EIR

The special reports listed below, prepared by the EIR staff, are now available.

1. Prospects for Instability in the Arabian Gulf gence input, stemming from Qaddafi's training at A comprehensive review of the danger of instabil­ Sandhurst and his ties to the Senussi (Muslim) ity in Saudi Arabia in the coming period. Includes Brotherhood. Heavy emphasis is placed on con­ analysis of the Saudi military forces, and the in­ trol over Qaddafi exercised by elements of the fluence of left-wing forces, and pro-Khomeini net­ Italian "P-2" Masonic Lodge, which coordinates works in the counry. $250. capital flight, drug-running and terrorism in Italy. Also explored in depth are "Billygate," the role of Armand Hammer, and Qaddafi's ties to fugitive 2. Energy and Economy: Mexico in the Year 2000 A development program for Mexico compiled financier Robert Vesco. 85 pages. $250. jOintly by Mexican and American scientists. Con­ cludes Mexico can grow at 12 percent annually for 6. What is the Tr ilateral Commission? the next decade, creating a $100 billion capital­ The most complete analysis of the background, goods export market for the United States. De­ origins, and goals of this much-talked-about tailed analysis of key economic sectors; ideal for organization. Demonstrates the role of the com­ planning and marketing purposes. $250. mission in the Carter administration's Global 2000 report on mass population reduction; in the P-2 scandal that collapsed the Italian government 3. Who Controls Environmentalism? this year; and in the Federal Reserve's high A history and detailed grid of the environmen­ interest-rate policy. Includes complete member­ talist movement in the United States. Analyzes ship list. $100. sources of funding, political command structure, and future plans. $50. 7. The Global 2000 Report: Blueprint for Extinction A complete scientific and political refutation of 4. Prospects for Instability in Nigeria the Carter Administration's Global 2000 Report. A full analysis of Nigeria's economic develop­ Includes a review of the report's contents, demon­ ment program from a political standpoint. In­ �trating that upwards of 2 billion people will die if cludes review of federal-state regulations, analy­ its recommendations are followed; adetailed pre­ sis of major regional power blocs, and the envi­ sentation of the organizations and individuals ronment for foreign investors. $250. responsible for authorship of the report; analysis of how the report's "population control" policies 5. The Real Story of Libya's Muammar Qaddafi caused the Vietnam war and the destruction of A comprehensive review of the forces that placed Cambodia, EI Salvador, and Africa; analysis of en­ Qaddafi in power and continue to control him to vironmentalist effort to "re-interpret" the BitJle in this day. Includes discussion of British intelli- line with the report. 100 pages. $100.

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EXECUTIVE INTELLIGENCE REVIEW

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Make checks payable to: Executive Intelligence Review, Dept. MC·1, 304 West 58th Street, 5th floor, New York, NY. 10019 (212) 247-8820, �------Founder and Contributing Editor: Lyndon H. LaRouche. Jr. . Editor-in-chief: Criton Zoakos Editors: Nora Hamerman Managing Editor: Susan Johnson Features Editor: Christina Nelson Huth Art Director: Martha Zoller Contributing Editors: Uwe Parpart. Nancy Spannaus. Christopher White From the Managing Editor Special Services: Peter Ennis

INTELLIGENCE DIRECTORS: Africa: Douglas DeGroot Agriculture: Susan Brady Asia and Middle East: Daniel Sneider Counterintelligence: Jeffrey Steinberg Economics: David Goldman European Economics: Laurent Murawiec Energy: William Engdahl Europe: Vivian Freyre Zoakos Ibero-America: Robyn Quijano. Dennis Small Law: Edward Spannaus Military Strategy: Steven Bardwell Science and Technology: Marsha Freeman This week's Special Report on the implications of the Club of Soviet Union and Eastern Europe: Rome's depopulation effort is the result of a July 4 panel discussion at Rachel Douglas United States: Graham Lowry the New York City conference of the International Caucus of Labor Committees. INTERNATIONAL BUREAUS: The ICLC is a scientific association established in 1973-74, when Bogota: Carlos Cota Meza Bonn: George Gregory. Rainer A pel EIR founding editor Lyndon H. LaRouche, Jr. brought together Chicago: Paul Greenberg organizations in the United States, Ibero-America, Western Europe Copenhagen: Vincent Robson Houston: Harley Schlanger. and Canada, to revive the heritage of Plato's Athenian Academy. Nicholas F. Benton Political necessities impelled that step. 1973 was the year in which Los Angeles: Theodore Andromidas Mexico City: Josefina Menendez NATO's Club of Rome launched the Limits to Growth fraud; Henry Milan: Stefania Sacchi. Marco Fanini Kissinger's Trilateral Commission and its Club of Rome supervisors Monterrey: M. Luisa de Castro launched the first oil hoax to accelerate global de-industrialization New Delhi: Paul Zykofsky Paris: Katherine Kanter. and depopUlation; and, with Kissinger as the "inside man," Water­ Sophie Tanapura gate was launched to further destroy traditional U.S institutions and Rome: Leonardo Servadio Stockholm: Clifford Gaddy clear the way for a new "fascism with a friendly face." United Nations: Nancy Coker By developing and circulating the LaRouche breakthroughs in Washington D.C.: Richard Cohen. Laura Chasen. Susan Kokinda political economy, and exposing the controllers and goals of the Wiesbaden: Philip Golub. Mary Lalevee. depopulators, the ICLC has countered the momentum of the Club of Thierry Lalevee. Barbara Spahn Rome. The ICLC and our international collaborators are currently Executive Intelligence Review (ISSN0273-6314) the single strongest threat to the Malthusians, who know (although is published weekly! 50 is.mes) exceptfor the second week ofJulyandflrst week of January by Malthus didn't say so) that menticide, the destruction of the ability of Ne ....Solidaritl' InternationalPress Service 304 W. 58thSireet. New York. N. Y. 10019. popUlations and policy-makers to grasp the scientific and moral In Europe: Executive Intelligence Review. Nachrichten Agentur GmbH. conceptions required to carry out economic development, is a prereq­ Postfach 2308 . D. 6200 Wiesbaden Tel: 30-70-35 Executive Director�: Anno Hellenbroich. uisite for their new world order. Michael Liebig Yet, as this issue of EIR reports from many angles, Henry Kissin­ In Mexico: EIR. Francisco Dfaz Covarrubias 54 A-3 ger, that perverted deployable of the Malthusian oligarchs, is still at Colonia San Rafael, Mexico DF. Tel: 592-0424. Japan sub.,eription sales: large. Kissinger is doing great damage. Kissinger, who three months O.T.O. Research Corporation, Takeuchi Bldg., 1- 34-12 Takatanobaba. Shinjuku-Ku. Tokyo 160, ago, with his accustomed blend of obsequiousness and arrogance, Tel: (03)208-7821 Copyright © 1982 New Solidarity described himself publicly as a British agent, will do still greater International Press Service All rights reserved. Reproduction in whole or damage until the intelligence below is acted upon by Kissinger's in part without permission strictly prohibited. Second-class postage paid at New York, adversaries. New York and at additional mailing offices. Subscription by mail for the U.S.: 3 months-$125, 6 months-$225 , I year-$396 , Single issue-$IO Academic library rate: $245 per year TIillConteDts

Interviews Economics

14 Sridath Ramphal, 4 Mathematics Secretary-General, breakthrough to be British Commonwealth released in September Interviewed at a Society fo r EIR's LaRouche-Riemann International Development model will be able to (SID) conference, he quantify the relations confirmsthat the new between energy-flux-density proposal by Robert and relative potential McNamara fo r centralized population. global credit controls is the Brandt Commission plan. 8 Currency Rates

15 Dudley Seers of 9 Evil-doings at the the Society for Bohemian Grove: International another credit cutoff Development maneuver This veteran of Sussex Europe, Japan, and the University's British Foreign United States are supposed Office deployments to be blackmailed into describes a blueprint for accepting it. turning southern Europe into a balkanized "Third 11 The Society for World" extension. International Development presents Departments McNamara policy in Baltimore 18 Energy Insider Along with Aquarian "grassroots organizing." Not another energy Documentation: An reorganization. interview provided to EIR with an Overseas 49 Africa Report Development Council The IMF's warning official. to Kenya. 16 Domestic Credit 50 Middle East Report Conti's not the only one. Egypt's star rises. 17 World Trade 51 Dateline Mexico Taking the U.S. for a ride. New low point in U .S.- Mexico relations. 19 Trade Review

64 Editorial 20 Business Briefs "Christians who are not Christians." Volume 9 Number 31 August 17, 1982

Special Report International National

34 New evidence of 54 Kissinger's secret Kissinger's role in agenda for the Aldo Moro murder WhiteHouse Introducing the Comite de After a November electoral Monte Carlo, and reviewing debacle for the GOP, the reason the former specificpolicies are to be Secretary of State wanted imposed by the avowed to avert a Christian British agent on a politically as part technologies" project of the Democratic-Communist crippled President.If World International Development Agen­ Party "historic you thought Haig cy. Primitive labor not only shortens lives but compromise." was a disaster.... constrains the economic base for future popula­ tion potential. Thomas Sennett/World Bank 36 A kidnap plot against 56 U.S. fusion budget to Helga Zepp-LaRouche become a PR joke? The current project Instead of fulfilling the 22 How the Club of Rome of Kissinger and legislative mandate for an intends to increase the Roy M.Cohn. engineering prototype to global death rate bring cheap, limitless 38 The final doublecross: nuclear energy on line, the 24 The link between has the U.S. lost administration and some energy use and the Middle East? physicists have fall into "image" and "competition" population growth By Editor-in-Chief traps. potential Criton Zoakos.A By Contributing Editor and strategic assessment. Fusion Energy Foundation 57 Book Review Research Director Uwe 40 Panama's President The Toynbee Factor in British Grand Strategy, by Parpart. Royo was ousted by Lyndon H.LaRouche, Jr. the British 28 The United States is Future destabilizations 59 Eye on Washington failing to reproduce include a threat to the canal. its population 60 Congressional Closeup By Steven Bardwell, EIR's 42 Gandhi's visit poses Military Editor and development option to Editor-in-Chief of 62 National News the Reagan Fusion magazine. administration 30 The Roman model of Documentation: Excerpts from the Prime Minister's mass depopulation statements and addresses. By Kenneth Kronberg. 46 The Frankfurt mafia: 33 Colombian economist Part II scores Malthusians The real He1abank scandal. Julio Silva Colmenares exposes the World Bank's 52 International Intelligence depopulation program. �ITrnEconomics

Mathematics breakthrough to be released in September

The specifications of an important breakthrough in ap­ City, during December 1978. The subject of the seminar plication of mathematics are now scheduled to be re­ was comparison of leading features of Soviet and U.S. leased publicly during the coming month of September, progress in thermonuclear fusion and related matters of according to a New York City-based spokesman for an relativistic physics. The question was, how to focus U.S. international scientifictask-f orce. research in such a way as to catalyze the highest rate of The results to be announced represent a fundamental advancement, in light of known Soviet work in this advancement in the ability to conduct computer-based field. analysis of certain classes of what are called "non-linear" The seminar emphasized that the most crucial ad­ features of economic and analogous processes. Despite vances in 20th-century relativistic plasma physics had that emphasis upon economic processes, the results con­ been prompted by the influence of an 1859 paper of the tain the basis for useful improvements in a variety of leading mathematical physicist, Bernhard Riemann. fields, including crucial problems within experimental This 1859 paper, predicting the generation of phenom­ plasma physics. ena now popularly associated with "sonic booms," is The results to be announced are the outcome of a entitled, "On Propagation of Plane Waves of Finite research and development project begun in New York Amplitude." This paper was crucial for the work of City during December 1978, but subsequently involving Erwin Schrodinger in accounting for the wave-particle scientists and research specialists of several nations. The dualism of electrons, and was crucial in Soviet successful international task-force has been co-sponsored by a development of a deployable H-bomb. prominent U.S. scientificassociatio n, the Fusion Energy Although that Riemann paper dealt nominally with Foundation, together with an international political­ predicting the generation of "acoustical shock-waves," intelligence newsweekly, the Executive Intelligence there is nothing properly surprising, the Fusion Energy Review. Foundation reports, in its broader application to micro­ physics and plasma physics . The Foundation points out History of the project that this 1859 paper was developed by Riemann as an The project was born during a series of seminars example of the kind of experiment needed to prove held by the Fusion Energy Foundation in New York experimentally certain kinds of laws of the universe.

4 Economics EIR August 17, 1982 Riemann outlined this method in an early, 1854 paper, the journal, Fusion. and the Executive Intelligence Re­ "On the Hypotheses Which Underlie Geometry," in view. during 1979 and 1980. which he first specified what he named the method of However, the Foundation spokesman stressed, the "unique experiment." The Foundation's scientists em­ 1979-82 version of the LaRouche-Riemann forecast phasize that if the universe is Riemannian in its physical represented only an informed approximation of the geometry, then the 1859 shock-wave paper is a model result proposed during the December 1978 seminars. A fo rm of experiment to be applied to a wide range of full-scale application had to be delayed until a suitable what are termed "relativistic" phenomena. assembly of indispensable demographic and energy­ Unfortunately, now as during 1978, one of the major consumption data had been collected and cross­ prdblems in the U.S. physics community, according to checked. Trial tests of the data-base during July have the Foundation, is the influence of Riemann's factional now adequately demonstrated the characteristics of the opponents, the so-called Newton-Cauchy-M axwell fac­ required "model" as to specifications. The results fully tion allied to the late Bertrand Russell's co-workers and confirm the proj ected expectations of December 1978, fo llowers. Although experimental results have forced the Foundation spokesman reported. scientists to employ some aspects of Riemann's work, In view of the general scientific importance of the and despite the influence of such Gottingen University results, the characteristic features of the functions em­ refugees as Richard Courant, no general, serious atten­ ployed will be released during a projected September tion is given to the broader implications of Riemann's press conference, although the upgrading of quarterly successes in some many fields. forecasts to include these improvements is not projected Prior to the December 1978 seminar, the Foundation to be completed before the final quarter of 1982. reports, it had had extensive discussions of this problem with leading circles of the U.S. plasma-physics commu­ The LaRouche-Riemann method nity, meeting a generally negative attitude against seri­ of forecasting-analysis ous treatment of Riemann's more general approach to The developments in economic science of LaRouche, physics. Yet, as the 1978 seminar noted, known Soviet the Foundation spokesman reported, are ultimately successes, matched with the results of U.S. work, based on the principles of economic science defined by showed that no general progress could be expected until Gottfried Leibniz, beginning with Leibniz's 1671 Soci­ a more thorough study of application of Riemannian ety & Economy. These are the same principles informing physics informed research into certain key frontier the work of Lazare Carnol's Ecole Polytech nique, and questions. are most famous as U.S. Treasury Secretary Alexander The seminar therefore resolved, the Foundation Hamilton's American System of political-economy. reports, to develop a computer-assisted program of To this, the Foundation reports, LaRouche added economic analysis, using Riemannian methods to over­ one essential advancement in economic science, begin­ come what are termed commonly "non-linear" prob­ ning 1952, with the discovery that economic processes lems of economic analysis. This course of action was are uniquely Riemannian. recommended at that time by a sponsor of the Founda­ "Leibniz created economic science proper," La­ tion, Lyndon H. LaRouche, Jr., who stipulated that Rouche insists, "by placing economics on what we Riemann's 1859 paper defined in principle a compre­ would today best describe as a thermodynamical basis." hensive solution to this problem of analysis of economic According to LaRouche's writings on this subject, processes. LaRouche undertook to commit the Execu­ Leibniz started by focusing on the implications of the tive Intelligence Review to assist the Fusion Energy heat-powered machine, by means of which produced Foundation in the proposed project. The Executive heat could replace human and animal muscle-power in Intelligence Review would benefit by having access to the process of production. LaRouche emphasizes that the best economic-forecasting method in existence. It Leibniz generalized this notion of the thermodynamics was agreed that the Foundation would have proprietor­ of production, to include a sense of the ordering of ship over the mathematical-physics products of the joint progress in productive technology prior to development effort. of powered machines. From this basis, LaRouche re­ An informed approximation of the LaRouche-Rie­ ports, "Leibniz developed a rigorous conception of mann forecasting method was brought on line during those notions we call work and power in both economic 1979, producing, beginning the final quarter of 1979, science and thermodynamics today." the first of a series of quarter,Iy forecasts for the U.S. LaRouche has argued that the firstbasic measure­ economy which has been the only competent forecasting ment of economy is a value he terms "potential relative by any go vernmental or private econometric forecasting population-density." This, he describes as the average agency during the period to the present date. The number of persons who can be sustained on an average methods employed for this purpose were published by square mile of habitable land of relatively improved or

EIR August 17, 1982 Economics 5 depleted quality, by means solely of the productive ratio rises over time, "we might say that the closed­ labor of the population inhabiting that land. His analy­ system is exhibiting 'negative entropy.' It is more con­ sis centers on the fact, that the relatively finiteness of venient to use a shortened term; we prefer to say apparent natural resources for any fixed level of tech­ 'negentropy. ' nology means that societies must either progress tech­ "There is more to be considered. If a closed system nologically or tend to collapse. is consuming its own free energy in a negentropic way, He insists that a second measurement must be made: the intensity of the energy of the system is rising. The the number of kilowatts of usable energy available per best way to describe this kind of intensity is the term square mile of habitable land. The Foundation's spokes­ 'energy-flux-density.' '' Energy-flux-density measures men insist that mankind existing in a primitive fo od­ the rate at which useful work is passing through a gathering mode of existence could never have exceeded standard cross-sectional area of the process, such as a world-wide population of about 10 million individu­ kilowatts per square meter. "Unless this rise in the als, requiring an average of about 15 square kilometers energy of the system is accompanied by either a constant of the earth's habitable surface to sustain an average value for, or an increase of the ratio of free energy to · individual. There is almost an exact correlation between energy of the system over successive periods, the system increases in kilowatts of usable energy per square mile is not truly negentropic, but is running down, toward, and rises in potential relative population-density per at best, some equilibrium-point." LaRouche describes square mile. systems which sustain at least a constant ratio of free Before proceeding to examine the function of tech­ energy to energy of the system as "absolutely negen­ nological progress in more detail, LaRouche insists, the tropic." He cites living processes and "societies which broader thermodynamical characteristics of the eco­ are not in the process of dying" as illustrations of nomic function must be defined. closed-system processes which are "absolutely negen­ LaRouche, according to the Foundation spokes­ tropic." man, "begins with the usual procedure in ordinary It is the increases in energy-flux-density, combined thermodynamics . The total usable energy-throughput is with maintaining a closed-system free-energy ratio, firstdivide d into two parts." The firstpart is the amount which, the spokesman stated, is key to the thermody­ of energy the system must consume merely to prevent namic significance of what may be termed the increase itself from "running down." This, the spokesman indi­ in the level of organization of absolutely negentropic cates, is usually referred to as the "energy of the closed systems. system." The remaining part of the usable energy­ According to LaRouche, a negentropic development throughput is usually referred to as the system's "free of society correlates with a twofold increase in the energy." organization of the economy. First, he states, the divi­ Generally, according to the spokesman, we think of sion of labor in production and movement of goods the role of this "free energy" in one or a combination of becomes more complex. Second, he points to the fact two ways. Often, we consider the non-wasted part of that design of machinery may combine two or more the "free-energy" as the capacity to do work on some­ labor-operations into a single machine-operation. He thing outside the system itself, as in the case of a power­ argues that this is merely transferring some of the generating system. In other cases, like an economy, we complexity of the social division of labor into increased are interested in the application of the non-wasted part complexity of the machine. He argues that this has the of the "free energy" in some way used to change the general effect of increasing the complexity of produc­ system which generates this "free energy." tion in the most advanced, tool-creating part of produc­ We refer to the second kind of case as a closed tion, while reducing the portion of the labor-force system, the spokesman indicated. "We may describe the required for consumer-goods production. work done in the non-wasted free energy in this second, This, LaRouche pinpoints as the location of the closed-system case, in various ways, all of which are problem of accounting fo r the role of technology as really diffe rent ways of saying the same thing." Useful such. Up to a point, LaRouche and the Foundation application of free energy can be viewed as raising the insist, simply input-output modeling is unavoidable. level of organization of the system, "which is the most However, they emphasize, in the case of either techno­ useful way of looking at the process in some instances." logical progress or contraction of the economy, any There is a simpler, more commonplace, thermodynami­ effort to interpret an economy in terms of systems of cal way of uescribing the result. linear inequalities breaks down. "The rows and columns "We compare the ratio of free energy to energy of of the matrix are changed, as well as the coefficients," the system over successive periods of the operation of LaRouche stresses; "It is these changes in the proper the system." If this ratio declines or turns negative, the input-output matrices, combined with the energy-flux­ closed-system process is described as entropic. If the density-function changes, which cause the usual econo-

6 Economics EIR August 17, 1982 metnclan to howl his cry of injured protest, 'non­ ment of energy in production. "Energy pay-back" is a linear.' " LaRouche ridicules as childish, the efforts of built-in feature of the analysis. Ilya Prigogine and Prigogine's group to solve such The analysis shows immediately, according to Foun­ problems either for economies or power-distribution dation spokesmen, that the only tolerable energy-gen­ networks. "For anyone fa miliar with Riemannian phys­ erating policies for society today must be a combination ics, the approach to the solution is properly quite of technologically-improved fossil-fuel combustion, obvious." . such as MHD, combined with high-head hydroelectric The basic solution, according to the spokesman, is power, and fission and fusion forms of nuclear-energy to perform Riemannian integration upon a potential generation. "Our objective must be to generate fusion­ function or order N, to generate a potential function of energy in the fo rm of a stream of charged-particle order N+l. plasma, not neutrons. Using neutrons to produce steam, So, the spokesman reports, potential relative popu­ to run turbines, is like using a jet-engine to operate a lation-density for the entire population of a society must mechanical horse pulling an old-fashioned buggy," the be the measure of the required function. The only work spokesman stated. "If the fusion-output is a stream of actually accomplished by an economy is an increase in charged particles, conversions such as MHD-type pro­ that potential for the society's population as a whole. duction of electricity are obvious." This increase in potential relative population-density is The spokesman also stressed that such forms of viewed as congruent with an increase in the negentropy fusion-energy technology mean the most fu ndamental of the economy as a closed system. revolution in chemistry and production technology in It is this increase in potential which correlates with the history of mankind. "Controlled, ultra-high energy­ the required increase in energy-flux-density of the usable flux-density heat-sources mean a fundamental change in energy-throughput of the society. It is implicit that every one of our conceptions of production and natural increase in the per-square-mile energy-throughput cor­ resources." relates with the per-capita energy-throughput values, in terms of the population-density per square mile. It is The deeper issue also implicit that the energy-flux-density of point­ The spokesman emphasized that the successful elab­ sources of usable energy must be increased to sustain oration of Riemannian functions for economic process­ the desired overall per-square-mile increase in energy­ es will not completely settle the issue between the two throughput. factions among scientists. He emphasized that there are deeper issues, which he illustrated by Gottfried Leibniz's 'Energy pay-back' attacks on the dangerous implications of the ar uments �g It is clear, the spokesman noted, where the Founda­ of Rene Descartes. tion stands on such issues as "soft-energy technologies" "Since the time of Plato," he stated, "the definition and so-called energy conservation. One does not need of scientific method has been fought out between the to go so far as Riemannian analysis to show that society followers of Plato and the followers of such Phoenician, must measure the amount of energy invested in creating pagan cults as the Temple of Apollo at Delphi and the and operating an energy-producing system. How long Temple of Isis at Thebes. The fight is not going to die must an energy-producing system operate, before j{ out easily or quickly. The fight of Leibniz against pays back to society the amount of energy used up in Descartes was essentially nothing but a continuation of producing that energy-generating system? the fight of the followers of Plato against the Cult of With present solar-energy technology, the answer is Apollo. The same history is true of the delphic cults of "Never." Present solar-energy techniques use more Newton, Cauchy, Helmholtz, Maxwell, and so forth, energy than they produce in their entire lifetimes. The against Riemann." same is true for so-called bio-mass energy-programs. The underlying issue has been, the spokesman The effect of energy conservation-programs of the kind stated, the implication of what are called the "five the Carter administration pushed, is that the United Platonic solids." He stated, "During Plato's lifetime, a States will lose more energy as a result of those conser­ collaborator of his at the Cyrenaic Temple of Amon vation measures than will be saved by the conservation proved that within Euclidean space, only five kinds of itself. "Scientifically, the spokesman stated, "the so­ regular polyhedrons can be constructed. Kepler later called alternative energy programs and soft-technolo­ proved that Plato's argument is correct. Kepler proved gies programs are all a gigantic fraud. They will accom­ that this limitation of the five solids demonstrates that plish exactly the opposite effect to that advertised." the physical space we see is not reality as such, but a In the LaRouche-Riemann analysis, what is meas­ special sort of distorted reflection of reality. We say, ured, according to the spokesman, is the rate at which that the visual physical space we see is a geometrically society's energy-flux-density is increased by the invest- bounded discrete manifold. By proving that the orbits

EIR August 17, 1982 Economics 7 of the solar bodies are bounded as to orbit and orbital relative orbital velocities, by the harmonic principles adduced from the five Platonic solids, Kepler proved Currency Rates that Plato was correct, and Plato's adversaries com­ pletely in error. That, however, did not stop the adver­ saries from continuing to be adversaries. "That was the issue between Leibniz and Descartes, between Leibniz and Newton, between Louis Lagrange , The dollar in deutschemarks and the neo-Cartesian Augustin Cauchy, and between New York late afternoon fixing Riemann, Weierstrass and Cantor, on the one side, and 2.45 '" r- � such as Kronecker, Dedekind, Helmholtz, Maxwell, .../ I'� : I ! Rayleigh, and Russell on the other side. It is the same � old issue of scientific method, between the followers of I 1 \.. J 2.351 I Plato and the delphic followers of the ancient Phoeni­ t� 2.30 -��= cian cults, simply dressed up in fresh disguises. I I "Riemann's special achievement was to complete 2.25 what Kepler started. Kepler proved that the discrete 6/16 6/23 6/30 7/7I 7/14 7/21 7/28 8/4 manifold of visible space was a harmonically-ordered mirror of a higher reality. Riemann, standing upon the Thedollar in yen accomplishments of all of Kepler's followers, completed New York late afternoon fixing the work of defining in principle what the nature of that .-. -- unseen, higher-order reality must be. What we see in 250 ----r-:::;:- ___r-- ",/ our images of the discrete manifold is a harmonically­ 6J: -- � V 240 1 ordered reflection of real action occurring in a negen­ ! tropic form of continuous manifold. That is, the contin­ 2301 uous manifold is characterized by the principle of 220 Riemannian integration of potential functions from any given order N, to an order of potential function, N + 1. 210 7/21 7/28 8/4 We can make statements which are true concerning the 6/16 6/23 6/30 7/7 7/14 continuous manifold only by means of observations and experiments which meet the specifications of the unique experiment. The dollar in Swiss francs· "The reasons for objections to Riemannian physics New York late afternoon fixing are not scientific. They are psychological. To put the '----r-:i point in the simplest terms, many people, even trained ::TI ,2.05 I scientists, are fanatically attached to believing that the 1 , " reflection of reality in the mirror of visible space is an f adequate substitute for the reality which is reflected. ----�--�_�-L-�-t-�' Riemann's validity, like Kepler's, has been proven over and over again, to the point no scientific defense of Riemann's opponents really exists in the experimental t.::6/16 6/23II 6/3 0 7/7 1+ 7/14 7/21 7/28 8/4 evidence. The issue is not scientific. It is a psychological problem invading the practice of science. That is the The British pound in dollars reason that not even the hydrogen bomb could shake New York late afternoon fixing - the delphic faction to its senses on this issue. ��:;-- : l-----·T�--,-·- [-----T "The successful completion of the project will not - -� -- - �---.. ------'-+� I l j I necessarily convert pagan Phoenicians into Christians t--�-_r_ - �-I ! 1.80 -- I or Cartesians into scientists. We hope it will be useful to t -t- ---. t- : -�-+---·-t --- --++-t--t-1H those scientists and others who wish to have the advan­ �- t� 1 tage of looking at Riemannian functions from a differ­ i�1 ent vantage-point of comparative reference. - "Considering the kind of progress Riemannian 1.65t �6/16 6/23 6/30 7/7 7/14 7/21 7/28 8/4 physics can contribute to crucial areas of research today, one hopes there are not too many Phoenician fa natics among our scientificprof essionals."

8 Economics EIR August 17, 1982 Monetary Policy

Evil-doings at the Bohemian Grove: anothercredit cutoff maneuver

by David Goldman, Economics Editor

The Bohemian Grove, California's summer camp for this midsummer monetary reorganization cite two corporate and political brass, dominated by drag musical methods of overcoming the West German Chancellor's skits and opportunities for uninhibited communion with reluctance to sign an agreement which would tie West nature, was the unlikely point of origin of a new proposal Germany's hands in international affairs. First, they say, for world banking reorganization. Secretary of State Shultz can offer the carrot of loosened sanctions against George Schultz, noting the pre-crisis state of the Western West Germany's participation in the Soviet pipeline. banking system, asked West German Chancellor Helmut What may come of this is disputed even among the Schmidt and others in the "Mandalay Camp" party, Shultz circle, since not merely West Germany but the rest including Henry Kissinger, for backing in the most of Europe has flouted the pipeline sanctions and has dramatic international financialproposal since the 1929- proceeded as per schedule with contracted deliveries of 31 management of Germany's war debts. goods to the Soviets; what the Germans fear more than According to Bohemians who sat in on at least part the existing sanctions, as the German business daily of Shultz's presentation, the new Secretary of State Handelsblatt wrote in an Aug. 5 editorial, is additional promised to remodel the State Department to run all trade restrictions, e.g. on European auto exports to the international economic policy, and to subject virtually U.S. or on irreplaceable soybean exports to Europe. all existing agreements on lending and trade to compre­ For the new State Department to betray the mailed hensive review. This grandiosity came under the central fist underneath the velvet on trade issues would ruin the heading, "Global Agreement for Risk Analysis," which apparent rapport between Shultz and his old finance­ boils down to a formula for shutting off lending to the ministry colleague Schmidt. It is even doubtful whether, developing sector and the East bloc and others judged as Shultz promised, the new Secretary of State can per­ risk-unworthy. After the recent failures, e.g. Banco Am­ suade the Reagan administration to drop the sanctions, brosiano, the world is indeed at the beginning of a global now that the White House has dug its credibility into a financial crisis, said Shultz; but the central banks could mulish position on the subject. not be expected to rescue failing institutions unless, in What Shultz aides cite by way of a stick with which return, they obtained assurances that such problems the West Germans may be persuaded to hamstring their would not crop up in the future. Every East bloc country freedom to issue credit to their trading partners repre­ is now in trouble, Shultz added, and various institutions sents even a greater danger of miscalculation: a crisis, in and nations might well go under; specifically cited were the international money markets or in the Mideast, they Continental Illinois and Mexico, which recently has been believe, would further drain funds out of the already shilt off the bank syndication markets and has paid its weak German mark and cause a general run for safety day-to-day bills by factoring its future oil shipments into the American dollar, further weakening German through the Royal Bank of Canada. banks and the German economy. Under such circum­ At the level of global institutions, Shultz continued, stances, they argue, the German central bank would have the State Department would press such an agreement to ask the Federal Reserve for lines of credit to support through the Bank for International Settlements, whose German banks who had taken large dollar deposits, as regulatory staff has presented such an agreement for the well as to support the German currency; under these past several years, without notable successs. Alternately, circumstances, could the West Germans fail to come to the State Department might put the credit issue at the terms? top of the agenda at next November's extraordinary ministerial meeting of the General Agreement on Trade Britain: The U.S. would go first and Tariffs, viewing credit as another international com­ The answer, according to skeptical Bank of England modity. GATT might then rationalize all controls and analysts, is that once a crisis were underway, the pro­ exports credits, Shultz added. pects for negotiating any sort of quid pro quo would Aides to the new Secretary of State who helped design disappear in a general scramble of private and central

EIR August 17, 1982 Economics 9 banks to stay afloat. The threat, in the case of the Shultz inabilty to reach agreement among its member central proposal, as Aron Nimzovich said, is mighter than the banks on a mechanism to stabilize the mess. execution. British analysts-at the Foreign Office and among Thatchers's private advisers as well as the Bank The 'debt bomb' of England-expect that the worst of the crisis will What counts, no matter how Shultz and his friends break first and heaviest on the American banking understand the issue, is what sort of arrangements will system itself, and that, far from presenting itself as the replace the current monetary structure, dependent on tower of financial strength to the world, the United failing, unregulated Euromarket credit. At least in a States may in fact be the epicenter of the crisis. "The certain way Shultz's advisers understand this. Accord­ countries which are now ripest for debt default, like ing to one participant in the Bohemian Grove sessions, Mexico, have spent too long working within the global there is real fear among the new State Department financial system to contemplate any drastic action," group of what Latin Americans call the "debt bomb." said an official of the Foreign Office division for Objectively speaking, the Latin Americans have the Commonwealth affairs. "It will take a major bankrupt­ power to obtain virtually any debt-reorganization terms cy in the United States to get any motion going in the they require, if they act together. Not merely the Third World. The big point now is to convince people possibility that Latin American might act together in that the crisis is really here-although, ha-ha, Citibank this fashion, but the liklihood that Japan and Germany might have to go under before they admit it." (with suitably pious, hypocritical expressions of regret) In general, the West Germans have never responded might fall in with such an arrangement. The Japanese to direct arm-twisting of the sort that some Shultz aides Ministry of International Trade and Industry, says one threaten. A close adviser and confidante of the West well-known international bank economist, "would love German Chancellor warned, "If this is just another an international banking collapse and a wave of debt roundabout way to stop us from issuing credits to the moratoria, so that they could start issuing new credits East bloc or to the developing countries, it would be to the Third World and export again." Less aggressive, politically unacceptable. It would be extremely unwise but no less self-interested, are the West Germans. for Shultz to bring it up. We have an East bloc financial That is the midsummer nightmare of the Bohemian problem on our hands which is very difficult to deal Grove. While Schmidt-to the extend of subjecting with; the Soviets will not help their satellites; the banks himself to the humiliation of spending several days with do not want to lend without some government guaran­ Americans in togas and false eyelashes-went to every tee; and the govenment of West Germany, like yours, is length to appear conciliatory, he is not to be "trusted" not in such good financial shape itself, and not anxious to accept a permanent world depression while others to give out guarantees. The Americans don't want to proffer the possibility of a New World Economic Order. lend to the East bloc, and they can't turn around and Like virtually every other German public figure of his tell us not to." generation, Schmidt, is in no fashion capable of truly In sum, the Shultz proposal to apply a tourniquet to independent action outside the scope of American tol­ international lending on the pretext of banking safety erance, although the Schmidt-Giscard combination of has no future, at least not as a formal proposal. 1978 that put the European Monetary System in place Nonetheless it bespeaks an orientation for the new State came close. Department which represents enormous danger not Far from gloating over Schmidt's visible limitations, merely to the West Germans but to world trade. As the the Bohemians are afraid lest Schmidt keep lines open the most recent statistical releases of the Bank for to the sort of New World Economic Order approach International Settlements indicate, the rate of interna­ forwarded in one way by Indian Prime Minister Indira tional lending has already dropped off sharply between Ghandi and, in another way, by this pUblication's the last quarter of 1981 and the first quarter of this year. founder, Lyndon H. LaRouche, Jr. At least some of the After the Banco Ambrosiano case in Luxembourg, the Germany-watchers in the Shultz camp feel this keenly. first interbank market disaster since the 1974 Herstatt The central problem is not to make a deal with Schmidt collapse 'and perhaps the biggest of all time, the rate of covering basic policy issues where no deal is ultimately lending must decline further. possible, commented a former State Department official The unraveling of the present monetary system is, as with close ties to the new crowd; rather, Shultz will keep EIR has emphasized, not a matter of speculation, but Schmidt grasping for a proffered deal that was never rather ocurring in full public view. At issue is not what really there. Under these circumstances West Germany form of patches might be applied to the present struc­ would be able to play no role in the breaking monetary ture; the impossibility of that, short of a dramatic crisis. Not Schmidt's susceptibility to pressure, but his change of policy at the U.S. Federal Reserve, only caution and mediocrity, will permit the Bohemian per­ reflects itself in the Bank for International Settlements' spective to triumph by default.

10 Economics EIR August 17, 1982 Conference Report

The Society for InternationalDevelopment presents McNamara policy in Baltimore by Peter Rush and Lonnie Wolfe

The British Foreign Office-controlled Society for Inter­ Club of Rome founder Aurelio Peccei was conspic­ national Development (SID) held its 25th anniversary uously absent from the conference, though he was conference in Baltimore on July 18-22. Under the title scheduled to make two major presentations. The official "The Emerging Global Village," the Conference was word from conference organizers, and on a note circu­ intended to promote the notion of "one-world" interde­ lated in Peccei's name, was that he was sick; reliable pendency, within which primitivism of the "village" sources report that Peccei's invitation was withdrawn so ought to rule as the operative social ethic. that the Club of Rome's reputation in the developing The economic correlative presented is to use the secto� would not "stink up" the SID conference. current world financial crises to force acceptance of a The SID leadership and the Club of Rome have no new world monetary institution exercising control over principled policy differences. The Club of Rome, how­ all international credit, and hence all Third World devel­ ever, has been unable to sell its ideas to any but a opment, a proposal spelled out by former World Bank handful of developing-sector leaders. It has been dam­ president Robert McNamara in a keynote speech. The aged severely by attacks on its genocidal policies by "world central bank" proposed by McNamara and pub­ organizations associated with economist Lyndon H. licly seconded by several SID leaders would enforce a LaRouche, Jr. lending contraction that in reality would spell genocide In 1981, the Club of Rome announced plans to build for tens of millions in the developing sector. mass-based organizations in the advanced and develop­ The conference was intended to attract both leaders ing sector, and especially in the United States. Though and "grass-roots" organizers in the developing coun­ it attempted to repackage its "limits to growth" ideas tries, and bring them together with the hard-core zero­ with more positive rhetoric, the Club of Rome has failed growth base of the misnamed SID in the United States to achieve any of its stated organizing objectives. and Western Europe. Fifteen hundred people attended, Sources close to the SID leadership say that these but Third World leaders were almost entirely absent, and failures led to the decision to distance themselves from outside of Africa, participation from other Third World Peccei and the Club. representatives was also very thin. The conference was run on two parallel levels, one McNamara's initiative emphasizing more traditional development issues such The principal effort of the Conference directed to­ as aid, investment, and the necessity for the industrial ward the Third World participants was McNamara's countries to do more for the Third World, to appeal to "world central bank" proposal. Coming in the wake of the developing sector; and a second track for the "Aquar­ speech after speech about how the developed countries, ian Age" deindustrializers and opponents of develop­ especially the United States, could not be expected to ment, who, it is hoped by SID's leadership, will eventu­ do much more than the very little they are presently ally be able to destabilize the governments presently doing to aid the Third World, this proposal was billed being publicly courted. These Aquarians are intended to as the best hope for these countries. Mahbub ul-Haq, congeal into the shocktroops of a new fascist world order long-time SID leader and former lieutenant of Mc­ in both developed and developing countries. Their pro­ Namara's at the World Bank, now Pakistan's Planning posals for "decentralization," "community organizing," Minister, reiterated in open session that the most impor­ and "people-oriented" actions emphasized the alleged tant feature of this proposal was the elimination of the evil of "Western" patterns of development and culture. dollar from its role as a reserve currency, and the

EIR August 17, 1982 Economics II placing of the industrial countries under the same subsuming political-cultural entities defined by culture supranational monetary controls the developing coun­ and language, without economic sovereignty, a design tries now suffer under, all in the name of "fairness." reminiscent of the Persian and Roman Empires-and A top official of SI D's leading affiliate in the U.S., more recently the British Empire. Seers also evisions the the Overseas Development Council, specifiedto a jour­ disintegration of the nation-states of the Middle East nalist that the new bank would "have the power to and Africa, which would come under the same kind of eliminate the right of sovereign nations to issue credit control. on their own behalf without [the bank's] approval adding that it "would impose the same kind of austerity Fascism at the 'grass roots' on advanced-sector countries and the U.S. that the IMF The other effort transmitted at the conference was imposes on the Third World. In that way everything the establishment of the "Grass Roots Strategies and appears much fairer." He said the draft proposal had Initiatives" (GRIS). Since 1969, the SID has been trying had input from the ODC, the SID, the World Bank, the to sell the Third World on the desirability of "appropri­ British Commonwealth (whose Secretary-General, Sri­ ate [i.e., low] technologies," meeting "basic needs" dath Ramphal, endorsed the proposal at the conference) rather than fostering development, and local rather than and "enlightened bankers" (see interviews below). national and international development efforts, with To give the plan the appearance of the "best deal very modest success. In Baltimore, the G RIS was touted possible" to developing sector leaders, the McNamara as a means to recruit tens of thousands of local com­ speech was preceeded by a hardline statement at a munity organizers into the SID orbit in both developed conference panel by IMF Vice President Azizali Mo­ and developing countries, to be used in actuality to hammed that the IMF would mount no bailout opera­ attack Third World leaderships still committed to tions for Third World debt. "Western" patterns of development. The McNamara plan, first floated by the Brandt While G RIS, less than a year old, is still embryonic, Commission over a year ago, was identified at the time the voiced intention is to recruit zombies from the by economist LaRouche and this magazine as a pro­ "Aquarian Age" kooks touted in Marilyn Ferguson's gram for global fascism. Its main feature is an agree­ book Th e Aquarian Conspiracy. "New Age Conscious­ ment to regulate all international lending through one ness" and cognate buzzwords of the Aquarian kook central facility. This new facility would issue its own culture rang from podiums in numerous panels on currency, a form of paper money similar to the IMF's "alternative life-styles," "new frontiers of science" and Special Drawing Rights. The U.S. dollar would be grassroots organizing. The longest applause of the dethroned as the world reserve currency, accomplishing conference was given to the lunatic Ivan Illich upon a longstanding goal of the City of London. completion of his speech on the necessity to restore the The new facility would end the power of sovereign subsistence economy and way of life of the pre-industri­ nations to issue credit through their treasuries and al peasant village. central banks without the approval of the bank. In addition, the new facility would ensure that credit­ Will it work? both private and government-would go only for proj­ There is every likelihood that the SID will continue ects that it approved. its evolution toward a fascist organization. But the The plan is being sold to gullible developing-sector problem that has plagued the Society since 1969, the leaders as "anti-North." difficulty of recruiting developing-sector agents to be In his conference presentations and more frankly in used to destroy the developing sector, was not overcome an interview with the EIR (see below), SID ideologue in Baltimore. Three EIR representatives repeatedly Dudley Seers discussed the political dimensions of the broke the brainwashing environment by intervening to McNamara proposals. Seers, the "grand old man" of present reality in the form of the proposals for low cost, the SID who is associated with the British Colonial long-term credit for high-technology development Office'ssuccessor, the Institute for Development Studies worldwide, and the highest level of classical education, at Sussex University, attacked the "Global Village" advanced by EIR founder LaRouche. Many of the theme of the conference, arguing that only supranation­ Third World attendees, especially the Africans, the al entities on a continental scale, reminiscent of George largest contingent from the developing sector, had no Orwell's 1984 conception, could function in the future. trouble recognizing the SID for the destructive organi­ Seers described his own efforts to pull together the zation it is, and sought to find out more about the continent of Europe, by "digesting" southern Europe LaRouche alternative. It was clear by then that the into the Common Market during the 1980s, and Eastern battle to control the minds of Third World intellectuals Europe during the 1990s. According to Seers, the ideal and political leaders has been far from won by the structure is a continent-wide economic dictatorship British Foreign Office and its appendages.

12 Economics EIR August 17, 1982 Mohammed said that the IMF could not mount a bail­ out, even as large as the 1980 bailout, of Third World problem cases, nor did they politically desire to do so. A: It is the last point that is important. You will have to Interview: ODe spokesman look to the IMF board of governors' meeting in Septem­ ber to see how far they are going, but the IMF is From a July 30 discussion with a senior official of the definitely interested in provoking controlled crises to Overseas Development Council, which disseminates the shake things up, to sound alarm bells about the debt Brandt Commission program: situation. But the IMF is not credible as an institution to carry out these policies. It does not appear democratic Q: Are you familiar with McNamara's plan for a new enough for the developing sector. It can't be overhauled, world financial institution that he put forward at the SID so we need a new Bretton Woods. conference? A: We had some input into drafting the speech. So did Q: What would it take to get a new Bretton Woods? many people in the leadership of the SID and at the A: You need a combined political and financial crisis to World Bank. These ideas are really what Mabub ul-Haq get people to accept a radical change. Until the financial has been saying for some time, also people in the Com­ crisis takes on the proportions of a Beirut, you won't monwealth office and people in the international bank­ have any motion. If one country goes over the edge, ing community, the more enlightened ones, and of course you'll try to solve that situation with a bandaid. If some people like Ted Heath and Willy Brandt and that whole banks are hurt in the United States, if they go under, [Brandt] commission. well, that's a domestic or regional problem, so you solve it locally. You need a big fireball. But there are problems Q: He is making this proposal in the context of what with that. ... If things get too chaotic, what happens if many perceive as a growing debt crisis .... the developing sector says, "Screw it all, these guys in the A: I would like to caution you about this crisis or what North don't know what to do. Let's have a new world people say about it. First of all, most people don't economic order on our terms," and they declare debt perceive [it] yet as a crisis, although it is a crisis. With all moratoria. Then you have a mess that becomes difficult that debt out there, there is still no country that has to work out-too many intractible positions. The crisis defaulted, everything seems so orderly. But there is chaos must be managed before it gets out of hand, but it will inside the system. The debt burden has destroyed the get sharper before there is any hope of action. monetary system. So I know that McNamara is coming from a different direction. He is among those visionaries Q: Do you think there is a real possibility of Third who recognize that we have had no monetary system World debt moratoria? since August 1971, that we need a new Bretton Woods. A: It is greater now than it was before, but it is still We have been running on empty for too long. His plan is remote. It is more dangerous a possibility as the crisis a realization of some of the ideas of Mabub about the grows sharper. The way such a thing would have to work need for a new banking system. is that all the Third World countries would have to do it. If any one or two did it, the banks would sink them. Q: If nething has gone wrong with the IMF and so forth, why do we need a new institution? Q: What would be the response of the North? A: The problem is the decision-making process and A: If they all did it, if the South said, "We won't pay and enforcement of order.... The major thing that the we won't listen to the IMF and now what are you going McNamara proposal would do is create a new world to do," the North would s--- bricks. Then they would reserve currency to replace the dollar. It would eliminate maybe offer the McNamara proposal. And they would the power of the United States to dictate international hope like hell that the South didn't know precisely what economic policy and place it in a better forum than the it wanted. IMF, this new institution. The new institution would also But let me go back to the question of how to get a have the power to eliminate the right of sovereign nations new Bretton Woods, because I don't like thinking about to issue credit on their own behalf without [the bank's] a total Third World debt moratorium. The real problem approval. It would impose the same kind of austerity on is the United States. There are bankers that support the advanced-sector countries and the U.S. that the IMF idea, but the problem is the government and more specif­ imposes on the Third World. In that way everything ically the White House. They are totally uninterested. appears much fairer.... They hardly know the developing sector exists, except when there is war there. That is the problem-they will Q: At the SID conference, IMF Vice President Azizali sit on their ass over in the White House until they get

EIR August 17, 1982 Economics 13 their ass burned. do about it is the question. The thing that will shake them up is Mexico. You can take seven countries in the developing sector and push EIR : What about debt renegotiation? them over the edge, and the White House might not Ramphal: The banks wouldn't make that suggestion notice, even with United States banks screaming. But if ....I haven't got a blueprint, but the next step is, having one of those countries is Mexico, then it is a different recognized it, for North and South, creditors and debt­ story. Mexico is the only Third World country that ors, together to sit down and recognize that we've got to Reagan knows exists. So the easiest thing is to force negotiate this thing on a global basis. Mexico to the edge and that is already happening. That would panic people. You get a crisis in Mexico caused by EIR: Was Mr. McNamara's proposal the first you'd their debt problems and their poor development policies, heard of his new bank? you plunge the country into chaos right on our border, Ramphal: No, the idea of an international central bank and you have several other countries close to the margin is one that the Brandt Commission has specifically pro­ as well, then you get people fjcreamingfor a new Bretton posed. However, I was glad to hear Mr. McNamara, I Woods from all sides. It is already starting to happen in thought, in effect, endorse it. We think this is an impor­ Mexico, like I said. Just read the newspapers or look at tant development. the TV. It is going to get much worse. That will ring the bells in the White House. Mexico alone could do it. EIR: How would the central bank actually work? Ramphal: Again, it's a matter for negotiations. But the concept that just as a financial community at the national level needs the regulatory agency of a national central bank, so increasingly in an interdependent world we need Interview: Sridath Ramphal a regulatory agency or an international central bank, From an interview conducted by EIR's Peter Rush with properly structured, professionally run, so as to save the Sridath "Sonny" Ramphal, Secretary-General of the Brit­ world from these recurring economic crises. ish Commonwealth, on July 20 at the SID conference. EIR: But how would it deal with these obvious questions EIR : There have been numerous articles in the Latin of national sovereignty over currency? American press recently about the possibility of a debt Ramphal: I think that is the real challenge that faces us bomb, where Latin America would use its debt situation in the '80s and beyond. We have to come to terms-the as leverage to force some kind of debt reorganization. Third World in particular, those with newest sovereignty, Have you heard any discussion of this kind of possibility? are most jealous of it-with the fact that we're living in a Ramphal: I believe that the established agents in govern­ different kind of world, interdependent. ... mental positions are refusing to come to grips with the problem of international debt, and it is in that kind of EIR: How would the currency be differentiated from vacuum that all kinds of approaches, some of them quite SDRs, for example? scary, will emerge. We have all been trying to emphasize Ramphal: Well, SDRs are clearly something for which the enormity of the debt problem, that there should not the time has come. The Brandt Commission made it quite be a conspiracy of silence, which is the normal bankers' clear that they thought SDR should be used more effec­ reaction: "Don't talk about it, it'll only get worse." But tively, and they are under the control of the IMF. everybody knows that it is so bad that you know you have to talk about it because you've got to do something EIR: How would the currency of the central bank be about ,it. We should come to grips as an international different from SDRs? community with the enormous volume of debt. Other­ Ramphal: No, it would be akin to SDRs. wise, you will respond to one crisis today, say Poland, somebody else tomorrow, and you can handle a few; and EIR: Would it be like the IMF's SDRs? then bang, there will be a crash, and you'll be back in the Ramphal: That's right. 1930s, and this is a situation in which we ought to be more intelligent.

EIR : What solutions do you see? Ramphal: I think we have to impress the international community-this is what the Bank of International Set­ tlements was saying-they are after all virtually the Interview: Dudley Seers central bankers to the world banking system, and they From a July 19 interview with Dudley Seers, a British were saying things are getting out of hand. But what to subject and guiding light of the SID, conducted by Peter

14 Economics EIR August 17, 1982 Rush at the Baltimore conference: there be a quid pro quo? Seers: Yes; I would see this linking with the breaking up EIR: In your speech you suggested that rather than a of NATO. I think you can see a logical pathway to this. global village we might have continental villages. Are we I think it [breakup of NATO] may well come about and moving toward a world in which continental blocs re­ then the Russians will be a lot less apprehensive. place the era of the two superpowers? Seers : I see two" different points being asked: are things EIR: We have the danger in the Middle East, especially moving in that direction, and should they move in that if Khomeini defeats Iraq, of a balkanization of the direction. I think the answer to both is a qualified yes. Middle East, into a number of ethnic groups, the Kurds We are trying to work in that direction, and are trying to and so on. Lebanon looks like it may end up in two or break down some of the old scenarios, because they get three countries.... in the way of one's thinking. Seers: That may not be entirely wrong. You see, some Let's concentrate on the case of Europe, which is the of these countries are very artificial, and many African ne I have studied. I believe the outside world is forcing ? countries are purely colonial creations, and they have the It to become more unified,to work out common policies, problem of irreconcilable groups, in Uganda, in Nigeria such as on the Middle East, where it has a rather vague between the Yorubas and Ibos, and so on. These are not policy, but there are common policies emerging. There natural nations. I come back to this idea of cultural are many issues, the pressure of Japanese trade on the community. one hand and U.S. economic confli�ts on the other, over the gas pipeline, over loan policies toward Eastern Eu­ EIR: Do you see it as a healthy development if certain rope, trade with Eastern Europe, and so forth, and also ethnic and language families were to become political steel, on which European governments feel that by com­ entities, rather than the nation-states they are now en­ bining together on a common policy, they have more cased in? leverage in the world. The point I am making is that Seers: I would think it would be. I think that although culturally, I think Europe feels more coherent not so in a way any structural change does give an opportunity much because there are inside movements for this, but for external forces, political, economic and so forth, I because of outside events. People like Khomeini and so think the resistance to the wrong type of development, on make Europeans feel they have more in common, and wrong techniques, wrong assumptions, is better with a realize they are different from Argentinian generals. common ethnic base. I think the Basques may resist it EIR: At the same time there is a tendency about which more easily than the Spanish. you have written that seems to be the opposite of this, the growing importance of smaller, ethnic groups. EIR: So would a Basque nation be preferable? Seers: In a way, the smaller groups have more of an Seers: I would think so. I think as a general proposition opportunity in a continental context. For example, the there should be cultural cohesion in political groups. Basques are happier in a European community than in Now we have within the European Community the pos­ the Spanish monarchy. It provides a partial solution to a sibility of distinguishing between the economic groups regional problem. But I think to complete Europe logi­ and the political groups. I mean a Basque nation cally you need Eastern Europe. So in the 1980s there is wouldn't make economic sense, but it would make polit­ the question of the digestion of southern Europe, and it ical sense. will certainly take the whole of the decade, in order to solve the policy problems and the money that needs to be EIR: If it didn't make economic sense, how would it spent and changes in institutions and voting in the function? Community and so forth. All those will take time. But Seers: Well, it still would deal with a lot of issues, all the 1990s will be a period, I believe, of increasing links forms of local issues, while still keeping within Europe, between the Community and Eastern European coun­ its doors open to European trade, European capital tries. Whether that will take the form of them joining or . movements. not, I don't know. You see, there are all sorts of treaty associations already, with Rumania for example, as there EIR: What you are describing sounds similar to an idea are with Turkey, so there are linkages which are more or going under the name "Europe of the Regions," used by less formal. I think ideally, I don't see that the socialist the Pan-European movement, a right-wing group. camp issue is such a tremendous one, providing that Seers: I also feel that, and I realize that this is a danger­ everyone accepts more or less the same rules of the game ous thing to say in some audiences, that this distinction as far as pricing policies, monetary policies, and so forth. between left-wingand right-wing is becoming much less I definitely think this is possible. important compared to the distinction between those who set the importance of cultural cohesion and nation­ EIR : You think the Soviets would go for this? Would alism high, and those who don't.

EIR August 17, 1982 Economics 15 Domestic Credit by Richard Freeman

Conti's not the only one ket its CDs. Bad loans, excessive leverage, and a shaky deposit structure are Lastly, Conti is very much over­ leveraged. Raymond Dalio, presi­ jeopardizing other top American banks. dent of Bridgewater Associates cal­ culates in a recent report that Con­ ti's loan-to-deposit ratio is 111.1: for every $100 in deposits, Conti has $111.1 0 in loans. This empha­ ontinental Illinois of Chicago cause they are secured against Nu­ sizes the significance of Conti's use Cheld a closed-door meeting with corps' assets. But these assets, such of borrowed funds. including CDs, New York bank analysts Aug. 2 in as drilling rigs, are unsellable at to make loans. an attempt to cover up the severity even half the price in today's col­ Dalio's view is that the entire of the bank's problems. Conti's top lapsed market. domestic banking system is in Con­ management, according to one Conti also classifieda large por­ ti's shoes. "The American loan-to­ participant, "promised that Conti­ tion of its $150 million loan to the deposit ratio is the worst it has been nental will exercise much better troubled Mexican Alfa group as since 1929," Dalio stated Aug. 4. control and judgment over its performing, even though Alfa was "Most American banks have many loans." forced to tell the world on Aug. 3 more bad loans on their books than But most of the bad loans Con­ what everyone has known for three they are willing to say." tinental has to worry about have months-it is incapable of paying First, almost four-fifths of all already been made. Continental is interest. earning assets for banks are loans now simply the most prominent­ Conti's non-performing loans today, he reckons, whereas in 1945, though not necessarily the worst­ are thus probably four to five times American banks had only one-fifth case of a bank in trouble. the cited $1.3 billion. Since this is of their assets as loans. In the 1940s The London Financial Timeson much larger than Conti's reported and 1950s, banks had the majority July 30 spotlighted Conti's prob­ capital of $I.7 billion, were a signif­ of their assets in the form of Treas­ lems because London banking cir­ icant portion of these loans to have ury bills or investments. Thus, the cles want to see the major money­ to be written off, then Conti's losses non-loan cushion in the event of center bank for America's industri­ would exceed the value of its bank loan defaults is now very small. al and agricultural heartland to go capital, the technical definition of Second, Dalio reported that at down. bankruptcy. the largest money-center banks, 50 Continental announced in July Senior American and British percent or more of deposits are that its second-quarter losses were bankers reported Aug. 4 that Con­ made by foreigners. In the case of $61 million, and that its non-per­ tinental Illinois, which had to with­ Citibank, 72 percent of deposits are forming loans total $1.3 billion, draw Aug. 2 from the pool of top 10 held by foreigners. Should foreign which is 3.7 percent of its total loan commercial banks that jointly cir­ depositors withdraw 5 to 10 percent volume outstanding. But Conti is culate their certificatesof deposit of of their deposits from American not honestly reporting its books. $100,000 or more, can not raise banks, loans will have to be called For example, Continental reported money through issuing CDs in in. This could bring down the it is categorizing $170 million in either the United States or Europe. American banking system. loans to Nucorps Energy as current At the closed-door Aug. 2 meeting, Dalio commented, "I call this and performing, even though Nu­ Conti reported that it was obtain­ the failure period. Banks are writ­ corps went bankrupt July 27. One ing funds from Europe; but as one ing off loans of failing companies would assume that performing source commented "We live in a 24- that defaulted at a faster rate than loans are at least paying a small hour market. If Americans won't any time since 1929 .... The situa­ amount of interest, but .that is a touch Conti's CDs, why assume tion will get worse. I can't see any­ meaningless idea for a bankrupt that Barclays should?" Conti would thing that would turn it around. company. Conti replies that its have to pay an unaffordable 250 We're in the worst banking situa­ loans to N ucorps are not bad be- extra basis points if it were to mar- tion since 1929."

16 Economics EIR August 17, 1982 Wo rldTrade by Leif Johnson

Taking the U.S. for a ride production and into higher yielding 'Domestic content' legislation would raise auto prices, wreck financialinvestments, if it could ob­ the industry, and promote trade war. tain higher profits in a protected market. Similarly the deeper the wage concessions granted by the union, the faster the companies diversify or reduce production. Domestic bill in Congress sponsored by household cottage industry." auto production would then fall, Aone of the leading Global 2000 en­ The Ottinger bill is simultane­ while presumably the manufactur­ thusiasts would raise the price of ously a lesson' in the economics of ers would announce a "new autos in the United States by at the auto industry, a case study in strengthening" of the industry. least $1,500, reduce auto employ­ how the "de-industrializers" oper­ The Ottinger bill would also ment, make locating foreign assem­ ate and a reminder how gullible the prevent foreign car assembly in the bly plants in the United States pro­ average American can be. United States since the imported hibitive, scapegoat labor for the I[ 1.4 million Japanese autos parts would violate the "domestic bill's passage, and possibly trigger were excluded from the United content" requirements; and no for­ an international trade war. Entitled States, the immediate impact would eign company could afford to build highmindedly "The Fair Practices be felt by the car buyer. Compara­ a complete production unit in the in Automotive Products Act," the ble domestically produced units United States at current interest bill is a shoo-in in the House; it cost an average of $I,500more than rates. could pass the Senate as an amend­ Japanese imports when reliability Congressional sources involved ment and be stuck to the President and longevity are taken into con­ with the Ottinger bill claim not to just before election time. sideration. be primarily concerned with the The legislation (H.R.5133, The Japanese of course have no auto sector. They see this trade-war S.2300) would require that above "domestic content" law, no import threat as one of the best means of the first 100,000units, an increasing restrictions on autos from any na­ forcing Japan to phase out its high­ percentage of "domestic content," tion and, unlike the United States, growth industrial system. i.e. parts manufactured in the no tariffs on imports. While the U.S. auto companies United States, be contained in im­ Primarily because of high U.S. have kept a low profileon the bill, ported autos, beginning with the interest rates, U.S. manufacturers the United Auto Workers union current 1983 model year. That cannot compete with the Japanese. has been unleashed to build popu­ would immediately eliminate 1.4 Instead of Japan's 90 hours of labor lar sentiment for auto protection­ million of the present 1.68 million per unit, the U.S. average is 120 per ism. The half-million-dollar cam­ cars imported from Japan. car, while interest rates in the paign is based on the UA W claim of The bill's chief sponsors are United States are at least double saving 800,000American auto jobs, hardly defenders of industrial those in Japan. For example, long­ a falsehood that might make even growth. The House bill was initiat­ term industrial bonds, carry a 15 .0 Hen ry Kissinger blush. For the first ed last December by Rep. Richard percent rate in the United States time in its history, the union has Ottinger (D.-N.Y.), infamous for while comparable bonds in Japan sent a direct-mail appeal to all its his attempt to force population are currently 6.6 percent. members urging support for the control upon U.S. foreign aid re­ If, because of the Federal Re­ bill. cipients, and Barbara Mikulski (0.­ serve System's usury, the compa­ Were the legislation to be Md.), founding member of the new nies cannot reduce costs to Japa­ passed, the prominent role played International Women's Resources nese levels, they could easily in­ by the UAW in its promotion Agency, which is dedicated to de­ crease prices once the major source would lead Americans to ascribe stroying "male-dominated" indus­ of competition were banned. rapidly mounting auto prices to the trial society and restoring Like the steel industry, auto avarice of the UA W and, by exten­ "women's productive activity in would accelerate its move out of sion, all organized labor.

EIR August 17, 1982 Economics 17 EnergyIns ider by William Engdahl

Not another energy reorganization economic depression, it would de­ Th e attempts by anti-growth moles to finish off the DOE stroy the precious research efforts in areas such as nuclear fusion and should be rebuffe d by Congress. breeders which are the prerequisite for recovery and long-term pros­ perity . Roth's effort is part of a process which began under the Ford ad­ he Reagan administration is The new act proposes to take ministration, when the Atomic En­ Tmaking a renewed push to gain the bulk of present DOE responsi­ ergy Commission was dissolved congressional passage for the Fed­ bilities and dump them into the into a branch of an amorphous En­ eral Energy Reorganization Act of basement of the Commerce build­ ergy Research and Development 1982, S.2562. Were this particular ing, including the entire nuclear Administration in 1975. This war bill intended to ensure more effec­ weapons program, approximately against the actualization of an At­ tive federal backing for advanced 40 percent of the Department of oms for Peace nuclear era, was fo l­ nuclear and magnetohydrodynam­ Energy budget. This program com­ lowed three years later by RAND ic (MHO) energy R&D, it would prises some of the least understood technology decoupler Rodney fail to fulfillthe purpose. Unfortu­ and most vital areas of national Schlesinger, who drafted the shape nately, S.2562 is not even that. defense research, and oversees the of present DOE. The valuable Less than fiveyears after Con­ national laboratories-Lawrence handfuls of top scientific and ad­ gress created a cabinet-level De­ Livermore, Los Alamos, Brookha­ ministrative veterans who avoided ' partment of Energy uniting nucle­ ven, and so forth. It comprises all purge during this series of bureau­ ar, solar, and fo ssil energy pro­ nuclear energy technology trans­ cratic upheavals are likely to vanish grams with nuclear weapons pro­ fers, such as the provision of urani­ if another reorganization further grams, the administration has com­ um for India's Tarapur facility. reduces the priority of energy. mitted itself to dismantling the Given the preoccupation of Com­ The Reagan administration, agency. merce Secretary Malcolm Baldrige fo llowing the advice of glassy-eyed On May 24, about five months with launching trade-war provoca­ David Stockman and Stockman's after the President announced that tion against U.S. allies such as West OMB assistant, Fred Khedouri, foolish proposal, Sen. William Germany and Japan, the prospect from the anti-nuclear Natural Re­ Roth, a Trilateral Commissioner, of bestowing on him the entire ar­ sources Defense Council, has mo­ introduced S.2562. It was cospon­ ray of civilian nuclear technology tivated the package by claiming sored by colleagues who knew bet­ arrangements to wield in the form multibillion-dollar budget eco­ ter but had made a stupid back­ ofenergy blackmail is less than ap­ nomies. By their logic, perhaps we room compromise-Majority lead­ pealing. ought to throw the entire Defense er Howard Baker from Tennessee, The Senate Committee on Gov­ Department into Commerce at the the staunch supporter of Clinch ernmental Affairs, chaired by Roth, same time and really save! River Fast Breeder; Energy Com­ held hearings on this new piece of The General Accounting Of­ mittee Chairman James McClure mischief on June 24. Secretaries fice, a research arm of Congress, (R-Ida.); and Armed Forces chair­ Baldrige, Weinberger, and Ed­ issued its report on Aug. 2, disput­ man Tower (R-Tex.). wards, along with David Stock­ ing the administration's claims. A Senate source claims that man's Office of Mismanagement GAO accused the administration of S.2562 is "dead in the water" for and Budget, all lined up to push poor documentation and ques­ this term, but largely for the wrong Roth's legislation. Baldrige chant­ tioned any · fiscal benefits. Others reasons: because it doesn't push al­ ed a Friedman mantra: "The un­ have noted that if budget-cutting ternative energy hard enough, and derlying premise ofthis reorganiza­ were the sole or prime justification, it retains an excessive nuclear pro­ tion is a reasoned reliance on the it could be done far cheaper by gram, in the eyes of liberal Demo­ marketplace." This is a code-word cutting DOE programs where they crats. for budget-slashing; in a widening are.

18 Economics EIR August 17, 1982 Trade Review by Mark Sonnenblick

Cost Principals Project/Nature of Deal Comment

NEW DEALS

Jamaica/ The bankrupt Jamaican govt. has signed a countertrade Seaga, anointed "the U.S.A./U.K./ agreement with General Motors. Under the deal-the great white hope" of West Ger­ firstof several sought by Jamaica with major suppliers­ President Reagan's many/Japan Jamaica will pay for motor vehicles and heavy equipment "free-enterprise model" made by General Motors in Europe and Japan with for the Caribbean, has bauxite exports to U.S. metals companies and even the failed to bring in the for­ U.S. govt. Modalities of the deal are still confidential, eign investment he used but it is presumed that payments for much of the 6 mn. as his campaign slogan. tpy of bauxite Jamaica ships to the U.S. will thus go The "free marketeer" is directly into payments fo r imports needed to keep the naturally turning to bart­ beleaguered economy going. Jamaica's prime minister er. Would GM like to Seaga told parliament the deal "has the dual effect of market late-model Ja­ saving foreign exchange as well as expanding the mar­ maican chickens? keting of bauxite." Jamaica already supplies 45% of the bauxite to the depressed U.S. aluminum market, and it is not clear at whose expense or how GM would gain it a larger market share.

$9 mn. Grenada/ Grenada Prime Minister Maurice Bishop signed pact in Low commodity prices U.S.S.R. Moscow for export of cocoa over next 5 years "at stable create political oppor­ prices, which is of great value for our country." Bishop tunities in Third World noted how collapsed cocoa prices had prevented revival for those who seek them. of Grenadan economy. The Soviets are donating 1 mn. rubles of fo od, clothing, and other items to Grenada. Also providing $7.7 mn 100yr. credit at 3% on rubles for Grenadan shopping in U.S.S.R. First $1.4 mn purchase is for 500 tons steel and 400 tons flour.

Cuba from Cuba has agreed to Soviet plans to build 850 MW nuclear Cuba going nuclear U.S.S.R. power station, Cuba's first. Construction will take 5 while most other devel­ years. oping countries forced to cancel plans.

$250 mn. Japan from Japan Air Lines ordered three long-range Boeing 747s. World trade is a 2-way U.S.A. Two will be Dash 200B passenger planes and one a street. In aircraft and freighter; all will have Pratt & Whitney engines. Japan other areas, Japanese Air has now bought 45 of the 747s. Order, while Japan buy American. Air is having losses and cutting employment, is a life­ saver fo r Boeing, which has been hit by cancellations.

$5 mn. Iran from Italy Breton di Castello di Godego of Rome is providing Monuments becoming a marble-finishing machinery for a new plant to be built "growth industry" under outside ofTeher an. Khomeini.

$959 mn. Iraq from Iraqi govt. awarded contract to build 305-mile electrified Iraq has continued infra­ South Korea railroad for high-speed trains north of Baghdad to Hun­ structure development, dai and N am K wang Construction. despite war and oil price decline.

$106 mn. India fr om India will use consultants from the National Coal Board British govt. will finance U.K. of England to develop Amolori coal mine, which will $53 mn. for equipment feed a 1,000 MW "super" -thermal electric station in for the mine and guaran­ Uttar Pradesh. tee other British costs. Lazard Bros. financing costs in India.

EIR August 17, 1982 Economics 19 Business Briefs

Energy Policy was a war prisoner in Russia and speaks truck and agricultural implements facili­ fluent Russian, was "very impressed" by ties; and restructure its debt, including break in the German the ability of the Soviets to move such a foregoing paying interest, as part of a A large workforce into the sub-zero cli­ sweeping "survival" plan. 'nuclear freeze'? mate, a colleague says. The problem Harvester will have in Christians also spent a week in Af­ selling its construction-equipment facili­ The first West German nuclear plant ghanistan, presumably evaluating for ties is that any purchaser of the plant construction license in more than five himself the political and military stability would have to assume the workers' un­ years has been granted. The permit, ob­ of the Soviets' southern flank. funded pension liabilities at $1.2 billion tained by Bavarian Bayernwerk for its Deutsche Bank was the lead manager are twice the size of the value of Harvest­ 1,300-megawatt K WU reactor, Isar II, is in a syndicate of German banks who er's invested assets of$580 million. If this expected to be followed soon by approval provided a DM 6 billion loan to further two to one ratio obtaiflsfor the construc­ for Lingen in Lower Saxony. Two similar the Soviet pipeline last month, the larg­ tion division, a purchaser might not be reactors, Biblis-C in Hesse and Nechar­ est-ever loan made by West German • fo rthcoming. If a purchaser agrees to westheim II in Baden-Wtirttemberg are banks. assume those liabilities, but offers no expected to be licensed within the coming cash that would not help Harvester suf­ year. ficiently. The de facto nuclear-plant freeze has High U.S. interest rates have reduced European Industry been abetted by Interior Minister Ger­ American farm implement producers' hard Baum, a Free Democrat. Baum has tractor sales (of over 40 horsepower) come under strong pressure fr om indus­ Bonn reports a sharp fr om 130,863 units in 1978 to 83,148 on try. decline in output an annualized basis for the first six The last reactor approved, Grafen­ months of 1982. American sales of com­ rheinfeld in Bavaria, required 240,000 bines has fallen from 31,494 units in 1978 pages of paperwork to satisfy require­ In the May through June period, West to 9,298 units on an annualized basis for ments from Baum's office. The four new German capital-goods industry reduced the first six months of 1982. reactors will be built by K WU, a subsid­ output by a full 5 percent. The interme­ iary of Siemens, under a new "convoy" diary processing sector showed a fall of 3 method of standardized design which is percent. According to figures released the first calculated to reduce construction time by In ternational Credit about 25 percent. week of August by the Economics Min­ istry, the only industrial exception was construction, where output rose by 8 per­ Mexican Alfa Group cent. The ministry notes, however, that renegotiates its debt "construction activity still remains under the already low average level" of 1981. East- West Trade Mexico's industrial Alfa Group con­ Overall industrial output for all sec­ ceded to 150 creditors gathered at Chase tors declined by 2.5 percent. German banker's Soviet Manhattan on Aug. 3-4 that it was un­ able to pay either principal or 70 percent tour confirms pipeline of interest due on its $2.3 billion fo reign u.s. Industry debt. Under the tutelage of Lehman Deutsche Bank Chairman F. W. Chris­ Brothers Kuhn Loeb, Alfa presented a tians' extraordinary three-week tour of Harvester restructuring proposal for separately reorganizing the Soviet Union recently led West Ger­ each of the 15 companies in the Alfa man bankers to conclude that the Soviets won't work group. were deadly serious about the pipeline Alfa is trying to preserve total Mexi­ project, and strengthened the West Ger­ "International Harvester will find it very can ownership of its HYLSA steel unit, mans' decision to go ahead with the proj­ difficult to sell its construction equip­ one of the few Mexican companies which ect at all costs, top-level German banking ment production facilities," reported controls an advanced-technology pro­ sources say. Larry Hollis, analyst for Robert Baird, a cess utilized around the world-one for Christians spent a week touring the Milwaukee-based stock brokerage firm, the direct reduction of steel. The bankers Eastern Siberian gas fields, and was on Aug. 3. Harvester had announced are interested in acquiring HYLSA, one shown housing for 30,000 workers, in­ July 29 that it plans to sell off its con­ of the few profitable units of the com­ cluding 10;000 women, who will move to struction-equipment production facili­ bine, as partial payment for Alfa's un­ Siberia for two to three years on a vol­ ties, which earned $1 billion per year in payable debts. unteer basis. The German banker, who revenues; close or sell off some of its The Alfa bankruptcy is being used to

20 Economics EIR August 17, 1982 Briefly

• JAPANESE interest rates are being raised by 0.5 percent, bring­ ing the prime rate to 8.9 percent, try to shake open the doors of Mexico's action whereby a corporation that can reports the Japan Economic Daily. industrial economy, which has grown only pay interest by borrowing the The government was forced to rapidly in recent years through govern­ wherewithal uses the proceeds of a new raise rates on government bonds ment subsidies and protection. The cred­ loan to immediately repay the bank. Such in order to market them success­ itors, led by Lehman Brothers, are press­ "distress borrowing" generates no addi­ fu lly, propelling a rise in the entire ing to asset-strip the industrial giant to tional checking accounts. interest rate structure. In addition, pay bank debts while continuing to ne­ Therefore, the Fed staff has con­ short-term rates have been hiked gotiate with the Mexican government for cluded, the high rate ofgrowth oflending over recent weeks to stop the out­ further government credits to Alfa to pay has continued while so-called demand flow of capital, which is seeking off debt. for money has shrunk. Obviously, such higher interest rates overseas, and Lehman Brothers assured the other means of easing interest-rate pressures weakening the yen. creditors that the Mexican government only point to the overall weakness of the had assured Alfa that it would continue financial system. Despite the weakness in • JAPAN-INDIA cooperation in bailing out the firm at the same level the the economy, the $50 billion per quarter construction and engineering banks and management assume losses. rate of Treasury borrowing suggests an­ projects in third countries was the other steep rise in rates in early fall, with subject of a conference in Japan even more devastating consequences for beginning Aug. 5, attended by 400 a corporate sector which has by all prac­ firms from both countries. India tical standards moved to the verge of would like to provide Indian man­ outright bankruptcy under the Volcker Domestic Credit ufactures, raw materials, and regime. skilled labor for projects in part­ Interest-rate decline due nership with Japanese capital, technology, and finance. India al­ to economic collapse ready has experience in engineer­ ing proj ects in the Middle East and Last month's decline of U.S. interest Africa. The Indian delegation was rates, which saw the prime rate at major Banking led by Commerce Minister Viren­ banks fall from 16 to 15 percent, is the dra PatH while Minister of Inter­ direct result of an economic collapse, Private credit to LDCs national Trade and Industry Federal Reserve staff economists believe. (MITI) Shin taro Abe headed the The decline is the result of lower cash drops precipitously Japanese group. balances in the banking system, and therefore lower reserve requirements at Credit given by banks to less-developed • SHAUL EISENBERG, a for­ commercial banks, in direct relationship countries fell by over 80 percent in the mer official in the Israeli Mossad to the decline of economic activity. firstquar ter of 1982 compared to the first linked to Dope-Incorporated net­ The private view of the Federal Re­ quarter of 1981. According to a report by works, sealed an agreement last serve is that the economic depression will the Bank for International Settlements month on a fe asibility study for a continue without relief, contrary to (BIS), lending to LDCs dropped to $3.1 $6 billion coal venture in Guizhou Chairman Paul Volcker's public state­ billion in the first three months of 1982 province, China. Earlier this year, ments. compared to $16.9 billion in the compa­ a similar deal was made with Pe­ Declines in the so-called federal funds rable period the year earlier. king by Qaddafi-Iinked Armand rate (the rate for overnight lending of The BIS reports that LDCs drew Hammer for a coal-mining project banking reserves between major com­ heavily on their deposits in banks, as did in Shaanxi. mercial banks), led the general decline in countries in the Soviet bloc, whose in­ rates, Fed officialspoint out, noting that debtedness declined by $2.8 billion in the • THE U.S. COMMERCE De­ the rate fe ll from 14 percent in June to firstquar ter. partment has fo und a way to bols­ slightly over II percent during the first The Bank of England looks approv­ ter the impression that an econom­ week in August. The fed funds rate slide ingly upon a policy of much more "selec­ ic recovery is just around the cor­ was not principally due to Federal Re­ tivity" in bank lending to LDCs. The ner. Commerce dropped the level serve injection of funds into the banking banks, said one spokesman, "will be of bankruptcies from among the system, Fed officials argue, but rather to much more selective. There will be tier­ components that make up the lower reserve requirements arising from ing, premiums. The consequences are un­ leading economic indicators. This the declining rate of growth of the vol­ pleasant, but they are sustainable." He year the number of bankruptcies is ume of checking account deposits. claimed that the Euromarkets' rate of the highest since 1933. Virtually all new borrowing is now growth will decline from 20-25 percent a "distress borrowing," i.e., a paper trans- year to single-digit figures.

EIR August 17, 1982 Economics 21

• TIillSpecia1Report

How the Club of Rome intends to increase the global death rate

by Christina Nelson Huth, Features Editor

On March 18, 1980, the Executive Intelligence Review devoted its Special Report to demolishing the premises and findings of a study by Harvard Business School economists Daniel Yergin and Robert Stobaugh, which purported to show that it is possible to "decouple" energy consumption growth from growth in the overall economy. In this issue's Economics section and in this Special Report, we continue the job of debunking such econometricians' foolishness, with a series of articles on the progress of the LaRouche-Riemann economic model international research task force to­ ward mathematical breakthroughs that will quantify for use in global economic forecasting and planning the causal relationship between the increase of energy-flux-density in economic processes and the growth of population potential in the economy. This new breakthrough in the applicaton of the LaRouche-Riemann model, aspects of which are reported below by Contributing Editor Uwe Parpart, puts in the hands of global development fo rces the means to indisputably expose Thomas Malthus and his "limits to growth" fo llowers among the ranks of today's population-control advocates as liars and hoaxsters. As Parpart reports, the population potential of the earth has risen, throughout human history, in quantum leaps corresponding to the applica­ tion of new technologies, each distinguished from the preceding by an increase in its characteristic energy density. The human population potential today, with the application of modern fission technologies, Parpart reports, ranges up to 50 billion people. By these scientific criteria, the earth, amd most emphatically those regions and nations known as the developing sector, are vastly underpopulated, and the task of national leadership is defined by the necessity to increase population growth potential through application of new, more energy-dense technologies to production in the economy. The development of this new conceptual weapon against the Malthusians comes not a moment too soon. Those prestigious agencies, such as the World Bank and the Club of Rome, which have for the past decade and a half led the campaign to end world popUlation growth through restriction of energy

22 Special Report EIR August 17, 1982 Ugandan children waitillg for a llleal at an emergency center in Karamoja province. Cluh of Rome sympaThizers hare mOl'eel /rom a "zero population gro wth " .Ilogan to open!.!' advocating a higher death ra le. consumption and technology invcstment. are now facing the 1940s, Silva Colmenares reports that the anti-natalist the disastrous and genocidal consequences of their long­ lobby is and always has been run by the international time policies in the fo rm of accelerated economic collapse oligarchy, which fears normal robust population growth in the industrialized nations, and economic collapse ac­ in the developing sector as a threat to its con tin ued companied by fa mine and natural disaster in the devel­ control over the world's "limited" natural resources. oping sector. Their response to the crisis? A shift from espousal of mere zero population growth, to open calls Endpoint : the Roman model of collapse fo r negative growth--a policy which their esteemed Steven Bardwell documents below, that this oligar­ predecessor Parson Malthus correctly asserted could be chy has been eminently successfu l in ensuring the appli­ implemented only by raising the death ra te, that is, killing cation of its anti-technology and energy conservationist off people who are already born. fo rmulas to the U.S. economy. With the propaganda As Robert McNamara, former president of the cover of such hoaxsters as Stobaugh, Yergin, and World Bank, put it, the killers fa mine, war, and plague, Forrester, disinvestment in the nation's labor force and are the most efficient means of lowering the world's in the infrastructure, plant, and equipment upon which population. Jay Forrester, co-author of the Club of the economy depends, has brought America to the point Rome's fo unding document Limits to Growth, who has of demographic and productive collapse. recently released another econometric model hoax as­ What is the endpoint of the application of the serting that over-investment in technology is the root oligarchist scheme fo r total population control'? The cause fo r the depression in the U.S. economy, is only most devastating historical example of the genocidal slightly less explicit in his prescription fo r mass death in effects of this model is the Roman Empire. By 600A.D., India and other Thi rd World nations. two generations aftcr Rome's fall into the millenium­ Faced with these grisly fo rmulations, the ordinary long Dark Ages, the population of the Mediterranean moral reader may ask why the population-control advo­ world was reduced to 40 percent of that which lived 400 cates would go so fa r as to endorse genocide in the years before. As Kenneth Kronberg elaborates below, furtherance of their object ives. Julio Silva Colmenares, the Roman oligarchy accomplished this devastation oy the respected Colombian economist whose recent ad­ the same means bei ng used by the population control dress to the International Caucus of Labor Committees oligarchy today: a refusal to introduce modern, ad­ conference in New York wc summarize in this Special vanced technologies, genocide against subject popula­ Report, had an answer to this question. Describing the tions, and promotion of a cultural decay in Rome itself World Bank program under which his nation was made which soon rendered the elite of that city unable to a guinea pig of the population controllers at the end of reproduce itself biologically.

EIR August 17, 1982 Special Report 23 The linkbe tween energy use and population growth potential

by Uwe Parpart, Contributing Editor

Uwe Parpart, EIR Contributing Editor and research direc­ Undoubtedly, the gambling tables, for unit of dollar tor of the Fusion Energy Foundation, was the keynote output, take a lot less energy input, and therefore "ener­ speaker of the panel on "The LaRouche-Riemann Model: gy savings" are realized. A Study of World Population and Energy " at the July 4 The U.S. economy has been doing this now for at afternoon session of the International Caucus of Labor least five to six years, and we are facing the results right Committees semi-annual conference in New York City. now. There is a longer-term process, which started in the We print here edited excerptsfrom Mr. Parpart's keynote. mid- 1950s, of the internal shift fr om the manufacturing and agricultural sector into the service sector, and this In the aftermath of the 1973-74 oil crisis, many people longer wave of development interacts with the shorter­ suggested that in order for the economies of the advanced term substitution of labor fo r energy. sector to deal with the situation it would be necessary to The critical point to keep in mind is that we have at shift from a relatively advanced, energy-intensive econ­ this moment a situation about which short-term account­ omy, to relatively less energy-intensive economies. Spe­ ing parameters no longer tell the story. It is precisely cifically, proposals were made to substitute labor for because of this that all the traditional econometric energy, to reverse what were at that time almost 200 models-the Wharton School, Data Resources, Chase years of movement of the advanced sector economies in Econometrics-have failed miserably, while our own the opposite direction. model, which has taken into account these critical To a significantextent, this has actually occurred in boundary conditions of the evolution of the economy, the economy of the United States and also in several has been capable of making very accurate and very other advanced sector nations. And not in small part, the precise predictions. Under normal circumstances where, present difficulties and dangers inherent in our immedi­ for example, this labor-energy substitution did not occur, ate economic situation are due to that particular fact. one could have expected other models to perform reason­ In this same period people like the Joint Economic ably well by simply predicting existing trends linearly. Committee of the Congress, under the leadership of Ted But normal conditions are no longer the case. Kennedy, proposed the possibility of reducing energy The economy has, in fact, undergone a phase change consumption in the United States by up to 40 percent, and continues on a downward spiral, which is extremely while at the same time maintaining economic growth dangerous. The very people-and I think this is the most rates which they regarded as sustainable at a level of 2 to frightening element ofthis whole situation-such as Paul 3 percent per annum in GNP terms. Volcker and others who have thrown us into the depres­ Initially this sounds like a crazy proposal, but it sion that we are fa cing, have little or no understanding of becomes clearer what is intended when the internal com­ what determines the long-term behavior of the economy. position of the economy is studied. It is quite possible to The people who are evil are simultaneously so stupid that realize economic growth in GNP terms, specifically in they cannot actually find a way of evaluating the conse­ the service sector and the so-called tertiary sector of the quences of their evil deeds. economy . This service-sector growth gives the appear­ ance that the economy is growing, while in fact the A new world popUlation model production side of the overall economy is falling apart. We have begun the process of putting together a There is no question that apparent economic growth in world economic model on the basis of the concept of the service sector can be realized with great energy potential population density, which Lyndon LaRouche savings if there is a shift, for example, from steel produc­ has proposed specifically in his writings for several tion into putting up gambling tables in Atlantic City. years. We are now in the process of trying to quantify

24 Special Report EIR August 17, 1982 the relationship between population growth and energy engine in its original form, had by 1796 achieved a use in the economy. conversion efficiency of about 5 percent, which is ex­ The basic idea is quite clear and straightforward. tremely low. The converse of this proposition is that the The idea is to treat the notion of population potential as fuel consumption in kilograms per kilowatt hour of a potential function, and to look at the time-evolution these kinds of engines was very, very large indeed. The of a potential population, very much like temperature utilization of these engines did not significantlyextend or other functions in physics. the actual power of man over nature in those circum­ What we see is actually an ordered sequence of stances. In the second half of the 19th century, however, connected potential surfaces, which represent given the major technological innovations of the Industrial population densities and given points in time. They are Revolution were realized. The modern, latest-developed connected in their upward ordering of population den­ turbines give us a 40 percent efficiency and a simulta­ sity potential by major changes in technology. The neous decline in fuel consumption in kilograms per major changes in technology can in turn be described kilowatt hour. Here is demonstrated a very close corre­ quite efficiently in terms of the concept of energy-flux­ lation between the energy-flux-density and efficiency on density. We are trying to develop an ordered sequence one hand, and the actual relative-but not absolute­ of potential surfaces of increasing complexity connected savings in fuel consumption. by increasing energy-flux-density, defining the actual The same thing can be measured indirectly by potential at any given level. looking at the composition of industrial production. Percentages of what you might think of as total eco­ Energy use and population growth nomic activity expended in the actual production ' in How is this population potential defined and what these categories (averaged figures over Western Europe are the principal figures involved in this? This has to be and the United States) show that in the year 1900, 27 measured, as I said, mainly in terms of energy-flux­ percent was expended on food production. By 1955, this density. In the year 1800, we· know roughly the total percentage had dropped to 12 percent. Textiles had amount of energy that was actually used by mankind. dropped from 20 percent down to 8 percent, basic And between the year 1800 and the year 1975, for which metals rose from 7 percent up to 9 percent, with a we have measured these figures, there has been a 350- slightly higher period which covers the war years. The fold increase in actual energy production on a world most interesting categories are the last two: metal scale. In this same period of time, there has only been a products such as machine tools, which more than roughly fo urfold increase of the total world population. doubled from 16 percent to 34 percent; and chemicals, In the last 100years or so, as late as 1850, the energy­ which almost tripled from 5 percent to 14 percent. flux-densities associated with this large multiplication It is the last three categories which represent the of total energy production were very, very limited. For high energy-flux-densities in industry, and the previous example, as late as 1815, nine-tenths of all energy ones which represent much lower energy-flux-densities. produced and consumed in the U.S. was firewood, There is a wholesale shift in internal composition of which, in fact, represents the lowest energy-flux-density industrial manufacturing from lower to higher energy­ that we could have conceivably come up with at that flux-densities and that, in turn, has a lot to do with the time. When the United States was operating in 1850 on increase of the population potential. solar biomass, this was at an energy-flux-density of The best figures we have representing energy-flux­ about 10-6 megawatts per square meter. We are, by and density are figures that were assembled by a West large, meeting our energy needs now in energy-flux­ German utility company (REW) of the Ruhr region, the densities of between 10 and 50 megawatts per square largest supplier of energy in West Germany. If you take meter in the United States and in the entirety of the the total world land area, you can see the figure of .054 advanced sector. The gain of the efficiency associated watts per square meter. This represents energy con­ with that is precisely what defines the possibilities for sumption for all purposes, household as well as indus­ increasing the population potential . trial uses. If you look at the continental United States, In agriculture as well this principle applies. In you have 0.26. West Germany has about four times the considering the energy used per hectare for rice produc­ energy-flux-density of the U.S. at 0.96. The Ruhr region tion, We see that the higher the energy-flux-density on is the most industrialized region in the world, at 16.6. the input side, the more energy in effect is saved because These figures, if our general outlook is correct, the energy needed to produce a ton of rice varies should translate more or less directly to production inversely with the amount of energy input. efficiencies, and that's precisely the way it shapes up. If In industry various types of engines, mainly steam­ you look at production in normalized dollar terms powered, that have been developed since the late 17th (1978), and look at the amount of tangible goods in century, have raised energy-flux-density. The steam agriculture and industry produced per square kilometer

EIR August 17, 1982 Special Report 25 in the world as a whole, the figures are $50,000 per increase in unemployment translates roughly into square kilometer for the world as a whole; for the 50,000 deaths per year. That is to say, every time there continental United States it is $200,000, about four is a 1 percent increase in the unemployment rate in the times as high, which corresponds quite nicely to the United States, at the end of the year in which that mUltiplier in terms of energy-flux-density. In West increase occurs there will be 50,000 fewer people alive Germany, the figure is about 10 times as high again. than there would otherwise be. If you look at the The productive output of a square kilometer of surface increases in the unemployment rate over the last several in West Germany is actually $2 million; so basically that years, it is obvious that the death count directly due to indicates 10 times the productivity of the average Ger­ Paul Volcker's high-interest-rate policy probably is no man worker compared to the average American worker. less than several million people. We are talking about a If one now compares population, dollar GNP and situation in which we can directly lay the deaths of per-capita kilograms-of-coal-equivalent (that is to say, those people at the doorsteps of the United States energy contained in a kilogram of coal per capita), you Congress, of Paul Volcker, of the U.S. government, will see that in the United States, the GNP per capita at each of whom has fo und it impossible to reverse this this point is $8,800 while the kilograms-of-coal equiva­ situation. lent consumed per capita is 11,500 kilograms. When It is not so much the so-called crude birth rate that, you look at the last figure,in the case of West Germany, in the relative short term, determines actual population the average income in GNP terms is $9,500 per capita size and development, but actually the death rate. For now. However, the energy consumption is only about example, the crude birth rate in Europe in 1750 was 6,000 kilograms coal equivalent per capita; that is, about 35 to 40 people per thousand; the crude birth rate roughly half of what it is in the United States. This is in the developing sector at this point is roughly the due to distortions largely as a result of population same. That is to say, the industrial development that density-because the larger population density in West occurred in the 19th and 20th centuries in the advanced Germany actually brings down the transportation costs, sector, while it changed the birth rates in the advanced and transportation, in fact, accounts for close to 20 sector to some extent, did not change them in the Third percent of total energy consumption in any advanced­ World. What led to the major population explosion in sector country. In the case of the Soviet Union, the Europe fr om about 1800 on was not a change in the GNP per capita is $3,500, and the energy consumption birth rates, but a very rapid decline in the death rate. per capita is 5,500 kilograms-coal-equivalent per capita, The major population explosion, as people called it, so a similar distortion is present there. which occurred in the post-World War II period in the developing-sector nations, is due to the same phenome­ The U.S. demographic collapse non. While the crude birth rate essentially stayed the The United States at this point in time, much as all same, the death rate decreased q)lite dramatically, other advanced-sector countries, is actually losing peo­ though not nearly as far and to the low level realized in ple, and losing them at an increasing rate. The figures Europe. The decline was to a level of about 15 to 20 that were recently published in the New Yo rk Times in deaths per thousand live births (rather than to 10 to 15) February of this year for New York City and for the in the Third World sector nations at this point in time. United States are extremely telling and very important. This largely accounts for the apparent rapid population The youth population in New York City, that is to say, growth in the developing nations. people under 18 years of age, declined between 1970 In a certain sense, Malthus was right-that actually and 1980 by 21 percent. This translates into a net loss of the only way in which you can fi nd ways of reducing about a million and a half young people. Now someone the population growth rate is through increase of the might suggest perhaps they left New York City and death rate, and hardly anything else will work. Anybody went elsewhere, went South, went to Houston, Texas, who talks today about population growth reduction or what have you. This is not the case; the figures for knows precisely that. the United States are also down, though not by the We are saying, therefore, that the people who write same percentage. The total decline in actual youth reports like Global 2000. like Th e Limits to Growth. and population in the United States in the last decade is so forth, are not simply making predictions, but, in fact, close to 6 million; and this translates into a percentage are making policy proposals that are fully intended to decline of 8.5 percent. be acted on. The popUlation potential on the Earth The additional population pressure we're looking at right now is 30-50 billion people. We are nowhere near in negative terms actually comes from a direct medical that. So if anybody wants to cut down population connection between the unemployment rate and deaths growth, the only way to do that, being that we are so per year. There was congressional testimony on this far removed fr om that total potential, is by deliberately several months ago to the effect that every 1 percent increasing the death rate.

26 Special Report EIR August 17, 1982 However, the population potential of the human species in the entire period from 10,000 B.C. to the turn of the 18th century, probably could not and would not have exceeded I billion people. In the year 1750, it is estimated that there lived about 650-800 million human beings. There exist fairly accurate pop­ ulation figures for the second half of the 18th century, and they indicate strongly that population potential Howworld at that time and for that mode of economic reproduc­ population tion could not exceed 1 billion. Another indication has that a potential population density of about I billion potential grown was not to be exceeded is the fact that even though there were no major wars of depopulation like the During his presentation of the progress on the La­ Thirty Years War (1618-48) during the 18th century, Rouche-Riemann world energy and population mod­ the population growth rate during the second half of el, Uwe Parpart identified three major periods of the century fe ll to about .3 percent on a world scale by human development, which he distinguished in terms 1800. of energy fluxdensity and population potential. Then fo llowed the Industrial Revolution. This Repeated leaps in human society's energy flux change in mankind's mode of reproduction ushered in density and population potential, Parpart demon­ the most rapid population growth in human history. strated, refute the neo-Malthusians' claims that there A look at the second half of the 19th century, the is a fixed point at which the earth becomes overpopu­ period during which there was economic realization lated. o f the technological advances of the first half of the The first major period of human population century, shows enormous population growth rates. growth reached up to about 10,000 B.C. The most For example, in the territory which is now East and accurate scientific information at this time indicates West Germany combined, there were 17 to 18 million that 10,000 B.C. marks the transition in the most people in the year 1800. By the year 1900, this popu­ advanced regions of the world economy from a hunt­ lation had grown to 70 million, that is, a fivefold ing-and-gathering society to an agriculturally based increase in about a century's time. In that same period society-the Agricultural Revolution. Total world of time, at least 10 million native born Germans population at that period was no larger than 10 mil­ migrated the the United States. lion people, but was probably approaching 10 million, How was this growth rate sustained? What are the a figurew hich can be considered the actual population actual parameters of economic development that cor­ potential fo r the human species at the hunting-and­ relate to such a growth rate, and what kind of conclu­ gathering stage of economic reproduction. sions can we draw from the kind of economic and One way that this population potential figure can population growth that occurred during this period? be tested is by reference to contemporary hunting­ The popUlation potential defined by the Industrial and-gathering tribes in the Kalahari desert, which use Revolution was specifically defined by two break­ about 15 square kilometers per person to sustain their throughs in technology: the steam engine particularly existence in the hunting-and-gathering mode. The as it was perfected in the form of the internal combus­ total habitable land surface of the earth is about 135 tion engine, and electricity. With the rise in energy million square kilometers: if this is divided by 10 million, flux density brought about by,these new technologies, the result will be about 12-15 square kilometers. the population potential of the human species rose by A major increase in population growth occurred approximately two orders of magnitude over what it following the Agricultural Revolution. From the year was in 1800. 7,000 B.C. on, extremely rapid growth of the human If we consider only two-thirds of this figure to be population was taking place, and by 3-4,000 years optimum, and project worldwide popUlation figures before Christ there were several hundred million peo­ in terms of a popUlation density roughly that of ple on the earth. We know that in the year 2,000 B.C. India-200 people per square kilometer-at least 30 and later there lived close to 150 million on the Indian billion people could live on the earth's habitable 135 subcontinent alone. million square kilometers.

EIR August 17, 1982 Special Report 27 The United States is failing to reproduce its population

by Steven Bardwell, Editor-in-Chief, Fusion magazine

Over the past 15 years, the United States has failed to than they are being replaced, let alone upgraded. reproduce its existence as a nation. Culturally, educa­ The skilled manpower resources of the country are tionally, and even biologically, this country is rapidly also being eroded. Skilled workers are retiring faster ' devolving. than new workers in critical trades like machinists, and The United States has not maintained the physiCal tool and die makers can be trained. Perhaps least under­ plant necessary fo r a modern industrialized society: the stood of all, America, fo r seyen years, has maintained a housing stock, economic infrastructure, and the produc­ birthrate and family formation rate which guarantees tive machinery of the nation are decaying more rapidly extinction of this country within a century. Citydwellers in the United States can see that their own lives are declining because of unrepaired streets, Figure 1 poor city services, and decaying mass transit. But this Capital deficit for United States (1980) situation is by no means confined to the nation's major older cities. As Figure 1 shows, the condition of the Category infrastructure of the United States is abominable. The Capital investment' country's interstate highway system is falling apart; a Average age machinery 7.1 years large percentage of roads and bridges are beyond repair Average age plant 17 years and in need of replacement, and the urban service infra­ % older than 20 years 35% structure (i.e. water supply, sewage disposal) is accumu­ Real investment per year (high) -$ 72 billion Real investment per year (low) -$130 billion lating needed repairs much faster than such repairs are being made. Infrastructure2 % roads beyond service life 20 Too little investment, % bridges beyond service life 13 of the wrong kind Cumulative underinvestment $700 billion The situation with the plant and equipment of the (roads and bridges) U.S. economy is similar. Figure 1 also shows some re­ Cumulative underinvestment $ 60 billion (water services) vealing statistics concerning the reproduction of capital Cumulative underinvestment $ 40 billion investment over the immediately preceding period. For (New York City) example, the average age of U.S. machinery is 7.1 years. Cumulative underinvestment $ 1 billon In the past two years, this figure has increased by more (Cleveland) than one year; this means that the national rate of capital Housing deficit per year 2.5 million units investment is so low that existing machinery is not being Notes: replaced. A series of studies conducted by the EIR eco­ 1 Council of Economic Advisors, 1980 and 1981. Joint Economic Committee to Congress, March 1979. nomics group generated an estimate of actual capital 2 Council of State Planning Agencies, 1981. investment being made in the United States. After sub­ The cultural decline that has shown one form in the decay of tracting the EIR estimates for replacement expenses (that the U.S. population takes another form in the decay of the is, maintenance and depreciation) of existing capital physical plant of the United States. Figure 1 summarizes some of the most shocking aspects of this decay. Comparisons in some from the actual investments made, the resulting new categories with other countries are available: the percentage of capital investment is negative, ranging between -$72 machinery over the age of 20 years in Japan, for example, is less billion per year to - $130 billion per year. These studies than 1 percent! estimate that each year for the past five, there has been underinvestment of this amount.

28 Special Report EIR August 17, 1982 'It is important to note that the problem is a com­ pound of two different effects. First, there has been a Figure 2 massive underinvestment in quantitative terms; insuffi­ Reproduction requirements cient funds have been spent on capital over the past 15 for workforce years. Secondly, tax laws, inflation, and accounting Category procedures penalize capital-intensive investment. These have completely crippled national investment. Machinists and die makers For example, the U.S. steel industry, in many ways Annual retirement 31,000 Annual trainees k 5,000 a case study for what is wrong with the entire economy, Annual graduates 2,400 has invested over the past 20 years slightly more in capital equipment and plant than its Japanese competi­ Mold makers Cumulative deficit (1980) 40,000 tor. For that approximately $100 billion investment, the Japanese were able to purchase roughly 90 million tons Metalworkers Cumulative deficit (1980) per year additional steel-making capacity. However, for 250,000 the same investment, the U.S. steel-making capacity The most fundamental prerequisite for cultural and economic reproduction is that the skilled labor force of a nation remain decreased. actually The in vestment strategy was totally intact. At the very minimum, the number of retirees in a given different in the two countries; the Japanese concentrated necessary skilled job classification must be matched by the their investment in from-the-ground-up greenfieldplant graduating apprentices in the same field. Figure 2 shows repro­ duction figures for some key categories of skilled labor in the construction, using the most advanced technologies of United States. The cumulative deficit shown in the last two continuous casting, integrated processing and trans­ categories is the result of a now-decade-Iong period of under­ port, and the like. The U.S. investment, on the other reproduction of the workforce. hand, was almost totally in repair of old steel-making capacity-repairing already outmoded technologies. The result fo r the U.S. industry is an artificially bloated workforce has become less skilled, smaller, and less figure of capital stock, a completely unrealistic estimate motivated. These generalized problems have shown up of depreciation, and, worst of all, a secularly increasing in the tremendous lags in military production, in the average age of capital and decreasing productivity. very slow productivity growth of American industry, and in the many unfilled skilled jobs. U.S. workforce: smaller, Figure 2 quantifies this situation for some of the less skilled, less motivated most critical skilled job categories in the United States. The reproduction of skilled manpower in the United Although the astounding shortages in these categories States has suffered a similar fate over the past 15 years. are not unique to the United States, they have a very As many commentators have noted, the U.S. industrial different significance than, for example, in the case of

Figure 3 Age structure of U.S. population.

85·89 85-89

1975 2000 75·79 2025 75-79 65-69 65-69 55-59 55-59 45·49 45-49

35·39 35-39

25-29 25-29

1 5-1 9 15·1 9

5-9 5·9 5·9

o Millions 20 o Millions 20 0 Millions 20

EIR August 17, 1982 Special Report 29 Japan. Japan is estimated to have at least 850,000 unfilled skilled and unskilled positions in industry. However, these empty jobs are due to a much higher rate of economic growth than population growth, re­ sulting in too few people for the jobs, not too few people of the required skills. This demographic shortfall is due almost entirely to a very successful birth-control program instituted by the Japanesee in the early 1960s. The ROlIlan lIlodel of It resulted in a quite predictable effect 20 years later: a dramatically reduced number of new entrants into the job market. lIlass depopulation not The U.S. labor shortage is demographic. It is a by Kenneth Kronberg question of deteriorating skill levels in the population. This problem extends from the skilled blue-collar jobs into the most highly skilled engineers, computer scien­ Examination of the demographic features of the Roman tists, and teachers. And statistics indicate that the Republic and Empire provides a striking commentary on frightening problem will get worse: last year Minnesota the genocidal effect of the global population policies certified only one new mathematics teacher for elemen­ proposed by the Club of Rome today. The Romans tary and secondary schools. Out of 15,000 teachers rej ected technological innovation in favor of "appropri­ certifiedlast year in New York, only 30 were certified to ate technologies," looted the workforce below the eco­ teach chemistry. nomic level required for population expansion, and pro­ mulgated a mass culture of Dionysiac cults and homo­ Zero growth by sexuality which discouraged the growth of families. The the year 2000 result was the collapse of Mediterranean civilization into The underlying causal factor responsible for this the Dark Ages, from which humanity struggled to re­ lack of material reproduction of the United States is cover for a thousand years. perhaps best demonstrated by Figure 3, which shows the Figure 1 graphs the population of Europe since 400 population structure of the United States over the next B.c.; the rapid growth since the Industrial Revolution is 50 years. The immediate prospects are of a period of evident (note that the horizontal scale is attentuated negative population growth, increasingly high average twice, after A.D. 1000 and A.D. 1550, in order to avoid age, and fewer and fewer children born each year. These an almost vertical incline over this period). The scientific trends will exponentially increase, if we assume only development of agriculture and industry since the Gold­ that the present fertility rate and family fo rmation en Renaissance appears here in the ability of European statistics remain constant. That is, we have made the society to support a vastly increased population; we see conservative assumption that the recent drop in the U.S. also the short-term impact on popUlation of the depres­ fe rtility rate will stop, and that the fe rtility rate will sion and wars of this century (a), of the Thirty Years War remain constant. Even under this assumption, America of the 17th century (b), and the devastation of the Black will reach zero growth by the year 2000, and the Death precipitated by the collapse of the Italian banking population will begin to fall exponentially after that. houses of the 14th century, in which at least one-fourth Many commentators have assumed that such a of Europe's population perished (c). demographic self-destruction by a country is impossible, The portion of the graph marked (d), lying between because as soon as the population reaches zero growth, 400 B.C. and A.D. 1000, shows the period when most of fe rtility will rise to replacement rates. This assumption Europe was under Roman control. Here we see a gradual might be plausible-except for the fact that the cause of population increase until A.D. 200, followed by a grad­ the present low and declining fertility rate is a deeply ual decline until A.D. 600, when the trend reverses and rooted cultural pessimism. reflected in the economic the population begins to grow again. The period follow­ statistics noted above. Other industrial countries are ing A.D. 200 marks the end of the Pax Romana and the already far advanced along this road. West Germany, beginning of the "decline" of the Roman Empire. for example, has such a low fe rtility rate that with every Figure 2(a)-(d) focuses on this period, and compares generation the number of native-born Germans decreas­ the population of Europe to that of the entire territory es by 20% ! The ancient civilizations of Hellenistic ultimately dominated by Rome at its greatest extent, to Greece (about 250 B.c.) and the Roman Empire both that of Italy itself, and to that of Greece. (The scales of collapsed from internal demographic decline before these graphs have been adjusted to facilitate compari­ they were externally conquered. History offers little son.) hope for a "natural" reversal for a culture which is not Rates of popUlation growth and reduction appear as reproducing itself. anything but gradual in this close-up. The combined

30 Special Report EIR August 17, 1982 comparison of population densities of Italy and Greece. In 400 B.C., at the height of their power, the Greek Figure 1 Figure 2a city-states were able to sustain an European Population, Population, 400 Be to 1000 AD (millions) average population density of23 per­ 400 B.C. to Present (millions) sons per square kilometer, as a result 700 of their application of scientifictech­ niques to agriculture and industrial production. This was almost five 600 times the average population density of the less-developed areas of Europe (a) overall, and was also the maximum 500 level of population density achieved Figure 2b in Roman Italy. This level was not Roman World G,.lIIest Extent reached again in Italy until approxi­ '00 mately A.D. 1200; England could not sustain this density of population until the early 15th century. Roman Italy was never able to sustain a greater population density than that of Greece because the Ro­ mans never surpassed the level of Greek technology available in agri­

Figure 2c culture and production. In fact, the Romans refused to introduce avail­ able technologies, for instance water mills and mechanical pumps. The process that led to the stag­ nation of the Italian population by A.D. 1 is shown even more clearly in 400IC 20D 1 AD .. 410 _,.. Figure 4, where emigration from out­ population of Roman and non-Ro­ side Italy, particularly of slaves, has

man Europe in A.D. 600 had plum­ Figure 2d been discounted. Here we see that meted to only slightly above what it although the total population offree had been in 200 B.C., while the pop­ adult males counted in the Roman ulation of the entire Roman world, census rose from over 200,000 to al­ including territories in Europe, Afri­ most 800,000 during the period from ca, and Asia, was substantially less in 200 B.C. to A.D. 1 [Figure 4(a)], the A.D. 600 than it had been 800 years rate of population growth over this before. From a maximum popula­ period slowed down from an initial tion of about 47 million, the Roman 400 Be 200 1 AD 200 400 eoo 80D 1000 1.5 percent to almost zero [Figure world had shrunk to about 29 mil­ 4(b)]. That is, by the time of the birth lion, or almost 40 percent! The( population of Italy during

this period rose and fell in a similar Figure 3 manner [see Figure 2(c)], except that the crisis point was reached about Population density, 1000 B.C.-A.D. 600 200years earlier. 1000 B.C. 400 B.C. 200 B.C. A.D. 1 A.D. 200 A.D. 400 A.D. 600 Total Ikm.' Total Ikm.' Total Ikm.' Total Ikm,' Total Ikm,' Total Ikm.' Total Ikm,l The population of Greece [Figure 2(d)] declined almost continu­ EUROPE 10m 2.7 20 5.2 26 7 31 8.3 36 9.7 31 8.3 26 7 ously from the defeat of the Golden GREECE 1 7.7 3 23 2.5 19 2 15.3 2 15.3 1.5 11.5 .8 6.15 Age of classical culture until after A.D. 600, when the Mediterranean ITALY 2 8.6 4 13.3 5 18.6 7 23.3 7 23.3 5 16.6 3.5 11.6 world began to recover fr om the Italy, 1200 A.D. = 24/km.2 England, 1377 A.D. = 19/km.2 Dark Ages collapse of Rome. Figure 3 reflects these trends in a

EIR August 17, 1982 Special Report 31 of Christ, Roman Italy had achieved information on life expectancy and that dream of the Club of Rome­ Figure 4a longevity which implies an extremely zero population growth! high death rate. Figures 5(a) and 5(b) Peninsular Italy Population, Adult MaleS (ad(usted( That collapse resulted from com­ show two different measures of bined features of the Roman tax­ length of life from selected areas dur­ farming economy: the constant wars ing the period of the Roman Empire: over new territories to loot, the ex­ 5(a) shows expectancy at birth, and treme immiseration of the mass of includes the high infant and child­ the populace, and the degenerate cul­ hood mortality; 5(b) shows probable ture which placed little value on in­ duration of life for individuals who dividual human life. Infant exposure had survived to age 15. Figure 5(c)

300 200 100 o YEAR8 (8C) was the widespread and common compares the percentages of total method of "family planning," and population who died within certain Figure 4b the prevalent homosexual culture age-intervals. Peninsular Italy Population Growth Rate discouraged marriages and child­ Here we see that fully a third of % Growthper anllum bearing. Although these factors low­ the population died between the ages 15 ered the birthrate, they could not of 15 and 35. In the immediate vicin­ have in themselves resulted in zero ity of the city of Rome, a mere 14 population growth were it not for the percent of the population lived be­ extremely high death rate during this yond their 35th year. These were the period [see Figure 5(a)-(c)). conditions under which Roman Italy Although we lack statistical data was able to achieve the depopula­ that would allow for a direct calcu­ tion. Enough people were dy ing fa st lation of the death rate, we do have enough to aI/ow marginal reductions

Figure Sa Figure 5b Figu re 5c Life expectancy at Probable duration of DeathsfTotal Population by Age Group: Roman Empire birth: Roman Empire life: Roman Empire (%) exceeding o yr•. 1·14 yr•. 15·34 yr•. 34 yrs. Northern Italy 46 years Rome 15.8 year Bordeaux 40 Rome-Latium 31% 28% 27% 14% Latium 14.5 Danu be 36 Cisalpine Gaul-Proven�e Cisalpine Gaul 20.7 22 22 35 21 Britain 38 Gaul 23 Campagna 18 21 32 29 North Africa 49 Campag na 24.6 Northern Italy 14 18 33 35 Egypt 36 Northern Italy 28.3 Spain 15 9 36 40 Egypt 28.7 1931 India 45 years Egypt 15 18 32 35 Spain 32.7 1927 Egypt 50 North Africa 41 .8 1946 England 74 North Africa 14 10 23 53

Figure 6 in the birth rate to take hold. Only Population and land cultivation reduction under similar conditions could the North Africa: Late Roman Empire % cultivated Global 2000 program be successful. Population on 0/0 % Imperial deserted After A.D. 200 the Roman world AD 100-200 AD 422 reduction estates (sample) entered a series of convulsions which

Africa 750,000 290,000 61 39 39 mirrored the prior process in the ital­ ian peninsula (Figure 6). This was Byzacena 510.000 250,000 51 50 50 the process that ushered in the Dark Numidia 695,000 347,000 50 Ages. Mauretania 1,828,000 914,000 50 Charts and tables based on data in: Colin 3,783,000 1,800,000 McEvedy and Richard Jones, Atlas of World Population History (1977); P.A. Brunt, Italian Tripolitania 100.000 50,000 Manpower. 225 B. C. -A.D. 14 (1970); J.C. Rus­ sell, "Late Ancient and Medieval Pop­ 10% non-rural cities 388,000 185,000 ulation," Transactions of the American Phil­ osophical Society, NS 48, 3 (1958); A. H. M. TOTAL 4,271.000 2.041,000 Jones, Th e Later Roman Empire ( 1964). Figure I is reprinted from McEvedy & Jones.

32 Special Report EIR August 17, 1982 to develop all of its anti-natal conceptions to justify underdevelopment. ... The problem of poverty is not a problem of population, nor of resource scarcity, but of social relations, that is, how production occurs and how the surplus is distributed ....It was in the interests of the multinationals operating through the World Bank to present an apparently scientific theory to justify what they had already decided on: to impose birth control on the underdeveloped countries as a means of maintaining in their hands, for the immediate future ahead, control over our natural resources." Silva Colmenares demonstrated the irony of the Mal­ Julio Silva Colmenares thusian argument that population and resource "short­ ages" are obstacles to development. He pointed out that while the Rockefeller and Ford Foundations were spon­ soring birth-control programs in Colombia in the name Colombian economist of aiding development, the multinationals behind them were looting the country of the very resources whose scores Malthusians alleged scarcity was preventing adequate development. .. Between 1920 and 1974," he reported, "when Colom­ by Valerie Rush bia's oil allegedly 'ran out,' Colombia exported some 2 trillion barrels of oil which according to our estimates produced a net profit for the oil muitis, especially the A recent public appearance by the eminent Colombian Rockefeller and Mellon groups, of not less than $4.5 economist Julio Silva Colmenares in New York City, to billion, based on an investment of $450 million. The denounce as genocidalists the neo-Malthusian propo­ country was left with no oil, no petrochemical industry, nents of Third World population control headquartered only empty oil wells." at the World Bank and the International Monetary Fund, demonstrated the degree to which crucial leaders of the developing sector nations consider U.S. support of Population equals development their growth and development plans to be crucial. Silva Silva Colmenares stressed that popUlation growth Colmenares, who will return to the United States later in has been historically demonstrated to correlate with August for a lecture tour with the Committee Against expanded growth and per capita income increase. "Pop­ Genocide, spoke on July 5 to a mid-year conference of ulation is the most important resource any country can the International Caucus of Labor Committees, which have. There is no doubt that the living labor force is gathered more than 500 participants from fo ur conti­ that which creates wealth and all of the surplus of a nents to discuss the anti-Malthusian American System of society." He described institutionalization of population economics and politics. control in the guise of government health care and The Colombian economist is a lecturer at numerous maternity programs, reading fo r a shocked audience the universities and institutes in his country and a member of recommendations fo r Colombia of Population Council the Central Committee of the mass-based Colombian head Bernard Berelson from Berelson's book Beyond Communist Party. He is the author of several books, Family Planning: including No Mas Hijos and Verdaderos Duenos del (1) government use of a sterilizing agent in water Poder (No More Children and The Truly Powerfu l). and food supplies; (2) legal permits to have children, Silva Colmenares explained in his presentation that acquired through purchase, inheritance or donation he became a specialist in demography about a decade only; (3) reversible sterilization of all women pending ago, when it became apparent to him and other pro­ government approval fo r childbearing; (4) obligatory growth leaders in politics, the universities, and the sterilization of all men with three or more living chil­ Church, that a concerted effort was being made to revive dren; (5) obligatory abortion of all illegal pregnancies. the discredited theories on population of Thomas Mal­ Silva Coimenares, speaking in the name of those thus within the developing sector-nations. This "neo­ forces inside the developing sector who, in his words, Malthusianism," he explained, asserts that there is a are determined "to protect ourselves from such genoci­ direct causal relationship between poverty and "excess dal conceptions" of the anti-natalists, concluded his population." presentation with an appropriate comment: "As the "The country from which I come," said Silva Col­ Pope once said, the solution is not to cut people's heads menares, "was chosen as a guinea pig by the World Bank off if there are not enough hats to go around."

EIR August 17, 1982 Special Report 33 New evidence of Kissinger's role in AidaMora murder

by Umberto Pascali from Rome

Some of the blood on Henry Kissinger's hands is at last enjoying the support of both the DC and Italy's second seeping through to the pages of the international press. largest party, the Communists, who are supported by a The Italian newsmagazine Panorama has finally pub­ plurality of Italian workers. Under this plan, called by lished what the European Labor Party and this news Moro a national unity government, more than three service asserted four years ago-that Henry Kissinger decades of instability and "class war" in Italian political was the man behind the 1978 kidnapping and murder of life were to be brought to an end. Leading sections of former Italian Prime Minister Aldo Moro. the Communist Party, including its General Secretary, Within days after Panorama identified Kissinger as Enrico Berlinguer, were agreed on this perspective. the "symbol" of the conspirators who brought about (Berlinguer called it the "historic compromise.") Moro's death at the hands of Red Brigades terrorists, Then Moro, the architect of the plan, was kidnapped Kissinger's name surfaced last month in Italian court by the Red Brigades, and after being held for 52 days testimony as a member of the Comite Monte Carlo, a during which the Socialist Party and others carried out super-secret freemasonic lodge set up by Grand Master "negotiations" with the terrorists over the opposition Licio Gelli. Gelli was, once upon a time, a torturer for of the government, Moro was killed and his bloody Mussolini's secret police. More recently, he became the remains left in the trunk of a car in Rome. organizer of the Propaganda-2 (P-2) Lodge outlawed by During the trial of Aldo Moro's terrorist captors the Italian government for plotting a fascist coup. Gelli's and assassins, Moro's widow Eleonora testified. "Both and Kissinger's Monte Carlo lodge has now been identi­ my husband and other persons told me," said Eleonora fiedas behind the terrorist bombing of the Bologna train Moro, "that from 1975 on, Moro had been told that his station which claimed the lives of more than 80 people on attempt to have all the Italian political forces collabo­ Aug. 2, 1980, among its other crimes. rating at a governmental level was not appreciated. He You are about to learn what has become common was warned not to pursue this poliy .... Otherwise he knowledge to citizens of the Italian republic, but is would pay dearly for his stubbornness." banned from news media in the U.S.A.-two document­ Previously, on April 13, in an interview in the Italian ed homocidal episodes in the career of Henry Kissinger. daily Corriere della Sera, Eleonora Moro stressed that these threats came from an important international The Moro case personality. "I am trying to remember how the threat In 1978, former Prime Minister Aldo Moro, then the was fo rmulated," she said. "You must stop pursuing elected leader of the Christian Democracy (DC), Italy's your political plan to establish a political collaboration largest political party, was trying to stabilize what had among all the political forces of your country. You become a very shaky Italian repUblican system (40 either stop it now or you will pay dearly for it. You governments in 35 years) by effecting a government must decide how you wish to take this advice."

34 International EIR August 17, 1982 A Christian Democratic parliamentarian, Cervone, everything, then I didn't understand anything any a close friend of Moro, has reported that shortly before more.' Moro was enraged." Moro was kidnapped, the DC leader told him, "You The year 1947 was the year Italy voted in a referen­ will see, they will make us pay for our political line. My dum to free itself of the Savoy monarchy. situation is similar to that of Berlinguer," the Commu­ Revival of the Savoy monarchy was the explicit goal nist leader, ,said Moro. "He doesn't find understanding of P-2 Lodge Grand Master Licio Gelli, which brings in the Soviet Union; I don't find it in the U.S.A. and us to the two-year-old murder of 80 people in the parts of Germany." (Cervone commented that by "part Bologna railway station massacre. of Germany," Moro meant Franz Josef Str auss, the Bavarian ally of Kissinger.) "Now," said Cervone, "we The Monte Carlo Lodge have reached this conc lusion: the Red Brigades were In 1969, as is well known in Italy, White House aide used as a cover by the ones who organized the kidnap­ Henry Kissinger and his underling Alexander Haig ping and the assassination." shoved their snouts into Italy to "restructure and Last month at the trial of Moro's killers, Moro's strengthen" Gelli's P-2 lodge on behalf of the British daughter Agnese reported recalling how Moro had been royal family and Italian oligarchs. Then began the now threatened during a reception at the Italian embassy in famous "strategy of tension": terrorism, coup attempts, New York in 1975. assault after assault on the institutions of the Italian Who threatened Moro? Henry Kissinger, Panorama nation-state. Gelli was in constant contact with ex-King magazine answered in its recent issue. Referring to the Umberto of Savoy, whom he hoped to return when testimony of one of Moro's Red Brigades "j ailers," demands for "order" had been sufficientlyor chestrated. Antonio Marini, the magazine reports that Moro told What surfaced last month was new knowledge con­ his kidn appers that Kissinger was the one who had cerning the P-2's "wetworks" operations, and the exist­ threatened him. ence of the supersecret Co mite Monte Carlo. "This name, Kissinger," Panorama concluded, "is Italian prosecutors investigating the Bologna train the symbol of those circles that prepared the violent station bombing have in their hands today a confession , interruption of the political line of Moro." from one of Gelli's close collaborators, Celso Ciolini. The Comite Monte Carlo, said Ciolini, included several Why Moro was killed internationally renowned persomilities, mentioning in Of course, it is a matter of public knowledge-even particular the name of Henry Kissinger. in the United States-that Henr y Kissinger publicly It is Comite Monte Carlo, with Kissinger in its opposed Moro's proposed national unity government midst, that controls both right 'and left terrorism. The "on anti-Communist grounds." But the notion that Monte Carlo lodge had elaborated a detailed plan to Kissinger ordered the kidnapping and assassination of wreck Italy, with the participation of parts of the trade Moro "to keep Communists out of the Italian govern­ union leadership and key political and financial leaders. ment" is laughable. Kissinger wanted Moro out of the The Bologna bombing, according to confessions way because he opposed the policy of stability Moro taken by the prosecutors, was planned at a meeting of represented. the Monte Carlo lodge on April 11, 1980. A month later Kissinger's oligarchical masters hate the Italian re­ at the Hotel Sheraton in Buenos Aires, Argentina, Gelli public and wish to shatter its institutions and to return and Ciolini met one of the top operatives of the Black it to the direct control of the old oligarchical families Fascist International, Stefano della Chiaie, the terrorist who ran it as a collection of satrapies. Revival of the boss linked to the "Madrid Center" and reportedly in House of Savoy, Italy's 19th-century monarchy, is part contact with the infamous Center for Documentation of this process. organized in 195 1 in the Spanish capital by the pretend­ On Aug. 17, 1978, after the killing of Moro, DC er to the throne of Austria-Hungary, Otto von Haps­ Senator Granelli, in charge of the party's foreign office, burg. The Madrid Center included [behind Gelli] Hjal­ was asked by La Repubb/ica newspaper what he thought mar Schacht's son-in-law Otto Skorzeny of Hitler's SS, of the possible involvement of "the Americans" in the rescuer of Mussolini and head of certain postwar Nazi Moro kidnapping. networks. Libya's Muammar Qaddafi was in contact "The Americans?" Granelli replied. "This expres­ with the center well before he organized his so-called sion is too general. It was well known that Kissinger coup in 1969-the year the strategy of tension was and Moro did not understand each other. I re member launched in Italy, and the year Henry Kissinger moved an unpleasant toast in Rome at the end of a long into the White House under Richard Nixon. meeting with Moro. Kissinger said: 'We discussed the In the fall of 1982 a new wave of terrorism is Italian situation at length; until 1947 I understood expected throughout Europe and the United States.

EIR August 17, 1982 International 35 one of the highest-ranking targets for assassi nation or kidnapping in the United States or Europe today. Two sources of the highest level confirmthi s. One of these two insists that the security services of West Germany have been contaminated to cause this lack of cooperation. The other reports that this contamination of officialcircles in the Federal Republic has been arranged by Henry A. A kidnap plot against Kissinger. These reports are corroborated in part by the fact of fa lse reports concerning Mrs. LaRouche's security com­ Helga Zepp-LaRouche ing as official and stated unofficial assertions fr om offi­ cial and semi-official sources in the Federal Republic. The Kissinger involvement is circumstantially con­ Two security sources have independently reported that firmed. Official U.S. government records document Kis­ an attempted kidnapping of Helga Zepp-LaRouche is singer's signature to documents issued, giving wildly planned for the immediate future. One of the known false information against Mrs. LaRouche's husband no authors of this project is the notorious U.S. organized­ later than 1975. Recent information from the Federal crime member and Henry Kissinger crony, Roy M. Cohn Republic shows false information issued by Kissinger of New York City. fr om the United States to be coming out of the mouths Cohn is working with several channels into influential of official circles in the Federal Republic. It is otherwise circles of the Federal Republic of Germany, coordinating fully confirmed that Kissinger has been involved in projected major news-media slanders ag ainst Helga major, dirty-covert operations against LaRouche for Zepp-LaRouche, as well as plans for a kidnapping-at­ more than a year recently, with Kissinger circles caught tempt to be conducted in Germany. red-handed attempting to corrupt a key witness in a Cohn's contacts include Father LeBarr of the New major legal case involving the Khomeini agent Cyrus York Catholic Archdiocese. LeBarr, a professed "blue Hashemi. fascist," reports himself to be in collaboration against Also confirmed is the liaison between Kissinger and Mrs. LaRouche with Friedrich W. Haack of the Federal Roy M. Cohn, involving in part overlapping homosexual Republic of Germany, and with corrupted Catholic rings in which both are closely associated. Recent meet­ Church circles in that country. Another of Cohn's prin­ ings in New York City restaurants may have directly cipal channels into Germany include Karen Furey of involved joint-operations against Mrs. LaRouche and New York City'S East Side Conservative Club, who also her husband, or may have involved discussing the usual serves as an official for an influential organization in sexual interests of the pair. Germany. Cohn is presently reported to be visiting Monaco, Roy M. Cohn meeting with the secret council of the Grand Orient In addition to projecting a kidnapping-attempt Lodge branch in that city. Since it is known that Cohn is against Mrs. LaRouche in Germany, Cohn and his currently spending most of fo ur to fivedays of each week accomplices in U.S. diplomatic and other channels, are concentrating on the operati on against Helga Zepp­ currently projecting a massive propaganda-barrage LaRouche, and since that Monaco Lodge is a Kissinger against Mrs. LaRouche in both the United States and hang-out whose roster includes the genocidalist Aurelio the Federal Republic of Germany. Cohn's circles project Peccei, it is probable that Monaco is one of the centers in a barrage of lying attacks on Mrs. LaRouche to surface Europe being used for the targetting of Mrs. LaRouche. in major periodicals of the Federal Republic of Ger­ Three other of the highest-level intelligence sources many on the eve of the election in Hesse. Cohn and his in the world have reported, independently of one anoth­ staff are currently designing such articles in a ga rage­ er, that the threat against Mrs. LaRouche is currently turned-operations-headquarters in New York City. cranked up to the level that an attack is virtually certain Among the charges Cohn is considering using is the should she set foot in Europe at this time. One of these allegation that Mrs. LaRouche's father was a Nazi sources says official agencies rate the probability of an official. Mrs. LaRouche is the only, orphaned daughter attack by one terrorist group with her name on its target­ of a mother who married her childhood sweetheart at list to be about 7.5 on a scale of 10. the close of the war, when the mother was 21 years of The targeting of Mrs. LaRouche in Germany is based age. There is no limit to the vileness of the lies Cohn on the fact that official agencies of the Federal Republic and his collaborators in Germany will employ. of Germany are currently refusing to afford her any Cohn, a ravinghomos exual, rose to fame, first as an security cooperation, despite the fact that she is currently associate of the prosecuting attorney during the Rosen-

36 International EIR August 17, 1982 berg trial, and then went on to gain notoriety as chief counsel for Sen. Joseph McCarthy. A certain affair, involving Cohn and his intimate friend, David Schine, in a West German hotel during the McCarthy period, is indicative. Cohn's involvement in the Rosenberg case has two STOPPING THE DEPRESSION continuing implications. First, it was the policy of the AND prosecution to have the Jewish Rosenbergs tried by a REBUILDING THE STEEL VA LLEY Jewish judge and prosecuted by a Jewish staff. Also, the securing of the death-sentence was based on the fraud­ A Conference on Economic Development sponsored by ulent argument that information supplied to Moscow The National Democratic Policy Committee by the Rosenbergs had enabled Moscow to develop an VVednesday, Aug. 25 Marriott Hotel H-bomb. As leading scientists, such as Harold Urey, 9:00 A.M. to 9:00 P.M. Monroeville, Pa. correctly emphasized at the time, this allegation was the height of absurdity. A Cohn who would aid such a CONFERENCE SCHEDULE trick, to the purpose of ensuring that a pair of Jews 8:30 a. m. Registration were "fried," is a pretty low sort of degenerate. 9:00 a.m. Welcoming Remarks Cohn's planned libels against Mrs. LaRouche are 9:15-10:45 a.m. "High Interest Rates, Industrial Collapse and the Coming Monetary Blowout" typical of the Roy Cohn of the McCarthy period, what SPEAKER: is known as "McCarthyism." Interesting is the fact that David Goldman, Economics Editor, Executive Intelligence Review PA NEL: McCarthy, with a raving faggot as his chief counsel, Gene Mahoney, President, Central Labor Council. Fayette County hounded the U.S. State Department with the allegation Emil Dicembre, President, Cement Masons Local #56 that it, the State Department, was covering up the nest 10:45-1 1 :00 a.m. Break 11:00 a.m.-12:30 p.m. "The 'Post-Industrial Society' Threat to of homosexuals in sensitive positions. Why, then, did the Steel Industry; the Causes of its Current Collapse" McCarthy keep Cohn on his staff? SPEAKER: Richard Freeman, Economist, Executive Intelligence Review Cohn moved on from the deathbed of the alcoholic PA NEL: wretch Joe McCarthy, to finerthings. He became a part Jim Olson. Field Engineer. U.S. Tubing Specialties, Gary. Ind. John Baliant, USWA Local 1397 of organized crime. During the early 1960s, he was 12:30-2:00 p.m. Lunch break business partner of the notorious Joseph "Joe Bananas" 2:00-5:00 p.m. "Creating a U.S. Capital Goods Boom: Great Enterprises, City-Building and Trade Expansion in the Developing Sector " Bonanno, in the Lionel Corporation. This corporation SPEA KER: was the U.S. corporate branch of the Canada-Switzer­ Uwe Parpart, Director of Research. Fusion Energy Foundation. PA NEL: land-based Permindex organization. Permindex, headed Representatives from India, Lalln America, and Africa by Bronfman attorney Louis M. Bloomfield of Mon­ 5:00-7:00 p.m. Dinner break treal, Canada, was the organization expelled from 7:00-9:30 p.m. "Creating a U.S. Capital Goods Boom: Great Enterprises and Infrastructural lmprovement Projects in the U.S.A." Switzerland for complicity in attempted assassinations SPEAKER: of President Charles de Gaulle, and later indicted on Paul Gallagher, Executive Director, Fusion Energy Foundation PA NEL: charge of complicity in the assassination of President Tom Shetterley, Vice President, Central Labor CouncIl. Fayette County John F. Kennedy. Cohn today is the attorney for the John MCilvaine, Labor Arbitrator, Compensation Counse l. UMW District 4; farmer; director of the American Beefalo Association so-called five organized-crime families of New York Organizational affiliation for Identification purposes o �Iy. City, and a leading figure of the organized-crime infest­ ....- ed New York East Side Conservative Club, of Karen For more information contact the Furey, Tom Bolan, the Buckleys, et al. ;\Iational Democratic Apart fr om being a "McCarthyite" and a gangster, Policy Committee 2215 Arch Street, Philadelphia, Pa. homosexual Cohn is a leading figure of the networks of or Call (215) 561-5585 the World Anti-Communist League, the mother-organ­ ization of the Latin-American death squads. He is also a Kissinger asset, of the Henry Kissinger who travels among and uses many of the same assets. A full dossier on organizations in the German Federal Republic cooperating with Cohn, Kissinger, Father LeBarr and Karen Furey's circles, is being assembled for publication-unless the government of the Federal Republic of Germany provides the endan­ gered Mrs. LaRouche the security cooperation her safety requires.

EIR August 17, 1982 International 3 The final doublecross: has the U.S. lost the Middle East? by Crlton Zoakos, Editor-in-Chief

Secretary of State George Sh�ltz's acts of omission since tion, men are about to descend to the animal level," as he assumed office carry certain sinister implications for one senior Arab diplomat put it. the future of the United States as a major power .. His The master over this situation appears to be British studied "low profile," especially in the context of the diplomacy around Lord Carrington's pet "European unraveling Middle East disaster, might prove the discreet Third Force" project, on whose behalf Henry Kissinger Secretary of State a most calamitous public servant. If is deployed. Saudi, Kuwaiti, and other Arab investors the Secretary continues to subscribe to the widsom of are now prepared to withdraw financial assets (of which "low profile" until the November election, he will have there are an estimated $100 billion) out of the United de facto and by default surrendered U.S. foreign policy States and into London, a move which would throw the for the critical period ahead to self-confessed British United States into the worst economic crisis in I}.istory. agent Henry A. Kissinger. Thus, within days, the United States may be looking As of Wednesday, Aug. 4, the United States lost, and into the bowels of the following Hell: The entire Arab lost dramatically, every last remnant of influence over world from Morocco to the Straits of Hormuz denounc­ the Israeli government. With each day's new failures in ing and condemning the United States as responsible the Habib mission, U.S. influence among Arabs has been fo r Beirut's massacre by Israel; an embattled and defiant collapsing in an equally dramatic way. That influence is Israel emerging fr om Beirut's bloodbath with the reali­ disappearing faster under George Shultz than U.S. influ­ zation that it destroyed forever its last chance to win the ence in Latin America under Alexander Haig. Before the right to exist peacefully in the Middle East, betrayed by new Secretary reconsiders the wisdom of his adopted the United States; and a United States crushed by the · modesty behind his discreet "low profile," he must re- worst financial and economic collapse since 1929, lying view the fo llowing facts and their implications. paralyzed and impotent. From their respective corners of the globe, London AfterBeirut's massacre and Moscow will be looking on with satisfaction, If the Israeli government, under Sharon's and Nee­ planning their next moves. When the stupid Lord man's influence, goes ahead with the projected spectac­ Carrington finally realizes that only Moscow has the ular massacre of PLO combatants in western Beirut, a means to make the next move, will he then instruct new, hideous genie will be unleashed in the Arab Middle Henry Kissinger to go for a showdown? And how close East, a wave of racialist, violent irrationalism which will will Kissinger be allowed to the nuclear button? take decades, perhaps more, to abate, a monstrosity analogous to what Khomeini unleashed in Iran. Arab The invariant pattern : doublecross governments, aware of this imminent eruption, have We are reaching this point of crisis after an unbro­ been signaling Washington that they will be unable to ken string of miscalculations and doublecrosses which resist this development, and therefore they do not plan go back to the beginning of June. The analyst who has to resist it. If Israel does what Neeman and Sharon tell closely watched the evolution of this crisis fr om then to it to do, it is likely that the nationalist political anti­ now, will confirmthat the single invariant fe ature which Israeli sentiments in the Arab world will be transformed determined the whole affair so far has been doublecross/ into hideous racialist anti-Semitic passion which will miscalculation/carnage. Back in May, the United States open a shameful new era in Middle East politics. "You was making secret arrangements with the PLO whereby get the feeling that after 6,000 years of relative civiliza- the PLO would recognize "Israel's right to exist" and

38 International · EIR August 17, 1982 the United States would extend diplomatic recognition to the PLO. Then Alexander Haig doublecrossed the Arabs and informed Sharon of the proceedings. Israel proceeded to make a deal with the Syrians to go after the PLO and divide Lebanon between themselves. Next. Israel received prior approval from the United States to invade Lebanese territory up to 25 miles in order to secure its border area. Then Israel moved into Lebanon. doublecrossed its Syrian partners by crippling their military force in Lebanon and doublecrossed the United States by going all the way up to Beirut. Now came the turn of the Soviet Union to doublecross the Syrians, who hurried to Moscow to seek new military assistance which was not fo rthcoming. Then came the turn of the moderate Arabs to doublecross the Palestinians: Haig had disseminated the line throughout the Gulf governments that their fears of radical upheavals should now be laid to rest: there is, he said, a plan to dismantle the military organization of the PLO; after its elimination Lebanon, Syria. and Jordan will join a new phase of the Camp David agreements in conformity with the Fahd Plan. and a great anti-Soviet "strategic consensus" of Arabs and Jews will be achieved in the Middle East (which will also take care of the Gulf states' problem with Kho­ meini). After two weeks of vicarious sarcasm against the PLO, the Arab leaderships of the Gulf woke up to the fact that they too had just been doublecrossed: Haig was gone, and Habib. whose mission was supposed to accomplish all these wonderful things, had totally failed. Then comes the turn of the Israeli government to be Israel, too, has outsmarted itself Kissinger with Begin in 1978. doublecrossed: after two months of brutality, heavy casualties and escalating domestic opposition, Wash­ ington tells Begin and Sharon that they are not allowed ing maneuvered the entire situation into its present to finish off the PLO-the only result which would have course. With the demise of U.S. influence, Britain will justified the brutal campaign in the eyes of Israeli pretend to be the protector of the security for those citizens. Upon receiving the U.S. ultimatum, the Israeli Arab oil producers who need outside patrons to remain cabinet met for fi ve hours on Aug. 6, and voted to reject in power; and thus Britain will attempt to pretend to be every point made by the White House as well as the the guarantor of Western European oil supplies. Britain United Nations. Subsequently. a few hours before this has been able to doublecross the United States only writing, a large-scale new military assault was mounted because the Soviet Union has agreed to maintain a against Palestinian positions in western Beirut. discreet distance while Lord Carrington is emasculating Now Alexander Haig. who lost his job for telling the United States. Once Carrington's surgical operation lies to President Reagan (see E1R , July 20) has drafted is completed, it will finally be the Soviet Union's turn to a document in which he claims that President Reagan, doublecross Her Majesty's very clever diplomat. When before the Israeli invasion, had agreed that its military the Soviets move, the United States will be bandaged in purpose should be to wipe out the terrorist organiza­ its sickbed, while Lord Carrington begins to realize that tions in Lebanon. The more the Israeli government is he has bitten off more than he can chew. pressured by Washington, the more it is tempted to take The patient will either watch the final act of the advantage of Haig's habitual lies and make President drama with pathetic resignation. or, the last doublecross Reagan appear co-responsible in Arab eyes for the will, according to all the precedents of this crisis, lead to impending western Beirut massacre. one final global carnage. Secretary Shultz should con­ On the larger canvas of grand strategy, it is Great sider these implications before his studied "low profile" Britain which is doublecrossing the United States, hav- allows Henry Kissinger a magnified field of action.

EIR August 17, 1982 International 39 Central America

Panama's President Royo was ousted by the British by Gretchen Small

Only the short-sighted, an unfortunately large contin­ lesson to others considering charting an independent gent in Washington, D.C. these days, fo und satisfaction policy fo r their nations. The actual lesson is, howevt:r, in the July 30 coup against President Aristides Royo by that Panama, and Royo, wert: left exposed by the failure Panama's National Guard. of other countries in the continent to move more quickly. In Ibero-America, fe w missed the political message: The "fight for a new continent," in which Royo had "Royo's fall could well have been meant as a warning to played a prominent role, began when [bero-American other Latin American leaders who intend to hang tough leaders recognized that the British-Amt:rican alliance in the fightfo r a new continent," stated the lead editorial against Argentina in the Malvinas war had nothing to do in the Caracas daily El Mundo Aug. 3. Signed by publish­ with the territorial dispute, but was a precedent for future er Angel Capriles, the editori al charged that Royo's NATO-backed confrontations they would face them­ ouster had been ordered by forces in the United States in selves over debt collection and t:conomic policies. With reprisal for the former Panamanian President's role in nearly a quarter trillion dollars in debt outstanding, and support of Argentina over the Malvinas Islands. Pana­ little means to pay in the midst of plummeting world ma's new president is Ricardo de la Espriella, a fo rmer trade, the more far-sign ted of Ibero-A merica's leadership employee of Rockefeller and Kissinger's Chase Manhat­ decided that defense measures had to be adopted. tan Bank. Royo, like others, was studying the proposals by President Royo resigned from his post for "health American economist and politician Lyndon H. La­ reasons" and left Panama altogether less than a week Rouche, ElK s founder, fo r the t:stablishment of an later for an extended "visit" to Spain. Royo's brief press Ibero-American Common Markt:t and the use of the statement claimed that he had developed a sudden "debt weapon." LaRoucht: had pointt:d out that i n the "throat ailment" which led his doctors to recommend he current fi nancial crisis, even a few Ibero-American coun­ keep silent if his health was to remain intact! tries, if agreeing to jointly renegotiate their debt, could Two days before, Royo's voice had been heard quite force governments and bankers alike to accept their clearly in a call for the American countries to unify in terms for renegotiation. LaRouche proposed that these defense of their economic integrity and sovereignty, countries move now to demand a new international whether or not the United States chose to join in. During monetary system which assures credit fo r technology the Malvinas War, Royo urged the United States to transfer and economic development as the conditions for uphold the Monroe Doctrine against Britain. renegotiating the debt. In a joint communique with Venezuelan President The potential fo r [bero-American countries to link Luis Herrera Campins released July 29, fo llowing two up with the fo rces of LaRouche within the United States days of discussions in Caracas, Royo and Herrera Cam­ around that program, sent the oligarchy of the "old pins endorsed plans to hold a meeting of continental continent"-Britain, Venice, the remnants of the Haps­ foreign ministers in Panama later this year. On the burg Empire-scrambling. Their strategy is simple: agenda was to be the development of a "strategy that will overthrow governments considering this action; assassi­ permit Latin America to overcome its problems of vul­ nate other leaders; and trigger border wars which set off nerability and ...strength en the Latin American organ­ one nation against another. izations that support that process of integral security," the communique read. "Eradication of colonialism" was Prelude to Royo's fa ll

emphasized. In Venezuela Royo noted that, in his opin­ • July 27: as President Royo arrived at the Caracas ion, the future foreign ministers' meeting should include airport for meetings with the Venezuelan President, a Cuba, but not the United States. Venezuelan National Guard member assigned to Royo's subsequent ouster was meant as an object Royo's security "shot himself. " Many at the time

40 International EIR August 17, 1982 thought that an assassination attempt against Royo was were before." Reports from Colombia indicate that occurring. The same day, the Washington Post ran an incoming President Belisario Betancur, to be inaugurat­ article "predicting" all of the major features of the coup ed Aug. 7, is under great pressure to fulfill outgoing against Royo, which took place four days later, and President Turbay's promise to make Colombia the saying that the head of the National Guard, Ruben policeman of the region. Belisario's personal security is Dario Paredes, favors an "open economy." lax, an AP wire announced internationally on Aug. 3, • July 28: Peru's President, Fernando Belaunde, was making him an easy target for terrorist attack. almost killed by a bomb which exploded close to the And for Argentina? Schroeders Bank sources com­ site where he had just delivered an address. A striking mented at the end of July, "It's only a matter of days or increase in terrorist activity in Peru is ascribed to the weeks" before the country "falls apart ... this could drug-linked Maoist group, "Sendero Luminoso." mean a radical change in policies or government." A • July 29: Caracas daily El Mundo published La­ top executive at Lazard Freres suggests Aug. 16 is the Rouche's call for Ibero-America's use of the debt weap­ date for a bankers' coup. on, next to the coverage of the Royo-Herrera Campins In Washington Royo's ouster is termed a blow for discussions. "stability" in the region. National Guard Commander • July 29: Colombian President Julio Cesar Turbay, Paredes, the power behind the coup, is "pro-American" who took Britain's side in the Malvinas War, held a while Royo was "flirting with Cuba." quick summit meeting with Venezuela's President to The overthrow of Royo was the third step in a year­ deliver a single message: Venezuela and Colombia must long project to remove the last vestiges of the Torrijos unite to combat communism and Cuban influence in machinery from power in Panama. For whatever rea­ the region as their only priority. Venezuelan govern­ sons, Torrijos, despite his unsavory side, had decided to ment officials understood the message: Venezuela's try to help end the continuous depopulation war in negotiations to reestablish relations with Cuba, its Central America. When Torrijos died in a mysterious decision to join the Non-Aligned Movement as a full plane accident on July 31, 1981, Aristedes Royo stepped member and organizing with countries like Panama fo r in, holding power with a more aggressive touch than inter-American unity are unacceptable to Turbay's U.S. anyone had expected. State Department controllers; Venezuelan participation But three months ago, Colonel Paredes took over as in the coming war in Central America must come first. head of the National Guard. When Royo began his The same day, the New York Journal of Commerce aggressive organizing against British plans, Paredes was ran an article, "Venezuelans Fear Devaluation," which told to make his final move. admitted that there is no technical reason for the bolivar But with the structure of command within the Guard to be devalued, but persistent "rumors" to that effect weakened in the series of power struggles, Parede� is are seriously harming the country's credit rating. not likely to last long, nor is a peaceful transition to • July 30: El Mundo ran another statement by civilian elections likely. Next in line in the power Lyndon LaRouche, this one calling for dumping the struggle is the head of Panamanian National Guard inflationary Eurodollar market on the British and Intelligence, Col. Manuel Noriega, the widely acknowl­ smashing the pound sterling. Again, the article was edged kingpin of drugs and prostitution in the Guard. placed next to the paper's coverage ofthe Royo-Herrera Colonel Noriega "has as close contacts with CIA direc­ Campins communique calling for continental unity. tor William Casey as with Fidel Castro," as Jeremiah • July 31: Reports reached New York from Vene­ O'Leary put it in a recent Washington Times analysis, zuela that during a recent visit to Washington, the placing Noreiga as an asset of the networks of Anglo­ Secretary of Foreign Relations of the ruling Christian American intelligence who have long-established coop­ Democratic Party, Juan Jose Monsant, had been raked eration with the worst elements in Soviet intelligence. over the coals by the chiefs of American diplomacy, The strategic significance of Noriega's rise is the including Assistant Secretary for Latin America Thom­ following. During the Malvinas battles in the Sputh as Enders, George Landau, a Kissinger crony appointed Atlantic, British policymakers began putting out the ambassador to Venezuela, and Viron Vaky, a private word that the strategic significance of the Malvinas citizen. Vaky's ties to Henry Kissinger date from his old Islands lay in their position guarding the trade routes State Department days. He headed the Aspen Institute's through the Magellan Straits, the only trade route that committee on "Governance of the Western Hemi­ could replace the Panama Canal should that canal be sphere" whose recent report outlined how border con­ taken over in a process of internal chaos in Panama. flicts can destroy Ibero-American unity. Colonel Noriega is just the kind of operative who After Royo's ouster, Vaky privately stated that while could carry out such a destabilization of the Canal. the Venezuelans have been the "most hysterical" after Ironically, with the ouster of Royo with American aid, the Malvinas war, "they will now go back to where they Noriega is now all the better situated for such a task.

EIR August 17, 1982 International 41 Gandhi's visit poses development option to the Reagan administration by Paul Zykofsky from Washington, D.C.

When Indian Prime Minister Indira Gandhi arrived at Gandhi was critical of U.S. cutbacks in financial assist­ the White House on July 29, she described her first visit ance to developing countries-cutbacks which also slow . to the United States in more than a decade as "an down export-based economic recovery in the developed adventure in search of understanding and friendship." sector. In this context she rejected U.S. proposals that Several days-and countless speeches and meetings­ developing countries like India should rely more on later, Gandhi told reporters that she felt her eight-day dwindling credits from the commercial markets, since visit had been largely successful. high interest rates have made such loans extremely costly. That success was the result of Gandhi's statesmanlike attitude and her ability to convey India's views and Contrast to 1971 concerns to the administration and to the public at large. Yet the talks between Gandhi and Reagan were held It was also based on President Reagan's willingness to in a friendly atmosphere. This was a sharp contrast to listen. Summing up her 90-minute meeting with the her last visit to the United States in 1971 when Gandhi President, Gandhi noted, "It was a good meeting. Presi­ clashed with the Kissinger crowd-which was then fully dent Reagan is easy to talk to. He is a good talker, but he committed to a "Pakistan tilt"-over Washington's is also a good listener, and I was able to put across India's refusal to condemn the Pakistan military'S genocide point of view." against the population of East Pakistan. The Indian Prime Minister added that she and Mr. But today the administration appears to have be­ Reagan had "agreed to disagree" on a number of issues. come more aware of the importance of India as a "We don't expect President Reagan to change his poli­ regional power-as well as the instability of "tradition­ cies, but we do want him to try and understand why we al" Asian allies Pakistan and China-and went out of follow the policies that we do; what are the compulsions its way to give Gandhi a warm reception. In particular of and circumstances behind what we are trying to do. the two heads of state appeared to have established a And I think I did get this point across to the President." rapport, which, observers note, could be an internation­ Mrs. Gandhi did not conceal India's concern over al factor in the future given Gandhi's similar close certain aspects of U.S. policy. On the situation in the relationship to the Brezhnev leadership in Moscow. Middle East, she noted in a television interview that if Gandhi, who is scheduled to visit the Soviet Union in the administration had taken a "strong attitude earlier," September, is known to be concerned with the need to the situation in Lebanon "may not have deteriorated to improve U.S.-Soviet relations. this extent." Gandhi also implied that the United States An element which contributed to the fr iendly tone would be well advised to deal directly with the PLO, of discussions was working out a solution for the one whose leader Yasser Arafat had "struck me as the most major outstanding bilateral dispute between the two moderate Arab" on the question ofrecognition of Israel countries-the cutoff of enriched nuclear-fuel supplies during his recent visit to New Delhi. for the U.S.-built Tarapur atomic power station. De­ Regarding sales of sophisticated military equip­ spite a 1963 agreement which committed the United ment-including FI6 fighter-bombers-to Pakistan, States to supply fuel for the entire 30-year life of the Gandhi noted that President Zia had given assurances to plant, the fuel supplies have been blocked by the 1978 the Soviet Union that it would not use these weapons Nuclear Non-Proliferation Act. Under an "agreement against its troops in Afghanistan. In that case she fe ared in principle" announced after the White House talks, that the arms would be used against India, as had oc­ the enriched uranium fuel will be supplied by France to curred in the past three wars with Pakistan. She pointed bypass the Non-Proliferation Act. The 1963 agreement out that the arms sales were fo rcing India to spend more will remain in force, including provisions for interna­ on arms, diverting funds fr om development needs. tional inspection of the facilities and future use of the Addressing the administration's economic policies, spent fuel. India's desire to reprocess that fuel to supply

42 International EIR August 17, 1982 plutonium for its fast breeder program will be addressed ship with the developing countries for economic growth, at a later date. as an alternative to its current pursuit of the policies of economic collapse and confrontation set by its Anglo­ Clearing up misconceptions American advisers. Prime Minister Gandhi also spent a good deal of We excerpt below Mrs. Gandhi's statements on time clearing up "misconceptions" about India and its leading issues during the course of her visit. policies. In countless meetings with journalists, inter­ views with the press and television, and discussions with scientists, businessmen and political analysts-not to Gandhi greetsMr. Reagan mention the official talks in Washington-Gandhi re­ peatedly explained the motivations for India's domestic At the Wh ite House arrival ceremony, July 29: and foreign policies. Mr. President and Mrs. Reagan, to me every journey Responding to charges that India is "pro-Soviet," is an adventure. And I can say that this one is an Gandhi stated: "We do not lean to one side or another, adventure in search of understanding and friendship. neither to the so-called East nor West. We judge issues It is difficult to imagine two nations more different from the Indian point of view and in terms of human­ than ours . As history goes, your country is a young one. kind's right to a peaceful and fuller life." Over the years, it has held unparalleled attraction for the Addressing the Soviet intervention in Afghanistan, adventurous and daring, for the talented as well as for Gandhi reiterated India's opposition to the Soviet troop the persecuted. It has stood for opportunity and freedom. presence there, but also said that India stood for "total The endeavors of the early pioneers, the struggle for non-interference," referring to the outside backing for human values, the coming together of different races, Afghan rebels operating from Iran and Pakistan. She have enabled it to retain its elan and dynamism of youth. noted that India had refrained from sheer condemnation With leadership and high ideals, it has grown into a great ofthe Soviet Union-for which she has been criticized­ power. Today, its role in world affairs is unmatched. since this only pushed the U.S.S.R. to "dig further" and Every word and action of the President is watched and to create a more dangerous East-West confrontation. weighed and has global repercussions. Instead, India has pressed for a negotiated settlement India is an ancient country. And history weighs heav­ through which the Soviets would withdraw, rebel activ­ ily on us. The character of its people is formed by the ity would stop, and Afghanistan would return to non­ palimpsest of its varied experiences. The circumstances alignment. of its present development are shadowed by its years of Gandhi also outlined India's efforts at "industrial­ colonialism and exploitation. Yet, our ancient philoso­ izing, modernizing and transforming an ancient society phy has withstood all onslaughts, absorbing newcomers, of immense size, population and diversity," based on adapting ideas and cultures. We have developed endur­ planned economic development, since independence ance and resilience. fr om the British in 1947. It was through this process In India, our preoccupation is with building and that India had attains self-sufficiency in fo odgrain pro­ development. Our problem is not to influence others, but duction and a fivefold increase in industrial production, to consolidate our political and economic independence. she reported. We believe in freedom with a passion that only those who In a speech to scientists Gandhi presented an India have been denied it can understand. We believe in equal­ "preoccupied with building and development," based ity, because many in our country were so long deprived on advanced science and technology. Gandhi stressed of it. We believe in the worth of the human being, for India's desire for cooperation through transfer of tech­ that is the foundation of our democracy and work for nology, while noting the need for developing countries development. That is the framework of our national to build up their own scientific expertise. She reminded programs. her audience that India has created the world's third We have no global interests. But we are deeply inter­ largest pool of scientists and engineers. After the official ested in the world and its affairs. Yet, we cannot get talks both sides announced the agreement to form a involved in power groupings. That would be neither to special joint commission of Indian and American scien­ our advantage, nor would it foster world peace. tists to determine new areas of scientific cooperation, Our hand of friendship is held out to all. One friend­ including agriculture, bio-engineering, immunology ship does not come in the way of another. This is not a and materials sciences. new stance; that has been my policy since I became Prime In her arrival speech at the White House, Mrs. Minister in 1966. Gandhi summed up what a United States true to its No two countries can have the same angle of vision, historic purposes as a nation means to others. From the but each can try to appreciate the points of view of the vantage-point of this speech, her visit can be seen as others. Our effort should be to find a common area, having posed to the Reagan administration a partner- howsoever small, on which to build and to enhance

EIR August 17, 1982 International 43 cooperation. I take this opport u nity to say how much we - in India value the help we have received from the United States in our stupendous tasks.

On Indo-U.S. cooperation To the Foreign Policy Association in Ne»' York City, Aug. 2: There have been many ups and down in the curve of Indo-U .S. relations. Two large, vibrant and plural soci­ eties cannot possibly agree on all matters and especially on details, but if we concentrate on a shared perception of global welfare and respect fo r the same human values, we have a base on which to build understanding and cooperation. I believe such an affinity exists betwee n our two countries. and that in the coming decades we can cooperate creatively in the great task of harnessing the resou rces of our planet more rationally and fr uitfully for the benefitof all humankind . ... We want fo reign investment. We want it to bring such technology as we can absorb and adapt to our conditions. which will augment our exports. improve our balance of payments. and strengthen our self-reliance. Of the 6.232 industrial collaboration agreements signed between 1957- 1 980, about 20 percent were with U.S. firms. Mrs. Gandhi with President Reagan at the Wh ite House. Foreign investment in India can earn its normal rate of return and be assured of security. We have borrowed out vast possibilities. Homegrown expertise has helped from private fi nancial institutions but there are limits, our oil exploration. Had we been wholly dependent on because of heavy debt servicing charges .... foreign experts, we would not be producing 16 million tons of petroleum a year.... For India, science is essential fo r development and no On science and technology less for the intellectual self-reliance and creativity of our To the American Association fo r the Advancement of people . Science on July 30: Scientificendeavour, as success in any other walk of On economic devel p t life, instills confidence in a society and leads it to a higher o men sense of achievement and fu lfillment. Apart from the To the Foreign Policy Association, Aug. 2: raising of traditional skills and techniques. using avail­ In no way is it (our planning) totalitarian or coercive. able materials in agriculture and rural crafts. our efforts We try to take the largest possible number with us at in science cover a wide spectrum, encompassing work in every stage. Industrializing, modernizing and transform­ some frontier areas of atomic energy. space science, ing an ancient society of immense size, population and oceanography, electronics, and fundamental research in diversity is a daunting venture and, inevitably, a gradual mathematics, particle physi cs . molecular biology and so one. In a democracy particularly, but even in other on . systems, the pace of transformation cannot be faster than Why should India, w h i c h is still wrestling with the its acceptance by the public .... m ore obvious basic n eed s . concern itself with such ad­ India is now basically self-sufficient in grains. In 1979 vanced areas'! Scientists are aware that new knowledge is we could withstand one of our worst-ever droughts, often the best way of dealing with old problems. We see though it seriously affected our economy in the succeed­ our space effort as relevant fo r national integration . ing year. Our grain production has now reached the education, communications. and the fuller understand­ record level of 134 million tons. This green revolution ing of the vagaries of the monsoon which rules our was made possible by the gradual spread of new technol­ economic life. Mapping fro m the sky also gives infor­ ogy, of better and new varieties of seeds, of the use of mation about natural resources. Oceanography aug­ fe rtilizers and pesticides, ofland reforms, ofprice policies ments food and mineral supplies. Modern genetics opens and credit to fa rmers, and above all the skill, hard work,

44 International EIR August 17, 1982 and adaptability of the ordinary Indian farmer and the these dialogues. We do want relationships of trust and increasing involvement of the people at the grass-roots amity. A no-war pact was firstof fered to Pakistan by my level in the process of development. ... father and repeated in different forms subsequently. But No less substantial is the growth and diversification Pakistan seemed to be allergic to the words. However, in our industry, bringing us to the firstdozen countries the substance of a no-war declaration was incorporated in volume of industrial production. In 30 years since in the 1972 Simla Agreement between [Prime Minister] 1950-5 1, the index Of industrial output increased more Bhutto and myself. Pakistan has now come forward with than fivetimes. a proposal for a no-war pact. We are ready to take it up once more. In fact I have publicly affirmed that, pact or no pact, India will not attack Pakistan. I have proposed On North-Southcoop eration a treaty of peace, friendship and cooperation which To the Foreign Policy Association, Aug. 2: would include non-aggression commitments, and affirm India and most developing countries need fo reign aid strict adherence to nonalignment by both countries and and loans to get new technology and to make structural a resolve to settle all diffe rences by bilateral negotiations. changes in the economy. Shortages of foreign exchange I have also suggested ajoint commission as a mechanism and deficit in balance of payment are closely connected for continuous consideration of bilateral cooperation. with development problems. They cannot be solved by cutting down expenditure or changing exchange rates. From NBC's "Meet the Press," Aug. 1: To reduce imports, we must increase our domestic pro­ We don't want the U.S.A. to break off its friendship duction. To augment exports, we must produce more with Pakistan. I don't think that would solve any prob­ exportable goods and these need markets in industrial­ lem. But we do feel that being friends with Pakistan ized countries. All this calls fo r investment, higher pro­ should not preclude being friends with India. ductivity and more flexibility. We need external assist­ ance to support developmental programs .... From interview with the New York Times, Aug. 1: We are doing everything possible to have ... a reconciliation [with Pakistan-ed.]. But my only-I On the Middle East don't know if "suspicion" is the right word-is that Pakistan is a bit wary of all this. Not because they don't From a discussion at the National Press Club, June 30: want friendship, but because they are worried about We have been agonized by the Lebanon tragedy, Indian influence. Not influence which the Government especially by the bombing of civilian areas, and we've of India will exert, but there is no doubt that greater expressed ourselves very strongly on this. We have talked friendship with India will encourage the forces of democ­ to the u.s., Soviet Union and France, who are in the best racy. This is our problem not only with Pakistan, but position to do something about it directly .... with all our neighbors.

From NBC- TV "Meet the Press," Aug. 1: When Mr. Arafat came to India not too long ago, he Gandhi on Afghanistan struck me as the most moderate Arab I have met on this From speech at Foreign Policy Association, Aug. 2: issue [of recognition of Israel-Ed.]. And he very clearly Much emotion has been aroused in the U.S. and stated that he thought that some kind of agreement could other countries on Afghanistan. We are no less con­ be reached by which the Israelis, the Arabs and the cerned. For it is a neighbor with whom we have a historic Christians in that area could live together in peace. He friendship. Our position has been made clear publicly said this was the situation before Israel came into being and privately, through diplomatic channels and at the and he would very much like some such arrangement. personal level, that foreign troops in Afghanistan should India, long ago when this matter came up at the U.N., be withdrawn. At the same time we are aware of other had proposed a federal kind of set-up. interferences there. This also must be taken into account.

On Pakistan-India relations From ABC- TV "Nightline, " Aug 3: The question is do we want this to increase the To the Foreign Policy Association, Aug. 2: confrontation between East and West, or create a new In spite of the conflicts and hostilities which we have kind of confrontation in the region. I think that would be faced in our own neighborhood, we have kept wide open disastrous for the world. Therefore we have been trying lines of communications and the road of reconciliation. everything possible to have some kind of negotiated In my last term of office I took the initiative to improve settlement and we are told by the Afghans that if the help relations with China and Pakistan, and we are continuing to the rebels will stop they will ask the Soviets to g,o back.

EIR August 17, 1982 International 45 The Frankfurt mafia: Part II Vo lker Hassman, European Labor Party candidate in Hesse, pursues the Wes t German side of the organized-crime banking empire.

Th is article first appeared in Neue Solidaritat on May 6. Wh o of the British-Israeli Mossad networks. 1982. Part I investigated the dirty-money operations of Dr. • Then there was the intermeshing of the BCI with Tibor Rosenbaum. whose Swiss-based Banque de Credit the Permindex organization in Switzerland, the assassi­ Internationale (BCI) fu nctioned as the "central bank" fo r nation bureau directed by British intelligence veteran the international drug trade until its col/apse in 1974. In Louis Mortimer Bloomfield. Permindex was behind the this installment. Hassmann' begins to unravel the dope murder of John F. Kennedy and the assassination at­ lobby's operations in the West German state of Hesse. tempts against French President Charles de Gaulle. After fo llowing the trail which leads to the fa ctional opponents of the war Bloomfield had become a Canadian citizen, and Chancellor Helmut Schmidt in all three of West Germany's ran the local affiliate of Credit Suisse, a Swiss banking major parties. operation deeply involved in these same financial net­ works. Who were the late Tibor Rosenbaum's cohorts in the The remnants of Dr. Rosenbaum's financial empire, BCI? which was liquidated in 1975, still exist today, albeit • On the board of the BCI sat Ernest Israel Japhet, listed under different addresses. president of the Bank Leumi, Israel's largest bank. His family's trading company, Japhet Company, is involved Siamese twins in the diamond trade between Israel and Hong Kong. Acco rding to the team of Israeli authors Eisenberg, Precious stones are exchanged for opium in the same Dan, and Landau in their biography of Meyer Lansky, "Golden Triangle" where the Japhet family began its Th e Mogul of the Mob. there was more to Rosenbaum's career with Dope, Incorporated 150 years ago. dirty business: a special friendship bound him with • One of the trustees of the Bank Leumi is Baron Bernie Cornfeld. It is virtually impossible to establish Stormont Bancroft, deputy chairman of Cunard Ship­ just where the BCI left off and Cornfeld's swindle ping Lines, which is suspected of transporting heroin operation Investors Overseas Services (lOS) began. along its Asian and Middle Eastern routes. Already in 1960 and 1961 the two would meet for • The BCI maintains close ties with the Bank Ha­ planning sessions in Monrovia, the capital of African poalim, the second-largest Israeli bank. According to Liberia, to draw up their joint strategy. In the Federal French author Jacques Derogy's investigations into the Republic of Germany the lOS scandal is remembered Israeli mafia, this bank also plays a role in the diamond only too well, since it cost quite a few political necks. and drug trade. Illegal proceeds from the Israeli-Thai On the surface the lOS was an international invest­ exchange of diamonds for opium were first channeled ment fund, run first by Cornfeld and later by Robert into a trustee account in London and then into bank Vesco. But upon closer examination it turns out to be accounts in Johannesburg. From there they were redi­ nothing but a giant pool fo r the laundering of dirty rected by Bank Hapoalim to accounts with the BCI. money. Cornfeld's "representatives" would travel the • Rosenbaum effectively took over yet another bank, world over, often carrying with them large sums of the Swiss-Israeli Trade Bank, also headquartered in Ge­ cash. The official version has it that this was the neva. This bank controls the shipping lines of the Paz investment deposits of countless anonymous depositors. business group, which in turn has a monopoly over In reality it was money fleeing countries where strict Israel's oil and petrochemicals industry. In 1978 the New regulations governed foreign-currency exchanges. York police seized a ship belonging to the Paz group Many of these alleged "small investors" were actually which was about to unload a cargo of liquid hashish . the local point-men for Lansky's Israeli mafianetwo rks. Another partner in this group is Max Fisher, one of the Rosenbaum and Cornfeld reached a special agree­ big-shots in American organized crime. The list of direc­ ment at their meetings in Monrovia. lOS customers tors of the Swiss-Israeli Trade Bank reads like a Wh o's could either buy lOS certificates directly or open an

46 International EIR August 17, 1982 account with the BCI. Der Sp iegel magazine reported at the time that the BCI itself gave credit to investors who then used it to buy lOS paper. The pair of Siamese twins complemented one another magnificently. When the BCI got into trouble in 1967, Cornfeld came to its rescue with a respectable sum. Rosenbaum reciprocated, paying Cornfeld's bond when the financial swindler was arrested afterthe breakup of lOS in Switzerland. The Swiss have a reputation as extremely well­ scrubbed and fastidious. But one can scarcely avoid the impression that the Swiss authorities must have aban­ doned this national virtue of cleanliness when investi­ gating the case of lOS, since its true character as a revolving door fo r the transfer and "recycling" of hot money fr om the worldwide drug trade never came to light. There was also another side to the lOS: Cornfeld as "the people's capitalist." Countless ordinary individu­ als, dreaming of making a killing, threw their savings into this murky money-canal, and all of them had lost even before they received their first certificate. Only after the great crash did they realize that they were floundering in a net spun by Cornfeld, Vesco, and Rosenbaum, the money-launderers of organized crime. But what about the German reputation for fastidi­ Meyer Lansky ousness? When the Hessische Landesbank (Helaba) joined up with the BCI in 1972, Helaba chief Wilhelm Bank in Munich, assisted by Hubertus Baron Digeon Hankel claims to have known no "concretely incrimi­ von Monteton, who had left the central offices of nating facts" about it. But he knew very well with Deutsche Bank to take this job. whom he was dealing, having personally conferred with Mende made himself into a sales king, and one Rosenbaum in Bonn. He knew that Rosenbaum and might surmise that he found his political relations with Cornfeld were zeroing in on the Federal Republic representatives of all party colorings very useful. He during the second half of the '60s. The danger of alone built up 200 lOS agencies and gave more than competition fo r the German Grossbanken [the big three 100 speeches per year during the course of his activity commercial banks-ed.] from the earliest activities of as evangelist for Rosenbaum's partner. Many promi­ Cornfeld's and Rosenbaum's "representatives" in the nent people were among his customers, including the investment business was by that time a widl;!spread wife of a well-known politician from Bavaria, who these subject of discussion. The German banks were seeking days is considered the fi nance minister in a Christian the protection of Bonn legislators from the aggressive Democratic Union/Christian Social Union shadow cab­ lOS apparatus, since the hard-selling methods of the inet.and who would certainly be expected to have more gate-crashers were resulting in steep success curves fo r experience in finance policy than his acknowledged the new market operation. credentials would indicate [a reference to CSU chairman During 1966-69, lOS's turnover in the Federal Re­ Franz-Josef Strauss-ed.]. public amounted to half of the total volume of business Back to Wilhelm Hankel, the economics professor of the swindle empire. This was not least to the credit of and spiritus rector of all the banking reforms of the Dr. Erich Mende, Vice-Chancellor under Chancellor social-liberal coalition [the Social Democratic-Free Erhard and a prominent Free Democratic Party (FOP) Democratic coalition which has governed in West Ger­ politician. A party colleague and fo rmer director of the many since 1969-ed.] The German banks, helpless in Gerlin Company, Dr. Pohl, had enlisted him fo r Corn­ the face of Cornfeld's success, were demanding an "lOS feld. law." It was Hankel who, after his appointment in 1968 It seemed that the FOP was particularly well suited as Ministerial Director of the Money and Credit De­ for business practices such as these; Mende's party partment in Karl Schiller's Economics Ministry, took colleagues, fo rmer minister Viktor Emanuel Preusker the teeth out of the law against foreign investment (from the Bankhaus Preusker & Thelen in Bonn), was companies. In the phrasing of his legislation one could likewise involved. He himself fo unded the lOS's Orb is even read that the Federal government "welcomes the

EIR August 17, 1982 International 47 activity of fo reign investment companies in the Federal party arrangement came about through which Hankel, Republic." right out of the Economics Ministry, was deemed Rosenbaum's and Cornfeld's success relied to a suitable for the Helaba post-although his senior, Eco­ considerable extent on a wide scope for action in the nomics Minister Karl Schiller, had fallen into disfavor Federal Republic. And who in the Federal Republic with his own Social Democratic Party (SPD). would be considered dishonest if involved with such Th e Economist of London on Feb. 26, 1977 found successful businessmen? Contributions of large sums Helaba's involvement with "the tiny BCI" a "highly and other fa vors, about which nothing was ever dragged peculiar investment." The magazine suggested that before the public, facilitated these deals greatly. Had perhaps the close ties between Chancellor Willy the German public known at the time just who this Dr. Brandt's SPD and the Israeli Labor Government were Rosenbaum really was, just whom Hankel had met with the decisive factor in establishing links to such an in Bonn, it would hardly have been possible for Hankel, ambitious Israeli financier. right after that meeting, as the newly-named head of the Hessische Landesbank, to join up with the BCI The Tzur connection without any resistance and later to say, with a shrug of The Frankfurter Allgemeine Zeitung reported at one the shoulders, that there was no way one could have point about the diverse fu nctions carried out by Rosen­ known what "mysterious darkness" one was getting baum's bank. A group of lawyers in Geneva had mixed up in. presented evidence in 1974 showing that the BCI was a Rosenbaum found Helaba's participation very use­ haven for German tax evasion. Hankel knew this, and ful. His business deals since the beginning of the '60s he knew more. Michael Tzur, an old friend of Rosen­ had not been going too well, as he was having no end of baum, showed him how Germans could attain tax-free trouble with some extravagant real-estate failures in status through the BCI, taking advantage of German Liechtenstein. A good thing then that he knew Wilhelm laws intended to promote investments in developing Hankel, who in the meantime had been named a board countries . Officially the BCI had been founded to member at the Neu Mainzerstrasse in Frankfurt Square. finance trade with Africa and with other developing Hankel was interested in giving Helaba, which was too countries. Yet this was, as we have already documented, provincial in his eyes, an international reputation. His just one side of Rosenbaum's double bookkeeping. motto, "Big is Good," flashed in advertisements in all Who was Hankel's advisor in this matter? Tzur was the German newspapers. Hankel began to put this a high official in the Israeli Foreign Trade Ministry and slogan into action. He had the main floor of the bank the chairman of the foreign exchange commission, an renovated for 300,000 marks, and cynics said that this important institution in a country with strict exchange was the cheapest decision he ever made for Helaba. and capital controls. He played an important role in the Fast expansion-that was the way the bank's bal­ work of the Israel Corporation, a company that admin­ ances would be increased. Big deals. International busi­ istered millions of dollars in contributions from around ness. But it was never explained why this should exclu­ the world fo r the economic development of Israel. The sively involve Luxembourg, the Far East and the. Baha­ Israel Corporation had invested a portion of these mas, and-with BCI participation-Switzerland, where contributions in Rosenbaum's bank, and an enormous Helaba was already represented by the Banque Worms, scandal broke out in Israel when it became known that considering that Geneva was not a preferred location for Rosenbaum had used the funds for his risky real-estate raising foreign funds. Yet Hankel persisted with deals. his "offshore" markets and the BCI. It did not seem to Tzur himself had cashed a total of $1.4 million in bother him in the least that his counterpart Rosenbaum bribery money while transfering company funds to the was considered a mafioso by certain Swiss bankers and BCI. That cost him a prison sentence of 15 years . But had gotten acquainted with prison facilities from the what never came to trial was the fact that Tzur was one inside. of the bigwigs in the diamond trade. According to Hankel acquired 36.4 percent of the shares of BCI, Jacques Oerogy's book Th e Israeli Connection. the but was granted 50 percent of the voting rights. Behind diamond trade has an important function in "launder­ the BCl, which was increasingly falling into disrepute, ing" dirty money. Nevertheless Rosenbaum's primary now stood the Hessische Landesbank, backed up by the task was to function as the meeting ground between the state of Hesse. And who would think twice about the diamond trade and the drug trade, which were acquiring BCI when Helaba's chairman of the board and Hesse's a bigger and bigger share in Israeli foreign trade. governor Albert Osswald sat on its board of directors? The channels of influence that Rosenbaum had built up The next installment takes up the political conse­ since the '60s in Germany stood him in good stead. quences of the BCI affa ir in toppling the government of To this day it has not been explained how the multi- the state of Hesse.

48 International EIR August 17, 1982 Africa Report by Douglas DeGroot and Mary Lalevee

The IMF's warning to Kenya scheme for brainwashing officials Th e coup atte;"pt this month may not have been intended to from Third World countries into thinking that population growth is succeed, but population-control demands certainly are. the root cause of poverty. A leader of the program, Malcolm Donald, was quoted as commenting, "Ken­ ya has the highest birth rate in Afri­ he Kenyan capital of Nairobi OAU summit in early August be­ ca, and President Moi says he wants Twas the scene of an attempted coup cause the Polisario-M orocco issue Kenya to start a population pro­ on Aug. I. Air Force troops took has splitthe OAU. gram. But there is tremendous re­ over the main radio station and The destabilization of Kenya sistance, and the efforts they are broadcast appeals to the public to hits the country long considered to making are only lukewarm. Moi support their efforts to oust Presi­ be the most stable in the Horn of may not mean what he says. We dent Arap Moi. Hordes of looters Africa, and makes more ominous have made two trips to Kenya, a raided the stores in central Nairobi, reports received earlier this year by third is slated, and we are still not and several hundred soldiers and EIR from British surces that the out of the batter's box." civilians were reportedly killed in entire Horn of Africa would be­ The IMF and the World Bank rioting and in the crushing of the come a chaotic nightmare. Tremors have increased the pressure, with coup attempt by army personnel have been reported from the south the World Bank officially telling loyal to President Moi. of Sudan. New fighting is reported the Kenyan authorities that no The coup attempt was organ­ in Somalia, and President Obote's more loans would be forthcoming ized in a way that would lead to attempts to stabilize Uganda are unless a population control council ethnic conflict in the future, conflict being hindered by Qaddafi-aided was set up. that could wreck the nation-state. rebels. The coup itself seemed virtually The coup attempt was led by young Kenya has traditionally been designed to fail, with no serious members of the Air Force, who one of the few stable, prosperous attempt by the Air Force troops were reportedly predominantly countries in Africa, with its exports involved to attack other major in­ members of the Luo tribe, while the of tea and coffee bringing in high stallations than the radio station, or political direction of the country is earnings, and tourism adding need­ to capture government ministers. predominantly in the hands of the ed foreign exchange. However, in This could be the last warning to Kikuyu tribe. At this point the en­ the last fiveyears , the world market Moi to knuckle under to IMF de­ tire Air Force has been arrested. prices for tea and coffee, like those mands ...or else. While press reports claim that for other commodities, have fallen The Financial Times, the voice these "ethnic rivalries" were behind drastically . Tourist revenue is being of the City of London, warned the recent events, in fact the real carefully managed by outside fi­ Kenya that the West's readiness to reasons for the coup attempt lie nancial circles, according to Ken­ help out financially depended on elsewhere. yan diplomatic circles, with the re­ "internal reforms," especially an The entire continent of Africa is sult that Kenya never sees a cent of end to the policy of subsidizing being targeted fo r destabilization, its money. food prices to allow the urban pop­ in order to carry out the genocidal Kenya has a thriving popula­ ulation cheap food. This is one of policy of decoupling Africa from tion growth of 4 percent per an­ the standard IMF demands to every the world economy, and preventing num, with existing population Third World country-a step which the development of nation-states on merely 15 mi11ion or so. But this has invariably led to unrest where it the continent. The Organization of growth rate is being attacked by the has been fo rced through. African Unity is divided and unable Club of Rome and Global 2000 In future issues EIR will report to deal with the fundamental crises. circles as "catastrophic." on what is happening in other Afri­ There will probably not be a quo­ In June 1981, EIR published a can countries lacking the "privi­ rum of African heads of state at the report on the RAPID program, a leged" position Kenya has \lad.

EIR August 17, 1982 International 49 MiddleEastReport by Thierry Lalevee

Egypt's star rises non and a massacre of the Palestin­ But thefr uits of diplomacy will be bitter. ifthe Un ited States ians would have but obvious conse­ cannot stop the bloody Israelis. quences: the immediate destabiliza­ tion of all of America's friends in the region, beginning with the Gulf countries . An Israeli victory would be de facto a victory of the forces of stracized by the Arab world as Egypt has served as a mediator for radicalism, be it under a Palestinian Oan accomplice of Israel since it the PLO with Washington, stress­ or Islamic fundamentalist cover; a agreed to the Camp David treaty in ing that the only solution to the victory for Ayatollah Khomeini. 1977, Egypt is now looking to be­ Lebanese crisis is for the United To stop that, there were few come once again the political center States to break with the Kissinger­ steps Egypt could take to contain ofthe Arab world. Indicative of this drafted 1975 agreement with Israel, an upcoming wave of terrorism. As was a commentary by Israeli ana­ which specifies that Washington Hassan Ali declared to Le M onde of lyst Mordechai Abir on Radio Je­ will neither talk to or ever recognize Paris on Aug. 3, "If Beirut is taken rusalem, Aug. 5. Abir emphasized the PLO. over by the Israelis, I do not know that "[a] farfetched [idea] only two Using the fact that it has rela­ how we could continue to maintain years ago, it is now not unthink­ tions with Israel to act as a unique normal diplomatic relations with able that Egypt will soon regain its mediator with Washington in the Israel." Internally, President Mu­ natural leadership of the Arab crisis, Egypt has maneuvered in barak is taking the necessary steps world." turn to rebuild its bridges to the to defuse radicalism. He de facto Since the April·25 Israeli return Arab world. supported all the efforts of the left of the Sinai, Egyptian President Over the weeks, Washington opposition to support the PLO, Hosni Mubarak has met with Saudi has been very slow to move, but sending money and supplies to Bei­ King Fahd and other Arab leaders there was no doubt that the Egyp­ rut, and is about to announce an in an effort to re-establish diplo­ tian voice has had more weight in amnesty for most political pris­ matic relations. American ears than any other. oners . But everyone krrows nothing But the failure of the United When President Mubarak attended more can really be done, as, in the States to restrain Israel in its bloody the funeral of King Khaled in Mec­ words of a diplomatic source, drive to invade west Beirut, may ca, he was more than warmly wel­ "Once we break relations with Is­ cause Washington to lose Egypt, its comed by his old friend King Fahd. rael, everything will change in the most trusted Arab ally . Since the Some weeks later, the Iraqi leader­ region." There is growing dissatis­ invasion began, Mubarak has de­ ship, itself in search of allies, invited faction expressed in the daily Egyp­ livered numerous messages to Rea­ Mubarak to attend the September tian papers, where it is openly re­ gan that the U.S. position in the non-aligned summit in Baghdad. gretted that peace was made with a Arab world would be destroyed as a Although some cynics may con­ country which does not want result of Israel's aggression. A sider that after all, the Lebanese peace." But it is similarly under­ member of Egyptian Foreign Min­ crisis was "good business" for Cai­ stood that breaking relations with ister Hassan Ali's July 29-Aug. 1 ro, no one in Egypt dares to think Israel will be a step of little value delegation to Washington revealed so, for obvious reasons. Egypt compared to the destruction of Bei­ that Egypt will look toward EUlOpe knows that its fate is closely inter­ rut. This is what Egypt has been for a new partnership if the United twined with the rest of the region. trying to have the Americans un­ States does not finally succeed in This was the substance of themost derstand, and the immediate future stopping Israel. recent message sent by President will tell if they succeed. As for the Immediately after the June 6 Is­ Mubarak io President Reagan dur­ Americans, the present lack of raeli invasion of Lebanon, Mubar­ ing the Hassan Ali visit. The mes­ courage to act means not merely the ak announced an indefinite post­ sage detailed precisely that the lack collapse of the ill-fated Camp Dav­ ponement of the Palestinian auton­ of American pressure on Israel, en­ id treaty, but the collapse of a re­ omy talks with Israel. Since then suring an Israeli diktat over Leba- gion.

50 International EIR August 17, 1982 DatelineMexico by Josefina Menendez

New low point in U eSe-Mexico relations and outraged at the ABC program," Francisco Galindo An ABC- TV program raises wide suspicions among Mexicans Ochoa, President Lopez Portillo's as to what the United States is up to. press spokesman, told a group of U.S. officialsat a highly tense meet­ ing July 28. Attendees included Charles Wick, head of the State would have never expected that a him a "high government official Department's International Com­ Isingle television documentary pro­ who would have been happy in munications Agency (USICA). gram could become the central is­ Nazi Germany." ABC charged that According to press accounts sue in U.S.-Mexico relations. But the official, Nassar Haro, is a sym­ here, while Wick talked about the that is precisely what a July 25 bol of Mexican corruption and in­ "excellent" relations between the ABC-TV documentary has pro­ diffe rence to justice. United States and Mexico, Galindo voked. A preliminary look at ABC's abruptly interrupted to remind him As I reported to you last week, corporate composition indicates of "the hostile attitude toward ABC's "Mexico: Times of Crisis" that Ebergenyi may be on target. Mexico coming from U.S. dailies, program told Americans that The network is run from the top by magazines, which this program has bloody Iranian-style revolution is the old Joseph Kennedy- Meyer increased. " about to sweep Mexico . "Mexico is Lansky organized-crime machine. According to Excelsior column­ not immune to the upheavals of Represented on the board of di­ ist Joaquin Lopez Doriga, the am­ Central America," ABC gloated. rectors of ABC are banks such as bassador, John Gavin, who dis­ Mexicans' outrage has been Schroeder, which took such a gracefully appeared on the ABC phenomenal. As columnist Manuel prominent role in bringing Adolf program to endorse claims that the Buendia asserted in Excelsior July Hitler to power; as well as Lazard Central American turmoil could 29, the program attempted to con­ Freres and Morgan, known for soon undo Mexico , has explained vince Americans that "a U.8'. their financial warfare against to government officials that his [armed] intervention should occur Mexico since the 1920s. statements were taken out of con­ soon under the pretext that our Intersecting the ABC propa­ text and has expressed quite economy is falling apart." ganda is specialized propaganda "strong" words about the ABC In a column July 30 in the daily being circulated among U.S. busi­ producers. EI Sol. Chao Ebergenyi, a column­ nessmen . One of the fo ulest "Irani­ In a letter to Galindo Ochoa ist close to government circles, zation" shots is a recent two-page published in the press here July 30, commented that U.S. analysts document by the Massachusetts­ U.S. Embassy spokesman Stan "have the serious problem of look­ based "Probe International" intel­ Zuckerman takes a brutal snipe at ing at the world as they would like it ligence outfit. Titled "A Compari­ those "who see a proof of a great to be .... Iran could hardly com­ son Between Mexico in 1981 and campaign of slanders in every hos­ pare to Mexico ....We don't have Iran in 1976," the document lists a tile note." holy wars; neither do we suffer from series of "revolution-making" fac­ The same day, the ultra-leftist Ayatollahs. " tors. "Disaffected students: Iran, daily Uno mas Uno commented that Ebergenyi wonders whether the yes. Mexico, not visible; large mili­ after all, there was some truth in the people behind ABC are "the pro­ tary: Iran, yes. Mexico, not yet; ABC "Iranization" special. In the moters of Global Genocide 2000," inequitable distribution of wealth: same edition the paper called on the report advocating depopulation Iran, yes. Mexico, yes," etc. disaffected workers to protest re­ by U.S. Malthusians under the Car­ ABC is now responsible for cently decreed price increases in ter administration. having brought U.S.-Mexico rela­ basic products. On July 29, ABC-TV renewed tions to their lowest point since the This convergence of opinion be­ its attack, devoting 20 min utes of its times of the zero-growth adminis­ tween radical outlets and U.S. offi­ "20/20" show to the fo rmer head of tration of Jimmy Carter. cials has not escaped government the Mexican security police, calling "As a Mexican, I am worried leaders here.

EIR August 17, 1982 International 51 InternationalIntel ligence

Ziyang for leading an "independent" keepingthe list of attendees confidential, Iran vows: no Non-Aligned fo reign policy while British Prime Min­ it has been learned that two members of meeting in Baghdad ister Thatcher will visit China in Septem­ the West German Parliament, Otmar ber, bringing with her, among other Schreiner, a Social Democrat, and Mat­ things, tidings of sophisticated British thias Wissmann, a Christian Democrat, The speaker of the Iranian parliament, arms for Peking. were present. Also from the German side Ayatollah Hashemi-Rafsanjani, issued a The People's Daily carried a promi­ were executives of Morgan Bank, Frank­ declaration on July 25 that Iran will es­ nent article by an official of the presti­ furt, and Esso, West Germany. calate its war against Iraq in order to gious Academy of Social Sciences accus­ American participants included block the September meeting ofthe non­ ing the Reagan administration of "being AFL-CIO international affairs spokes­ aligned group scheduled to be held in divorced fropt the complicated reality" man James M. Ellenberger, and an indi­ Baghdad. Iranian Prime Minister M us­ of the world situation. The newspaper vidual presenting himself as the head of savi has since reiterated Hashemi-Raf­ first focused on the administration's de­ the Democratic Party in New Jersey. sanjani's declaration stressing that Iran cision to continue arming Taiwan. It is known that among the topics will not allow Iraqi President Sad dam The article then scored the U.S. for discussed was that of the political activi­ Hussein to take the chairmanship of the using Moscow as a scapegoat. ties of Helga Zepp-LaRouche, wife of Non-Aligned movement which he is The Chinese repeated in much EIR founder Lyndon H. LaRouche; and scheduled to acquire in September. stronger terms attacks on U.S. economic of Zepp-LaRouche's party, the Europe­ The Khomeini dictatorship has beeen policy for "infringing on the interests" of an Labor Party. The ACG, known in conducting aggressive diplomacy within Western Europe, and critil;jzed the Rea­ Germany as the "Atlantic Bridge," is the group of developing nations to get a gan administration's sanctions against chaired by the 87-year-old John J. Mc­ consensus against holding the meeting in the Soviet pipeline. Simultaneous attacks Cloy, former allied commander of the Baghdad. Iran has been coordinating on continued U.S. grain shipments to postwar German occupation. McCloy with Cuba, which led to Cuban Foreign Moscow show that Peking is less con­ has recently been tied to the Bahamas­ Minister Malmierca's trip to Baghdad cerned about the harm done to East-West based operations of gangster Meyer Lan­ Aug. 2 to urge that the meeting be held trade than it is in finding another issue sky. somewhere else. on which to divide Europe and the U.S. In late July President General Ershad of Bangladesh issued a statement that because of the Iran-Iraq war, the Non­ Aligned meeting should be called off. Poland targeted Ershad was speaking on behalf of the Secret American-German same Chinese-allied Muslim Brother­ by terror networks hood which installed Khomeini. gathering unveiled Poland-watchers are worried that Aug. At San Francisco University, a carefully 31, the anniversary of the Gdansk agree­ selected grouping of West German and ments that legalized the Solidarnosc American youth leaders were assembled movement, may mark the outbreak of Chinese revert to Aug. 2-8 by the American Council on Ireland-style terrorism in Poland. "Po­ Germany, the foremost private organi­ land may turn into another Ireland by 'third way ' posture zation coordinating political links be­ next year," said one expert linked to tween the two countries. The 80 attendees Swiss banking circles. The official People 's Daily published one were selected over an eight-month period Solidarnosc, now underground, is­ of China's strongest attacks on the U.S. to hear presentations on foreign affairs sued a call on July 31 for holding "peace­ to date, at the beginning of August, con­ by such notables as Undersecretary of fu l" demonstrations Aug. 31 for the res­ sistent with its stiffening "Third Way" State William F. Buckley and former toration of the union's legality. fo reign-policy orientation of criticizing Central Intelligence Agency director Contacts between elements of Soli­ both the Soviet Union and the United William F. Colby. darnosc and the Italian terrorist Red Bri­ States. At the same time Peking is coor­ Also present at the event as a coordi­ gades were made public during the trial dinating with Britain and Socialist nator was ACG treasurer Karen Furey, of Brigade members earlier this year. France to encourage a "breakaway Eu­ who also functions as a top coordinator Exposed Brigader Luigi Scricciolo, inter­ rope" scenario vis-a-vis Washington. for the East Side Conservative Club in national secretary of the Socialist Trade During his visit to Peking in early Manhattan and maintains confidential Union Confederation (UIL) in Italy, August, French Foreign Minister Claude links between the two organizations. confessed that he not only maintained Cheysson was praised by Premier Zhao Although Furey put great effort into contacts, but had attended the Sept. 1981

52 International EIR August 17, 1982 Briefly

• YUVAL NEEMAN, Israel's Solidarnosc conference in Gdansk. Scric­ terrorism live in the Rue des Capucines new Minister of Science and De­ ciolo also met regularly with Jacek Ku­ and the Rue des Dames," says the mag­ velopment (and also putative fath­ ron, who is now serving time in a Polish azine. er of its nuclear bomb), is assum­ jail for his attempts to instigate a civil Imposimato maintains that since the ing top-down control of all Israeli war. roundup of some 400te rrorists following R&D, with extraordinary powers The would-be assassin of Pope John the freeing of kidnapped NATO Gen. including the transfer of certain Paul II, Juan Fernandez Krohn, was also James Dozier, "we have known that 14 responsibilities from other minis­ invited to the 1981 Gdansk congress of brigadists, including Lanfranco Pace and tries. His entry into the cabinet is Solidarnosc, and did go to Poland short­ Oreste Scalzone, have taken refuge in expected to add to the weight of ly before his attempt to assassinate the Paris. Thanks to confessions, we know Defense Minister Sharon. Pope on May 13. the addresses, names ...everything ." • 'DEFENDING EUROPE One representative of the oligarchic "We are also absolutely certain," Im­ Palla vicini fa mily in Rome declared that posimato said, "that they have set up a Without the Bomb" is the cover "the situation in Poland and terrorism in Red Brigades column in the French cap­ story in the July 31 issue of Th e Italy, will, one hopes, change the think­ ital and they work with other interna­ Economist. "NATO really ought ing of Italy and the Pope." tional groups [including] the French to be able to block a Soviet attack and tanks alone, without Now an und erground terrorist NAPAP." The Red Brigaders in France with men more or less assuming that it will group, the MRKS, has surfaced. In a are also known to be in touch with the have to pull the nuclear trigger in July 18 interview with the Italian daily IRA, the RAF of West Germany, and L'Espresso, three MRKS terrorists open­ the ETA and GRAPO of Spain. the process," says the advocate of ly compared themselves to the Red Bri­ neo-colonial conventional wars. gades, and to the Polish World War II resistance group Armija Krajowa. • PIERRE TRUDEAU is plan­ Ne w role fo r Va tican ning to put Canada under an emer­ as international mediator gency dictatorship in response to a banking collapse sometime be­ tween now and October, according Imposimato names Paris Agostino Cardinal Casaroli, Vatican Secretary of State, delivered an impor­ to a statement issued by Giles Ger­ as terrorist base tant new proposal for international di­ vais, candidate of the Movement plomacy being made by Pope John Paul for the Commonwealth of Canada "We have had proof for a long time in II, on Aug. 3 at the first press conference fo r mayor of Montreal. Rome," declared Italian Judge Ferdi­ of his current visit to the United States. FRANCISCO GOY A nando Imposimato, "that terrorism has President Reagan flew to Hartford to • contrib­ taken root in France, and that Paris has meet with the Cardinal a day earlier. uted a painting of the Greek goat­ become a remarkably well-structured op­ The Vatican Secretary of State an­ god Pan to the Mexican Labor erational base." nounced that, in this delicate period of Party's campaign against the post­ Imposimato revealed the latest results international crises, the Vatican had de­ election reign of terror being con­ of the anti-terrorist investigation he has cided to · put itself forward as the only ducted by the fa scist PAN party in been leading, in an interview in the Aug. appropriate mediator for all internation­ Mexico. The PLM poster shows 2 issue of the French weekly Le Point. He al issues. Unfortunately, he said, the Pan surrounded by a group of added that "all the demands to the United Nations has shown that it lacks transfixed females, with the warn­ French police on the part of Italian po­ the moral authority to carry on this role. ing "PAN wants your women." licemen and carabinieri have been in There are three requirements for any in­ UNESCO, vain." (EIR has been independently in­ stitution that would attempt to fulfillthis • possibly the most formed that in July 150 Italian terrorists role, he specified. They are, first, moral egregiously Malthusian of all were deployed into West Germany and authority, second, a sincere interest in the United Nations bodies, held a France, with the connivance of a French solution of these problems, and third, "World Conference on Cultural cabinet minister.) great experience. Citing the Church's Policies" July 26-Aug. 5 in Mexico Le Point reports that surrendered two-thousand years' experience, Casaroli City. EIR was on the scene, much Red Brigader Carlo Brogi told police noted that the Vatican seemed to unique­ to conference organizers' dismay, that he was assigned by Red Brigade ly fulfillall three of these prerequisites. and will carry a full report in a "brains" Mario Moretti to find apart­ Casaroli's press conference was given future issue. ments in Paris for the terrorist group: in Boston. The Secretary of State has "Thus we learn that the leaders of Italian come under political attack lately.

EIR August 17, 1982 International 53 �TIillNational

Kissinger's secret agenda for the White House

by Richard Cohen, Washington Bureau Chief

While the President is being sent around the country to Policy aims exude an electoral image as a strong "leader of the free While Henry Kissinger spoke, "Alexander Haig and world" who would never back down on his announced Gerald Ford sat crosslegged before him. Secretary of policy commitments, former Secretary of State Henry State George Shultz and his guest Helmut Schmidt, the Kissinger was telling an elite group of U.S. corporate, Chancellor of West Germany, were off to the side." banking and political leaders at the secretive Bohemian According to early information on the Kissinger Grove gathering July 23-24 that the United States must plan, the permanent withdrawal from superpower rank be made to renounce its superpower status in world will occur in tandem with moves authored by Kissinger affairs. and endorsed by Shultz to enforce horrible contraction According to a reporter who penetrated the Bohemi­ on the developing sector and extreme austerity on the an Grove sessions (which exclude non-whites and Jews), U.S. economy following the November elections. To the central theme of Kissinger's keynote address rea­ accomplish this, advisers to Kissinger and Shultz are soned "that in the period following World War II, the said to be considering broad schemes of developing­ United States controlled 55 percent of the world's gross sector debt rescheduling that would be linked to out­ national product. The figure today is more like 25 per­ right genocidal conditionalities . In addition, they are cent. Now as a result the United States needs to conduct said to be considering a warmed-over version of Kissin­ a different kind of foreign policy that accounts for its ger's 1975 proposal for the creation of an International diminished economic influence-a fo reign policy that Resources Bank; under this typically British scheme, would be more like that of Great Britain." developing-sector debt might be refinanced on the basis In short Kissinger told the self-styled U.S. elite, "You of mortgaging raw-material reserves. In the advanced are now a once-developed nation like Britain. You must sector, secondary banking structures linked to local now reduce your economic and military commitments trade and industrial and agricultural production will be globally, and instead resort to British tactics of psycho­ triaged. logical and cultural warfare." According to the reporter Permanent shrinkage of the U.S. economy and the present, the drunken, foolish U.S. leaders present all world economy under the auspices of Kissinger-style cheered for policy that amounts to the final surrender of crisis management or possibly a new global institution American principles. requires, according to Kissinger's estimates, the acqui-

54 National EIR August 17, 1982 escence of the leadership of West Germany and the of the extent of the Secretary's duplicity. Soviet Union (see article, page 9). In addition it would Now Kissinger and Sonnenf eldt are once again

require an irreversible Kissinger coup within the Rea­ playing these channels. In fact, it was _ reported that gan administration. Kissinger is so intent on raising the heat throughout the According to sources close to the Kennedy family's Middle East, that he has connived to get both Haig and political operations and U.S. intelligence sources, the Israeli Prime Minister Menachem Begin to threaten the Kissinger operation within the Reagan administration White House with alleged information that would fi nd will surface openly to attain these objectives after Rea­ its way in to the major U.S. press "proving" that gan and "Reaganism" suffer stinging defeats in the Reagan was aware of Israel's real intentions before the November elections. White House sources have told me Israelis marched into Lebanon. This blackmail along unequivocally that Shultz will make important new with persistent warnings from the President's pollsters moves fo llowing those elections. A source familiar with are said to have destroyed all hope of effective Presiden­ the thinking of the Soviet Politburo confided to me that tial reaction against the annihilation of Beirut. they are convinced that a "new turn" in U.S.-Soviet relations will develop after November. And a source Presidential impotence presumed with close ties to the Atlantic Council reported that, Accordingly, while the Israelis sack Beirut and Iran's fo llowing private talks in California with both Shultz Khomeini builds fo r a final attack on Iraq-an assault and Kissinger, Chancellor Schmidt is also convinced which the White House is convinced will be successful­ that relations with Washington will now improve. President Reagan is scripted to sit on his hands. This is an essential aspect of Kissinger'S plans. Impotent Presi­ The modus operandi dential rhetoric in the wake of blatant threats to Middle Intelligence sources here report that Kissinger is East oil supplies will gu arantee not only devastating depending upon two key operations between now and Republican losses in November but Western European November to build his assets in preparation fo r the desperation. According to Washington sources, this is policy coup. Kissinger is exerting all his influence to exactly what Kissinger seeks as he moves to seize top­ secure control over U.S. Middle East policy. As I down control of the U.S. negotiating machinery. Kis­ reported last week, Kissinger's first meeting with Shultz singer will then ask for European compliance with his focused upon the assignment of longtime Kissinger British controllers' post-election global economic reor­ collaborator Helmut Sonnenfeldt to a crucial informal ganization, in exchange for his help in securing oil advisory and troubleshooting role with Sh ultz. It was supplies! Sonnenfeldt, when dir ector of the sensitive Bureau of Kissinger's second objective between now and No­ Intelligence and Research at the State Department in vember is to place more of his people into key positions 1958-60, who leaked quantities of classified U.S. mate­ within the Reagan administration. Most important here rial to Israeli intelligence. In fact, Sonnenfeldt was has been the joining of forces within the administration almost retired from the foreign service when in 1958, of people loyal to Kissinger and others loyal to Vice­ State Department security officers caught him sending President George Bush. Bush has only obliquely op­ to Israeli intelligence secret information on Eisenhow­ posed the recent presidential decisions which his mouth­ er's plans to send U.S. marines into Lebanon. At that piece Commerce Secretary Malcolm Baldrige has pub­ time Sonnenfeldt was also helping to build Fat Henry's licly criticized. In a fi rst attempt to create political career by delivering classified material to the Harvard distance between Bush and Reagan, Baldrige has made professor. Thus both Sonnenfeldt and Kissi nger had it known that he opposes the President's decision to established clandestine channels to Israeli intelligence continue arms sales to Taiwan, the Trans-Siberian pipe­ aro�nd the Lebanon crisis of 1958. Kissinger then used line sanctions decision, and Reagan's erroneous mid­ the channels while National Security Advisor and Sec­ year budget-deficit proj ections. Washington intelligence retary of State. Former Secretary of State Alexander sources have told me that the preliminary moves by the Haig became fa miliar with these channels while serving Bush group anticipate a Republican debacle in Novem­ as Kissinger's "dirty tricks" caretaker at the National ber; they are meant to precede a full-scale effort within Security Council (see EIR , July 20). It was the use of the Republican Party to get the President to announce these clandestine channels to elements of Israeli military after the November elections that he will not run fo r a intelligence associated with Def ense Minister Ariel second term. These so urces say that Reagan will be Sharon through which Haig connived to set up the presented with only one other post-election alternative: Israeli invasion of Lebanon and for which he was to shift his policies 180 degrees. Either way, Kissinger summarily dismissed when the President was apprised obtains \:;,uad control over White House policy.

EIR August 17, 1982 National 55 the present level of funding "is viewed as adequate" and that it would be difficult to argue for any significant increase in funds. This budget-tightening process is inter­ national, Keyworth noted, but due to the fact that it would not be possible for the United States to achieve a demonstration of fusion power on its own, only by u.s. fusion budget to international cooperation might it be possible to keep the program going. This, however, would require deci­ become a PR joke? sions "from the highest levels of government" on the issue of control of technology transfer, a policy never before forced on magnetic fusion programs. by Mary McCourt The response of the laboratory scientists present was a "consensus" that no significant engineering work The Fusion Energy Foundation has obtained a copy of could begin on fusion reactors until the present series of the minutes of the June 1-2, 1982 meeting of the Depart­ stretched-out experiments are completed by the end of ment of Energy's Magnetic Fusion Advisory Committee this decade, which are marked by competition for an (MFAC) which confirm the warnings of retiring DOE "optimum design," rather than scientificcooperati on. Fusion Office Director Edwin Kintner last December Dr. John Clarke, Acting Associate Director for Fu­ that the fusion "program is being destroyed" by ending sion Energy, of the Office of Energy Research, reiterated the "national mission orientation" to fusion power de­ Keyworth's assessment. Because "the administration velopment under massive budget-cutting pressure. Un­ perceives that we do not need a new power source before der former director Kintner, the meetings of the MFAC the end of the century," Clarke stated, "we should not were the means for the DOE to assess the quality and take extreme risks." Using language more appropriate progress of research in the nation's labs. to Madison Avenue advertising campaigns that the ques­ But the minutes of the June meeting reveal that the tion of the future of the nation's energy supply, Clark leaders of national laboratory fusion work, the nation's called the top priority "maximum progress in developing most advanced science and technology program, are the data base to permit those outside to enthusiastically being forced to assess their scientific and technological support the program .... The program can be acceler­ progress on the basis of "the country's perceived notion ated without structural change if fusion is perceived as a of the value of fusion support," i.e. Fed Chairman Paul national need. He likened the new strategy to how a Volcker's vicious austerity policies, rather than the actual company markets a new product. energy needs of an advanced industrial economy. "There must be sufficient scientificand technical data The basis for a new "mission orientation" does exist to demonstrate fe asibility, which leads to product defi­ in the proposals of the Fusion Energy Foundation and nition, which leads to sufficient belief in the product to its founder and board member, Lyndon H. LaRouche, justify investment. ... By this strategy we can hope to to use the recently discovered polarized fuel properties of select an attractive fusion concept that will merit devel­ plasmas to engineer commercial fusion reactors by 1995. opment .... " Work by two scientific teams in the United States, one at Dr. Stephen Dean, president of Fusion Power Asso­ Princeton University and the other at Brookhaven Na­ ciates and a former official in the DOE magnetic fusion tional Laboratory, has shown that polarization of the program, whp supports the policy-outlook being organ­ plasma fuel within the fusion reactor could enhance ized for by the Fusion Energy Foundation, made the fusion fuel cycles by 1.5 times. If polarization of the fuel only response based on a realistic assessment of national nuclei can be maintained for the time necessary for the and world energy needs. He told the committee that he fusion reaction to take place, fusion can be achieved at believed that many industry people are opposed to this lower temperatures than previ ously thought necessary. If "new strategy" outlined in the Comprehensive Program these results can be demonstrated experimentally, it Management Plan (CPMP). He cited as the major prob­ would mean that several large-scale fusion machines lems that the strategy puts the focus of the program 10 would have already achieved breakeven, i.e. the temper­ years offin the future, and that rather than attempting to ature at which the machine produces as much fusion build an ambitious Engineering Test Reactor (ETR) for energy as the energy required to ignite the reaction. which there is insufficient data, the program should go Reagan Science Adviser George Keyworth made an ahead to build a facility that makes a lot of fusion unusual appearance before the Advisory Committee to power-something achievable within 2 to 3 years. Dean enforce the austerity mentality. Claiming that "there was asserted that CPMP had no resemblance to the intent of no more difficult technological problem than producing the Magnetic Fusion Energy Engineering Act of 1980, fusion power," Keyworth stated that "no one could and the committee is thus alienating Congress and the predict" when there would be.results. Keyworth said that nuclear industry.

56 National EIR August 17, 1982 BookReview

LaRouche on the Toynbee factor in British grand strategy by Criton Zoakos, Editor-in-Chief

"There is hardly a task worthier of speedy accomplish­ Thus, LaRouche locks his fire on the question: what ment than the publication of this book," was the unani­ has happened to the character of Americans that they mous agreement of the New Benjamin Franklin Publish­ permit the oligarchy to run U.S. policy? Or, as he puts ing House editorial board, upon reading the manuscript it, "It is past time someone took up the question 'How " of Th e Toynbee Factor in British Grand Strategy, the come?' " latest book by Lyndon H. LaRouche, Jr. The answer is not pleasant, but the answer is there. Mr. LaRouche, probably the most prolificAmer ican A fundamental shift in our national character has writer on important topics in recent decades, commands been caused which accounts for a discrepancy between a grip on argument and creative force which has private morality (of that majority which still values made him the beloved thinker of many and the object of moral conduct in private affairs) and public morality of compulsive hatred of others. His latest book, Th e Toyn­ policy-making. Privately moral persons will admit this, bee Fa ctor, clarifies beyond ambiguity the crucial and with some difficulty. Many of them will claim that many times unspoken issues upon which are based the "nothing can be done about it." A few, those morally controversies and polarization around the person of Mr. more gifted, will seek ways for remedy. It is for those few LaRouche: The book's primary objective is to lay bare that Th e Toynbee Factor has been written. the causes of the national failure of the United States, Our national character has been tampered with primarily in fo reign policy formulation; but also in gen­ because we have tolerated in our mental, cultural and eralcond uct in the pursuit of national purpose. scientificlif e, including the area of "entertainment," the His identi fication ofthese causes will knock the prov­ most extensive outpouring of banality and hedonism. erbial socks off the complacent philistine and odd Dean What occurs inside the minds of members of our of Political Science Department who flatulently deems culture, from the musical performances of Bruno Walter himself "well informed" in such matters . No matter. As and Arturo Toscanini, to the grotesque empiricist out­ LaRouche himself points out, "Lord Carrington's close looks in natural science progressively more dominant collaborators will not disagree so much with what is since the Solvay Conference, to the hardly concealed reported in this report, as the fact that the matter has pornography of television "soap" and Neronian been brought into the public light." Th e Toynbee Fa ctor's "sports," is all coherently reducible to a single phenom­ thesis, of course, is that the cause of the United States' enon of mental life: infantile regression,' efficiently failure in fo reign policy lies in the fact that the United identified by LaRouche as the "oligarchical principle" States has allowed the European, primarily British oli­ in ordering cultures and societies. garchy to capture its fo reign policy-making institutions. LaRouche has brought fo rward a major challenge This is a fact which will not be contested by anyone who to Toynbee's contention that the "oligarchical princi­ knows. ple" is a more or less "eternal," permanent feature in Perhaps most shocking to the Toynbee school will be the ordering of human behavior within civilization. This LaRouche's proof that human civilization, as adducible challenge, which will provoke howls of hysteria for years fro m evidence of calendars and epic myths, must be to come, is founded on LaRouche's revolutionary his­ dated back as far as 42,000 years. It was not until the toriographical method, in which he synthesizes the ancient maritime civilization, reflected in epics such as evidence drawn from surviving historical records, eco­ the Indian Rigveda, was destroyed by barbarian tribes nomic evidence, thermodynamic and technological that the age of astrology, which the oligarchical school transformation evidence, to adduce laws of human reflects, came into existence. behavior upon which he can rest his "Atlas Epic"

EIR August 17, 1982 National 57 hypothesis. author of Th e Toynbee Factor, gripped by the question: "Has the American people lost the moral fitness to Who ruined our fo reign policy? survive?" The answer to this question will remain in It is not often that the reader of a major book on suspension for a while, fo r it must be arrived at in a United States fo reign policy, written in part as an truly Aeschylean manner: you, the reader/viewer, must appendix to testimony before the Senate Foreign Rela­ recognize yourself in the pathetic actions of the tragic tions Committee (as Mr. LaRouche's latest book is), person on stage and, with us, you must act to change finds the more regrettable and painful "secrets" of his the laws of hum an behavior regulating your dying or her fa mily and personal life paraded as exhibits of culture. There you, like us, should fi nd that there is no evidence into a court inquiry, as it were, into the matter challenge worthier of your contribution than the speedy of "who ruined our fo reign policy?" Yet Th e Toynbee publication of this book and its circulation throughout Fa ctor is, in its poetic quality, less than a grand court the United States. proceeding and more like an Aeschylean tragedy in Since our nation's public life has been deprived of which the reader, like the audience in the Eumenides, the possibility of cultivating its moral judgment in great suddenly realizes that he or she, is the dramatic actor on performances of Shakespearean or Marlovian political the stage, compelled by the "laws" of his/her culture to tragedies, let us now take this book, and make the march ineluctably into doom and expiation. Thus, households of America, from coast to coast, the stage LaRouche's reader is caught, inside his own tragedy, of our Aeschylean resolution. calling out, "don't do it," "don't march into Fate's destruction," till he discovers that it is to himself that he Th e Toynbee Fa ctor is available from New Benjamin calls out. The solution to such Aeschylean tragedy as Franklin Publishing House. For more information call this through which our nation is going, is not for the (212) 247-7484 or (212) 247-8820, or write New Benjamin individual actor to change the course of his action, Franklin Publishing House, 304 W. 58th St., 5th Floor, because within the "laws" of his culture, any course of New York, New York 10019. action will lead to doom. The solution is for the reader, like the Aeschylean audience in the Eumenides, to become the Areopagus, the lawmaker-within-the-play, and effect a shiftin the laws which determine the course Outlook For of the drama. U.S.-Japan

No easy matter Economic Relations For a society in such an advanced stage of cancer, EIR's new 95-page Special Report shows why this is no easy matter-it takes no less a scholar than U.S.-Japan economic frictions will intensify unless U.S. economic policy is fundamentally changed. The LaRouche to attempt a solution . furor caused by the "Hitachi computer espionage" This reviewer has identified at least a score of major case may be dwarfed by the u se of a "national secu­ scientific themes, each of which, in happier times, would rity clause" limiting Japanese exports to the U.S. The have justified the establishment of a new disciplinary report details how administration officials designed the administration's strategy of economic tension department in major universities, the which Mr. La­ with Japan, and how they manipulate congressional Rouche summarily develops with compelling arguments reflexes to carry out their "post-industrial" plans for in The Toynbee Fa ctor. The entrenched flatulence of our both Japan and the United States. The report in­ cludes: culture's practices in mathematics, physics, history, economics, music, poetry, philology is given a trounc­ • Strategic and Economic Context for ing, which shall have salutary effects for our social U.S.-Japan Econo'mic Relations health if the gifted layman, rather than bow before the • The Five Key Areas of Conflict in the rumps of Philistia, joins with LaRouche to kick these Coming Year . asses out of court and out of our public consciousness. • The Politics of Economic Friction: But for the layman to do so, he or she must be gripped the Trade Warriors' Strategy by the same ferocious, ruthless passion to preserve the • Exclusive Interview with William integrity of moral mind against the fo ul encroachments Brock, U.S. Trade Representative of the Kissingers and similar counterfeits now adulated • Exclusive Interview with Lionel by our republic's sheep-the same ruthless passion Olmer, Commerce Undersecretary which dominates Mr. LaRouche's latest book. 95 pages $250.00

The editors of the New Benjamin Franklin Publish­ Order from: Peter Ennis, EIR Director of Special Services. ing House, sharing, as citizens of this republic, in the at (212) 247-8820. or 304 West 58th Street. New York. NY 10019 near-death agony of this ruined culture are, like the

58 National EIR August 17, 1982 Eye on Wa shington by Freyda Greenberg

President that the United States is By 1980 Richard Wirthlin was on the edge of changes that negate top campaign strategist for Ronald most of the traditional liberal or Reagan's presidential campaign. conservative beliefs. His October 1980 paper, "Seven The message, carried in opin­ Conditions fo r Victory," outlined ion polls and other orchestrated what Reagan's image should be "perceptions," is that in order to going into the elections. After the survive the elections, Reagan election, he became director of should turn over major policy deci­ planning for Reagan's transition sions to outside "experts" and ditch team. He created the Officeof Plan­ Latter-day astrologers the traditional constituencies that ning and Evaluations and placed Richard Beal, who is President rejected Jimmy Carter for Reagan his employee of eight years, Rich­ Reagan's Special Assistant in in 1980. ard Beal, in charge. Charge of Planning and Evaluation Beal told the Boston seminar Then Wirthlin spawned the "In­ (you'll fi nd out what that is in a that the economy of the future will itial Action Plan" which begat the minute), has been busy outside his favor merchants of information "First 90 Days Project" headed by usual quarters in the White House (like himself, of course) rather than George Bush's presidential cam­ basement lately. EIR ran into him producers of hard goods. "Produc­ paign operative, David Gergen. at the World Futures Society con­ tivity" will become irrelevant, as Gergen compiled records of the fe rence in Washington in July, will organized labor, he said. first 100 days of every President where he gave a briefing on the Beal is only one of the latter-day since FOR, concluding: I) this is White House situation room, lo­ astrologers who work down in the the period to establish the Presi­ cated in the basement. He came White House basement. EIR's in­ dent's "persona" and thus the above ground again a few days later vestigation of these shadowy "character of the administration"; in Boston, where he addressed a gnomes reveals that Beal is a pro­ and 2) the President must be kept seminar at the Taft School of Go v­ tege of pollster Richard Wirthlin, from making any "big mistakes." ernment of the University of Mas­ whose power in the Reagan admin­ To accomplish this, Gergen rec­ sachusetts. istration has won the awe of the ommended that Reagan "keep a For anyone who wonders why court astrologer of the most syn­ simple focus and go strong on the the American voters elected a Rea­ thetic President ever to reach the economy ." The team of Gergen­ gan administration in November White House. Patrick Caddell, Jim­ Wirthlin-Beal has been consistent 1980 and still don't have a Reagan my Carter's pollster, has said, "I in hammering away with this ad­ administration, creatures like Rich­ could kiss them [Wirthlin's team] vice. Reagan should leave foreign ard Beal are important to watch. for using thematic approaches. policy and other "complicated" U nelected, unscrutinized by Con­ They really do understand the im­ matters to experts, and focus on gress, Beal and his cohorts whom portance of themes as the great pursuing an economic recovery by the reader will meet in this column projecting fo rce of political man­ means of the "supply-side" or other wield a power comparable (as the agement." varieties of quackish wizardry enthusiastic Boston Globe put it in being offered up by economic ex­ covering Beal's Boston speech on perts. Judging from results, the ex­ Aug. I) to the witch doctor in a Who is Richard Wirthlin? perts are determined to make the primitive society, or the phenome­ Wirthlin, so the story goes, was astrologers' prediction of an econ­ non readers consulted by the Cae­ teaching economics at the Univer­ omy with no hard goods produced sars in the temples of ancient Rome. sity of California in 1964. By 1980 come true ! (The Globe also loved the Washing­ he headed a polling and public rel­ Wirthlin warned again in the ton Futures conference.) tions firm, Decision Making Infor­ fall of 1981 that Reagan "has to be Beal is a "computerized proph­ mation, Inc., which grossed $3 mil­ careful not to diffuse his presiden­ et" whose policies sound more like lion from corporate banking and tial power by getting tangled in too California Governor Jerry Brown GOP clients. One special account many diverse issues ... managing than President Reagan, and who involved reviving the fl agging fi­ the economic recovery will remain conceives his job, according to his nances of Southwest Savings and at the top of his agenda." recent speeches, as convincing the Loan of Arizona. To be continued.

EIR August 17, 1982 National 59 congressional Closeup by Ronald Kokinda and Susan Kokinda

cratic National Committee task tax cuts and the administration's Parliamentary bills force on Independent Expendi­ continued "support" for a policy in House tures, delivering the recommenda­ of tight money. The man who Recent initiatives in the House of tions of the task-force study he had fo ught every congressional effort Representatives have opened a just completed. These recommen­ to go after Paul Volcker in 1981, fl ank in the Harriman campaign to dations include strengthening the now states, "Bold action by Con­ turn the United States into a par­ parties through facilitating public gress is imperative, because the liamentary system modeled on that funding, e.g. increasing the federal administration has embraced two of Great Britain. These initiaives income-tax "checkoff' and having economic experiments which to­ include two bills, a Republican­ funds go to parties, who then de­ gether have brought our nation to sponsored H.R.4070 and a Demo­ termine what candidates get funds; the brink of depression." cratic-initiated H.R.6479, drafted limiting independent PAC expend­ The Bank for International Set­ out of discussions and hearings in itures to that of an individual can­ tlements has let word trickle down the House Administration Com­ didate; and increasing disclosure. to the likes of Robert Byrd, that mittee's task force on elections, GOP National Committee monetary policy must now accom­ which would amend the Federal Chairman Richard Richards also modate the impending necessity to Elections Campaign Act of 1971. testified against independent PACs. bail out the Eurodollar market. The first of these would strengthen In fact, Byrd requires the Fed the control, especially fi nancial to keep real interest rates above control, of the two major parties the level of inflation. The Fed will over the political process; the sec­ then be primed to slam the domes­ ond would strip independent-ex­ B IS proposes, tic monetary brakes while turning penditure political action commit­ Robert Byrd disposes on the printing presses to bail out tees' ability to influence policy or After three years of unabated ob­ the Eurodollar market. elections by drastically limiting the struction of the fight against Paul PACs' expenditures while increas­ Volcker, Senate Minority Leader ing disclosue and reporting re­ Robert Byrd (D-W.Va.) has sud­ quirements to the FEC denly . introduced the "Balanced In response to claims that the Monetary Policy Act of 1982 " H ospital bidding independent expenditure political (S.2807), along with 30 other Dem­ wars proposed action committees are running ocrats. Byrd's legislation, intro­ Carter administration plans to de­ amok, the House has embarked on duced on Aug. 3, mandates the stroy the nation's high-technology the legislative component of an Federal Reserve Board to target medicine have been re-Iaundered ongoing project by such overt pro­ interest rates (as it did before Oc­ under the rubric of "fiscal austeri­ British parliamentary-system ad­ tober 1979), as well as monetary ty" and Skinnerian/utilitarian re­ vocates as fo rmer White House aggregates (as it has since October wards for "good behavior" by hos­ counselor Lloyd Cutler, Sen. Ted 1979). There is nothing in the leg­ pital management. Kennedy, Cyrus Vance, and Dem­ islation which would preclude Paul The notorious former director ocratic Party eminence grise, Av­ Volcker from telling Congress that of Carter's Health Care Financing erell Harriman. he could achieve one target, and adminstration (HCFA), Robert A. The bulk of testimony at two not the other, thus rendering the Derzan, who is currently Vice­ House Administration Committee legislation meaningless-as a Byrd President of Lewin & Associates, a task force hearings-on June 10 intimate admitted. Washington D.C health-care con­ and July 28-was consumed with In the floor speech accompa­ sulting firm, praised a June 23 attacks on independent expendi­ nying the legislation, Byrd suc­ Senate Finance Committee Health ture committees and recommenda­ ceeded in avoiding all mention of Subcommittee report on proposals tions for how to curb or even elim­ Paul Volcker's name, and instead, for government prepayment of inate them. Top Harrimanite op­ blamed the Reagan administration Medicare and Medicaid Hospital erative Ted Sorensen testified on for high interest rates, citing the Costs in his June 3 testimony. Der­ July 28 as chairman of the Demo- budgetary effects of the Reagan zan said, "The question you are

60 National EIR August 17, 1982 addressing, simply stated, is how tal which can reduce services below which mirror exactly this journal's [can we] purchase care from the agreed-upon price for the year warnings. Several days later, Eu­ hospitals? . . . Medicare's practice will be rewarded by being able to rodollar Bill bounced back onto of retrospectively paying incurred keep the "savings." the Senate floor to panic over the costs has created strong incentives The June 23 hearing is the first Bank of Italy's decision to let Ban­ for hospitals to spend more, not in a series of hearings projected to co Ambrosiano's Luxembourg less; and what is worse, has en­ run through the next session and subsidiary collapse. couraged hospitals to believe that generate the legislation based on almost all capital investment is the Derzon perspective. risk-free. " Derzon earlier gained interna­ ' tional attention when his now fa­ Levin attacks Japanese, mous "Derzon Memo," issued on German defense levels June 4, 1977 as administrator of London's basketball favorite Senate Armed Services Committee HCFA, was made public. Under wants Eurodollar bailout member Carl Levin (D-Mich.) re­ the heading of "Regarding Cost­ Former New York Knickerbocker peated portions of a Defense De­ Inducing Activities," the memo forward and reputed Senator fr om partment "Report on Allied Con­ said that the Federal government New Jersey, Bill Bradley, is finally tributions to the Common De­ could save $1.2 billion through in­ giving his Rhodes Scholarship fense," in a floor speech on July creasing the death rate of elderly sponsors their money's worth­ 30. The report, which rates allied medicare recipients by fo rcing $1.8 trillion, to be precise. In a NATO countries' and Japan's con­ states to enact Living Will legisla­ Senate floor speech on July 29, tributions to common defense ef­ tion. "Additional Federal savings Bradley called for the United fo rts, was mandated as a result of would accrue to Medicaid and the States to fu nction as a "responsible a Levin amendment to the 1982 VA and Defense Department lender of last resort," and to bail Defense Authorization Act. health programs" beyond the $1.2 out the Eurodollar market. Brad­ While Levin notes the "Iow­ billion if the government was able ley would give the IMF a virtual key" manner ' in which the report to eliminate the last year of life of carte blanche to destroy the dollar: was released, apparently, he con­ only one-fourth of the people now "There could be established a mul­ cludes , in an attempt to "spare receiving government health bene­ tilateral fund from which central some of our allies-especially Ja­ fits,conc luded the memo. banks could borrow the fo reign pan-major embarrassment," the In his June 1982 testimony exchange they need to cover en­ report nonetheless concludes that Derzon complains, "We know that dangered banks under agreed con­ Japan and West Germany are fail­ when HCFA set 223 limits on only ditions. The fund would need au­ ing substantially short of defense inpatient costs, hospitals built in­ thority to borrow from the central commitments. tensive-care units which are ex­ bank of the country whose fo reign Levin underscores the report's cluded from routine costs and hos­ exchange was in demand in order veiled, Kissingerian threats. "Our pitals shifted costs to ancillary ser­ to reloan to the central bank in allies ...ne ed ...to increase their vices and outpatient clinics." He need. It appears to me that the contributions to the common se­ praises what the Senate Finance International Monetary Fund curity in the context of the expan­ Committee has called "prospective (IMF) would be the appropriate sions ofou r own efforts to defend reimbursement" because "pro­ agency to administer this fund, but the Persian Gulf-which benefit spective payment means hospitals there are alternate candidates. " the allies as much, if not more, will know in advance what they Bradley's proposal to turn the than they do ourselves." If the will be paid for their product re­ U.S. dollar into toilet paper was allies and Japan do not reverse gardless of their production costs." preceeded by a lengthy analysis of their current positions, Levin con­ The bottom line of the 24-page the fragility of the Eurodollar mar­ cludes, "We will have to consider Senate report is that hospitals must ket, the chain-reaction threat of a drastic cures for the disease of se­ be forced to bid in advance for Polish debt default, interbank curity complacency which seems to government contracts. The hospi- lending and other salient points afflict some of our allies."

EIR August 17, 1982 National 61 NationalNews

Chairman Volcker, in agreement with the Pol Pot regime in Cambodia. members of the Basel, Switzerland Bank LaRouche's second statement, "Kis­ for International Settlements, deliberate­ singer, the Politics of Faggotry," makes AFL-CIO plans political ly refused to bail out Penn Square in clear what motivates Kissinger. "Henry order to "discipline" domestic banks. containment of labor A. Kissinger is no ordinary, common, Hefner is a Carter liberal, a rarity in garden variety of homosexual. His The Executive Council of the AFL-CIO the oil business, who maneuvered a prov­ heathen sexual inclinations are merely an refined its plan for guaranteeing the la­ iso into the 1978 Natural Gas Policy Act integral part of a larger evil. ... bor vote to a Social-Democratic presi­ to exempt so-called deep gas (below "Psychologically, Henry is of a dis­ dential candidate at its quarterly meeting 12,000 feet) from price controls. Hefner's tinct species ...the species some psycho­ in New York the first week in August. GHK is the largest independent lease­ pathologists prefer to describe as an ex­ This strategy would include the first pre­ holder in the deep gas region of the An­ treme anal variety of sado-masochistic primary endorsement of a candidate in adarko Basin of Oklahoma, a major personality, of the same pathological the history of the Federation, to prevent lending prop for Penn Square. type as organized crime's Roy Cohn .... the "defections" of union members to "Most citizens have noticed about vote for candidates on the basis of indi­ Kissinger, that he explodes into irration­ vidual decision. In 1980, 44 percent of al rages very easily. He exhibits a distinct­ union members "crossed party lines" to LaRouche challenges ly unmanly testiness .... As long as he vote for Ronald Reagan, a decisive factor believes he is being admired, or admired in defeating Jimmy Carter. Kissinger to sue him for reasons of fe ar, Kissinger can be al­ The AFL-CIO General Board is slat­ Lyndon H. LaRouche, the noted econo­ most generous, more or less 'seductive' ed to endorse a candidate in early De­ mist, has issued two statements in his in the way some confidence men often cember 1983. The endorsement will re­ own name warning of the extreme danger are with prospective 'suckers.' 'Cross quire a two-thirds majority of the of allowing Henry Kissinger to return to Kissinger,' rip away his narcissistic, anal Board's 99 members, weighted by the any position of power in the United self-delusions, and his impulses turn in­ size of individual union membership. The stantly homocidal-as Pakistan's Bhutto States, on July 28 and August 3. decision would only be binding on AFL­ In his first statement, LaRouche recalled vividly before he died by Kissin­ CIO state federations and local central urged the American public to make ger's decree. labor councils, it is expected that few 0 known to President Reagan that they "T understand the kind of faggot affiliated international unions would fully back his having kept Kissinger out Henry Kissinger is, ...think back to the buck the Board's decision. of the U.S. government's affairs up to Emperor Nero and his court. Think of this point. LaRouche motivates this po­ Studio 54, then of Nero's court, and then litical mobilization, with fu ll acknowl­ of Studio 54 again. Think of Roy Cohn's edgement that Kissinger may attempt to parties .... Think of Nero, and then of Kissinger, and then of Nero and then of Was Penn Square sue him for his statements, with descrip­ tions of Kissinger's own admission in his Roy M. Cohn. That is the kind of faggot plugged? May 10 speech at London's Chatham Henry Kissinger is. "That is the kind of faggotry that Some intriguing unanswered questions House of lying and treason to the U.S. destroyed Rome. Will you permit it also remain regarding the dramatic fa ilure of president. to destroy the United StatesT' the Oklahoma City Penn Square Bank "Personally, Kissinger is a nothing. last month. According to their own ad­ Or, as we say in Yiddish, a golem. His mission days later, one of the bank's first intelligence boss, back when Henry major shareholders, GHK Oil company, was a Pfc. jeep driver in Oberammergau, withdrew most of its holdings in Penn says, " invented Kissinger.' ...A golem forum gathers Square, amounting to undisclosed mil­ is a thing, a hunk of mud squeezed into AEI lions, just several days before the failure. the shape ofsomething semi-human ... Ford administration types GHK owner Robert L. Hefner III made to walk and run errands .... The World Forum of the American En­ says that he made the move on advice of "But the important thing is not the terprise I nstitute was scheduled to be a "prominent New York fi nancial insti­ disgusting thing which Kissinger is per­ held Aug. 13-15 at fo rmer President Jerry tution." This has led to speculation that sonally. The most disgusting thing is Ford's residence in Vail, Colorado. the Penn Square affair may have been what he had done to our own and other Among the speakers and attendees are deliberately triggered against certain do­ nations ..." including the set up of the Henry Kissinger, former GOP chairman mestic U.S. banks. This is especially sig­ political murder of Pakistan's President Bill Brock, fo rmer Fed Chairman Arthur nificant in light of the fact that Fed Bhutto, and the genocide carried out by Burns, former vice-presidential candi-

62 National EIR August 17, 1982 Briefly

• THE AFL-CIO Executive Council gave unqualified support to the Israeli invasion of Lebanon at its quarterly meeting. Federa­ , tion president Lane Kirkland ad­ mitted to an EIR correspondent date in Ford's 1976 race Bob Dole, and In the past, such "eugenic" theories that he had found U.S. Mideast fo rmer economic adviser Alan Green­ of sociology have been used by the Har­ policy "confusing" since the dis­ span. rimans in the United States and the Nazis missal of fo rmer Secretary of State Also on the list are Council on For­ in Germany as a justification for mass Haig, for whom he had only eign Relations-approved congressmen extermination and sterilization cam­ praise. Kirkland mentioned meet­ like Tom Foley of Washington and Bar­ paigns against the poor and racial minor­ ing with fo rmer Kissinger aide ber Conable of New York; Trilateraloid ities, as well as an excuse not to imple­ Lawrence Eagleburger. GOP activist Dick Cheney of Wyoming; ment needed reforms in sanitation and Kissinger sidekick Brent Scowcroft; and, public health. In recent years, Commen­ • PIERRE SALINGER, an exec­ from the AEI, Irving Kristol and pro­ tary has been used as a fo rum for the utive with ABC-TV, met recently gram director Marvin Esch, an associate closely related Social Darwinist ideas of with Henry Kissinger and Roy of the unsavory GOP moneybags Max Harriman protege Daniel Patrick Moy­ Cohn on the West Coast. ABC has Fisher. nihan and his associate Edward Banfield, recently run two programs por­ Forty-seven CEOs from Fortune 500 both advocates of a policy of "benign traying the Republic of Mexico as companies are expected, along with for­ neglect" against the nation's poor. on the verge of Iran-style chaos. mer French President Valery Giscard Commentary is supported financially d'Estaing and former British Prime Min­ by the DeBeers diamond mining interests • ANDREW GREELEY. author ister James Callaghan, who headed gov­ of South Africa. While it claims to speak of the "fictionalized" attacks on ernments during Jerry Ford's tenure. for a segment of the Jewish community, the late John Cardinal Cody in Th e The theme of the closed-door, invita­ it has refused to publish any of the evi­ Cardinal Sins, and source of the tion-only session is "the Atlantic Alli­ dence of the role of the Harriman-funded material for the subsequent Chica­ ance," and informal discussion is bound eugenics movement in assisting in the go Sun- Times slanderous "investi­ to occur on how to increase the Trilateral extermination of the Jews. gation" of Cody, is being sued for grip over the Reagan administration. $3 million fo r libel by journalist EIR will report on the proceedings in a James Winters. Greeley claimed future issue. that Winters had actually "stolen" his material, which included a U.s. court rules taped diary saying, "getting Joe for WPPSS project Bernardin [Cody's replacement] Commentary magazine into the College [of Cardinals] is The Federal Court for the Western Dis­ getting our conspiracy in .... endorses eugenics book trict in Seattle, Washington has ruled In its August 1982 issue, Commentary, unconstitutional State Initiative-394. 1- • RICHARD COHEN, EIR 's the magazine of the "American Jewish 394, voted last year, requires state-wide Washington Bureau Chief, briefed Committee" published a review which vote of approval every time the Washing­ an audience of 30 diplomats, EIR fully endorsed The Underclass, Ken Au­ ton Public Power Supply System requires subscribers and media representa­ letta's recently published analysis of bond financing for construction of large tives on the EIR 's "Kissinger file" A merican urban problems from the nuclear projects. Joseph Califano, fo r­ on Aug. 5 in Washington, D.C. standpoint of eugenic race science. mer Carter HEW Secretary, represented Cohen presented evidence of the According to Auletta, "crime, dis­ an anti-nuclear coalition supporting former Secretary's role in the over­ ease, alcoholism, schizophrenia, and Washington State against the WPPSS throw and judicial murder of Pres­ other mental illnesses" are all largely projects. ident Ali Bhutto of Pakistan, the determined by human "genetic inherit­ While the Federal Court ruled the 1- kidnap-murder of Italian Prime ance," as are "anti-social behavior, dys­ 394 was an unconstitutional impairment Minister Aldo Moro, his geopolit­ lexia, manic depresson, low IQs, temper­ of contract between a federal agency, ical manipulations of the Mideast ment, stuttering, and shyness .... It is Bonneville Power Administration, and and the "China card," and his self­ both a hopeful and a depressing signal WPPSS, the court left 1-394 in effect confessed role as an agent of the that the study of human genetics has pending appeal. A bond sale for $680 British Foreign Office, and then co me out of the closet. Hopeful ... be­ million just before 1-394 took effect will brought the audienceup to date on cause it provides a fuller portrait of the ensure construction will proceed on Unit new information pertaining to truth. Depressing because it will no 2, which is 95 percent complete, and Unit Kissinger's membership in the se­ doubt prove that more citizens than we 3 which is 56 percent complete. Three cretive Monte Carlo Lodge. care to admit are beyond the reach of other plants have been deferred or can­ , 'science.' . celled in the past 15 months.

EIR August 17, 1982 National 63 Editorial

'Christians who are not Christians'

During the past month the Mexican National Ac­ pean Union, it is dedicated to bringing about a new tion Party (PAN) has declared a state of "national feudalist order through use of the environmental­ civic insurgency." This party, which garnered visi­ ists, "right" and "left,"the dionysian rabble at war ble strength in the July 4 elections, particularly in against the progress of peoples, against the perfect­ the northern border states, is dedicated to carrying ing of the repUblican order as defined by Pope Paul out the Iranization of Mexico, "insurgency" IV in the encyclical Populorum Progressio. against the Mexican state for the imposition of a Like the black oligarchy that created them, the feudal order. Panistas are "Christians who are not Christians"; The PAN is a nominally "Catholic right-wing" they are dedicated to using inquisitorial methods to party, neither Catholic nor right-wing. It is a cultist promote irrationalism. tool of the international black oligarchy-the same While apostolic Christianity as definedin Pope oligarchy running left and right terrorism through­ John Paul Irs encyclical Laborem Excercens de­ out Europe. The PAN was aided in the election fines fostering the creative potential of the human period in its operations against the Mexican state mind, man's building and creating, in the image of through the U.S. Embassy in Mexico City and the God, as the purpose of government, the PAN and U.S. consulates in the northern border states. the Pan-European Union are dedicated to eradicat­ Weeks afterthe election, ABC's prime-time TV ing the humanist basis of the Judeo-Christian tra­ extravanganza against Mexico fe atured the U.S. dition to bring about a satanic, dionysian world Ambassador to Mexico, John Gavin, predicting order. The PAN is not hesitant about working with Central American-style chaos for Mexico . the radical left to this end. "Whose side is the U.S. on, anyway?" one asks. The anti-Christian cultism of the PAN was EIR has documented the plan to turn the Mex­ demonstrated shortly before the Mexican elections ican republic into a cauldron of chaos and insurrec­ when dionysians led by Liberation Theology ele­ tion since Lyndon LaRouche denounced George ments in the Catholic Church announced the ap­ Ball's "Paddock Plan" for wiping out half the parition of the Virgin of Guadelupe, the object of Mexican population through "war, pestilence, and cult worship in Mexico for hundreds of years. This fam ine," in a half-hour election-eve television new apparition took place, according to the PA N, broadcast in 1976. in the home town of the Panista mayor of Ciudad Today those plans are in operation with the Obregon, Sonora, Adalberto Rosas. The Archbish­ complicity of the U.S. State Department and Henry op of Sonora, Quintero Arce, announced that the Kissinger, who warned Mexico in 1978 that "too Virgin had appeared because the popUlation was rapid modernization" would make an Iran out of living under such oppressive conditions, an open our southern neighbor. And James Buckley, his attack on the ruling PRI party. "conservative Catholic" family, and their National The cultist nature of the PA N and their method Review are backing the "Catholic right-wing" par­ of organizing based on manipulating fa naticism, ty, formed in 1939 by admirers of Hitler and Mus­ ignorance, and superstition, is well known through­ solini: the party of "national civic insurgency." out Mexico. Buckley family assistance and State Will Liberal Trilateralist Vice-President Department complicity in this operation against George Bush also back this fa scist party for the the Mexican republic is also a well-known fact . sake of carrying out a Global 2000 policy of mass Now rumors are spreading that PAN leaders murder in Mexico? have been involved in the celebration of black The PA N is a tool ofthe oligarchy's new Inquis­ masses. One would hope that Mr. Bijckley would ition. Much like the Hapsburg-created Pan-Euro- renounce such perversions.

64 National EIR August 17, 1982 EIR

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