the large projects' cost. However, pumping groundwater with billion in government supports to agriculture; elimination of systematic recharging of the aquifers has caused salination so-called surplus stocks of grain, meat, and butter, and de­ and a lowering of the groundwater table. cisive steps to bring national farm production into "free mar­ India receives annually about 330 million hectare meters ket orientation ." Sources inside the OECD reveal that that (mhm) of water, excluding 70 mhm which evaporate imme­ plan is simply a propaganda ploy to loot desperate develop­ diately after precipitation. Of these, 330 mhm enter the soil, ing-sector debtor nations such as Brazil or Argentina, by where about 110 mhm are retained as soil moisture and the allowing multinational cartel trading giants like Cargill or remaining40 mhm enter the deep strata in the form of ground­ Archer Daniels Midland to set up "run-away" factories at low water. Of the remaining 180 mhm of water which do not find wages, to export super feed concentrates such as soyacakes. their way into the soil, only 17 mhm are impounded as run­ The scheme benefitsneither developing nations nor industrial off to the reservoirs. The rest- 163 mhm of water, or 90% countries; but Cargill enjoyed a 66% net profit increase last of the run-off-goes to the sea and is lost. Mter four decades year, as a result of such maneuvers. of massive irrigationpro jects and expendituresreaching $30 By July of this year, the European Commission in Brus­ billion, only 10% of India's annually renewed water re­ sels plans to have a full 12-member EC "experts' review" sources can be captured for use! approved, in which each member country will send up to two

ElK May 22, 1987 Economics 19 officialsto hammer out details of the proposal. driessen's predecessor at the EC for agriculture. According to people involved in the scheme, the attempt This slashing of production parallels the process which to restrict nitrogen fertilizer and nitrates from animal manure , savaged food production in the 1920s. Today, as then, the is aimed at cutting food production. "We could not care less vital issue for governments is whether to protect production about the environment. This is going to be used to cut fo od of food and industry, or to let the monetarists' policies dev­ production," said one. "This is the interest of [Agriculture astate production of real wealth. Under Commissioner Franz] Andriessen, to cut production of agriculture to meet market demand." No scientific basis Is the new Brussels initiative based on any scientific evi­ The Danish precedent dence, which would demonstrate the causal relationship be­ According to Brussels sources, the tactic follows closely tween the kilogram input of nitrogen fertilizer into agricul­ the unprecedented decision of the Danish Parliament, reached ture? Hardly. It is based on no detailed preliminary evidence in February of this year, to force severe reductions in farm fr om any competent university or agricultural research fa ­ nitrogen use from fertilizers as well as manure, and to man­ cility. A source intimately involved in the preparation of the date billions of dollars of investment in manure storage tanks, new initiative admitted, "The initiative is based on no close on the false premise that manure piles, a rich source of nitro­ collaboration [with any scientificresearch agency-ed.]. We gen fertilizer, seep nitrates into the ground water and ulti­ based it on the general fe eling, as expressed in the literature mately out to the ocean. There , Danish environmentalists on nitrate pollution." According to this "general feeling," lyingly claimed last fall, the nitrate increase results in faster nitrates from fertilizer and animal manure sources are re­ growth of seaweed, purportedly robbing sea life of necessary sponsible for 70-80% of nitrates found in ground water! oxygen. Danish soil scientists had demonstrated in exhaus­ The latest issue of Andriessen's DG VI "Green Book," tive experiments over years, that fertilizer use is not chemi­ about to be officially issued by the EC, for the first time cally a major addition to ground water. But this did not stop includes "admission" of the responsibility of agriculture for the environmentalist demagogues. "pollution." While framed in general terms , sources in Brus­ Fritz Herman, a Danish farm leader and board member sels say this is considered a foot in the door for the whole of that country's oldest alternative farmers' union, LFO, told "fertilizerspollute" offensive against European food produc­ a Coblenz, West Germany conference of the Schiller Institute tion. "It is a good coincidence that our effort comes in the on May 9, "I am here to warnGerman farmersof the dangers environment area, just when the EC is preoccupied with how we in Denmark have experienced. In the last six months, we to cut the surplus food production. Two or three years ago have been accused of being the worst destroyer of the envi­ we could never have succeeded with such an initiative. Ag­ ronment in the world. It all centers on nitrogen in the seas of riculture interests would have blocked it right away. We were the Kattegat, so-called fish-death, and alleged pollution of actually surprised when we sent our proposal for comment to drinking water." Danish farm suppliers since the January the Directorate for Agriculture. They returned it without ma­

1987 introduction of the legislation to Parliament, have seen jor change and told us to proceed. They gave the ' green light. ' orders for new farm equipment simply collapse. No farmer They see it as a possible measure to cut production . Our goal has been willing to risk major capital investment, in the face is to cut production, " related an official involved in the direct of such an attack on the basic elements of agriculture . discussions. Unlike in Denmark, the EC attempt to cut vital nitrogen The Brussels bureaucrats are expecting to receive help input will proceed in stages. "Our firststep will be to localize from Denmark in implementing the bold measures. The pro­ the issue to application in so-called environmentally sensitive posed mechanism, to be applied first to "environmentally areas," said one source. "This will allow us to get it by sensitive" areas, will be in the form of ceilings on nitrogen without major controversy. We will show how it damages inputs from animal or chemical fertilizers, so that nitrate the environment, or health. Then it will be easier to expand content in groundwater for "environmentally sensitive areas" into other areas. This will then allow us to move ahead and does not exceed a proposed level of 50 mg/liter of water. take other measures." There would be varied levels of allowed inputs of nitrogen; The "other measures" have not yet been defined, but the for example, for certain range crops, a maximum of 150 kg/ general intent is clear: to implement the "free-market orien­ ha. , or a maximum animal holding capacity when manure is tation" strategy of the multinational cartels. That strategy, spread, of 2-3 cows/ha. for those designated areas . which is the base for Andriessen's policy since 1984, was EC planners expect this formula will hit the Netherlands, drafted by David Rockefeller's Trilateral Commission, in an West Germany, Denmark, Britain, and parts of France most April 1985 report on "Agricultural Policy and Trade." The severely. "Nitrogen is one of the most important factors in head of that task force was Andriessen's friend and adviser plant growth," admitted one Brussels bureaucrat. This is why Pierre Lardinois, a fellow banker from Utrecht, Holland. some are attempting to block its use for further development Lardinois, now chairman of Rabobank in Holland, was An- of the world's food supply.

20 Economics EIR May 22, 1987 Mrica Report by Mary Lalevee

Zambia breaks with the IMF out of the country for "giving money President Kaunda also blasted the Socialist International's to the Zambia Congress of Trade Unions" (ZCTU), traditionally a fo­ Friedrich Ebert Foundation fo r weakening the economy. cus of opposition to the government. A Zambian source in West Germany commented that he was "very sad" about what had happened. "There are these foundations that give you the Zambia has become the second na­ public sector investment. The curren­ impression they are your friends, and tion in Africa to follow the example of cy, the kwacha, was revalued, and you get a surprise when they do things Peru's President Alan Garcia, in IMF-dictated foreign exchange auc­ like this .... You take them for breaking with the International Mon­ tions were abolished. These auctions granted, and you don't realize they are etary Fund (IMF) and imposing a limit had led to the devaluation of the cur­ stabbing you in the back." What the on debt service repayments. Last No­ rency by 528% since October 1985. EbertFoundation was doing was "tan­ vember, Zaire's President Mobutu an­ President Kaunda said, "The IMF tamount to destabilization, by groups nounced that no more than 10% of program was supposed to help us get which on the surface are supposed to Zaire's export revenues would be used out of the quagmire we had got into. be helping." for debt repayment: Now Zambia has But the time has come to reconsider The Swedish Social Democratic followed suit. the situation in its entirety. The severe government reacted to Kaunda's break In a dramatic televised speech to austerity program of the IMF has only with the IMF by declaring that finan­ the nation on May I, Zambia's Presi­ brought suffering and malnutrition to cial aid to the country may be sus­ dent Kaunda declared that the IMP's Zambians." Sweden's Svenska Dag­ pended. Zambia was supposed to re­ latest conditions for resuming aid to bladet quotes Kaunda saying, "People ceive about $16 million from Stock­ his country were unacceptable, and here are starving to death as a result of holm, but according to a Swedish for­ that his governmentwould embark on the IMF reforms. " eign ministry spokesman quoted in a new policy of growth from its own President Kaunda accused the In­ Svenska Dagbladet on May 7, "It is resources. He said that debt service ternational Monetary Fund, South Af­ no longer self-evident that there will payments would be limited to 10% of rica, the United States, the UNITA be a payment ...to Zambia. We must export earnings. rebels from Angola, RENANO rebels analyze this new situation." Zambia has been following IMF­ from Mozambique, and most interest­ Support for Zambia's step came dictated policies since 1973. The re­ ingly, the West German Friedrich from the Organization of African Un­ sult has been drastic falls in living Ebert Foundation of deliberately ity, whose secretary general Ide Oum­ standards, with per capita income now weakening the economy to undermine arou declared on May 9 that the OAU only one-third of the 1981 level , less his authority. The pro forma attacks would fully support Zambia after the than $200 per annum, and with almost on South Africa aside, his naming of breakwith the IMP. Oumarou said that 60% of the active population unem­ the Socialist International-run Ebert the move was justified by the failure ployed. Zambia's economy has also Foundation is very significant. Kaun­ of IMF policies in African countries, been hit by the fall in the price of cop­ da has always presented himself as a with their programs of reducing gov­ per, which provides 90% of export "humanist," rejecting "the narrow­ ernment expenditure and liberalizing revenues. The copper price has fallen mindedness of Western Capitalism and the economy not achieving their aims . 75% since 1973. In 1986, eighty per­ the perversity of Marxist-Leninist So­ Not only had there been no influx of cent of export revenues were used for cialism," as described in a govern­ foreign capital for productive invest­ debt repayment. ment radio commentary, and had al­ ment, but the IMF measures had led Kaunda announced the abandon­ lied closely with Socialist Internation­ to rebellions in several countries. ment of the liberal economic policies al figures like Willy Brandt and the The French newsletter Lettred' Af­ insisted on by the IMF, and the im­ late Olof Palme. rique reports in its May 5 issue that position of strict import controls, the On April 15, 1987 Kaunda broke Zambia's move "is just the begin­ freezing of prices, the fixing of loan with that policy by ordering a leading ning," and several other African coun­ rates at 15%, and a new program of representative of the Ebert Foundation tries may follow suit.

EIR May 22, 1987 Economics 21 Business Briefs

Science commercial imports; 3.2 million tons will Sudan i� only paying 20% of the debt have to come from food gifts. service due this year. Space technology called In early May, Zambia announced that it was suspending all but a small percentage backbone of economy of its current debt service payments. Gov­ InternationalTrade ernment spokesmen denounced the policies James Fletcher, director of the National of the International Monetary Fund as de­ Aeronautics and Space Administration, said India, Soviets structive. May 13 that the American space program has paid for itself two or three times over. sign new agreements Speaking to an audience in Chicago, Fletcher stressed that technology developed The governments of India and the Soviet The Debt Bomb in the space program is now the backbone Union have reached agreements that are in­ of the u. s. economy. $200 or $300 billion tended to increase Indo-Soviet trade turn­ Colombian official has been returned to the economy for the over by two-and-a-half times in the next five $100 billion spent. years. calls for moratorium He stated that 30,000 new or improved Included in the trade basket are chemi­ products resulted from space research and cals, power, coal, steel , electronics, and Colombian Controller of the Currency Gon­ development, and pointed to electronic cal­ railways. The "service sector" has also been zalez Garcia has called for a debt morato­ culators and programmable heart pace­ identified as a new area for expanded com­ rium by his nation. Addressing an audience makers as examples. mercial ties. of business executives in Cali May 10, he Earlier studies, including one by Chase Indian companies are said to be likely to stated: "Since the times of Bolivar and San­ Econometrics, estimated that at the height receive the contractsfor constructionof three tander, Colombia has had moratoria, not be­ of the Apollo Moon-shot program during the hostel complexes in Tashkent, Samarkand, cause we are accustomed to not paying, but 1960s,6, 000new technologies a month were and Bukhara, U.S.S.R. because the debts exceed the abilities of the being introduced to the private-sector econ­ The Russians will market manufactured debtors. It is legal to declare moratoria, be­ omy. Chase stated that for every $1 spent on goods in India, including tea, coffee, tobac­ cause more important than debt is human space research, $14 was generated through co, textiles, leather goods, and machinery. survival of all nations such as ours." improved productivity in the civilian econ­ At present, there is a large trade surplus He complained that the countrypays one­ omy. between the two countries in India's favor. quarter of its export earnings to meet "ex­ The current agreements are said to be de­ aggerated commitments to the multinational signed to bring trade more into balance. and international banks. "How are we going to maintain a policy Agriculture of social development if there is no basic budget support to repair highways, to re­ Black Africa can't InternationalCredit solve the problems the · guerrillas leave in their destructive wake, to revive the margin­ feed its population alized zone;s." Sudan to follow !

According to the latest report of the U.N. Zambia on debt? Food and Agriculture Organization, the na­ tions of Black Africa, who suffered severe On May 4, Sudanese Finance Minister Be­ Finance, drought and farnine in 1985-86, are still not shir Omar declared that Sudan was not able in a position to feed their popUlations alone, to pay the total debt service it owes to for­ Japan to auction and will require continued internationalaid. eign creditors this year, and will not seek to The report particularly stresses the cases do so. bonds to foreigners of Ethiopia, Angola, Botswana, Lesotho and Sudan owes foreign bankers some $10.6 Mozambique. These five, says the FAO , billion in payments for 1987. Japan plans to auction some of its govern­ will need need "extreme food help" in the Omar called for the outright cancellation ment bonds in a way that suggests Tokyo is next 12 months. of the debt of all drought-affected African responding to U. S. pressure to open its mar­ The report said that this year's grain def­ countries, adding that for debt to private kets more tofor eign, especially U . S. , firms. icit for nations south of the Sahara is almost banks, rescheduling could be considered, Currently,most Japanese govemment bonds 7.5 million tons. According to FAO esti­ provided no interest payments whatsoever are sold to a syndicate controlled by local mates, 4.5 million tons could be covered by were paid. institutions, which in tum sells them to other

22 Economics EIR May 22, 1987 Briefly

members . Now, in many cases, foreign firms ment plans, and concluded that Brazil's in­ will be able to bid on an equal basis. tent is to invest nearly $16 billion in these In early May, the U.S. House of Rep­ projects in each of the next three years. The • 2,500 PEOPLE mobbed a local resentativespassed an amendment to its trade World Bank considered this viable, but ob­ hotel on May 7-8 to compete for 25 bill barring foreign firms, i.e., Japanese, jected to the $20 billion figure. jobs offered by Lever Brothers at its from being primary dealers in U.S. govern­ A second Gazeta report says that both soap manufacturing plant in south­ ment securities unless U.S. firms were the International Monetary Fund and World east Baltimore. "Eager job hunters granted equal access there . Bank are against the north-south rail link, beganlining up at II p.m. Friday and Forcing Japan to open its markets for pronouncing it "exorbitant" and "seriously waited outside all night," said a local looting by desperate international financial affecting the credibilityof the Sarney gov­ pressreport. institutions has long been the program of the ernment." Trilateral Commission, and is currently an • BILL BRADLEY, the senator incorporated feature of Reagan administra­ from New Jersey, told a Washington tion trade war policy. Government meeting of the Council of the Amer­ The Japanese government is consider­ icas May 12 that the debt policies of ing, in addition to 20-year bonds, auctioning Justice Dept. plans the Reagan administration are open­ off at least some of its lO-year bonds. ing up Ibero-America to Soviet influ­ This "sounds like a major advance com­ tax-case changes ence. He noted that Mikhail Gorba­ ing sooner than most people expected .... chov will visit Ibero-America in Sep­ It would be a major step forward, if these Former officials of the IRS and Justice De­ tember. "Why don't U.S. banks governmentauctions were to be implement­ partment are opposed to a plan, expectedto charge Brazil the same spreads they ed in such a way that the foreign firms and be approved soon, that would cut Justice charge the Soviet Union?" the sena­ the Japanese were able to bid on an equal Department tax lawyers in Washington out tor asked. That would save Brazil $2 basis," said Mark J. Lerner, head of Merrill of the process of selecting tax fraud cases billion a year. Lynch's Japan Banking Group in New York. for prosecution. Instead, U.S. Attorneys U.S. financial institutions are also de­ around the nation would decide which cases • JAMES BAKER, Secretary of manding more than the six seats they cur­ to pursue. the Treasury, has asked the Council rently have on the Tokyo stock exchange . The department's Washington tax law­ of Economic Advisers to study the Currently, Merrill Lynch, Morgan Stanley; yers would handle only the "overflow" of possibility of employing a national Goldman, Sachs; and a unit of Citicorp hold cases the U.S. Attorneys did not want to lottery to help shrink the U . S. budget seats. pursue. deficit. Opposition is expected to However, in a letter to AttorneyGeneral come from those opposed to govern­ Edwin Meese, 21 Washington tax lawyers, ment-sponsored gambling, states many of them former officialsat the IRS and which already have lotteries and are Infra structure Justice Department, objected to the plan, afraid their take will be lowered, and stating that similar decentralization propos­ those who say they have no idea how Brazil's big-project als "have been considered and rejected by to estimate, and so budget for, what successive attorneysgeneral over the last 50 the take will be. plans upset Wo rld Bank years as unworkable and likely to jeopardize the national criminal enforcement program • AN ARTICLE by EIR's Brazili­ World Bank officials have received "disa­ of the Internal Revenue Service. " an correspondent,Lorenzo Carrasco, greeably" plans disclosed by the Brazilian The current IRS commissioner, Law­ was featured prominently in the May government to invest billions in the next rence B. Gibbs, also objected to the plan, 12 Jornal do Commercio in Brazil. three years in maj or infrastructure projects. saying that a decentralized system like the Titled "World Financial Collapse According to a report in Rio's Gazeta proposed one "would have a very adverse Soon," Carrasco's articlestated: that Mercantil, the value of infrastructure proj­ impact" on tax enforcement. the recentouster of Finance Minister ects planned by the government of Jose Sar­ Former IRS commissioner Sheldon S. Dilson Funaro"is farfrom ending the ney, but not included in the 1987 budget, is Cohen stated that U. S. attorneys "don't know real dangers of an imminent world $20 billion. The sum includes $2.4 billion anything about sophisticated kinds of finan­ financial collapse, whose responsi­ for a north-south railway link; $6. 1 billion cial-transactioncas es. They tend to crap them bility falls exclusively on. the usu­ for a Rio-Sao Paulo rail link; an east-west up ." rious financial and banking practices rail link, and various others . Nevertheless, Deputy Attorney General practiced with the tolerance of the According to the report, World Bank Arnold Burns is expected to approve the U.S. Federal Reserve." "technicians" recently reviewed the invest- plansoon .

EIR May 22, 1987 Economics 23 �TIillScience &: Technology

How theAp ollo program produced economic wealth Lyndon LaRouche has been proven right about the relation between a dlifense build-up at theJro ntiers ojtechnology. and economic recovery. By Robert Gallagher.

The commitments made last winter by leading Democrats into capital investment to implement more advanced tech­ and Republicans toward "Apollo program style" economic nology. policies have so far proven to be worth less than the paper the The effects of the Apollo program on the U.S. economy speeches were written on. Rep. Jim Wright, Speaker of the show that goal-oriented programs in defense and aerospace House of Representatives, has abandoned his promise "to get drive economic recovery and subsequent growth in two dis­ this country moving again" with the sort of programs that tinct ways. Apollo represents, and has turned booster for austerity and First, by requiring that capital-goods industries develop trade war instead. Typically, the focus of recent official eco­ and produce the most advanced possible equipment and sys­ nomic policy debate has been over whether to raise interest tems to attain a goal within a specific period of time, such as rates to strengthen the dollar in the currency markets (an a manned Moon landing, the very initiation of such a program action that would cut off credit to U.S. industry) or lower sends the entire economy into a capital investment boom that interest rates and produce a collapse of the dollar. increases the amount of capital equipment available per in­ Not a single one of the announced Democratic or Repub­ dustrial operative-that is, increases the capital-intensity of lican presidential candidates has even put forward a program the economy as a whole. This capital investment has the for economic recovery , let alone exhibit the determination immediate effect of boosting productivity throughout the bas­ required to implement it-except of course, Lyndon H. ic industrial sectors of mining, manufacturing, construction, LaRouche, Jr. and utilities, as technology developed by previous programs, A cursory glance at even post-World War II economic but not yet implemented, is infused into the economy. To history would show these persons the sort of thing that works produce such a "tidal wave" of economic impact, the Apollo in economic policy, and what doesn't. For this purpose, we program had to be accompanied by the enactment of Kenne­ publish here adapted portions of a study from the EIR Quar­ dy's tax and other incentives for capital investment. terly Economic Report, 4th Quarter, 1986, on how the Apollo The second type of "economic driver" effectproduced by program produced a period of economic growth from 1961 goal-oriented defense and aerospace programs, flows from to 1967 unparalleled in the over 40 year postwar period. the propagation of the technology developed by the program Complete documentation appears in that Report. throughout the entire economy. This effect, which lags be­ When President John F. Kennedy launched the Apollo hind the initiation of the program by as much as several years , program in 1961, the stagnant U.S. economy needed some will, if followed through, produce productivity advances of driving economic process that would cheapen the cost of a qualitatively higher order than the first, and thus amplify production throughout industry. Investment in the Apollo the economic impact of the program. program and the post-Sputnik missile build-up, provided this Contrary to Marxist doctrines that portray investment in driver for the economy so that, by the achievement of set defense and space exploration as a net cost to the economy, national goals, it forced the economy as a whole forward , and defense and aerospace workers as a form of "hidden

24 Science & Technology EIR May 22, 1987 unemployment," investment in these areas is an integral part

of building the future . In fact, the space program, in a fashion TABLE 1 similar to President Lincoln's program to build the railroads, Defense cuts and inflation is entirely an investment in building the future infrastructure (Avg . percents) of an economy that will increasingly be moving out into 1950-1957 1959-1969 1970-1980 space. Thus, in making necessary preparations for the econ­ omy's continued existence, it can hardly be considered over­ Aerospace & defense production % head . workers as of durable goods production workers 8.0 7.7 5.3 Even in defense weapons development and production, New orders, capital goods, in most of the capital investment goes into production equip­ aerospace as % of nat'l. total NA 30 22 ment that can be used in both military and civilian production. % change new orders, capital One example of this dual aspect of military production facil­ goods, nondefense industries ities is the production of the famous Boeing 707 jet airliner, (constant dollars) -7.7 127 36 which was nothing but a KC-135 military jet fuel tanker with Annual % change in wholesale windows punched along the fuselage and seats installed. price index 2.4 1.1 9.3 Of course, it is understandable why "Marxist" nations of Annual % change in prices of capital equipment 4.1 1.7 8.8 the East may regard defense and aerospace as a drag on their economies. Only in the democratic republics of the West can these sectors perform the healthy "driver" role we have out­ lined here . Spurredon by Kennedy's investment tax-credit program, Apollo program, however, saw an explosive growth in cap­ new orders for capital goods boomed during the 1959-69 ital-goods spending in constant dollars, from $103 billion in defense-aerospace build-up for the firsttime since World War 1959 to $234 billion in 1969 , an increase of 127% (see Figure II . From 1950 to 1957, annual new orders for capital goods 1 and Table 1). in non-defense industries actually declined by about 8%. By The role of aerospace as a driver for the economy is seen 1958, the decline was 18%. The following decade of the in the fact that while annual new orders for capital goods in aerospace almost doubled from 1958 to 1967 (92% growth), this growth in aerospace provoked a faster acceleration of investment in non-defense industries as a whole (127%),

FIGURE 1 while aerospace accounted for only three-tenths of the total New orders for capital goods in growth in new orders in that period. manufacturing boomed during Apollo program Three periods in postwar economic history New orders Under Kennedy's program, the stagnant U.S. steel in­ dustry got a new lease on life. Although very little steel is actually used as material in fabrication of, for example, a Truman- Post- Kla.lngar- Eisenhower Sputnik Carter Saturn V rocket, the requirements for steel of the machine­ period buildup period tool, metal-working, and construction industries, to meet national objectives, drove even industries like steel, appar­ 300 ently remote from aerospace, to implement more advanced technologies in major capital investment programs. Backed 200 by the investment tax credit, the industry was able to convert its steel-refiningmills from the obsolete open-hearth furnace technology to the basic oxygen process. 100 90 Only as a result of the momentum built up during the 80 70 Apollo program, did the Kissinger-Carter years see an addi­ 60 tional increase of 36% in annual investment in capital goods 50 up through 1980. 40 U.S. postwar economic history is thus characterized by 30 three periods: 1) a period of stagnation following the Korean War mobilization, from Harry Truman's second administra­ 20 tion until the 1958 recession; 2) the post-Sputnik aerospace­ defense build-up from 1959 to 1967; and 3) renewed stag­ nation deliberately imposed on the economy from the elec­ 10 1950 1960 1970 1980 1985 tion of Nixon and installation of Kissinger as national security

EIR May 22, 1987 Science & Technology 25 Inflation rates for capital eqUipment parallel these statis­

FIGURE.2 tics. From 1959 to 1969, the average annual percentchange Cost trends for high-technology civilian in the price of capital equipment was 1.1%. From 1950 to electronic products, 1950-1975 1951, the ratewas 4. 1%, andfrom 1910 to 1980, the average Ratio of annually advertised prices to 1950price annual percent change was8.8 %. Figure 2 gives one indication of the tremendous cheap­ .". - 1.1 '" ...... " ening of production throughout the economy produced by " \ / \ aerospace and defense investment. Note that the rapid drop 1 .0 �" \ in pricesfor the items shown in the figure,coincides with the \ 0.9 \ capital investment boom set off by the post-Sputnik missile \TapeI8COIder ($415)" and space programs. The specifi¢ technologies whoseappli­ 0.8 � cation brought down these prices (for example, the mass productionof reliabletransisto rS),had actually been devel­ 0.7 opedunder the 1950sballistic-missile program or earlier, but were only driven into the civilian economy as a result of 0.6 Apollo.

0.5 '\ Notice also that the rate of fall of these prices slows "', \ dramaticallyfrom the late 19608 onward, aftertheinvestment B&W T,V. ($778)· "'" '\ 0." "'" driver effect of the Apollo program had been aborted with "" '" , " , the election of Nixon andthe installation of Kissinger at the , 0.3 , White House as national security adviser. This regressive " ..... shift in national investment polity removed the mechanism 0.2 ...... for driving technologies produced by the Apollo program into the civilian sector. As a result, most Apollo-eratechnol­ 0.1 ogies neversaw application in industry as a whole.

------Forexample, thesecond-gereration nuclear fissiontech­ OL-____-L __ ---- L- -L �� � 1950 1955 1960 1965 1970 1975 nologies, developed by NASA in the 1960s program for a mannedmission to Mars, neverbecame commercial breeder • Fogures in pafIInIhesis are 1950 prices in..,..... FY 19n -.. .. Color T.V, figureis 1965 pricein ..,..... FY 19n ck*rs and high-temperature reactors built by U.S. utilities .

Source: Jacque GonzIer, The DeIIJnse 1ttduttJry, MIT pras, The economy that Kennedy inherited adviser, through the Carter years. This was a conscious re­ When the United Statesembarked upon its civilian and versal of President Kennedy's conservative economic poli­ military space program, the U.S. economy was actually, in cies. Thethird period of enforcedrecession saw inflation take foundation, in miserable shape. off at rates previously unimagined for the U.S. economy, I) From 1948 to 1958, new orders of capital goods in and a drop in the percentage of the productive labor force non-defense industries had stagnated around the same level involved in defenseand aerospace,to aslow asthe immediate of 80- 100billion constant 1982 4011arsper year. postwaryears by 1973. 2) By 1958, fully60% of metalworkingmachine tools in The point of thiscomparison of the period of the 19608 usein metalworking industries were classifiedas "over-age" withthe Truman-Eisenhoweror Kissinger-Carter periods , is or "obsolete" by the American Machinists' Inventory of simply this: The economy in the postwar years has been Metalworking Equipment, a significant increase from pre­ healthier the greater the proportion of national resources viousinventories (seeElR Quarterly Economic Repo rt, June 1985). committed to defense and aerospace-industries thatunder conventional wisdom, do not contributenational to wealth. 3) The American iron and Steel industry wasbased on When these industries are cut back, inflation is set off, as if antiquated technology from the 19th century, the ancient uponcommand . open-hearth furnace andthe same basic blast furnace devel­ Theperiod of 1958 to 1968 whenU.S. defense andaer0- oped by Andrew Carnegie, improved only by computeriza­ space spending grewat the highest rate in thepostwar period, tion and the introduction of superior raw materials. Stagna­ coincideswith theperiod of thegreatest postwar price stabil­ tion in iron and steel was indicatedby the fact perthat capita ity. From 1959 to 1969 the average annualpercent change in ironproduction had remained for 40years at aboutthe same wholesaleprices was 1.1% peryear. From 1950to 1957, the level as it was in 1920 (seeEIR Quarterly EconomicReport, rate was 2.4%, and from 1910 to 1980 the averageual ann June 1985). From 1958 to 1960, per capita iron and steel percent change was 9.3% per year. Increases in iJiflation production was lower than any year since World War II. correlate withcuts in inve�tmentin defense andspace explo­ Energy flux density in U.S. blast furnaces, a measure of ration. reducing power. leveledoff in the postwarperiod.

26 Science & Technology EIR May 22, 1987 4) The electric power industry was little betteroff. Since the unusual characteristic that it employs one scientist or the 1930s, it hadbeen struggling with the technological lim­ engineer in research and development for every four or five itations of boiler technology . The increase in energy flux productionwaders. By contrast, in manufacturing industries density across the boiler heat transfer area, had leveled offin as a whole, one scientist or engineer is employed for every the 1930s due to these limitations. As a result, increases in 30-40production workers . In part,it is this characteristic of energy flux density in electricpower production, could only aerospace that makes it possible for its contribution to the be achieved by increasing the scale of furnaces (or going economy as a whole to be a healthy one . However, this high­ nuclear! See EIR . June 20, 1986). technology industry must be assigned a definite goal to These, and problems elsewhere in basic industry, con­ achieve, without budgetary constraints, and backed up by the tributedto producing the 1958 recession that resulted in Ken­ right national investment policy, for this potential to be re­ nedy's victory in 1960. These same factors prompted U.S. alized. Steel to attempt to raise steel prices in the early partof Pres­ Lyndon H. LaRouche, Jr. has recently argued that a ident Kennedy's administration, resulting in his famous c0n­ healthyU.S. economy would consisto f a laborforce of which frontation between the steel companies andthe young Presi­ 55% wouldbe production workers in manufacturing, mining, dent. construction, utilities, andagricUlture , andanother 10% sci­ entists andeng ineers involved in researchand development, Aerospace as a science driver with a resulting ratio of one scientist or engineer for every In the 1959-69 boom, it was not mere employment in five or six production waders in the economy as a whole. aerospacethat was the driver forthe economy . From 1959 to The only sectors "in the ballpark" with this projection, are 1967 , the number of production workers in aerospace in­ aerospace and communications . In 1983, there was one sci­ creased only about 14%. The driver was the effect that aer0- entist or engineer for every 5.5 production waders in pr0- space investment had on the rest of the economy. We have duction of communications equipment (Standard Industry already mentioned how investment in new orders of capital Classification 366). goods by aerospace industries almost doubled between 1958 and 1967 . This is remarkable given that in 1958, the Air Profileeconomic of decline Force ballistic missileprogram was already tooled upf orfull One way to understand how the economy was wrecked production and the long-range bombers were already rolling in the 19705 by Kissinger, et al . , is tocompare the proportion offthe production lines. of the productive labor force-the fundamental resource of The mere quantity of capital investment is notthe only any economy-deployed in aerospace and defense in the fe ature of aerospace's driving of the economy to cheapenthe 1960s aerospace build-up, with the Kissinger-Carter years. cost of production . Rather, the type and quality of capital Anotherme tric is investment pattems in these high-technol­ investment is just as important. The aerospace industry bas ogy areas. During these periods in postwar economic history, the deployment of the American productive labor force in de­

FIGURE 3 fense and defense-related industries, such as shipbuilding Production workers in aerospace and and aerospace, was markedly different. From 1950 to 1969, shipbuilding as a percentage of all almost 8% of productionwaders involved in durable-goods production workers in durable goods, production were employed in shipbuilding and repair, air­ aircraft 1937- 1965 craft and partsproduction , andproduc tion of missiles and space vehicles. In the period from 1970 to 1980, the .. average percentage ofdurable-goods production workers in­ 1_ volved in these defense-related areas, had declined to 5.3% (Figure3) . Investmentin capital goods was greatly differentover the periodsexamined. From 1958 to 1969, an average of 30% of all new orders for capital goods in the United States originat­ ed from theaerospace and shipbuilding sectors . From 1970 to 1980, the average percentage of new orders of capital goods in aerospace and shipbuilding had declined to 22% (Figure4 ). The fullextent to which thepolicies of Henry Kissinger's Mutually Assured Destruction (MAD) tore the guts out of U.S. defense industries, producing the collapse of the U.S. economy, is shown when welook at the tremendous decline in the absolute numbers of production workers devoted to

ElK May 22, 1987 Science & Technology 27 indicates the shift in the nature dfinvestment away from the FIGURE 4 high-technology investment characteristic of aerospace and New capital goods orders by aerospace, defense industries. shipbuilding and by defense as percent of This same pattern of redeploymentof resources appears national total, 1958-1985 in the deployment of the productive labor force over the 1960s and 1970s. While the number of production workers involved in production of durable goods reached a postwar 30 peak of 9,110,000 in 1979, prod1l1ctionworkers in shipbuild­ ing and aerospace became a diminishing proportion of that total . i ·· ...· There is this dubious distinction: Only with the collapse 1 Capital goods 20 : orders by of production in basic manufacturing and durable-goods in­ f defensa Industry dustries since Paul Volcker became head of the Federal Re­

. . . serve in 1979, has aerospace and shipbuilding risen signifi­ y(... / cantly as a percentage of production workers involved in durable-goods production. Defense-related employment as a 10 percentage of production workers involved in durable-goods ...,.""'\ production at the 1979 peak, has stagnated at the level of 5% .i \\" \ Annual rsta of under the Reagan administration; the administration's de­ r",� \ Inflation of ' ,,,, " prices for fense build-up really doesn't have all that much muscle. r / capital equipment How McNamara got the decline going 1958 1967 1970 1976 1980 1985 The destruction of the U.S. economy did not begin pre­ cipitously with the swearingin ofHenry Kissinger as national aerospace and shipbuilding over the past 25 years. In the late security adviser to the President in 1969. Kissinger merely 1960s, these defense-related industries reached a peak em­ carried on a process that was set into motion when Defense ployment of industrial operatives of approximately 680,000 . Secretary RobertMcNamara adopted the policyknown MAD. In the two years from 1969 to 1971, employment in these Underlying this dogma was the assumption that it was not sectors was reduced 40% to 417,000,and remained at that necessary for national defense tol have a strong basic indus­ level until 1977. Even in 1985, at the height of the Reagan trial economy, that only the maintenanceof a fleetof ballistic defense build-up, productive employment in shipbuilding missiles was necessary, and that once this fleet wasdeployed , and aerospace is still over 234,000(30%) lower than the peak further investment in new defensetechnologies and strategies reached in the late 1960s. was not required. The trend in investment in capital goods in the same Although McNamara announced this policy in the wake sectors, over the same period, is just as alarming. In 1967, of the Cuban missile crisis before President Kennedy's as­ new orders for capital goods in aerospace, that is, aircraft, sassination, the policy itself, and especially its economic missiles, and space vehicles production, had reached a height impact, was not felt until after Kennedy was dead . of $30.4 billion (in 1967 dollars). By 1970, this level of new McNamara and his allies began dismantling Kennedy's orders of capital goods in aerospace alone had collapsed 50% "New Frontier. " They eliminated aerospace and defense pro­ to $15.5 billion in constant 1967 dollars. New orders for grams right and left: the supersonic transport, the Air Force capital goods in defense work alone, in all industries-aero­ manned orbiting laboratory, the original 1960s program for space, communications, shipbuilding, and others-totaled an aerospace plane, Project Defenderfor a space-based ABM almost $30 billion (in 1967 dollars) in 1968. By 1972, this system, and NASA's post-Apollo program for rapid devel­ rate of investment had collapsed 42%. Only in the last few opment of a Shuttle and space station, and many others . As years has the rate of investment in aerospace and defense LaRouche recently wrote in an essay 'The World Economic begun to approximate that of the late 1960s. Depression in Progress: Why It Happened, and How Recov­ This drop in new orders for capital goods was specificto ery Must Be Organized": the aerospace and defense sectors in the early 1970s. In the same period, from 1967 to 1972, in which new orders of The collapse of the U. S. economy, is not the result capital goods in aerospace and defense plummeted 42%, new of any single facet of U.S. Wlicy; it is the result of orders of capital goods in the entire economy fell only 3% the mutual interaction of the past 20 years' trends in and recovered in succeeding years. In 1984, when defense several policy areas: monetary policy, credit policy, and aerospace had begun to achieve late-1 960s investment tax policy, and economic policy. In the area of eco­ rates, new orders of capital goods for the entire economy nomic policy, the most powerful depressing factor, were 33% greater, in constant dollars, than in 1967. This was a dramatic shift in U. S. defense policy, estab-

28 Science & Technology EIR May 22, 1987 lished under President Johnson, and consolidated un­ economy have gone as far as it has gone. der the Nixon, Ford , and Carter administrations. Defense policy enters the picture in the following Data on the 1963-65 period give several indicators, that way. the seeds of the economic crisis that Kissinger forced the Although the Johnson administration launched the country into in 1969, had been planted under Defense Sec­ neo-malthusian, "technetronic" policy as an official retary McNamara. In 1963, the number of metalworking policy-trend of government, the "post-industrial" pol­ machine tools in use in metalworking industries per 1,000 icy was consolidated by the Nixon administration. Key production workers in mining, manufacturing, and construc­ in this was Henry A. Kissinger's leading role in ne­ tion, achieved a postwar peak of 180 machine tools per gotiating arms-control and other treaties with Mos­ 1,000 production workers, and then proceeded to decline cow, treaties which made neo-malthusianism federal into the 1970s and 1980s. law, spilling over from the military sector into civilian Following Kennedy's assassination, the proportion of production and the economy generally. funding of industrial research and development provided by The victorious survivors of the death of President the federal government, underwent its first period of con­ John F. Kennedy-McGeorge Bundy, Averell Har­ tinuous decline in a decade. Under the post-Sputnik aero­ riman , George Ball, Robert McNamara, and so on­ space and defense build-up, the federal government con­ started the process of transforming the United States tributed between 56% and 59% of all industrial research and from the most powerful state in world history, into development funds invested in the country. Curiously, this becoming a second-rate power. The initial emphasis, proportion began a continuous decline in 1964, from 58% in which McNamara figured prominently, was turning in 1963 to 49% by 1968. This coincides with McNamara's the United States into a second-rate military power. policy of pulling the government out of the financing of The means by which the U.S. began to be trans­ capital equipment and work-in-progressin the aerospace and formed into a second-rate military power, during defense industries, as detailed in the second 1986 EIR Quar­ McNamara's term and later, was destroying the U.S. terly Economic Report. position as a leading economic power .... The effectof the shift in policy introduced by McNamara Under "normal" conditions, in which the Western under President Johnson, had an almost immediate impact nations are committed to continuing a policy of tech­ on the economy. The lag time between the shutdown of nological progress in both military and civilian pro­ Kennedy's ambitious aerospace/defense policy by Mc­ duction, the total economic strength of the Western Namara, and that shutdown's effect on other industries var­ alliance is between three and four times as great as ied with the condition of other basic industries and their the combined resources of the Soviet empire. There­ proximity to aerospace and defense. Industries that were in fore , as long as we use that economic superiority to the worst shape exhibited problems earliest. maintain military superiority, we have no reason to In electric power production, the rate of increase in seek war with the Soviet empire, and the Soviet forces energy flux density leveled off in the mid- 1960s, produc­ would not dare to attack us. That is the kernel of a tivity growth leveled off by 1970, as did improvements in "peace through strength" policy. the efficiency of power production. As long as the U.S. remained committed to such In the machine-tool industry, productionof heavy metal­ a "peace through strength" approach to defense of the cutting and metal-forming tools, reached a peak in 1967 of United States and its allies, it was impossible for the shipments of 118,000 tools. The industry then entered a advocates of a malthusian "post-industrial society" to decline which has yet to be reversed. sustain any headway in pushing the U.S. government Productivity in the steel industry continued to grow into into a "post-industrial" policy. It was impossible for the early 1970s as a result of a large-scale conversion of the Soviet empire to threaten launching a nuclear first­ steel refiningfrom open-hearth technology to basic oxygen strike attack against us. Only if we abandoned a "peace process technology from 1960 to 1972. However, the impact through strength" policy, could there be the danger of of this conversion was short-lived, and the across-the-board an actual thermonuclear conflict. Only if we aban­ trends in the overall economy began to express themselves doned a "peace through strength" policy, could fellows as per capita iron and steel production reached a postwar such as Zbigniew Brzezinski succeed in selling their peak in 1973, and began to decline thereafter, for the first ruinous"technetronic" sort of "post-industrial" policy. time since Herbert Hoover's depression. McNamara's doctrine of "systems analysis" start­ Shortly thereafter, in the second half of the 1970s, per ed the process of ruining the Defense Department's capita production of electric power entered into its first role in the economy. McNamara's doctrine could not decline since the early 1930s. Productivity in the machine­ succeed by itself; without Kissinger's actions of the tool building sector itself peaked in the mid- 1970s, at about 1969-76 period, the Soviets could have never built up 340 heavy metal-forming and metal-cutting machine tools military superiority, nor could the collapse of the U.S. per 100 production workers.

EIR May 22, 1987 Science & Technology 29 America's space program needs a shot in the arm by CarolWhite

On April 28 of this year, a stinging criticism of the U. S. for the space station be met, so that the decision to postpone space program was issued by the American Insitute of Aero­ it and plans to launch it in two stages be reversed, and they nautics and Astronautics, at their annual convention. The support development of expendible launch vehicles, and ad­ AIAA is a 4O,OOO-member group which mainly includes ditional Shuttle capacity. They also emphasize that while engineers, scientists, managers, and policy-makers in the safety is a predominant consideration in restarting the Shuttle aerospace industry. program, it must be recognized that �pace-ftight activities At the conference, AIAA spokesman, Jerry Grey , re­ will always involve some degree of risk; therefore they rec­ ported upon a document issued in Marchof this year by the ommend that all proposalsfor redesign take into account the AIAA, U.S. Civil Sp ace Program. an AlAA Assessment (of need to rapidly regain regular access to space. which he was one of three editors), which warns that the While the report gives favorable mention to the National United States is headed towards second-class status as a space Commission on Space recommendations for establishing a power, if the present NASA budget is not substantially in­ manned base on Mars , its objective is not to argue for specif­ creased. ics but to emphasize and reemphasize the necessity for the The AIAA recommends a 40% increase overall in sci­ United States to have an aggressive space program. In this ence, with a 100% increase in NASA funding devoted to regard they draw attention to the role of the European gov­ basic scientific research. Grey criticized the penny-wise ernments and the Japanese in supporting theirown nations' pound-foolish attitude toward budgeting which has ham­ space programs. strung NASA over the past decade or more. As he said, and They warn that by 1992 the United States is in danger of the nation learned to its horror with the Shuttle disaster, losing its large share of the high-technologyaerospace mar­ scrimping in the present only increases the costs downstream, ket, and they point out how the foolishness of the U. S. failure and creates additional problems which effect performance to underwrite continued high technology development in adversely. space, is underscored by the enonnous payback to such in­ Grey and the AIAA argue for a U.S. space program which vestment by increased tax revenues. To illustrate this, Grey sets its goals first, as in the days of President Kennedy's related an amusing anecdote. Once Michael Faraday was Apollo program, and then determines the budget needed to asked what was the practical use :of his discovery of induc­ accomplish the assigned task. Today, the reverse occurs , tion. He replied that he didn't know , but assured his interlo­ with NASA being forced to scale its objectives down to meet cutor that he would be taxing it in:the near future . preexisting budget levels. The report includes a comparison of NASA funding to The report that of other federal agencies, which shows a drop of 54% in The following quotations frotn the AIAA report itself, funding from 1965 to 1985 (in 1985 dollars), compared to a make the case which we also have been arguing in EIR . total increase in governmentspending for Agriculture, Com­ merce, Defense, Education, Energy, Health and Human Ser­ The firstrequirement [for a:healthy space program] vices, Housing and Urban Development, Transportation, and is a unified national policy which sets clear long-term Environmental Protection, of 157%. To take one example, objectives and makes firm cotnmitments to their im­ the Environmental Protection Agency funding increased over plementation. The Soviet Union, Europe, Japan, and that time by 974%. China have made such commitments to strong space They strongly recommended that the original program programs; U.S. preeminence ()annot be reestablished,

30 Science & Technology EIR May 22, 1987 nor can the U.S. participate properly in global space insanity in Congress, which is building a climate of trade activities, without comparable action. war against our allies. Instead they argue for the government to: "recognize civil space expenditures as an investment in The AIAA report argues against excessive security mea­ the future industrial competitiveness of the country, and sures, pointing out that the best security is in a high rate of increase them appropriately as recommended above. " Rei­ development. To quote: terating their argument against undue secrecy they say about In all cooperative activities of this type [Le., the a joint effort to build a space station: space program] , by far the best counter to foreign Benefits will be proportional to the vigor with competition is to remain ahead in research and tech­ which a nation employs the space station resource. If nology development. However, current technology the U. S. investment in the program is not accompanied transfer policy, aimed at preventing the leakage of by a strong exploitation of the capability, the preceding unclassifiedtechnolo gy, is considered by many to have precautions will be futile. The concerns that have been adversely affected U.S. innovative potential. expressed by several members of Congress that NASA will "give away the store" in the space-station ne­ In the section of the report devoted to an assessment of gotiations will then be real . But the best way for the the U.S. Space Program they have the following to say: U.S. to stay ahead of its foreign competitors, both in Underlying the theme of this AIAA Assessment the space �tation and in other high-technolgy areas, is the fundamental premise that a vigorous civil space is to move faster and more effectively than they do program is a key element in promoting both national in research and technology development, not to bar vitality and successful international relations, and that their cooperative participation in developing new and U.S. leadership in space is essential to the strength of potential valuable space facilities. the nation . This AIAA report is a particularly important policy input . . . The formerly healthy U.S. balance of trade in right now, as we stand on the brink of the panic phase of high-technology products and services has been de­ a global economic collapse. It is precisely the kind of ap­ caying sharply since 1980-81 . . . and even the tra­ proach recommended by the AIAA, coupled with the goal ditionally strong favorable balance in agricultural of colonizing Mars and industrializing the Moon, in a 40- products declined from nearly $15 billion in 1981 to year period, which offers an alternative to the threatened only $7 .5 billion in 1986. Although the aeropspace economic chaos. trade balance has remained positive during this period, foreign inroads, particularly in the still-small but rap­ The significanceof aerospace idly growing space sector are building alarmingly. The aerospace industry is significant in itself, but it plays Foreign governments provide substantial support of an additional role in the economy, as that sector which, in space activities not only in the Soviet Union but also general, develops and deploys the highest level of technolo­ in Europe, Japan, and China, with the clearly stated gy, which can then be disseminated throughout the economy. intent of developing the industrial capability needed This, of course, was typifiedby the NASA Apollo program. to take advantage of growing space-related global mar­ It is no exaggeration to say that the vitality of the aerospace ket opportunities. and associated industries determines the health of the econ­ Unless the government strengthens its support of omy as a whole. U.S. space activities, particularly in the key areas of The reason for this is not obscure. The health of an econ­ space transportation, applications technologies (com­ omy is determined by the rate at which it is able to generate munications and remote sensing), microgravity re­ new technologies, with the proviso that these technologies search, and advancing the basic science and technol­ are themselves the embodiment of what might be termed ogy that underlie all new development, the early U.S. technological phase shifts. Concretely, this means that a lead in this important new economic area will continue healthy economy generates technology waves, each one of to decay. which is more capital-intensive and more energy-intensive . . . The AIAA recognizes the urgent need for than the last. Such a healthy economy provides the resources strong government-industry-university teamwork to necessary to support a growing population with a constantly return the nation's civil space program to its former increasing standard of living. preeminence, with the consequent benefits both to Advancement in technology is not a matter simply of economic return and international prestige. enhancing or upgrading the "tools" of production; these''tools'' Criticizing the U.S. failure to adequately finance its must be deployed by a workforce which is capable of trans­ space program-a problem which has been building since forming itself in order to assimilate the new technology. One the end of the Apollo program-the AIAA rejects the current important parameter this can be seen in is the ratio of scien-

EIR May 22, 1987 Science & Technology 31 tists and engineers deployed in aerospace compared to other * * * * * * * * * * * * * * * * * * * * industries. Not only is this ratio extremely high compared to * (Cut out and save) * industry as a whole in the United States, from 1959 to 1961, * * the number of scientists and engineers per 100 production * * 20. GOLD workers in aerospace jumped from 13 to (In the recent * NEVER * 30; period, this figure has increased to however, this merely * DEFAULTS * registers the fact that the industry is maintaining the most * * Use THE GOLDEN IRA to insure your retirement skilled section of its workforce while it is forced to lay off * savings with something safe and sound-the new * production workers .) * U.S. Gold and Silver Eagle COins. * Under the impetus of the Apollo program, each dollar HOW TO aSE THE GOLDEN IRA * spent by NASA gave a $10 returnto the economy in terms of * 1. Convert your regular IRA Account * real growth in the gross national product. Such spinoffsop­ * 2. Consolidate your present IRAs * 3, Yo ur spouse's IRA erated in many ways-from cheapening the cost of transis­ * * 4. SEP-IRA - tors to transforming the computer industry. Similar devel­ * * 5. Rollovers from job changes opments from the SDI program, such as the development of * 6. Termination of qualified plans * the free electron laser, will have a similar, although vastly * BUT DO IT TODAY­ * more powerful , influence today. But it was not merely in * BEFORE ANY PANIC HITS * terms of "spinoffs" that investment in aerospace paid off. * * Gold-Silver-Platinum sales The demands upon the aerospace industry for new orders * Call or send for free brochure. * of precision, in order to produce the range of rockets for * *

ICBMs as well as manned space travel, implied a revolution * * in machine tooling. New materials were needed which could * * withstand the stress of acceleration and extremes of temper­ * * ature change, and so on. The demands placed upon the aero­ * INVESTMENT METALS, INC. * 5805 EXCELSIOR BLVD MINNEAPOLIS, MN. 55416 " space industry per se were transferred to supplier industries, * (612) �25-6050 * and so forth . But in themselves, these did not constitute the * (Cut out and save) * exuberant stimulus to productivity which characterized the * * * * * * * * * * * * * * * * * * * * period. To understand the real spinoff of the Apollo program, or of the post-Sputnik period as a whole, we must recognize how such a transformation in one section of an economy CONSULTING transforms the way in which problems are approached and solved throughout the economy . The aerospace industry is a ARBORIST pacesetter for across-the-board productivity gains because it Available to Assist in operates with the most advanced technologies. The planning and development of wooded sites throughout the continental United States as well as

�iii5�The development of urban and SILVER suburban planting areas and SHORT SQUEEZE The planning of individual • WHO? • WHAT? • WHY? • homes subdivisions or Not what you think! Daily limits soon. Exchange industrial parks cannot stop this one because it is different. Send $5 to SIBBET for information. He is the one advisor who predicted the other two squeezes. Make $50 per oz.! SIBBET PUBLICATIONS For further information and availability 1091 E. WOODBURY RD., PASADENA, CA 91 104 please contact Perry Crawford III

Name ______Crawford Tree and Landscape Services 8530 West Calumet Road Address ______Milwaukee, Wisconsin 53224 State Zip

32 Science & Technology EIR May 22, 1987 TM Si l mp Yall yo u need.� AN ENTIRE HEALTH SPA THAT FITS INTO YOUR BRIEFCASE.

Check or Money Order ONLI" I.& •• 9.95 + $3.25 tax & shipping. LIGHT WEIGHT - STRONG - COMPACT 2 SIZES A V AILABLE: Regular and Large (Men's) with larger and stronger elastic cord. Order today or pick up in person. BIOBOBle 1324 RIALTO AVE .•SAN BERNARDINO, CA 92410 ------, CALL 7 14-885-8416 Please send me _ regular size or_ large 1 1 (Men's) .size BIOROBIC Exerciser. 1 1 En c losed is $19.95 + $3.25 tax & shipping for 1 1 each. Name ------1 1 1 1 Address Made in U.S.A. L9�______...: �;:;;_� _;:;:-;;;_;;;-..i._....;..

ARABIAN HORSES ARE STILL A GOOD INVESTMENT!

Our Triple National Champion, • Business Brokers Zarabo + + +, is an American Legend • Accounting Systems Family-Oriented Show Champ ions and Future Show Cham p ions • Analysis Service are now offered for sale- • Investment Counseling a tax shelter for horse-lovers.

The HIGHEST QUALITY Arabians WALLIS at believable rices! p ASSOCIATES

Moehlmans Ranch & Training Stable :BP1 4 WAR FIELD ST. , UPPER MONTCLAIR, N.J. 07043 P.O. Box 1567 Greenville, Texas 75401 (214) 862-3620 (201) 746-0067

EIR May 22, 1987 Science & Technology 33 TImFeature

My policy on Soviet anns control proposals by Lyndon H. LaRouche, Jr.

This statement was released May 11 by the LaRoucheDemocratic Campaign.

Sunday's news dispatches reported that Soviet Secretary General Mikhail Gorba­ chov will soon propose that Moscow will evacuate Soviet troops from the captive nations of Eastern Europe, if the United States will withdraw its troops from Western Europe . News reports say that Gorbachov will make this proposal offi- . cially during the forthcoming Warsaw Pact meeting in East Berlin. I have been waiting for Moscow to make such a proposal as part of the public relations campaign for the so-called zero-option agreements. If the United States were to accept such a proposal , it would mean that Soviet troops could soon occupy the entirety of Europe whenever Moscow might choose to do so. This propaganda stunt is one of wily Soviet Marshal Nikolai Ogarkov' s n�ally clever strategic tricks, aimed at confusing and duping the West into virtual strategic suicide. Under present conditions, accepting such a proposal would mean that U.S. forces leave WesternEuro pe , never to return, while Soviet forces in Russia would move back to the frontier of Germany whenever they pleased. Within a fe w years, when the Russians had deployed their own "SOl," which the Soviet military is now deploying at the most rapid rate possible, they would be able to overrun WesternEurope at their pleasure. Under these conditions, most of WesternEurope would most probably accept Soviet terms without firing a shot in resistance. This would leave the United States sitting alone in North America, with more than two-thirds of the world's industrial might-and about three-quarters of the world's developed mineral resources, and most of the sea lanes-in Soviet hands. It would be only a short step beyond that, for the massively outpowered United States itself to accept Russian imperial overlordship of North America, too. In return forour willing submission, Moscow would allow us to keep about the same degree of independence as Poland or Czechoslovakia today. Obviously, for those reasons, I am opposed to any U.S. troop withdrawal from WesternEurope . Any presidential candidate who disagrees with me on that issue, is not thinking straight. Obviously, only a lunatic wishes to leave the United States or WesternEurope exposed to Soviet nuclear arsenals. Even if all nuclear weapons could vanish

34 Feature EIR May 22, 1987 -

-

Today ' s fro ntiers of military technology, alld the tradition they embody: (Left) High-energy laser beam director, all experimental pointing and tracking system designed to track targets infiightand direct a high-power laser beam to selected aimpoints . (Right) One of Leonardo da Vinci's most advanced military machine tools. A hydraulically driven complexforfo rming a stave of a gUll barrel having a heavier breech section than that at the muzzle . The power transfe r diagram is worked out at the bottom . Such cannon barrels were too large to make by fo rging methods befo re Leonardo's invention . magically, we have suffered enough major wars in this cen­ official, I am presenting a proposal. If a Cap Weinberger or tury already . However, there has to be a better way of avoid­ General Abrahamson were to say the same thing publicly, ing nuclear war than surrendering to one Soviet strategic that would be revealing that our government is already com­ expansion and demand after another, as we have done step­ mitted to some of the same things I am presenting as a can­ by -step , mostly, since 1945. didate's proposal. In other words, if they speak, they are I say: Forget the so-called Zero Option, and forget about revealing secrets of our government; if I say the same thing pulling U.S. forces out of Europe . There has to be a better in the form of a personal proposal, I am not revealing gov­ way of avoiding nuclear war, than surrendering, inch-by­ ernment secrets . inch, to expansion of the Russian empire . There is a better Let me restate that same point in a slightly different way . way. What most of you know by the name of "Strategic I was among the designers of the SOl policies adopted both Defense Initiative" (SOl) is the key to that better way . SOl is by the United States and among our allies. My proposals, not the total answer, but it is the key to making all other made publicly before the SOl was officially adopted, are options workable ones. obviously not national secrets, However, the question of how I explain that in a better way. I must explain it, because much of my proposals on SDI or other military policies has

none of the other presidential candidates-Republican or been adopted by our government or our allies, is a govern­ Democrat-in the race has the special technical background mental secret. needed to explain key strategic issues involved . So, for a defense official of our government to repeat "Hold on a moment, buddy," some of you are thinking; some of the same things I said publicly back during 1981, "Are you asking us to believe that Cap Weinberger doesn't 1982, and early 1983, would be revealing that the govern­ know as much as you know about this?" Of course, respon­ ment is committed to those details of my policy. It is that sible Defense officials such as Cap Weinberger and General commitment by government which is the national secret in­ James Abrahamson's staff are experts in this area. I have volved. So, when I speak about my own policy, I can say merely stated that the other presidential candidates presently anything I wish to reveal, and I do not compromise our in the running do not. There are some things which knowl­ national security by revealing this. However, as a responsible edgeable officials such as Cap Weinberger or General Abra­ citizen, I can not and will not reveal any commitment to hamson should not discuss in public, but which are perfectly details of my policy by our own or allied governments, unless proper for me to discuss in public. it has aleady been made public, or unless I were specifically When I speak publicly, since I am not a government authorized to leak that information .

EIR May 22, 1987 Feature 35 Before getting into the detailsof thebetter way I propose, Ogarkov, one of the most intelligent and dangerous oppo­ I summarize my role indesigning the SOl. nents the United States has known during this century, a man vastly more dangerous than Adol( Hitler. My role in the SDI In thisconnection . I have beehdeeply involved in study­ I have beenworking on designing thenew strategic doc­ ing the total strategic situation ofthe United States and its trine now called SOl since 1977. When I, as a leadingDem­ allies in everynook: andcranny of this planet. Anything that ocrat, met with Reagan administrationof ficialsduring ·1 981 , might affect the total capabiliti� of either our side or the to present my suggestions for a bipartisan agenda, SOl was Soviet side, I have been obliged to study, and to analyze the one of the items on the agenda I presented. Most of theother way in which local developments affect the total strategic items on my agenda, including the dumping of the Volcker picture. This has included my wqrk on cultural and political policies carried over from the Carter-Mondale administra­ tion, were not adopted by the administration; my proposal for what became SOl was the item in which the relevant officialsexpressed the greatestinterest for continuing discus­ What the Russians have in mind sions. fo r the nations ofW$tem Europe There are some things I did during the 1981-83 period which I am not free to discuss at this time. Some things are and North America, 'is not placing either matters of national security, or involve privileges of the Red Flag over such structures the Executive Branch. However, the partsof my activities on as our national Capitol or the White which I must still hold back informationhave no directbear­ ing on the scopeof this report. House, but rather "allowing" us to There were two technical aspects to my design for an have an "independent" SOl. Theadvanced physics involved, I had available through government, such as those of my positionas a director ofa prominent scientificassoc iation, an institution which our government has most ungratefully, Soviet-ruled Eastern Europe today, recently, shut down, in a highly illegal procedure.The ec0- undoubtedly with a,sllghtly greater nomic feasibility of SOl was a matter directly within my appearance ofin dependence than specialized technical competence. The key to SOl is, that if we use advanced physics principles, the cost of destroyinga the Eastem European states . missile is less than the combined cost ofbuilding , deploying, andlaunching that missile. By the end of 1981, my work on the economic feasibility of SOl was approximately finished. It was understood, that the properway forthe u.S. gov­ issues, economic policies, the Soviet direction ofmost of the ernmentto move into an SOl doctrinewas to presentthe idea narcotics trafficking and terrorist deployments around the of such a change publicly, to avoid creating the situation in world, and the special danger represented by assassination which either the Soviets or our allies would be surprised by and sabotagecapabilities of both the Soviet militaryspetsnaz our government's announced adoption of such a policy. So, forces and similar lethal arms of theSoviet KGB. for that reason, I was the first toannounce-at a well-attend­ My commitment has been to discover how the United ed February 1982 public conference held in Washington­ States could avoid nuclear war without continuing to back what became known as the "SOl," thirteen months before down, step-by-step,to Russian imperial aggressionand sub­ the President's televised announcement of March 23, 1983. version. In otherwo rds,what combinations of cultural, mil­ By the time SOl was announced as official U.S. doctrine, l itary, anti-drug, anti-terrorist, and military policies would had given in-depth briefings to groups of relevant military halt Soviet-directed subversion, and deter Moscow from re­ officialsin France, West Germany, andother allied nations. sorting tothe kinds of military adventures which wouldplunge Although the President's announcement of SOl cameas a the world into total war. surpriseto many, every fo reign government of ourallies and My solution is a policyof "peace throughstrength ." Ac­ adversariesknew the policyin detailmonths beforethe Pres­ cordingto formerNational Securi1y Adviser McGeorge Bun­ ident's announcement. dy, thiswas the policywhich PresidentJohn F. Kennedy was I have been deeply involved in the technical side of the to present in the address he would have delivered on the strategybusiness since 1981. My function has includedkey evening of the day he was assassinated. This includes not responsibility for assessing Soviet war-plans, so that we might only militarystrength, but also cultural, political. health, and be better able to judge what our technical requirements and economic strength, and greatly improved internal security timetables must be, to match the Russians' capabilities for against irregular Soviet forces such as terrorists, drug-traf­ posing a military threat. So, I have been virtually nose-to­ ficking. and spetsnaz and KGB spies, saboteurs, and killers. nose against the top Soviet war-planner, Marshal Nikolai It means building up strong boads of alliance or merely

36 Feature ElK May 22, 1987 friendship with as many nations of this planet as possible, Duringthis time, the same faction within the Czar's in­ which means treatingour allies and other friendsfairly on all terior and justice ministries behind theOkhrana actions cre­ issues which might tend to divide us. It also means treating ated an assortment of ultra-radical, violence-prone illegal ourown citizens fairly in quality of income, education, em­ organizations, including the famous Russian nihilist assas­ ployment security, food supplies available, and in health sins, the Populists (Narodniks), and the quasi-Marxist Rus­ policy. sian social-democratsof V .1. Lenin and his Menshevikcom­ That said, I come to the technical matters. I admit that petitors. By a somewhat complicated process, these forces much of this is technical, that some seems complicated. inside high places in Czarist Russia organized the 1905 rev­ Competent policy shapers have no choice; it is the world olution as a dress-rehearsal, and then launched the revolu­ which is very technical, and very complicated. There areno tions of 1917, bringing the Bolsheviks to power. Leading simplistic solutions of the sort which can be identified by Okhranaofficia ls, who had been"controllers" of the Bolshe­ simple campaign-slogans, or by double-talk filled up with viks before October 1917, became top officials of the Bol­ popular"buzz words."There is no sound strategic or military sheviks' secret-policeorganization , theCheka, immedi ately. policy for the United States which does not require very Although the early Bolshevik rulers kept Dostoevsky's serious thinking. Anyone who seems to make the issues in­ namein thebackground for decades-chieflyto avoid fright­ volved simple, emotional appeals to popular prejudice, is ening Western Marxist recruits-Soviet policy has never telling you dangerous foolishness; if he believes what he is deviated from the policies set down in Dostoevsky's plan. saying, he is the sort of bungling fool you should wish n0- Today, the Okhrana's successor, the KGB, has officially where nearthe White House. raisedDostoevsky to a Muscovite sortof culturaland political I startwith the Russian imperial threat. sainthood, andthe Queenof all the Russias, "Czarina" Raisa Gorbachov, has madeDostoevsky the central figure of her Moscow's plan for world-conquest Armand Hammer-funded armof cultural subversion against Officially,the rulersof Moscow have beenco mmittedto the West, the Soviet CulturalFund . making Moscow the capital of a world-wide new Roman Russian imperial policy was stated very plainly by dic­ Empire since A.D. 1510. If we look at the changes in the tatorv, Khrushche duringhis public appearances in the United world's political empire since 1510, we see the redblob States: "We will buryyou !" So far, since Khrushchev made spreadingfrom Moscow, conquering nearby Slavic peoples, that threat, Moscowhas gone a long way towardaccomplish­ overrunning then the non-Russiansof the Caucasus and Asia, ing just that. and spreadingand spreadi ng. Under Czar or Commissar, this There is noexaggeration inusing the term "Russian Em­ imperialcommitment to world-conquest has never changed. pire," to describetoday 's Warsaw Pact alliances, nor are we Throughout modem Russian history, since even before carelesslyslinging nasty labelson anadversary when we say 1510, as early as A.D. 1440, the people of Moscow have that the Russians are imperialists. Since the Chaldeans, an hated Western culture, which they have always called, ever "empire" means a system of colonies and semi-independent since, theculture of "the Rome of the West." Thefew Czars, "satrapies"under the administrative andmilitary domination such as Peter the Great and Alexander II, who attempted to of a master race . civilize Russia with Western European and North American Like the ancientChaldeans and Magi of the ancient Me­ culture, were deeply hated by most Muscovitesfor this rea­ sopotamianemp ires,the Russians of todayplace greatvalue son. For the same reason, at the end of World War II, the on assigning to each ethnic or religious"nationality" a Rus­ Russians celebrated their victory by butchering theChristian sian-approved foint of distinctive ethnic or religious "cul­ priests and destroying their churches, in the Ukraine and ture ." Evgenii Primakov's Soviet Oriental Instituteis one of Romania, just as Russians had committed mass-murder the mostnotable Soviet intelligence agencies which fulfills against about40, 000Polish prisoners of warat Katyn during thisfunction of the ancientBabylonian priesthood. It selects the war. and concocts an approved list of "customs" and "myths," During the 1880s and later, following the assassination whichit endorsesas approvedbeliefs of thesub jectethnic or of PresidentLincoln 's ally, Czar Alexander II, by the Czarist religious nationality. It concocts these mythologies both as secret police, the Okhrana, the same Russians responsible ''religious''ideas used to foster subversion-asin thecase of for killing this czar elaborated a new policy for world-con­ Peru's Sendero Luminoso terrorists-and as the approved quest, based on a plan to overthrow the entire Romanov culture of the "nation" brought to power by aid ofsuch sub­ dynasty, and to create a new dynasty based on the most version. fanatically anti-Western strata of Russian society, the so­ Forobvious reasons, likeancient the Babylonian priests, called ''Old Believers" (Raskolniki). The key figure in writ­ theSoviet "Magi" of todaybury certain common features in ing up this new plan of world-conquest was a writer wholly each of the assorted cults manufactured at locations such as owned by the Okhrana, Fyodor Dostoevsky. Dostoevsky's Tashkent. The ideasman, of nature , andGod, in each case. "Diaryof a Writer" is the bestsource to study to understand arethe pagansame belief-system of theancient Rus worship­ this plan. pers of the "blood and soil" cult of Matushka Rus, the doc-

EIR May 22, 1987 Feature 37 trine of Stalin in his famous, barely literate text on the "na­ maximum as a partner of regular warfare . tionalities question." The cult is hewn in such a way as to "Irregular warfare" means generally what most people assist the Moscow overlords in manipulating more readily are accustomed to call "subversion," enriched by assassina­ the ethnic or religious entity organized around this cult-my­ tions and sabotage . It includes undermining the culture of the thology. West, corrupting Western politicians, business leaders, and So, today, Moscow deploys its Soviet State Orthodox political parties. It lays heavy emphasis on "peace move­ Church, to demand that Western Protestant and Catholic ments" and "anti-nuclear movements" of the sort started up churches modify their liturgy into "ecumenical" conformity by the most evil man of the 20th century, Bertrand Russell. with the dogmas of the Russian church, attacking the "Fil­ It means subverting ministers; priests, and rabbis, and ioque" of the Latin Creed with about the same degree of churches and temples, to become vehicles to radiate Mos­ fanaticism it directs against the U. S. SDI. cow's influence. What the Russians have in mind for the nations of West­ It means working to cause Western economies to weaken em Europe and North America, for example, is not placing themselves from within. It meaRs promoting radical move­ the Red Flag over such structures as our national Capitol or ments, as Moscow backs Ramsey Clark's cronies among the the White House, but rather "allowing" us to have an "inde­ "radical ecologist" movements of Europe and North America pendent" government, such as those of Soviet-ruled Eastern today . It means promoting the inttnnational drug-traffic, which Europe today, undoubtedly with a slightly greater appearance Moscow has now largely taken over, at the point of produc­ of independence than such EasternEuropean states. The way tion and initial distribution, since the beginnings of these things would work for us, were that to come about through Soviet operations in 1967, as a way of destroying large sec­ aid of "zero-option" agreements, would be that the candi­ tions of the population of the We$t. It means deploying inter- dates and policies of the candidates would be selected with . national terrorism, created by Moscow as a partner of the Moscow's prior approval. Our present Federal Constitution, international drug-warfare program in 1967 . with its presidential system, would have to go, of course, to It means building up paramilitary capabilities controlled be replaced by a parliamentary system, under which arrange­ by Moscow, such as nearly 10,000 West German paramili­ ment Moscow could quickly and quietly dump any head of tary forces deployed for mass Vliolence (under direction of governmentwho displeased the imperial overlords, without GRU auxiliary officers trained in and directed from chiefly having to upset the system of self-government charitably East Germany, Czechoslovakia, and Syria). It means deeply allowed to us. penetrating the rear echelons of 'the interior of Western na­ We would deliver to Moscow the goods it required, at the tions with Soviet military spetsrtaz sabotage and assassina­ prices Moscow chose to pay-as we see this trend in present tion units, and similar units of the KGB . U.S. and WesternEuropean charity to Moscow in subsidized In discussing Soviet military strategy as such, I shall food shipments. Moscow would pay for these purchases concentrate only on the key strategic role performed by War­ whenever it pleased Moscow to do so. We would have no saw Pact spetsnaz units, which operate directly under Soviet realpower over our foreign policy. We would have no indus­ military command, and which are used for such included triesMoscow did not allow us to maintain. Twenty to thirty missions as deploying "hand-carried" nuclear bombs, chem­ percent of our national product would be skimmed off for ical-biological weapons, and radio-frequency weapons, mis­ delivery to the imperial overlords in Moscow. Nowhere in sions used as a substitute for Soviet missile-warheads against the world would there exist an organized force capable of strategic military and logistical targets, at the moment of saying "No" to any Moscow demand. outbreak of war. That is what Russian imperialism means in practice. That Selected assassinations of Western public figures and is the Soviet strategic objective, which they intend to have military commands, near or at the point of outbreak of war, solidly in place by the end of this century, after which they are included among military-strategic Soviet operations un­ will tum to the question of China. der the direction of Marshal Nikolai Ogarkov, in his present From the beginning, to the present day, Soviet policy position as Soviet Deputy Supreme Commander in time of toward the West has been "total war." By "total war," stra­ war. tegic specialists mean a combination of two kinds of war­ What the Russians have done; is to redefinewar-planning fare: what we call "regular warfare ," the use of lethal in such a way that the various aspectsof irregular and regular force by regular military forces, and what we call "irregu­ warfare are treated in a combined way, under the kind of war­ lar warfare ." They see the two kinds of warfare as inter­ planning we associate with the German General Staff under dependent. "Irregular warfare" is the Soviets' method of von Schlieffen. fighting war against their enemies up to the brink of regular This is an extremely important point. Not only do we in war; once regular warfare begins, irregular warfare does the West fail, so far, to see irregular and regular warfare in not end: irregular warfare is increased in intensity to the this integrated way. Since the negotiations with Moscow

38 Feature EIR May 22, 1987 establishing the United Nations, at San Francisco, we of the West have abandoned classical war-planning, and have sub­ stituted a diplomatic doctrine of military policy called "crisis Whatother s have to say management." "Crisis management" doctrine means, that our defense officials and military professionals are prohibited about Gorbachov's offe rs from using any thinking which is based on traditional military science. Senate Majority leader Robert Byrd (D-W. Va.): Some among our professionals may think in "Clause­ "The President should not race into an agreement solely witzian" terms privately, but they are not permitted to reflect based on political expediency." such thinking in the shaping of defense policy, or in terms of Senate GOP leader Robert Dole (R-Kan.): "We functions of military command under combat conditions. It shouldn't count our arms-control chickens before they was this "crisis management" policy which led to a "no-win are hatched . . . those little birds may not be the sortof peace" stalemate in Korea, and was directly responsible for thing we would like on the dining room table." every disgusting feature of the U.S. protracted war in South­ Rep. Richard Gephardt (D-Mo.): "Arms control east Asia. must be the top priority of the next President. . . . In So, the Soviet military commanders are way ahead of us pursuit of arms, this administration has busted the in official military-science practice today . Not only is their budget of the United States." ongoing irregular war against us conducted under the direc­ Sen. Albert Gore, Jr. (D-Tenn.): "A positive step tion of military war-planning requirements, but they are per­ which pushes us in the right direction . . . the President mitted to think ahead in a way which Western commands are ought to pick up some of the threads that were dropped officially prohibited from doing. So, Soviet commanders at Reykjavik. " have wide ranges of policy-options which are not available Rep. Jack Kemp (R-N. Y.): "The Soviets ap­ to Western governments at this time. proach arms control the way Andy Warhol approached This brings us again to Marshal Ogarkov. He is the author art-anything you can get away with." of the currently operational Soviet master war-plan, the so­ Sen. Sam Nunn (D-Ga.): "An historic opportunity called "Ogarkov Plan." He is the military peacetime com­ that in the long term promotes an accord on strategic mander of all combined ground, sea, and air forces on the arms ." Western front, facing Western Europe and the Atlantic thea­ Rev. Pat Robertson: "We have so m�ch military ter of the United States. He is the senior field commander of presence in Europe ....It seems like we ought to be all Soviet forces in all theaters . He has been nominated re­ able to deploy those men somewhere else." cently as Deputy Supreme Soviet Commander, a post which House Speaker Jim Wright (D-Tex.): "This is our has remained unoccupied since Marshal Zhukov occupied best chance since Alexander Kerensky to negotiate sat­ this postduring World War II. After the first secretary of the isfactorily with a leader of the Soviet Union." Communist Party , General Secretary Gorbachov, he is the most powerful man in the pecking order of strategic com­ mand in the Russian empire, and is the actual director of warfare operations globally under conditions of actual war­ picture, as do very, very few officialsin the West today. So, fighting. I recognize Ogarkov as the greatest single threat to us, and At present, the Soviet economy is undergoing a massive, Moscow has repeatedly identifiedme , since March 23, 1983, and often bloody-handed reorganization. The Russians call as the greatest single threat to Moscow's plans. this reorganization "perestroika." "Perestroika" is a leading Among supporters of the SDI in official and other key feature of the Ogarkov war-plan, in which "perestroika" is positions, it is broadly understood, that the kinds of defensive defined as a limited period of military mobilization of the weapons proposed by Dr. Edward Teller's Lawrence Liver­ Russian economy, in preparation for the launching of a full­ more Laboratory are an effective means for destroying most scale first strike attack against the West. of the missiles and warheads in a general Soviet nuclear­ One of the facts which has put me personally into direct missile barrage, and that the intrinsic cost of destroying a opposition to Ogarkov in the global strategic picture, is the missile by this means is approximately one-tenth the cost of fact that he and I are pushing the same conception of how the constructing and launching that Soviet missile. Unfortu­ next world war might be won, despite so-called "nuclear nately, too few among the supporters of SDI have yet under­ deterrence" capabilities. Not only is he the most vigorous stood the fuller and deeper implications of the SDI policy I backer of Soviet SDI's "crash development and deploy­ presented to French and German military authorities at the ment," as I am his opposite number on this point in the West close of 1982. Unfortunately, Marshal Ogarkov does ! as a whole. He understands the place of SDI within the total For this reason, most of the published official and think

EIR May 22, 1987 Feature 39 tank assessments of both the Soviet internal situation, and of the combined economies of North America, Western Eu­ Soviet strategic policy, are more or less incompetent. rope, and Japan, are each more than twice the Soviet poten­ They do not understand how the Soviet economy func­ tial. On condition that we follow the correct choices in eco­ tions, and often see it as failing, when, by Russian standards, nomic and military policies, Moscow would never dare at­ it is more or less successfully accomplishing its assigned tack us. That, I consider an excellent way to have durable strategic mission. Some folk assume that the Soviets are peace-especially if one understands the mind-set of our attempting to take some of the pressure of military spending­ Russian adversary . levels off the civilian economy, when the Soviet command We have another vast superiority over Moscow, our has precisely the opposite intention. Their domestic economy Western European Judeo-Christian culture. The nations of policy is based on the policy of preparing either to win a Western Europe, Japan, and of North and South America combined, have throughout a developedform of culture which enables us to develop and to a�similate very high rates of technological progress. Traditional Muscovite culture does The Soviet command understands not permit them to match us in this. very well what am proposing, and Moscow could not even contemplate further imperial ex­ I pansion, unless it could rely upon our undermining our own therfifo re sees me as the greatest traditional pro-technology culture , and our willful, system­ danger which any publicjigure atic destruction of our agro-industrial output and develop­ poses to their mad dreams oj ment. It can not dare further expansion, unless it induces us to weaken ourselves greatly from within-culturally, mor­ world-conquest. They hate me all ally, economically, and militarily. the more, because I do not Ifwe followed my strategic doctrine in these matters, we underestimate the Russians, would rapidly outpace the Russian empire so much, that within a generation or two, Russians would be forced to especially not Marshal Ogarkov. recognize the permanently hopeless inferiority of their pres­ ent culture, and would begin to change their culture into what would be predominantly as near an imitation of ours as they could manage. That is my policy for winning victory through global war, or to be so capable of winning such a war, that peace based on strength. the West capitulates to Soviet demands step-by-step. Their The Soviet command undenstands very well what I am economy is operating on the basis of the pre-war mobilization proposing, and therefore sees me as the greatest danger which specifications of the Ogarkov war-plan. any public figure poses to their mad dreams of world-con­ Consequently, Western experts often see the inevitable, quest. They hate me all the mo�, because I do not underes­ sometimes bloody-handed political friction "perestroika" timate the Russians, especially not Marshal Ogarkov. causes in Moscow, as implying a growing internal factional In this day and age of sports and movie fans, it is consid­ threat to the policies of Gorbachov and Ogarkov. They refuse ered "showing the right attitud�" to insist that the Russian to understand the nature of the Ogarkov Plan, and therefore system doesn't work, that everything they do is a failure , that misread the symptoms of the implementation of that plan. they are about to collapse, or that present leaders are about There is a more specific point, which I wish to stress at to be overthrown. "Rah! Rah ! Rah ! Siss-boom-bah! Yeah, this point. Ogarkov's plan, like mine, is not only committed team!" Unfortunately, Russian military production has out­ to the most rapid full-scale deployment of a global "SDI." paced the combined output of the United States and its allies. Gorbachov and I are thinking in similar ways about what is Since 1945 , they have been winning, and we have been known to military science as high rates of "technological retreating, especially since 1967. "Siss-boom-bah!-bunk !" attrition." We are also each thinking of the importance of The fact that an adversary is a deadly one, means exactly that having all the essential elements of production of high rates he is not to be underestimated, even if we must offend the of technological attrition within our respective national econ­ "sports fans" in noting this fact. omies, I in the United States, he in Russia itself. Our defense policies must be precisely the right ones, The difference is, that under my policy, the United States especially for the increasingly most dangerous months and can outpace the Soviets in technological attrition, and the years just ahead. That Soviet marshal and his immediate Soviet command understands this. I have been told directly, collaborators are among the military geniuses of this centu­ more than once, by high-ranking adversaries among Soviet ry-in strategic matters as such. They are not likely to miss officials: "Yes, your plan for strategic defense will work, but many opportunities, and will probe us now for every exploit­ your economy will outpace ours. Therefore, we will never able chink in our material capabilities and poltiical will. We allow the United States to adopt your policy." must not permit sloppy, pragmatic compromises, to spoil the The combined populations and agro-industrial potential very precise set of strategic policies we must fo llow to get

40 Feature EIR May 22, 1987 safely through the next months and several years of greatest defending force. Is the defense or the offense more effective? danger. Our job, in either case, is not to pile up a "body count." Our objective is to reduce the enemy's mobility, firepower, The relevant ABCs of military science and depth. People are killed in that process, of course, but Modem military science developed around Renaissance the killing of persons is not the objective. The killing is an Florence. Strategic principles of statecraft were founded by unfortunate but unavoidable side-effect of doing the things the great Cosimo de Medici. International law bearing upon which win war. It is the adversary's effective (!) mobility, war and peace, was established implicitly by Cardinal Nico­ firepower,and depth which must be destroyed; it is the degree laus of Cusa. The first modem strategist was France's King to which we accomplish that result, not the simple number of Louis XI, whose example is well worth study in light of the adversaries killed, which measures whether or not our action Soviet threat of today. The first military scientist as such, is tending to win the war. was Leonardo da Vinci, as echoed by his follower Niccolo So, our choices of weapons, of organization of our forces , Machiavelli. and methods and objectives of rapid development in contin­ The principles of Machiavelli's "Commentaries on the uing deployment, are properly shaped to produce this very Ten Books of Livy" were given exemplary application by specific sort of war-winning result. By using the right sort of Oliver Cromwell's New Model Army, the precedent for 18th­ Riemannian geometric model, we are able to assess these century U.S. military policy. The founder of modem "grand questions of doctrine and policy most effectively. strategy" was France's Jean-Baptiste Colbert-also relevant If we are wise, we do not limit the application of this for study today. The great impetus for further development method of analysis to battlefield situations in the particular of military science was supplied by Gottfried Leibniz. The actual or hypothetical case. Instead we examine the way in great commander of the 18th century, until the 1793-95 work which the same principles operate more broadly, in terms of of Lazare Carnot, was Prussia's Frederick the Great. U.S. seeing total war-integrated irregular and regular warfare , military policy under General Washington, incorporating spread over the extent of the pre-war period, as well as that Prussian and French military science, stunned the world. of regular war-fighting. Carnotestablished modem classical military science, and his This leads us to consider a very special kind of case, in accomplishments were improved upon rather fundamentally which it is possible to win a war without actually coming to by the Prussian reformers, vom Stein, von Humboldt, and the point of regular warfare . In other words, if we create , for Scharnhorst. the potential adversary, a pre-war condition which makes his Those are the broad essentials. launching of war prelude either to a defeat, or to endurance Within this, 18th-century France resumed the work of of losses beyond his willingness to tolerate them, then we Leonardo and Leibniz, in the application of projective ge­ can win the peace without actually coming into a condition ometry to analysis of the relationship between offense and of regular war-fighting. defense. The question was , how to situate mobility, firepow­ This special case helps to draw our attention to a more er, and depth of capabilities, respecting options for defense general case, the study of a mixed condition, in which irreg­ and offense. A modem, updated version of this application ular warfare may represent such percentages of the total-war of projective geometry, is indispensable for analyzing the effort as 25%, 50%, 75%, or even 100% of the total war­ implications of Soviet military strategy and how to deal with effort. For example, in what are called "low-intensity wars," them. the victorious party will probably expend between 70% and The ABCs are elementary enough to be more or less 80% of his means on non-military political, cultural, and readily understood by the thoughtful layman. economic operations-or else, he will often likely not be the Let us define the offensive and defensive forces, respec­ victorious party, as we should have learned beforeescalating tively, as each representing a certain number of military in Southeast Asia. Non-military means are not merely sup­ personnel deploying in a certain amount of territory . First, plements to regular warfare , nor merely substitutes. look at the offensive forces. Measure the mobility, firepower, Now, the measurements become more complicated, al­ and depth of these forces, per capita and per square kilometer though the basic principles remain much the same. The intro­ of area in which the forces are operating. Next, let us use the duction of modem technical forms of mobility and firepower same measurements of the enemy forces against which the (especially) makes the geometry of our model much more offensive firepower of the attacking forces is directed. By sophisticated. No longer can we use the images of school­ estimating the likelihood that a shot by attacking forces will book projective geometry. We must use much more ad­ reduce the mobility, firepower, and depth of the defending vanced geometries, particularly those developed during the forces, we can construct the idea of "effective firepower." 19th century by two of the century's greatest scientists, Karl Mobility and depth pertain, then, to the possibility of en­ Gauss and Bernhard Riemann. That aspect of the technical hancing the effectiveness of firep9werdirected. details I need not presentin this report. I assume I have given Then, simply shift the definitions slightly. Obviously, you the gist of the idea, and that will be sufficient for our the defenders are shooting back, an offensive action by the discussion now.

EIR May 22, 1987 Feature 41 Now we must come to the crucial point of my design of to launch a first-strike attack by about the point that the war­ sm, a point on which Ogarkov has based his design of the economy mobilization approaches saturation-levels. fraudulent "concessions" Gorbachov has offered, in the ef­ The political and other impact of "perestroika" on Russia fort to lure the United States into a strategically suicidal must be understoodsolely in those terms of the Ogarkov Plan. "zero-option" agreement: high rates of "technological attri­ Second, in his writings-'-':and we must presume else­ tion." where-Ogarkov himself has repeatedly insisted, that Sta­ Ogarkov has assumed that the catastrophic economic sit­ lin's great strategic blunder prior to Summer 1941, was to uation building up in the United States since Carter-Mondale shiftfrom the economic policy of 1929-35 to the lower level has brought the West into the kind of economic and budgetary of strain on the civilian economy of the 1935-4 1 period. The crisis in which the West will render itself incapable of de­ lack of broadly based technological progress and logistical ploying significantly increased breadth or depth for its mili­ depth in Soviet military productionduring the 1935-4 1 period tary forces, a condition in which the rate of technological was crucial to Hitler's initial victories of 1941, according to progress in weapons-design and so forth will be at a relative Ogarkov. minimum. Under these conditions, if Ogarkov's "perestroi­ He insists that that error must not be repeated. Yet, West­ ka" restructuring is pushed with a sufficiently bloody hand ern analysts generally assume the Soviet policy will tend to inside Russia, Moscow can sustain rates of technological snap back to an approximationof Stalin's post- 1934 adjust­ progressin warfare capabilities which the West will not match ment. The fact that Ogarkov's "perestroika" is operational is even approximately. sufficientproof that such analysts have their heads buried in For various reasons, the United States has wishfully de­ an awkward place. luded itself into imagining that Moscow can not drive its Based on these features of "perestroika," we know that economy at such a combined pace of military production and Moscow has selected the present period of economic and technological advances in military hardware . What is true in political crisis in the West as a "window of historic opportu­ the "least worst" among these misguided estimates among nity" for pushing through a global strategic victory. If the U.S. and WesternEuropean specialists, is that "perestroika" Western economies were to revive, and resume pre-1967 produces all of the problems of bottlenecks and political rates of technological progress, Russia's present strategic frictions which any war-mobilization level of military pro­ opportunity would vanish. The launching of "perestroika," duction would cause inside Russia. Ogarkov took this fully given the fact that the Soviet command is fully aware of the into account in presenting his policy. difficulties ofextending that indefinitely, signifiesthat Mos­ First, the Soviet military planners have emphasized the cow is viewing the second Reagan administration, plus the following point to the Soviet political command. initial period of his successor's term, as a "Now or Maybe In the preceding two world wars of this century, intense Never" chance for making Soviet strategic victory an irre­ war-economy mobilization began after regular warfare was versible fact shortly down the road. under way. However, the decisive margins of destructive The Ogarkov Plan is a furtherelaboration and refinement force repesented by nuclear and related initial-assault weap­ of the doctrine of Marshal V.D. Sokolovskii' s 1962 Military ons ensures that all defense plans based on post-D-day mo­ Strategy, emphasizing Soviet "SD!" as the key to a war­ bilizations of reserves are the folly of wishful budgeteers; no winning assault against the United States and its allies. How­ such post-D-day mobilizations will occur in time to over­ ever, Ogarkov has grasped a point which I have tried to come the effect of the first 48 to 72 hours of initial war­ persuade our governmentto recognize. fighting. Second, that the destruction suffered by initial bom­ The SDI is not merely a "defensive system," to be de­ bardments will lower productive potentials of combatants to ployed once a more or less "peIfected" design is approved by a fraction of their pre-war levels. Therefore, Soviet war­ the accountants, and then adopted. In 1982, I specified four planners have submitted and won the argument, that the kind successive sm systems to be deployed by about the end of of full-scale war-economy mobilization which heretofore this century: an initial Mark I, then an improved Mark II, followed the outbreak of hostilities, must be completed be­ then an improved Mark III, and then a Mark IV. Each im­ fore the war is launched! provement would be deployed between three to five years In summary,the maximum level of war-production which after its predecessor. The total cost of the Mark I, I estimated one might imagine to be reached after the onset of war, must at about $200billion; the total eost of all four systems, about be reached prior to the outbreak of war! $1 trillion (in 1982 dollars). However, the total net outlay for Ogarkov et al. have also stressed, that the Soviet civilian all four systems would be no greater than the cost of the first economy could not withstand the strain of such a war-econ­ Mark I system, since the increase in productivity in the civil­ omy mobilization indefinitely. After peak levels of such mo­ ian sector of our economy, caused by spillovers of SDI tech­ bilization are reached, further war-economy mobilization nologies, would increase the federal tax-revenue base so that would cause the productive potential of the economy to fall, the sm would more than pay for itself in this way. with ultimately potentially catastrophic strategic effects. So, This pay-back would occur for us, only under the condi­ "perestroika" means, that the Soviet command is preparing tion that we used a system of investment tax-credits and

42 Feature EIR May 22, 1987 special, low-priced investment credit to encourage manufac­ usually called an asymptote. The familiar S-curve, for ex­ turers and utilities to invest in the new technologies SDI will ample. Do processes exist which do not permit that kind of introduce directly into the civilian machine-tool sector. graphing? This takes us into Riemannian physics directly. The Soviets can not match us in this, since our culture One of the simplest illustrations of this is the way Riemann favors high rates of assimilation of new productive technol­ forecast the possibility of powered flight beyond the upper ogies by our labor-force, whereas Russian culture produces limit of the speed of sound. a labor-force which stubbornly resists high rates of techno­ For a long time, even after Riemann, most physicists logical progress. However, if we are not following such a denied that transonic powered flightwere possible. This view program, Ogarkov recognizes, then the poorer potential per­ was held by many up to the point in the postwar period, our formance of the Russians will be sufficient to produce new first military supersonic flights occurred. It was assumed by kinds of weapons-systems our federal budgets and so on will so-called conventional mathematicians, using conventional prevent us from matching. This special factor of Soviet ad­ gas-theory as the basis for their argument, that once the plane vantage gained fromthe errors in our economic policies, was reached the speed of sound, that a barrier existed which first conspicuously demonstrated during the 1970s, by the would prevent faster speeds. Already in 1859, Riemann qualitative superiority of speed and other factors of new gen­ proved this was not so. As the poweredpro jectile reached the erations of Soviet submarines. speed of sound, a new condition is introduced, a condition of What I have just described is, in firstapprox imation, what a type which physicists call a "singularity ." At this point, the military science names "technological attrition." High rates local laws of physics operating seem to be changed in a of technological progress by one power, in the case that its definiteway . adversary is technological stagnant or nearly so, ensures a This is the general nature of the effect of continuous potential war-winning capability for the former. technological progress on economies. From the standpoint Earlier, I have identified some outlines of the way in of conventional, linear mathematical physics, the old laws of which factors of mobility, firepower, and depth, per capita physics appear to break down, and new laws take their place, and per square kilometer, fitinto a geometrical function de­ in the form of "new factors" which suddenly pop into the fining"eff ective firepower." Now, let us modify that picture, equation. Another way of saying this, is that "new physical by constructing our geometrical function to include "tech­ principles" take over. nological attrition." This image suggests the appropriate con­ The specifications I gave for SOl technologies were based ception to be applied in understanding what Ogarkov allows on using known kinds of "new physical principles." Once we Gorbachov to seem to be so generous in offers of "zero­ move into the domain of those new technologies, a whole option" conditions. series of new kinds of technologies appears one after the I must introduce a conception here , which most readers other. That I attempted to show our government. Ogarkov will not understand. However, it is so indispensable to anal­ has succeeded in convincing his. ysis of Ogarkov 's strategy, that I must mention it nonethe­ When we enter the domain of generation of coherent less. It is better that you should know that something impor­ pulses of electromagnetic radiation as either tools or weap­ tant exists, which you may not understand, than not to know ons, if we apply to the use of such technologies principles of so important a factor does exist. If I attempt to construct a harmonics we should readily learnfrom optical biophysics, geometrical function to include technological attrition as an we are operating in what might seem to many at firstas a new independent variable, I face the difficulty that there is no universe. Among the array of such weapons, are not only simple linear algebraic function which can describe the func­ defensive SDI weapons-systems, but, at a more advanced tional effect of successive advances in technology. The func­ level, also radio-frequency assault weapons. tion is of a type which mathematicians and physicists term What most strategic analysts and policy-shapers in the "non-linear. " West are overlooking so far, is the fact that Ogarkov's will­ This sort of function happens to be, as the fellow says, ingness to dump large portions of presently deployed types "just my meat." All of my accomplishments in economic of nuclear assault-weapons, if the West does likewise, is that science are based on recognizing the nature of a Riemannian he is basing his current adjustments in the Ogarkov war-plan solution for the role of a representable line of succession of on the deployment of more advanced kinds of assault weap­ technological advances, each superseding the other, in an ons. These include a new generation of missile-systems more economic process. advanced than the SS-20 (for example), and also include I explain the practical meaning of this in language which increased reliance upon radio-frequency assault weapons, I hope will help the reader to understand the military problem including anti-personnel weapons against which, presently, involved. there is virtually no defense. If Ogarkov can accelerate the The reader who has gone through a pre- 1960s pre-science deployment of the Soviet version of "SOl," now being read­ course in secondary schools or freshman university mathe­ ied rapidly, changes the mobility and firepower with more matics, is familiar with graphs which show a process increas­ advanced kinds of weapons systems, and reorganizes his ing in a line without sharp breaks, up to some upper limit, strike-forces order of battle to take this into account, Ogarkov

EIR May 22, 1987 Feature 43 might be able to produce several Russian military varieties weapons only for a range of spe¢ial purposes, such as de­ of "Sputniks of the 1990s," rendering us, if we are not pre­ stroying adversary military forces, including his own mis­ pared, helplessly outflanked on the technological flank of siles. With the advent of new physical principles, we have in war-fighting. sight weapons better suited to the military planner, weapons For that reason, Ogarkov's game behind Gorbachov's which have the potential of killing just as many people, and "zero-option" hoax , is to enable Russia to shift its production sometimes getting through adversary defenses where nuclear capacities from production of the less-advanced weapons arsenals can not. These new kinds of weapons are much more systems Moscow is now deploying, to more advanced sys­ "ultimate" than nuclear "bangs," and we know that they are tems, including new kinds of assault weapons on the other by no means the "ultimate ones. " side of the next level of technological singularities. No weapon could ever be so devastating that its use would Unless we commit ourselves now, to putting U.S. mili­ tary production through the paces of high rates of technolog­ ical attrition, and if we accept Moscow's zero-option offers, Ogarkov could win. If we were to accept the zero option, we might seem to buy a period of relative strategic calm in the What most strategic ,analysts and European theater. However, this apparent Soviet pull-back policy-shapers in the West are from advanced positions in EasternEurope would be merely a regrouping of Soviet forces, pending the early deployment overlooking so Ja r, regarding of the Soviet SDI and the reorganization of Soviet forces Ogarkov's willingness to dump around the new series of weapons issued. Then, Moscow large portiOns qfpr esently deployed would be ready to strike, and is clearly intending that this attack will be launched at approximately the point that the types qfnucl ear assault-weapons, present Soviet war-economy mobilization peaks at near-sat­ ifthe West does likewise, is that he uration levels. is basing his current adjustments If I were to become President, Ogarkov could not win. I know the game, and know how we can win it with,.,;,t actually in the Ogarkov war-plan on the going to war. I can force Moscow to give up the game, as deployment qfmor e advanced one it knows it can not win, and which it can not afford to kinds qfas sault weapons. play out for long, unless it were assured of winning.

Some of Ogarkov's cute tricks Some folks have been conditioned to accept without question the slogan that "thermonuclear arsenals are the ul­ be categorically "unthinkable." The use of any available timate weapon." Many also believe that the use of such weap­ weapon is as "thinkable" as it is I'unthinkable" to accept the ons is "unthinkable." Both popular assumptions are without consequences of not using it. There will always be someone any foundation in fact. around, in the right position to decide that it would be "un­ Back in early Eisenhower administration days, good old thinkable" to accept the consequences of not llsing a partic­ Charley Wilson, over at Defense, was in a defense-budget­ ular sort of weapon. cutting fit. We could reduce our military forces, he argued, Just to illustrate the point, let us see how our acceptance by relying upon thermonuclear weapons and airpower to of the zero option would affect the spread of AIDS. deliver them. We could reduce "conventional forces," cut We know now of the existence of several species of tax rates, and so on and so forth, if we simply proceeded with viruses with effects of the sort we associate with AIDS. In a doctrineof "a bigger bang for the buck." Charley was good addition to the "original" AIDS virus, which is already evolv­ at his trade, but it wasn't national defense. Coming from ing rather rapidly, we have others also spreading rapidly, business management into military planning, and trying to which are as much like AIDS as a tiger is a lion. So, instead substitute a few catchy ideological buzz-words, like "bigger of thinking of just one species of AIDS virus, we must think bang for the buck," may sell on the rubber-chicken circuit, of an "AIDS virus group. " This infection is now estimated to but it is terrifyingly incompetent defense policy. be approximately 100% fatal, after periods of incubation Thermonuclear weapons are very powerful weapons, but, varying from several to fifteen years, is transmitted in many froma military standpoint, very bad weapons. Once they go ways (in addition to the famous "sex" and needles), and bang, they oftenproduce as many effects ofthe type we don't appears to be cooking up new ways to transmit itself. There want as those we do. Over the years, we have recognized that is no cure in sight, and the best estimate of experts is that we good old Charley didn't really understand nuclear arsenals; could not expect a vaccine or cure in earlier than five to ten we have reshapedour arsenals for smaller blasts, and vastly years-while the number of fatally infected persons appears improVed accuracy, with the idea that we should use these to double each eight to twelVe/ months.

44 Feature ElK May 22, 1987 The question is: What is the probability of stopping the ern Europe-since knowing the trajectories of missiles is AIDS pandemic if the Soviet empire were to dominate the very convenient to the fellows who areassigned to intercept­ world during the course of the 1990s? The answer, unfortu­ ing and destroying those missiles. nately, is, "Probably zero ." Let us ask the question: Why use an interceptable nuclear First fact to consider, is that we either care for persons missile to deliver a lethal effect which can be carried to the infected with AIDS, or we kill them as a way of stopping target in a briefcase or at least a truck? Now, probably, you them from spreading the infection. If we care for them, the begin to see the reason I stressed the importance of consid­ combined cost to society for dealing with AIDS will probably ering Soviet spetsnaz forces' deployment in assessing the reach an amount much larger than the defense budget by some Soviet's offers of terms of a zero option ! time during the 1990s . To develop a cure, will require a Let us consider two cases. The case of Soviet targets in massive investment in very advanced biophysics technology WesternEurope , and the United States. of research, on the scale of a Manhattan or Apollo Project, at Let us consider three types of "carry weapons" which least. Soviet spetsnaz forces could covertly deliver against what Second fact to consider: Would we be able to mobilize are otherwise Soviet first-strike missile targets in Western such expenditures under the conditions of Moscow's early Europe: 1) Small nuclear devices; 2) chemical or biological phase of world-domination? Almost certainly not. weapons; 3) radio-frequency weapons. The first could be What happens then? Either the entire human species, or delivered by an ordinary sort of motor vehicle. The second, nearly all of it, is wiped out by some time during the first half could be delivered in a briefcase, generally speaking. The of the coming century. In that case, is it "thinkable" not to third could be deployed inside a trailer truck. To take out a use whatever means are required to prevent Moscow's world­ port facility, or analogous logistical capability, nuclear de­ domination? The alternative is to shoot immediately each vices would be implied. To take out the personnel of every AIDS-infected person . Would you rather that, or find a way large NATO and related military command-center in Europe, of preventing Moscow from achieving imperial domination? radio-frequency weapons and alternative use of some select­ There are other major reasons for resisting Moscow's impe­ ed repertoire of chemical-biologicals might be preferred. rial aggression, but the AIDS example is sufficient to make How could such weapons be delivered into spetsnaz units' the point. There is a point at which not resorting to the hands deep inside the European rear echelons? Presently, the "unthinkable" becomes less "unthinkable" than not resorting easiest thing imaginable. In containers by way of ports such to such action. a Rotterdam and Hamburg, or the freight terminals of major In military planning, a "good weapon" is one which does airports, or in TIR trucks operating in Western Europe from precisely what is required, and an absolute minimum of any­ origins in the Warsaw Pact nations. They would not need to thing else. be introduced assembled. The components of radio-frequen­ I shall not go into details of what I know about radio­ cy weapons are what is needed, with some components ac­ frequency weapons, because I have not yet decided what quirable in the West. Chemicals and biologicals can be pre­ ought to be kept secret about these techniques-not only pared in the West, generally speaking. Nuclear weapons fromMoscow , but from some nuts who I might hope should components incur greater difficultiesfor the spetsnaz. never know even as much as I know presently about these The general principle was emphasized by Britain's Col. techniques. I shall merely say, that they are thermodynami­ David Stirling, in proposing the development of the famous cally efficient in performing their mission beyond the wildest British SAS for operations in North Africa during World War imagination of most of you, and that there is, to all intents II. Five properly selected and trained men, operating in a and purposes., no defense of persons against them, but to team, against the enemy's deep rear echelons, can cause more eliminate the weapon before it is fired. Practically speaking, net damage to the enemy than a regiment on the firstli ne. these weapons are as deadly as a neutron bomb, and leave In the case of spetsnaz operations in the Western Euro­ less residual after-effects than a neutron bomb. pean theater, the Soviet objective is to occupy this territory That said, I shall come directly to my horrifying conclud­ in case of war. Therefore, unless the Soviets perceive no ing point. alternative means, they will prefer the means which cause The Ogarkov Plan for the European theater of Soviet first­ the least annoying after-effects for Soviet units operating in strike launch of general war, requires the immediate destruc­ the affected area. This would tend to limit their use of nuclear tion of approximately 250 selected military and logistical weapons, and would greatly delimit the use of somewhat targets in Western Europe, as far as Brittany in France, and unpredictable biologicals in that region. In the United States, southern regions of England. Up to now, the conventional the Soviet spetsnaz would be operating with no such restric­ view has been that Moscow would accomplish this destruc­ tions. Long-lasting after-effects are , generally speaking, no tion with warheads from short- and medium-range or inter­ deterrent against use of almost any weapon suited to the mediate-range nuclear missiles. This has been a useful study means available for its deployment. by some key Western specialists, very valuable to us in plan­ It is doubtful that the Soviets would use anything but ning the deploying of strategic and tactical defense of West- spetsnaz for these kinds of strategic "hand-carry" sorts of

EIR May 22, 1987 Feature 45 operations. Theirloyal paramilitariesfrom among thenatives lence and sabotage, but who ha"e not yet been sufficiently of WesternEuropean countries and the United Statesmay be criminaIized to be prepared to gc> forth to kill or be killed. just that, but the Soviets would never entrust such "auxili­ Around that screening layer of violence-prone mush-heads, aries" with an operation as politically-strategically sensitive there are the outerlayers of the Green Party-pivoted "radical as this sort of monkey-business. These would be hardened ecologist" strataas a whole, includingthe punkers, thesquat­ spetsnaz under strictSoviet military command. ters, and so forth . The innermost kerneloverlaps theterrorist For other D-day operations in our rearechelo ns, such as gangs as such. This is the generil situation throughout Eu­ assassinations of selected key persons, the KGB's killers rope . would tend to come significantly into play, with numerous All of the crucial deploymellts are under direct Soviet targets assigned to the locally recruited paramilitary auxili- control. Paramilitary "officers" ate on the scene directingthe deployments of the violence-poone forces. The photos of these "officers" have been taken in many cases, such that their identities, political party affiliations, and East bloc By delimiting the scope ojpolitical training are known. The entire complex of terrorist forces is under Soviet control, via such channels as East Germany, and logistical infras tructure around Czechoslovakia, and Syrian intelligence, the latter the up­ the spetsnaz, and actually front coordinator of Soviet-directed international terrorism since 1967. catching afew ojthese, to be able Around the radical ecologists as a whole, there are their to detennine the nature ojtheir liberalsympathi zers, especially t�oseassociated with sundry assignments, the way is prepared forms of the anti-nuclearand peaCe-march movements. fo r a more general clean-out. It These locally recruited force$ inside the nations serve as an essential part of the political and logistical infrastructure must be done fa irly quickly. inwhich Soviet spetsnazand KGlJ operatives swim "like fish "Perestroika" should be read as a in the sea." Once this configuration were made clear to the general public, and the dangerS of the spetsnaz and KGB signal that we have not many units made clear, the hard-core: would tend 'to be isolated years tofritter away cleaning up ratherquick ly, and easily arrested and given harsh sentences this mess. in consonance with the quality o. criminal acts in which they are apprehended as perpetrators .i Thiswould rem ove the sea from the GRU and KGB fish----,which is one very efficient way of catching fish. aries as well. The command structure of the Soviets is such, The securityof freight transportand airportsand seaports that an irregular means of conducting a strategic military couldbe tightenedup, and TIR andother suspicious vehicles action would behighly compartmentalizedwithin the appr0- subjected to random spot-checks. (Many of the East-bloc priatechannels of the military command itself. drivers prove to be East bloc military or intelligence 0pera­ Have we no defense against this sort of "hand-carry" tives.) strategic attacks? We could, but presently, in strictly techni­ By delimiting the scope of political and logistical infra­ cal Latin, our internal security stinks. structure around the spetsnaz, and actually catching a few of The strategic opportunity for Ogarkov's use of spetsnaz these, to be able to determine theinature of their assignments. surrogates for missiles, depends upon the fact that Soviet the way is preparedfor a more general clean-out. It must be spetsnaz and similar KGB units swim in our societies like donefairly quickly. "Perestroik3" should be read as a signal fishin the sea, to borrow Mao Tse-tung's famous imagery. that we have not many years to fritter away cleaning up this Inside our-based mass radical movements, such as the mess. radical ecologists and other countercultural sub-cultures, there It is not necessary to have a ·'witchhunt." "Witchhunts" are various layers, arranged sociologically like concentric tend to destroy the very system (Iflaw we are supposedto be circles. Softmush-heads on the outside, andhardened killers defending against Russian impe.uu or othersorts of dictator­ of "criminal energy" in the smaller, inner layers. For exam­ ships. Oean operations, which never abusethe innocent, are ple, in West Germany, there are approximately 10,000 per­ possible with propertraining andicoo(dination of the agencies sons of "criminal energy," ready to kill or be killed, inside responsible. the radical ecologist ferment as a whole. Inside the 10,000 However, this hideous special problem of strategic use hard-core,there are well-trained paramilitary forces totaling of spetsnazaside , the basic solution to the overall problem is to an estimated2, 000. Aroqnd the 10,000,there are violence­ to move ahead quickly now, w�th the general policy of de­ pronemush-heads, ready to deploy as a screeningforce around fense . and economic development which I have identified the contingents of the inner 10,000, and to do assorted vio- here.

46 Feature EIR May 22, 1987 SEEKING INVESTORS in diversified farming and livestock operations 30,000 acres. Abundant expansion available.

Allen Towne HeR 69 Box 580 Midland, S.D. 57552 Finely crafted Telephone, daytime 605-567-3326 evening 605-567-3393 Pipe Ornans for America's Churches

07naha Steakst!D � ...thwrqtf' . Since 1917 and INTRODUCTORY Public Institutions OFFER!

Tr, ... Norman R. Ca11 t---. a.'ttle Make those special occasions truly ._ � _ ..a ...rae •• memorablel Just try a little tender­ ness. Candlelight...soft musIc . . and ...magn ificent, aged Filet Mignons. Perfect. Experts select and prepare each filetl Their artistry in cutting and aging is your assurance of utmost inenjoy­ men!. Steaks arrive frozen. Co mplete satisfaction guaranteed.

Six 6 oz. Filet Mignons, 1114 " thick Mobil home (reg. $52.95) ...... $29.95 ! phis 54 50 ShiPPing handlmg f Service YOU SAVE $23.00 OFFER VALID ONLY IN 48 STATE S UNTil MAY 31, 1987.

OR SAVE EVEN MORE ... Recreational Twelve 6 oz. Filet Mignons at Extr. special price of ...... $58.95 Vehicle Service Iplus 54 50 shipping handling) LIMIT OF 2 PACKAGES PER ORDER

Phone or mail order. Use major credit card and Call Free 1-800-228-9055 In Nebr.sk. phone 0-402-391 -3660 collect. 282 Chapel Road Ordertod.y or witte lorFREE c.t.1og .nd 10% d1Kount coupon. South Windsor, Connecticut 06074 (203) 528-3344 07naha Steakse �a.... � ...tf'!' Dept. 1 786/P.O. Box 3300 / Omaha, NE 68103

ElK May 22, 1987 Feature 47 Gorbachov unveils new advances in space defense by Konstantin George

We in the West have just been treated to a new equivalent of II, when Marshal Georgi Zhukqv was named to command all the 1957 "Sputnik Shock." For the better part of three days, Soviet fighting forces). It malfes him both wartime com­ May 12-14, Soviet General Secretary Mikhail Gorbachov mander, and chief overseer of wrrent war preparations. conducted an extraordinary tour of the Soviet Space Flight There was another unusual dimension to the Baikonur Center in Baikonur, Kazakhstan, to inspect the first Soviet tour, which underlines the sig*ificance of the new military space shuttle, scheduled for launching later this year, and a reorganization. In a rare displ�y of actual glasnost ("open­ • just-completed giant new booster rocket, capable of carrying ness"), the Soviet news agenc� TASS significantly dropped extra-large payloads for the construction of military orbital all standard ritual references tb Russia's "peaceful" space bases in space. program. On May 14, the day that Gorbachov returned to The visit underscored the fact that Moscow's top priority Moscow, TASS announced that a "new type of very large is its "Strategic Defense Initiative" (SDI) and military space booster rocket" had been completed and was being readied program, designed to revolutionize warfare and pave the way for launching at Baikonur. Here again, the ritual phrases of for Russian global domination. praise for the new rocket's "contributions to the Soviet Union's Most extraordinary was the defense-related composition peaceful program for the expl()ration of outer space" were of the Politburo-level group that accompanied Gorbachov to conspicuously lacking. Baikonur: Defense Minister Marshal Sergei Sokolov, a can­ Gorbachov's speech to the, Baikonur Space Center sci­ ' didate Politburo member; KGB boss and Politburo member entists, engineers, and workers was an impassioned praise of Viktor Chebrikov; and Politburo member Lev Zaikov, the Russian high technology in the Soviet military-related space Central Committee Secretary in charge of the military indus­ program: "Everything here at . the Cosmodrome, from the try, or, to use a more precise term, the Soviet war economy sophisticated launching structures and laboratories, to the and industrial pre-warbuild up. powerful carrier rockets, space vehicles, their life-support . The Baikonur tour demonstrates that the essence of the systems, fitted with modern computers and highly sensitive highly publicized Gorbachov perestroika ("transformation") instruments-all this is Soviet-made, everything is of a high of the Soviet Union, is the crash implementation of a Soviet quality and of moderntechnological standards." SDI and related high-technology-based war plan, drafted by Gorbachov called for a surge in the Soviet military space Marshal Nikolai Ogarkov . program, saying, "The vast scientific potential we have ac­ Marshal Ogarkov was recently named deputy command­ cumulated in 70 years of Soviet power should be brought into er in chief of all the Soviet Armed Forces, placing him, play." protocol-wise, directly under General Secretary Gorbachov in the U. S. S. R. 's highest military body, the Soviet National The zero-option deal Defense Council. Ogarkov' s appointment is unique in Soviet The coincidence of the Ogarkov appointment and the peacetime history (the post has been vacant since World War Gorbachov tour of Baikonur, should be causing alarm bells

48 International EIR May 22, 1987 to ring in the capitals of the West. Yet events of recent days, agreement on medium-range missiles. Getting rid of the ob­ with the exception of certain developments in France, have solescent Soviet SS-20, for example, and other relatively out­ been far from encouraging in this regard. of-date nuclear weapons systems, would be welcomed by The day Gorbachov returned to Moscow, the NATO de­ Ogarkov and the Soviet leadership. This could allow Mos­ fense ministers were meeting in Stavanger, Norway. The cow to concentrate on the SDI, and producing the most mod­ meeting generally reflected an adaptation to the scandalous em weapons systems, or what Ogarkov calls "the highest pro-"zero-option" appeasement raging in Washington, with­ possible technological rates of attrition." Thus, a Euromissile in the administration (the Pentagon under Weinberger being agreement would not only begin the process of rendering a notable exception) and Congress. A few days before the Europe defenseless to the Russian Empire, but would corre­ Stavanger meeting, the House of Representatives further cut spond to Soviet war-planning priorities. the administration's request for $5.6 billion to fund the SDI, The more Moscow can siphon off from older nuclear and down to the paltry sum of $3. 1 billion. conventional arms programs, into its military space program, At Stavanger, some European NATO allies, privately the closer becomes the target date where the war-winning apoplectic over the ramifications of a U.S. nuclear missile goals of the Ogarkov war plan can be realized. withdrawal, began to fall into line behind the State Depart­ ment lead. British Defense Minister George Younger an­ France not fooled nounced that London would approve "under certain condi­ On the European continent, the nation responding most tions" a "double-zero option," i.e., scrapping of both longer­ appropriately to the Ogarkov warplan is France. The govern­ range 0,000-5,000 km) and shorter-range (500-1,000 km) ment of Premier Jacques Chirac has not only led European medium-range missiles stationed in Europe. The British For­ opposition to the zero-option sell-out, but unveiled a program eign Office issued a parallel statement to this effect. The earlier this spring, ratified by Parliament, to quadruple the conditions listed included: exclusion of British and French number of French nuclear warheads over the next fiveyears . nuclear forces; strict verification; provision for West Ger­ On May 14, Chirac arrivedin Moscow for a meeting with many to keep its non-nuclear (though nuclear capable) Persh­ Gorbachov. His visit was preceded by the greatest barrage of ing IA missiles. Soviet attacks against a Western government, on the eve of a The Dutch and Belgian defense ministers, present at Sta­ prime minister's visit, perhaps in the entire postwar period. vanger, joined in the call for the "double-zero option," thus An article in the Soviet KGB-linked weekly Literaturnaya joining the core appeasement bloc within NATO which em­ Gazeta, which appeared on May 13, denounced Chirac for: braces the governmentsof Greece, Norway, and Denmark. supporting the SDI; repeatedly denouncing the "Soviet dan- . Further reflecting the sense that an agreement on the ger"; "extreme reserve" toward the "new" Gorbachov poli­ missiles is possible this year, the top three defense ministers cies; maintaining and expanding the Frenchforce de fr appe present, Weinberger of the United States, Younger of Brit­ (nuclear deterrent); France's "excessive anti-Soviet cam­ ain, and Manfred Womer of West Germany, held lengthy paign"; arresting and expelling Soviet spies; "violating the sessions discussing post-zero-option alternativenuclear mis­ 16th Parallelin Chad"; and denouncing the Soviet occupation sile and aircraft deployments by the United States, in and of Afghanistan. aroundEuro pe. The Soviet attacks continued after Chirac' s first Moscow But Weinberger was sharply critical of the Soviet pro­ meetings, with Soviet Premier Nikolai Ryzhkov and Foreign posals. He told the other NATO defense ministers on May Minister Eduard Shevardnadze. 12 that there was "no logical basis" for a zero-option with­ Premier Ryzhkov, facing Chirac at the May 14 Kremlin drawal from Europe, which would allow the Soviet Union to dinner, said: "Some West European govemments have voiced retain 100 medium-range missiles aimed at Asia. "We don't doubts and objections [on the zero option] . Progress depends want to give up on the issue," he said. On a "straight, sub­ on whether Europe responds appropriately ....We regrett­ stantive, moral basis," the U.S. administration should refuse ably have failed to see France among the critics of the nuclear to capitulate. He said he was not concerned about appearing armsrace ." to undercut the arms agreement with such statements, be­ In a meeting the following day with Gorbachov, the same cause his position on the Soviet missiles deployed against differences emerged. Gorbachov reiterated to Chirac his Asia "is not mine; it is the President's." "double-zero option" proposals for arms control, calling on Even at this late date , the shock that Moscow is prioritiz­ Chirac to support them. Chirac replied that the French nuclear ing space-based warfare capabilities, and the realization that potentials were "definitelynot negotiable," and that his gov­ the zero option will serve to exponentially increase Soviet ernment had no intention of commenting on the issue of the investments in that realm, could lead to some startling, abrupt U . S.-So viet Geneva talks, since France was not a negotiating Western breaks with this pattern of drift and appeasement. partyin these talks. Concen. ng the short-range missiles, the The Ogarkov war plan's timetable would be accorded a French premierreaffirmed that France would remain "in full significant, if not crucial boost, by aU. S.-So viet zero-option solidaritywith her European allies."

EIR May 22, 1987 International 49 Russians tighten the noose around We st Berlin by Rainer Apel

While U.S. governmentspokesmen still steadfastly maintain lation of the status of Berlin." that there is "nothing out of the ordinary" going on in West Also following the May Day riots, the Soviets and East Berlin, the Soviet-backed insurgency which began on May Germans proceeded to test the resistance of the Western 1, is continuing to build (see EIR , May 15, "Soviets stoke powers, in a series of "incidents" : replay of 1961 Berlin crisis"). New outbreaks of violence, • On May 6, East Germani border troops climbed over steered by the Socialist Unity Party of West Berlin (SEW), the Wall into the British sector, to seal off a car that had and financed by East Germany, were timed to coincide with crashed against the Wall. When British military police ar­ the visit to the city on May 11 of French President Fran�ois rived, the East Germans blocked the way, trying to intimidate Mitterrand. With the upcoming visits of Britain's Queen the British with the outrageous assertion: "This is territory of Elizabeth on May 26 and President Ronald Reagan on June the G.D.R. [East Germany] !" TheBr itish officerwas forced 12, the targets for a terrorist escalation are in sharp focus. to call the Soviet command at Karlshorst, in East Berlin, and Anticipating the arrival of Mitterrand, the same rioters only three hours later, after heated exchanges on the tele­ who ransacked the city on May Day, met on May 8 in the phone between the British patrol and the Soviet command, Kreuzberg district, to plan out "more efficient actions." In did the East German troops pullback. the first salvo, several hundred of them blocked traffic and • Just hours before Presidenl Mitterrand's arrival on May scuffled with police the next day on the Kurftirstendamm, 11, an incident occurred on the border between the French West Berlin's showcase avenue. and Soviet sectors. East German border troops fired several Of the three wartime Allied powers who share responsi­ rounds from machine-guns to stop a group of refugees from bility for West Berlin-the United States, Great Britain, and escaping to the West. Berliners !living near the area reported France-only the last has responded at all to the Soviet irreg­ an unusually heavy deployment of East Germanborder troops. ular warfare probe. Mitterrand, during his one-day visit, • After three days of blackout, the news broke in the incurredthe wrath ofthe Soviet media with his presence, and Berlin press that on May 10, a guard at the U.S. military his statement of support for the divided city. "Berlin, and the headquarters on Kleestrasse, West Berlin, died from a shot Wall, are a symbol of the divided Europe," he said. " ...I in the chest. Unlike the usual procedure in such "accidents," mean the city in its entirety, not just a part of it, when I speak the U.S. authorities refused any comment on details of his of Berlin ....It is French policy, to further, maintain, and death. develop the existing relations between West Berlin and the Federal Republic of Germany . . . as long as the Wall is Carrot-and-stick tactics there ....It is to be considered only natural, that the popu­ Parallel to these events in West Berlin, Soviet pressure lation of West Berlin feels it belongs to the people in the tactics have intensified againsf West Germany. Here, the Federal Republic of Germany." radical anti-NATO movement began new protest actions on The French handling of protocol during Mitterrand' s visit May 3, against the Pershing II exercises at the U.S. military particularly enraged the Kremlin. In a gesture intended to base of Mutlangen. In several cases, German police and U. S . underline Westernties to the city, Mitterrand had taken Bonn military police had to move in, to clear the grounds around Chancellor Helmut Kohl on his plane to Berlin, and met West the base. More than 100 persons were arrested in four days, German President Richard von Weizsacker at the presidential in sit-ins and street blockades. A serious incident occurred residence in West Berlin-the first such official visit by a on May 11, when U. S. military police had to move in to clear Western head of state since 1945 . out a Pershing exercise site from protesters. The Soviet news agency TASS retorted: "The French Especially noteworthy in these disruptions, is the partic­ State President misused his visit to the city, in a way not in ipation of protesters from the VVN and other pro-Soviet compliance with the Four-Power Agreement." The broadside "anti-fascist" groups. VVN activists appeared costumed as called Mitterrand's meeting with Weizsacker "a serious vio- concentration camp prisoners, chaining themselves to the

50 International EIR May 22, 1987 barbed-wire fences of the missile base. Once U.S. military page article in West Germany's leading mass-circulation police intervened, the VVN started denouncing them as "Nazi newspaper, Bildzeitung, which maintains special channels kapos," and the Pershing missiles as the "heritage of the into Moscow, and has been used repeatedly by the Kremlin mass-extinction policy at Auschwitz." The VVN belongs to to launch trial balloons. "Will Gorbachov Offer Reunifica­ the same network of Moscow's subversion into West Ger­ tion?" was the headline, under which Bildzeitung reported many as the SEW of West Berlin. that the Bonn government expects such an offer to come The Soviet hand was also becoming visible on another soon. An unnamed cabinet undersecretary was quoted: "If front of political escalation. Social Democratic Party vice­ [Gorbachov] really puts such an offer on the table, he will chairman Hans-Jochen Vogel inaugurated a new nationwide shake us up quite a bit." Bildzeitung reported that according campaign against the American missiles, under the slogan to a recent opinion poll, sponsored by the government, no "Raketen Raus!" ("Get the Missiles Out!"). The party plans less than 71 % of West Germans would "welcome reunifica­ to distribute several million leaflets, to force the Bonn gov­ tion into a non-aligned Germany. " ernment into "a positive response to the proposals made by On May 13, Bildzeitung published an interview with the Gorbachov." Included in this mobilization are actions against former Bonn minister of economics, Count Otto Lambsdorff. nuclear power technology, and against alleged "plans for a He repeated statements from a radio interview given the same German nuclear bomb." The Social Democrats announced morning, that "such an offer is in the air," and that it "should their campaign one day after Moscow's black propaganda be carefully examined, but not rejected." Lambsdorff re­ cannons began attacking Chancellor Kohl's "reluctance on vealed that he "already discussed this weeks ago" with Amer­ the zero option," warning of "plans in Bonn for a German ican politicians, during a trip to the United States. bomb." Also the notorious proponent of a German-Soviet deal on Accompanying these pressures, the old "carrot"of a So­ reunification, BQnn parliamentarian Bernhard Friedmann of viet offer for German reunification has re-emerged from the the ChristianDemocratic Union, appeared in Bildzeitung the vaults of the 1950s-the vision of a "historic deal" between same day, calling on President Richard von Weizsacker to the Germans and the Soviets. The price would be the military "definitely bring the question up" with his Soviet interlocu­ neutralization of a reunifiedGermany . tors during his trip to Moscow July 6-1 1. This emerged anew on May 12, in a sensational front- The Soviet leaders will certainly be ready, if he does.

ments were made only in time of war. Like 1961 : We st covers up Well-placed European strategic analysts are asking: Where will Moscow strike next? Although Ogarkov is the Soviets' new Berlin crisis author of the present design for Soviet nuclear surprise attack, analysts see no likelihood that Moscow will go to This statement, by Lyndon LaRouche, Jr. , was released full-scale war yet. More likely, they think, is a combina­ in Leesburg, Virginia on May 7, by the LaRouche Demo­ tion of aggressive Soviet breakouts on NATO's flanks. cratic Campaign: Worried eyes are turned to crisis-tom Yugoslavia. Moscow is feinting an onslaught of some sort in Scandi­ At this moment, dawn is breaking in West Berlin. The navia. Armand Hammer and Edgar Bronfman have played eighth day of Moscow's new Berlin crisis is beginning. a key role, in manipUlating both Israel and the United Yet, even after seven days, no officialreport of the crisis States, into turning the entire Middle East into a Soviet has been acknowledged in the capitals of the NATO coun­ sphere of influence. Like 1961, a new Berlin crisis is used tries. by Moscow as a pivot for launching strategic adventures The Soviets are already gloating. They have tested in other parts of the world. President Ronald Reagan's nerve, just as Khrushchov Meanwhile, reports are flowing in: some with added tested President Kennedy's nerve back in the 1961 Berlin details of the Russians' preparation and launching of the crisis. So far , Reagan has capitulated exactly as Kennedy unprecedented paramilitary violence ofthe past weekend, did back then, by pretending that the crisis which might some on Moscow's continued escalation of the Berlin interfere with a new "summit" does not exist. crisis itself. Meanwhile, various high-level sources confirm, that Something verybig is going to breakduring the months Marshal Nikolai Ogarkov, author of the currently opera­ of May and June, with no indications that the period of tional Soviet war-plan for world-conquest, has been ap­ escalating crisis will end then. Meanwhile, so far, offi­ pointed to a newly created position of power over all cially, the capitals of the United States and other NATO Soviet military forces. Previously, such Soviet appoint- countries are asleep at the switch.

EIR May 22, 1987 International 51 leading European members of the' Russian Orthodox Church Outside Russia, headed by Father Count Ignatiev (descen­ dant of the infamous "Okhrana" family of the Czarist nobil­ ity). Russian Church seeks A source close to the Vatican said that the conference, which alleged that with Kiev began the "Russian" millen­ German reunification nium, was a slap in the face to Pope John Paul II, who defends the pro-Western Ukrainian Catholic (Uniate) Church. The by Luba George Church, outlawed in the U.S.S.R;, traces its tradition to the Councils of Lyons and Florence, where the principles of Augustinian Christianity triumphed. Sensational headlines in the West German press these days The Pope has asked Soviet authorities for permission to are speculating that the Soviet Union will offer a modern visit Kiev in 1988, besides Moscow, for the celebration of version of the 1952 "Stalin Note," proposing a deal for a the Christianization of Kievan Rus . The Regensburg "Cath­ "neutral," reunified Germany . What is not revealed, how­ olics" thus conformed to Moscow's agenda, rejecting the ever, is that the terrain for such a treasonous arrangement Pope's wishes to visit the Catholic regions of the U.S.S.R., was explored in two high-level, closed-door conferences in­ the Ukraine, and Lithuania. volving the Russian Orthodox Church (ROC), the German The nefarious designs of this conference were graphically Protestant Church (EKD), and anti-Papal "Catholic" clerical presented in an ROC paper praising the 19th-century Russian elites. mystical theologian and Isis-cultist Vladimir Solovyev, the On April 21-26, the Bavarian city of Regensburg was exponent of a "Third Rome," Moscow-centered "Universal host to a symposium titled "Mir-Miru-Peace on Earth-A Church" as the "bridge-builder" between the Eastern and Thousand Years Between Volga and the Rhine," involving Western churches. the largest Russian Orthodox delegation ever to visit Ger­ many, and those nominal West German Catholics who are Next stop, Tutzing bitter foes of the current Pope. Regensburg is notorious as The ROC delegation was next hosted by the German the residence of the evil billionaire Thurnund Taxis family, Protestant Church May 7- 10, at its Academy in Tutzing, reportedly in the thick of efforts to strike a German-Soviet Bavaria, on the shores of Starnberg Lake south of Munich. strategic accommodation. Unlike the Catholic Church in Germany, which contains The event was sponsored by members of the German strong anti-Soviet currents, the EKD leadership is committed Catholic Bishops Conference and the Benedictine-run Ost­ to a reunification deal with Moscow. kirche Institut in Regensburg. The ROC sent 13 delegates of In the presence of 150 participants , the Tutzing Acade­ bishop rank and higher, including Metropolitan Pitirim of my's director, Dr. Claus-JiirgenROpke , was awarded a "Spe­ Volokolamsk, mooted successor to Patriarch Pimen, and cial Order" by the ROC delegation. It was bestowed on him Metropolitan Filaret of Kiev. Dr. Rauch, Director of the in absentia by Moscow's Patriarch Pimen, for his "ecumen­ Ostkirche Institut, who had spent over six weeks in the ical" work. Roepke, the author of a recent book titled Third U.S.S.R. last year, organized the event. Rome: Renaissance in Russia. is one of the top figures in­ In theory, the gathering was open to any Catholic priest; volved in the EKD elites' deal with the Soviets. In the con­ but in reality, the list of attendees was as restricted as any ference room, Metropolitan Filaret of Kiev proclaimed: "The Moscow "peace" festival. A Ukrainian Uniate (Catholic) Russian Orthodox Church totally supports the transformation priest who was registered to attend, was barred, after the taking place in our society" -a re!t'erence to Marshal Nikolai ROC delegation threatened to leave: "Either he goes, or we Ogarkov's perestroika-the reorganization for a war build­ go." Forbidding entry to the priest was in direct violation of up. The EKD applauded. Pope John Paul II's policy in support of the Uniates. The At Tutzing, the ROC announced plans for a 1988 "Ecu­ Regensburg "Catholics" instead tacitly endorsed Stalin's 1946 menical Council" in conjunction with the millennium cele­ bogus "Council of Lvov," where the Uniate Church was brations. An Ecumenical Council is an event of extraordinary outlawed. importance, attended by all ROCBishops from the Moscow The symposium's agenda focused on preparing a 1988 Patriarchate (from inside the U.S.S.R. and from abroad) . joint Russian-German "co-celebration" of the Russian The EKD and other Western chu�ches will attend as observ­ Church's 1,OOO-year anniversary. Speeches and papers em­ ers. The last such Council was held in 1971, and Pimen was phasized "the special bonds" uniting Russians and Germans elected the new Moscow patriarch. over the centuries, "the thousand years of relations between As the chances are high that Pimen will not survive until the Russians and the Germa ns," in the cultural, political , June 1988 (he has been seriously ill for many months), the economic, and religious realms. Russian participantsinclud­ ROC millennium celebrations could well coincide with the ed, for the first time ever at the same dais with the ROC, appointment of a new patriarch. ,

52 International EIR May 22, 1987 connection between drug smuggling and certain intelligence France networks in the Westernhemisphere .

The peculiar Jacques Verges However the most remarkable element may be the case of his lawyer, Jacques Verges. Sure of the fate of his client, Verges announced in several pre-trial interviews that his de­ fense would aim at attacking the French State and society. According to his own declarations, his line of argument will Nazi-communism on aim at proving that the French State has no political or moral rights to judge Barbie for Crimes Against Humanity, given trial in Barbie case its own record of war crimes in Indochinaand Algeria. Verges is expected to bring as witnesses, several fonner members of by ThierryLalevee the Algerian Liberation Front, to describe the torture inflicted on them by the French police and army. He will also argue that Barbie's crimes could only have been perpetrated in full The trial of fonner SS officer Klaus Barbie, which opened cooperation and collaboration with French elements who sid­ on May 11 in the French city of Lyon, is expected to be ed with the Nazis against the Resistance. In this way, Verges remarkable in many ways. Considered the most important is aiming to destroy what he calls "the myth of the Resis­ trial of a Nazi war criminal since that of Adolf Eichmann in tance," and has let it be known that he will have new revela­ Israel in the early 1960s, the Barbie trial is also considered tions on "who the collaborators were." The immediate polit­ to be the last of its kind. Because of the 20-year statute of ical target is all too obvious, given that the present French limitations, Barbie cannot bejudged for his warcrimes against government, headed by Jacques Chirac, draws its legitimacy the French Resistance, for which he was twice condemned to from the Gaullist movement and the anti-Nazi resistance. death in absentia in the 1950s. But he will be tried for Crimes This strategy is not new for Verges, who, just two months Against Humanity, such as his personal involvement in the ago , was the lawyer for internationalterrorist George Ibrahim arrest, deportation, and murder of thousands of French Jews. Abdallah. However, his deliberate provocations may back­ Topping the list of crimes, was the arrest of 44 Jewish school­ fire. In the days preceding the trial, Verges's career was children, all of whom died in concentration camps. carefully analyzed and exposed in the media. Two intercon­ Whatever sentence is decided, Barbie, now 73 years old, nected issues emerged: first, his long-standing association will most likely die in jail. Extradited from Bolivia in Feb­ with Soviet-sponsored organizations, and his friendship in ruary 1983 to France, he has already been operated on twice. the early 1950s with Aleksandr Shelepin, then leader of the On the pretext of his bad health, and the fact that he is a Soviet student organization, later chainnanof the KGB ; sec­ Bolivian citizen, named Klaus Altman, his pseudonym for ond, his association with the Nazi International, represented 30 years, Barbie withdrew from the court-room on May 13, by Lausanne banker Fran<;ois Genoud. the third day of the trial . The trial, which is expected to last What was known only to a few before, is now widely until early July, will continue without him. acknowledged: that Soviet agent-of-influence Verges has There are several important issues involved. Through worked with the Nazi Internationalfor at least three decades. Klaus Barbie himself and his numerous crimes, it is the entire When it was revealed that Barbie could not pay the lawyer's Nazi regime which will be once again in the dock. Barbie fee , Genoud's name came up-but the implication was de­ was the chief of the Gestapo, the political police of the SS, nied by Verges, who asserted that he was defending Barbie in Lyon from 1942 to 1944. In his firststatement on May 12, free of charge. The end result is that much of the "Verges Barbie predictably argued that he was "not the chief of the myth" has been exposed. In an interview with a French week- Gestapo, but one among some 120 others"-an argument 1y' Verges warned anyone who would want to go after him: which carried little weight, as a few hours later he denied Ifl were to be killed, he said, I have taken precautions. There even being the accused Barbie. is a list of names of those with whom I want to share either Barbie's activities since the end of the war are also ex­ paradise or hell. I know that I have enough friends, that I will pected to be raised in the course of testimony. The story will not have to wait too long to meet these peopleaga in. once again be told, of how Barbie was recruited by American A direct death threat, and perhaps the first public ac­ intelligence services in the immediate post-war days, and knowledgement by Verges that his friends are murderers . smuggled to Ibero-America, at a point when French intelli­ But that was known anyway. Indeed, a few years before he .gence was on his trail. During the last 30 years , Barbie has had defined his philosophy of Man by stressing that "crime served as a military adviser to numerous military govern­ is the difference between man and animal. When we become ments, notably that of Bolivia's "cocaine colonels." Ulti­ a criminal, we either become Man or God." mately, the mention of these activities will bring to light the Barbie could not have chosen a more suitable lawyer.

EIR May 22, 1987 International 53 Project DeITlocracy imposes IMF dictator on the Philippines by Linda de Hoyos

Under the banner of "democracy," Philippine President Cor­ vative, GAD chairman Vicente Puyat told the crowd, "a full azon Aquino, with the full weight of the United States behind 40% of the Filipino people were disenfranchised in this elec­ her, May 11 perpetrated the worst case of national election tion." GAD candiate Abul Alonto, a Muslim from Mindan­ vote fraud ever witnessed in the country . At 8 p.m. on the ao, one of the opposition's strongholds, stated that the "entire evening of May 11, before even a single vote was counted, island of Mindanao has been disenfranchised. If we're going presidential press secretary Teodoro Benigno announced that to be disenfranchised in this way, it means war. It is outra­ the Aquino slate for the new Senate had carried out a near geous and we will not stand for it." Former Defense Minister "clean sweep" in an unprecedented "landslide." This "news" Juan Ponce Enrile warned the government that the failed went out to the international press and Philippine radio election would bring "untold misery and turmoil to our coun­ throughout the next 24 hours, with less than .03% of the vote try for some time to come." counted. The next day, nearly 1 million people gathered on the As of May 16, one candidate of the slate for the opposing Edsa highway in front of the military's Camp Aguinaldo and Grand Alliance for Democracy had made it onto the lists. Camp Crame-scene of the mass "people's power" protests Seven other GAD candidates, considered by a consensus of that brought down Ferdinand Marcos in February 1986. The the Philippine media as "shoo-ins" for a seat in the Senate, crowd brought together not only the GAD, but loyalists of did not win. As Liberal Party leader and GAD candidate Eva Marcos's KBL, and also adherents to the left. "There is no Kalaw put it: "I fought Marcos for 17 years, but I have never time for talk," stated Enrile. "We were pushed up against the seen anything like this. " wall. We are not calling for a recount. We are calling for a Answered Benigno: "Cory could no more steal votes new Edsa II Revolution." from the people than Queen Elizabeth could steal money from Even the Washington Post, which on May 12 hailed the her chambermaid." election as Aquino's greatest accomplishment and consoli­ In reality, the election result was the imposition on the dation of her rule, was forced to admit on May 15 that "the Philippines of a dictator who has already sold out the Philip­ opposition's sharp attack on the election's integrity-coming pines to the demands of the InternationalMonetary Fund and before even 112 of 1 % of the votes had been counted­ the creditor banks. In a lurid display of gunboat diplomacy, appeared to suggest that despite her popularity Aquino still theUnited States moved 20,000 U.S. Marines from Okina­ faces formidable obstacles in consolidating her rule." wa, Japan, to Subic Bay, Philippines, and placed all military personnel on alert in case of "trouble in Manila." Incredible fraud The fraud was coordinated by the agencies of the U.S. As EIR warned last week, the fraud was perpetrated with Project Democracy, including the National Republican Insti­ the aid of an internationalpress blackout throughout the cam­ tuteof International Affairs , the National Democratic Insti­ paign against the Grand Alliance. Stated Benigno in answer tute for International Affairs, and the Center for Democracy, to nationwide protests against the failed election: "Even the which sent "observer teams" to the country for the elections. media agrees that the May 11 polls were one of the cleanest All these organizations have hailed the elections as the and most peaceful in our history. " "cleanest in Philippine history." Twelve countries sent ob­ Not the Philipp ine media. On May 14, leading columnist servers to the elections, but only the U.S. embassy has con­ Luis Beltran endorsed the GAD protests, stating that he was gratulated Mrs. Aquino. forced to do so by the "fantastic statistical improbabilities" The election results may have credibility in the United produced in the results so far: States, but not in the Philippines, reports our special corre­ • In Paponga, GAD chairman and Paponga "favorite spondent from Manila. On May 12, the day after the elec­ son" Vice�te Puyat came in #35 for the senate race . tions, 20,000 people gathered at the small plaza outside the • In Cebu, GAD candidate Rene Espina, who has been Manila Cathedral to protest the vote. Even if we are conser- a governor of that province and consistently led the Senate

54 International EIR May 22, 1987 vote in Cebu where he was in the Marcos camp or opposing Now, through gross election fraud, Aquino has turned it, came in #33 in Cebu. the Senate into a rubber-stamp body for her own pro-IMF, • GAD candidate Jose Almendras , who has never lost a pro-bank, pro-corruption policies. If the election is upheld single election in his home city of Davao, came in 25th. and not nullified, the Senate will be rendered 100% impotent Almendras further noted that in his own precinct, he and his by virtue of its members' complicity in the fraud. A new IMF family voted for him, yet the Namfrel vote tally registered 0 dictatorship, far more severe and operating with the backing votes for him. of U.S. Marines, is in power. • In Bicol, Francisco Tatad, an information minister under Marcos who left the administration in protest and has How the fraud was carried out also never lost an election, placed 23rd in his own province. The fraud operation itself also showed the "heavy hand" • Joseph Estrada, the only GAD candidate to make it now operating in the Philippines, behind the saintly smile of into the Senate, placed #17 in his own municipality, even the brainwashed Mrs. Aquino. though he has been a six-term mayor in the city. The fraud was carried out by Jaime Ferrer, the Minister These results are statistically impossible, stated Beltran. of Local Governments. As a long-time known asset of the "Why should this be the firsttime in our history-even during U. S. Central Intelligence Agency, Ferrer cut his teeth coor­ the Marcos era-that the opposition has been so roundly dinating the fraud in the 1950s on behalf of the CIA that put defeated in such a way?" Raul Magsaysay in the presidency. The local officialsin the Philippines-such as mayors­ Full dictatorship were all summarily appointed in the aftermath of the Febru­ The GAD ticket was minimally expected to come in with ary 1986 revolution by Malacanang Palace, replacing the 8 seats out of the 24 in the Senate, given the known vote­ duly elected officialsthat had served under Marcos. A month getting power of many of its candidates, although the GAD before the elections, Ferrer announced that any officialswho itself projected a 40-50% GAD vote. One week before the did not campaign for the Aquino ticket would be dismissed. elections , the U.S. embassy projected 4-5 seats for the GAD As projected by the new constitution, local elections were to in the elections. This would have constituted "credible" fraud have been held on August 24, in which the appointed officials in the election results. Why the near-total shutout of the would have to stand for election. Given the hatred for these opposition? Why the incredible fraud? appointees throughout the country, many would be expected The answer is the necessity for President Aquino and the to lose. A week before the elections, Ferrer announced that coterie of cronies and leftists around her to retain the capacity the August 24 elections were "indefinitely postponed." As to exert dictatorial power over governmentpol icy, especially late as May 15, Ferrer announced that any local official who economic policy. did not get out the vote for Cory would be relieved of his The international media projection of an "issueless cam­ post. Large sums of money "from outside agencies" also were paign" and a campaign of personalities, with Aquino on one passed into the hands of the local officials. side and Marcos loyalists on the other, was a fabrication. On May 11, the ballot boxes throughout the countrywere GAD chairman Vicente Puyat led a campaign against the passed from the precincts-numbering 200 voters or less­ International Monetary Fund and the sell-out debt resched­ to the local officialswhen the official tally sheets for counting uling agreement of Finance Minister Jaime Ongpin. Not only did not arrive at the precincts due to a national "printing did the country's leading press come behind him, but even delay." Ferrer's appointed stooges are now sitting on the Aquino slate candidates fo und it impossible to defe nd Ongpin vote. No votes have been passed as yet to Comelec, the op enly in electoral debate. Former Aquino Resources Min­ governmentelection commission for counting. ister Jaime Merceda, in a televised debate with Puyat May 8, The "clean sweep" for Aquino will not solve her prob­ said he had protested Ongpin' s deals while he was in the lems. The absentee military and government votes that have Aquino cabinet. been counted show a 100% victory for the GAD in the first As the Los Angeles Times pointed out on May 9, the new 12 Senate seats, with Enrile leading the count. In Manila, constitution gives the Senate a strong hand in policy-making. Filipinos are in a state of shock and bewilderment over the The presence of only 4-5 opposition members in the Senate shut -out of the opposition. would have turnedthe Senate into an independent institution The stakes for the Philippines are very high. Unless the in its own right. However, under that condition, it is likely Aquino-IMF policyis exchanged for the program of indepen­ that the protest against the IMF coming from the GAD sena­ dent national recovery put forward by the GAD, there is no tors would have split the ranks of Aquino's own people, hope for the Philippines to stave off the mounting insurgency producing a constitutional crisis in short order. Behind the of the New People's Army, which continues to thrive off GAD is the overwhelming sentiment in the country against destitution. Aquino's wanton flouting of the democratic pro­ the IMF-the cry that brought down Marcos was ','Down cess has now brought the Philippines a giant step closer to with the U. S.- IMF dictatorship. " all-out civil war.

EIR May 22, 1987 International 55 national's ally, fonner Prime Minister Manuel Ulloa, de­ Peru manded Garciaget back to "diaJogue" with the International Monetary Fund, and imposea corporatist "social pact,"join­ ing the State, labor, and capital behind a new austerity pro­ gram. Garcia has resisted demands to match the bari>arism of the terroristswith a bloodbath,instead turningto theCatholic Church to help mobilize against panic and pessimism. Two ,days afterthe blackout, Garcia declared a national half-day Moscow orders civil holiday, to celebratethe 25th anniversaryof thecanonization of Lima's first black saint, St. Martin de Porras . Thousands war of Peruvians, most from the poor barrios surrounding Lima against Garcia wherethe terrorists recruit,joined the President and members of the cabinet and military, in an outdoor mass in Lima's by Gretchen Small Plazade Armas officiated by Juan Cardinal Landazun. The Cardinal invoked S1. Martin de Porras-famed for having Jorgedel Prado, secretary general of theMoscow-allied Pe­ gottena cat, a dog, and a mouse to eat fromthe same plate­ ruvian Communist Party, announced on May 8 that the CP as the image of reconciliation needed today . The Cardinal has begun preparations for civil waragainst the government called uponPeruvians to join the Church in assuring thatthey of Alan Garcia, and initiated a "dialogue" with the terrorist and the Fatherland advance together, ending poverty and Tupac Amaru Revolutionary Movement (MRTA), to coor­ violence. Ourpeople must be �ided by the word of Christ, dinate"mass actions" with "armed struggle." DelPrado told not foreign ideologies, full of bate and harm, the Cardinal the CP's daily, La Voz, on May 8, "As things now stand, if urged. no politicalagree ments are reached . . . everythingappears to be heading towards civil war. Furthermore, if a "fascist CP joins Shining Path, MRTA regime is established, it will be the detonator for war. We Moscow's Communist Party weighed in decisively on have to be prepared for everything.... Reformist recipes the side of those seeking to create enough chaos, to cover a have failed." DelPrado specified that if the government tries coup or an assassination against PresidentGarcia . The shift to impose a state ofsiege , or even announces a new plan in by the Communist Party to outright war on the government "agreement"with the Armed Forces on tougher anti-terrorist is no local decision. Except for the panic resulting from the measures,that will beconsidered the sign of "a fasciststate ," terroristwar, Garciastill enjoys enormous supportas a Pres­ to becombatted by civil war. ident who has charted apath of morality and growth which Del Prado's declaration comes as terrorist warfare has other Western nations must, sooner or later, recognize as in reached unprecedented levels. Since May 4, when terrorists their own strategic interest. Garcia is still an obstacle to bombed 14 main electrical towers, blacking out the capital Moscow's efforts to tumthe collapseof the Westernfinancial for four hoursaDd some provinces as long asthree days, there system into an East-Westconflict, along the lines mouthed have been: attacks on three factories (burning one almost by Fidel Castro. entirely), bombings in a dozen-plus bank branches, assassi­ The Communist Party began to mobilize its base behind nationsof three heads of government regionaldevelopment the new phase of confrontation. preparatory toits National programs (two in Huancayo), the explosion of a car bomb Congress, scheduledfor late May. The May 8-9 meeting of 100 meters fromthe National Palace, and the dynamiting of the CP's regional organization in Huancayo, Junin, ended the ministries of economics and of energy and mines. On with agreement to prepare "to use revolutionary insurgence May 13, terrorists "seeded"Lima with a kind of bomb acti­ when the case is required," plans to "dialogue" with the vated by touch or a system of remote control said to be used MRTA, and the decision by the CP, a leading force in the by theSpanish terrorist band , ETA, but previouslynot known country'ssecond-largest political coalition, United Left, to in Lima. break: offall cooperation withtbe Garcia government. "Not "Right-wing" forces blamethe terror on Garcia's refusal even tactical" agreements can be allowed, La Voz reported to crawl back to the International Monetary Fund, and de­ theregional CP had demanded. mand the military impose a state of siege. PopularChri stian "Dialogue" withthe ,hasMRTA already become a mon­ Party leaderMario Polar U gartechethreatened that Garcia is ologue. On May 13, La Voz pUblished a two-page "inter­ making the same mistakes as Argentina's Juan Peron, and view" with the MRTA's "political prisoners' committee" in Chile's Salvador Allende-both overthrown by the mili­ Lima's Lurigancho prison. "War will continue," in Peru, tary-during a heated debate on economic policy in Peru's unless the government declares a general amnesty forall Congress onMay 13. In the samedebate, theSocialist Inter- imprisonedterrorists, stops all paymentson thefo reigndebt,

56 International EIR May 22, 1987 and "demilitarizes" the country, the MRTA commanders subversive offensive which will last until the month of July raved . "We cannot say if civil war is imminent ...but . . . will come to its climax in the middle of the month of everything indicates that we are marching towards it. . . . June . . . with audacious acts of sabotage and resonant as The people should prepare themselves for confrontation, well as terrifying political assassinations, with which Shining strengthen their organizations, and keep [Garcia's party] Path will try to 'commemorate' the June 19, 1986 massacre APRA from dismantling the popular movement." of the prisoners accused of subversion. . . . In those days, Immediate CP efforts center on plans for a general strike according to a secret source, they have prepared with months against the government, organized by the CP-controlled Gen­ of planning, the assassination of an important political leader eral Confederation of Peruvian Workers (CGTP). The strike whose name, of course, they have not wished to give us." was called for May 19-the day after Shining Path has an­ nounced it plans to celebrate the seventh anniversary of its Moscow's orders "Initiation of Armed Struggle" with bombings and killings, When Garcia came into office in July 1985, the CP la­ and four days after apossible national police strike, for which beled him a "national reformist," but avoided public criti­ Shining Path's newspaper, El Diario, has been organizing. cism, because of Garcia's great popUlarity throughout the CP protestations that any connection between Shining Path's continent. America Latina, the magazine published by the terror anniversary and the CP's choice ofdate for the national Soviet Academy of Sciences' Latin American Institute, sig­ strike is "purely coincidental" -the pathetic disclaimer is­ naled the coming shiftin its policy toward the Garcia govern­ sued by CP labor leader Gustavo Espinoza on May 13-did ment, in October 1986, when the Soviet institute broke a year not stop El Diario from issuing a front-page statement of of silence on Peru , with an issue containing nine articles support for the strike on May 14. analyzing its situation. CP leaders emphasize that the strike is political, aimed at Criticism of Shining Path , which America Latina admits the government. A laundry list of 56 demands, ranging from matches Cambodia's mass butcher, Pol Pot, in "irrationality, wage increases, to a general amnesty for those charged with barbarous methods and total violence," must be limited, Lat­ terrorism, and a lifting of the state of emergency, has been in America specialist Tatiana Vorozheikina ordered, be­ drawn up. APRA Secretary General Luis Negreiros charged cause, like the Khmer Rouge, Shining Path was born "of the that, "more than a platform for a strike, these demands are a genuine anger and authentic suffering of the people." The program for government." gloves were taken off on Garcia himself, accused of attempt­ Claims by CP leaders that the strike will pull 2 million ing to "divide the working class . . . and popular movement," peopleout of work, areconsiderably exaggerated. Although and maintaining a "flexibleattitude" to Shining Path. the pro-International Monetary Fund policy imposed on the The United Left must stay independent of the govern­ democratic trade unions by the America Institute for Free ment, the Soviet ideologues stressed, in order to remain "a Labor Development (AIFLD) over the past 10 years drove strategic alliance . . . destined to become an alternativegov­ the majority of the country's labor unions into the hands of ernmentand power." the CGTP, the percentage of Peru's workforce which is un­ In March 1987, America Latina admitted that its goal is ionized is relatively small. A mobilization against the strike the finalelimination ofWestern civili zation in Peru, this time has begun by APRA organizers, leading members of the in a purported "cultural" review of the work of Peruvian Catholic Church, and leaders of the United Left coalition indigenist-terrorist ideologue, Jose Maria Arguedas. The who continue to support the Garcia government, putting na­ novels of Arguedas demonstrate how "prolonged resistance tional interest over "ideology. " of the Indians" can bring about "the possible destruction of By hooking the strike onto Shining Path's planned terror the political and social despotism of the . . . mestizo," Soviet wave, CP leaders hope to gain the appearance of greater specialist Ivan Orzhitskii wrote. "According to this writer's support for their campaign against the government. Several criteria, the autochthonous traditions must serve as the basis of Peru's media have aided the CP in this campaign. "A city for unity, and it is only these which can help [build] resistance without electricity-the blackout of last Saturday could have to inhuman W e�ternciviliza tion. " been a test run-which at the same time could be leftwithout The description matches Shining Path's description of its gas and without drinking water, is a matter to be considered," self-appointed war on Western civilization in the name of speculated Caretas in its May 11 issue. "It's not that Shining "defending the Indian culture." America Latina takes care to Path would join the strike . . . but that it would contribute to claim Arguedas as their own. Arguedas worked with the the instability of the regime. With this perspective, many original leaders of the 1960s guerrilla movements in the Pe­ people who in other opportunities would not participate in ruviancountr yside, Orzhitskii notes; and his coffinwas draped the strike, would prefer to stay at home to avoid risks." with the flags of Cuba and Vietnam, as well as Peru when he Equis X, a Lima weekly known for its accurate "predic­ died. His first wife, Cecilia Bustamante, was a Communist tions" of Shining Path's next actions, outlined a scenario of Party member, who introduced Arguedas to the CP, "which warfare lasting into July, in its May 11 issue. "The great influencedin considerable measure his world outlook."

EIR May 22, 1987 International 57 Andean Report by Val erie Rush

Venezuelan 'days of rage' sectors of tQe country to urban centers Economic crisis and a leadership vacuum have turned the like Caracas . One of the more fright­ country increasingly toward violence and terrorism . ening signs' of the crisis came in the form of an April 11 press report that Venezuela' $ laboratories had run out of insulin aM were unable to acquire W hat began as a series of student shredding of its traditional financial more for laqk of import financing. riots in response to an early-April de­ "cushion" due to the oil price collapse One year ago, U.S. Treasury of­ cision by the Jaime Lusinchi govern­ and the allocation of nearly 50% of its ficialTim McNamar had told the press ment to hike the cost of public trans­ export earnings to service its foreign that if the debtornations failed to meet portation, has become a serious de­ debt, the Lusinchi governmenthas de­ their obligaQ,ons, !bern-America could stabilization of this usually calm An­ creed a number of highly unpopular experience . sudden shortage of insu­ dean nation, with frightening impli­ austerity dictates, such as the 50- 100% lin. A few months later, the Eli Lilly cations for the rest of the region. transport rate increase, which trig­ company, one of the few international April and May have seen a virtual gered the riots, and a wave of new insulin producers, announced it was replay of the 1968 "days of rage" in price hikes. shutting down its officesin Argentina. France, with tens of thousands of stu­ The government has bent over Under cover of the growing wave dents rampaging through the streets of backward to please the international of anti-austerity outbursts has come a more than a dozen Venezuelan cities, banking community, lifting restric­ resurgence of professional terrorism, looting stores, stoning policemen, tions on foreign investment and other courtesy of the networks put in place burning police cars, kidnapping bus "free exchange" measures that have by Nazi-Communist terrorist Stefano drivers, etc . At least one student has facilitated the growth of Venezuela as Delle Chiaie, currently held by au­ been killed, and scores seriously a drug-money laundering center. The thorities in Italy, and agents of Libya 's wounded in the clashes. The bus driv­ government's avid defense of creditor Muammar ,Qaddafi . When Delle ers' federation is threatening to strike rights, over those of the national inter­ Chiaie was seized in April, captured nationwide, and riots continue to es­ est, is creating a storm of reaction documents revealed a potential terror calate, in number and violence. among Venezuelans who see Alan network fin�ced by Italian and Lib­ The Lusinchi governmenthas been Garcia's Peru experiencing unprece­ yan commereialinter ests. Venezuelan forced to indefinitely postpone a dented rates of economic growth while newspapers have named the powerful planned May visit to Venezuela by the threatened bankers' "reprisals" DiMase brothers , one of whom is the Ronald Reagan, out of fear that the against that Andean neighbor have yet ambassador to Venezuela of the Order U.S. President's appearance would to surface. of Malta, as among those financiers. only aggravate politi,cal tensions. Yet, with all its propitiation of Venezuelan press of April 1 re­ The government has charged creditors, Venezuela continues to get ported that the police are pursuing in­ "professional terrorists" with being dangled, along with the rest of Ibero­ vestigations' into the possibility that behind the student protests, and has America. Bankers' mouthpiece Paul the student riots are linked to Delle already conducted several university Volcker, headof the U.S. Federal Re­ Chiaie. Several of the arrested stu­ raids and made hundreds of arrests. serve, returned from a "private" two­ dents named Delle Chiaie as the intel­ While there is evidence that trained day visit to Venezuela to inform the lectual cluthQrof the riots. That Ven­ provocateurs are in fact infiltratingthe press: "In the future, a regular finan­ ezuela has apparently become a nest­ student protests, the reality is that a cial flow will be reestablished to Ven­ ing ground fur internationalterrorism dramatic collapse in living standards ezuela." Pressuredto assign dates and is suggested by the early May arrest of has turned normally law-abiding citi­ dollar amounts to his prediction, Jordanian terrorist Mahmoud Atta, zens into very frightened, very angry, Volcker sneered through his cigar, said to be in charge of Western hemi­ and very manipulable ones. "Miracles don't happen in a day." sphere opeflJtions for the Abu Nidal Despite all the public speculation As the country continues to bleed terror network. In his apartment were about how this "stable" country got itself throughdebt service, deadly dis­ discovered precise instructions on the itself into such a fix,one need only ask eases like meningitis and tuberculosis creation of a base of operations in the average Venezuelan. With the have begun to move from rural poor Venezuela .. ,

58 International EIR May 22, 1987 Northern Flank by G6ran Haglund

New underwater activity in Stockholm sources reported findings of traces on Mystical waves, camping Poles, and an East bloc truck were the bed of the lake, coming from a vessel or a heavy diving outfit. Ac­ detected near the king's new residence. cording to a defense spokesman on May 6, the "video films are still being analyzed. We have not yet decided A one-day police and military alert fense Staff Security Service personnel whether the results will be published. was caused on May 5 in Stockholm, cordoned off the beach. Divers placed They might appear in the Command­ as several suspicious events signaled a red buoy in the water, and under­ er-in-Chief's next quarterly report," foreign espionage or spetsnaz activity water video recordings were made issued to report on the submarine in­ in waters near the king's castle. Gov­ twice. cursions. ernment buildings were guarded by Hours later, a witness reported One policeman guarding the cor­ reinforced police units, police patrols seeing a submarine periscope in the doned-off coastal strip told journalists were armed with submachine guns, eastern archipelago of Stockholm. on May 5, "This is probably the most and civilian and military intelligence Uncertain of what was going on, and serious incident in Sweden in recent were buzzing with activity, as the se­ knowing that U.S. Ambassador Gre­ years. But I have been muzzled." A curity establishment grappled to eval­ gory Newell was about to visit Pre­ Navy officer added: "If you think we uate the threat. mier Ingvar Carlsson to officially in­ got a false bite, you're wrong." And a Despite officialsecrecy wraps, the vite him to Washington, police or­ police radio communication from the following events are known. Two po­ dered an alert, including reinforce­ site was overheard, "Call in and say licemen, driving across Nockeby ments at all governmentbuildin gs. On that it is a plus. Say only that." Bridge in western Stockholm at about June 17, 1986, Newell had already It was just a couple of years ago 4.30 a.m., observed some heavy been the target of a failed assassina­ that the king' s residence was relocated waves and whirlpools in the otherwise tion attempt. fromthe old Stockholm City Palace to glassy water of Lake Miilaren, extend­ The five camping Poles and ex­ Drottningholm Castle, on a semi-rural ing westward from Stockholm. The Poles told sApo, whose reputation island west of Stockholm. While the Nockeby Bridge leads from Stock­ hasn't gone unscathed after the Palme official reasons were the island's ab­ holm to the island where the king's murder, identical stories of how they sence of auto exhaust fumes and its residence, Drottningholm Castle, is were merely celebrating the gold med:.. nicer playgrounds for the king's three located. On the beach a few hundred al won by the Swedish ice hockeyteam children, insiders know the activity of meters away, about a kilometer from at the Vienna world championship! mini-submarines in the Stockholm the castle, the policemen observed a Their "celebration" had begun the day harbor, a mere stone's throw away campfire. before, and as they stayed overnight fromthe City Palace, was a more sub­ Arriving at the campfire, the po­ in their tent, cold weather, despite stantial reason. Located on the inland, licemen found a tent, three Polish cit­ plenty of booze, had forced them to lake side of the coastal capital, all izens, and two naturalized Swedes of light a campfire.... waterways to the new residence from Polish extraction. A sixth person had Although some of them were the seaside lead through narrowlocks . been there, but had left the scene. The known in police records for petty Apart from possible targeting of five were arrested, suspected of crimes thefts, they were released for lack of the king, the new incident occurred against the security of th� state, and evidence tying them to whatever went exactly where a highly sensitive tele­ the Security Police (SAPO) took on under the water. Later reports said communications cable passes across charge of the case. police were searching a truck ob­ the bottom of the lake, to the nearby Moments later, police divers ar­ served on the island of the castle, car­ headquarters of the Armed Forces' rived and started to search the water, rying East bloc license plates and a Radio Institute, the center of Swe­ between 7 and 13 meters deep at the "TIR" sign, under which seal trucks den's advanced electronic communi­ location. Still later, Navy divers ar­ can pass national borders without cus­ cations surveillance. A Defense Staff rived, and the search was directed from toms checks. The truck was later spokesman insisted that the divers the East Coast Navy Base at Musko, found, empty, on a nearby island. found the cable to be "wholly un­ east of Stockholm. sApo and De- As the divers' search went on, touched."

EIR May 22, 1987 International 59 International Intelligence

agency TASS chargedthat "old, well-known Bernard Rogers warned on May 13 that the Zepp-LaRouche proposes winds of NATO" are blowing from Bonn. British Labour Party's non-nuclear defense Sovetskaya Rossiya 'science city ' in Germany The Russian daily wrote policies would be "the straw that breaks the that Bonn had "not yet made up its mind camel's back," and would convince the which way to go," but was tending "toward American public that U.S. troops should be Helga Zepp-LaRouche , the chairman of the the old categories of nuclearwa r." The armed pulled out of Europe . Patriots for Germany party , made a proposal forces daily Krasnaya Zvezda charged pol­ SpeaIq.ng in an interview with the BBC, for creation of a "science city" in West Ger­ iticians of the ruling Christian Democratic General Rogers said: "If [the United States] many a centerpiece of her election campaign Union with working for "a united front of sees that one of the key members of NATO in the state of Rhineland-Palatinate. The all enemies of nuclear disarmament in Eu­ is going t� shuck off the burden of nuclear election was held on May 17. rope ," and sabotaging an agreement on the responsib lity it has borne all these years She proposed that the city be named � denuclearization of European defense. . . . that straw will cause the United States "Cusanus City," after Nicolaus of Cusa, the In an interview with the German daily to say 'all'right, that is enough. It is time to great theologian of the 15th century, the Mainzer Allgemeine Zeitung May 9, Albert bring the troops home . '" founder of modem science. Grigoriants, an official of the Supreme So­ laboUr Party foreign affairs spokesman In a ceremony on May 14 nearWittlich, viet, accused "part of the Bonn government Denis Healey boasted on May 12, "I think the valley in the Eifel region where the sci­ coalition" of thinking "in outmoded strateg­ the Russians are praying for a Labour vic­ ence city is tobe built, Mrs.LaRouche broke ic categories." He singled out Franz-Josef tory . I thiJlk they would much prefer a La­ the ground with a shovel and erected a sign Strauss, chairman of the Christian Social bour government." Healey, who was in that reads , "Here Stands Cusanus City . " She Union party in Bavaria, for opposing Gor­ Moscow for a visit, met with Soviet foreign presented to the assembled supporters the bachov's proposals. Strauss and his back­ policy czlir Anatoli Dobrynin, head of the first draft of a city plan, worked out by an ers, he said, "want a joint European nuclear Central Committee's International Depart­ architect. strike force ....these politicians want to ment, after which Healey claimed he had In a public meeting in Wittlich later, she give the Federal Republic the status of a received the Kremlin's authority to say that called for a competition of architects and nuclear power." the U .S.S�R. did not want Margaret Thatch­ designers . "I call upon architects' creativity These absurd allegations are intended to er to stay in power. 'The idea that they would to build a new city from scratch, which must activate the West German anti-nuclear prefer a Tory Government, I think, is the not be just a collection of elements or build­ movement against the govemment-a threat most utter buncombe and they authorized ing complexes, but one unit. Since Cusa is which must be taken seriously, in view of me to say so," he told reporters . a founding father of the great Renaissance, past terrorist actions by the Soviet-backed Healey, a former Communist Party ac­ designs will have to follow the principles of underground. Siemens manager KurtBeck­ tivist, alSQ discussed "conventional force re­ city-building in Florence at least." urts was killed by terrorists on the basis of duction" with Soviet Foreign Minister Ed­ The same day, the Patriots had placed the false chargethat he worked for "NATO's uard Shevardnadze . an advertisement in the newspaper Trier­ plans for nuclear assault on the Warsaw ischer Volksfreund, with the text: "Wanted: Pact." 72,000 engineers , 100,000 construction workers . . . . An ad like this one will ap­ Libya and Iran stir pear in your newspaper, if Cusanus City is up more trouble built, as planned by the Patriots for Ger­ The British elections: many. A parliamentary group of the Patriots New destabilization efforts by agents of Ay­ will make sure , that this new science city Defense issue is key atollah Khomeini of Iran and Muammar will be built. Vote Patriots for Germany !" British Prime Minister Margaret Thatcher Qaddafi of Libya are drawing angry re­ announcedon May II that national elections sponses from several Third World nations . Soviets blastBonn 's would take place on June 11, and that she During the second week of May, the was hoping not only to win a third term, but government of Egypt ordered two Iranian waffling on arms policy was also hoping to run for a fourth time in diplomats to leave the country, and closed the future , thereby surpassing Prime Min­ their office in Cairo after uncoveringan ex­ The Soviet media is denouncing the "inde­ ister Gladstone's record tenure . tremist Muslim group funded by Teheran . cision" of the West German governmenton As the election campaign heats up, the The foreign ministry cited "non-diplomatic General Secretary Gorbachov' s "zero-op­ issue of NATO defense is at the center of activities" in its expulsion order. tion" arms offer. In a May 8 report, the news attention. NATO SupremeCo mmander Gen. On May 13, the government of Kenya

60 International EIR May 22, 1987 Briefly

• OVER 150 ANTI-WAR groups denounced Libya for carrying out military • Houses of prostitution and homosex­ were represented at a meeting in training in Nairobi of disaffected Kenyans, ual bars and saunas are to be placed under Moscow May 13. Former British La­ with an apparent view to destabilizing the surveillance and can be closed if deemed a bour Party chairman Frank Lalone government. Omar Fakih, African affairs health threat. said that the movement would con­ chief of the foreign ministry, referred to a • Clients of prostitutes and homosexual centrate on pushing through Gorba­ report published in the Nairobi newspaper bars can be required to identify themselves chov's proposals to reduce medium­ The Standard, that "more than 200runaway to the police. and short-range nuclear missiles and Kenyans were receiving such training in • Foreigners who are infected will not stop "the militarization of space . " Libya." The report said the Kenyans went be allowed to stay or to enter. to Libya after first receiving travel docu­ • 'THE SHORTER THE ments in Uganda. In April, Kenya expelled RANGE, the deader the Germans . fiveLibyan diplomats. We can't go along with that policy,' Meanwhile, a diplomatic uproar has ar­ Bronfm an charged with West German government disarma­ isen in the Pacific, over charges by Austra­ aiding Soviet strategy mentadviser Volker Ruehe told Brit­ lian Prime Minister Bob Hawke, that Libya ish Foreign Secretary Sir Geoffrey is seeking to gain a foothold in Vanuatu, French journalist Annie Kriegel denounced Howe, during a discussion on West including training troops there , for deploy­ World Jewish Congress head Edgar Bronf­ German objections to the Soviet pro­ ment againstcountries in the region. On May man for aiding and abetting the Soviet cam­ posalto removemissiles abovea range 12, Vanuatu Prime Minister Walter Lini an­ paign to decouple Europe from the United of 300 kilometers from Europe . nounced a ban on military contact with Aus­ States, in a May 13 article in the daily Le tralia, and accused Australian agents of cov­ Figaro . Bronfman's prominent role in at­ • ANATOLY DOBRYNIN ad­ ertly interfering in Vanuatu. tacking Austrian President Kurt Waldheim, dressed a Moscow conference of The government of New Zealand de­ she said, is helping "to destabilize a democ­ Communist and "democratic" edi­ fended Qaddafi on May 11, saying that Trip­ racy situated at the frontier of the Soviet tors, to explain Gorbachov's "new oli has a legitimate interest in the South Pa­ empire." Waldheim has been declaredp er­ thinking," and to propose that the cific. The real problem in the South Pacific sona non grata in the United States, on the West adopt a policy of "non-aggres­ is France's control of New Caledonia, Prime totally unproven charge that he is a Nazi war sive defense ." Minister David Lange said. criminal. Kriegel, a spokesman for the French • THE PUGWASH CONFER­ Jewish community, wrote: ENCE on "Security in Europe" will Bavaria cracks down " ...The other great success ofM. Gor­ next meet in Poland, May 25-29. bachov has been to gain himself an unex­ on sp read of AIDS pected ally . . . the World Jewish Con­ • AN INTERNATIONAL con­ gress .... gress of "resistance fighters" opened The German state of Bavaria has adopted "The president of the WJC, M. Bronf­ in Athens on May 11, cosponsored legislation which will enforce the following man, believes, with a mixture of naivete and by the Soviet-backed German "anti­ measures to curb the AIDS epidemic , effec­ very American arrogance, to be able to Nazi" group VVN. Participants in­ tive May 12: transfer into the domain of international re­ cluded Soviet war veterans, Nazi • Anyone who wants to work in a state lations, the type of commercial aggressivity death camp inmates, and communist job (for example , as a teacher) has to be that succeeded so well for him in the whis­ resistancefighters . The agenda: "signs tested before being hired. key business. He has, besides, with the Wal­ of neo-fascism" in the European • Both male and female prostitutes have dheim affair, demonstrated how one can countries. to be tested every four months. If they are succeed, in the midst of the disarray in which infected, they are forbidden to continue with the American administration finds itself, in • MR. AND MRS. GORBA­ their "job." making the U.S. swallow a process which, CHOV received the Russian-Indian • Anyone suspected of having AIDS without any proof, still risks destabilizing a artistSvyatoslav Roerich on May 15, must be tested; police will use force if nec­ democracy situated at the frontier of the So­ son of the cultist painter Nikolai essary. viet empire." Roerich, and a member of Raisa Gor­ • People who are infected, but do not Kriegel further criticized the WJC's bachova's Soviet Cultural Founda­ follow the restrictions placed on them by the claim to be the representative of all Jews tion. health office, will be quarantined. internationally.

EIR May 22, 1987 International 61 �ITillNational

Will 'Project Democrqcy' destroy the Constitution?

by Kathleen Klenetsky

The fundamental issue at stake in the so-called Irangate scan­ triedto help those Nicaraguans fighting and dying to reclaim dal , is the survival of the U.S. Constitution, and with it, the a democratic revolution that has been stolen from them by American republic. Events during the month of May made it the Communists." If Walsh "should go on bringing indict­ inescapably clear that, if the invisible government, which has ments for actions that were neither clearly illegal nor custom­ grossly perverted American foreign policy since the end of arily subject to criminal penalti�s, there will be no escaping World War II through such bizarre and suicidal ventures as the conclusion that the real 'crime' for which he wants to put the Iran-Contra policy, is not immediately brought to heel, patriotic American citizens in jail is helping the Contras in the United States will cease to exist as a governmentby law. their struggle to liberate Nicaragua from Communist domi­ Since the beginning of May, one Supreme Court justice, nation." Thurgood Marshall, publicly described the Constitution as "defective"; the White House Chief of Staff called for major A Russian 'constitution' changes in the Constitution; and Robert McFarlane, a key Elsewhere in this issue, EIR founder Lyndon LaRouche, Irangate figure and former national security adviser, did the notes that Moscow intends to impose a parliamentary system same. on the United States to ensure its status as a s'atrapy in Rus­ The Project Democracy apparatus is attempting to sell its sia's new world empire. Under thisarrange ment, LaRouche destruction of the Constitution to the American population writes, "Moscow could quickly and quietly dump any head on the grounds that "patriotism" is incompatible with the law. of government who displeased the imperial overlords, with­ "Right-wing Social Democrats" Ben Wattenberg and Nor­ out having to upset the system of self-governmentcharitably man Podhoretz , in nationally syndicated columns, both de­ allowed to us." fended the parallel government-the "patriots"-against In fact, the growth of the parallel government has coin­ those who dare to defend governmentby law. In his May 14 cided with a significant shift by the United States in the column, Wattenberg called the Irangate hearings a battle direction of a de facto parliamentary system, especially in between the "self-identified constitutionalists," such as in­ the last several years. The lines between the duties and obli­ dependent prosecutor Lawrence Walsh, who are attempting gations of the executive and legislative branches have been to close down the secret government, and the "self-perceived increasingly blurred, through such intrusions by Congress as patriots"-the Richard Secords, Ollie Norths, et al., who the War Powers Act and the Boland amendment. Currently, broke the law to aid the Contras because they were "patriots. " Congress is attempting to arrogateto itself the right to make Podhoretz expressed the same view in his May 12 col­ and unmake treaties, exemplifiedby its insistence that Pres­ umn. Leaping to the defense of his son-in-law , State Depart­ ident Reagan adhere to SALT II and maintain the so-called ment honcho Elliott Abrams, now on the chopping block for "narrow" interpretation of the ABM Treaty. his role in the Iran-Contra scheme, Podhoretz bitterly at­ The central figure involved in theinvisible government's tacked prosecutor Walsh, who "seems bent on establishing attack on the Constitution is Lloyd Cutler, a leading member the criminality of a good many of the Americans who have of the Trilateral Commission and former counsel to Jimmy

62 National EIR May 22, 1987 Carter during the period in which the Carter administration the congressional Irangate committes to deliver an I I-minute brought Khomeini to power in Iran, and then struck a series lecture on what he thinks is wrong with the American gov­ of secret agreements to send arms to the Ayatollah's anti­ ernment, echoing the same themes sounded by Baker and Westernregime . Cutler in the process. Cutler firstpublicly staked out his opposition to the Con­ Charging that "the relationship between this administra­ stitution in a Fall 1980 Foreign Affairs article, in which he tion and the Congress has been a very stormy one" and has argued that the United States must adopt a parliamentary been "very unsuccessful" in forging cooperation on foreign system on the grounds that the constitutional form of govern­ policy, McFarlane then claimed, "The reasons that this has ment, with its commitment to constituency representation, not been possibleprimarily lie in the Executive Branch. . . ." was incapable of imposing either economic austerity or sell­ We must move, he said, to a situation in which the "Congress ing out American strategic interests. truly leads and represents power," and "the President respects Cutler subsequently formed the Committee on the Con­ his obligation to consult with that leadership and beyond." stitutional System, a group of 50-plus "insiders" which is McFarlane proposed several measures to achieve this, in­ lobbying up a storm on behalf of a parliamentary govern­ cluding a four-year term for the House, and an eight-year ment. In January, the CCS issued its formal recommenda­ term for theSenate , because this "would make them far more tions, all of which would eliminate the separation of powers interested in the President's welfare and his policies." and give increasingly merged political parties dictatorial He also made a bid for public financingof congressional powers. campaigns on the grounds that this would ensure the election The CCS ' s proposalsinclude extending the terms of House of people who are totally committed to their respective par­ members to four years and making them co-terminous with ty's official policies. "I think that unless reform of campaign that of the President; allowing members of Congress to serve finance laws gives the leadership of the Congress some con­ in the cabinet; establishing public financing of congressional trol over the purse-strings that affect people's re-election, campaigns, with the monies to be channelled through the you're going to have this disintegration of leadership on the parties, etc . Hill here." White House Chief of StaffHoward Baker gave an inter­ To make his message absolutely clear, McFarlane re­ view to James Reston of the New York Times' May 12, in ferreddirectly to the CCS. "But it isn't for me , a person who which he lauded the CCS report, and said he planned to is not a government expert, to comment on precisely what arrange a meeting between Cutler and President Reagan to would improve matters. I refer to the commission that has discuss it. Baker told Reston, ''I'd commend to you Lloyd been in operation for several years to study . . . how these Cutler's piece on reforming the political system." He elabo­ matters might improve our ability to forge foreign policy. " rated: "A four-year term forHouse members, co-terminous with the President, would create an astonishing togetherness The LaRouche case between the House and the President. It is this assault on the foundation of the American repub­ "The President has read the Cutler report," Baker added, lic which lies behind the flagrantlyunconstitutional attack on "and I hope to have him and Cutler talk about it afterthe first Lyndon LaRouche and his associates. As LaRouche ex­ of the year. " plained in the last EIR ("The Soviet role inside Project De­ Cutler described himself as a "long-time friend of Bak­ mocracy"), he is at the center of the factional battle now er's," and reported that, in addition to the four-year House being fought by patriotic elements of the American policy­ term, Baker is also interested in CCS's proposals for amend­ making establishment against the Project Democracy gang, ing the Constitution to provide public financing forcongres­ under the rubric of "Irangate," because he represents the one sional campaigns, and for tightening party control over pres­ figurein the United States willing and able to identify Project idential selection by giving greater weight to elected officials Democracy as the Soviet asset that it is, and to fightit on that at nominating conventions. grounds. Asked if Reagan is amenable to constitutional "reform," For this reason, the Soviets have ordered LaRouche's Cutler replied: "After six years of trying to deal with the elimination, and the Project Democracy apparatus has leaped problems arising from the separation of powers, in the con­ to obey this order. In this context, it is instructive to note that text of a weakened partysyst em, I would certainlyexpect the EIR has just learned that the U.S.A.-Canada Institute, the President to be open" to these and other recommenda­ Russians' premier profiler of America and a key instrument tions ....We need a sober look to see if it needs to be for Soviet attacks against LaRouche, has launched a project changedfor its third century . " on the U.S. Constitution in the context of its bicentennial. Connected with this project are some of the same key Soviet A diatribe from McFarlane lawyers now working with their American counterparts to The day after Baker's interview, former national security declarethose who support the SDI in violation of the Nurem­ adviser Robert McFarlane interrupted his testimony before berg statutes.

EIR May 22, 1987 National 63 Exposures of u. s. Contra policy and PAN set off shock waves in Mexico

by D.E. Pettingell

Finally, the major U . S. news media have decided to expose spectrum of political groups and journalists. The Mexican what EIR has been charging since 1985 and what all Ibero­ Senate met May 12 for four hours to discuss whether to America knows, that the Reagan administration's relations withdraw the PAN's political party status. The decision was with Ibero-America as a whole have been determined by only not to do so for the time being, although the PAN leadership one issue: the Contras. Nations considered "friendly" are was put on notice. those backing or actively supporting the Contras; in contrast, The campaign to get the PAN out of Mexican political the nations on the black list, those opposing the Contra insan­ life did not stop with the Senate decision. Manuel Juarez ity, have been subjected to threats and pressures and have Blancas, head of the PRI-affiliiated Revolutionary Workers even seen their economic aid cut off. and Peasant Federation, called the PAN "traitors" and de­ In a lengthy front -page article May 10, the M iami Herald manded that they be stripped of party status and that those reported on the Reagan administration's "secret campaign" found guilty of treason be sent out of Mexico. The widely of threats and intimidation against five nations. Because of read Pica-Piedra column in La Prensa declared that thePAN 's their leading role in organizing the "Contadora Group" peace constant attempts to instigate ' violence, discredit Mexico process in Central America, Ibero-America's alternative to abroad, and thus promote foreign intervention must be dealt the Contra insanity, Mexico and Panama were particularly with. and viciously targeted for destabilization. The Contadora Group's policy was to promote the economic and political EIR 's record strength of Nicaragua ' s neighbors in Central America, to thus If not all the details in the Miami Herald article, certainly ensure peace and stability in the region-anathema to the the political portrayal of the Reagan administration's de­ "Project Democracy" drive to promote general warfare in the stabilization campaigns has been regularly fe atured in EIR region. since the summer of 1985. In 1986, EIR published the widely The Herald reports that the administration campaign circulated Special Report, "White Paper on the Panama cri­ against Mexico and Panama included "an effort to force from sis, Who's out to destabilize the U.S. ally, and why," in officethe head of the Panamanian defense forces, Gen. Man­ which we exposed what the M ;ami Herald now confirms 10 uel Noriega. When Noriega did not respond to a direct request months later. from then-national security adviser Vice-Adm. John Poin­ In April of this year, EIR's Special Report, "Project De­ dexter that he resign, the United States cut offaid to Panama, mocracy: the 'parallel government' behind the Iran-Contra thenleaked damaging classified documents aboutNoriega to affair," used Mexico and Panama as "case studies" of the the New York Times and NBC News." Reagan administration policy. 'EIR identified the New York Mexico, the United States' closest neighbor, was sub­ Times campaign against General N oreiga as part of Poindex­ jected to similar threats. "The most remarkable U.S. tactic ter's pressures to dump Noriega. "On June 12, 1986, Project against Mexico involved threats to undermine the ruling In­ Democracy escalated, with one of the dirtiest operations to stitutional Revolutionary Party (PRl) by throwing U.S. sup­ come out of the NSC's headquarters in the basement of the port to the PAN (National Action Party)." The Herald reports White House. Under the bylint of Seymour Hersh, the New on secret meetings held in the summer of 1986 between York Times ran a full-page slander of General Noriega, call­ indicted Contra fundraiser Carl "Spitz" Channell and PAN ing him everything fromdrug-runner to a Cuban agent, mon­ representative Ricardo Villa Escalera. Channell "told PAN ey-launderer, and murderer.. ... 'U.S. officials,' said Hersh, followers that Reagan would help them fight PRl if PAN consider Noriega 'the Panamanian connection to crime and helpedthe Contras," reports the Herald. want him out.' ...Most 'officials' remained anonymous, The Herald articles have created a political earthquake in except Project Democracy's Admiral Poindexter, who was Mexico. Demands for banning the PAN or bringing its lead­ cited as a leading source of the slander against Noriega," EIR ers to trial for- treason have been put forward by a broad wrote .

64 National EIR May 22, 1987 In the case of Mexico, the report exposed the PAN 's Villa Escalera meeting, Channell met with President Reagan frequent trips to Washington sponsored by Col. Oliver North's "to discuss Nicaragua and ...brought up the issue of Mex­ network. Over a year before the Iran-Contra mess erupted, ico." Reagan stated that he was very "upset" and "disappoint­ in the summer of 1985, the "private" network of right-wing ed" that President de la Madrid had not taken a "stronger Contra fanatics was first identified as the PAN 's U.S. con­ position in supporting democracy in Nicaragua." trollers in the book, EL PAN, eL Partido de La Traicion (The The connection to the Contras themselves so far has only PAN, the Partyof Treason, published in English as The PAN, been made public by EIR . Villa Escalera confirmed May 12 Moscow's Terrorists in Mexico). EIR helped with the re­ that he had had discussions with Jaime Morales Carazo, the search on the book. Nicaraguan Contra whose brother, Jose Morales Carazo, is Not surprisingly then, the PAN 's first reaction to the currently Contra chief Adolfo Calero's lawyer. As Calero's Herald expose was to denounce EIR 's fo under, Lyndon lawyer, Jose Morales Carazo will soon be called to testify LaRouche, and the Mexican Labor Party , the independent before independent counsel Lawrence Walsh's Iran-Contra Mexican organization that published The Party of Treason . investigation. In the summer of 1986, a secret meeting took place in 'We are the Contras' Miami, where Morales Carazo proposed to PAN representa­ The PAN leaders' defense has only shed more light on tives that they form a "joint commando unit" of Nicaraguan their treason. Ricardo Villa Escalera, a PAN official and Contras and "Mexican Contras," that is, the PAN , to over­ former PAN candidate from the state of Puebla, told the throw both the Mexican and Nicaraguan governments. They Mexican press May 13 that he had met with indicted fundrais­ were confident that the United States would support the en­ er Channell not only once, but several times. Villa Escalera deavor. stated that he had told Channell, "We are the contras in Morales Carazo, Villa Escalera, Corella, and Gurza are Mexico," denying reports, confirmed to the Miami HeraLd all members of the PAN business front, Coparmex, which by Channel's co-workers , that he had agreed to look for ways receives funding from the National Endowment for Democ­ to raise $210,000 requested by Channell for the Contra fund. racy through the Center for International PrivateEnterpri se. Villa Escalera added that he had not been the only PAN The NED is the public arm of North's clandestine "Project official to meet "several times" with Channell. Alfredo Cor­ Democracy" network. ella and Alejandro Gurza, two PAN businessmen, held meet­ Villa Escalera is also in touch with the Heritage Founda­ ings in Washington with Channell as well. Corella lead a tion and the Roosevelt Center for American Studies. The delegation of about 40 Mexican-American supporters of the Mexican specialist at the Washington-based Roosevelt Cen­ PAN from Chicago and PAN members fromChihuahua who ter is Richard Nuccio, accused in Mexico of being a CIA met with Sen. Jesse Helms Aug. 13, in an extraordinary agent. Nuccio participatedin the meetings with the PAN and Mexico-bashing session on Capitol Hill aimed at embarrass­ Channell, according to reliable sources. ing President Miguel de la Madrid, in Washington at the time With this evidence, why has the Mexican government not for an official visit. given the PAN the treatment it deserves? The answer lies in Alejandro Gurza, on the other hand, is well connected to Mexican Interior Minister Manuel Bartlet' s role in promoting the Rev. Sun Myung Moon's cult, a key piece in the Contra a Project Democracy-style political reform in Mexico based support apparatus. In March of 1986, Gurza participated in a on a "bipartisan system" in which the PAN is to play "con­ "roundtable" discussion to promote the PAN sponsored by servative" to the PRI's "leftist"line . Moon's International Security Council in San Diego. Other The Party of Treason book began to expose the PAN 's participants from the United States included alleged CIA clandestine backers within the Mexican political system, agent Daniel James, Contra fan Gen. (ret.) Gordon Sumner, known in Mexico as the enPANizados. Some of these inside and Mossad agent Joseph Churba. Aside from Gurza, Mex­ the Mexican government will start to come out as the Iran­ ico's traitors were represented by Jose Angel Conchello, Contra investigation evolves. Leading the list is the press former PAN chairman, and Luis Pazos, the "Mexican Milton secretary to the presidency, Manuel Alonso. In October 1985, Friedman." he hired the Washington-based Peter Hannaford and Asso­ ciates to help "improve Mexico's image abroad." The Han­ Meeting with North? naford Company was also hired by Channell's National En­ But the complete picture of what the PAN did and what dowment for the Preservation of Liberty for the same pur­ they plotted in Washington, has still to come out. pose. Jared Cameron, an employee of Hannaford, was Chan­ A report that Villa Escalera and possibly Corella and nell's spokesman during the entire year that Hannaford was Gurza met with North himself, has been neither confirmed representing "Mexico's interest" in Washington. nor denied by sources close to Channell. There is also the If the Mexican governmentlets this opportunityto finish reportthat Villa Escalera met with President Reagan. What off the PAN go by, it will commit a more serious crime the Herald does confirmis that two days before the Channell- against Mexico's future than the PAN's treason.

EIR May 22, 1987 National 65 Elephants & Donkeys by Kathleen Klenetsky

by the seven candidates acknowl­ troller Roland Burris, a top DNC of­ edged by the media to be vying for the ficial and protege of DNC chairman Democratic nomination. Paul Kirk. Although Hart held a command­ Clearly, there's rampaging fear ing lead over his opponents, that de­ among the "backroom boys" that the rived far more from the higher name confluenceof the AIDS crisis, the col­ recognition he enjoyed, and not be­ lapse of the economy, and Moscow's cause of any deeply felt grassroots pre-war moves, will push many peo­ support. ple into the LaRouche camp, espe­ The most ironic aspect of all this cially since · none of the other candi­ poll-taking and punditry, is that the dates has thd slightest idea how to deal Who's on first? one candidate whose name recogni­ with these major threats. It's been quite a spectacle watching tion alone makes him a far more seri­ The Wall Street Journalpublished the various pundits, pollsters, and ous contender than the "seven a telling article May 13, reportingthat commentators tryto figureout who the dwarves," has been carefully (hyster­ AIDS has emerged as the issue of the new Democratic presidential nomi­ ically) omitted from the polls. 1988 campaign (something which nation frontrunner is, now that Gary LaRouche predicted in the fall of 1985) Hart is out of the race. and that every candidate in the race is Black-out on LaRouche Depending on which TV station or now being forced to formulate a posi­ newspaper you tuned into during the That candidate is EIR founder Lyndon tion on the epidemic. But with the ex­ week following Hart's withdrawal, H. LaRouche, who, according to a poll ception of LaRouche, the rest of the you would have learned that: commissioned by Time magazine one candidates either take the homosexual • Jesse Jackson now leads the year ago, had a name recognition fac­ lobby's position that measures such as pack (the Washington Times, News­ tor of 39%. The only person now in universal mandatory testing and quar­ week); the race who ranked higher, was Jack­ antine are a violation of civil rights, or • Massachusetts Gov. Mike Du­ son, while three of the current crop of that the nation cannot afford to spend kakis has taken the lead (the Los An­ "major candidates"-Gephardt, for­ the money necessary to treat AIDS geles Times); mer Arizona governor BruceBabbitt, victims, an� finda cure. • Rep. Richard Gephardt has and Sen. Joe Biden-ranked 14%, Just how intense are the DNC's moved into Hart's top-ranking posi­ 8%, and 6%, respectively. fears of LaRouche, can also be mea­ tion, at least in Iowa (the Baltimore The glaring omission of La­ sured in the recent move by some top Sun); Rouche's name from recent polls is a Democratic powerbrokers to come up • The ultimate winner is not even rather pathetic attempty by his ene­ with a candidate with more stature than in the race yet (former Democratic mies to deny him "credibility." by the present gaggle. National Committee chairman Bob pretending he is not a candidate. No In a May 10 interview on NBC­ Strauss). matter what is being put out for public TV's "Meet the Press," Bob Strauss And that's just a sampling of the consumption, you can bet your bot­ (who, by the way, engineered the set­ widely divergent opinions being ex­ tom dollar that the DNC is keeping a up of Gary Hart), promoted Sen. Sam pressed by the so-called experts. minute-to-minute watch on the grow­ Nunn (D-Ga.) for the nomination. The truth of the matter is that the ing support for LaRouche and his pol­ Calling the race "wide open," real frontrunneris "undecided." In the icies. Strauss said he expected one or two Los Angeles Times poll, for example, Claims that LaRouche is not a se­ new candidates to enter the race-in­ undecided scored 42% , with Dukakis rious candidate are laughable: If that cluding NUDD. the next highest with a measly 12%. were the case, why would the DNC Meantime, New York Gov. Mafia The same holds true for the News­ have passed a resolution at its Santa Cuomo continues to coyly refuse to week poll, which gave Jackson 22%, Fe meeting in late April, vowing to rule out a draft, while at least two Dukakis 11 %-and undecided 37%. deny the Democratic Partylabel to any prominent 'Democratic insiders, Hart's presence in the race had ob­ candidate suspected of supporting George Ball and Felix Rohatyn, are scured this fundamental fact-that the LaRouche's program? The resolution urging Sen. Bill Bradley (D-N.J.) to electorate is not in the least impressed was sponsoredby TIlinois state comp- takethe plunge.

66 National EIR May 22, 1987 Eye on Washington by Nicholas F. Benton

believe that World War III could hap­ A Soviet analyst from Stanford pen, and I paint a grim strategic as­ University, on a fellowship currently sessment for the 1990s." to the Joint Chiefs of Staff at the Pen­ He said the "new Soviet generals tagon, confirmed at a Committee for . . . hope the Alliance will not wake National Security Forum here May 11 up to the potentials of new technolo­ that Ogarkov may have had a "dual­ gies developed by the Strategic De­ hatted role"-namely, that he could fense Initiative program." He called have been coordinating the Western the SOl "an information revolution," theater while also operating as partof and added, "The Soviets fear the po­ the Soviet high command. tentials of this aspect of it more than Dr. Condolezza Rice, responding Ogarkov promotion any particular SOl deployment. So far, to my question on the Berlin crisis and the Soviets have been better at apply­ Ogarkov, this time in front of nation­ frightens Abshire ing these potentials of SOl technolo­ wide C-SPAN TV cameras , was quick Repeated inquiries by this reporter in gies than we have." to affirmthat the Soviets "have a con­ the first10 days after the outbreak of Abshire endorsed outgoing NATO ventional force posture on the borders a new Soviet-inspired Berlin crisis on Supreme Commander Gen. Bernard of Western Europe that is offensive in May Day, found a consistent, deaf­ Rogers, who has been warningagainst nature," and that the Soviets "are now ening "official silence" from all the the dangers of the Reagan administra­ pushing the concept of the 'battlefield corridorsof power in the nation's cap­ tion's "zero-option" proposal for of the 1990s,' that would utilize mi­ ital . withdrawing missiles from Europe. cro-electronics, high-yield conven­ However, a major corollary of the Abshire said of Rogers that he "is will­ tional weapons (with the equivalence crisis, the elevation of Soviet Marshal ing to put NATO's weaknesses on the in power of small-scale nuclearweap­ Nikolai Ogarkov to a newly created top of the table and demand action to ons), and an information processing post of deputy commander-in-chief of correct them. He's been more forth­ revolution. " all Soviet armedfo rces, has sent waves right and honest than any Supreme Dr. Rice was willing to draw out of alarm through the elite policymak­ Commander that NATO has had." the implications of her assertions about ers. The reaction of former U.S. am­ Abshire is currently affiliatedwith Soviet conventional force posture, bassador to NATO, David Abshire, to the Center for Strategic and Interna­ only after I raised the issue. She was my question put to him before a May tional Studies (CSIS), apparently a speaking before a group of ultra-lib­ 8 forum at the Heritage Foundation, center of the alarm over the threat of erals (the Committee for National Se­ was a tip-off. the administration's zero option to de­ curity being organized by the likes of ''There are a number of far-seeing couple the alliance and hand Europe William Colby, Paul Warnke, and . Soviet generals who are focused on over to the Soviet sphere. The CSIS is Richard Barnet), and appeared barely the applications of new technologies also the haunt of Henry Kissinger, who distinguishable in her remarks from for tactical deployments, and who are has become another opponent of the the other speakers, including Soviet reorientingSoviet tactical capabilities zero option. spokesman Sergei Kislyak, until she toward quick movements." He said found there were more than just lib­ that this orientation toward the "blitz­ erals there . krieg"mode of deployment "does not Ogarkov's 'dual-hatted' She subsequently insisted that it is necessarily mean the Soviets intend to not just Soviet conventional force nu­ actually initiate a military action this role conceded merical superiority which poses a way, but they see it as giving them All this fuss over Ogarkov is old news threat to Europe, but the "offensive military leverage against WesternEu­ to readers of EIR , especially those who force posture" of those forces, based rope." read the summer 1985 Sp ecial Report, on a "military doctrine of the primacy However, he cautioned, ''This "Global Showdown," which outlined of the offensive," which is based on mode of deployment significantlyin­ Ogarkov's central role in developing "penetrating so far into NATO before creases thepossibility of war through the "Plan B" for reorganizing the en­ any response could be organized, that miscalculation." Abshire said, "I am tire Soviet economy under a massive NATO's options for response would among those here in Washington who military modernizationprogram . be delinuted and crippled."

EIR May 22, 1987 National 67 Congressional Closeup by Ronald Kokinda

Defense bill stalls over gress into the President's jurisdiction had been referred to several commit­ Levin-Nunn amendment to conduct our nation's foreign af­ tees including Energy and Commerce, Senate Republican backers of the fairs ," including ongoing arms-con­ Judiciary, Armed Services, and Post Strategic Defense Initiative prevented trol negotiations in Geneva, and the Office and Civil Service. "None of consideration of the Defense Author­ President's treaty-making powers. them have been set for hearing by any ization bill with a filibuster on May Senators also objected that the provi­ of the committees," Dannemeyer said. 13. It was the beginning of what is sion for a veto by either house clearly "We are being stonewalled. They do expected to be a months-long struggle violated the Senate's constitutional re­ not want to hold any hearings on these over the interpretation of the Anti­ sponsibility to advise and consent on bills at all." Ballistic Missile Treaty and the extent treaties. of the SDI program. SDI backers are attempting to re­ move an amendment sponsored by Senators Carl Levin (D-Mich.) and House rejects Sam Nunn (D-Ga.) which would re­ AIDS legislation u.s. troop pullouts strict work on the SDI to the so-called blocked in committee The House acted on two amendments narrow interpertation of the ABM Reps. Dan Burton (R-Ind.) and Wil­ to the Defense Authorization bill on Treaty . The Nunn-Levin amendment liam Dannemeyer (R-Calif.) took to May 8, rej ecting proposals to pull U.S. would only allow more advanced test­ the House flooron May 11 to continue troops out of any NATO country or ing or development of SDI systems if to educate their colleagues on the threat South Korea, thus dealing a blow to approved by both House and Senate. of the deadly AIDS virus, and strongl y advocates of U.S. decoupling from our The Defense bill is being held hos­ condemned the leadership of several allies. tage by Nunn who has promised that House committees for refusing to An amendment by Rep. Bill Rich­ the restriction will be included in any schedule hearings on legislation they ardson (D-N.M.) denying the use of defense spending bill. If separated out have introduced. funds for any purpose which would as a bill by itself, Nunn and other op­ "We cannot even get a hearing on result in the reduction of U. S. troop ponents of a more aggressive SDI pro­ these bills because the committee levels in any NATO country below gram fear that the Senate would sus­ chairmen do not agree with our posi­ FY87 levels, was approved by voice tain a presidential veto. Senate Minor­ tion," Burton said. "All I can say is if vote. ity Leader Robert Dole (R-Kan.) and we arecorr ect, then it is criminal what "As far as the allies' not needing 33 other senators have written to Rea­ these people are doing. And if we are the U. S . like they used to , '" Rep. gan promising to sustain a veto. not correct, at the very least it ought Beverly Byron (D-Md.) argued, "Let Ranking Armed Services Com­ to be investigated." me remind my colleagues that our mil­ mittee member John Warner(R-V a.), Burtondevoted a considerable de­ itary is not forward deployed for rea­ condemned the Nunn-Levin provision gree of time to the need to determine sons of charity. Rather, we are for­ as "a unilateral constraint on theUnited whether tranmissionof AIDS was oc­ ward deployed because it is in our own States on a military program which curring in ways other than the as­ best interest to be near the likely site both the United States and the Soviet sumed routes of sexual and blood con­ offuture conflicts. If we pull back, not Union are now pursuing." It "would tact. Burtonoutlined the work of Dr. only will we be sending a terrible po­ impose on the United States a restric­ Mark Whiteside where 50% of the litical signal, we will also be hurting tive interpretation of the ABM Treaty cases of AIDS in Belle Glade, Fla., our military capability to respond in a to which only the United States and had no known cause. "I called Dr. crisis." not the Soviet Union would bebound ." Whiteside," Burton said, "and he said Byron warned: "If we terminate or Warner and other Republicans that he believed indeed that mosqui­ reduce that support-especially at a pointed out the blatant unconstitution­ toes were a contributing factor to the time when we may withdraw inter­ ality ofthe amendment. It "would per­ spread of the virusin Belle Glade." mediate nuclear forces from Eu­ mit an unacceptable intrusion by Con- Dannemeyer noted that his bills rope-we are , indeed, inviting disas-

68 National EIR May 22, 1987 ter." Byron also stated, "I can assure Ways and Means Committee Chair­ Passage of the Bennett amend­ you that the worst possible way to ne­ man Dan Rostenkowski (D-Ill.), and ment followed defeat of several other gotiate conventional anns reductions backed by the Reagan administration, proposed funding levels. An amend­ is by making unilateral concessions." to permanently raise the ceiling to ment by Congressman Heftey (R­ An amendment offered by Repre­ roughly $2.6 trillion, was stronglyre­ Colo.) for- a $4.05 billion level of sentative Mrazek (D-N.Y.) directing jected on a 259 to 162 vote. On April fundingwas defeated by a vote of 129 the DOD to develop a fiveyear plan to 23, MacKay had won a vote to impose to 286. Representative Rowland's (R­ reduce U. S. troop strength in Korea a Gramm-Rudman-like across the Conn.) amendment for a $3.55 billion was also rejected by voice vote. board cut of 21 % in the FY87 supple­ level was rejected by a 207 to 213 The negative-growth defense lev­ mental appropriation on a 263 to 123 vote. el of$289 billion passed by the House, vote. SDI was also constrained by Rep­ however, will hit operations, mainte­ On May 14, the Senate also passed resentative Hertel's (D-Mich.) nance, and personnel somewhere. the extension on a 58 to 36 vote. Sen­ amendment, accepted by voice vote, ator Phil Gramm (R-Tex.) agreed not prohibiting the deployment of any ele­ to bring up his amendment for auto­ ment of an ABM system unless spe­ matic cuts after reaching an agreement cifically authorized by law. An with the White House. Gramm said he amendment by Representative Buech­ Debt ceiling raised, now had White House backing to use ner (R-Mo.) was also adopted by voice Gramm-Rudman the long-term debt extension as a ve­ vote, which reaffirmedthe right of the fight delayed hicle to press for Gramm-Rudman and United States to defend and protect its The United States narrowly avoided other budget reforms. citizens and territory from ballistic becoming another Brazil and default­ missile attack. ing on its obligations as the House and A more serious restriction on U . S. Senate passed a temporary increase in collaboration with its allies on SDI the debt ceiling which is expected to came with the adoption of an amend­ allow the government to continue to House continues ment by Rep. Les AuCoin (D-Ore.), borrow for another 60 days. attacks on SDI which prohibits foreign firms or gov­ A major fightover reimposing the The House continued consideration of ernmentsfrom receiving SDI research automatic sequestration mechanism of the FY88 Defense Authorization bill or development funds unless the De­ the Gramm-Rudman-Hollings budget in mid-May, considering a number of partment of Defense certifies that the deficit law, which threatened to tor­ amendments on the SDI which would work cannot be done in the United pedo the debt ceiling extension, is now further cripple the program. States at an equivalent cost. It passed also delayed until mid-July. The SDI funding level was cut to by a vote of 229 to 187. On May 13, the House passed H.R. $3.1 billion , half a billion below this Attempts at early deployment of 2360 to raise the debt ceiling tempo­ year's level, when an amendment SDI were overrwhelmingly rejected. rarily by a vote of 296 to 124. Gramm­ sponsored by Rep. CharlieBennett (D­ An amendment by Rep. Jack Kemp Rudman advocates in the House, led Fla.) was approved by a vote of 219 to (R-N.Y.) that sought to require the by Reps . Buddy MacKay (D-Fla.) and 199 on May 12. The duplicityof House Defense Department to begin full-scale Rod Chandler (R-Wash.), agreed to Armed ServicesCommittee chairman testing of SDI systems and compo­ the short-term extension with the un­ Rep. Les Aspin (D-Wisc.) was very nents to achieve operationalcapability derstanding that a permanent deficit apparent. After reducing the Armed by 1993 failed on a 121 to 302 vote. reduction plan would be reached by Services Committee figureof $3.8 bil­ A similar amendment by Rep. Jim July. They demanded that a Commis­ lion to $3.6 billion in the Aspin sub­ Courter (R-N.J.) to allocate $300 mil­ sion, similar to the one which cut So­ stitute, Aspin then voted for the $3.1 lion for the deployment of an SDI sys­ cial Security, be established to reach billion level in order to set the basis tem that could protect against acciden­ such an agreement. for compromise with the Senate's $4.5 tal launches of ballistic missiles was An amendment sponsored by billion level. rejected by a 121 to 297 vote.

EIR May 22, 1987 National 69 NationalNews

documents critical to the defense wereunder Sher's OSI is allegedly a "Nazi hunting" the lock and key of newly appointed trust­ unit within the Justice Department. As EIR ees. Judge Penn granted a 30-day continu­ has documented, it is closely interfaced with Va. Court denies move vs. ance despite the protestations of assistant the Soviet Justice Departmentand the KGB , attorney general John Russell who claimed and has devoted its resources to attacking LaRouche associates that the Commonwealth had nothing to do whom the Soviet wish attacked. At a hearing in Loudoun County, Va. Cir­ with the bankruptcy proceeding. The Sher visit to Austria comes after cuit Court May 12, Judge Carlton Penn de­ But ...accompanying Russell in court Attorney-General Meese declared Austrian nied the Commonwealth of Virginia's re­ was Dennis Szabala, from the Alexandria President Kurt Waldheim persona non gra­ quest to prohibit the defendants, associates U.S. Attorney's civil division, who argued ta in the United States, on the basis of his of Lyndon LaRouche , from contacting on behalf of the government at the bank­ alleged Nazi past. Waldheim is currently thousands of LaRouche supporters . ruptcy proceedings. suing World Jewish Congress head Edgar The Commonwealth had asserted that Bronfman, an outright Soviet agent of influ­ these individuals were "victims" of alleged ence, for defamation following a diatribe by securities fraud charged against five corpo­ Brunfman on the Nazi theme . rations and IS associates of LaRouche. Commonwealth Attorney William Burch Health service opposes stated that any individual who hadever made a loan to COl, Campaigner Publications, the broadened AIDS testing Fusion Energy Foundation, PGM, Inc., or u.s. Public Health Service officials have Convicted Israeli spy EIR was the "victim of the sale of an unre­ rejected additional mandatory testing for gistered security" and thereby a potential AIDS and called for stronger laws to protect attacks Weinberger witness at upcoming trials. Since bail bonds the secrecyof test resultsand the "civil rights" Israeli spY Jonathan Pollard, now spending prohibit the defendants from contacting of the virus to continue spreading. life in a U.S. prison for stealing secrets for "victims" in the case, Burch asked the court According to a report in the May 12Bal­ the Israelis and Russians, fell just short of to extend the prohibition to all such lenders. timore Sun, the health service proposals, in calling Defense Secretary Caspar Weinber­ Defense counsel argued that the common­ a 99-page confidential reportby the Centers ger an am.ti-Semite in a letter written to a wealth was subverting the purpose of the for Disease Control, said mandatory testing friend and published in the Jerusalem Post bail laws to halt the political organizing and would waste resources better used for other under the title, "What I truly believe." In the first amendment activity of the organiza­ purposes, and that mandatory testing was letter, Pollard revealedhis own racialist out­ tions involved. "not justified"by currentknowledge [sic 1 of look. The judge asked Burch if he intended to how the AIDS virus was spreading. "I'm sorry if I'm a painful reminder of call all the people they alleged to be "vic­ The report did concede, however, that this fact, but the evident problem some peo­ tims" as trial witnesses. Mr. Burch's mute presence of AIDS antibodies "is tantamount ple have accepting the transcendent nature response prompted a ruling restricting con­ to a diagnosis of current and persistent in­ of our racialallegiance over that of any other tact only to witnesses the commonwealth fection, even though many infected people alien nationalism can't be solved by simply names and those already named in the in­ have no clinical evidence of disease." dropping. me down a dark hole and wishing dictments. "If they are not going to be that I disappear." This attitude Pollard pro­ called," Judge Penn said, "the court should claims proudly to be "racial arrogance." not restrictcontact with three or four thou­ Pollardalso writes: ''To beperf ectly frank sand people... You 'rejust going to have . . . I had completely underestimated the to tell the defense who your witnesses are OSI officials head unbridled enmity Weinberger feels toward going to be." Israel, in particular, and Jews in gener­ Among other issues heard by the court for Vienna al ....Unfortunat ely, the so-called leaders was a defense request for a continuance of Neil Sher, head of the U.S. Justice Depart­ of the American Jewish community in their the case because of an involuntary bank­ ment's Office of Special Investigations, and mad, self-flagellating wish to reaffirm their ruptcyaction brought by the federal govern­ Justice Department honcho Mark Richard loyalty to their country, are overlooking the ment on April 21 after a Boston judge had were scheduled to arrive in Vienna, Austria implications of this letter at their peril. . . . imposed a multimillion-dollar "contempt of May IS. The visit was announced by an If this case can instill a fear of 'pogrom' court" fine against three of the corporate Austrian government spokesman and re­ within oqr Jewish leaders, then what does defendants. Defense attorneys argued that ported in the May 9 French daily Le Figaro . this say about the durability of our life here

70 National ElK May 22, 1987 Briefly

[in the United States]?" and destroyed, containing only provisions • A SPECIAL TEAM from the Pollard likens the case against him to the for so-called AIDS education. It was then United States has been sent to West Spanish Inquisition and the Moscow 1933- that the real policy fight began. Germany to investigate Soviet prov­ 38 purge trials staged by Andrei Vishinsky, In the course of three days, dozens of ocations around Berlin, U.S. military the chief prosecutor, "in which the defen­ activists associated with the LaRouche sources have told EIR . It is accepted, dants were melodramatically portrayed as Democratic Campaign, generated scores of said the sources, that the objectives being the embodiment of some diabolical irate telephone calls into the homes of leg­ of the current Soviet-run "low inten­ plot to undermine the security of the state. " islators, brought in medical experts, ap­ sity conflict" are to neutralize West In fact, Pollard worked, and knew he peared on radio programs, and convened Germany as a U.S. ally, and to test worked, for a unit of the Israeli Mossad neighborhood meetings. U.S. policy . whose purpose was to pass U . S. secrets sto­ By May 6, the Manchester Union-Lead­ len by him and others to the Soviet Union. er, reported the mobilization's success: • DEBRA FREEMAN, public "Senate Resurrects Controversial Plan for health adviser to presidential candi­ AIDS Testing," reporting: "A hotly debated date Lyndon LaRouche, addressedthe AIDS testing plan that appeared to have died Maryland State Central Committee of quietly last week, was resurrectedyesterday the Democratic Party on May 11. An LaRouche AIDS policy by the Senate. The Senate voted 13-11 to argument on the floor forced the require AIDS tests of people about to mar- question to a vote, allowing her to rocks New Hampshire ry ...." speak for five minutes on the role The state legislature of New Hampshire very LaRouche was playing in the current nearly made that state the first to begin man­ strategic situation, detailing the cur­ datory testing for the deadly AIDS virus. On rent Berlin crisis, the war on AIDS , Monday , May 11, a joint committee of the and impending economic collapse. state Senate, and the House of Representa­ Release white paper tives formulated the final wording of House • THREE JDL members were ar­ Bill 322, which would require all individu­ on ASAT development rested by the FBI in New York May als applying -for marriage licenses, to be President Reagan has released a White Pa­ 8, and charged with a series of minor tested for AIDS by the state public health per defending support for development of a bombings beginning with a 1984 fi­ service. The bill had passed the state senate U.S. anti-satellite (ASAT) system May 12, rebombing of a car parked outside a on May 8. An estimated 22,000 people re­ despite congressional votes to ban testing of Soviet residential complex in River­ ceive the pre-marital test annually. a system. dale, New York. Victor V ancier, Jay On May 15, the measure was defeated The paper notes that the Soviets have Cohen, and Sharon Katz are charged in the House by 165- 136, with 98 persons had an operational ASAT capability for 10 with conspiracy to injure foreign of­ absent and 1 vacant seat. The provision for years, and "have maintained satellites in or­ ficials, and violating federal explo­ mandatory testing was first proposed by Gov . bit, the purpose of which is to provide tar­ sive statutes. The arrests stemmed John Sununu, at a Concord, New Hamp­ geting information against our armed fromthe earlier previousarrest of 65- shire, press conference on April 7. On Feb. forces." year-old JDL leader Murray Young. 7, 1987 , Democratic presidential candidate The U.S. ASAT system now under de­ Lyndon H. LaRouche Jr. , issued a statement velopment consists of a miniature vehicle • FUNDING for the National En­ titled, "My Program Against AIDS ." Dur­ warhead mounted on a modified ShortRange dowment for Democracy is in serious ing thecourse of February, more than 75,000 Attack Missile (SRAM) booster as the lower question. The NED, also known as copies were distributed throughout New stage, and a modified Altair II rocket motor "Project Democracy," was proven to Hampshire. That set the tone for the fightto as the upper stage. This is carried aloft and be implicated in the Iran-contra affair achieve competent public health measures launched froma specially modifiedF- I5 air­ by a recent EIR special report, and is on AlOS. craft. The ASAT mission will involve the F- now under investigation by indepen­ During the week of April 27, however, 15 flying toa launch point identifiedby mis­ dent counsel Lawrence Walsh. A official and unofficial statemedical spokes­ sion control and launching the inertially­ State Department authorization bill, men denounced the AIDS testing proposal guided missile toward a rendezvous area. which includes funding for the NED, as unnecessary, unworkable, and too expen­ After the upper stage bums out, the minia­ is likely to come to the floor of the sive. Within days, when the bill came up for ture vehicle separates and is guided by an House the third week in May. a vote before the entire Senate , it was diluted on-board sensor to the target.

E IR May 22, 1987 National 71 Editorial

'No' to a new constitutional convention

In two hundred years, the only flaw shown to have Some numerous parts of the forces behind this pro­ existed in the original United States Constitution, as to posal are avowed fascists, who are now working to principle of law, is the "Service and Labour" provision bring the leaderships of the two major political parties of Section 4, Article IV. This compromise on the issue into such close collaboration, in such matters as allow­ of those legacies of British law and rule, slavery and ing who is permitted to run for Federal office, that a indenture, tolerated practices then opposed by the sen­ one-party dictatorship is established in effect. They timent of the majority represented, but was endured as intend to use a changed constitution, to introduce a kind a compromise to secure the adherence to the union by of fascism last seen in such cases as the pre- 1936 Aus­ the slave-holding states . tria under Dollfuss or Mussolini's Italy. The abhorrence we have for the substance of that The proposed change in government is called "cor­ point of compromise, must never blind us to the fact porativism," which some call "democratic fascism," that this simple document, this Federal Constitution, which others call "local control." The aim is to establish is, on point of principle and historic performance, the "corporations" like those of Mussolini' s Italy, and to greatest instrument ever adopted to provide the order­ use those "corporations" as means for "democratically" ing of self-governmentof free men and women. Taking choosing which economic interests and which free­ into account the useful amendments added until the doms the members of those cOlporations and the nation time of President Woodrow Wilson, and including the shall relinquish. From such "democratic corporativ­ franchise of adult women, this Constitution is both the ism," to a tyranny like Mussolini's, would be a very shield of individual freedom, and the wisest guide to short step. the ordering of the relations among branches of govern­ The main force pushing for "corporatism" in the ment, and of the relationship among federal govern­ West today , is in the leadership of Willy Brandt's So­ ment, the federal states, and the individual citizens. cialist International . Inside the United States, the "dem­ Should we ever alter those features of the Consti­ ocratic fascists" are centered in a bi-partisan organiza­ tution, especially under stress of crisis, the freedom of tion calling itself, curiously, the National Endowment every citizen were placed in jeopardy, and the kind of for Democracy, the chief culprit in arranging support tyranny never possible in this republic, would become for the drug-trafficking "Contras ." an immediate possibility. The operating arm of the National Endowment for At this moment, our republic is in just such a danger Democracy is Ollie North's accomplice, Project De­ of being transformed into a tyranny. Misguided men mocracy. Project Democracy is a network of organi­ and women are being duped into supporting the prop­ zations, mostly social-democratic , centered around a osition, that a new constitutional convention should be former top U.S. agent for the Soviet intelligence ser­ held. vices, Jay Lovestone. In the United States, it is these Some are rallied to support such a proposal, by the so-called "right-wing social democrats" who are the delusion that the constitutional provision for an oblig­ most important among those pushing for "corporatist atory annual balancing of the federal budget will curtail reforms ." the woes of the taxpayer, when in fact it will oblige the The mere calling of such a proposed constitutional federal governmentto raise taxes. Other, darker forces, convention, under these circumstances, could be the propose to tear up the presidential system itself, and to cause of the early death of this republic. If you love introducethat parliamentary form of governmentwhich freedom, you will not tolerate support for such a foolish has shown itself such a disaster in other nations. experiment.

72 National EIR May 22, 1987 Now with 'Iran-gate,' you can't afford to wait for the best intelligence EIR can prpvide--��ediately. The economy is teetering at . the brink, and even the larg­ est American banks are shaking at their fo undations. We alert you to the key developments to watch closely, and transmit 10-20 concise and to-the-point bulletins Alert twice a week, including periodic reviews of debt, terror­ ism, and drugs. The "Alert" now puts special emphasis on economic developments. It reaches you by First Class mail twice a week (or more often, when the situation is hot). For Europe and the Middle East, the Confidential Alert Alert Bulletin appears once a week in the fo rm of a one-page telex message.

In the U. S.: Confidential Alert annual subscription $3,500. In Europe: Confidential Telex Alert annual subscription OM 12,000, includes Quarterly Economic Report Strategic Alert Newsletter (by mail) annual subscription OM 6,000 Alert Make checks payable to: EIR News Service P.o. Box 17390, Washington, D.C. 20041-0390 In Europe: EIR Nachrichtenagentur GmbH. Postfach 2308, Jl. 1an+ Ootzheimerstr. 166, 0-6200 Wiesbaden, F.R.G.

------�

I would like to subscribe to 1 Executive Intelligence Review for 1 Executive 1 o 1 year 0 6 months 0 3 months 1 1 Intelligence I enclose $ _____ check or money order 1 I Review Please charge my 0 MasterCard 0 Visa 1 Card No. ____ Exp. date _____ 1 Signature ______u.s.. Canada and Mexico only 1 1 year ...... 1 $396 Name ______6 months ...... $225 1

3 months ...... $125 Company ______

Foreign Rates Phone ( Central America. West Indies. Venezuela I Address ______and Colombia: 1 ':Ir. $450, 6 mo. $245, 1 3 mo. $135 1 City ------South America: yr. $470 , 6 mo. $255, 1 1 State ______Zip ___ _ 3 mo. $140. I I Make checks payable to EIR News Service Inc .. Europe. Middle East. Africa: 1 yr. DM 1400, P.O. Box 17390. Washington. D.C. 2004 1- 6 mo. DM 750, 3 mo. DM 420. Payable in '1 0390. In Europe : EIR Nachrichtenagentur deutschemarks or other European currencies. 1 GmbH. Postfach 2308. Ootzheimerstrasse 166. I 62 Wiesbaden. Federal Republic of Germany. Asia and Oceania: 1 yr. $550, 6 mo. $300, 1 telephone (06121) 8840. 3 mo. $150. 1 ______------