fUr [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 Wh ite, Costas Kalimtgis, From the Editor Uwe Parpart, Nancy Spannaus

INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot Agriculture: Susan B. Cohen, Bob Ruschman Asia: Daniel Sneider Counterintelligence: Jeff rey Steinberg Economics: David Goldman Energy: William Engdahl Europe: Vivian Zoakos Latin America: Dennis Small Law: Felice Merritt O n Oct. 5 the West German population will go to the polls to elect Middle East: Robert Dreyfuss Military Strategy: Susan Welsh the country's federal parliament. The issues being debated in that Science and Technology: election are of strategic importance for the future of the Atlantic Marsha Freeman Alliance and the world economy. West Germany's crucial role in Soviet Sector: Rachel Douglas determining if there will be war or peace, depression or economic United States: Konstantin George United Nations: Nancy Coker growth, is detailed in our special report this week. We commissioned Webster Tarpley, an American journalist who INTERNATIONAL BUREAUS: Bogota: Carlos Cota Meza has specialized in European affairs most of the last decade, to bring Bonn: George Gregory, you this lively account of the real story behind the candidates and Thierry LeMarc what's at stake in this election. Chicago: Mitchell Hirsch Lately, U.S. foreign policy commentators have begun to smirk Copenhagen: - Vincent Robson Houston: Tim Richardson that, in the wake of the Polish crisis, Helmut Schmidt will be more Mexico City: Josefina Menendez "realistic" and turn toward Washington, away from the detente policy Milan: Muriel Mirak he developed in tandem with the French. Tarpley assesses Schmidt'ss New Delhi: Paul Zykofs ky Paris: Katherine Kanter, past record in depth, and lays out the role of two adverse leaders in Sophie Tanapura Schmidt's Social Democratic Party-British agents-of-influence Willy Rome: Claudio Celani Brandt and Herbert Wehner-along with the role of Schmidt's coali­ Stockholm: Cliffo rd Gaddy Washington D.C.: Laura Chasen, tion partner, the liberal Free Democrats. Susan Kokinda We have another special feature in this issue which takes you (European Economics): Wiesbaden behind the scenes in the Iran-Iraq war. Iraq is fighting for keeps Mark Tritsch and Laurent Murawiec against the fanatical regime of Ayatollah Khomeini. Iraqi President Executive Intelligence Review Saddam Hussein has determined that the economic development (ISSN 0 146-9614) is published weekly by New Solidarity International Press Service plans of Iraq and the rest of the Arab world will be sabotaged if 304 W.58th Street, New York, N. Y. 10019. Khomeini's Islamic fundamentalism and the Muslim Brotherhood In Europe: Campaigner Publications, Deutschl. GmbH. + Co. Vertriebs KG are not destroyed. Postfach 1966, D. 6200 Wiesbaden Middle East editor Robert Dreyfuss and Judith Wyer detail the Copyright I:> 1980 New Solidarity history of the conflict, the French collaboration in Iraq's economic International Press Service All rights reserved. Reproduction in whole or development projects, and how the outbreak of war has collapsed the in part without permission strictly prohibited. deal carefully being constructed between the Carter administration Application to mail at second-class postage rates pending at New York, New York and and the Ayatollah for release of the hostages before the November additional mailing ofJices. election. POSTMASTER: Send address changes to New Solidarity International Press Service, 304 W. 58th St., N. Y., N. Y. 10019

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Departments Economics

4 Editorial 6 A sunset policy for u.s. The American spirit lives basic industry? Two Democratic policy groups 50 Dateline Mexico have put forth opposing programs More than a campus battle for the future of u.s. steel and auto. The Stevenson-Bentsen version would phase them out. 51 Middle East Report Included: interviews with Behind the Turkish coup economist Lester Thurow, the Commerce Department's Fred 60 Congressional Calendar Knickerbocker, and 'revitalizer' Eli Ginzberg. 64 Energy Insider What about nuclear energy? 12 Banking Free banking zone on front burner.

13 Agriculture R&D cuts traded for Carter votes?

14 Gold Price jump not just a scare reflex.

15 International Credit EMS at loggerheads with IMF

16 Trade Review

17 Currency Rates

18 Business Briefs Volume 7 Number 39 October 7, 1980

Special Report International National

36 The Iraqi war to 54 U.S. Army found clean out Khomeini unfit for combat The offensive launched against Why some policymaking circles, Khomeini's Iran by Iraq's Saddam and some of America's top Hussein has caught Washington military officers, are alarmed at and London wholly off guard. It the Carter administration's could not only help stabilize the defense-spending and war-fighting Middle East, but significantly shift doctrines alike. the balance of strategic forces in �nancell.or Helmut Schmidt (r) with party favor ofthe European peace axis. 56 Another crisis and chairman Willy Brandt (I) and the Social another committee Democratic parliamentary leader, Herbert 38 Iraq shatters U.S.-Iran Wehner (c). The slogan: "Responsibility For The Carter administration is Our State." Photo: German Information pact on the hostages setting up both. Center.

40 Franco-Iraqi miliary deals 58 The real winner of 20 The significance of aid Arab economic buildup the debate the West German national elections Contributing Editor Nancy 42 Gromyko issues an Spannaus on the Reagan­ Helmut Schmidt's future policy icy warning Anderson display. choices, and the changing of the Dropping all protocol to reject guard in all the parties, will have a the U.S. "limited" nuclear war 59 Fusion energy bill decisive effect on the future of the doctrine. clears Congress Atlantic Alliance and the world's What the final bill looks like that economic well-being. Webster 43 Shanwar Bhutto on Tarpley relays a full-scale analysis . will expand fusion R&D. Muslim fanatics An exclusive interview on Pakistan 62 National News 24 Catholic bishops and Afghanistan with the son of attack Schmidt Pakistan's greatest leader.

25 Der Spiegel 46 Chopping block for attacks the EAP Polish industry The opponents of heavy capital 34 The philosophies of investment are taking over. An the candidates interview with a Polish correspondent stationed at the Vatican casts further light on how the destabilization occurred.

49 Who's running the Omega 7 threat

52 International Intelligence Editorial

The American spirit lives

Time was when the world stood in amazement and cratic National Policy Committee, a constituency­ gratefully looked on as American farmers, workers based, policy-formulating institution possessing an and businessmen forged ahead with irresistible intellectual sophistication that has not been seen in spirit to level mountains, carve out waterways, sow American public life since the great "American mighty cities in the wilderness, flood the world with System" economist Henry C. Carey advised Presi­ new and miraculous machines capable of subject­ dent Lincoln on how to lay the foundations for an ing nature to man's rational command. industrialization drive which transformed the Those were the 1880s and 1890s, the teens and U.S.A. into a miracle among nations. twenties, and again, on a smaller scale, the forties and fifties of this century. The world gave this The NDPC study phenomenon a name that stuck: American booster­ On Sept. 26, the NDPC released to the public ism. its first major study, Industrial Revival for the There is, however, something more profound 1980s. a reasoned and aggressive report which to the historical American phenomenon than this puts forward the following perspective: banalized notion of "boosterism." To better under­ First, the policy of all three major presidential stand it, we invite you to reflect upon last week's candidates of discriminating between "sunrise" key developments. and "sunset" industries and committing them­ True, the current business climate is viewed as selves to policies of condemning to death the gloomy. True, Paul Adolph Volcker, the chairman sunset industries (steel, auto, construction, chemi­ of the Federal Reserve, once again jacked up the cals, agriculture) is proven to be a policy of discount rate from II percent to 12 percent and the national suicide which would result in a cata­ prime rates went up correspondingly. True also strophic caving-in of our overall national produc­ that inflation continues to surge ahead. And pro­ tivities not later than 1985. If this policy is ulti­ duction to go down; and unemployment up. Our mately implemented, one can make the deduction own subscribers and clients are increasingly con­ that by the year 2000 our nation's economy would cerned and unnerved about upcoming economic be so transformed as to be unable to sustain a prospects. The war rages in the Persian Gulf and population larger than 75 million persons. the legions of bureaucratic mice are busy in Wash­ Second, the NDPC report outlines a compre­ ington preparing for "emergency controls," hensive set of immediate and intermediate meas­ "emergency allocations," "emergency rationing," ures to get the American economic engine surging and so forth. Should one be "optimistic" or "pes­ forward again, namely: simistic" in forward business planning? we are • Full-scale revival of our nuclear energy in­ asked. dustry to the status of the principal "sunrise" One should be neither. One should be rational industry, deploying the full range of its capabili­ and, above all, combative. ties from fission plants, fast breeders, and re­ Two important events last week justify this processing facilities to fusion reactors. perspective: one is the unanimous voice vote on the • Revitalization of our agriculture by means floor of the United States Senate which passed the of parity prices at levels capable of financing a Fusion Energy Research, Development and Dem­ dramatic expansion of capital formation in Amer­ onstration Act, which is now on President Carter's ican agriculture. desk to be signed into law; the second is the emer­ • Mobilization of our traditional industries of gence within the Democratic Party of the Demo- steel, auto, chemicals, construction, and so forth,

4 Editorial EIR October 7, 1980 as feeder industries capable of providing the ma­ This is the significance of the passage of the terials and technologies needed by both agricul­ fusion energy bill in the Senate and also the ture and the nuclear industry. significance of the Maine nuclear energy referen­ • Recasting of our national monetary and dum. Once the fusion bill is signed into law, a banking policies in accordance with a national thoroughgoing transformation will begin building strategy to drastically increase American exports momentum in the less visible, vital core of the to the world by about $100 billion. American economic machine. Based on a commitment to strengthen our From the standpoint of modern science, in regional and local banking system, such an export which this magazine and its collaborators have policy should be designed to increase overseas pioneered, competent economic policy proceeds effective demand fo r American goods by redeem­ from the demonstrated fact that the generalized ing our trillion-dollar-plus "Eurodollar" obliga­ concept of social productivity is derived from the tion with gold-backed United States bonds which, rates of improvement of the ratio free energy/total offered at low interest rates, will become the energy characteristic of any given technological instrument by which foreign nations can pay for stage of an economy. the importation of high-technology American This is precisely what the thermonuclear fusion goods. reactor will provide. Finally, the NDPC report concludes, "the fu­ ture industrial prosperity of the United States and The economic future its citizens depends on such a moral national Once this task is accomplished in the not-too­ commitment to help the nations of the developing distant future, the rest of the organism of our sector gain access to the industrial and technolog­ national economy will, sooner or later, rationally ical goods they require to enter the era of indus­ reorder itself around the fundamental break­ trialization. " through in the energy production sector. Allowing ourselves an appropriate metaphor, we can ven­ The feasibility question ture the prediction that the currently besieged As our own editorial bias is both unabashed political constituencies of the country-farmers, and well known, we do not hesitate to emphasize business, labor and minorities will be capable of that the matter of "optimism" and "pessimism " responding to the emergence of the policies of the in matters of forward business planning very much National Democratic Policy Committee, in a way depends upon a rational political judgment of how analogous to the response the aggregate industrial feasible a programmatic perspective is. In our sectors of an economy would display toward the view, it is eminently feasible. introduction of fusion in the energy production The basis for this judgment is scientificrather sector: higher productivities, greater effectiveness than simply moral. One need not move ahead in and a higher degree of rational self-organiza­ the spirit of exuberant but uninformed "booster­ tion. ism." We once again repeat that the underlying This is "politics" in its best and noblest sense. cause of " American boosterism" is not the implied In the spirit of this politics, we confidently greet banality of the youthful fool; rather, it is the the emergence of the National Democratic Policy embedded, though recently alarmingly weakened, Committee whose Advisory Committee is ably ability of the American people to respond to chaired by Lyndon H. LaRouche, Jr., the founder reason and to science. and contributing editor of this publication.

EIR October 7, 1980 Editorial 5 �TIrnEconomics

A sunset policy for U.S. basicindustry?

by Richard Freeman

Two wholly different proposals for "reindustrialization" with a heavy dose of military expenditures, a massive of the United States have now been placed before the synthetic fuels sector, and a buildup in computer-based Democratic Party nationally. One, issued last Aug. 4 by office and home gadgetry. This view was also expressed the Subcommittee on Industrial Policy (SIP) of the Sen­ in the perspective of a parallel group, the White House ate Democratic Party Task Force, is premised on the Commission for a National Agenda for the 1980s, set up proposal that the U.S. economy should no longer be by Hedley Donovan, the former publisher of Time mag­ based on agriculture and basic industry. A second, issued azine. According to a report on a mid-July Commission this week by the National Democratic Policy Committee, conference: has rejected the SIP proposal as "incompetent" and calls A transformation of the economic base is under­ for a revival of basic industry like steel and auto on a way. The once very prosperous, but now mature high-technology basis. basic industries-steel, primary metals, paper, tex­ This week brought fresh evidence that the SIP pro­ tiles-will continue to decline in their relative im­ posal is already being effectively put into operation by portance .... How should they adjust-scrap ex­ the continued tightening of interest rates under Federal cess capacity, reorganize by merger or acquisition, Reserve Chairman Paul Volcker. In August, it was an­ transfer labor and capital to new growth sectors? nounced that a 200 basis point increase in six-month Treasury rates helped cut new factory orders by 2.3 To the "older, mature industries" can be added auto, percent for the month. housing, trucking, airlines and the thrift institutions, The SIP, a think tank for the party, is a relatively new which have been dubbed by the SIP "sunset industries," creation under the direction of Democratic Senators and elsewhere "industrial losers." The light industries, Lloyd Bentsen of Texas and Adlai Stevenson III of along with the defense contractors and coal liquefaction Illinois. SIP, although nominally created to guide Dem­ and oil shale developers, have been christened the "sun­ ocratic electoral campaigns, authored proposals to phase rise industries." Thus, during this recesson, the U.S. out basic industry and shift capital flows into electronics economy is being divided into two tiers, with the winners and telecommunications fields that are essentially in allowed good credit terms while the sunset tier is phased agreement with those "reindustrialization" proposals out. favored by the policy advisers and controllers of the Reagan campaign and the John Anderson campaign. No capital The basic tenet of the SIP is that the U.S. economy The Subcommittee on Industrial Policy singles out must now be transformed into a postindustrial economy, auto and steel in particular for immediate gutting.

6 Economics EIR October 7, 1980 :;- ,. -i 'll-�:,.} J Bethlehem Steel on short hours.

"There is little economic justification, if any, for the A White House source was more blunt. "There's no bailout of industrial losers ....The process of disinvest­ use trying to bail out ailing industries like auto. The ment is essential for economic growth." auto industry is an industry of the past and it will have In particular, the Bentsen and Stevenson-led SIP to face that fact." states that the steel industry cannot be resuscitated. Precisely because these industries will be shut down, Although Japan revitalized its steel industry in the the SIP has prepared an elaborate worker relocation 1 960s, this success story is not generalizable, says the plan. States the SIP document, "In light of the current SIP. "Radical steel restructuring being promoted under situation in the auto industry-an estimated 300,000 the European Community's Coal and Steel Authority workers are on layoff-consideration should be given [the Davignon Plan-ed.] has generated social unrest to a special larger scale demonstration 'worker adjust­ and political problems, particularly in France. Nowhere ment plan' " which will relocate workers into the sunrise has the revitalization of basic industries been accom­ industries. panied with growing or even stable employment, al­ The postindustrial economy is to have a heavy base though output may expand." of $200 billion military procurements; an energy autar­ Thus, because revitalization can't work, states the ky, based on $600 billion in synthetic fuels investment SIP, the basic sunset industries must close down, or at over the next 25 years; the growth of the "information" least be seriously contracted. To do this would mean sector of computers, paper processors, and the like. having to dispense with the auto industry as well. "The Select high-technology areas like semiconductors and Chrysler Corporation will cut its North American car telecommunications would be steered into support fo r production capacity from 3 to 4 million car output to the same military, synthetic fuels, service and informa­ 1.5 to 2 million by 1983," stated a well-placed source at tion economy buildup instead of high-technology rein­ the Department of Transportation Sept. 10. "This was dustrialization. agreed to on the dotted line, as part of the Chrysler loan This is not only the view of the Carter administra­ guarantee from the Congress," he added. "Ford may tion, but of the campaign of Republican Party presiden­ have to reduce their North American car output from 5 tial hopeful Ronald Reagan as well. Indeed, many of million car units to 2.5 million units in the same period. Reagan's advisers are drawn from the Georgetown Ford's North American car operations profitloss this Center for Strategic and International Studies (CSIS) year will be $2 to $3 billion. They can't sustain that for and the Stanford Research Institute, whose proposals in much longer, without closing down their operations the areas of synthetic fuels and Wunderwaffen defense here and taking them overseas," he stated. procurements far exceed anything floatingin the Carter

EIR October 7, 1980 Economics 7 camp administration circles. Interviews The problem with this approach was incisively ana­ lyzed by a newly formed think tank that rejects the "sunset/sunrise" strategy and instead bases itself on a high-technology solution for America's economy. This group, called the National Oemocratic Policy Commit­ tee (NOPC), in a document released this week, stated 'Use credit controls its own premise: for an economy to function, it must to cut consumption' promote productive activity. Most of the purposes to which the sunrise activities are to be placed are non­ Th e following is an exclusive interview with Lester C. productive in the extreme. Take for example the syn­ Th urow. Professor of Economics and Management at the thetic fuels program. Coal gasification will produce oil Massachusetts Institute of Technology and the author of equivalents at the price of $75 to $90 per barrel, three the Zero-Sum Society. Th urow. a former editorial board times the commercial price set by OPEC . Compared to member of the New York Times, was among the people the high-technology use of coal in magnetohydrodyna­ consulted in the drafting of the Senate Democratic Policy mics (MHO), which turns coal into an energy-dense Task Force report on "sunset and sunrise" industry. plasma and converts this directly into electricity, it is grossly inefficient. In addition, the U.S. could and EIR: What is your view of the administration's so-called should move rapidly to the use of nuclear power, both revitalization program? 00 you feel that it is too oriented the construction of 1,000 nuclear power plants by the toward helping the so-called sunset industries? year 2000, and the commercialization of fusion power Thurow: I think that all the particular steps are oriented by the 1990s, as provided for by the McCormack fusion that way ....This is a "prop up the losers" program. bill. Within such an energy-dense regime, the NOPC says, the use of coal liquefaction represents a deduction EIR: Can we talk a little about the losers? from the type of allocations that must be made for such Thurow: One thing that I think ought to be made clear is a competent energy-dense energy program. that people often talk like if we don't help the steel If the misallocation of materials proceeds on a industry, it will go out of business. The steel industry is massive scale, and the Volcker high interest rate policy not going to go out of business, it is going to get smaller. continues into the next year, �hen capital formation There are many kinds of steel where it still makes sense rates will plummet, not just for steel, but for all basic to make them in the U.S. We ought to be doing high­ industrial processes. At this point, the productive goods technology, high quality steel and get out of making needed for the sunrise industries' construction will massive numbers of tons of pig iron. The real question is collapse. how are we going to prop up the "winning" parts of The U.S. economy would benefit instead, said the steel. ... NOPC document, by building the U.S. economy around the two real sunrise industries of the U.S. EIR: You have talked of funding these changes with an economy: nuclear energy and food production. The Thurow: I don't think auto is a loser. Textiles are a loser. basic steel, specialty metal alloy, and equipment produc­ Chrysler is a loser, but that is because of the management tion parts of the U.S. economy would be technologically of Chrysler. Ask yourself what the Japanese would have upgraded and its production capacity expanded to meet done about Chrysler. I think there are two answers. They nuclear power requirements. Waterways, dams, and would have opted for one healthy auto company, instead internal trucking and rail transport would be upgraded of one very sick company and one semi-sick one .... to meet the expanded shipment of food. A return to low-interest credit, coupled with the U.S. participation EIR: Isn't the economy too skewed towards a service in the gold-based monetary system started by German economy now? Chancellor Helmut Schmidt and French President Val­ Thurow: I don't think so. Not at all. ery Giscard d'Estaing, would be the needed financial and monetary arrangements to make the industrial EIR: You have talked funding these changes through an -� . policy work. investment policy, that someone will have to give up Yet, John Sawhill, testifying before the Senate En­ consumer goods so that they can become investment ergy Committee Sept. 17 confirmation hearings on his goods, that there will be a five-to-ten-year period when nomination as director of the newly created Synthetic consumption must fall. Fuels Corporation, told them that the Carter version of Thurow: If you think about how long it takes to build the coal program will emphasize synthetic fuels produc­ new factories, it takes fiveto ten years. If you really talk tion, as well as some coal production for export. about a major shift of investment, the money that is

8 Economics EIR October 7, 1980 going into investment or the goods and services that are people to re-elect him though he had not solved the going into investment have to come from somewhere. problem. He had persuaded the people that although he They are going to have to come out of consumption. I've didn't solve the problems in four years, he had a vision spoken about ways to do this, like the value-added tax. about how to solve them. Another possibility is to really use credit controls to You must absolutely build a coalition around the stop people from buying consumer durables. If you can't fo llowing unfortunate choice: we can deliberately lower buy a car except by paying cash for it, then you do two our consumption standards in the early 1980s in order to things to savings. First, somebody else's savings don't start them on that upward path in the late 1980s or we have to finance your car. And second, business can use can do nothing in the early 1980s and we will be on a your savings fo r investment until you get the full amount slow downward path for the next 20 years. This must be to buy a car. The Europeans use a value-added tax to done. And it can be done only through a real recognition drive down consumption. The Japanese drive down con­ of the crisis. People have never responded with the kind sumption by making consumer credit much less avail­ of sacrifice necessary because they never have had to able. Nobody will like this. These are not popular things. respond. You look at the British, we surpassed them in I think that you have to do this in such a way that you per capita GNP in 1900; ever since then they have been spread the consumption cuts across the whole economic writing articles about pulling up their socks and doing spectrum. If you are saying that "look, we can't do this, something. They never have. The same group of human it is too unpopular" then you are saying, really, "look, beings, when they were confronted with an invasion in we can't compete." World War II, pulled up their socks in ways in which I recently wrote an article for Psychology Today on very few societies have ever pulled up their socks. So you the role of economic trust as it deals with these kind of can't say that there is anything wrong with the human political economic questions. They ended up not publish­ beings because they did it. But what you can say is that ing it because there was too much economics in it and the slow relative decline never gives the feeling of a crisis not enough psychology. I started off by pointing out that that we have to survive, yet over 80 years you go from Roosevelt in 1936 got 65 percent of the vote, yet every­ being the number one economic power in the world to thing was worse than it was in 1932. How did he persuade number 25.

easy cheap gasoline. The classic idea is that we are not saving enough, but I don't think that we should do things exactly the way the Japanese and Germans are. 'Detroit workers can I don't believe a major nation like ourselves should let its steel industry disappear. What's going on is that move to synfuels' for the last 15 years people were not investing in steel. And I don't favor reestablishing the Reconstruction EIR conducted the following interview on Sept. 11 with FinanceCorporation. I'm not sure we would not have Eli Ginzberg of Columbia University, who heads the been better selling off part of Chrysler. National Committee on Manpower Policy. Certain areas of the economy must be permitted to fade; these include industries from inexpensive shoes EIR: On the topic of reindustrialization, what do you to computers. The question is which other industries think? to end. We haven't begun to do the analysis on this. Ginzberg: Reindustrialization is a major error. The We are shooting from the hip. There will be a new economy is already tilted to nonmanufacturing so cycle in auto where there will not be as many em­ while I'm not opposed to shoring it up, it is a small ployed. We have to shift from auto into some industry part of the total. I'd prefer the term revitalization of for these workers. If we go through a big synfuels the economy. The American economy is heavily bal­ program then a large number of workers from Detroit anced toward services and food. can go into that-into synfuels or construction. Our wage rates are in good shape because they are EIR: What areas should be revitalized? below Germany and France. But they are not lower Ginzberg: It is not clear. People are misled by data. It than the Third World. Things like cheap shoes should is not clear what percent of the economy is-much of be made in the Third World; they should fade out the decline is make-believe. Our economy is in pretty here. We should have just advanced technologies, good shape, especially if we did not have such free and agriculture, and advanced services.

EIR October 7, 1980 Economics 9 EIR: What about steel? Nearly everyone is saying that the production of basic steel in the U.S. will decrease sharply, that it is really a sunset industry. Knickerbocker: Again, we fundamentally want the indus­ try to have the opportunity to get its fair share of the 'Auto and steel international market. Let the market say what is profita­ ble and what isn't. As for how small the industry might will recover ... a little' become, I don't think that anyone can say right now. There is wide disagreement on the subject. If current The following are excerpts from an EIR interview with production capacity is around 100 million tons, I would Fred Knickerbocker, Director of Policy Planning, Depart­ say that people who are talking about dropping it to, say, ment of Commerce. 75 million are crazy. I think that it may drop to 90-95 million tons, but let me stress that we feel that it is going EIR: There has been a great deal of debate around the to be the market that determines the size of the industry. Carter revitalization program about the concept of "sun­ We are not going to "enforce" a policy here-we are not set and sunrise" industries and how to handle the prob­ going to tell the industry which plants to shut down. lem. They will make those decisions and are already making Knickerbocker: Not just around the Carter program, but them, just as they are deciding how to go about modern­ within the Carter administration itself. There is a great izing the plants .... deal of disagreement about these ideas. The program doesn't go very far in favor of the idea of picking winners EIR: Aren't these matters going to be discussed in the or losers. There are some people around here who don't newly formed tripartite committees for auto and steel? believe that it's possible .... Knickerbocker: Yes, they are going to discuss things like that there. They will plan a strategy to revive the indus­ EIR: But doesn't the program target certain areas of tries; that is why they were formed .... concern, like auto and steel? It doesn't say anything about the sunrise industries like semiconductors. EIR: Why hasn't the administration linked the coal Knickerbocker: As I said, there was some uncertainty development program it has announced to the economic about the viability of a winners and losers strategy. Our revitalization program? program has a generalized stimulus and shies away from Knickerbocker: That is a real good question. I'll be too much specific targeting. The tax proposals work in damned if I know. We have an interagency task force that way .... working right now on spelling out the details of the coal program and what you are saying is right. There are EIR: What about auto and steel? We have massive many people who want to go big with the coal program unemployment in auto and problems in steel. and I think that eventually we will spell it out in that Knickerbocker: Let's talk about auto first. The main way .... problem we have there is in reorienting the product line toward high quality small cars. That is taking place. The EIR: I have one other question. How can you and the investment is being made to do this and the industry will Carter administration be serious about really promoting be restored to health and it will show some vitality .... a "revitalization program" as long as Volcker and the Federal Reserve push high interest rates. No one can EIR: Does the administration accept the idea that the afford to borrow capital. Steel, for example, can't afford auto industry will shrink in size? Can its former employ­ any real modernization program. So despite what you ment levels be restored? say, all that is likely to happen is to shrink industrial Knickerbocker: The industry can recover. I don't think capacity .... anyone here has really worked out how much it will Knickerbocker: What you are saying is at least partially recover, whether it can go back to former employment true. It would be nice if interest rates were lower, but I levels. The plants are being retooled. There will be cuts in can understand Volcker's policies and what must be done employment caused by automation .... It is not neces­ to keep inflation down .... sarily administration policy to put all the auto workers back to work in auto plants. There is going to be some EIR: But do you support the Volcker policies? reduction in the workforce. We want to let the market Knickerbocker: I think it would be easier if there were forces determine the size of the industry. We see the U.S. slightly different policies. But Volcker knows what he is growing as an exporter of auto parts, not finished cars. doing and he will do what he wants anyway. We don't That is the way the market is going to work. run the Fed, really. . . . •

10 Economics EIR October 7, 1980 "To understand what has gone on in Iran, one must read what RobertDreyfuss wrote in the Executive Intelligence Review." - Empress Farah Diba Pahlevi, widow of the Shah of Iran, to the West German magazine Bunte

The EIR's Mideast Editor, Robert Dreyfuss, predicted in a series of articles that the fall of the Shah was the first phase in a plan to disrupt Mideast oil flows. The plan, as Mr. Dreyfuss documented, was to blackmail Europe with an oil cut-off and to put a full stop to Iran's attempt to modernize. It was this plot which the Shah only belatedly came to understand-as Empress Farah has reported.

Now the Executive Intelligence Review presents a full strategic assessment of the Arabian Gulf afterthe Shah's fall. Is the Saudi Royal Family next in line? Will Kho­ meini's terrorism spread? Get the inside story in: Prospectsfor Instabilityin the ArabianGuH A special report from the Executive Intelligence Review available November 1980 $250.

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Free banking zone on front burner public endorsement of the free zone Has Volcker struck a deal with the Chicago banks for a by a Fed official as"consis tent with national EFT system? the national interests of the U.S." On June 24, the ABA, whose thou­ sands of regional members had pre­ viously strongly opposed the free zone, sent a little-publicized letter to the Fed endorsing the proposal Federal Reserve chairman Paul banks who originated the proposal "in light of" the New York banks' Volcker is quietly pushing for im­ may agree to set up a nationwide so-called new amendments. In early mediate creation of no-reserve Electronic Funds Transfer system July before the House Banking "free banking zones" in the United to hook the nation's 50 largest Committee, Fed chairman Volcker States, Fed sources said this week. banks into one huge market. himself called for a speedy new "re­ Federal Reserve staff director for The IBF proposal is not new. view" of the free zone issue. monetary policy Stephan H. Axil­ The New York Clearing House As­ In fact, this flurry of action on rod and his Washington staff are sociation, the umbrella group for the free zone is taking place because busy wrapping up a semi-classified the big twelve New York banks, "Volcker and the New York banks new study of the International proposed the free zones in July 1978 have made a deal with the larger Banking Facility (IBF), to be sub­ and since then has repeatedly been regional banks," Capitol Hill mitted to the Board of Governors voted down by vociferous opposi­ sources say. The deal is to cut the for approval some time during Oc­ tion from the nation's 14,700 small larger banks outside New York-in tober. Volcker thinks he has the and medium regional banks. Chicago, Boston, Detroit, San votes. Pressed to explain, Fed sources Francisco, etc.-in on the free zone, As one New York bank lobbyist claimed the new review was in return for their political support put it, Volcker is bringing the Euro­ prompted by a little-known May of the program. The rest of the dollar market back home. Under 1980 letter to the Board from the nation's banks would be cut out. the free zone proposal, U.S. banks New York Clearing House modify­ With the creation of a Eurodol­ ,'ould be able to accept non-taxable ing its old proposal with two lar market in the U.S., First Chica­ {oreign deposits without U.S. gov­ amendments. These would move go, Continental Illinois, the First ernment reserve requirements just back the opening ofthe free zone to National Bank of Boston, and as the London Eurodollar market July 1981 to "enable institutions to others, are demanding a nation­ banks now do, moving most of the plan" fo r Fed removal of reserve wide extension of the New York American banks' London business, requirements- (Regulation D) and banks' Clearing House Interna­ in effect, back into the United liftingof interest rate ceilings (Reg­ tional Payments System (CHIPS) States. The American banking sys­ ulation Q), and raise the minimum computer. tem would soon be awash with deposits into free zone accounts Continental Illinois executive short-term Eurodollar lending as from the $100,000 originally pro­ vice-president Alfred F. Miossi told banks turn away from domestic posed to $500,000 to "avoid poten­ EIR this week that "we could sup­ production activities. tial disruption of local markets," port the New York proposal for The Fed's new free zone plan that is, to keep small depositors IBFs if we have equal treatment. may also be used to introduce na­ from rushing out of local banks and We cannot have a situation where tional banking in the U.S., vastly into the free zone with their savings. the New York banks have a com­ accelerating the Carter administra­ Following these minor conces­ petitive advantage because they can tion's general deregulation of U.S. sions by the New York banks, a clear funds so cheaply with Europe banking, and undermining the na­ number of startling events oc­ through CHIPS and we cannot. We tion's regional banks. curred. New York Federal Reserve must have equal access by all major To gain the support for free president Anthony M. Solomon, in banks through a national CHIPS zones from Chicago and other big a speech to the New York Bankers system to clear directly with Lon­ money center banks, the New York Association June 2, made the first don, nationwide."

12 Economics EIR October 7, 1980 Agriculture by Susan B. Cohen

R&D cuts traded for Carter votes? into research where-other factors Uncovering a kibosh on federal mechanization efforts, being equal or neutral-the major effect of that research will be the in order to court Chavez. replacing of an adequate and will­ ing workforce with machines," the Secretary stated. If successful, this move will not simply reverse the tradition of high­ "I 'm not saying there isn't any tation as of the beginning of the technology agriculture, but under­ such thing," Deputy Director for new fiscal year Oct. 1, and report mine the "American System" of Joint Planning and Evaluation of that project leaders affected are progress based on of an ever-more­ the u.s. Department of Agricul­ being so advised. highly skilled workforce. ture's Science and Education Ad­ The decision to single out the The directors of the fifty state ministration (SEA) James Nielson apple, citrus and lettuce sectors-to agricultural experiment stations stammered in a recent telephone the exclusion of the myriad other quickly pledged to challenge the interview, "but I have to get a better fruits and vegetables like broccoli, Secretary if forced. It is in this con­ hold on what you are talking peppers, sugar cane, etc., where text that the administrative initia­ about." Dr. Nielson was respond­ mechanization work will be able to tive was quietly launched, preempt­ ing to my inquiry concerning relia­ continue-smells like a crude vote­ ing the activities of the special task ble reports that top levels of the getting ploy. The three targeted force on mechanization. SEA's USDA and SEA are now moving sectors are among the largest in Nielson, also a co-chairman of the administratively to terminate feder­ terms of numbers of farmworkers task force, was happy in fact to al work and funding on mechaniza­ who stand to be "displaced" from issue denials on behalf of the task tion in three major areas: apples, their stoop labor by mechanization. force. They had decided against a citrus fr uit and lettuce. As we reported here several study of existing mechanization Federal support for agricultural months ago, at the time that Secre­ projects fo r lack of time and money, mechanization research was pushed tary Bergland originally made he insisted. into the limelight last December known his preference for cheap, But when confronted with de­ when Secretary Bergland told an manual labor over machines, a law­ tails of the administrative maneu­ audience in California-the home suit against the University of Cali­ vers, Dr. Nielson became curiously of militant stoop labor advocate fornia had been making its way ill-informed for a man who is one of Cesar Chavez-that he thought through the state courts. The plain­ six deputy directors at the head of fe deral support for labor-saving de­ tiffs sought to prevent tax dollars the SEA. "There is constant review vices "improper." from being used to support re­ and redirection every year," he A so-called "Redirection Plan" search that allegedly benefits pri­ said. "It is motivated by the tight­ ordering that work be stopped and vate, not public interests. The suit, ness of budgets, or sometimes by funds withdrawn from ongoing brought by the California Rural congressional priorities," he con­ proj ects to develop mechanical har­ Legal Assistance project, centers on tinued. "Perhaps they are sensitive vesting technology in the three the development of a mechanical to the need to look especially named areas is reportedly now tomato picker at U .C.-Davis, closely at these areas because of the being circulated for approval in the where a prototype lettuce picker Secretary's concerns." command structure of the SEA. has also been developed. The When it was suggested that The plan will not pull fe deral dol­ CRLA maintains not only that the there might be someone else in the lars out of the state research units mechanical harvesting machinery is SEA administration with more di­ altogether, knowledgeable sources increasing tomato production, but rect knowledge of the situation, Dr. say, but will order their "redirec­ is eliminating thousands of menial Nielson demurred. "Let me look tion" to approved projects. The jobs. This, according to CRLA, is into it," he insisted. "I will look into same sources surmise that the plan contrary to the public interest. it and I will call you back if there is is being cleared now for imp lemen- "We will not put federal money anything to talk about."

EIR October 7, 1980 Economics 13 Gold by Alice Roth

Price jump not just a scare reflex in the May issue of the Soviet jour­ Why the up ward trend will continue, and the remonetization nal Economic Science, an article first brought to the attention of plans will, too. Western readers in an EIR exclusive last July. Marsh also notes that, as EIR readers were already aware, officials of Consolidated Gold­ GOld surged past the $700 an gence of a European Monetary fields, a London-based mining fi­ ounce mark last week, not simply Fund as a gold-based competitor to nance house with extensive hold­ because of a shift in the world stra­ the IMF. In a recently published ings in South African gold mines, tegic picture favoring an early re­ review of the gold market entitled had talks in Moscow that could turn to some form of gold-based "The Gold Price 1980-84," London lead to Soviet-South African col­ monetary system. The Anglo­ stockbrokers Laing and Cruik­ laboration in gold marketing. American policy establishment, shank accept the formation of the The end result of all this is that who are the chief opponents of gold EMF as a given and predict that gold is probably heading higher, at remonetization, suffered major set­ this will lead eventually to much least in the medium term, until West­ backs last week on two fr onts. greater stability in the gold price. ern European governments gain First, the Iraqi invasion of Iran The mobilization of central bank the political confidence to go ahead wiped out the Carter administra­ gold reserves in the EMF will make with the EMF and declare a fi xed tion's hope of a rapprochement gold "the sun around which adjust­ gold price. A final note: EIR was with Iran. Should Iraq prove suc­ ments in parities will be made." correct in predicting a resurgence in cessful in toppling the reactionary, Under such a system, the central the gold price this fall, when many antimodernizing mullahs presently banks will not be able to counte­ well-known Wall Street analysts ruling Iran, they will also discredit nance wild swings in the gold price were projecting either a recession­ the "fundamentalist Islamic" fac­ and will intervene to stabilize the related collapse or aimless chop­ tions currently threatening the sta­ market, the report states. ping which would go on to another bility of Saudi Arabia and other Meanwhile, Financial Times six months to a year. We were right Arab states. This could open the columnist David Marsh empha­ because of a superior grasp of the way to a major improvement in sized in a Sept. 19 article the Soviet world strategic picture. The inepti­ Euro-Arab relations. Union's growing interest in the tude of Carter's Middle East policy Second, the credibility of the EMS and Western Europe's effort was certain to have triggered an International Monetary Fund to remonetize gold. Marsh notes explosion in that region at some (IMF) has been eroded as a result of the warm commentary on the EMS point. that institution's confrontation with the Saudis over the question of whether the Palestine Liberation Organization should be given ob­ Gold 750 server status at the IMF annual (Dollars 700 meeting. If the U.S. succeeds in per ounce) ... blocking the admission of the PLO, r- 650 � the Saudis will have the pretext they � � need to cut off funding to the IMF/ 600 � � World Bank-and proceed toward closer collaboration with the Euro­ 550

pean Monetary System (EMS), London 500 which is based on a pooling of Eu­ afternoon ropean central bank gold reserves. fixing 450 8/28 9/4 British analysts are increasingly 8/7 8/14 8/21 9/11 9/18 9/25 concerned about the possible emer-

14 Economics EIR October 7, 1980 InternationalCredit by Renee Sigerson

EMS at loggerheads with IMF bank lending to LDCs will proba­ If Europe gets serious about" recycling" OPEC fu nds, it will bly amount to $70 billion.) During the meeting, in addi­ undermine the 1M F. tion, an expanded version of this plan was presented to the ministers by the EC's Monetary Commis­ sion. This version called for the European fi nance ministers met Also attacking the IMF is Saudi EMS to also allocate loans to a Sept. 19-20 in the town of M iiller­ Arabia, which is demanding a select group of about 40 developing thaI, Luxembourg, to approve a much larger voice in shaping IMF countries: Portugal, Spain and plan which increases the resources policies in return for loans the IMF Greece (which are associate EC and powers of the European Mone­ in trying to get from OPEC. members), and the 36 Asian, Afri­ tary System (EMS). The EMS was Asked about the emerging con­ can and Caribbean countries which created in 1979 to expand Europe's flict between the EMS and IMF in are members of the EC trade pact financial clout through stable ex­ an interview on Sept. 23, a French known as the Lome treaty. change rates and economic stabili­ government official emphasized Many European officials are ty. Now the EMS guidelines will be that the IMF must drop its policy of currently saying that this second, revised to allow it to accept multi­ attaching. harsh austerity require­ expanded plan will have to wait one billion-dollar deposits from OPEC. ments to loans it makes to Third to two years to go into effect. An The meeting preceded the Sept. World countries. "The IMF can no EC official explained, "Since June, 30 annual conference of the Inter­ longer demand such austerity con­ the EC has taken an interest in the national Monetary Fund (lMF), ditions that the result is to topple question of recycling ...the com­ the 35-year-old bastion of Anglo­ governments," he stated bluntly, in munity could extend credit to non­ American domination of world fi­ an obvious reference to Turkey. members ....My own sentiment is nancial policy. Private banking of­ Earlier this month the Turkish mili­ that there is extreme reluctance, ficials and EC spokesmen con­ tary seized power in a coup aimed at based on the fact that we are badly fi rmed in interviews this week that quelling the social chaos which positioned to compete with the if the EMS now starts to assume a erupted there because of an IMF IMF." larger role in recycling "petrodol­ austerity program which sliced im­ The major cause of this "reluct­ lars," which is what the new plan ports, devalued the lira, and cut ance" is reflected in the current na­ suggests, then the EMS will be industrial output. tional election campaign in Ger­ moving into a world fi nancial posi­ The EMS plan just approved at many, where Chancellor Schmidt is tion previously assumed only by the M ii1lerthal is a first step in the di­ bending to immense pressure not to IMF. rection of a larger EMS role in rally voter support for any policy This change in the EMS guide­ solving the Third World debt crisis which could be considered an af­ lines comes at a time when the IMF through programs of economic de­ front to the United States. The U.S. has come under increasingly vocal velopment essentially financed by still considers expansion of the attack from many nations. Last OPEC. EMS onto the IMF's "turf' an af­ week, 150 countries at the United The plan calls for the EMS to front, as evidenced by an emergen­ Nations voted to have the IMF put acquire between $10 and $14 billion cy study commissioned last week by under day-to-day U.N. control to in OPEC deposits. These funds will the State Department on the vol­ ensure lending policies more in line then be reallocated to European ume of EMS transactions. The with the needs of developing coun­ countries hit by record deficits in State study was requested after offi­ tries. During the U.N. vote, France 1980 due to high oil payments and cials there realized they were mis­ broke ranks and voted in favor of sagging exports. This deficit refi­ taken in an earlier assessment that the resolution and against a U.S.­ nancing program will help free con­ President Carter had succeeded in British-German veto bloc which tinental European banks to contin­ scaring off any kind of EMS-OPEC prevented the passage of the reso­ ue private lending to the Third linkup plan during the Venice sum­ lution. World. (In 1980, world commercial mit last spring.

EIR October 7, 1980 Economics 15 Trade Review by Mark Sonnenblick

Cost Principals Project/Nature of Deal Financing Comment

NEW DEALS

$192 mn. U.S.S.R. from France Rh6ne-Poulenc is supplying Soviets with technology for a 21,000 ton per year methionine plant. Methionine is an additive to animal fodder. Speichim, also of France, wi\1 build the plant. The agreement is part of a 'Soviet-French long-term economic cooperation pro­ gram and is paralleled by a second deal fo r trade in animal feed products.

$179 mn. Iraq from France The French firm Thomson-CSF won Separate from bidding to set up a radio broadcasting $952 mn. system. electronics deal reported in EIR Sept. 2, which has not yet been announced.

$100 mn. Ireland from Japan Fujitsu, Japan's leading computer company, wi\1 build plant near Dublin to manufacture integrated-circuit com­ puter components.

UPDATE

$350 mn. U.S.S.R. from France 480,000 ton per year electrical steel French Exim French sheet plant. Japan Times reports U.S. Bank. reportedly will Undersecretary of State Richard Coop­ sign soon. er failed during a special visit to Paris this year to stop Creusot-Loire from signing contract for the plant. Nippon Steel of Japan and Armco of the U.S. had won the contract last December, but were forced out by sanctions against Soviet actions in Afghanistan.

$500 mn. Brazil from France Petroleum equipment induding two Consortium Brazil semi-submersible rigs and electronic headed by negotiating echo-sounders for use in Campos Bas­ Paribas. terms and in. Half of loan wi\1 finance equipment; minor half will not be tied to trade. participation of Brazilian capital goods industry.

$50 mn. France from Brazil French Defense Ministry announced it Banco do Brasil Deal had been will buy 52 Xingu training planes from export credits. stalled by Brazil's Embraer. Opponents of the controversy. deal allege that Brazil will buy Mirage jets in return. This is Brazil's most im­ portant aircraft export deal.

$40 mn. U.S.S.R. from Japan Added credit for cost overruns on cok­ Japanese Exim ing coal project Japanese are building Bank. in Yakutia, Eastern Siberia, was ap­ proved by Japanese Exim Bank. An­ other credit for fo restry was also ap­ proved.

16 Economics EIR October 7, 1980 Currency Rates

American The dollar in deutschemarks Reindustrialization: New York late afternoon fixing The High Technology 1.90 Solution 1.85 A Groundbreaking Advance in 1.80 Econometrics ,,/ 1.75 � The American economy will not survive if 1.70 the policies for "reindustrialization" of the N/6 N/B 11/10 8/27 9/3 9/ 10 9/ 18 9/24 United States championed by the three major presidential candidates are implemented much fu rther. Contesting the need to aban­ The dollar in yen don decline of America's steel, auto and other New York late afternoon fixing so-called "sunset" industries, the seminar

240 will use the LaRouche-Riemann economic model to show that "reindustrialization" 230 must be based on reviving American basic in­ - dustry, led by the development of nuclear 220 "- �� energy. EIR's forecast for 1981 will also be .A. 210 r----....� - ""- �";'" presented.

200 M/6 M/ B 11/10 8/27 9/3 9/ 10 9/ 18 9/24 In Atlanta Thursday. Oct. 23. 1980. 2:00 pm The dollar in Swiss francs Tower Place Hotel New York late afternoon fixing 3340 Peachtree Road NE Atlanta, Georgia 1.75 Speaker:

1.70 David Goldman, EIR Economics Editor $25, Cash bar to follow 1.65 F � Contact: Susan Schlanger (404) 266-0744 ." 1.60

1.55 In Chicago M/6 M/1.1 11/10 8/27 9/3 9/ 10 9/ 18 9/24 Tuesday. October 28. 1980. 1:00 pm McCormick Inn The British pound in dollars Lakeshore Drive and 22nd St. New York late afternoon fixing Chicago, Illinois Speakers: 2.40 A David Goldman, EIR Economics Editor - """"" 2.35 r '- -J Ron Thelin, State President, Conference of Illinois Cement Masions Union 2.30 $25 admission 2.25 Contact: Paul Greenberg (3 12) 782-2663

2.20 M/6 M/ B H/20 8/27 9/3 9/ 10 9/18 9/24

EIR October 7. 1980 Economics 17 Business Briefs

International Credit ground [of overall production declme]," should never have implemented such a Japan's business daily Nihon Keizai stringent monetary policy at a time when Int'l Monetary Fund Shim bun was told by economist Hisao it was already placing the banking system Kanamori, one of the architects of Ja­ under strain with the new Omnibus cash-short in 1981 pan's 1960s boom. Banking Bill's provisions to deregulate Steel is one of the heaviest areas of banking, he said. According to calculations by an Ameri­ investment even though in Japan, as in "Either one would have been difficult can research organization, the Interna­ the U.S., total output is less than before enough to absorb by itself," O'Connell tional Monetary Fund will come up the oil crisis. Japan's firms are heavily stated. "Tied together, they have added roughly $10 billion short in lending re­ investing, not in capacity expansion, up to a prescription for chronic chaos in sources during 1981. Even after the which occurred up to 1973, but in conver­ the fi nancial markets." United States Congress approved its sion from conventional processes to con­ O'Connell criticized what he called contribution to the fu nd's new round of tinuous casting, which uses one-third less "unprecedented swings" in interest rates quota increases, the International Mon­ energy per ton of steel. Kawasaki Steel under the Fed's program. "We have had, etary Fund had usable resources of no president Hideo Iwamura says the ratio in short, an overload of financial change more than $30 billion, the Atlantic Coun­ of continuous casting in his firm will rise at a very difficult time for the economy," cil of the United States believes. The to 80 percent through this program. he stated. Council calculates that the $80 billion Other major areas of investment are in payments deficit of the developing sector robotizing auto plants, improving elec­ during 1981 will require larger IMF out­ tronic products, and other high-technol­ Banking lays, given the unwillingness of private ogy fields. After inflation, the overall capital investment represents a 15 sector banks to increase commitments to Agreement nears on already heavily-indebted countries. percent increase, compared with 5 per­ What the Atlantic Council fears is cent in 1979. U. S. banking free zone severe institutional weakening of the IMF, if it is unable to meet Third World The New York Clearing House Associa­ fu nding requirements. Domestic Credit tion of the twelve largest New York Prospects for raising additional fu nds banks has set up a task force on Interna­ from the OPEC countries or other Federal Reserve tional Banking Facilities (IBF) with the sources seem dim. Most observers rule major Chicago, Boston, and California out a major direct contribution from the under attack banks. The task force is ready to endorse reluctant Saudi Arabians or Kuwaitis. the IBF, or "free banking zone," Chica­ An alternate plan, to have the IMF bor­ The U.S. League of Savings Associations go sources told EIR . The Federal Re­ row on world capital markets to re-Iend has mounted a fu ll-scale attack against serve is expected to quickly rule in favor to borrowers, appears to have been put the deregulation of U.S. banking as part of the New York banks' 1978 proposal, aside under European objections. of which William O'Connell, League Ex­ which has been held up for two years by ecutive Vice President, this week hit the the powerful opposition of the largest Fed itself as a "dangerous" concentra­ money-center banks outside New York, tion of power. these sources say. Capital Expansion O'Connell told the California Sav­ "We have certain conditions regard­ ings and Loan League convention Sept. ing equality with New York we want Despite recession, 23 that the Fed "has not only the respon­ met, but we're willing to move now on sibility for monetary policy, but, through the IBFs in view of our negotiations with Japanese invest more the Depository Institutions Deregulation the New York Clearing House," a Chi­ Committee, it also has new and effective cago banker told EIR this week. The Despite a decline in output at an estimat­ life-and-death power over all financial Association of Reserve City Bankers, the ed annual rate of 5 percent since March, institutions. This is, I submit, an extra­ national organization of the top 100 Japan's industries are expanding capital ordinary, unwarranted and dangerous banks' chief executive officers, is said to investment by 22 percent in the year end­ grant of power to a few non-elected have agreement on the free zones from ing March 1981, better than the 18 per­ public officials who are not accountable every major regional banking giant in cent hike businesses had planned on be­ to the electorate of a representative de­ the country. fore the recession began. This is the high­ mocracy ." The regional giants' "condition for est expansion since the pre-oil-crisis O'Connell also denounced the Fed's equality" is the establishment of a na­ boom year of 1973. "In the past, I can't current high interest rate policy and its tional Electronic Funds Transfer pay­ remember accelerating capital invest­ entire monetarist orientation to mone­ ments system . They want a national ver­ ments taking place against such a back- tary policy since October 1979. The Fed sion of the private Clearing House Inter-

18 - Economics EIR October 7, 1980 Briefly

• CHINA has abandoned plans to build a $250 million trade center in Peking. The cancellation of the project is a source of embarrass­ national Payments System (CHIPS), secondary impact of parity pricing, and ment to David Rockefeller, who which electronically clears New York also to critically evaluate the assump­ devoted great time and effort to banks' payments with their London of­ tions in the econometric models routinely the proposal, and Chase Manhat­ fices and among themselves. There are used by the USDA and others to rule out tan, which was organizing financ­ various stages to a national CHIPS. a parity policy for agriculture. Eschwege ing for the project. Continental Illinois says the Chicago said the study concluded that fo od prices banks are ready to go if they are merely would rise along with net income, hardly allowed to set up a CHIPS terminal in a new fi nding, but that currently avail­ • THE EXIMBANK has been their Chicago headquarters on line with able techniques do not permit estimates denied an additional $1 billion ap­ their New York correspondent bank­ of secondary effects and thus cannot propriation by the U.S. Office of that is, without even themselves becom­ draw a total picture of whether or not, Management and Budget, on the ing full CHIPS members. Bank of Amer­ for instance, consumers would be better grounds that the increased funding ica is asking for an account for its San or worse off in the long run. would contradict the Carter ad­ Francisco headquarters at the New York ministration's commitment to Fed to clear with CHIPS-a sort of"par­ budget cutbacks. tial" CHIPS membership. First National Bank of Boston would be satisfied for Foreign Exchange now with fu ll CHIPS membership for its • IRWIN KELLNER, a Manu­ facturers Hanover economist, pre­ New York Edge Act subsidiary, which Currency markets calm presently operates through a New York sents a grim picture of world eco­ correspondent bank. despite war buildup nomic prospects in a recent bank All these sources told EI R they expect study: "An extended period of global low growth, the introduc­ eventually to become fu ll national mem­ Foreign exchange rates had ended their tion of protectionism, beggar-thy­ bers of a U.S. CHIPS system-but that wild fluctuations by Sept. 24 even though neighbor economic policies, sharp they'll support the free banking zone the Iran-Iraq war intensified at the same cuts in living standards with the even before that occurs. time. Traders had initially viewed the war disappointment of social and eco­ as advantageo us for the U.S. dollar and nomic aspirations, debt default by British pound, since the economies of one or more of the LDCs with Western Europe and Japan would be consequences for the international Agriculture much more vulnerable in the event that financial system-any or a combi­ Persian Gulf oil traffic were shut down nation of these could introduce a or Iraqi oil output halted. On the other GAO reports out period of economic chaos." hand, the toppling of the Khomeini re­ parity study gime through an Iraqi victory would probably result in greater availability of • DR. UWE PARPART, director Spokesmen for the U.S. Government Ac­ oil to continental Europe. of research for the New York­ counting Office officially presented on The deutschemark recovered against based Fusion Energy Foundation, Sept. 18 the summary conclusions of the the dollar despite a Bundesbank an­ recently concluded a week-long study they were directed to undertake nouncement Sept. 24 that in August, trip to some of Mexico's major almost two years ago on the impact of West Germany had run its first trade cities, including Hermosillo and parity pricing in agriculture. Henry deficit in 15 years. The deficit was about Ciudad Obregon, Sonora, and Eschwege, director of the GAO's Com­ $74 million, compared with a $543 mil­ Mexico City. The FEF has just munity and Economic Development Di­ lion surplus in August 1979. Bundesbank completed a proposed 30-year eco­ vision, and several staffers who had officials blamed the deficit on the higher nomic development program for worked on the report appeared at hear­ cost of imported oil and rising imports of Mexico based on the LaRouche­ ings called by Rep. Nolan, the Minnesota other goods. Although the volume of oil Riemann model. Dr. Parpart held Democrat who heads the Subcommittee purchases and other raw materials fell a public seminar fo r economists, on Family Farms, Rural Development 7.5 percent in the quarter ending in July, scientists and engineers, press con­ and Special Studies, which had commis­ as West Germany's economy began slip­ ferences, and meetings with gov­ sioned the study. ping into a recession, the volume of im­ ernment officials on the FEF's Eschwege read a preliminary state­ ported finished goods jumped 8.5 per­ LaRouche- Riemann econometric ment that gives little hope that the study cent. Lacking domestic sales and hoping model and the need for Mexico to itself will emerge with any teeth from the to benefit from the cheap dollar, U.S. begin an aggressive nuclear devel­ so-called peer review process in which it companies have dumped large amounts opment program. is still ensnared. The GAO's mandate of goods on European markets in recent had been to examine both the direct and months.

EIR October 7, 1980 Economics 19 TIillSpecialReport

The significance of the West German national elections

by Webster Tarpley

On Oct. 5, citizens of West Germany will go to the polls to cast their votes for the country's ninth Bundestag, or federal parliament, since the establishment of the Bundesrepublik Deutschland in 1948. That Sunday's vote will decide whether the present ruling "social-liberal" Bonn coalition of Social Demo­ crats (SPD) and liberal Free Democrats (FDP) led by Chancellor Helmut Schmidt and Foreign Minister Hans-Dietrich Genscher will withstand the challenge of the Christian Democratic Union (CDU), who are offering as their chancellery candidate Franz-Josef Strauss, the prime minister of the federal state of Bavaria. A third force in the election fight, influential out of all proportion to its numbers, is the Europiiische Arbeiterpartei (EAP), the European Labor Party in the Federal Republic. The EAP's chancellery candidate is Helga Zepp-LaRouche, wife of former Democratic presidential candidate Lyndon LaRouche. Because West Germany is one of the pillars of the Paris-Bonn axis, the . most important political combination in the world today, because of this country's status as economic giant of Western Europe and strategic center­ piece ofthe continent, these elections are of decisive importance for the entire world. European media, unlike those in the U.S., are now devoting broad attention to the battle between Schmidt, the stolid manager from Hamburg, the old Hanseatic League trading city at the mouth of the Elbe in northern Germany, and Strauss, the volatile, impulsive Bavarian from the deep south. Television programming is full of speeches by Schmidt, delivered in meas­ ured High German accents, and by Strauss, in his abrasive Bavarian peasant dialect. These two have been joined by Helga Zepp-LaRouche, who is getting less television time, but who is generating excitement by the sheer political content of her television and radio appearances. Zepp is from Trier, near the French-German-Luxembourg border, the home town of the Renaissance philosopher and politician Cardinal Nicholas of Cusa. This West German election is diffe rent from the present phase of the U.S.

20 Special Report EIR October 7, 1980 Helmut Schmidt . in Hamburg cap. on campaign tour.

presidential contest. West German voters can do some­ thing more than choose among competing brands of Trilateral Commission degeneracy. This is true because About the author Schmidt and Zepp-LaRouche, on the one hand, and This unique, in-depth report on the West German elec­ Strauss and company, on the other, represent the two toral campaign and its aftermath was commissioned by hosti le policy factions that are presently struggling fo r Executive In telligence Review from American journalist control of Europe and the world. and economist Webster G. Tarpley to provide U.S. and The contributions of Zepp-LaRouche and the other other non-German readers with an accurate overview of leading candidates of the EAP-Uwe Friesecke, Anno political trends in America's most important allied coun­ Hellenbroich, Elisabeth Hellenbroich, Gabriele Liebig­ try, developments that have been ignored or distorted in represent the clearest and most competent fo rmulation the U.S. press accounts. After firstcomin g to Italy as a Fulbright scholar in of the economic development fa ction. The EAP is run­ 1966, Mr. Tarpley has been writing on European political ning on a five-point program that calls fo r deepening the and economic developments from Western Europe fo r Franco-German alliance, launching the European Mon­ nearly a decade. Since March 1979, he has produced and etary Fund as a new, gold-based universal monetary presented the "Osservatorio Economico," a weekly half­ system, fu lly exploiting nuclear energy, reshaping Ger­ hour wrap-up on world economic developments for the man education through a return to the classical models Vatican-linked television channel Teleradiosole in of Leibniz, Schiller, and Beethoven, and massively as­ Rome. Tarpley directed the team of authors who produced saulting the drug problem. the 1978 book-length study Who Killed A Ida Mora? The authoritative Milan newspaper Carriere della Sera called Schmidt's program it the most exhaustive account of the kidnap and murder of the fo rmer Italian premier and the background of West German political history since the fa ll of Willy international terrorism. Brandt in 1974 has been marked by the EAP's increas­ He brings to his account of the 1980 German elections ing ability to fo rce Schmidt's convergence on successive both the "outsider's" insights as an American and the "insider's" view of one who has lived and worked in approximations of the EAP program. This process has West Germany. A long-time associate of EIR fo under not been simple, and there have been repeated phases of Lyndon LaRouche, Webster Tarpley headed the conser­ backsliding on the part of the chancellor, but the trend vative Democrat's presidential campaign committee in is unmistakable. Whatever his inadequacies may be Europe this year. today , Schmidt has come a long way since he took

EIR October 7, 1980 Special Report 21 office in 1974, and key parts of his present policy Hungarian sovereign-see eye-to-eye on a conception profile-the French-German alliance, the European of society that has deep roots in the feudal turf of pre­ Monetary Fund, the tendency to decouple from Wash­ World War I Eastern Europe. ington and NATO-come straight from the EAP. In In matters of foreign policy, Franz-Josef Strauss is these elections, the EAP is seeking to go beyond its an apostle of confrontation with the Soviet Union and high-level influence, and to consolidate its own machine its allies; even more blatantly than Henry Kissinger or of political power. Zbigniew Brzezinski, he speaks in the linguistic cliches Helmut Schmidt has staked the future of his govern­ of the cold war of the 1950s. In his campaign speeches, ment on an alliance with French President Giscard vehement to the point of raving, the old Dulles dream d'Estaing, his old friend from the days when both were of "rollback of Communism" is never far below the finance ministers during the monetary crises of the early surface. Strauss is in basic agreement with the Dutch­ 1970s. The Schmidt-Giscard combination is an attempt man Josef Luns, the general secretary of the North to replicate the de Gaulle-Adenauer "entente c;:ordiale" Atlantic Treaty Organization; with British Prime Min­ of the early sixties, this time with more ambitious ister Margaret Thatcher and her Svengali, Sir Keith content. The Paris-Bonn axis of today, virtually the only Joseph; with France's hawkish pseudo-Gaullist Jacques going concern in the entire field of international diplo­ Chirac; and with Italy's Amintore Fanfani, another macy, is committed to a policy of war avoidance vis-a­ Christian Democrat who is hooked up to the same vis the Soviet Union and the Warsaw Pact, through the Jesuit and fo rmer Nazi networks that give Strauss his maintenance of the highest possible level of diplomatic, power. economic, and cultural contacts with the East bloc. The perception of the majority of German industri­ More importantly, Bonn and Paris have taken the alists and bankers, who back Schmidt, is that Strauss's first steps towards the creation of a new gold-anchored commitment to confrontation in the political, economic, international monetary system, the European Monetary and ultimately strategic arenas is so strong that if the System of March 1979, to replace the IMF and related Bavarian were to succeed in his quest for power by relics of the defunct Bretton Woods system. The future establishing himself as tenant of Bonn's Palais Schaum­ of the human race is very much riding on the quality of burg, the chancellor's official residence, the outbreak of political and economic moves that Paris and Bonn come head-on confrontation between the great powers in up with during the coming months, since these are the Europe would be a foregone conclusion. only world capitals th�t have maintained any approxi­ It is thus a matter of immediate importance to the mation of fruitful, global strategic initiative during the nations of the world that the West German electorate, period of cataclysmic crisis that the world has been according to all surveys taken to date by a broad passing through during the last year in particular. spectrum of polling organizations in the country, seem This is the essence of the Bonn-Paris alliance, which to have every intention of giving Schmidt four more was ceremoniously affirmed duringJuly on the occasion years in power with a parliamentary majority somewhat of President Giscard's visit to West Germany, the first larger than the present one. Somewhere between two­ by a French head of state since General de Gaulle. thirds and three-fourths of the citizenry judge Schmidt the best man for the chancellor's post, making him the Strauss: apostle of confrontation fi rst German politician who has been able to top the popularity of founding Chancellor Konrad Adenauer, Franz-Josef Strauss is a horse of a different color. who was number one among his countrymen fo r almost Strauss's pedigree goes straight back to the intelligence a decade afterhis death. circles of the Wittelsbach family, the dynasty that held Strauss, by contrast, is seen as too likely to set the the throne of the Kingdom of Bavaria until 1918, and Russian tanks rolling in the wake of social conflict, to the related intelligence establishment of the Haps­ strikes and disorder on the home front. Schmidt would burg Austro-H ungarian monarchy in Vienna. Contrary today be on the verge of an overwhelming landslide to surface impressions, the influence of these feudal victory, were it not for the German public's intense aristocrats is far from extinct, especially down in the dislike fo r the left wing of Schmidt's Social Democrats, Danube Valley, where Franz-Josef hails from. represented by men like Horst Ehmke, Egon Bahr, One of Strauss's most intimate associates continues Erhard Eppler, and other satellites of fo rmer chancellor to be Grand Duke Otto von Hapsburg, the pretender to and present SPD chairman, Willy Brandt, who is a close the throne of the Holy Roman Empire, the Austrian friend of Robert McNamara of the World Bank. Empire, and the Kingdom of Hungary, though Otto EAP surveys show that the overriding concern of has been keeping a lower profilethese days than he did the West German population is the maintenance of in last year's elections for the European Parliament in peace in Europe. In reaction to the Carter administra­ Strasbourg. Otto and Franz-Josef-the name is not tion policies, which are seen by the average German as coincidentally an allusion to the next to last Austro- aberrant and adventurous, there is a colossal anti-Amer-

22 Special Report EIR October 7, 1980 Franz-Jose! Strauss (r) during a parliamentary session.

ican resentment abroad in the land, a resentment which organized by Bavarian television several weeks ago, is still boiling under the surface merely because no Schmidt offered the following analysis. The principal politician of the major parties has chosen to become a causes of the threat to peace are essentially fo ur: Iran, spokesman for it. For the mature German citizen, the after the fall of the shah and the taking of the American experience of war as catastrophe, as Untergang, is now hostages; Afghanistan, after the Soviet invasion; the the operative factor in determining political behavior. Middle East; and the threat of a massive new escalation Ironically, this feeling, which derives from the tragic in the arms race between the United States and the experience of Hitler's assault on the Soviet Union, has Soviet Union. At the beginning of this year, Schmidt led to a profound psychological rapprochement with continued, all dialogue between the United States and the Soviet people. This is based on the convergence of the Soviets had been broken off, and the diplomacy of the German and Russian perceptions of war as the total the superpowers had been paralyzed by crossed ultima­ negation of everything that makes life worthwhile, and ta. Schmidt said that this extremely dangerous "wall of of war avoidance as the imperative necessity. Germans mutual silence" had been overcome only through the and Russians, one increasingly hears, have "war in their diplomatic initiatives, first of the French Republic under bones," and differ in this from the political culture of "my friend" Giscard d'Estaing, and then by the Federal the United States, which knows almost nothing, by Republic of Germany. Schmidt stressed above all the comparison, of war's real devastation, and is thus seen necessity of such dialogue: "Security derives from hav­ here as a country that courts confrontation in a totally ing one side listen to what the other is saying," he irresponsible manner. asserted in one of his speeches. In this connection, Schmidt has repeatedly under­ The threat of war scored the importance of maintaining equilibrium be­ tween the United States and the U.S.S.R. This equilib­ Schmidt's two slogans fo r the SPD campaign are rium is imperative, he said during his Bavarian televi­ "Sicherheit fii r Deutschland" (security fo r Germany) sion interview, and the purpose of arms limitation, arms and "Increase the well-being of our people while ward­ control, and disarmament is to guarantee that equilib­ ing off threats." Several months ago Schmidt compared rium can be reduced to lower and lower levels of overall the world situation of today with that of July-August military appropriations. In response to a question about 1914, on the eve of the outbreak by miscalculation, of Ronald Reagan's quest for U.S. military superiority, he World War I. He has repeated this analysis recently, answered that Germany would never accept such a stressing that the present world configuration is "emi­ policy. Out of this flows Schmidt's commitments to nently dangerous." fa vor talks between Washington and Moscow on the In a television interview with several journalists limitation of the medium-range missiles in Europe. This

EIR October 7, 1980 Special Report 23 was the only result of his late June trip to Moscow, fo ur D-marks to buy a dollar; now it is about 1.75. other than the approval of several important develop­ Pointing out that the West German economy has thus ment deals with the Soviets. been shielded from the increased cost of oil, Schmidt In a more recent television broadcast from the praised the D-mark as one of the hardest currencies in offices of the Nurnberger Nachrichten, a newspaper in the world, established as such by all the currency northern Bavaria, Schmidt elaborated that a new cause markets in the world, not many of whose brokers are of world instability is the destructive economic effects German Social Democrats, he quipped. We have the of the 1979 oil price increases, which are now being greatest currency reserves of any nation in the world, acutely felt by all countries. Schmidt said that he was the second greatest gold reserves in the world, the deeply concerned that the prospect of rising unemploy­ lowest inflation rate and the lowest rate of joblessness ment and inflation would cause a turn to protectionism of any major industrial nation, Schmidt continued. and thus deal a fatal blow to the integrity of world trade. From this point of view, he added, today's world Schmidt tying his own hands economic situation can only be compared with that of the years 1931, 1932 and 1933. All well and good: but at the same time the motor In a speech before the Munich International Energy force behind the deterioration in the military-strategic Conference, Schmidt added that without the develop­ realm is the ongoing economic decline, as has been ment of nuclear energy, there was a danger that wars obvious in famine-ridden East Africa. This was the could break out for the control of a dwindling world oil focus of Helga Zepp-LaRouche's first national TV spot. supply. The other side of the coin is seen inside West Germany: If Schmidt is compared to the corresponding level of beneath the appearances of order and well-being is a politicians in the United States or Great Britain, he population with a birth rate of 1.4 children per woman, appears to be a paragon of statesmanlike competence, towering over disgusting immorality and abysmal stu­ pidity of his counterparts. However, this standard of comparison is not the relevant one. Schmidt, like Gis­ card, must be measured according to the standard of Catholic bishops necessity, of the adequacy of their policies to guarantee attack Schmidt the survival of the human race at this strategic juncture, since this is the role they must perform; and from this The conference of Roman Catholic Church bish­ point of view, Schmidt's rating looks very different. ops, with the consultation of one of Franz-Josef Schmidt's problems center on conceptualizing the Strauss's campaign advisers, last week drafted a relation between monetary crisis, world depression, and pastoral letter which was read from the pulpits of the threat of war in today's world-strategic process. over 12,000 churches, criticizing the Schmidt gov­ Most simply put, Schmidt has fo r the moment dropped ernment for "sacrificingou r youth's future by fol­ all initiatives in the direction of the urgent implementa­ lowing a policy of inflationary public state debts." tion of the second or credit-issuing phase of the Euro­ In a speech given a few days Iter on Sept. 23 by pean Monetary System. As recently as several months Archbishop Josef Hoffn er. The Archbishop de­ ago, he was reported to be thinking hard about ways to clared that West Germany's politicians and indus­ wipe out the Eurodollar market and use this liquidity trialists were leading the country into a "world fo r development credit within the fr amework of the new catastrophe" with their industrial development European Monetary Fund. But, for the time being, both policies. He called such policies a "cancer" which Schmidt and Giscard seem to have decided that this is a threatens to engulf all of God's creation, and espe­ bridge that can only be crossed after the German cially singled out what he termed "the reckless elections, and perhaps even after the French elections pursuit of nuclear energy construction." The head late next spring. Schmidt seems to see these issues as of the conference of bishops added that man should either-or: either stress dialogue and peace policy, or else not treat nature as his resource reserve, but must push the EMF, but German and international power find his way back to the simple methods of soil relations do not permit both. cultivation practiced by the Benedictine Order and Thus, the EMF is never mentioned these days by the Cistercians. Schmidt or by his fi nance minister, Hans MatthOfer, Schmidt responded to the bishop's move by The Europaische Arbeiterpartei, however, continues to calling it an unprecedented and unwarranted inter­ make the EMF the core of its campaign. Schmidt tends ference of the Church in political affairs. He added to point to his own track record in economics with the that there was nothing in the Old or New Testa­ smug complacency of a successful sales manager. He ment dealing with state finances. said on television that when the SPD took office, it took

24 Special Report EIR October 7, 1980 far below the level of simple reproduction, which is 2.2. himself very sly, rejected the opposition demands, say­ The point is that Schmidt has chosen not to use the ing that he agreed instead with President Carter that election as a forum of mass education around the interventions into the Polish situation should be kept to leading strategic and economic issues, beyond the level a minimum, and adding that he had just received a of the general briefing summarized above. In his ap­ letter from Carter recommending that Western econom­ pearances he is rather more concerned with projecting ic help to Poland should be increased, not cut. an image, that of the sober, self-controlled statesman­ Schmidt may have cleverly boxed in the hapless like, reliable steward of the public interest, all in com­ Kohl and Strauss, but many intelligent Germans per­ parison to Strauss, who is none of these. ceived these remarks as the cheap election trick they This strategy means that Schmidt has tied his own were. One veteran SPD factory councilor in a steel mill hands in a critical period. It is well known that in the Saarland told this writer: "We've had it up to Schmidt's attitude towards "unpredictable" President here with letters from Washington telling our govern­ Carter is one of personal loathing, and deep distrust; ment what to do, and Schmidt should have said so." nevertheless, Schmidt is careful to keep these we!l­ Despite deep popular loathing of the Carter administra­ known facts under wraps during the campaign, lest he tion's dangerous antics, West German Chancellor Hel­ offer grist for Strauss's mill. Behind the scenes, an mut Schmidt's campaign for reelection has steered clear official of the Bonn coalition predicted that until Oct. 5, of attacks on Carter. The political mood in the electorate Schmidt would avoid all overt clashes with Carter. But is increasing hostility to having Bonn pushed around by after that, he said, there would be a series of extremely Washington. But a strange taboo has descended on this tough confrontations between Bonn and Washington, question in the past few months. growing more out of the predictable course of events One index is this year's Autumn Forge maneuvers, than out of any special plan of Schmidt's. which are billed as the biggest war games on German soil He characterized the Bonn government as sick and tired of receiving ultimata from Washington, and said that he was eagerly awaiting the day when Schmidt or some other member of the cabinet would tell Carter to go to hell. For this, a united Europe would be necessary, Der Spiegel but, he added bitterly, some countries, like Italy, are attacks the EAP little better than colonies of the United States. In Italy, the Americans' have erected an iron curtain against the The West German magazine Der Spiegel promi­ necessary "historical compromise" between Christian nently features in its Sept. 22 issue an article entitled Democrats and Communists, he said, and it is the "Dark Forces," which characterized the European Americans who need constant terrorism to make sure Labor Party (EAP) as rightwing and Nazi, myste­ that the PCI is kept out of the government. Kissinger is riously supported by both the CIA and KGB. The the evil spirit who curses at the German detente with EAP's leading candidate in the October elections is the East, the Ostpolitik, he went on. Pretty soon, he Helga Zepp-LaRouche, wife of the American polit­ concluded, the French and the Germans are going to ical leader Lyndon LaRouche. get together with the Soviet Union and impose a Der Spiegel accuses Mr. LaRouche of brain­ solution on the Middle East in coherence with European washing his supporters through "deep analytical interests. therapy" and "endless interrogations with depri­ Top officials of the Bonn coalition are known to vation of sleep and fo od ...a political Jim Jones." consider Zbigniew Brzezinski a dangerous lunatic, and Der Spiegel is a left-liberal magazine whose to keep certain artifacts of Brzezinski's more crack­ editor, Rudolph Augstein, was arrested in Italy last brained escapades on prominent display in their offices, year on drug charges. where they can be ridiculed for the amusement of The EAP has issued a leaflet pointing out that visiting officials and guests. "the original source of most of the lies in this Unfortunately, not much of this is allowed to seep week's Der Spiegel is the weekly New York City out in public, despite the fact that people are more than newspaper Our Town, whose editor is Ed Kayatt, a ready to hear it. At high-point in the recent Polish crisis, convicted felon who served time in prison for fraud Schmidt showed the extent to which he underestimates involving U $. government bonds." Kayatt, the the political maturity of the population here. Helmut leaflet continues, is a protege of Roy Cohn, a Kohl, the CDU chairman, and Strauss had both de­ lawyer whose first claim to fame was his participa­ manded that Schmidt declare his full support of the tion in the McCarthy witch-hunts of the 1950s and Polish strike movement, and that he deny the Warsaw who now distinguishes himself as a lawyer for government a OM 1.4 billion loan that had been fl oated international organized crime members. by a consortium of German banks. Schmidt, thinking

EIR Octo ber 7, 1980 Special Report 25 since 1945, with hundreds of thousands of NATO troops, the Federal Republic, there is no doubt that the Paris­ especially British troops, taking part. Last year, Defense Bonn-Moscow combination has lost momentum when Minister Hans Apel's ministry had protested what it it could have been accelerating. termed the unnecessary scale of similar maneuvers. This Clearly, this was not Schmidt's intention. His calen­ year, despite the fact that the maneuvers are a bigger and dar for August had originally called for a visit by Polish more absurd provocation in every way, Apel meekly party secretary Edward Gierek to Schmidt's private took his place beside NATO General Secretary Joseph home in a quiet suburb of Hamburg, a privilege that Luns and NATO Supreme Commander Bernard Rogers Schmidt extends only to those foreign leaders whom he at the Royal Air Force base in Giitersloh for the official finds both personally and politically congenial, and opening ceremony. At the time, Helga Zepp-LaRouche which has never been offered to Carter or Thatcher, of the EAP urged Schmidt to end West Germany's status who lose on both counts . After that, Schmidt was as an intimidated, occupied nation by calling off maneu­ scheduled to travel by car into East Germany for a vers that coincide with the Warsaw Pact fall maneuvers meeting with the DDR chief-of-state and party leader in the neighboring German Democratic Republic, as Erich Honecker. This meeting was slated to yield further well as with the critical final phase in the West German massive improvements in inter-German trade, energy election campaign. agreements, and possibly a dramatic all-German call to Appearing in an EAP television election spot follow­ preserve the peace in Europe and the world, containing ing the second program evening news, Zepp-LaRouche a pledge by both sides that world war will never again introduced herself as the wife of Lyndon LaRouche, the be unleashed from German soil. This meeting, which American presidential candidate and economist, and was to have taken place near the Werbelinsee, northeast sharply attacked the Carter administration for deliber­ of Berlin, would have been the fi rst-ever summit of the ately theatening Europe with nuclear destruction in the two German states. Afterward, Schmidt was scheduled service of Zbigniew Brzezinski's military fantasies . to visit the Baltic seaport of Rostock. There he was "Enough is enough," she said emphatically. expected to receive a very warm reception from local "I know the United States better than Schmidt, to say citizens, which would have duly impressed West Ger­ nothing of Strauss," said Zepp-LaRouche, "and I know man voters. that the real America is not the bankers of New York, As it turned out, Gierek was forced to cancel his Boston, and Chicago." The real America, she asserted, visit, and it was left to Schmidt to call off the projected would welcome the imposition of rational policies on German summit, fearing that it would coincide with Washington by joint Franco-German policy initiatives. Polish or Soviet military moves to crush the Polish First among these must be the implementation of the strikes, or that provocateurs might exploit his presence second phase of the European Monetary System, in the in the DDR to touch off rioting there. West Germany's context of energetic measures to neutralize Carter's con­ right-wing Springer press, which backs Strauss, was frontation policies in all the relevant world arenas, she quick to assert that the basic thesis of Schmidt's Ostpol­ said. itik-that East-West negotiations and dialogue must be maintained under all circumstances, and especially in Results of vacillation times of crisis-would not hold water.

Schmidt's reluctance to undertake such meaningful, How Schmidt is boxed in high-impact measures in the months before the election has permitted a noticeable deterioration in the policy To findthe cause of these setbacks for Schmidt, one climate. By shying away from the domestic political need look no further than his own party, the SPD, and risks of an open repudiation of Carter and everything his coalition partner, the FDP. that he stands fo r, Schmidt has armed the enemies of The most serious problem is represented by Herbert detente policy, both in Washington and Moscow. From Wehner, leader of the SPD faction in the Bundestag, the Soviet point of view, Schmidt is the man who met boss of the powerful AFA (Arbeitsgemeinschaft fUr Ar­ with Brezhnev in June, who received a member of the beitnehmerfragen, or working group on employee prob­ DDR Politburo in Bonn for the first time this spring. lems), the interface between the SPD and the huge Ger­ But he is also viewed as an accessory to the December man trade union confederation. Wehner is the eminence NATO decision to deploy the medium-range Euromis­ grise of the SPD-and the most powerful British agent in siles, a prime mover in the boycott of the Olympic West Germany today. He is, for example, a much higher Games, and the vice-chairman of the SPD, a party grade asset, from the British point of view, than the which provided major inputs into the Polish destabili­ better-known Willy Brandt, who tends to act as a spokes­ zations. Although Soviet President Brezhnev, in his man and vehicle for policies decided upon by Wehner. recent Alma Ata speech, repeatedly stressed the Soviet When, in the wake of the Polish destabilization, the centrist faction's desire for cooperation with France and official East German press agency Neues Deutschland

26 Special Report EIR October 7, 1980 Foreign Minister Hans-Dietrich Genscher (/).

issued a stinging attack on the West German media and containment and harassment operations against the "revanchist circles" fo r blatant interference in the Polish influence of the EAP and Lyndon LaRouche in the SPD situation, there can be little doubt that Wehner's net­ since the fa ll 1974 "incompatibility" decision, which works in the East bloc, including various networks dat­ barred SPD members from joining the EAP. ing back to the infamous SPD Ostbiiro espionage and Wehner was unquestionably a major factor in the subversion operation of the cold war years, were being Polish destabilization, and he did not act alone. Partners targeted. in this operation included such figures as Horst Ehmke, Wehner started out in the Weimar Republic as an Erhard Eppler, and Egon Bahr, presently the organiza­ anarchosyndicalist professing views similar to those of tional boss of the SPD and fo rmerly the top envoy in Gregor Strasser of the so-called left wing of the National the East bloc fo r fo rmer Chancellor Brandt. Some of Socialist German Workers Party. Later, Wehner became these, like Brandt's old sidekick Ehmke, are among a communist, joining the Ernst Maslow-Ruth Fischer Schmidt's most bitter personal enemies. Much of putschist-terrorist fa ction of the old KPD (German Schmidt's real power, by contrast, comes from outside Communist Party). He worked in the British-infested the SPD and the trade unions altogether. Schmidt has Paris offi ce of the Comintern. During the Second World the backing of key sectors of German high-technology War, Stalin decided that an anglophile agent like Wehner industry, including nuclear reactor exporters and firms was expendable, and tapped him fo r a high-risk infiltra­ trading with the East bloc. tion mission into the Nazi capital of Berlin. Wehner, The pro-environmentalist, antinuclear bias of a traveling toward Germany on the classic "northern large, swampy section of the Wehner-led SPD Bundes­ route," fi gured out what was happening and gave himself tag faction is another big problem fo r Schmidt. High­ up as a Comintern agent to the Swedish government, level figures of the Bonn coalition say privately that as who did not extradite him to the Reich, but merely soon as the election is over, the federal government will interned him. When the war was over, Wehner popped launch a nuclear reactor construction effort modeled on up almost immediately as a leading SPD politician in the the French program, including significant funding fo r strictly controlled self-government organs of the British the high-temperature reactor, the fa st breeder, and a big zone of occupation in Germany. Up to that point, he had increase in fusion research appropri ations. But in pub­ never been a member of the SPD. lic, Schmidt allowed himself to be upstaged by the EAP Wehner's world-outlook is that of an anarchosyndi­ and by Strauss on this critical issue. calist and a German chauvinist. He also has some At the recent world energy conference, Strauss took romantic slavophile tendencies. Because he is such a a stand for a clear and unconditional "yes" to nuclear vehement enemy of the American System of economic energy, while Schmidt hemmed and hawed about the growth, he is strongly anti-American; fo r the same unsolved problems of nuclear waste disposal, ending up reason, he detests French economic dirigism, and has with a lukewarm commitment to nuclear. Official SPD exerted as much anti-French influence as possible. It is propaganda says that the party wants neither economic reportedly Wehner who has also been running the major growth nor nuclear energy "at any price," and approves

EIR October 7, 1980 Special Report 27 from the state parliament. The panic-stricken FOP leadership is now banking everything on two interrelat­ ed tactics to stave off repetition of this defeat and the ouster of the party fr om the Bundestag in the national election. First, the FOP chairman, the chubby Foreign Min­ ister Hans-Dietrich Genscher, is playing the peace card to the hilt, trying to outdo Schmidt in cashing in on the popular will to avoid war. "Ohne Frieden geht nichts" ("without peace, nothing works"), is the headline of the FOP's election newspaper. Genscher is crisscrossing the Federal Republic at a breakneck pace, asking fo r votes to continue the "Schmidt-Genscher" government and to stop Strauss-not to implement "liberal policies," as the FOP slogan usually has it. Genscher reflects current strategy among the British faction formerly headed by Lord Mountbatten, demanding on the one hand that the United States and the U.S.S.R. begin negotiations without preconditions on the Euromissiles, while re­ peating a litany of protest about the Soviet presence in

Folk musicians campaign/or the FDP. Afghanistan on the other. Genscher has succeeded in the past in sabotaging Schmidt's policies, simply by threatening to withdraw from the coalition in fa vor of a nuclear only to cover energy needs that cannot be met deal with the CDU-CSU. by coal and a hodgepodge of "renewable" sources. Secondly, the chaotic, antinuclear, pro-marij uana "greenie" wing of the FOP, as typified fo r example by The role of the FD P Hamburg Bundestag Dep uty Helga Schuchard, a fr um­ py Gloria Steinem, has totally disappeared from the On this front, like all fronts, pressure against national print and bro adcast media. Eclipsing them has Schmidt continues to come from his coalition partner, been Count Otto Lambsdorff, the economics minister. the Free Democrats. The EAP and Helga Zepp-La­ Lambsdorff has been pushed up front in an effo rt to Rouche are calling on West German voters to turn the provide a moderate point of identifi cation, especially FOP out of offi ce and open the way fo r an SPD-EAP fo r disgruntled CDU voters who are not comfortable coalition. with Strauss, would like to see Schmidt stay on as The FOP is the direct descendant of the old German chancellor, but would rather die than cast a vote fo r Democratic Party of the Weimar Republic, whose "subverter of the state" Brandt and the SPD left wing. fo unding fa ther was the subsequent Nazi Finance Min­ Count Lambsdorff, a petty oligarch like so many ister Hj almar Schacht. After World War II the British­ FOP spokesmen, started a campaign for middle-class sponsored, reconstituted FOP was a popular back door votes-small businessmen, professional people, and so route fo r various personalities who had not stayed clean fo rth-that made him one of the most hated men in during the 193 3-45 period to get back into politics. The Germany. In an appeal to small employers, Lambsdorff principal leader of the FOP during the 1950s, Erich asserted that German workers have slacked off, and Mende, was part of the international dirty-mo ney net­ should work much harder if they ever expect to compete works that later sponsored Bernie Cornfeld's Investors with the Japanese. In the factories of the Ruhr, Hessen, Overseas Services (lOS). Stuttgart and Lower Saxony, the workers were furious. During the 1970s, the FOP became the most zero­ "Let that bum count come down here and tell us what growth of the Bonn parties , with a strong antinuclear he thinks after a day on the assembly line," said one wing. Even more than the left SPD, the FOP is a party angry factory councilor. Nevertheless, among some closely attuned to the Club of Rome. It is the party of CDU strata, the tactic is working: some will abstain Countess Marion Donhoff, a Kissinger liaison who from voting, which is virtually unheard of here, but edits the weekly Die Zeit. the party of Malthusian Ralf others will vote FOP. Dahrendorf of the London School of Economics. At the same time, the FOP left wing has periodically In elections held last spring in North Rhine-West­ come out of the closet. The party youth organization, phalia, the most populous and most heavi ly industrial­ the Judos, now fu lly support the legalization of hashish ized of the West German fe deral states, the FOP fa iled and marijuana, a position that is also widely attributed to obtain 5 percent of the votes and thus disappeared to the interior minister, Gerhard Baum of the FOP.

28 Special Report EIR Octo ber 7, 1980 terrorist youths, and even a convicted terrorist on leave from jail, who screamed their defiance of the capitalist state and the pigs who work for it. Die Zeit called the meeting a failure, while the CSU branded Baum "the terrorists' friend," and for once they were right. Certain SPD members would like to see their party attain the absolute majority in the parliament, in com­ parison to the 42.6 percent the SPD received in the 1976 elections. This would make possible an SPD AUeinregi­ erung, or one-party government. In 1976 the CDU-CSU got 48.6 percent, and the FOP 7.9 percent. During his Nurnberger Nachrichten television interview, Schmidt noted that never, not in the pre-1918 German Empire, nor in the Weimar RepUblic, nor since World War II, had the SPD ever achieved an absolute majority. "It would be very nice," Schmidt said, to have the honor of leading that kind of victory, "but it's not going to happen." For the SPD to become the biggest faction in the Bundestag, which has not happened since 1933, would already represent a great personal triumph for

Willy Brandt at a rally in Salzgitter. the chancellor, and the polls show that this is within reach.

Baum, unlike his colleagues Genscher, Lambsdorff, and Strauss runs amok the agriculture minister, Josef Ertl, is a member of the younger, "greenie" generation of the FOP. The biggest architect of the probable social-liberal In addition to his notorious softness on the drug election victory will of course be Franz-Josef Strauss issue, Baum has been pal-ing around more with known himself. The Bavarian patriarch, who just turned 65, is terrorists during the past year. First there was the case nothing but a raging, greedy Id, constantly out of of Horst Mahler, the West Berlin lawyer who was a key control, and running amok. But since Franz-Josef goes member of the Baader-Meinhof gang, the so-called Red ape in every speech, for the last year his own personality Army Fraction, during the late 1960s and early 1970s. has been the issue of all German and thus much of Mahler, who had un disputably shared in several of the European politics. Strauss is what is called here a Baader-Meinhors earlier crimes, repudiated terrorism Wiihlersch reck er, a candidate who scares off voters and while in jail. Baum, interior minister since a 1978 is always placed on the defensive by having to explain cabinet reshuffle, bought the story, and that certainly his most recent ranting fit. helped Mahler to win parole this year after having There is method in this particular madness. Late in served only half of his sentence. Long conversations 1974, when Schmidt was just settling in as federal between Baum and Mahler have even been published as chancellor, Strauss delivered a notorious speech in the a book, Th e Minister and the Terrorist. town of Sonthofen which, Helga Zepp-LaRouche More recently, during the hot phase of the election claims in her introduction to the EAP election pam­ campaign, Baum decided it was time for another public phlet, "What Wehner Refuses to Say About Strauss," appearance with Mahler, allegedly to keep in contact has been the Strauss strategy ever since. In that speech with disaffected youth who might otherwise drop out Strauss said: "The economic situation will have to get and pick up the gun. This came at a time when the much worse before we will have a chance to get people Baader-Meinhof was launching its August buildup fo r to listen to our ideas, warnings and proposals. Every­ new terrorist acts during the election campaign, with thing has to go bankrupt somehow, followed by a real Chancellor Schmidt as the number-one target. Baum shock in public awareness. We have no reason to want appeared at a public forum with Mahler and Professor to avoid this crisis, because otherwise there is only a Klug, the fo rmer interior minister of the federal state of pause, and after the pause everything starts going in the Hamburg. wrong direction once again." In the meantime, Strauss The round table was presided over by Rudolf Aug­ stressed, it would be a big mistake to propose positive stein, the editor and publisher of Der Spiegel, West solutions to any problems whatsoever. In his reflective Germany's biggest weekly news magazine. Augstein moments, Strauss probably cackles while comparing was arrested last year in Italy on charges of possession himself to Goethe's Mephistopheles, the devil who of marijuana. The discussion was interrupted by pro- always negates. Schmidt's standard characterization of

EIR October 7, 1980 Special Report 29 Strauss is not off the mark: "He is incapable of peace. boy," "the tool of Moscow," "the blue-tailed fly," "a We cannot vest control of all of us in a man who cannot chameleon," "the panic chancellor," "the war chancel­ keep himself under control." lor," "the peace prattler," "the Moscow faction," "the Thus, there is almost nothing to say about Strauss's top executive of Marxists, Incorporated," "a fraud," "a positive program: he has none. In a television interview liar," "the prophet of panic," a man guilty of "delusions fr om the offi ces of the Westfalenblatt in Bielefeld, of grandeur," responsible for "war hysteria." Strauss summed up his positive program in two points: According to Strauss, the "course of the SPO is maintain the free, democratic order, and peace in free­ decided today by the Marxist long-range strategist dom, meaning a strong commitment to NATO. If Herbert Wehner, by the false prophet Willy Brandt, and elected, he said a few days ago, I wouldn't go to by the underground manipulator Egon Bahr, who is Moscow or the OOR, but to Washington. Strauss told responsible for the fact that SPO propaganda can the Rheinischer Merkur that he stands fo r "Peace and hardly be distinguished from the propaganda of Julius Freedom-not peace through surrender on the install­ Streicher and the magazine Der Stiirmer back in the ment plan, not getting chummy or showing willingness 1930s." Der Stiirmer was a broadsheet of the Nazi to give in." "Pax Americana, not Pax Sovietica," says stormtroopers. Strauss, and that means "functional alliances, not a Strauss during the same speech called the SPO rank paper guarantee from Moscow." When asked how his and file "the street mob and a collection of vagrants" Ostpolitik would differ from Schmidt's, he replied: paid and organized by Egon Bahr-who is taking "More dignity, less chumminess, more reserve, more Strauss to court on that one. clarity. " But Strauss's classic speech probably remains the one he gave several weeks back to a joint COU-CSU delegate conference in Munich, which has been repeat­ One of the reasons that Schmidt edly excerpted in television spots. Here Strauss gives a veritable litany lasting a quarter of an hour on the looks good as chancellor is that the following model: "If you think that Wehner's connec­ visible alternatives in the SPD are tions to Moscow are more important than our connec­ all so vastly inferior to him in tions to Washington, then you should vote SPO or FOP. If you think that we should pay more to East ability and maturity. It is a rule of Germany, then you should vote SPO or FOP. If you thumb in Europ ean politics that think we need more government and not less, then you the older politician who has should vote SPO or FOP. If you think that another currency reform would be a good thing, then you experienced war and postwar should vote SPO or FOP. If you think the government reconstruction will acknowledge a knows what you should do better than you do yourself, reality principle in some fo rm. then you should vote SPO or FOP." And so on, winding up with "The question is not whether we Only fr om this point of view can should be red or dead, but whether we will be red first, the fu nction of the EAP be fu lly and then dead in a war against the United States." All app reciated ... to ensure that West this, and more is the product of what Strauss called on . television "my cool analytical mind, my hot heart and Germany is provided with passionate mouth." "I say what I think and I do what I 'survivable' leadership through the say," concludes Franz Josef. Small wonder that Schnauze. 1980s and beyond. Schmidt's old nickname "the Lip," is seldom heard these days. While Strauss is out on the hustings warning against the consolidation of the "SPO State," the COU-CSU Otherwise, Strauss has made the following claims: "leadership team" has been able to generate, at last "If I were chancellor, there would be no Russians in count, two issues in addition to the "issues" implied so Afghanistan." "If the Poles could vote, they would fa r. Each is, in its own way, the fruit of profound choose me, and not Gierek." "In contrast to Helmut desperation. Schmidt and the German trade unions, I stand on the The secretary and campaign manager of the COU, basis of democracy." Heinrich Geissler, is responsible for the charge that The Strauss campaign is otherwise a cataract of Schmidt is robbing old people of their pensions. raving insults and abuse, much of it aimed at Schmidt "Schmidt is a political pension thief," is Geissler's personally. Strauss has branded the popular chancellor refrain. Geissler himself is a sneak, vain, cynical, and as "ready for the mental hospital," "Moscow's errand calculating. The substance of his attack is that the

30 Special Report EIR October 7, 1980 social-liberal coalition is computing pensions on the Catholic party. With Kohl and Strauss, it has become basis of net earnings during a working lifetime, rather the Catholic Volkspartei, or People's Party. With Kiep than gross earnings. Schmidt, says Geissler, is a con and Albrecht, the CDU would touch bottom as a liberal man. Catholic party, aligned with the Club of Rome, and Otherwise, there is only the debt issue. The Strauss ready to celebrate the coming of the Age of Aquarius. boys have discovered that the yearly debt service on all The changing of the guard is approaching in the forms of public debt (federal government, federal states, SPD as well. Wehner will be stepping down as Bundes­ and cities) is now more than the total debt load when tag faction chief in 1982. Schmidt has been described by the CDU-CSU left the government in 1969. Strauss's insiders as immensely tired, telling friends that two full shadow finance minister, Schleswig-Holstein governor terms is all that a man can stand. That would mean that Gerhard Stoltenberg, and Strauss himself have therefore Schmidt, too, might resign during 1982. Schmidt thinks been spreading the ridiculous rumor that the D-mark is that he has succeeded as chancellor far beyond anything about to fall, with a Weimar-type inflation just around that anybody could have expected. He reportedly feels the corner. Strauss says he predicted it all; in 1969, that demands that he keep detente alive and create a when the social-liberals took power with Willy Brandt, new world monetary system at the -same time are just he wrote: "Here and today begins the sellout of Ger­ plain unreasonable. many." Karl Klasen, the former head of the German One of the reasons that Schmidt looks good as central bank, the Bundesbank, pointed out that the total chancellor is that the visible alternatives in the SPD are debt burden is only 28 percent of the yearly German all so vastly inferior to him in ability and maturity. The GNP, compared to figures like 52 percent for the best of these is Hans Apel, a stolid Hamburg business­ United States and 61 percent fo r Great Britain. man type whose experience as former finance minister and present defense minister recalls Schmidt's own The fu ture of the parties career before he rose to the chancellorship. But Apel is Schmidt's inferior by at least one full order of magni­ By now, the only real question left open regards the tude. Until recently, Apel was the unquestioned succes­ exact dimensions of the CDU-CSU debacle, and Strauss sor. Next comes the current finance minister, Hans knows it. In the wake of the coming election defeat, the Matth6fer, a former trade-union bureaucrat who is older generation of CDU-CSU politicians will be swept cagey but who has all of Schmidt's crass defects­ away. Strauss will remain as power broker, but he will pragmatist, big operator-with none of Schmidt's sav­ be washed up politically. CDU Chairman Helmut Kohl, ing competence. Even less acceptable is Justice Minister Geissler, Stoltenberg, the CDU's Hesse boss Alfred Hans-Joachim Vogel. Dregger, CSU Strauss cronies like Friedrich Zimmer­ Beyond these senior ministers, the outlook is even man, Gerold Tandler, Werner Dollinger, and General bleaker. It is rule of thumb in European politics that the Secretary Edmund Steuber-all will be finished. The older politician who has experienced war and postwar future of the CDU-CSU will belong, by all indications, reconstruction will acknowledge a reality principle in to the Lower Saxon finance minister, Walther Leissler some form. This even applies to British agents. Those Kiep, the prime minister of Baden Wiirttemburg, Lo­ too young to have such experience are for the most part thar Spath, and the Lower Saxon prime minister, Ernst mere plastic technocrats, veering on the whole toward Albrecht, all CDU. Of these the most dangerous is leftish heteronomy. That is what we find if we look at certainly Kiep, the synthetic product of linguistic labs Schmidt's younger cabinet officers like Volcker Hauff and image makers. Kiep, smooth-talking and urbane, ( technology), Rainer Offergeld ( development), Dieter has been cultivating a sort of Jack Kennedy mystique Haack (housing), Jiirgen Schmude (education). for a number of years. He passes out T-shirts that say Only from this point of view can the indispensable "Kiep Smiling." His pedigree is pure Anglo-American; historical function of the EAP in West Germany be two years ago he told a crowd in Hannover, "I love fully appreciated. As we have seen, the EAP is necessary Queen Elizabeth." Kiep is a mouthpiece for Zbigniew first of all because of the fact that Schmidt, good as he Brzezinski's controllers: he has lately been saying that it is by empirical standards of evaluation, simply is not is time to send the Federal German navy down to the good enough. Equally important, it is the role of the Cape of Good Hope to guard the routes of the oil EAP to ensure that West Germany is provided with tanker convoys. Kiep and Albrecht are holed up in the "survivable" leadership through the 1980s and beyond, Lower Saxony government with Science Minister Ed­ a problem that will become absolutely critical in only a uard Peste!, the leading spokesman in West Germany couple of years, depending on how long Schmidt holds fo r the Club of Rome, of which he is an assiduous out. collaborator. Lothar Spath's political profile is still Were it not for the EAP's past campaigns, Schmidt blurry. would never have come as far as he has today. The Under Adenauer, the CDU was the conservative EAP's campaigns in Lower Saxony and Hesse in 1974,

EIR October 7,.1 980 Special Report 31 in the Ruhr in 1975, and during the Bundestag elections in 1976, all of which centered around versions of the LaRouche International Development Bank, were in­ dispensable in preparing Schmidt personally and West German public opinion in general for the 1977-78 developments that led to the mid-1978 Schmidt-Giscard decision to fo und the European Monetary System. Only fr om this point of view can the indispensable historical function of the EAP in West Germany be fully appreciated. As we have seen, the EAP is necessary first of all because of the fact that Schmidt, good as he is by empirical standards of evaluation, simply is not good enough. Equally important, it is the role of the EAP to ensure that West Germany is provided with "survivable" leadership through the 1980s and beyond, a problem that will become absolutely critical in only a couple of years, depending on how long Schmidt holds out. Were it not for the EAP's past campaigns, Schmidt would never have come as far as he has today. The EAP's campaigns in Lower Saxony and Hesse in 1974, in the Ruhr in 1975, and during the Bundestag elections in 1976, all of which centered around versions of the LaRouche International Development Bank, were in­ dispensable in preparing Schmidt personally and West German public opinion in general for the 1977-78 "Peace Means Development",' an EA P slogan. developments that led to the mid- 1978 Schmidt-Giscard decision to fo und the European Monetary System. During this phase the EAP's impact was, above all, stressed that real saturation and penetration begins only mediated through policy-generating circles. During last when a candidate is on television several times a week, year's campaign for the European Parliament, the rather than a total of fo ur 2'/2 -minute spots, the sole EAP's access to fo ur nationwide television spots gave coverage the EAP was allotted. the party a vastly heightened mass impact. During that This year, in order to be present in all 10 federal campaign, Helga Zepp-LaRouche appeared in 20 mil­ states, the EAP, mobilizing something less than 100 lion German homes before the backdrop of the Biblis fu lltime activists, had to collect more than 35,000 sig­ nuclear reactor complex, the largest in the world, de­ natures on petitions, filled out in duplicate according to manding a full commitment to nuclear energy as the exacting bureaucratic standards. By Oct. 5, these same only alternative to the immiseration of the developing EAP members and volunteers will have distributed sector and world war. This spot resulted in massive more than 500,000 program folders. They will have put pressures on Schmidt to announce an enhanced com­ up almost 20,000 posters and billboards. mitment to nuclear energy, which the chancellor first Being present in all 10 federal states means that the delayed until after the election, citing the usual left SPD party will be assigned fo ur 2'kminute radio spots and "greenie" opposition, and then diluted altogether. The ten 4'/2-minute radio spots. In addition, various region­ spot was apparently so memorable that it was cited in a al television stations, corresponding to federal states, front page editorial of the Munich daily the Siiddeutsche have been filming coverage of EAP rallies. In the wake Zeitung a few weeks ago in an attempted slur of the of Helga Zepp-LaRouche's television attack on Jimmy EAP. Carter, Stern magazine and other publications have Despite its expanded influence, EAP deputies were requested interviews. not elected, due in large part to voting manipulations EAP pressure on Schmidt to tell the truth about that spanned all national parties and the trade unions as Carter is hitting a very sensitive point very hard. One well. A key factor was the stubborn refusal of the Zepp-LaRouche radio spot contained a reference to television, radio, and press to report the EAP's cam­ Carter as unzurechnungs/iihig, conveying the idea that paign in accordance with its newsworthiness. A leading Carter is unable to account for his own actions, and pollster marveled at the party's ability to achieve signif­ that the President is mentally incompetent. The North icant results in the face of virtual media boycott, but German Radio of Hamburg played the spot as record-

32 Special Report EIR October 7, 1980 Helga Zepp-LaRouche with a portrait of Schiller. ed. Several days later, the West German Radio of culture. In the homeland of Beethoven, Schiller, and Cologne called the EAP fe deral executive to complain Riemann, each of the fo ur established parties is using that the term unzurechnungsJiihig represented a slander­ rock, disco, and other varieties of counterculture to ous insult of a foreign political leader. The West Ger­ attract young voters. This is wholly coherent with the German Radio, the most servile of a bad lot, demanded educational and cultural policies of each of these parties, that the passage be deleted. Several days later, Hesse's which now comes down to total betrayal of the Leibniz Radio of Frankfurt called in with the same demand. tradition in favor of the most destructive Anglo-Ameri­ The EAP program demands the construction of 80 can empiricist pragmatism. The EAP is demanding a more nuclear power reactors during the next 20 years, return to German humanist traditions that made this plus the implementation of the total fuel cycle in the country the leading musical,. philosophical, archaeolog­ Federal Republic. For many years the EAP was the ical and scientificpower in the world. only German party with this quality of commitment to The basis of the EAP's views on these leading issues advanced nuclear technology. It is likely that Schmidt's was summed up by Helga Zepp-LaRouche during her real postelection nuclear posture will look very much keynote speech to the party's election congress held in like what the EAP is demanding. the Rheingau some weeks ago. In that speech, she The EAP, in cooperation with the West German described the decades-long commitment of Anglo­ Anti-Drug Coalition, has made drug trafficking an American intelligence, through the Versailles war-guilt explosive political issue in this country, mainly at the clause, the years of Nazi rule, and the crushing imposi­ expense of the FDP, which acts as the semi-official tion of postwar "collective guilt" on all German citizens prodrug lobby. It has recently come to light that the for the crimes of the Nazi regime, to the utter destruc­ SPD, FDP and CDU-CSU are all parties to a secret tion of every positive national identification and sense agreement, through which they are all committed to of patriotism in the German nation. As a result, any make sure that the drug issue is not raised in the real German patriot is routinely defamed as a Nazi. The campaign. In so doing, they have abandoned the issue EAP stakes its claim for a positive sense of German to the EAP, which intends to use it to expose the national identity which must be present to mobilize the bankruptcy of the other parties. population of this country to make the contribution Related to this issue is the question of education and that is required of them in the industrial and scientific

EIR October 7, 1980 Special Report 33 development of the Third World. The German Federal Republic, she said, has today attained a degree of national maturity that makes possible and necessary a fu lly independent foreign policy of active war-avoidance which must be asserted in cooperation with France in The philosophies of direct opposition to the insane confrontationism of Washington, London, Tel Aviv, and Peking. the candidates The choice is either to declare the Second World War and its aftermath over once and for all, or to face European voters are more accustomed than Americans to the Third World War, Zepp-LaRouche concluded. The explicit statements of politicians' philosophical outlook. EAP's policy of technological and scientific develop­ Th e fo llowing is a summary of the philosophies of the three ment is the only basis for overcoming the conflicting candidates fo r the Chancellorship of West Germany. anticommunist and anticapitalist compulsive delusions built into the leading institutions of the two Germanies, HELMUT SCHMIDT and preparing the terrain for eventual German reunifi­ cation in the context of a European development bloc As the Chancellor remarked in an interview in early "from the Atlantic to the Urals." 1979, he began his political career an Anglophile; later The EAP is running to replace the FOP in the reduced his ties to Britain to become an "Americano­ Bundestag and in the ruling coalition, but there is no phile"; and now considers himself a Francophile. guarantee of success. The West German political system Schmidt was referring to his ties to the London-based has two built-in fe atures which make changes in the International Institute of Strategic Studies during his party landscape extremely difficult. The first is the five tenure as Defense Minister (1969-74), when he worked percent clause, which bars any party from sending closely with IISS German member Theo Sommer. At deputies to the national and state parliaments until that the end of the Nixon-Ford administrations, he deem­ party has obtained a full 5 percent of the total vote. This phasized his ties with Britain, in favor of a closer aspect of the Federal Constitution was motivated by the working relationship with U.S. conservative layers, but need to avoid the proliferation of splinter parties that in reaction to the Carter administration's foreign poli­ had marked the Weimar Republic. Today, the fi ve cies, soon went through the same transition as his percent clause acts as a psychological deterrent to any predecessor Chancellor Adenauer: pursual of a Franco­ person seeking an alternative to the fo ur present Bun­ German alliance with France's President Giscard. destag parties, because of the extremely high risk that Schmidt has said that his personal philosophy is that such a vote will turn out to have been thrown away. of Immanuel Kant's Critique of Practical Reason: to The second obstacle regards the parties themselves. behave so that one's morality coheres with a universal In comparison to American political parties, the West rule. This outlook, in abstraction, is characteristic of German counterparts, like European parties in general, many other estimable Germans; by comparison with a are highly uniform, centralized multi-level bureaucratic Charles de Gaulle, however, it lacks active commitment structures, highly oriented to national issues. Labor, to transforming the outlooks of others, as a means for business, professional and cultural organizations tend shaping history. to be tightly nailed down, by one party or another. This In practice, Schmidt's philosophy is said to rest on rigidity of political structures is generally unfavorable the maxims of the Stoic Roman emperor Marcus Aure­ to the growth of new parties. lius-patient endurance of fools and ingrates, because The current national tours of Helga Zepp-LaRouche there is no single principle of natural law to guide the and the other leading EAP candidates have yielded development of nations and men's minds. At the same indications that this picture is changing. Many regional time, because Schmidt is a German nationalist, his power brokers are saying, "As long as it is Schmidt or Kantian rationality is sometimes influenced by the Zepp-LaRouche, I'll choose Schmidt. If it gets to be "Leibniz" humanist world outlook, which was the MatthOffer or Zepp-LaRouche, that's a different story." foundation for the American Revolution. He is known Many of these contacts agree that a new party may be to be a practicing student of Bach's organ music, and the way to avoid the blind alley that SPO, FOP, COU during his university study in war-devastated Hamburg, and CSU will clearly represent by the mid-1 980s at the had intended to become an architect and city planner. latest. Many express admiration and respect for the courage of the EAP, which says out in public "the FRANZ�OSEF STRAUSS things that we can only discuss behind closed doors." Photographs in this section are courtesy of the German Strauss is often called a neo-Nazi by those who have Information Center, unless otherwise identified. little inkling of how close his social philosophy actually

34 Special Report EIR October 7, 1980 is to the attacks on "big business and big labor," or the way resolved, and every conceivable enemy of our state pleas for a "return to the land," vaunted by Nazi is consistently looking for ways to undermine our demagogues in the 1920s and 1930s. As governor of morale as a republic, precisely then have we won this Bavaria, he said in 1978: "The peasant's vocation is a small but important victory .... form of undertaking that unlike any other is suited to "We have come to a point at which the German economic stability and environmentally healthy produc­ population bears a special world-historic responsibility, tion .... We do not want any industrialization of as Chancellor Schmidt and East German Premier Hon­ agriculture. . . . Our peasantry is an indispensable ele­ necker have recognized and publicly acknowledged. ment of a wholesome population faithful to its home­ Never again can Europe, West and East, become the land ...." Globally, Strauss extends his polemic against arena of war. Not because the German people carry the industrialization and technology: "Today the mass-con­ blame for two world wars, but because we in particular sumption society, as realized in the West and still, with can measure the grief bound up with war, do we have a ever-greater obstinacy, striven for under social-industri­ special responsibility. alism, is no longer a viable form of society, and in no "The German population in the Federal Republic way, despite the illusions cultivated by the U.N., should and the German population in East Germany have the be transferred to the developing countries." specific historic task of giving detente policy a lasting In the same speech, Strauss identified his own phi­ foundation. While the expansion of East-West trade, losophy as "pragmatism," and in a fashion reminiscent even under conditions of the present world monetary of postwar propaganda about universal German guilt, system, represents an important means of securing excoriated "great plans and visions of the future" peace, an active strategy of war-avoidance is still re­ stemming from "German idealism." quired .... Strauss in 1979 went so far at a Pan-European "If the European Monetary System can go into its Union symposium as to throw the Nazi charge against second phase, and thus, through gold-backed credits, the industrialists: "This technological development is put into motion an industrial upswing on a global level, nothing other than the palpable expression of an intel­ the Federal Republic will assume a unique role. Precise­ lectual tendency that ultimately led to Fascism in Italy ly because the West German economy is Europe's most and to its National Socialist imitation in Germany, and important, and in a certain way acts as the motor of in a weaker form to the centralized governments and Europe, we will decisively determine the course of the administrations of other European countries under the world economy. myth of the nation-state." Strauss himself, despite his "We in the Federal Republic must deliberately fol­ attacks on the United Nations, explicitly favors a su­ low the 'volcano theory,' that is, participate as an pranational world government along the lines sketched exporter of high technology in the development of the by his friend Zbigniew Brzezinski in Th e Technetronic underdeveloped sector; at the same time, as an 'avant Age (1968), and beneath it, as prescribed by the Pan­ garde,' we must develop the next, higher stages of European Union, a balkanization of the West into technology .... ethnic principalities. "Our positive national identity thus lies precisely in the tradition of so-called German idealism, of the HELGA ZEPP-LAROUCHE strategic policy of a Leibniz, the economic policy of a Friedrich List, the tradition of mathematical-physical Mrs. Zepp-LaRouche, who also ran for Chancellor science of a Georg Cantor, a Bernhard Riemann, a in 1976, is known throughout Western Europe as a Christian Gauss. It lies in the humanism of Friedrich scholar specializing in the great 18th-century German Schiller, in the classicism of Bach, Mozart and Beetho­ philosopher, writer and historian Friedrich Schiller, and ven. in the 15th-centuryGerman philosopher and political leader "A population schooled in the great humanists, Cardinal Nicholas of Cusa. Her own philosophy was deriving from them its ethical standards, and drawing recently stated in her preface to a 58-page campaign on them fo r its concepts of the future, will reject a pamphlet published by the Europiiische Arbeiterpartei, political leadership that can only exist when the popu­ titled "What Wehner Refuses to Say About Strauss": lation is degraded. "Permit me at the outset to offer a personal com­ "Rather, such a population will demand the repre­ ment. It makes me happy that Strauss has lost the last sentatives it needs because it will be elevated by such a two elections on the state level. It makes me happy, leadership. In the sense of Nicholas of Cusa, and thus because it says something good about the German according to natural law, political leaders must be population. distinguished as, not the cleverest spokesmen for the "Precisely at a point when the question of a positive population, but those with the highest moral standards national identity for the Federal Republic is still in no and the greatest readiness to pursue the national good."

EIR October 7, 1980 Special Report 35 The Iraqi war to clean out Khomeini

by Robert Dreyfuss

The warfare that has broken out between Saddam Hus­ It is EIR 's evaluation that a significant and even sein's Iraq and Ayatollah Khomeini's Iran currently has determining factor in the overall situation around the the potential to create an entirely new international Iraq-Iran conflict can be introduced by continued strong, strategic balance, pending the ultimate resolution of the independent action by the government of Iraqi President conflict. Should Ayatollah Khomeini fall from power as Saddam Hussein, and meaningful action by exile circles a result of the ongoing conflict and its aftermath, or led by Prime Minister Shahpour Bakhtiar. should the Muslim Brotherhood regime survive in a modified but contained form, then the entire decade­ Two war aims long strategy of the Anglo-American financial faction According to intelligence sources, Iraq's intention in will be in jeopardy. They will have lost their "Islamic launching its offensive against Iran, which fo llowed card," and as a result, the international power and months of Iranian border provocations, is twofold: first, influence of the nations of the European Monetary Sys­ to recapture Iraqi territory from a long-standing border tem and their OPEC allies will be greatly strengthened. conflict between the two countries; and second, to force Questions still remain in regard to the ultimate inten­ the political collapse of the Khomeini regime. The scope tions of both the Soviet Union and continental Western of the Iraqi offensive, for which the entire nation has Europe in allowing the Iraqis to pursue their offensive been mobilized, indicates that Iraqi President Saddam deep into Iran. But at the same time, both the Carter Hussein has determined that Ayatollah Khomeini and administration and the British policymaking elite have Iran's Muslim Brotherhood regime must be handed a been caught off guard by the events in the Persian Gulf. crushing defeat in order to halt the spread of so-called They are still groping for a policy to deal with the threat "Islamic fundamentalism" into the Arab world and of a victory by Iraq and allied Iranian exile circles. other countries bordering Iran. In the midst of the policy vacuum in Anglo-American In its offensive Iraq has received support, either circles, some factions, like those associated with Zbig­ publicly or privately, from the Soviet Union, France, niew Brzezinski and Israel's Menachem Begin, are al­ West Germany, many Arab countries including Saudi ready demanding a strong Anglo-American intervention Arabia and Jordan, and from anti-Khomeini Iranian to defend the Khomeini regime and prevent even an opposition forces. apparent Iraqi victory. But at present, President Carter is Opposed to the Iraqi offensive are primarily Great operating within a limited range of options, given the Britain, the United States, and Israel. restrictions placed against U.S. intervention by Ameri­ For several years, Zbigniew Brzezinski, President ca's European allies, especially the governments of Carter's national security adviser, has sought to build France and West Germany. an alliance with the Muslim Brotherhood secret society,

36 International EIR October 7, 1980 a powerful British-sponsored Islamic cult, and with the an open revolt against Khomeini. In Kurdistan and Khomeini regime itself, which came to power in 1979 Khuzestan, as well as in the tribal areas of western and with the full support and encouragement of the Carter central Iran, a series of growing insurrections are devel­ White House and State Department. Brzezinski believed oping, and at least three entire western provinces are that Muslim fundamentalism would be an ally of U.S. reported already to be free of Khomeini influence. strategic interests in the area, serving as a "bulwark Further, according to Iranian sources, exiled Prime against Communism," and increasing Anglo-American Minister Shahpour Bakhtiar and other Iranian opposi­ leverage over Middle East oil and financial power. tion leaders have traveled to Baghdad or contacted the It is that entire strategy, Brzezinski's "arc of crisis," Iraqis about coordinating their struggle against Kho­ that stands in jeopardy from the Iraqi offensive. meini. Although few Iranian opposition leaders can afford to be associated publicly with Iraq's attack on Iraqi strategy their nation, privately they have welcomed it. The From the initial pattern of the Iraqi attack into Iran, Sunday Telegraph of London reported that Bakhtiar and from intelligence analysts in Washington, the fol­ was in Iraq this week to coordinate exile activities on lowing conclusions can be drawn about Iraqi strategy the eve of the start of the war. in the war. Alongside their military offensive, the Iraqis have The fighting began in earnest on Sept. 22 with a also launched a political broadside against Khomeini's preemptive strike by the Iraqi air force against ten partisans. In one appeal, the Iraqi leadership stated its Iranian air force bases scattered throughout the coun­ distinction between the Iranian armed forces and the try, including Teheran itself. Over the next 48 hours, fascist Revolutionary Guard, appealing to the Iranian Iraqi fighter-bombers continually pounded Iranian air army to stop fighting. "We bear no grudge against the force facilities in an attempt to eliminate Iran's air Iran regular armed forces, but only against the Kho­ capability. At the same time, Iraq's extremely sophisti­ meini Guard," Baghdad announced. Iraq also issued an cated electronic air defense systems took a heavy toll of appeal to the "sons of Iran's ethnic and religious Iranian jets which attempted counterstrikes against communities" to join the fight against Khomeini's Iraq, and Iran lost at least 50 planes in the first two "racists. " days of the war. Highly informed military specialists reported that Support for Iraqis because of Iran's lack of maintenance teams and ground Simultaneous with Iraq's declaration of war against facilities, routine equipment failures and mechanical Iran, issued Sept. 21, Iraq's Deputy Prime Minister upkeep problems are expected to put the vast bulk of Tariq Aziz left Baghdad for Moscow. The Aziz mission, the Iranian air force out of commission almost immedi­ though highly secret, was reportedly aimed at securing ately. a continued flow of Soviet arms to Iraq, which has a Once that initial Iraqi goal is accomplished, then standing treaty of friendship with the U.S.S.R. The Iraq's armored ground forces can advance under an fo llowing day, an unhappy Iranian Ambassador to almost invincible air cover, and the Iraqi home front Moscow, Mohammed Mokri, met with Soviet officials will be permanently secured from Iranian attack. and complained that he was not able to persuade Under these circumstances, Iraq would be able to Moscow to halt the flow of arms to Iraq. "We are advance at will deep into Iran, and to inflictpa inful and surprised at our Soviet friends," said Mokri. humiliating defeats on the Iranian forces. As the Iraqis Though publicly neutral in the conflict, the Soviet advance, the political authority of the Khomeini re­ Union has hinted broadly that it supports the actions of gime-which is already hated by the bulk of Iran's its Iraqi ally. A Sept. 22 Pravda article said bluntly, population-will crumble. Local, tribal, and regional "The United States is favoring Iran against Iraq." In leaders, dissident military units, and Iranian clergy Baghdad itself, the Iraqi press prominently reported the opposed to Khomeini could then launch a combined Pravda piece as a sign of Soviet support. civil insurrection against the Khomeini dictatorship. Then, on Sept. 24, Tariq Aziz-returning briefly to Thus, according to informed sources, Iraq is now Baghdad-left for Paris where he held a meeting with counting on its attack triggering a political upsurge President Valery Giscard d'Estaing. According to against Khomeini. French sources, the French, who also supply arms to Signs of the rebellion have already started to become the Iraqis, are quietly supporting the Baghdad offensive. known. In Iran's northern province of Azerbaijan, the Newspapers in Paris were effusively praising Presiden' popular clergyman and opponent of Khomeini, Ayatol­ Hussein of Iraq, calling him a "blockbuster patriot" lah Shareatmadari, has escaped from his house arrest in and a man who lifted his nation "out of backwardness." Qom and returned to his native Tabriz, Iran's most In recent years, Paris and Baghdad have developed a populous regional capital, where he is expected to lead close working relationship and France is supplying Iraq

EIR October 7, 1980 International 37 with a nuclear industry, a defense industry, various power. Gur said that Iraq was an "extremist, hard core advanced electronic systems, and so forth. member of the Rejection Front" and demanded action In the Arab world, Jordan, Kuwait, Yemen, and the to stop Iraq. United Arab Emirates, have officially supported Iraq A top Reagan adviser, Joseph Churba, a radical while Saudi Arabia, though silent, is widely known to Zionist, stated his belief that Washington should im­ support Iraq's action against Khomeini. In addition, mediately supply all the military spare parts Iran needs Saudi Arabia and Jordan are trying to persuade Syria, to defeat Iraq in exchange for the release of the Ameri­ which has opposed Iraq and tilted in favor of Iran, to can hostages! join now with Baghdad against Khomeini. Among more sober U.S. analysts, such as the New York Times' James Reston, the conclusion is that Wash­ U.S. paralysis ington must try to prevail upon Moscow to issue As for the Carter administration, which put the instructions to Iraq to halt the fighting. Regardless of Khomeini regime in power, it is the belief of most U.S. whether such Soviet demands on Iraq would be heeded, analysts that the United States has no choice but to do Reston declared in a column entitled "Where is the Hot nothing and watch the Iraqis defeat Iran. Although Line?" that even though there is the "possibility that some limited options do exist, for the most part any Moscow might not agree" the Carter administration American intervention runs the risk of touching off a ought to ask the Soviets to restrain Iraq and cool down direct U.S .-Soviet confrontation. the fighting. Since August, Carter has been working out a scheme At best, Reston is reflecting the dawning realization to bring about a rapprochement with Iran, including that the United States, which once earlier this year had the supply of American military spare parts and U.S. said it would use force to defend the Persian Gulf, is military advisers to Khomeini's regime, in exchange for now reduced to asking Moscow to restore tranquility to freeing the U.S. hostages. Now, with the Iraqi offensive, the region. that deal is shattered-and the U.S. is left without a That, if nothing else, is a measure of the blunders of policy. the Carter-Brzezinski administration. Sept. 25 President Carter convened an emergency meeting of the NSC to discuss U.S. options. According to Iranian military sources opposed to Khomeini, the chief U.S. contingency under considera­ h tion is the following. Iraq s atters U.S.-Iran First, in secret communication, the Carter admini­ h stration will arrange for the Khomeini regime to launch pact on the ostages a blockade of the crucial Straits of Hormuz in the Gulf. That action, which would halt the flow of two-thirds of by Judith Wyer the world's oil imports from the Persian Gulf countries, would then provide a pretext for direct U.S. naval Iraq's invasion of Iran this week has left in shambles a action to break the blockade. With the conflict thus months-long diplomatic venture launched by the Carter "internationalized," both Carter and Teheran hope they administration to free the American hostages in ex­ can halt the Iraqi advance. But such a strategy is change for recognition, and arming, ofthe outlaw regime dangerous in the extreme because of the likelihood of of Iran's Ayatollah Khomeini. Carter calculated that a Soviet intervention, including possibly a direct Soviet release of the hostages on the eve of the Nov. 4 presiden­ military move into Iran. tial elections would greatly enhance his chances of reelec­ Another U.S. option under consideration involves a tion. U.S.-backed coup in Iran bringing to power the Iranian So stunned was the administration over the Iraqi military loyal to President Abolhassan Bani-Sadr, at the invasion that neither the President nor administration­ expense of the inore extreme Muslim Brotherhood officialshave formulated a coherent response. leaders. Such a strategy presumably would allow Teh­ During a California campaign tour, President Carter eran to free the hostages and then ask for American told the press, "We have been monitoring the situation assistance. But most analysts also believe that this very closely. . . . We are doing everything we can to strategy is not viable. contribute to a peaceful resolution." A few hours after­ At any rate, Israel is leading the outcry against the wards Secretary of State Edmund Muskie gave a press Iraqi advance. Prime Minister Begin, General Morde­ conference from the United Nations which brought into chai Gur, and other Israeli officials have branded Iraq question what intelligence the Chief Executive was as a "Soviet puppet" and warned that an Iraqi defeat of "monitoring." A beleaguered Muskie stated: "Our re­ the Khomeini regime would create a new Arab super- sources in Iran are not all they were ....This is a serious

38 International EIR October 7, 1980 matter and we are trying to get the best intelligence who often advises the administration on the Gulf, was possible, as we must not jump to conclusions." aghast at the degree of the Iraqi assault: "There has Muskie also brought into question just how capable been armed conflict in the past, but the mutual vulner­ the U.S. may be in contributing to "a peaceful resolu­ ability of both sides has kept it at the level of skirmishes tion." He responded to a question on what initiative the and brinksmanship .... This time I'm baffled. Appar­ U.S. would propose at the United Nations Security ently this mutual restraint does not exist. It is unprece­ Council by stating that the U.S. had not talked to either dented that it has gone as far as it has." Iran or Iraq. Nationally syndicated columnist Jack Anderson is­ sued a story on Sept. 22 which stunned the White House Recognizing Khomeini's and State Department. According to "leaks" he claims 'revolution' he got from the National Security Agency, the Soviet The day before, Muskie, in an address to the U.N. Union is now prepared to counter a U.S. invasion of General Assembly, became the first administration of­ Iran. He reports that Moscow is already well-advanced ficial to publicly acknowledge the legitimacy of the in redeploying nuclear howitzers, SA-II missiles, and Khomeini regime. Muskie declared: "As a new chapter other hardware to the Iranian border from its borders opens, we emphasize that we recognize the reality of the with China and Europe. Iranian revolution, and we respect the right of the A military strategist at Georgetown University con­ Iranian people to choose their own form of government curs that "there is no way" the U.S. can counter the without intervention of any kind." Soviet Union in the Gulf region: "The Soviets hold all Muskie's obsequiousness was part of an effort to of the logistical cards, the U.S. Rapid Deployment legitimize the Islamic revolution in return for the hos­ Force is years away from being able to deter the tage release. The intention is to stabilize the Islamic Soviets." government with U.S. arms supplies to maintain the As a result, the U.S. is being forced to scrap a plan Khomeini regime as the centerpiece of a policy known which has been in the making since just after the as the "Islamic card." A creation of U.S. security chief November 1979 seizing of the American hostages, to Zbigniew Brzezinski, the Islamic card policy ostensibly effectively condition the American population to accept aims at containing Soviet influence along the southern the Iranian revolution. Only last week was it revealed flank of the U.S.S.R., but is chiefly designed to abort that the State Department had written a 60,OOO-page economic development in the region. document to be presented to the Khomeini regime Muskie's overture to Iran came too late. Days before admitting U.S. "guilt" in its wrongdoings towards Iran Iranian President Abolhassan Bani-Sadr and other Is­ under the Shah-a key demand for release of the lamic leaders began a bitter propaganda campaign hostages. M uskie had even sent a letter to Iranian calling Iraq a "U.S. agent in its aggression against Premier Muhammed Rajai expressing U.S. willingness Iran." The Iraqi invasion then made it impossible for to accept the Islamic regime. Bani-Sadr, considered to be the man in Iran amenable to a deal with the U.S., to heed Muskie's call. Christopher waves FLAG The White House has tried to salvage its deal with State Department Undersecretary Warren Christo­ Iran by feebly calling for both Iran and Iraq to halt the pher has played a central role in a twofold process war. But efforts to obtain a U.N. Security Council aimed at conditioning Americans to accept the Kho­ demand for a ceasefirewere watered down by the Soviet meini regime. First he was working with a State De­ Union during hours of deliberation over the crisis. partment task force and a group formed from the American Ambassador to the U.N. Donald McHenry families of the hostages called the Family Liaison complained that the Soviets had deliberately thrown up Action Group (FLAG) to forge a "reconciliation" with "procedural and substantive objections" to U.S. efforts the Iranian regime in order to free the hostages. And to secure a more fo rceful call for an end to the fighting. second, he and other State Department officials were complicit in an effort being run in cooperation with U.S. military left various anthropologists and linguists to popularize a without options view of Iranian "culture" which was aimed at creating Few strategic planners in Washington think the U.S. an "understanding" between the American people and has any military options to play in the Gulf. Former the revolutionaries in Iran. National Security Council staffer William Quandt, now The public response of the administration to the a Middle East analyst at the Brookings Institution, Iraq invasion has shown the American people and the observed that "If the Soviets are clever, they may be world the bankruptcy of the White House policy toward able to turn the Iraq-Iran conflict to their advantage." Iran and its inability to deal with international forces University of Virginia-based Professor R. K. Ramazani, committed to challenging that policy.

EIR October 7, 1980 International 39 Franco-Iraqi military deals aid Arab economic buildup by Judith Wyer

The Iraqi government this month initialed a $1 billion Crescent agro-industrial belt in which nuclear energy agreement with the French firmThomson-CSF that will and the most advanced technologies will serve as the establish the foundation of an Iraqi electronics and mili­ basis to develop the Arab world as a whole. This Franco­ tary industry. The agreement is the most recent in a series Iraqi commitment to act as a model for future Euro­ of contracts signed between France and Iraq to make Arab economic ties was sealed in July 1979 during a Iraq the center of an ambitious pan-Arab economic series of talks between Iraqi President Sad dam Hussein development plan, a plan which is expected to be ap­ and French Premier Raymond Barre. proved at the November summit conference of Arab heads of state in Amman, Jordan. Thomson-CSF's role Both Baghdad and Paris assume that the quality of Thomson-CSF has acquired a number of military industrial takeoff they envision for the Arab world can­ contracts in the strategic Arabian Gulf aimed at expe­ not be attained without developing an independent Arab diting efforts within the oil-producing nations of the military capability to provide security for the region. The Arabian peninsula to build an independent security Thomson-CSF deal is rumored in Arab circles to be capability. Last year Thomson landed a multibillion­ designed to launch an effort discussed in several Arab dollar contract with Saudi Arabia to build the Saudi capitals to reconstitute an inter-Arab arms industry. A navy. Thomson is also the frontrunner for a massive new consortium would replace the Arab Organization contract with British aerospace to build and launch the for Industrialization (AOI), an inter-Arab arms industry Arab satellite (Arabsat) inter-Arab communications that was to be centered in Egypt but fe ll apart after Egypt system. signed a separate peace agreement with Israel. Run by Philippe Giscard d'Estaing, cousin of the Iraq may become the seat of a new AOI, according to French president, Thomson was fo unded in the 1960s the Sept. 1 issue of Strategy Week, with participation by by the government under President Charles de Gaulle Saudi Arabia, the United Arab Emirates, and Qatar. It is and the French bank Paribas as part of a group of reported that these petrodollar-rich Gulf states will put companies designed to increase French participation in up the bulk of funds for the $3 billion arms industry. foreign markets, notably those of the developing sector. Thomson-CSF was awarded the Iraqi contract at the The terms of the Thomson contract with Iraq con­ last minute after a sudden falling out between Iraq and form to that policy. Thomson is reported to have agreed Britain a few months ago which took the British firm to build turnkey factories in Iraq, which means Thom­ Plessey out of the running. The Iraqis identifiedBr itain son provides all of the materials that go into the and Israel as initiators of an international campaign construction of the factory, including training Iraqi against Iraq's drive to develop nuclear energy, and in manpower. When Thomson leaves, Iraq intends to have particular against France's export of a nuclear training the most advanced electronics industry in the Mideast, plant to Iraq. and the labor and managerial force to run it. The contract strengthens France's bid to become the Financial sources report that fo r Iraq, one of the number-one foreign supplier fo r Iraq's race to develop a strong selling points in French contractors' favor is the self-sufficient agricultural system and industrial econo­ French government's ability to provide low-interest my by the year 2000. The Giscard government has been financing for projects. The French banking system an advocate of turning Iraq into the center of a Fertile works closely with the government in this effort. Paris

40 International EIR October 7, 1980 in recent months has become a new haven for Arab Riyadh would contribute to financing the construction revenues as various Arab nations have opened new of the fighterjet. branches of Arab banks in France. Paribas has recently gained the confidence of the Saudis and other nations Iraq-Saudi rapprochement of the Gulf as a broker for placing their surplus The sudden visit to Taif, Saudi Arabia last month petrodollars in fo reign investments. by Iraqi President Saddam Hussein has been seen in In turn, France has gained a new trust from the Gulf Arab and European capitals as having opened the door states as an ally in reaching peace in the Mideast that for the Gulf states to consider the scheme to reconstitute provides for a solution to the Palestinian problem, and the AOI. Besides Egypt, no other Arab country except undercuts the U.S.-crafted Camp David accords. This Iraq is thought to offer all of the necessary requirements Franco-Arab relationship has deepened since Giscard to house a fu ll-scale Arab arms industry. Iraq has the toured the Gulf states this spring. needed water, industrial infrastructure and indigenous Since then, France has signed a number of defense­ labor force to meet the challenge of servicing an Arab related contracts with the Gulf states. One of the most arms industry. notable achievements of Franco-Arab relations is a $2.5 Until the Iranian revolution in 1979, Iraq and Saudi billion contract with Saudi Arabia for naval equipment Arabia had been traditional adversaries, given Iraq's and arms, expected to be signed by the end of this year. longstanding leftist ideology and Saudi Arabia's ultra­ The agreement may include provisions for developing conservative outlook. But since the Khomeini takeover, the most advanced French fighter, the Mirage 4000, Iraq and Saudi Arabia have fo rged a formidable alliance and building assembly plants for the Mirage 2000 in that is the basis of a French-backed independent secu­ Saudi Arabia. There has also been speculation that rity force for the region.

The clique in Iran is using the face of religion to flame fanaticism, resentment, and division among the peo­ The diplomatic record ple of the area to serve the designs of world Zionism, whether this clique realizes it or not." of Iraq's Saddam Hussein On Feb. 8, 1980 Hussein submitted a major pro­ posal to the Arab League to reunify the fragmented Since Saddam Hussein took command ofIraq in 1979, Arab world known as the "Arab Charter." Hussein he has consistently fo ught to make Arab nationalism proposed that no foreign military bases or facilities be the basis of his plans for unprecedented economic allowed on Arab soil. The Arab Charter was, in effect, growth for the Arab world. Hussein has affirmedthat a sharply worded denunciation of President Carter's the growth of the Arab nation-state is fundamentally State of the Union address where Carter called for the challenged by the spread of Islamic fundamentalism installation of U.S. military bases in the Mideast, East centered in the regime of Ayatollah Khomeini. Be­ Africa and the Indian Ocean region. The creation of a cause of Hussein's outspoken Arab nationalism, he U.S. military presence in the Mideast is a feature of has been characterized as aspiring to become the "new the Camp David agreements between Israel and Nasser" of the Arab world. Egypt, to which Iraq has been adamantly opposed. On Sept. 17, Hussein delivered a speech to an Last month Hussein made a surprise visit to Saudi extraordinary session of the Iraqi assembly where he Arabia, the firstby an Iraqi head of state since Iraq's abrogated the 1975 border treaty with Iran and de­ 1958 revolution. During his talks with Saudi leaders, clared his intentions of challenging the Khomeini Hussein solidified an alliance between Riyadh and regime: "We say before you, before the Arab nation Baghdad designed to create an independent military and before the entire world, that we have unmasked and security capability to protect the strategic Gulf the false face by which the ruling circle in Iran came to from outside invasion or subversion. power. This clique has falsely used the face ofreligion In 1982, Iraq will become the head of the non­ to expand at the expense of the Arab sovereignty and aligned movement of developing countries in place of the nobler Arab interests. This clique has falsely used Cuba. Between now and then, Iraq is expected to the face of religion to fo ment sedition and division dramatically step up its development pace and to among the nation's ranks despite the difficult circum­ install a nuclear training reactor to create a new Arab stances through which the Arab nation is passing .... cadre of physicists and engineers.

EIR October 7, 1980 International 41 called anything but militaristic, has manifested itself in the so-called "new nuclear strategy." Using as a cover arguments concerning the possibility of some "limited" or "partial" use of nuclear weapons-arguments which are a far cry from reality-the architects of this strategy seek to instill in the minds of people the idea of the admissibility and acceptability of a nuclear conflict. This Gromyko issues fo olhardy concept exacerbates the risk of a nuclear catas­ trophe, which cannot but cause, and does cause, concern an all over the world .... icy warning Several propositions have recently been taken up by American foreign policy which, by all appearances, are by Rachel Douglas regarded as its credo. Here is one of them. This or that region of the world is chosen at will ... and declared with naked bluntness a U.S. "sphere of vital Soviet Foreign Minister Andrei Gromyko startled lis­ interests" ...not just anybody's but American interests, teners at the United Nations General Assembly session and on top of that-God only knows why-of "vital" Sept. 23 when he delivered one of the toughest speeches interests .... of his two-decade-long career. Dispensing with the oblig­ A build-up of U.S. military presence is underway in atory praise for the role of the U.N. and the accomplish­ East Africa where most recently new American military ments of detente, Gromyko launched immediately into bases have been coming into being .... an indictment of American fo reign policy. The anti-Arab Camp David deal has as its direct The next day, Soviet President Brezhnev repeated the consequence the unabated tensions in the Middle East charges against Washington, in a message to an interna­ where the situation is fraught with perilous unforeseen tional parliamentary conference taking place in Bulgaria. developments. That should not be overlooked .... In He said the war danger has grown since "one of the big short, since the time of the separatist collusion between powers" shifted nuclear strategic doctrine, referring as the U.S.A., Israel and Egypt, the situation in the region Gromyko did to the Presidential Directive 59 on counter­ has proven to be farther from a genuine peace than ever force and "limited nuclear war." before .... The sections of Gromyko's speech which we present In another region, the Far East, Washington is striv­ here, in the unofficialtra nslation ofthe U.S.S.R. Mission ing to strengthen its political and military positions and to the United Nations, come fr om its opening and closing is heating up militarist trends that are far from waning sections. among certain quarters in Japan. Peking is acting in * * * * unison ....In recent years, the United States, as well as Speaking today from this rostrum, I would like to some other Western countries, have resorted ever more emphasize at the very outset the great importance which frequently to playing the "China card" in order to use to this session of the General Assembly would have if it their own advantage the great-power ambitions of Pe­ were a success. In view of the specific character of the king which is itself keeping pace with the most zealous situation in the world today, it is particularly essential proponents of the position-of-strength policy and is stub­ for the work of the session to be conducted in a construc­ bornly and cynically advocating the idea of the inevita­ tive atmosphere ....We focus attention on this because bility of another world war with never a thought of the international situation has lately become more com­ giving this up .... plicated. This was caused by a sharp turn in the policies No responsible politician in the world can remain of the United States and some other NATO countries. indifferent to the course pursued by those countries in Let us turn to the facts-they are more telling than whose policies the cult of war is becoming a predominant words. factor. Indeed, even here and now in the host country of Back in May 1978, the NATO countries decided to the U.N. headquarters, massive propaganda of nuclear automatically increase their annual military expenditures war is being waged . Waged, one can say, before the very almost to the end of this century. Last December, they eyes of the public. But it is not a question of propaganda took a decision to produce and deploy in Western Europe alone. Plans for such a war are being worked out and new American medium-range nuclear missile systems, discussed, and it is all being done at a government level. which is designed to change the military strategic situa­ In the atmosphere of militarist frenzy which has of tion to the unilateral advantage of the NATO bloc. late become so widespread in the United States, there is Simultaneously, Washington also announced its own ever less room left for sound and sober assessments of multibillion-dollar build-up program. the world situation and well-considered conclusions for The course the U.S.A. opted fo r, which cannot be the conduct of policy. . . . •

42 International EIR October 7, 1980 ShanwarBh utto on Muslim fanatics An exclusive interview with the son of Pakistan '5 executed modernizing leader.

On Sept. 19. Executive Intelligence Review correspond­ military men. They only understand the meaning of a ents Th ierry Le Marc and Edith Hassman interviewed bullet, the meaning of a war, and we are going to Shanwar Bhutto. the youngest son of the late Pakistani confront them in that way from now on. Premier Zu/fikarAl i Bhutto. in Germany. Since the exe­ As you know, as everybody knows, nobody can stand cution of his fa ther by the military regime of General Ziaul in front of the will of the people. Nothing can stand in Haq in April 1978. the younger Bhutto has lived outside of front of that, no one, no obstacles. Obviously, there are Pakistan. He is currently touring Western Europe speak­ foreign agencies supporting this government, very large ing to the overseas Pakistani community and others in his foreign agencies. Intelligence agencies have been ruling capacity as a leader-in-exile of the Pakistan People's Party and influencing our country for the last 200 years. But (PPP). we are going to bring about a change with the will of the people, to give the people rights to advance technologi­ EIR: What is your assessment of the present situation in cally, to build the nation, to educate the people, not to Pakistan? move them back to the 14th century. Bhutto: The situation inside Pakistan has come to such a point that it seems like dynamite just waiting for a match EIR: How will you deal with the mullahs, with the to light it for it to explode. People are being terrorized Jamaat-i-Islami (the Pakistani branch of the Muslim into obedience, they are being flogged,the y are given the Brotherhood)? worst sort of treatment in jails, being tortured in jails. Bhutto: Well, the Jamaat-i-Islami of Mawdoodi, now Basically, it is terrorism. It is not the rule of the dead, of Mufti Mahood ...the people are fed up with government, it is the rule of terrorists. The will of the them also. The people have seen their real characters, majority is being ignored, and a small minority clique is their real role in Pakistan. They fully support the military using terrorist tactics against the majority of people. The Junta. They are part of the military junta. They are people are fed up, they are tired and they want a change. involved in the government of the military junta. The We have used every avenue, every method possible to people have seen their real face, they cannot hide behind achieve this through democratic and electoral manners, their beards any longer. The people have understood but we have failed because of the stubborness of the their real meaning. The people are not going to be fooled military government of General Zia. For these reasons by them any longer. we have come to the conclusion that we have to use The problem is not a religious problem in Pakistan, limited means of armed struggle. I am not saying armed we are all Muslims. It is not a religious problem. Our struggle, because armed struggle is used by the minority problems are socio-economic ones, not a problem of who against the majority, in certain cases. is a Muslim and who is not a Muslim, we are all Muslims. There are cases, of course, where armed struggle is Islam in Pakistan was not created on the 5th of July, used by the majority against �inorities. But a lot of 1977. It is much older than that. I do not see the mullahs, people say if you use armed struggle you'll be showing the Jamaat-i-Islami and these groups being much of a that you are a minority, that you cannot use any other problem because people know the real facts about them methods, you're using terrorist tactics, that you're not in the last three years. better than the enemy. We tried to explain to them that we have tried every other tactic, we have tried every other EIR: Could you just elaborate a bit further on how the means, but now we have come to the level the military government ofZia is dealing with political prisoners, and understands. They don't understand the meaning of a your people? discussion, the meaning of a conference table. They are Bhutto: The military government, as you know, is sup-

EIR October 7, 1980 International 43 ported by the lamaat-i-Islami, itself supported by other structure, a proper channel. We will go through such groups. It is a whole process, a whole line of people who channels to solve the regional problems, not through the are ruling Pakistan, not only from within, but from gun and the bullet. That is not our method! outside Pakistan. As you know in China there was the opium trade a EIR: What is your view of the Afghan developments long time ago, and they used opium to feed the people over recent years? that they would have no time to worry about political Bhutto: The man who made the coup against King Zahir problems because they would be trounced. The same Shah [king of Afghanistan, overthrown in 1973 thing is being used in Pakistan, in jails in Pakistan. The ed.] was a Khalqi [a member of the Khalq, or People's government is feeding the people with drugs so they Party faction of the currently ruling Afghan People's would not have the time or the consciousness to think Democratic Party]. They had been able to make a coup about the real problems inside Pakistan. They are re­ of their own and take over five years earlier, but they leased from jail, and they go around in a trance, like didn't, for their own reasons. They had their own reasons zombies, because of the influence of drugs in the jails. and we do not know them, but they were capable of It is a problem of Amnesty International, but A.1. has doing it. I do not think that it is the Soviet Union which not brought this up. They have ignored this problem. forced them to make the coup, because in any case they They must bring it up. There are no human rights in had the capabilities, they worked from within the mili­ Pakistan, but nobody talks about that. Carter and Brze­ tary. They still had the capabilities five years later, and zinski and all say, "Human rights! We depend on human they decided this time to do it. They did it when they rights. Our policy is human rights ...." But there are no thought the time was ripe. human rights in Pakistan and they fo rget about those The problem of the intervention of the Soviet Union, things. came two years later. It was not immediate. When Af­ ghanistan was in complete danger of being occupied by EIR: What is the strength of your party? reactionary fo rces supported by Pakistan and the la­ Bhutto: Our support inside Pakistan, as it is outside, is maat-i-Islami-that's when the Afghan government very great. Ifthe elections would be held today, we would asked for help from the Soviet Union. sweep the vote. There is no doubt about that. If there was Egypt has asked for help fr om America, why doesn't any doubt about it Zia would hold elections, but he anybody shout about that? Why doesn't anybody cry out knows we are going to win, therefore he doesn't hold and say, "Egypt has been invaded"? Egypt is giving elections. bases to America, Somalia is giving bases to America, Regarding international policy, I am not a policy­ nobody shouts and cries about that. maker. The policy line comes from the Pakistani People's The Chinese are in Pakistan. Whether they are there Party within Pakistan. We are not going to deviate from for construction work or what, nobody shouts about the policies of the People's Party of 1970. It is going to be that, although they are also a communist country! The the same policy. We have a mission! We say we have to Americans are not Muslims, the British are not Mus­ complete that mission, we have to make Pakistan into a lims .... progressive nation, we have to give it technology, we It is propaganda from certain channels through cer­ want it to advance technologically, we want to industrial­ tain radio stations to create internal problems so that the ize the nation, we want to build dams, we want to build people cannot progress technologically, cannot advance, schools, we want to get nuclear reactors for peaceful cannot be educated. They remain fourteen hundred years purposes, not to make a bomb. behind, to be under the influence of a small clique of We have to worry about our people first. We have to people determined not to let them progress, to keep them worry about our industrialization program. We want to in poverty, to make them dependent on certain nations educate the people. The lamaat-i-Islami doesn't want to so that these nations can control them .... educate the people. Of course they have their own rea­ The Afghan government wanted to change that, but sons, because they don't want the people to become the lamaat-i-Islami is not letting them do it. Each time a conscious, they don't want the people to realize the farce nation wants to progress, wants to educate its people, behind which the lam aati is hiding. wants to create industries, wants to create technology, the lamaat-i-Islami has had a hand in stopping it. They EIR: How would a government led by the PPP approach stopped it in Pakistan, now they are stopping it in regional problems such as the Afghanistan crisis? Afghanistan, they are trying to create problems in the Bhutto: We say that if democracy is established, we Middle East. Syria is a very famous example because would do everything in the power of the people to solve right now it is in the press [Syrian government suppres­ the crisis .... In a democratic government, you have a sion of the Muslim Brotherhood-ed.] but it is all over parliament, the parliament sits and decides. There is a the Middle East!

44 International EIR October 7, 1980 Islami or whatever their special group is called, will say "No! This is un-Islamic!" That is not correct. They abuse the name of Islam. They use the name of Islam to move towards their own ends. They themselves are not independent people, they are the puppets of intelligence agencies of the Western world.

EIR: How do these people act? Bhutto: Any person who even has a moustache, which is slightly thick, is considered by the so-called Mujaheddin to be a Communist. He is taken and either they use that man to defuse mines, or if he survives that, he will be put into another mine. That is when they are feeling gener­ ous. That is when they are in a generous mood they do that. Under normal circumstances they cut every part of the human body off, they take the eyes out. It is a fact that we have seen with our own eyes, we have seen the bodies. They mutilate the body completely, they cut people's hands and legs off and leave them on the moun­ Mr. Bhutto (c) and his brother Murtaza at an April 1979 tains, barren mountains. They cannot walk, they cannot rally in London protesting the death sentence against their fa ther. do anything, they are not dead, they die very slowly. They skin people alive completely. They hang people upside down from barges and they put them into the ice EIR: What is your review of the Afghan rebels, what do cold water of the Kabul River in the months of December they represent really? or January. These are just a few examples of the ways Bhutto: If you take ordinary Afghans from the moun­ they torture. They do not take any prisoners, they kill tains who have been fightingfor two years, and ask him: them all. Whether they kill them by skinning them or "Why are you fighting? What is your reason?" He will other means, they do not shoot them. not give you a social reason, or an economic reason. He will say, "The Jamaat-i-Islami, the leader of the Jamaat­ EIR: What message would you give to the Western i-Islami told me to fight." "Why do you listen to him?" countries? you ask him, but he will not answer. Bhutto: The Western European countries must realize You say, "You don't have food, the Afghan govern­ that Zia is not the alternative. Zia is going to make the ment is giving you food, you should support this govern­ Pakistani people move further and further away from the ment." He answers, "No, no, the leader of my area of the Western European nations. We do not want that! Jamaat-i-Islami says that this government is bad, you Pakistani People's Party has got a certain policy, a have to fight against this government, so I listened to certain fo reign policy which was made by our late chair­ him ...." man and martyr, Ali Bhutto, and we want to follow the This is a special kind of opium. It is not the drug same policy. We do not want to go off the tracks. But, if opium, but a different kind of opium where the man does Western countries continue supporting Zia the way they not think for himself. He depends on other people. He are, giving him economic and military aid, the people of doesn't think logically. He doesn't think about his own Pakistan will have to look for another alternative. social and economic problems. He is under the influence It is in the hands of Western powers whether the of this drug and he will just go according to it. people of Pakistan will continue to look to them, contin­ The Afghan people are very poor people. Why are ue to ask them for support in the future in a democratic they poor people? There is not a single industry in manner, or whether they want them to move away from Afghanistan. The agricultural system is two or three Western democracy. It is in their hands. hundred years old. The Afghan government wants to It is not up to me to decide this, it is up to the people change that, they want to build industries, to modernize of Pakistan to decide, and the way things are moving at the agricultural sector and to educate the people. The the moment, they are moving in the wrong direction. Jamaat-i-Islami says this is "un-Islamic" so this poor They are moving away from the Western democra­ man tries to get educated, tries to get his land cultivated, cies, and this is going to be very harmful for the Western but he will not because this madman of the J amaat-i- European countries. -

EIR October 7, 1980 International 45 Chopping block for Polish industry

Already the 'consumer' spokesmen are taki ng over policy, Rachel Douglas reports.

The new leaders of Poland have moved swiftly to For the firsttime in more than two months, Poland eliminate the remnants of former party chief Edward was reported to be free of any strikes in mid-September. Gierek's heavy industry development policies and to But the labor scene could be swept by unrest again. dismantle the political machines that ran them. Follow­ ing the purge of Gierek's closest allies from the ruling New unions chartered Polish United Workers Party (PUWP), officials respon­ Leaders of the new "free trade union" movement sible fo r East-West trade find their jobs in jeopardy as met in Gdansk Sept. 21 to draft the statutes of its the list of "corruption cases" up for court action national organization. The union will apply for formal lengthens by the day. registration later this week, in a Warsaw court. If it is Stefan Olszowski, the opponent of Gierek who holds refused, one union leader threatened, "recourse to a the economic portfolio in the PUWP Central Commit­ general strike" could not be excluded. tee under Stanislaw Kania's regime, confirmed the According to some reports, a militant wing of the direction of Poland's new economic policy Sept. 21, in unions is insisting that more concessions be granted his first speech since settlement of the most serious immediately. Five local unions from scattered parts of Polish strikes in early September. Speaking at the town Poland released a statement today accusing the regime of Bromberg, Olszowski criticized the party's "arro­ of backsliding on promises for full media coverage of gant, voluntarist system of action" under Gierek, by the independent unions' activities and warned of serious which he meant the attempt to boost Poland forward consequences for the nation if tha t trend were not through the centralized development of heavy industry. reversed. One of the researchers detailing new economic policies for Olszowski wrote that Gierek's economic policy had been a bundle of "seven sins" which now had to be remedied by decentralization and reallocation of invest­ ments into the consumer sector. The short term benefits of Olszowski's redirection of the Polish economy, for the consumer, will eventually Kultura liaison talks be undercut by shrinkage of the industrial base-forcing Poland even more into import dependency. about Poland Zdsislaw Grudzien, the party chief of the coal and steel district of Silesia and one of the remaining expo­ On Sept. 5 in Rome, EIR correspondents Umberto Pascali nents of Gierek's policy in the top leadership, was and Giuliana Sammartino interviewed Dominic Morawski, removed from the Polish Politburo and his regional job Va tican correspondent fo r the Polish emigre magazine last week. Now, the internal party reorganization is Kultura. Based in Paris, Kultura has served fo r many targeting individuals involved in East-West trade. years as the organ of the Polish opposition groups linked to Yesterday State Prosecutor Lucjen Czubinski an­ Poles abroad. nounced he would open proceedings against "economic Morawski sketches a picture of a controlled destabili­ criminals," including industrial enterprise officials who zation, stoppedjust in time to keep the Soviets fr om moving allegedly get kickbacks in their deals with Western in militarily. His proposal fo r a "Marshall Plan" fo r firms. Their trials will see the executors of another part Poland is a widely circulating plan to select investment of Gierek's policy, import of machinery from Western priorities fo r Poland fr om the outside. It apparently aims European countries, in the dock. to bring Poland into ever tighter dependency on its Western

46 International EIR October 7, 1980 creditors and out of the Soviet bloc, despite Morawski's the Polish domestic situation itself. On the other hand, plea fo r an "unpoliticized" attitude toward Poland. we have to remember that despite the cautiousness ofthe Our interview took place before Edward Gierek was political initiatives in Europe regarding the strikes in removed fr om the leadership of the ruling Polish United Poland, the U.S.S.R. managed to launch a hard attack Workers' Party. on Western Europe and the United States. We could say that Western Europe learned something EIR: What is your assessment of the Polish situation from past experience, namely the failure of its way of now, and of the conduct of the West, particularly West­ intervention in Hungary in 1956 and Czechoslovakia in ern Europe, towards Poland during the crisis? 1 968. In the first instance, Europe tried to push the Morawski: Certainly the hottest phase of the fight be­ domestic revolt and in the second it supported too force­ tween the authorities and the workers has ended, at least fully the so-called new course of Dubcek. in its most incandescent form. But this does not mean In Poland, the workers' demands have been accepted that everything has ended. On the contrary, and I am by the government essentially for two reasons. The first sure of this, we are at the beginning of a very long and one is that the government realized it was isolated and troubled process which involves the kernel of workers discredited and that the time of truth had come when it who obtained the firstfree trade union in the East bloc, was necessary to accept the workers' demands, including the population in general with its various layers, and the the hardest to accept, the free trade unions, but also to Polish United Workers Party, which has to acquire again proceed to a restructuring of relations between the au­ the credibility that has been destroyed-while at the same thorities and society. time managing the renewal process promised to the The second reason has to do with international polit­ population. ical relations. Gierek felt relatively safe from a Soviet I have heard a high official, a man very close to intervention into Poland, because the consequence of Gierek, saying, "Concerning the party-we are in an that would have been the end of the Ostpolitik*, which is earthquake; concerning the country-we are in a revo­ so important to Moscow, and victories for Reagan in the lution. " United States and Strauss in the German elections. The most important thing to understand is that this After the Afghanistan invasion and also its problems process, which the leaders of the party themselves call a in the Central Asian republics bordering on Iran, the revolution, represents a moment full of upheavals and U.S.S.R. looks with anxiety at the opening of the Madrid deep changes. It has, however, to proceed cautiously and conference, the results of which could be heavily influ­ gradually, particularly to avoid a Soviet intervention. enced by a Soviet intervention in Poland. But the party cannot manage this peaceful revolution What Europe can do to continue the process of without the approval of the population, and this will be liberalization is to continue to have a political attitude of the most difficultthi ng. In fact to build an alternative to great caution, without trying to interfere politically in all the mistakes made by the closed and monolithic party the Polish situation. On the other hand, and this is the over 35 years, mistakes which the officials themselves most important thing, it can continue what may be called recognize in their self-criticism, two things are needed: "the Schmidt Project," the policy of economic aid which approval and credibility. Chancellor Schmidt began with the firstloan to Poland, I think that the second strike wave will be the stu­ with [West German Foreign Minister] Genscher's trip to dent5' one, beginning at the opening of the academic the United States, and with the loan being negotiated in year on Oct. 1. The students will demand an independent London which seems to involve Japanese banks as well. organization from the one called the Polish Socialist But on this point we have to be careful. The loans Union, which is an appendix of the party just as the being made to Poland or the ones which will be made, official trade unions were for the workers' sector. given that country's bad economic conditions, could add Concerning the behavior of Western Europe and the up to money that cannot be paid back. Therefore it is United States, which has been very cautious, we cannot very important to consider what some circles of the say that it forced the Polish government to concede what dissidents and also outside of Poland are calling a new the workers were demanding. It only allowed the party Marshall Plan. to begin negotiations in a relatively calm situation, in This would not be a new American Marshall Plan, contrast to the one which would have existed given a but a plan by the European Economic Community. Soviet kind of attitude. America should participate without having the role of In Poland, I have also heard comments of approval protagonist, because that would mean a veto from Mos­ and acknowledgement of the way Western Europe and cow and would be wished neither by the government nor the United States behaved during the strikes. I repeat by Polish society because it could be exploited by Carter that the positions of Europe and the United States are for electoral purposes. important with respect to the U.S.S.R., more so than for What does a new Marshall Plan for Poland mean?

EIR October 7, 1980 International 47 Our economy not only needs loans which repay old debts 1976. It looked to the general interest of the state and the and interest on those debts, which this year requires $7 nation. An important thing to emphasize is that the final billion, but to have all of its productive capacity working. statement of the Central Council of Polish Bishops on What happens instead in Poland is that the plants, even Aug. 27, 1980 spoke of "the responsibility" of the Church if reconstructed and modernized, work at only half ca­ towards the state and the nation, referring for the first pacity. Managerial mistakes are serious. time not only to the nation but to the state. What does The circles in Poland about whom I spoke before are this mean? It means that the Church took into consider­ thinking of initiating a process of exchange of technical ation the social conditions and the situation of the nation and scientific knowledge through the temporary ex­ but also of the state and of the party governing it, and change of qualified workers between Western Europe that the state was almost losing control over the nation­ and Poland. What I have in mind is something similar. which could have meant a Soviet intervention in Poland. Here in Western Europe there is a skilled labor force, The Church did everything possible to avoid a degen­ sometimes semi-employed or even unemployed. These eration of the situation, knowing clearly the limits within people could be sent by various governments for a period which the party was moving. All the interventions made of six months or one year to Poland, and paid by our by the Church and its authorities were made with consid­ government in zlotys, without the use of other currencies. eration of the future, the long-term consequences. The This would really be a help for Poland. Church caused the opposition to moderate and protected But besides the bad operation of plants and bad it at the same time. management of various sectors of the Polish economy, I Today the press speaks (without knowing much) will tell you about the terrible situation of the transport about a privileged relationship between Primate Wyszin­ system in Poland-something people do not talk about. ski and Gierek, but forgets that two years ago Gierek I know that this important sector of the economy is and the Central Committee of the PUWP recognized in totally obsolete. For years, the infrastructure necessary their documents the national role of the Polish Church for transport has not been rebuilt. Because everything and asked the cooperation of the Church. The Church depends on the railway and road system for transport, accepted its power without receiving the communication we have the following situation: there is double the lead and information means it demanded in exchange. on the Polish rail system than what those of France and Therefore, during the strikes, the Church tried to find West Germany combined carry, despite the fact that the a way out ofthe crisis which would be positive and useful Polish network is much less developed than the French not only for the immediate future, but also for the long and German ones. When the government speaks of term and also not only for Poland, but for the other disruptions caused by the strikers in the national distri­ Eastern European countries. The Church, including in bution network, it does not mention that the real reason its official documents before the Polish crisis, was always for such bottlenecks is the decay of the rail transport committed to solve the situation of Catholics in the system. "persecuted nations." A new Marshall Plan means a new policy of trade and It is therefore clear that in this instance of the revolt cooperation, in which credits are not given without of the workers, the Church was actively interested in discrimination (because that way the credits could be what everybody now sees as the beginning of the deco­ used by the party to strengthen itself), but great latitude Ionization of the last empire in the world-Russia's. is given to visits and exchanges of experience in the labor What the press attacked Cardinal Wyszynski for is world. not true, namely that in his negotiations with the govern­ The Italian press reports that there has been a Come­ ment he went over the head of the workers. Actually, he con economic intervention for Poland, which provides put himself over and beyond all parts, knowing well the raw materials aid. I think that this fact, even if it is total risks Poland was running. positive, can be interpreted as the fear of the Soviet The Church therefore recognized the maturity shown leadership that the West will conduct an aid policy by the Polish working class, thanks also to its teaching, towards Poland which is broader than mere credit-the and is waiting for the developments to come in the exchange policy I have been speaking about. internal fight within the PUWP. I think that the party I want to say that the basis for this policy of exchange cannot back out of its promise without a bloodbath in is that this process is highly unpolitical. The ideological the country. and political elements have to stay out of this process. In any case, the party now has a debt to the Church. We have no need of propaganda in Poland, even if it is There will have to be a period of loyal cooperation well meant. between Church and government.

EIR: What role can the Catholic Church play for Poland? * Detente, called "Ostpolitik" in Europe after West Ger­ Morawski: The role of the Church in this new upheaval many's "East policy" of dialogue with the U.S.S.R. and East­ in Poland was coherent with its role in 1956, 1970 and ern Europe. •

48 International EIR October 7, 1980 Moon. During the 1960s, Reverend Moon created a International Terrorism similar W ACL organization spanning all of Southeast Asia. By late 1975, the U.S. Cuban exile networks had already begun to resurface as a terrorist formation with the founding of the Cuban Nationalist Movement, based out of Union City, New Jersey and Miami. It is widely believed that the CNM and Omega 7 are identical. Wh In late 1975, a former Chilean minister in the govern­ o's running the ment of Salvador Allende was assassinated in Rome. Bernardo Leighton and his wife were gunned down by Omega 7 threat an individual later identified as a member of the Italian fascist youth party, "Comando Cero." However, credit by Jeffrey Steinberg for the murder was claimed by CNM member Virgilio Paz. Paz would be later implicated in the Washington, On Sept. II, Felix Garcia Rodriguez, an employee at the D.C. assassination of Orlando Letelier. Cuban Mission to the United Nations in New York City This "joint venture" assassination was later explained was assassinated as he drove his car on a crowded street by Michael Townley, a go-between in both the Leighton in Queens, N. Y. Within moments of the assassination, a and Letelier hits, as a prearranged public relations stunt call was received at the Cuban Mission to the U.N. in to provide the newly constituted Cuban exile group with which the caller claimed credit for the killing on behalf of instant notoriety. the Cuban exile terrorist group, Omega 7. The caller Perhaps the most notorious factor in the Omega 7- threatened to carry out a similar assault on Cuban U.N. CNM story revolves around Townley himself. According Ambassador Raul Roa Khoury. to information released in the trial of Novo and Ross Sources have reported to Investigative Leads that Diaz, Michael Townley had been the Chilean director of Garcia, the security and counterintelligence expert at the Investors Overseas Service (lOS) for a number of years mission, had been investigating the role of Omega 7 and preceding the 1975 founding of Omega 7-CNM. Under other exile gangs in the multibillion-dollar cocaine and the guise of being an international mutual fund, lOS marijuana traffic in southern Florida at the time of his deployed an army of "salesmen" in over a hundred assassination. Some of that money may now be a war countries around the world. These salesmen were cour­ chest devoted to bankrolling a new wave of rightwing iers of black market revenues, garnered from interna­ terrorism throughout the Western hemisphere parallel to tional narcotics traffic and related criminal operations. the recent activation of the Armed Revolutionary Nucle­ In the 1960s, French President Charles de Gaulle and us (NAR) in Italy and the FANE in France. the French intelligence service SDECE proved that mon­ These fears of renewed activity from the Cuban exiles ies laundered through the lOS and the Banque de la have been bolstered by a series of recent developments. Credit Internationale (BCI) had been passed into a Mon­ On Sept. 16, the U.S. Court of Appeals in Washing­ treal-based international trade expositions firm called ton, D.C. ruled that two members of Omega 7, Guillermo Permindex to finance the assassination attempt against Novo Sampol and Alvin Ross Diaz, must be retried and the General. 10S-Permindex couriers had delivered their prior conviction overturned in the 1976 bombing $200,000 to the rightwing Secret Army Organization assassination of former Chilean government officialOr­ (OAS) for the hit attempt on de Gaulle. lando Letelier. The Court ruled that evidence critical to Former lOS Chile boss Townley currently lists him­ the original conviction of the pair had been illegally self as an official of the Chilean secret police agency, planted in their jail cell and therefore had to be stricken DIN A. As one of the countries in the cocaine-producing fr om the prosecutors' case. and shipment region of Latin America, Chile is at the The same day, a military tribunal in Venezuela en­ center of the international narcotics traffic route into tered a not guilty ruling in the trial of Dr. Orlando Bosch, southern Florida that Garcia was investigating at the the fo under of Omega 7 who had been accused of master­ time of his assassination. This raises the possibility that minding the 1976 Air Cubana bombing that claimed drugs, rather than "political ideology," may have been over 72 lives. the motivating factor behind the Garcia killing. It further The Omega 7 organization was created at the 1976 raises the possibility that the 10S- Permindex assassina­ World Anti-Communist League (W ACL) conference in tion-drug organization of the 1960s has been reconstitut­ Miami, Florida, attended by hundreds of Cuban anti­ ed-under a new series of commercial and political front Castro exiles and rightwing activists from all over the organizations-and that the recent spate of terrorist Western hemisphere. The U.S. delegation to that confer­ operations throughout Western Europe, Latin America, ence was bankrolled by Reverend Jose Casado, a minister and now the United States may be part of a single effort in the Unification Church of Reverend Sun Myung sponsored by the international drug network. _

EIR October 7, 1980 International 49 DatelineMexico by JosefinaMenendez

More than a campus battle solved the national university sev­ Th e presidency of Mexico's most prestigious university eral times because its teaching was controlled by Jesuit, feudal-minded is up fo r grabs. currents opposed to the consolida­ tion of nation-building. Former President Lazaro Car­ denas, who served as rector from 1934- 1 940, was stymied in his ef­ fo rts to harness the UNAM to the The question of who will succeed universities. SUNTU is headquar­ development needs of the nation in to the post of rector of the National tered at the UNAM. A strike is the 1930s. He created an entirely Autonomous University of Mexico threatened as early as this Novem­ new institution of higher learning (UNAM) has become one of the ber. based on the tradition of the Ecole main items of backroom conversa­ There are two other noteworthy Poly technique in France, the Insti­ tion over the past weeks. The post aspects of this year's fight. One is tuto Politecnico N acional. does not actually fall vacant until that the group which is in full gear With much of the responsibility January, but the successor to Dr. to capture it-that of current rector for the success of long-term devel­ Guillermo Sober6n Acevedo is Sober6n himself-seeks above all opment efforts riding on the choice likely to be selected by the Academ­ to accumulate fo rces to influence of the new UNAM rector, many ic Council of the university some the presidential succession of 1982, Mexican analysts are showing con­ months before, and the scramble when L6pez Portillo leaves office. cern about the candidates who have is on. Sober6n was first installed al­ emerged so far. The former Mexi­ Such intense interest in the mat­ most eight years ago (each term is can ambassador to the Soviet ter may seem strange to readers for fo ur years and an incumbent Union, Victor Flores Olea, is a well­ outside Mexico. But it should be can be reelected once) under of known zero-growth advocate and noted that, because of UNAM's Mario Moya Palencia, interior close personal friend of Enrique preeminent position within the uni­ minister under Luis EcheverrIa. Gonzalez Pedrero, head of the Na­ versity system as a whole, and the The second issue is the orienta­ tional Commission of Free Text­ major budget allocations it receives tion of university education in the books in the Education Ministry from the government, the rector­ country. Up to now the line of and a fa natic Malthusian. Gonzalez ship carries a great deal of political thinking which has predominated Pedrero and Flores Olea are both as well as academic weight. at UNAM has been to favor so­ graduates of the UNAM, and both Furthermore, keeping student called social science at the expense have been directors of the School of unrest within bounds at the univer­ of natural science and mathematics. Political and Social Sciences there. sity is of much more than academic As revealed in a seminar sponsored Although less prominently dis­ interest for politicians who remem­ by the Mexican Association of Fu­ cussed at this moment, also in the ber the days of 1968 when UNAM­ sion Energy this week, Mexico has running is Education Minister Fer­ led student marches, and the subse­ only produced 1600 doctorates in nando Solana, trained by the Jesu­ quent bloody Tlatelolco massacre, theoretical and basic sciences in the its. shook Mexico's political system to past 35 years! Now, with ambitious The candidate of Sober6n's fac­ its fo undations. economic development plans to ab­ tion is the current Secretary Gener­ This year, issues of university sorb the oil revenues, the shortfalls al of the UNAM, Fernando Perez politics will be especially tricky be­ in trained technical and scientific Correa. cause a leftist-controlled grouping personnel loom as perhaps the most It's a classic "politica ala mex­ of academic personnel and univer­ severe bottleneck the country faces. icana," but the outcome will pro­ sity workers, cal led SUNTU, is re­ The direction of university vide an important reading of questing Labor Ministry recogni­ training has been a recurring battle. whether the underlying basis for tion as the official bargaining agent Benito Juarez, Abraham Lincoln's sustained Mexican expansion is of all the country's state-supported republican partner in Mexico, dis- being properly set.

50 International EIR October 7, 1980 Middle East Report by Robert Dreyfuss

Behind the Turkish coup In June, the Demirel govern­ In the military takeover, the In ternational /Iionet ary Fund ment signed a stand-by agreement with the IMF, according to which played a special role. all subsidies to state enterprises were to be cut. Fearful of the public outcry that would have resulted, Demirel, like previous govern­ ments, dragged his feet in imple­ menting the measures. In contrast, Was the Sept. 12 military take­ fundamentalist National Salvation Ozal, backed by the military, is over in Turkey backed by the Inter­ Party-a party notorious for its il­ pushing full steam ahead with the national Monetary Fund? There legal drug-running activities and IMF program. are numerous indications that this Muslim Brotherhood terrorist op­ Laboring under a $16 billion may weB have been the case. erations. The NSP's leader, Nec­ debt, Turkey has been at the mercy Much of the evidence revolves mettin Erbakan, is expected to be of the IMF and its demands for around the figure of Turgut Ozal, tried in the coming weeks for his years. The IMF stand-by agree­ the economic adviser to ousted Pre­ efforts to undermine Turkey's secu­ ment worked out in June, the latest mier Demirel and the IMF's point larist orientation. It was Erbakan's in a series of IMF austerity pack­ man in Turkey. Within hours of the revival of militant Islam in Turkey, ages for Turkey, is a controversial coup, the generals announced that and in particular his demands for "economic stabilization" scheme Ozal would be retained as economic the destruction of secularism, that designed to bleed Turkey white in czar and that the IMF austerity triggered the coup. the interest of paying offthe debt. policies would be adhered to. Ac­ In 1973, Ozal, who is reputed to In his first public speech, Tur­ cording to a diplomat quoted by the be a member of the fundamentalist key's new interim Premier Biilent Washington Post, "the generals had mystical Nursi sect, ran unsuccess­ Ulusu pledged to "continue to im­ very little choice. If Ozal were to fuBy for a parliamentary seat on the plement the austerity measures tak­ quit, they would ha ve had it." NSP ticket. Ozal's brother Korkut en at the beginning of 1980," a Last week, Ozal was officially is a top leader of the NSP. Another reference to the IMF stand-by appointed to the number two posi­ brother of Ozal's and a son are package, whose measures were de­ tion in the new Turkish administra­ currently employed by the IMF and scribed as "draconian" by IMF of­ tion-Deputy Premier-enjoying the World Bank, respectively, in ficialsthemselv es. total control over economic policy. Washington, D.C. Last June, following the stand­ According to Turkish intelligence Ozal's commitment to the IMF by accord, the Turkish daily Cum­ sources, all the newly appointed is underscored by his declaration huriyet prophesied the fa ll of the cabinet members have had to agree last week of a 20 percent price hike Demirel government by the armed to the condition that they not inter­ fo r liquid fuels, gasoline, sugar, and forces. "All governments that try to fe re with Ozal's running of the fertilizer-all products of Turkey's implement the IMF's measures Turkish economy. large state sector. For years now, fall," wrote Cumhuriyet. "In many The irony of the situation is the the IMF has been demanding that cases, military governments have to publicly stated goals of the new Turkey dismantle its state sector come to power to impose these military rulers-eradicating terror­ enterprises, which produce 50 per­ measures, because of the inability ism and restoring the nation-build­ cent of the country's industrial out­ of a parliamentary regime to do so." ing traditions of Kemal Atatiirk, put, on the grounds that they are The generals, of course, will the fo under of the Turkish repub­ "uneconomical." Turkey's state have more authority than a civilian lic-are precisely what Ozal has sector-set up by Atatiirk as the regime to push through the IMF's been working against throughout backbone of a modern Turkish measures. But in doing so, they are his career. Besides being the agent economy-should be replaced by a merely re-sowing the seeds of the of the IMF's policies, Ozal is inti­ Friedmanite free-market system, very unrest that they sought mately connected with the Islamic the IMF has been demanding. through their intervention to quell.

EIR October 7, 1980 International 51 International Intelligence

with machine guns and lO-foot Chinese Kopp stressed: "It is not self-evident that U. S.S.R., Sy ria to sign bazookas was able to enter Paraguay [auto] import restrictions would provide security treaty undetected. significant stimulus to sales or produc­ The Brazilian daily 0 Globo reported tion of additional U.S.-built cars." This Sept. 20 Jhat Somoza may have been was a turnaround from Carter's election­ Syrian Information Minister Ahmed Is­ involved in drug traffic as well as the eering statements. kandar told the Paris-based magazine Al arms trade, and that his death "might Mustakbal that Syria and the Soviet Union will sign a military security treaty have been a settling of underworld ac­ "very soon." Syrian sources quoted by counts." Paraguayan dictator Alfredo the magazine said the signing would take Stroessner had maintained a virtual mo­ nopoly on all contraband in his country place Oct. 8 at a meeting in Moscow Italian government between Presidents Hafez Assad and and has ties into the "French connec­ Leonid Brezhnev. tion" of the cocaine business. toppled finally According to Iskandar, Moscow un­ der the new agreement "will supply Syria The Christian Democracy-Socialist Par­ with a large amount of military aid and, ty coalition government of Francesco if necessary, wiII have a heavy military Cossiga was brought down Sept. 24 when presence there." He characterized the U. S. offers deal if a secret ballot parliamentary vote fa iled planned treaty as "the adequate response Japan backs China to approve the premier's reworked aus­ to the plans of the Camp David signato­ terity decree by a single vote, 298 to 297. d ries" Egypt, Israel and the United States. Sources in Washington suggested this Earlier the same ay, in a roll call vote, Saying that the agreement would be week that the Carter administration has Cossiga had won a vote of confidence by "totally different from those concluded agreed to hold off on protectionist pres­ a 30-vote margin. Four days earlier a between the Soviet Union and other sures against Japan in exchange for Jap­ vote on a similar decree had been dead­ Arab nations," Iskandar compared it to anese support of Carter's "China card" locked 267-all, and the Cossiga govern­ the close military cooperation defined foreign policy. The deal reportedly in­ ment survived only due to a technicality between the U.S.S.R. and Egypt under cludes administration acceptance of vis­ which tips the scales to the government Nasser. iting foreign minister Masayoshi Ito's side in the event of a tie. pledge to cut Japanese auto exports dur­ The 30-vote shiftwhich ensured Cos­ ing the U.S. election period by 10 percent siga's failure was partially attributed to a below October-December 1979 levels. If bloc of parliamentarians within his own confirmed, the deal parallels the one DC party dissatisfiedwith Cossiga's pro­ worked out in May 1979 during former gram, which called for cuts in consump­ Drug war linkedto Premier Masayoshi Ohira's trip to the tion through reduced government subsi­ United States. dies for certain commodities. A second Somoza 's death ? Ito gave a press conference in Wash­ factor was the upcoming general strike ington strongly critical of France's Creu­ to protest announced layoffs of Fiat au­ According to Paraguayan officials, the sot-Loire for selling a $300 million steel to workers presently being organized by Sept. 16 assassination of former Nicara­ plant to the Soviet Union, the same plant trade unions. guan dictator Anastasio Somoza was order Japan's Nippon Steel lost because The international strategic situation carried out by a squad of the leftist Ar­ of Tokyo's adherence to Washington's may have influenced the vote due to gentine People's Revolutionary Army embargo against the U.S.S.R. Although grave concern within the Andreotti wing (ERP). The Paraguayan officerin charge Japanese businessmen estim ate they have of the DC that Cossiga might allow Italy of the murder investigation charged this lost $4 to $5 billion in sales now earned to become involved in NATO deploy­ week that the Sandinista Liberation by French and West German firms, aides ments into the Persian Gulf. Cossiga and Front of Nicaragua worked with the traveling with Ito report that Ito did not his Socialist defense minister Lelio La­ ERP to carry out the murder. even ask Secretary of State Muskie to gorio, had been criticized for their shift Oddly, less than 20 minutes after the ease U.S. proscriptions on Japanese sales in Italian fo reign policy, which had been kiIlings, police arrived on the scene with to the U.S.S.R.; instead, he dutifully described recently as making Italy "the prepared dossiers identifying the assas­ echoed Muskie's protest to the French bulwark of the southern flank of sins and handed them to the press. A few government over the Creusot-Loire sale. NATO." hours later, police drove up to the house A related development was the aston­ Cossiga had recently also been de­ of the alleged leader of the hit squad and ishingly pro-Japanese testimony on trade nounced by Communist Party military killed him as he "attempted to escape." matters Sept. 18 by Deputy Assistant strategist Arrigo Boldrini for "planning Observers are also asking how it was that Secretary of State Harry Kopp before the to get Italy involved in a limited nuclear a foreign band of known terrorists armed House Asian Affairs Subcommittee. war."

52 International EIR October 7, 1980 Briefly

President Sandro Pertini will now trade, particularly in the energy area: • IRAQ has announced that it designate the outgoing government to drilling equipment, for example, could will resume the pumping of crude govern in a caretaker status until the be bought from Sweden by the U.S.S.R., oil through its Mediterranean various parties meet and a new govern­ which could sell the Swedes power sta­ pipeline that runs from Kirkuk, ment is put together. Vying with An­ tion equipment as well as raw materials Iraq, through Syria, and into the dreotti for the premiership is Socialist such as natural gas. port city of Tripoli, Lebanon. It leader Bettino Craxi, who is purported to This week, the largest Swedish trade will be the first time that the pipe­ wish to head up a five-way coalition ex­ delegation to the Soviet Union in nearly line has been opened since March, cluding the Communists fr om power. If 30 years, 60 top businessmen, is at­ 1976, when Syria-Iraq tensions arranged, such a coalition is not expected tending a meeting of the Swedish-Soviet were at a high point. to last very long. Joint Commission on economic, techni­ cal and scientific cooperation to concre­ • WARREN CHRISTOPHER, tize this perspective. According to Swed­ Assistant Secretary of State, is out Franco-British summit ish press reports, Swedish participation to get the South Korean govern­ in developing a huge Siberian region just ment of strongman Chun Do Wan. dodges Ee budget East of the Ural mountains is at the top According to our congressional of the agenda. A natural gas, wide­ sources, Christopher leads the French President Valery Giscard diameter pipeline deal is also under dis­ pack at the State Department that d'Estaing and Prime Minister Margaret cussion, and will be pursued during a wants to threaten tough measures, Thatcher met in Paris Sept. 19 for the visit to Sweden by the Soviet oil minister including aid cutoffs, if the Kore­ annual summit between the two coun­ next month. ans go ahead and carry out the tries, in what were reportedly "cordial Swedish sources also note that the death sentence given Korean dis­ and confidential" talks. Most observers two countries are set to agree on "j oint sident Kim Dae Jung. noted, however, that Giscard had fore­ projects in third countries," and the warned Mrs. Thatcher that he would not newspaper Sydsvenska Dagbladet writes, • INDIAN COMMUNISTS, the discuss the chief issue between the two, "it has been hinted that this may be a pro-Moscow wing, have some­ British contributions to the European reference to cooperation in building nu­ what amended their previously Community budget. The Prime Minister clear power plants." hostile stand toward Mrs. Gan­ was told that if she insisted on raising the dhi's ruling Congress Party aftera matter, Giscard would listen, but not recent party executive meeting. reply. The CPI will "j oin hands" with the At the same time, French Premier Congress on certain issues, they Raymond Barre addressed the Franco­ Iraq negotiates to build say a shift from a policy that em­ British Council in Bordeaux, warning phasized unity with the Maoist 150 businessmen and government offi­ French jet fighters Communist Party /Marxist-Len­ cials that France will remain "intransi­ inist against Gandhi's "authori­ gent" on the "fundamental principles" Iraqi and French government officials tarianism. " of EC membership. Barre went on to are currently negotiating a purchase by evoke the possibility of a "two-tiered" Baghdad of 150 Alphajet fighters, which • HARVARD University recent­ Europe, which, from a Frenchman, al­ will be partly manufactured in Iraq. The ly conducted a seminar for Wall ways connotes that Great Britain would discussions reflect the growing coopera­ Street bankers on political opposi­ be on the lower tier. tion that has developed between the two tion to the Philippine government countries in aeronautics and other areas. and the Philippine terrorist move­ In November, the first of 60 French­ ment. The object of the seminar made Mirage F- l air defense interceptors was apparently to direct the bank­ will be delivered to Iraq. Now, it appears ers to maintain contact with lead­ Soviets, Swedes chart that Iraq has decided to set up its own ers of opposition groups. One aircraft industry with France's assist­ prominent U.S. bank, fo llowing energy projects and trade ance. After the Soviet Union, France is the seminar, ordered its Manila the number-two supplier of arms to Iraq. representatives to talk to "friends" Yurii Brezhnev, son of the Soviet presi­ Initially, the Alphajet will be pro­ of Cardinal Sin, a Jesuit who co­ dent and himself a deputy foreign trade duced in French plants. Later, Iraq ordinates a support network for minister of the U.S.S.R., told the Swed­ would assemble the most important AI­ terrorists whose bombs just killed ish newspaper Dagens Nyheter Sept. 10 phajet parts with French assistance. more than 10 people in Manila, that he wanted to double bilateral trade Eventually, most of the components of including some Americans. this decade. The expansion, said Brezh­ the Alphajet, including the jet engines, nev, should be centered on industrial would be built in Iraq.

EIR October 7, 1980 International 53 ITillNational

u.s. Army found unfitfor combat

by Konstantin George

There is extreme concern in knowledgeable quarters that Ellis rejects the countervailing strategy of aiming at President Jimmy Carter may militarily intervene into the selected military and political targets in the Soviet Union Persian Gulf crisis with a reliance on the "option of ... instead of relying on a strategy of annihilating the selective nuclear strike" against "Soviet forces or on entire civilian population." Soviet territory." That is the language used in Carter's Presidential Directive 59, which has placed the united Collapse of readiness States under the doctrine of "limited" nuclear war. That any Carter military move into the Gulf must The President has refused to rule out military action, either become nuclear, or abort under humilitating and it is known that the United States is unable to mount circumstances, is proven by even a cursory examination any effective intervention using conventional forces. of the status of the U.S. armed forces. If Carter decides to invoke his PO-59, it will be his General Jones, chairman of the Joint Chiefs of Staff, first and last "selective nuclear strike," as the Soviet recently issued a private memo assessing the U.S. forces' political and military hierarchy has repeatedly warned. combat readiness. As quoted in the Daily Oklahoman of The latest Soviet warning to the Carter administra­ Aug. 31, Jones said: "The size and sustainability of U.S. tion was conveyed Sept. 22 by Genrikh Trofimenko, conventional forces cannot ensure the success of the fo reign policy director of the U.S.S.R.'s Institute of the strategy they are required to support." U.S.A. and Canada; "PO-59 is ...extremely irresponsi- For added emphasis, Jones torpedoed the Carter ble and fr aught with danger ....It is aimed at knocking administration's on-paper claims of divisions available out the bulk of the Soviet Union's strategic forces with a for the Mideast: "In theory, fo ur divisions are ear­ first 'counterforce' blow. The Soviet Union," Trofimen­ marked for the Persian Gulf Mideast region, but that is, ko warned, "will not curtail its own military programs, of course, only if nothing happens in Europe." nor will it preoccupy itself solely with rebuffingcoun ter­ These statements by Ellis and Jones are, of course, force." at great variance with public pronouncements by the Carter's official transition to the "limited" nuclear same individuals. There has been a notable lack of war doctrine did not occur without opposition from the public professional military attacks on Carter policies. professional military. In a recent series of articles on The dismal state of U.S. readiness, the product of defense strategy, the Daily Oklahoman quoted a secret the Kissinger and later Carter administration, is shown April 1979 letter fr om Strategic Air Command General by the Army's own ratings of its divisions for combat Ellis to Defense Secretary Harold Brown. readiness. According to officialArmy documents, at the Ellis denounced the "countervailing strategy" of end of 1977, all ten of the Army divisions stationed in "limited nuclear war" that later became codified as PD- the continental United States, were rated as C-I, the 59. As the Daily Oklahoman summed it up, "General highest category, or, combat ready . By the end of 1979,

54 National EIR October 7, 1980 A t Fort Dix, New Jersey, a major training base.

seven of the ten were rated as C-4, the lowest possible Foreign Affairs Committee hearings on the B-52 bases. category, including two of the three divisions earmarked Congressman Stephen Solarz (D-N.Y.) and a majority fo r the so-called "Rapid Deployment Force" (RDF). of the committee's members attacked Carter for want­ These seven divisions are now officially labeled "not ing to station B-52s at Berbera, on the basis of Somalia's combat ready." location. Diego Garcia, Ras Banas, or even Oman, This collapse of military capability has produced looking directly out at the Gulf, were considered per­ hysterical reactions from some policymaking circles, fe ctly legitimate. but so fa r the debate has merely added to the blundering A no less incompetent debate is currently underway of Messrs. Carter, Brzezinski, and Brown. around the issue of the MX missile. The latest gizmo Brzezinski, Brown et al. have come Defense Secretary Harold Brown wants to go ahead up with is known as "strategic fo rces regroupment," with the land-based MX, which will ultimately cost over whereby B-52 bomber units are being rotated into a $100 billion and consume more water and cement than "forward-basing" mode. For the firsttime B-52 stategic any other single project in national history, leaving the units would be within quick flight striking-distance of dry West devoid of water for any other use. the Persian Gulf and adjacent Soviet territory. B-52s are Former Defense Secretary Melvin Laird, a Republi­ the vehicles for the "options of selective nuclear strikes" can, rejects the land-based concept. In a recent article, outlined in PD-59. Laird correctly became apoplectic over the ludicrous Strategic Forces units have never before been based social and material costs associated with the project. in fo rward deployment. Laird's alternative? Keep the counterforce MX mis­ Now, in addition to bases in the United States and sile as a missile, but make it sea-based, "either in ICBM Guam, B-52 basing capability has been established at ships or in flotation collars." the Indian Ocean island of Diego Garcia, and will be Laird's fant.asy missiles have been independently set up in the near future at Ras Banas, Egypt, and endorsed by such diverse elements as two former chiefs Berbera, Somalia. of the Joint Chiefs of Staff: Maxwell Taylor, Kennedy's The administration's justification for this deploy­ former defense adviser, and Admiral Thomas H. Moor­ ment is that the Soviets will know for certain that a U.S. er, a Republican defense adviser based at Georgetown bomber strike is limited, unlike a missile strike, where U ni versi ty . one is fo rced to assume that all missiles have been fired. These are the frightening calculations of an admini­ The most shocking fe ature of this policy is its tacit stration whose ostensible GOP policy-making oppo­ acceptance by the spectrum of leading figures who nents match it blunder for blunder, in the face of a parade as policymakers. Criticisms totally miss the potentially rapidly escalating, general crisis in the Per­ crucial point . A perfect example was the recent House sian Gulf. •

EIR October 7, 1980 National 55 U.S. army combat readiness U.s.-based December December December Another crisis divisions 1977 1978 1979 I st Infantry and another Ft. Riley, Kan .... C-I C-3 C-3

1st Cavalry committee Ft. Hood, Tx ..... C- I C-2 C-4 by Lonnie Wolfe 2nd Armored Ft. Hood, Tx ..... C- I C-2 C-4 Deputy Energy Secretary John Sawhill proudly an­ 4th Infantry nounced to the Senate Permanent Investigations Sub­ (mechanized) committee Sept. 22 that the Carter administration has Ft. Carson, Colo .. C- I C-2 C-3 formed yet another top-level committee-this one to deal with the energy crisis. 5th Infantry Sawhill stated that the administration has created a (mechanized) whole crisis management bureaucracy within the execu­ Ft. Riley, Kan .... C- I C-3 C-4 tive branch to deal with any emergency. The centerpiece is the Energy Coordinating Committee (ECC), a cabinet­ 7th Infantry level group that includes members of the National Secu­ Ft. Ord, Ca ...... C- I C-3 C-4 rity Council. Energy Secretary Charles Duncan, now formally the President's energy crisis manager in the 9th Infantry federal government, heads the committee. Ft. Lewis, Wash. C- I C-3 C-4 The ECC will make policy recommendations on the handling of an energy emergency, Sawhill told the sena­ 24th Infantry tors. It will be responsible for deploying and coordinat­ (mechanized) ing the operations of the Federal Emergency Manage­ Ft. Stewart, Ga. ment Agency (FEMA), the government agency created (RDF) ...... C-I C-3 C-4 to manage all emergency or disaster situations. FEMA, created by executive order, is best described as a govern­ 82nd Airborne ment within the government having broad-based powers Ft. Bragg, N.C. to act in an actual emergency. (RDF) ...... C- I C-2 C-2 Sawhill's statements were designed to reassure Con­ gress that the Carter administration is prepared for an lOlst Airborne emergency arising out of a disruption of Mideast oil (Air assault) supplies. Ft. Campbell, Ky. (RDF) ...... C- I C-3 C-4 $5 a gallon gas? RDF-Rapid Deployment Joint Task Force Sen. Charles Percy, the ranking Republican on the Key committee who called the hearings, expressed his grave C- I Fully combat ready concern over the United States' ability to withstand a C-2 Substantially combat ready new oil disruption. (minor deficiencies) The Illinois senator warned that the developments C-3 Marginally combat ready around the Iran-Iraq war could quickly lead to huge (major deficiencies) increases in the prices of gasoline, home heating fuel, C-4 Not combat ready and crude oil. Percy said, "Let's suppose that a full-scale war Source breaks out between Iran and Iraq, cutting off oil from /Jail.. Oklahomal/. Sept. 14, 1980. Based on interviews with military officials in those two nations ....The free world would lose almost Wa�hington. commanders in the field. defense specialists and top-secret docu- ments obtained by the O"lallOlllal/. 20 percent of its oil. The oil glut today would rapidly vanish, setting in motion the same events that occurred

56 National EIR October 7, 1980 in 1973 and 1979. ... If history repeats itself . . . a pumping of oil into U.S. strategic stockpiles in the supply disruption caused by an Iran-Iraq war could Louisiana salt domes. In addition, Sawhill and Percy triple or quadruple the price of crude oil again, to more declared that the standby gasoline rationing plan could than $100 per barrel. This time the hard truth of the get very messy. Sawhill stated that the administration is energy crisis would slam home with a vengeance: gaso­ now considering asking for the imposition of an emer­ line prices of $4 or $5 a gallon. Home heating bills of gency gasoline excise tax to cut consumption. Finally, well over $1,000 per month." both Percy and Sawhill agreed that the current crisis It was in this context that Sawhill, the newly-named demonstrated the need for increased conservation ef­ chief of the Synthetic Fuels Corporation boondoggle, fo rts. described his new crisis management bureaucracy. He The Washington Post and the New York Times stated that the United States had more than adequate immediately called for the Mideast crisis to spur new reserve supplies of oil to see it through a crisis deeper emergency measures. In an editorial Sept. 23, the Post than the 1973-74 Arab oil embargo. According to said, "The combat reports from the Persian Gulf are a Sawhill, the United States could handle a similar fo ur­ warning that there may not be time for a gradual, month shutoff and still have 40 days of reserves. comfortable transition to lower oil imports. Congress Sawhill did not once refute Percy's figures on the needs now to design an emergency gasoline tax that amounts of gas and oil price increases, although energy would rise sharply with the degree of a sudden shortage. experts watching the hearings were wondering where Congressmen who don't like voting for gasoline taxes Percy got his figures. Percy's claim that a shutoff of might usefully start thinking immediately about the Iran-Iraq oil constitutes a 20 percent loss of oil to the alternative." On the same day, the New York Times West is wildly extravagant. The 20 percent figure is said, "With luck the crisis will be contained before more than the total of all OPEC's exports to the West. world oil supplies are affected ....Our luck is bound to Similarly, none of the senators cross-examined Saw­ run out long before the oil in the Persian Gulf," urging hill on how the administration's Mideast policies con­ that action be taken along the lines of Sawhill's recom­ tributed to the present crisis, or what the administration mendations. planned to do about it. While Sawhill presented enough figures about U.S. Reuss hearings reserves to argue against the need for any energy The Percy hearings were not the only ones to deal emergency developing in the short or even medium with emergency measures. In the House, Congo Henry term, DOE sources report that it is currently preparing Reuss (D-Wisc.) called a session of the Banking Com­ for just such a crisis somewhere down the road. Four mittee to discuss "World War II and the lessons learned weeks ago a special office of contingency planning was on industrial problems." Spectators were treated to an created in the DOE and given the specific assignment of assemblage of old-timer crisis managers including Rob­ planning emergency measures to deal with a Mideast ert Nathan and David Ginsburg of the World War II oil shutoff. Meanwhile, the DOE's officeof intern at ion­ War Production Board. al affairs is monitoring "world oil flows" and is ready The testimony focused on how to handle the current to announce "when crisis proportions are reached," say crisis. Both Nathan and Ginsburg stressed that the DOE sources. At that point the ECC could move into nation lacked the appropriate sense of national purpose high gear. required to deal with the current emergency. Nathan criticized the new Energy Mobilization Board fo r its Who needs a shutoff? narrow focus on synthetic fuels. "We are ill-equipped to DOE sources report that it is conceivable that the deal with an energy emergency," he said. Ginsburg United States could be fo rced to cut back domestic expressed concern over the failure to comprehend the consumption without an oil shutoff. This would occur if full depth of the national economic and energy emer­ the U.S. was forced to share its oil supplies with gency. "What upsets me greatly," he stated, "is that we Western Europe and Japan, under agreements coordi­ don't have the contingencies in place. In fact, we don't nated through the Paris-based International Energy have a fallback contingency like wage-price controls. Agency. DOE officials stated that even under such We don't have authority fo r total rationing. We haven't conditions, the situation in the U.S. "would not resem­ even handed out the coupons for gasoline rationing," he ble the gas lines of 1973-74 or 1979." complained. Sawhill and Percy agreed at the hearings that the Ginsburg criticized the administration's lack of United States remains vulnerable to an oil disruption, planning and foresight. His proposal: set up another regardless of the stockpile figures. They agreed on the committee, an economic policy board, to deal with the need for new emergency measures including increased economic emergency. •

EIR October 7, 1980 National 57 Anderson did not disappoint his controllers one bit. With a strident tone reminiscent of a fishwife, he boasted of his intention to impose energy austerity measures such as the 50 cent per gallon gasoline tax that would help force Americans into a lifestyle coherent with "a new conservation ethic." It was all that the press panel could do to contain his enthusiasm sufficiently to keep him The real winner within the allotted time. Reagan showed more obvious distaste with the deg­ of the debate radation requested of him. But only once did he dare to disagree with the premise of the questions asked of him. This was to the first interrogatory-he simply asserted by Nancy Spannaus, Contributing Editor that he did not think the proper solution to the problem of inflation needed to be an "unpopular" one at all. Who gained more from the prime time television debates Having been rebuked by the panelist who muttered a sponsored by the League of Women Voters on Sunday disparaging remark about how he wished that the two evening Sept. 21? The answer to this simple question has would refrain from simply repeating campaign speeches, appeared oh-so-complicated to the nation's media pun­ Reagan did not veer from polite deference to his interro­ dits. gators again during the evening. Was it media creation John Anderson who benefited The Republican candidate concentrated simultane­ the most by being recognized as a major contender for ously on projecting a correct fatherly image, beginning the nation's highest office? Was it Ronald Reagan, who each remark with a slow stiff turn of his head and a escaped the evening without any of his traditional dis­ benign, if forced, smile. plays of embarrassing ignorance? The media panel chosen by the League of Women There are even some who claim that the winner was Voters, itself a creation of Anglo-American intelligence Jimmy Carter, because he stood "above it all" in the networks like the Aspen Institute, was not a particularly Oval Office-although these pundits are hotly contested distinguished group of individuals. There were no Walter by those who argue that Carter's disdain for the show Cronkites or Barbara Walters there to awe the candi­ made him the actual loser . dates, or the viewing audience. Only a selection of smug The answer is none 01 the above. underlings from every major wing of the Eastern Estab­ The only significantwinner from this dull and preten­ lishment press: the New York Times, Newsweek (Wash­ tious occasion was the policy grouping around the Coun­ ington Post), the Baltimore Sun, and so forth. cil on Foreign Relations that has announced in print that What was most striking was their arrogance and dead it would prefer that electoral constituencies not get in­ certainty that they were the only ones who would be volved in presidential politics at all, now that the function determining the outcome of the November elections. of government is supposed to be "allocating scarcity and The program which the media found acceptable was orchestrating sacrifice." It was an event of the media, by blatantly obvious from the formulation of each question: the media, and for the media-all of which is fully harsh energy constriction; the need for economic auster­ complicit in this CFR perspective. ity if the military were to be beefed up; the immense And the definite loser was the voting public. difficulty, if not impossibility, of solving the problems of Reagan and Anderson couldn't have been less in inflation and the cities; and the irrelevance of religious control of the situation themselves. Both of them had values to an electoral campaign. had to go through weeks of bowing and scraping before But the institutions running the media and these the media-Anderson in order to win his coveted 15 debates have another purpose in mind. As outlined in a percent poll to "qualify" for the debate, and Reagan in recent policy statement written by Lloyd Cutler, in the order to try to stanch the never-ending flow of abuse Council on Foreign Relations' mouthpiece Foreign Af coming from the nation's major media. la irs, the men who traditionally run presidential elections Anderson-whom media like the New York Times in this country have decided to junk the traditional openly acknowledge to be their creation-was naturally process. They have determined that within their world of the best acclimated for this kind of propitiation of the imposed scarcity, it will no longer be possible to satisfy press. Nothing made this more obvious than the fi rst the desire for improvements and progress of the Ameri­ question, which parroted Anderson's own campaign can electorate. rhetoric by asking what the candidate would do that was If the Anderson-Reagan debate made you hopeless "unpopular" with the electorate in order to solve infla­ about a solution to the depression and America's politi­ tion. cal crisis, they accomplished precisely their purpose. •

58 National EIR October 7, 1980 Fusion bill clears Congress

by Graham Lowry

Early next week, President Carter will have a bill on his Morris Levitt of the Fusion Energy Foundation in New desk that commits the United States to demonstrating York. "By recognizing the near-term potential fo r the the commercial feasibility of controlled thermonuclear unlimited benefits of fusion to become available, the fusion power by the year 2000. Final congressional ap­ Congress has provided us with the best possible alterna­ proval of the bill today opens the door for the develop­ tive to the austerity policies and synthetic fuel boondog­ ment of unlimited, cheap and clean energy. gles which up to now have been held out as our economic The legislation, initiated by Congo Mike McCormack future," said Dr. Levitt, the FEF's Executive Director. (D-Wash.), is entitled the Fusion Energy Research, De­ velopment, and Demonstration Act of 1980. Tarapur fuel sale approved For fiscal years 1982 and 1983, the bill orders an Congressman McCormack hailed the Senate pas­ additional $100 million each year to the nation's fusion sage of his bill as "a tremendous victory," and added, program and mandates reaching commercial fusion by "We've had several this week, including Senate approv­ "the turn of the 21st century." al for shipping nuclear fuel to India for its Tarapur The increased funding, which will reach approxi­ nuclear plant." The 48-46 vote on India Sept. 24 clears mately $500 million in 1982, will allow serious engineer­ the way for the United States to fulfill its treaty agree­ ing and design to begin on constructing an experimental ment to supply fuel for the U.S.-built plant. reactor in the early 1980s. At the Fusion Energy Foundation's headquarters in By voice vote on its consent calendar on Sept. 23, the New York, Dr. Levitt also praised "our nation's scien­ Senate passed a combined House-Senate version of bills tists and engineers, who have proven they can meet the filed by Congressman McCormack and Sen. Paul Tson­ challenge and get the job done when they're given gas (D-Mass.). Senate amendments had already brought support and adequate resources. With what the Mc­ the Tsongas bill into line with McCormack's, and the Cormack bill provides, we now have the basis to rebuild House voted final approval the day after McCormack our industries, our educational system, and a rational announced his acceptance of the amended Senate ver­ military policy." sion of the bill. Dr. Levitt, in addition to citing the impact of the Scientists around the country were jubilant over the FEF's campaign for fusion since its fo unding in 1974, bill's passage, which many believe provides an effective paid tribute to "the excellent leadership" of the govern­ mandate for unleashing an enormous set of potentials in ment's fusion program since the early 1970s. With the the most advanced technologies on the horizon. passage of the McCormack fusion bill, a program "This is a great day for America," declared Dr. previously restricted to large-scale scientific experiments "now moves ahead with an engineering commitment to An early- 1970s blueprint fo r a nuclear fu sion power plant. produce fusion energy at commercial prices by the turn

Source: u.s. Department of Energy of the century," Levitt declared. _

EIR October 7, 1980 National 59 congressional Calendar by Barbara Dreyfuss and Susan Kokinda

ing suggested editorial pieces and Soviets. It has not had any real N uclear fuel okayed at trying to secure their publication impact on meat production in the for India in newspapers across the Soviet Union." By a close 48 to 46 vote Sept. 24 country .... It takes on the ap­ The White House responded the Senate agreed to the admini­ pearance of a carefully orchestrat­ angrily to the Senate action, call­ stration's request that a shipment ed effort by one side by this debate ing it "a clear mistake." Further of enriched uranium be sold to to influence the political opinion action on the appropriations bill India for the Tarapur nuclear facil­ of the Congress through home­ was suspended later in the day with ity. The close vote came as a result town newspaper editorials." the Senate leadership removing it of a strange alliance between the The Senate measure assures the from the floor, ostensibly because administration and Reagan Re­ sale of the fuel. President Carter of disputes over anti-school busing publican, Idaho Senator James had ordered it in an executive or­ language. McClure. The administration, der, which requires a vote by both The House refused to agree to clearly perceiving the enormous Houses to overturn. measures to stop the embargo strategic implications of damaging when they were brought up in relations with India, pulled out the June, and the House may well re­ stops with Democratic senators on fuse to agree to the Senate version the Hill. of the appropriations bill when it At the same time Senator S enate votes to goes to a conference committee. McClure, one of the leading sup­ stop grain embargo There is also speculation that Pres­ porters of nuclear energy and of In a surprise slap at the admini­ ident Carter might veto the meas­ the use of nuclear energy to devel­ stration, the Senate voted Sept. 26 ure if it includes the grain embargo op the Third World, heavily pres­ to block the Carter administration rider. sured Republicans to support the from continuing its grain embargo sale. In a highly unusual move, against the Soviet Union. By a Secretary of State Edmund Muskie voice vote, the Senate added a rider was invited to appear before a Sen­ to the appropriations bill for the ate Republican caucus to argue the Commerce, Justice, and State De­ Pension investments in case, reportedly at the behest of partments, which forbids any of agriculture to be reviewed Senator McClure. McClure, who the departments' money from The Senate Small Business Com­ could never be categorized as "soft being used for "enforcement or mittee, at the request of Senator on the Soviets," successfully un­ implementation" of any restriction Baucus (D-Mont.) and with the dercut the arguments of some Re­ of agricultural goods to the Soviet support of Senator Gaylord Nel­ publicans who wanted to "punish" Union. son (D-Wisc.), will hold hearings India for its deepening ties to the The rider was proposed by Sen. Oct. 8 on the investment of pension Soviet Union. At the Republican Larry Pressler (R-S.D.) and it had funds into agricultural lands. Tes­ platform hearings this summer, the backing of many Democrats. tifying will be representatives from McClure tried, though unsuccess­ Although the measure was passed the National Farmers Union, and fully, to reverse the party position by a voice vote, in an earlier pro­ several other farm groups. Pres­ against the sale. cedural vote on the issue, II Dem­ sure fr om the farm groups propel­ On the floorof the Senate Sept. ocrats joined with the Republicans led the senators to hold the hear­ 23, besides arguing the merits of against the embargo. Sen. Robert ings to investigate whether it is approving the shipment, McClure Dole (R-Kan.), who has strongly appropriate or necessary for Conn­ also attacked the tactics of some opposed the embargo, declared, ress to pass legislation limiting opponents of the sale. He charged "It has had a severe impact on pension investment in farmlands. that "a small cadre of individuals farm income. It has given other The Committee will be reviewing have worked very hard at develop- countries new markets to feed the the activities of the American Ag-

60 National EIR October 7, 1980 ricultural Investment Management U.S. Treasury, of the nation's nally held under the aegis of the Company, which invests the pen­ share of the investment in the sea­ Government Affairs Committee, it sion funds of major corporations way. appeared to be a rump Armed in agricultural lands. The House Services Committee meeting, dom­ Agriculture Committee, asked to inated by Armed Services Commit­ look into the same matter, has tee staff who are closely tied to requested the General Accounting Georgetown University's Center Office fo r a study of this question. O ffice of Strategic for Strategic and International Trade proposed Studies. Sen. Scoop Jackson (D­ "We have had a history offocusing Wash.), a senior member of both on the export of hardware to the Government Affairs and Armed Soviet bloc, rather than on the Services, opened the hearing and G reat Lakes shipping export of know-how and technol­ then turned it over to Cohen, also may last through January ogy," former Deputy Secretary of a member of both commitees. A measure to keep the Great Lakes Energy John Deutsch told the Sen­ Cohen promptly invited Armed open for shipping through Jan. 31 ate Government Affairs Commit­ Services Commitee members Jake is now awaiting action by the tee on Sept. 24. Deutsch was testi­ Garn (R-Utah) and John Warner House Merchant Marine Commit­ fying on S. 2606, introduced by (R-Va.) to join him . tee. Introduced Sept. 10 by Congo Sen. Jake Garn (R-Utah) and Wil­ In addition, a new lobbying Thomas Ashley (D-Ohio), the tem­ liam Cohen (R-Maine), to create network closely interlinked to that porary chairman of the committee, an Office of Strategic Trade as an Armed Services Committee group­ the legislation H.R. 8095, would independent executive agency. The ing has been fo rmed. Called the extend the shipping season on bill would transfer to the new of­ Institute for Strategic Trade, the lakes Superior, Huron, Michigan fice functions now performed by group had one of its members, Dr. and Erie and their connection the Commerce Department under Miles Costick, testify at the hear­ channels from mid-December the Export Administration Act, ings. Chairman of the institute is through Jan. 31. It endorses the which provides for controls on Gen. Daniel Graham (retired), recommendations of the Army commercial goods or technologies long a proponent of severely re­ Corps of Engineers for facilitating which have dual or military appli­ stricting U.S. trade with the Sovi­ the shipping season with special cations. ets. Also on the institute is William additional equipment. It also di­ Deutsch's remarks showed that Van Cleave, an adviser to Ronald rects that an $8.25 million three­ such a new office could rapidly Reagan . year study be undertaken on pos­ expand its scope beyond exports sible shore structure damage and and could be used to inhibit do­ erosion to be expected fr om an mestic scientific investigations un­ extended shipping season. der the guise of protecting them L arne duck session The bill has several other pro­ from the Soviets. In particular expected in November visions to help facilitate such ex­ Deutsch singled out the problem For the first time in decades, there tended shipping including allow­ he used to have with scientists in will be a session of the old Con­ ing subsidized U.S. flag carriers to the DOE who wanted to partici­ gress after the new one has been offer alternate routes during the pate in public conferences on issues elected. The lame-duck convening closed season without disturbing such as "inertial confinement fu­ is expected to take place Nov. 13. their subsidy agreemeents covering sion," claiming that such confer­ The reason: the Senate has failed Great Lakes service, and permit­ ences would provide secrets to the to complete its 1981 financial ap­ ting a 30-year stretched-out repay­ Soviet Union. propriations. In fact, it has not ment by the St. Lawrence Seaway Capitol Hill observers noted even wrapped up funding for the Development Corporation to the that while the hearing was noml- remainder of 1980.

EIR October 7, 1980 National 61 National News

Despite the victory, nuclear advo­ dorsement usually given to an incum­ cates fear that the 40 percent environ­ bent, and adopted a platform of decrimi­ mentalist vote will be used by national nalization of marijuana, pornography Eizenstat: we are press and 0 environmentalists to escalate and prostitution, which Ray refused to attacks on the nuclear industry. Ray run on, saying that she is a "true Demo­ committed to coal Shadis, head of the sponsoring Maine crat." Nuclear Referendum Committee, claims White House domestic policy adviser Stu Now, Washington's voters face a they assembled get-out-the-vote organi­ Eizenstat told the first meeting of the choice between McDermott and Repub­ zations in 61 cities, while the Save Maine President's Coal Advisory Board this lican John Spellman, King County (Se­ week that the Carter administration is Yankee pronuclear coalition ran a cam­ attle) Executive, both of whom have been "firmly committed" to a large expansion paign confined to media advertising. The characterized as "antigrowth." Mc­ of U.S. coal production and a giant coal­ state Democratic Party supported shut­ Dermott has claimed his victory repre­ down, while the Republicans were silent. based synthetic fuels program. Eizenstat sents "a new majority [that] has emerged Only the state's building trades unions emphasized that the administration has in this state who believe that we don't mounted a door-to-door campaign already mobilized $20 billion to fund the have to waste Washington with nuclear against the referendum. effort. waste, and who also believe that we don't The board, which met in Charleston, have to allow growth to destroy the qual­ West Virginia, also heard fr om the state's ity of life in this state." governor, John D. Rockefeller IV, who called on the nation to move forward in the next decade to meet the ambitious Dixy Lee Ray defeated demand of the coal expansion program. in Dem primary Sources close to board members say the Committee calls for aid Democrat Dixy Lee Ray, Washington board has been given fuH White House state's outspoken pronuclear governor, to African famine areas backing to work on proposals to raise was defeated by a 3 to 2 margin in the A newly formed Ad Hoc Committee fo r coal output over the coming decade, in­ state's Democratic primary Sept. 16 by a New Africa Policy has issued a national cluding port and rail expansion as well as State Sen. Jim McDermott, a liberal child call for President Carter to adopt emer­ the already announced synfuel program. psychiatrist . The result is being touted gency food relief measures to supply 10 nationally as a show of zero-growth sen­ million Africans threatened with starva­ timent among the electorate. tion in the next several weeks, and an Mobilized against Ray were the additional 70 million who face the com­ Nuclear power wins press, broadcast media, the liberal wing bined results of "drought, famine, and of the Democratic Party, and Republi­ war on the continent." in Maine vote cans who crossed party lines to "get Citing the fact that the U.S. has near­ Nuclear proponents won 59. l percent of Dixy" by voting in the Democratic pri­ ly 26 million metric tons of surplus the vote in the Sept. 23 Maine referen­ mary. Ray's campaign strategists had wheat, 27 1 thousand metric tons of dry dum, the first of six such battles nation­ made a decision to run a low-key cam­ milk, and 30 million metric tons of corn, ally this year. Of the more than 390,000 paign, ostensibly because they believed the committee urges President Carter to who voted (56 percent of the electorate), that the governor would win easily. "direct the Commodity Credit Corp. to 230,780 turned down the firstref erendum The campaign fightdid not focus on purchase 18 million metric tons of grain that would have closed an operating nu­ Ray's economic development initiatives, and dry milk from farm producers at clear reactor and permanently banned such as bringing supertankers filled with parity prices ...and to work closely with future nuclear power construction. Simi­ Alaskan oil into Puget Sound. Instead, ... the affected countries to ensure the lar measures are on the November ballot McDermott and the press emphasized food supplies' effective transport and dis­ in Montana, Oregon, South Dakota, "personality" issues. tribution. " Washington, and possibly Missouri, if a Ray's allies were picked off in court Since the letter by the Ad Hoc Com­ court challenge to that referendum fails. or tried by the press. Larry Bradley, her mittee was sent out two weeks ago, it has The vote keeps the Maine Yankee top energy aide who opposed conserva­ received endorsements from over one Power Plant operating, to produce one­ tion policies emanating from the DOE, hundred ethnic, political, religious, farm, third of the state's electricity. Before the was charged with mismanagement and and labor leaders throughout the United vote two companies, IMC, which pro­ resigned. State Senator Donohue, who States. Signators include Hulan Jack, duces chemicals for the state's paper in­ helped steer Governor Ray's budget fo rmer Manhattan Borough President; dustry, and the 6,000-man Bath Iron through the legislature, was implicated Lillian Roberts, vice chairman of the Works shipbuilding firm, threatened to in the U.S. Justice Department's current flagship District 37 of the AFSCME leave the state if this deathblow to the "Gamscam" prosecutions. Even the state union in New York City, which includes state's economy passed. Democratic convention withheld the en- all of the New York service unions; 50

62 National EIR October 7, 1980 Briefly

• JOSEPH CHURBA, former director of Air Force intelligence and a senior adviser to Ronald Reagan, said in an interview this officials of District 37 AFSCME locals; Tokyo, he reportedly pressed Japan to week that the U.S. should imme­ NAACP chapters in Oakland and Hol­ "fill in the defense vacuum in Asia" be­ diately back Iran in its war against lywood/Beverly Hills, Calif., Plainfield, cause the United States has had to divert Iraq. Churba proposed that the N.J., and Seattle, Wash.; American Ag­ its Pacific forces to the Indian Ocean­ U.S. dispatch a fleet of C-30 trans­ riculture Movement leaders in Mary­ Persian Gulf area. According to Japan's port planes to Iran with spare parts land, Pennsylvania, Ohio, and elsewhere; Kyodo news agency, he stressed that Ja­ for the Iranian armed forces, in leaders of the National Farmers Organi­ pan should cooperate with the U.S. in an exchange for the release of the hos­ zation; officials of the African Methodist arms buildup. tages. Episcopal Church, including H. H. In India, Komer attempted to sell Brookins, President of the AME Bish­ $200 million worth of antitank missiles • MOBIL PRESIDENT William ops; leaders of the Transport Workers and howitzers, $32 million of which had Tavoulareas declared that "the Union, UAW, Building Trades, IBEW, been contracted during the administra­ United States should set as a goal Ironworkers, and church leaders of many tion of Prime Minister Gandhi's prede­ that all electricity should be gen­ other denominations. cessor. Indian sources expect the deal to erated by nuclear power" in an op­ go through. Komer did not visit China ed in the New York Daily News, as originally expected, but stopped in "We recognize that nuclear power Indonesia, whose government is skepti­ is not without risks. . . . But the cal about China's regional ambitions and risks of nuclear power are insignif­ Fortune magazine calls traditionally opposed to concentrations icant when compared with the U.S. democracy outdated of superpower military presence in greatest risk of all-the risk of nu­ Southeast Asia. clear war triggered by our depen­ In a Sept. 22 article titled "Making De­ The Middle East leg of Komer's trip dence on fo reign oil." mocracy Less Inflation-Prone," Fortune magazine blames economic disruption is to include Oman, Israel, Egypt, Som­ THE RDF assembled by the on excessive government concern fo r la­ alia and perhaps Saudi Arabia. • bor, farmers, minorities and business­ Carter administration is being crit­ men, and calls for constituency represen­ icized by Republican James tation to be drastically modified. The Schlesinger, who wrote in the article begins with an epigraph: "De­ Washington Post on Sept. 24: "It seems to be a hallmark of this ad­ mocracy has a very bad track record .... NDPC testifies on it has proved unable to withstand or ministration that it is prepared on defend itself against pressure from with­ synfuel appointments occasion to embrace-and then to advertise-some of Zbigniew in, the spendthrifts who disburse its re­ The Senate Energy Committee heard the Brzezinski's concepts. It is, how­ sources ... the pressure groups who try National Democratic Policy Committee ever, wholly unwilling to put be­ to cajole, corrupt, or intimidate govern­ testify Sept. 24 that the President's nom­ hind such concepts the resources ment. ..." The author of the epigraph is inees to the board of the newly estab­ and the planning effort necessary Lord Hailsham, presently presiding offi­ lished Synthetic Fuels Corporation are to turn concept into reality. Oddly cer of the British House of Lords. "unusually unqualified" to occupy such enough, Brzezinski himself ap­ Lord Hailsham is echoed by Alan powerful posts. The NDPC charged that pears to be satisfied with this ar­ Greenspan, fo rmer head of the U.S. none of the individuals is committed to rangement. " Council of Economic Advisers and a cur­ energy growth or concern for rational rent economic policymaker for candidate water, capital, and labor allocations, and • MICHIGAN GOVERNOR Ronald Reagan. Greenspan states: "The thus could not evaluate the scientificand Milliken is projecting $700 million problem of inflation has arisen because economic viability of synthetic fuels. in state budget cuts, includi ng cuts there is no governor in the system-no At the hearings, AFL-CIO president of $250.4 million in vital services. limitation on the exercise of one man, Lane Kirkland suggested that the cor­ Slated for cuts are police, agricul­ one vote." poration could fu nd a mass relocation of ture, public health, transit and so­ unemployed workers to synfuel sites. cial services ($170 million alone). Kirkland faded into inaudibility when By law, Milliken is mandated to asked if he would support Davis-Bacon balance this year's budget by Oct. provisions for the proj ects, which guar­ Robert Komer tours I, which shows a $180 million def­ antee that federally funded construction icit. A projected $800 million defi­ Asia fo r Pentagon meets area wage scales. Aftercomm ittee cit for next year is caused by lost Known among his colleagues as "Blow­ chairman Scoop Jackson demanded that tax revenues due to mass layoffs in torch" during the Vietnam War, Deputy he speak into the microphone, Kirkland the auto and feeder industries. Defense Secretary Robert Komer re­ murmured that he thought under most turned to the Asian theater this week. In instances Davis-Bacon would apply.

EIR October 7, 1980 National 63 EnergyIns ider by William Engdahl

What about nuclear energy? Evaluation will soon announce lat­ A look at the Carter administration's policy record and the est estimates for installed nuclear results fo r the nation. capacity by the year 2000. 150 giga­ watts is now their "best estimate." Less than a year ago, an interna­ tional review panel projected 255- 395 gigawatts. Even that is paltry compared to the Nixon administra­ Snce 1976, has Washington suc­ House vote under the act to halt tion target of 1,000 GW by 2000. ceeded in killing our most efficient, fuel deliveries for India's nuclear For reference, one nuclear plant least costly, and still safest energy reactor, Indian business circles with a typical 1 GW capacity pro­ resource-nuclear power genera­ were discussing withdrawal from vides enough electricity for a city of tion? Energy is clearly becoming a International Atomic Energy approximately I million and saves national and local election year is­ Agency safeguard stipulations and the equivalent of 10 million barrels sue in both congressional and presi­ development of the very reprocess­ of oil per year. dential races. It's a useful time to ing technology the U.S. law osten­ And months after the dust set­ review federal policy decisions over sibly was designed to stop. tled from Three Mile Island, it is the past three and a half years. Indeed, the very heart of the clear that aside from "psychologi­ James Earl Carter is the first IAEA international safeguard pro­ cal" damage to pregnant house­ President since the dawn of the cess underlying the Nuclear Non­ wives brought about by irresponsi­ peaceful nuclear energy age in the proliferation Treaty (NPT) is itself ble media, the primary damage early 1950s to make opposition to rapidly becoming a dead letter be­ from endless environmentalist ob­ continued development of nuclear cause of the uncertainties intro­ structions to an orderly cleanup power a central feature of admini­ duced by recent U.S. legislation. At could be to bankrupt the Metropol­ stration policy. One of his firstma­ the Second Review ofNPT meeting itan Edison utility. Regulatory de­ jor policy declarations after taking in Geneva last month, several de­ cision, or lack of it, has prevented officein 1977 was to declare his full veloping-sector nations almost restart of the second unit, TMI-l, endorsement ofthe conclusions ofa walked out in protest against the despite the fact that it was unaffect­ Ford Foundation study, "Nuclear Carter administration policy. One ed by the incident. Power: Issues and Choices," writ­ diplomat noted that "NPT has Meanwhile, the Soviets have ten by his Deputy Energy Secre­ passed its peak ....If they call an­ been operating a 600 megawatt fast tary, John Sawhill. other conference, it will be worse breeder near Beloyarsk since April. Carter then secured passage of than this one." The French, who have had a dem­ the Nuclear Non-Proliferation Act With nuclear exports all but cut onstration breeder operating for of 1978, commonly referred to as off through such policies in the last several years, are well into their the Nuclear Export Act. As a pre­ three years, the domestic industry commercial-scale Super-Phenix dictable result of the stringent ex­ was softened up for the political construction. France, West Ger­ port restrictions of this bilI, the assault that followed in the wake of many, Canada and the Soviets are United States, which only a few the Three Mile Island incident. grabbing up the lucrative interna­ years ago exported 90 percent of the George Cunningham, Assistant tional reactor supply, engineeering, world's nuclear equipment, has had Secretary of the Department of En­ and construction market leftby the to all but abandon its export of ergy fo r Nuclear Energy, stated re­ collapse of America's export capa­ nuclear plants. No country is will­ cently that "There is not an awful bility . It's food fo r thought as elec­ ing to stake its energy future on lot you can do to keep a factory in tion time nears. People like John what is rightly regarded as an "un­ business when there's no demand Sawhill, Carter's nominee to chair reliable supplier." The recent fight for its product." Such a statement the new Synfuels Corporation, may over shipment of uranium fuel to from a responsible official would be smiling; the rest of us cannot India's Tarapur reactor is a case in have been unthinkable several years afford to until these priorities are point. In the wake of last week's ago. The DOE Office of Policy & reversed.

64 National EIR October 7, 1980