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Executive Intelligence Review, Volume 7, Number 46, November 25

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Executive Intelligence Review, Volume 7, Number 46, November 25 [THIS PAGE IS INTENTIONALLY BLANK] Editor-in-chief: Criton Zoakos Associate Editor: Robyn Quijano Managing Editor: Susan Johnson Art Director: Martha Zoller Circulation Manager: Lana Wolfe Contributing Editors: Lyndon H. LaRouche, Jr., Christopher White, Costas Kalimtgis, From the Editor Uwe Parpart, Nancy Spannaus INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot Agriculture: Susan B. Cohen, Bob Ruschman Asia: Daniel Sneider Counterintelligence: Jeffrey Steinberg Economics: David Goldman Energy: William Engdahl Europe: Vivian Zoakos Latin America: Dennis Small Law: Felice Merritt Middle East: Robert Dreyfuss Military Strategy: Susan Welsh Science and Technology: Marsha Freeman Soviet Sector: Rachel Douglas United States: Konstantin George United Nations: Nancy Coker S ince Henry Kissinger rediscovered Communist China, we have been inundated with successive waves of Sinophilia. While the uncrit­ INTERNATIONAL BUREAUS: Bogota: Carlos Cota Meza ical adoration of Maoist China has slowed down somewhat, the media Bonn: George Gregory, in this country, encouraged by officials in Washington, are still Thierry LeMarc unabashedly biased toward our newfound "allies" in Peking. Chicago: Mitchell Hirsch Copenhagen: Vincent Robson The excesses of Maoism are supposedly over, and through the Houston: Tim Richardson leadership of Deng Xiaoping, China has entered a new era of political Mexico City: Josejina Menendez stability and openness to Western influence, we are told. Even more, Milan: Muriel Mirak Monterrey: M.Luisa Gomez del Campo there are daily reports of the victories of "capitalism" in China, from New Delhi: Paul Zykofsky Coca-Cola to hairdryers in Shanghai salons. Paris: Katherine Kanter, Sophie Tanapura This is a rebirth of that turn-of-the-century myth of the great Rome: Claudio Celani Chinese market. As many businessmen who have spent good hard Stockholm: Clifford Gaddy cash waiting in Peking anterooms for the past few years have discov­ Washington D.C.: Laura Chasen, Susan Kokinda ered, this time around the myth is no more real than befort;. Wiesbaden (European Economics): This week's Special Report is the first of a series which will give Mark Tritsch, Laurent Murawiec our readers hard facts inside of deliberate myths and wishful nonsense Executive Intelligence Review about China. The EIR made a decision several months ago to develop (ISSN 0 273-6314) is published weekly by a intelligence capability on China that would be second to none, and New Solidarity International Press Service 304 W.58thStreet, New York. N. Y. 10019. we have been quietly assembling the expertise and the information to In Europe: Campaigner Publications. carry out that commitment. Deutschl. GmbH. + Co. Vertriebs KG Postfach 1966. D. 6200 Wiesbaden The first installment focuses on the immediate political situation Copyright © 1980 New Solidarity inside China. Future reports will follow the events discussed in this International Press Service All rights reserved. Reproduction in whole or report, with lengthier background on Chinese history. And we are in part without permission strictly prohibited. now in the initial stages of preparing a blockbuster analysis of the Second-class postage paid at New York. New York and at additional mailing offices. Chinese economy that we promise will wipe out more than a few of those myths. POSTMASTER: Send address changes to New Solidarity International Press Service. 304 W. 58th St.. N. Y .. N. Y. 10019 Subscription by mail for the U.S.: 3 months-$125, 6 months-$225, I year-$396, Single issue-$10 ITillContents Departments Economics 5 Editorial 6 Will Reagan dump A new set of choices Volcker ... or get Thatcherized? 51 Book Review The Friedman partisans in the Steven Bardwell, plasma physics Reagan camp want the Fed to director of the Fusion Energy contract credit before January. Foundation, on Jeremy Rifkin's Entropy: A New World View. 8 Banking Expanding credit through 52 Middle East Report a new Federal Reserve. Time running out for Assad. A special banking report on draft 53 Dateline Mexico legislation. The Wharton model: Documentation: Excerpts consumer fr aud. from the Federal Reserve Reform Act 61 Facts Behind Terrorism of 1981. The Hare Krishna: a synthetic cult. 11 France can cure inflation Faster depreciation 64 Energy Insider for industry and curbs Politics versus reality. on real-estate speculation are proposed in our economic survey. 16 India seeks assistance for large-scale industrial projects A report from New Delhi on current negotiations. 17 Currency Rates 18 International Credit European Currency Unit moves ahead. 19 Trade Review 20 Business Briefs Volume 7 Number 46 November 25, 1980 Special Report International National 42 Who's doing what 56 Reagan's cabinet choices: to whom in Poland they're up for grabs Lyndon LaRouche's The pledge not to restore analysis of the Nixon-Ford personnel London-Moscow gambits wholesale is being and the traps ahead. taken seriously. 46 Will Reagan support an 58 Moderates look to alternative to Camp David? leadership posts Militia exercise at the Chiliying people's com- The interim U.S. debate The Democratic mune, in June 1975. Photo: Sygma and Europe's proposals. Party fight. 47 France, Tunisia launch 59' GO P chairmen to 22 Power struggle in development initiative reverse track China: the myth of The 'trialogue' comes off The Senate com­ 'the new stability' the drawing board. mittee prospects. An introduction. Documentation: The 62 National News 28 China's new leadership communique identifying investment areas. Their biographies. 49 'Shock therapy' 33 The return of the for Brazil? Chou-Deng group Correction: Chase Manhattan has An error crept into our A chronology, delivered its Nov. 18 book review heading. The from 1976 to 1980. instructions. publisher of Lyndon LaRouche's How Credit Can Be Greatly 35 The CCP: a facade Documentation: Comments by Expanded Without Adding to of discipline Willard Butcher and David Inflation is the National Party factions. Rockefeller. Democratic Policy Committee, not the New Democratic Policy Committee. The latter does not 37 The PLA: a 54 International Intelligence restive element exist. Army factions. 40 Discredited and dysfunctional The security apparatus. ''Watchfulobservers tend to ask themselves whether Volcker and Miller are merely incompetent or downright insane:' - Lyndon H. LaRouche Contributing editor, Executive Intelligence Review When Federal Reserve Chairman Paul Volcker introduced his credit control policies last year, the EIR was quick to sound the alarm to the danger of "Dr. Volcker's horse liniment."The Volcker package would not be anti-inflationary, EIR warned, but would carry the "Friedmanite stagflation" of the Nix<;>n years to extremes. Finally, red-faced economists and government officials are now admitting that "some­ thing" went wrong. The Executive Intelligence Review is now making available a comprehensive series of studies on the American economy to show why the Volcker measures had to fail, why the country's economists missed the boat in forecasting the trends for 1980, and why EIR's LaRouche-Riemann econometric model was right on the mark. Can the American Economy Recover? A special reprint series from the Executive Intelligence Review available November 1980 $50. And for ongoing domestic and international intelligence, subscribe to the 64-page ExecutiveEIRIntelligence Review weekly journal, the EIR. The economics report will be provided free of charge with We sell intelligence. every annual subscription purchased through this offer. Enclosed 0 $50 Can the American Economy Recover. Bill me 0 Enclosed 0 $65 3-month Introductory EIR subscriplion. Bill me 0 Name _____________________________________________ Enclosed 0 $99 3 month EIR subscriplion, plus American Economy at only $34. Bill me 0 Title _______________Company/Org. _______________ Enclosed 0 $396 Full·year EIR subscription, plus free copy of American Economy. Bill me 0 Address __________________________________________ Charge my subscription to: 0 Visa 0 Mastercharge Card No. Interbank# Expiration Date City _______________ State Zip _________ ___ Make checks payable to: Executive Intelligence Review, Dept. M, 304 W. 58th Telephone Street, 5th Floor, New York, New York 10019 area code Editorial A new set of choices On Election Day 1980 the American population is on. George Shultz and William Simon, who are went to the polls to rid the nation of the zero­ mooted to be in line fo r top cabinet posts, are both growth austerity policies that have collapsed the on the record in favor of Friedmanite austerity economy, put millions out of work, and made the policies. "Mr. Shultz says Mr. Friedman is his United States a second-rate power. Americans favorite economist and recently told the New York made a choice. Against a media charade designed Times that Mr. Friedman is also Mr. Reagan's to hide the immense dissatisfaction with the ad­ favorite," reported Reaganite Jude Wanniski in the ministration, the population threw Carter onto the Wall Street Journal. Simon went on record recently unemployment lines. But will Federal Reserve endorsing V olcker tight money policies, and call­ Chairman Paul V olcker go with him? ing on Volcker to "take even stronger action" than Now a more active choice is demanded of the he has. "Nobody considers Paul Volcker the ene­ citizenry. Will the constituencies that handed Rea­ my," he told the Wall Street Journal. gan a landslide victory ensure that his administra­ An overwhelming majority of the electorate did tion will junk
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