Executive Intelligence Review

May 13. 1980 $10.00

Europe resists Iran caper manipulation

Why Secretary of State Cyrus Vance resigned
The wreckage of the Carter administration

The Aquarian Conspiracy's road

to George Orwell's 1984
[THIS PAGE IS INTENTIONALLY BLANK]
Editor-in-chief: Daniel Sneider
Associate Editor: Robyn Quijano
Managing Editors: Kathy Stevens,
Vin Berg
Art Director: Deborah Asch
Circulation M anager: Lana Wolfe

Contributing Editors: From the

Lyndon H. LaRouche, Jr.,
Criton Zoakos, Nora Hamerman, Editor-in-Chief
Christopher White, Costas Kalimtgis,
Uwe Parpart, Nancy Spannaus

INTELLIGENCE DIRECTORS:
Africa: Douglas DeGroot
Asia: Daniel Sneider
Counterintelligence: Jeffrey Steinberg
Economics: David Goldman
Energy: William Engdahl and
Marsha Freeman
Europe: Vivian Zoakos
Latin America: Dennis Small
Law: Felice Merritt I n the early sixties the u.s. space exploration effort captured the
Middle East: Robert Dreyfuss imagination of the population, children dreamed of being astronauts
Military Strategy: Susan Welsh and scientists, and the future of the nation and the individual family
Science and Technology:
was defined by the need for progress and an advanced education for
Morris Levitt
Soviet Sector: Rachel Douglas all the nation's youth.
United States: Konstantin George Today an entire generation of youth is addicted to drugs and rock
United Nations: Nancy Coker
music, and environmentalists, yoga freaks, transcendental medita­
INTERNATIONAL BUREAUS: tionists and biorhythm kooks consult their horiscope to determine the
Bogota: Carlos Cota Meza future.
Bonn: George Gregory
And so do many of our elected officials.
and Thierry LeMarc
Brussels: Christine Juarez Governors take drugs and meditate, mayors are flagrant homosex­
Chicago: Mitchell Hirsch uals, presidents believe in UFOs, and one U.S. Senator, once an
Copenhagen: Vincent Robson
astronaut, has called for a congressional investigation to determine
Mexico City: Josejina Menendez
Milan: Muriel Mirak the role of extraterrestrial beings in the injury of cattle in his state.
New Delhi: Paul Zykofsky What happened?
Paris: Katherine Kanter The moral, material, cultural and intellectual decay of the nation
and Sophie Tanapura
is not a sociological phenomenon, but a deliberately induced social
Rome: Claudio Celani
Stockholm: Clifford Gaddy crisis.
Washington D.C.: Laura Chasen Our Special Report this week, The Aquarian. Conspiracy's Road
and Susan Kokinda
to Orwell's 1984, takes you directly to the controllers of the social
Wiesbaden: (European Economics):
Mark Tritsch and Laurent Murawiec engineering laboratories who have used media, drugs and bestialist
psychology to destroy the nation in what they now openly call the
Executive Intelligence Review is published by
New Solidarity International Press Service
"Aquarian conspiracy."
304 W. 58th Street. New York. N. Y.lOOI9. Contributing editors Lyndon LaRouche and Criton Zoakos de­
In Europe: Campaigner Publications.
scribe what this now "open" conspiracy is really all about: mind
Deutschl. GmbH. + Co. Vertriebs KG
Postfach 1966. D.6200 Wiesbaden control and manipulating the population's "self image" away from a
commitment to progress, and ultimately the total destruction of
Copyright' 1980 Yew Solidarity
science and sanity.
International Press Service
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in whol" or in part without
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 •

�I1mContents
Departments Economics

1 From the Editor-in-Chief 6 First Penn in receivership,

and there's more to come
5 Editorial The leading bank in Philadelphia
Humor and a way is the subject of the biggest
out of the mess bankruptcy proceeding in
American history; the leading
52 Dateline Mexico bank in Chicago is dumping
executives as it teeters on the
Kennedy and the Virgin
brink. With Paul Volcker at the
of G uadeloupe
helm , who can be sure that any
institution is safe?
53 Middle East Report
Can OPEC be reunified? 8 Argentina's
Friedmanite
58 Congressional Calendar bank collapse

60 Campaign 1980 10 International Credit

Substitution Account killed
61 Energy Insider
Will Carter use Iran to ration? 11 Agriculture
Pot and pesticides
64 Facts Behind Terrorism
The environmentalists 12 Foreign Exchange
look to Iran
The dollar's deepening slide

14 Corporate Strategy
The end of the family car

15 Trade Review

16 Construction: How Volcker

brought the house down

18 Business Briefs
 Volume 7, Number 18 May 13,1980

Special Report International National

40 The Iran rescue caper: 56 How EIR knew where

,
the wrecltage of the Volcker would lead
Carter administration What happens to an industrial
H ow the aborted U.S. "raid" was superpower if you increase
staged, and exactly why it failed, interest rates, reduce energy
are not entirely clear. But iUs consumption levels, and inhibit
clear that, with Cyrus Vance's exports? An audience of
resignation and more to follow, professional economists :
what was left on the Iranian businessmen, farmers and foreign
A still-shot from the Hollywood rendering sands was the wreck of the embassy representatives in
of "Hair," heralding the "Age of present American government . Washington were stunned as
Aquarius." Photo: UA EIR's Dr. Uwe Parpart, a
43 The rescue raid designer of the LaRouche­
20 The Aquarian Conspiracy's Riemannian economic model,
Will Brzezinski
road to Orwell's 1984 explained that America faced not
try it once m ore?
The New Left, international only depression, but loss of the
terrorism , the counterculture, the very capacity for recovery if the
45 Why Secretary Volcker program plus "energy
homosexuals, the proliferation of
Vance resigned conservation" were continued for
psychotropic drugs-these are
not "sociological phenomena," even 3-6 months m ore .
but carefully planned projects of 46 The EEC summit
the social-psychology research Europe resists Iran 62 National News
institutions. Their creators now caper manipulation
publicly proclaim them all "a
single movement." Patiently and 48 The Kremlin
methodically, the population of 'The U.S. is on the
the United States is being brink of madness'
brainwashed.
Documentation: Interviews with 49 What the press
Dr.William Whitsun of "Novus," is saying
and Stanford's Willis Harman
51 The Bogota affair
22 Tavistock: 'mother'
of planned madness Why the terrorists
were the winners
25 Stanford institute's
54 International Intelligence
'images of man'

27 Crisis management:
Aquarius goes public

34 The difference between

their science and ours

38 The Clearinghouse:
'new age' in Congress
 Editorial

Humor and a way out of the mess

Giscard , Schmidt and Carter are taken prisoner by ship to reassert the necessity of a war-avoidance
the Iranians, and brought in front of a fi ring squad . rather than a war-provocation policy . Since then,
As the gunmen level their sights on Giscard, he, the EEC has strongly rebuffed Britain's Maggie
thinking quickly, screams earthquake! In the fray, Thatcher, Helmut Schmidt has decided to visit
he escapes. M oscow, and the U . S . population from the trade
Back in position, the Iranians take aim at unionists, scientists and military on up to the ruling
Schmidt, and as usual, following Giscard's lead, he patrician circles have been shocked out of compla­
screams "flood!" And in the fray, Schmidt, too, cency.
escapes . Now, having deployed humor, a crucial arm of
All lined up again, the riflemen aim at Carter. courage, world leaders must relaunch a war-avoid­
Carter tries a repeat performance Ii la Schmidt and ance strategy. Such a policy was begun in M ay
Giscard. 1 978 when Schmidt last met with Soviet President
He screams "fire ! " Brezhnev and both agreed to broad ranging trade
The above story, was narrated on April 2 9 b y and development deals between the two nations.
the West German d aily Die Welt and was apparent­ Later the European Monetary System was created
Iy being circulated around the European Commu­ with the stated purpose of stabilizing the world
nity summit meeting in Luxembourg . monetary system and opening the way for the
The following day, another West German daily, European M onetary Fund to supply cheap devel­
Die Zeit, ran an article entitled, "The Bomb in the opment credits for technology transfer to the
White House," by Wolfgang Ebert. "The Ameri­ Third World.
cans have the bom b. The Superbomb . It is in These first steps o f a war-avoidance policy must
Washington . . . . in the White House. be taken up again as the basis for the creation of a
" . . .It makes no distinction between good and new gold based monetary system that will redefine
evil. That is why we are so afraid . . . The Americans the ground rules for detente and end the rule of
call it tenderly, 'Jimmy' ." M althusian depression economics.
"Dr. End-Game" tells us of the bomb: "Ac­ The Executive Intelligence Review along with
cording to the recent experience with American the Fusion Energy Foundation has made such
technology, there is still a certain chance that it economic and development planning our business.
might not function when the going gets tough ." Our LaRouche-Riemann economic model pro­
This story, which we reprint in full in the vides the conceptual tools and the program to pull
International Report, captures an important shift the world out of the mess.
in world politics since Secretary of State Cyrus We have held seminars in Washington, Paris,
Vance resigned after the humiliating spectacle of Milan and other cities to present our groundbreak­
the Iran rescue caper. The humor from the gen­ ing approach to the science of economic develop­
erally "respectful" West German press shows a ment. Diplomats, government officials, farmers
certain courage, a distancing from the flight-for­ and industrialists have sat down with us to discuss
ward insanity of the Carter administration , the our program for the industrial development o f
capacity to say no, we won't go along with this India, o r the way t o turn around the destruction of
insanity, not even for the "unity" of the alliance. U.S. industry and technology. In the coming
The fact that Vance himself refused to back weeks, seminars on the LaRouche-Riem ann m odel
"the first action of World War III" went a long will take pl ace in other cities throughout the world.
way i n allowing the more responsible world leader- Join us .

EIR May 1 3, 1 980 Editorial 5

�TIillEconomics

First Penn in receivership,

and there's more to come
by Richard Freeman

Perhaps the largest bankruptcy process in U . S . banking tures have had to cut back on their bread and butter
history began April 28, as the Federal Deposit Insurance loans to industry and agriculture, which constitute their
Corporation (FDIC) poured a $ 1 . 5 billion loan and bail­ margin of profitability. First Penn's situation of watch­
out package into the ailing First Pennsylvania Bank. The ing tens of millions of dollars in its government securities
emergency measure was taken to forestall the biggest portfolio get wiped out as Volcker's moves took out 20
collapse since the Bank Holiday of 1 934 boarded up U . S . to 40 percent of their Treasury's face value, is not atypi­
banks across the country. The price tag on the rescue cal.
exceeds by far any previous such bailout. But a banking collapse, while a terrible thing, is not
The same day that First Penn was being rescued, in altogether despised in certain quarters of lower M anhat­
the board rooms of First Chicago Bank a decision was tan and Washington, D .C . Such a collapse, so the reason­
reached that the failures occuring there would best be ing there goes, provides a chance to reorganize the
resolved by a general scapegoating of the bank's chair­ economy from the top down along deindustrialized
man, Robert Abboud, who was given the boot. Not far Schachtian lines. Moreover, for every bank failure, there
away, in the executive suites of First Wisconsin Bank, the is a golden opportunity for a giant New York City bank
ticker tape reported that First Wisconsin's loans to Ar­ to come in and pick up billions of dollars in assets at
gentinian banks, totaling $ 1 . 5 million, might go up in bargain basement prices. It is f9r this reason that last
smoke in the general banking crisis underway in that month an unholy alliance of ultra-liberal Rep. Henry
country. Reuss (D-Wis.), chairman of the House Banking Com­
This general atmosphere led the Wall Street Journal mittee and bank executives Walter Wriston of Citibank
of April 28, in something of a panic, to report in an and David Rockefeller of Chase Manhattan joined to
article entitled "Behind the Signs at the FDIC" , that that ram through Congress the "Depository Institution Der­
august body might lack the funds-currently $ 10 billion egulation Act." This bill, geared toward crisis periods, is
is in its kitty-to stem a run on U . S . banks. intended to steer the ensuing shakeout in the banking
The FDIC action at First Penn can reassure no one as system toward recasting the U . S . banking system along
long as Federal Reserve Board Chairman Paul V olcker the British model-where five to 1 0 superbanks, operat­
is at the helm . Volcker's actions in tightening credit ing across state lines, call the shots on the entire econo­
conditions that started in October 1 979, have now pushed my. A quick glance over one's shoulder at the wreckage
the banking system to a point of no return. M any U . S . known as the British economy shows how well that
banks have n o nperforming assets that outstrip their works .
performing loans, but because of Volcker credit stric- The first Penn bailout came as the bank was about to

6 Economics EIR May 1 3, 1 980

 The Federal Deposit Insur­
ance Corporation was cre­
ated during the depression,
to insure banks against a re­
peat of the "Black Thurs­
day" collapse. But today, it
is an instrument for triage of
selected banking institutions.

report $ 1 00 m illion in l osses for the secon d quarter o f The FDIC is gearing i tsel f up for further operatio ns.
this year . A s part o f t h e agreement , t h e F D I C p u t $325 Jack G uttentag , the b a n k expert at the Wharto n School
million and a consortium o f 26 b anks put $ 1 75 million o f Finance, to ld EI R Ap ril 3 0 that "the FD I C ' s kitty of
into capital debt, for a total of $ 1 . 5 billion. I n addition , $ 1 0 billion is not large enough for the tasks that lie ahead
the 26 banks agreed to put up a credit line totaling $ 1 for i t. Currently, people at the FDIC are working with
billio n . Reuss and Proxmire to expand the credi t line that the
The terms o f this bail-out disclose m o r e t h a n meets FDIC had with the Treasury, which is a lready there and
the eye . The contribution by the FDIC and 26 commer­ implicit, into an exp licit and unlimited credit line."
cial banks is being done at a price the "rescuers" are The cases of First Chicago and First Wisconsi n may
being offered warrants, redeem able in 7 years, for 20 prove the first b a n ks to be given an FDIC " rescue."
million sh ares o f First Penn stock at $3 per share. This First Chicago is a bank that h as long been .t roubled by
will give the FD IC and the banks 56 percent ownership a poor bond portfolio, a n d directly affected by the
of First Penn . The offered price of $3 per share is o ne­ Volcker cred it crunch. Through all of 1 978 a n d through
half the current m arket p rice of Fi rst Pen n's stock and the end of the third quarter of 1 979, Fi rst Chicago's
less than one third the stock's book value ! Thus the qu arterly profits were in the range o f $30 to $35 m i llion.
FDIC and 26 commercial banks are being h anded m aj or­ I n the fourth quarter of 1 979, its profits plummeted.
ity co ntrol of First Penn at a song. Capital izing on the difficulties at Fi rst C h icago, a
What will the FDIC do with ow nership of a ban k . faction o f the First Chicago board with friends in h igh
T h e answer is sell it o ff to another bank, once t h e dust places and connections to dirty m o ney networks began a
has cleared. First Penn was not rescued: it was j ust barely reo rganization o f the bank. Ben Heinemann, the head of
held afloat . First Penn is also getting large doses of Northwest Industries and a long-time m ember o f First
money from the Federal Reserve's discount window in Chicago's board, took over control of the First Chicago
the range of $500 m illion to $1 billion . In deed, what is executive committee, h aving himsel f appointed as its
going on at Fi rst Penn is what happened in 1 9 74 when chairm a n . H einemann then h ad Ro bert A b b o ud , First
Franklin Na tio n al Bank was propped up long enough Chicago 's chairm an who is kown to favor industrial
for a buyer to be fo un d . lending, o u tsted. Heinemann is a crony of both Hen ry
As for the most likely candi dates t o p urchase a decap­ Reuss a n d Commerce Secretary Phillip Klutznic k , who
itated First Pen n , the front-runner is the overly eager has b een implicated in d rug-related dirty m o ney net­
Citibank, which made the l argest bail-out loan to Fi rst works run from Chicago. He is also the individual re­
Pen n of the 26-bank syndi cate. spo n sible fo r asset-stri ppi ng the M i l waukee Road which

EIR M ay 1 3 , 1 9 80 Econom ics 7

his Northwest Industries owns.
At this point, there can be no doubt that if the First
Penn's of the U. S . banking system go belly side up, the Argentina's
other smaller regional banks can't be far behind . This is
the intention of the giant New York banks which encour­
aged the passage of the Depository Institution Deregu­
Friedmanite
bank collapse
lation Act of 1 980, which calls for "survival of the fittest"
deregulation warfare between banks. In depression con­
ditions, this always means that the biggest with the best
connections to the City of London come out on top . In by Mark Sonnenblick
addition to the already passed banking law, therefore,
Citibank's Walter Wriston, who called for "streamlining The chain-letter collapse of Argentina's financial insti­
the banking system" in congressional testimony this tutions could have maj or ramifications for the interna­
month, has supported an emergency FDIC bill, now tional banking system .
sponsored by House Banking Committee chairman On April 25, the Navy component of the Argentine
Reuss and his Senate counterpart Proxmire, to allow military government forced the central bank to intervene
interstate banking, and undo the McFadden Act which in three banks which were rapidly going under. Banco de
forbids such interstate banking. los Andes, the largest private bank in the country, was
The granting of interstate banking is just the clear­ among them .
ance Citibank needs to begin its own reorganization of The current panic was triggered by the M arch 29
the U. S . banking system by gobbling up the failures announcement that the central bank was liquidating
produced by Volcker' s depression . New York's Citibank Argentina' s number two bank, Banco de Intercambio
already has banks to spring into operation : it owns a $ 1 Regional. As it became clear that most of the banks
billion bank in Miami under Edge Act laws; a South which had engaged in a whirlwind of speculation had
Dakota Bank; an option to buy a Chicago bank; and 400 their portfolios filled with bad debts of clients they had
credit card offices in 40 states, which could start doing helped to bankrupt, the run began . Depositors lined up
banking functions if permission were granted. for blocks to move their funds from the local banks to
The bank reorganization has very high stakes. "The less vulnerable state and foreign banks. Some banks
First Penn bail-out was j ust a test-case," said Richard reportedly lost 75 percent of their deposit base in a
Wanlin, the emergency coordinator at the Controller of month.
the Currency office at the U . S . Treasury . Wanlin is the Pressures from military men, many of whom had
go-between the Controller of the Currency's office and substantial stakes in the crumbling banks, forced the
the crisis management Federal Emergency Management government to scrap its doctrinaire "laissez-faire" atti­
Agency (FEMA), which is running a top-down reorgan­ tude by which the "unfit" would be allowed to die. Just
ization of the economy . Wanlin is also connected with to try to control the pace of the banking collapse, the
the Federal Financial Institutions Examination Council. central bank last week gave peso depositors full FDIC­
This council was set up in M arch 1 979 deriving power type insurance and advanced $ 1 billion in emergency
from the Financial Institutions Regulatory and Interest funds to the stricken banks. Despite the bail-out opera­
Rate Control Act (PL 95/630) and its current chairman tion (which is likely to cost the austerity-ridden federal
is Comptroller of the Currency, John Heiman, who is government up to $4 billion), most Argentines and the
Wanlin's boss. "We are putting together powers that will respected IBCA Banking Analysis in London expect
bring the banking reform to a high point," he added. several dozen other institutions to fold in short order.
"Look at the emergency powers that we have. We can At least one uninsured credit union, with 35,000
use Emergency Banking Regulation # 1 , which was wheat industry employee members, had failed to gain
passed in late 1 962 during the Cuban missile crisis. Let us cash to meet withdrawal demand as a result of its funds
say there was a war between Iraq and Iran or the south is being tied up in the liquidated B . I . R . banks and deposi­
bombed. Under this regulation, we can merge banks, tors whose money is locked into closed banks are dump­
shift funds, do whatever is necessary." ing their holdings on the stock market at any price,
Wanlin added that he was in Alabama during the resulting in stock prices plummeting 30-50 percent over
floods there last year, when FEMA was there supposedly the past six weeks .
to help flood control. "While we were there we ran
simulated tests on how to run the Birmingham banks and Deregulation and bust
merge them after nuclear attack ." When asked whether Argentipa' s banking collapse was caused by precisely
his work on flood control was incidental, Wanlin re­ the same kind of Friedmanite "deregulation" policies
sponded quickly "of course." exemplified by Wisconsin Rep . Henry Reuss's Banking

8 Economics EIR M ay 13, 1980

Reform Act now pending in the U. S . House. Monetarist foreign banks who lost an estimated $80 million loaned
Finance Minister Jose Martinez de Hoz deregulated the to the defunct B . I . R .
banks in 1 977 to permit them to borrow and to lend at A specialist who wrote a study of the Argentine
whatever interest rates the "free market" would bear. De banking bubble for the World Bank last August told
Hoz acted on the basis of classical doctrines of economic EIR, "these little banks shouldn't be playing in the
liberalism with the j ustification that it would bring into tropical leagues, because sooner or later you' re gonna
the country the billions of dollars needed for its "eco­ get burned." This experience could help persuade lenders
nomic reconstruction" from the hyperin flationary break­ already queezy about the LDCs' ability to service their
out at the end of the Peron administration. debts to stop lending to the whole block of countries .
Argentina was transformed into a "banker's para­ For example, foreign bank representatives in Rio
dise," sucking in what First National of Boston estimates told the Brazilian daily Gazeta Mercantil that "more
to be $4. 5 billion in "hot money" from international than 500 banks consulted refused to participate in the
speculators who clear 3 percent profit per month in the $250 million Petrobras loan syndication headed by Deut­
"Argentine banking bubble." De Hoz generously in­ schebank and the Bank of America. " Brazil, which is
sured the speculators from exchange risk by announcing conservatively estimated to ha ve to borrow $ 14- 1 6 billion
a year in advance monthly devaluation rates less than to make ends meet this year, was able to float only one
half the country's 1 60- 1 80 percent internal inflation rate. $70 million bond and squeeze through the solitary $250
As befitting a nation run by Friedmanite policies, million loan during the first third of the year, according
interest rates became sharply positive in respect to infla­ to official information leaked to 0 Estado.
tion, leading the local middle class to j ump on board While the "public" line o f the bankers is that they
"the Argentine bicycle." The Times o f London reported: want shorter terms and a quarter percent more spread,
"With rocketing prices and land values, people are sell­ Planning Minister Delfim Netto' s trip to Europe last
ing their houses and taxi drivers their cars to cash in." week showed little disagreement there with American
The de Hoz tactic worked . The vaunted "savings bankers' insistence that Brazil submit to I M F condition­
rate" rose to a 28 percent of GNP. But only 8 percent of alities. The Brazilian daily Folha attributes the recent
the GNP was invested in productive activities . purge of the raving nationalist General Carlos de An­
What made the orgy of usury possible was the desper­ drade Serpa from the Army high command to his expect­
ation of Argentina' s once-dynamic industrial sector. The ed leadership of military opposition to an I M F-takeover
de Hoz team of monetarists sought to turn the country of Brazil .
into one big farm by instituting a "free market economy"
in which manufacturing would lose its former tariff
protection and subsidies and be forced to pay through
the nose for energy and other government services. Such
Can the American
policies decapitalized industry, while the speCUlative econornyrecover?
credit market drained funds away from long-term invest­
A series of seminars on
ment or direct capitalization. Industrialists had to turn
to the legalized usurers and pay the incredible interest the LaRouche-Riemann
rates, just to try to keep afloat.
But, after two years of banker euphoria, the high
Economic Analysis
interest rates and the increasingly depressed economy sponsored by

made the creditors unable to shoulder their debt burden, the Executive Intelligence Review
dragging down the banks with them . The worst may still and the Fusion Energy Foundation.
be to come. Argentina' s largest corporate combine, Sas­
The LaRouche-Riemann economic model Is the
etru, though centered in agro-business, is known to be only econometric model to forecast with accu­
unable to repay the $500 million it owes to the banks. racy the impact of the Carter administration's
With a "severe recession" begun, the pace o f failures will "anti-inflation" policies.

undo ubtedly escalate throughout the economy.

The crisis goes far deeper than "isolated problems In New York:
due to financial mismanagement by a few unscrupulous Wednesday. Mqy 28.2:30 PM
institutions" or "a temporary effect of the rapid decrease City Squire Hotel 7th Ave. & 51st st.
in inflation catching a few insitutions with high interest Registration fee: $50 per person
liabilities and low interest assets" -explanations o ffered For more information contact:
by defenders of de Hoz. Leif Johnson. EIR. 304 W. 58 St . . New York. N.Y. 10019
or call (212) 247-8820
The New York Times targets First National of Seattle
and the very shaky First Wisconsin as being among the

EIR May 1 3 , 1 980 Economics 9

International Credit by Peter Rush

Substitution Account killed

Fund in financing deficits .
The IMF made no progress toward official control of I M F sources themselves under­
OPEC's surplus or displacing the dollar at their recent scored after the Hamburg meeting
Hamburg meeting. that "no commitments were given"
by the Saudis or anyone else from
OPEC . I M F spokesmen also den­
ied to EIR a report by Le Monde
T he plan for a Substitution Ac­ in particular derided the idea of correspondent Paul Fabra that the
count was quickly defeated at the tying up gold reserves to back I M F Saudis and Gulf states are "espe­
April 24 session of .the Internation­ "funny money" instead of using cially receptive" to the proposal
al M o netary F u n d meeting i n the gold, as envisioned by the because they are bein g offered bet­
Hamburg . The Carter administra­ European M onetary Fund frame­ ter-than-market returns on their
tion-backed proposal would have work, to directly back the dollar presumptive loans to the Fund.
officially displaced the dollar as and the other leading international "The Arab countries have al­
the world's principal reserve cur­ currencies . ready expanded their loans to the
rency. "Excess" overseas dollar While the Substitution Account less-developed countries," said a
holdings were to be called in, cen­ has finally died an official death, Franco-Arab banker in New York
tralized in the I M F, and exchanged the question outstanding is control April 30. "I doubt that the IMF
for securities valued in Special of the $I20-odd billion in annual will be given control over the sur­
Drawing Rights, the I M F's bas­ lendable OPEC surplus revenues. plus. The Arabs want to keep for
ket-of-currencies unit of account. The I M F and the Carter admini­ themselves the political influence
The peremptory rejection of the stration want to 1) prevent expan­ that goes with the loans." The
plan was termed "a surprise" by sion of OPEC's direct dollar flows Brazilian industrial city of Sao
most of the American press. The to Western Europe and Japan, and P a u l o a n d t h e g overnment o f
ostensible stumbling block was the 2) to absorb as much as possible Turkey are reported elsewhere to
question of guarantees for the of the OPEC liquidity into the be among the recipients of quiet
SDR assets . The U . S. and I M F I M F and World Bank, so that Saudi lending .
wanted the Fund's still-large gold political and economic conditions This situation-or rather its
reserves to be appropriated as the can be placed by these institutions potential for expansion-enrages
guarantee. Western Europe pro­ on the reissuance of the surplus as the policymakers represented by
tested that the U . S . Treasury itself credit. the Sunday Times, which expostu­
should bear the financial burden. The London Sunday Times of lated that "the countries with two­
This dispute could have been April 27 triumphantly announced thirds of the population of the
resolved w ere E u r o p e a n d the that "Saudi Arabia has agreed in Third World, which rely almost
OPEC governments eager to es­ principle to lend large, though un­ wholly on aid from international
tablish the SDR account. Our re­ specified, sums of hard currency to agencies," unlike the South Koreas
port last week that they prefer in­ the International Monetary Fund and Mexicos of the Third World,
stead to strengthen dollar opera­ to help finance worsening pay­ will soon have to borrow from the
tions was confirmed by the Saudi ments imbalances. " But the 20- I MF's general loan facilities, "con­
announcement-timed to coincide member Interim Committee of the ditions and all . "
with the I M F meeting- o f an I M F ended its meeting April 28 At the Hamburg meeting, the
agreement to provide up to $2.4 without any tangible results of this Group of 24 less-developed coun­
billion a year in dollar credits to sort. According to the final com­ try spokesmen vainly demanded a
cover Japan's current accounts munique I M F Managing Director relaxation in I M F lending condi­
deficit. A similar agreement was Jacques de Larosiere was simply tions. The matter was deferred to
concluded with West Germany "encouraged to start discussions the a u t u m n General A ssem b l y
earlier this year. with potential lenders" in order to meeting of the I M F a n d World
Behind the scenes, the French prepare a "growing role" for the Bank.

10 Economics EIR �ay 1 3, 1 980

Agriculture by Susan B. Cohen

Pot and pesticides

tent must be filed with the County
California's environmentalist-drug lobby is acting to make Commissioner. After all this, the
pesticide production difficult, and getting a permit for its use permit is good for only one crop .
virtually impossible. The actual authors of the 45
pages of regulations and 1 20 pages
of operational protocol, written in
what rational observers describe as
"H ear about it?" exclaimed a California Environmental Quality "mindboggling legalese," remain
knowledgeable source, "I know for Act (CEQA) certified by Human unknown . There is reason to be­
a fact that it' s true." That was the Resources Secretary Huey Johnson lieve that the program was drafted
response to this writer's prelimi­ in December . Previously, pesticide in Huey Johnson's office. Johnson
nary effort to confirm the report use in agriculture had been ex­ heatedly denies it.
that Dope, Inc. was financing empted from the provisions of the Others insist that the regula­
moves to regulate farm chemical CEQA when the California legis­ tions came word-for-word from
production and pesticide use out lature decided that making a farm the Governor's office. Others ar­
of existence. producer submit a full-dress envi­ gue the distinction is academic.
Under the leadership of the En­ ronmental impact statement every Significantly, the same Huey
vironmental Defense Fund, the en­ time he wanted to use a pesticide Johnson threatened to throw Farm
vironmentalist lobby conspired to was "unrealistic and unworkable." Chemicals editor Gordon Berg out
rewrite California's pesticide reg­ Now, Assembly Bill 3765 orders of his office when Berg, in the
ulations program so as to virtually the Department of Food and Ag­ course of an interview, posed the
double the cost in time and dollars riculture to come up with pesticide question to J o h n s o n d irectl y :
of developing and using pesticides. regulations that meet CEQA by "What' s more important-pot or
The new regulations railroaded January 1 , 1 98 1 . food?" Johnson consented to con­
thro ugh the state's Department of Everyone i n the chemical in­ tinue the interview only if Berg
Food and Agriculture are present­ dustry and farm production agree would turn off his tape recorder.
ly stalled in the legislature. A cam­ that the measure' s effect will be Berg later questioned in print (see
paign has been mounted there to crippling. Previously growers con­ the April issue of Farm Chemicals)
deny funding for the farm chemical sulted with their local pest control why a man of Mr. Johnson's stat­
control program and five bills pro­ advisor, decided on the appropri­ ure would become so hysterical,
posing to do away with it altogeth­ ate pesticides to use, and applied refusing to be quoted on the pot
er have been fielded . to the County Agriculture Com­ lobby's role in the farm chemicals'
The agriculture industry na­ missioner for a permit which . Now fight.
tionally is watching the California the grower must prove to the It is admittedly shocking, but
case closely, fearing that it may be County Agriculture Commissioner the "marij uana connection" is one
a harbinger of an attempt to shut in writing that all "feasible alter­ of the best-known secrets in the
down farm chemical use state by natives" have been fully explored state. The individuals contacted by
state. California is known to have and that use of the pesticides does this writer were quite specific.
one of the strictest farm chemical not conflict with any "sensitive "They grow very fine marij uana
control programs in the country, area" prohibitions before receiving up along the northern coastal area
to begin with, more than comply­ a permit. of California," one reported, "and
ing with federal Environmental Once the permit is issued, the want to stop the use of chemicals
Protection Act requirements. The grower must further prove in writ­ in the forested areas." The possi­
proposed new regulations in effect ing that additional measures that bility of pesticide "contamination"
preempt federal law . would "mitigate" the adverse im­ cheapens their product, and could
The redrafting of the pesticide pact of the pesticide have been presumably put the illegal industry
regulations were to qualify them applied. Further, prior to using a out of business altogether, he ex­
as a "functional equivalent" of the pesticide, a detailed Notice of In- plained .

EIR May 1 3, 1980 Economics 11

Foreign Exchange by Richard Katz

The dollar's deepening slide

the Bundesbank also cut reserve
An interest rate decline has invited outflows from the u.s. requirements 8 percent and ex­
currency, but without reversing the business squeeze. panded rediscount borrowing quo­
tas by $2.6 billion for German
banks. The net effect is not a
straight tighte n i ng , b u t , as a
Deutsche Bank official character­
ized it for EIR , "increased liquidity
at a higher cost ." The Bundesbank
has taken into account the foreign­
trade effects of the deutschemark
appreciation encouraged by this
move. Upward pricing of exports
T he past two weeks' drop in U . S . ing its prime rate to 18Y2 percent. is expected to be outweighed by
interest rates has sharply acceler­ Fortune 500 companies are getting decreases in import costs, the costs
ated the decline of the dollar. Over a b r e a k , but p s yc h o lo g i c a l l y that have most fueled German in­
this period, the dollar has lost geared pullbacks of this small flation. Meanwhile, the funds in­
more than 5 percent of its value magnitude won't pay the nation's flow is intended to cover the cur­
vis-a-vis other maj or currencies bills. The U . S . lending structure rent accounts deficit.
(with the exception of sterling, remains locked into the Carter ad­ While the Bundesbank pro­
classified as a "high-inflation" cur­ ministration's credit crunch for in­ motes inflows into the mark, the
rency, like the dollar) . Unfortu­ dustrial and agricultural purposes . Federal Reserve acted to curb in­
nately, this is not a tradeoff be­ The recently announced down­ flows to the United States. On
tween a credit upturn and a dollar turns in U . S . loan demand reflect A p r i l 2 2 , Fed C h a i r m a n Paul
downturn . We are looking at the no decline in aggregate require­ Volcker told leading foreign cen­
worst of both worlds. ments for funds. Rather, banks tral bank governors to prohibit
Short-term rates have eased have lent up to the credit-corset private banks from lending to U. S.
dramatically as the Federal Re­ "base ratios" imposed by V olcker corporations, on the grounds that
serve this week allowed overnight in M arch . And the obvious effect such lending undermines Volcker's
interbank money to dip as low as of lower short-term U . S . rates is to credit cutoffs . The Bundesbank
10 percent from its recent 20 per­ heighten the potential for specu­ and Bank of Japan replied that
cent leve ls . Treasury b i l l s l ost lative outflows that will deepen the they will try to do so; the Banque
about half a percentage point in overall liquidity crisis here. de France refused, saying it lacks
one day on April 30-spurred by W e s t G e r m a n cen t r a l b a n k the legal authority.
foreign central bank purchases o f chief K arl-Otto Poehl announced . Outright dollar panic never
a Whopping $ 1 .2 billion i n U . S . recently that the Federal Republic materialized this week despite the
Treasury paper t o help bolster the is out to "attract foreign capital. " U . S.-Iran crisis, basically thanks to
dollar ! Private demand for Trea­ French and Belgian interest rates restraint by American allies. How­
suries, which helped drive down began to come down this week in ever, foreign exchange traders say
rates this month, also has ironic reaction to the U . S . situation. But they see no turnaround coming in
origins in investors' fear of other on April 30, the Bundesbank hiked the dollar' s slide, and no basis for
placements . interest rates. The cost o f discount one. As "long" positions mature,
The prime rate for favored cor­ borrowing was raised half a per­ they expect increasing movement
porate customers has been stickier. centage point to 7Y2 percent, its out of dollars . "The recession is
This week, seeking to reassure the highest in 10 years, and the lom­ supposed to help the dollar," com­
business community that some re­ bard rate (on loans from the cen­ mented Barclays Bank this week,
lief is in sight from impending tral bank collateralized by securi­ referring to the conventional wis­
chain-reaction ban kruptcies, the ties) went up 1 percent to 91/2 dom that "recession" will lick in­
ultraconservative Morgan Guar­ percent. flation. "But that really doesn't
anty Bank took the lead in lower- Unlike the U.S. Fed, however, make sense."

12 Economics EIR May 13, 1980

 The dollar in deutschmarks
New York late aftemooo
1.95

1.90

1.85

1.80

1.75
3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30

The dollar in yen

New York late afternoon
..... 260

.-/, "V'
- 250
"
1"""111 240
....
�
230

220
3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30

The dollar in Swiss francs

New York lale afternoon
1.85

1.80

1.75

1.70

1.65
3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30

The British pound in dollars

New York lale afternoon
2.30

J � � � � .. 2.25

....... -
./'I 2.20
-- --
""""" �
�
---""""
- .....
2.15
�
2.10
3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30

EIR May 1 3, 1980 Economics 13

Corporate Strategy by Leif Johnson

The end of the family car

Re�ss ( D -Wisc.) suggested that
Loan guarantee or not, Chrysler Corporation is about to be Chrysler convert a portion of its
capacity over to the production of
trimmed down to size and the rest of the industry will be
pollution abatement equipment for
forced to adjust to the standard. other companies .
In the new twist of the loan
guarantee saga· the Public Citizen
Litigation Group, the legal arm of
As of this writing the Chrysler effect of forcing Detroit to produce Ralph Nader's Congress Watch,
Loan Guarantee Board has again smaller, more "fuel efficient" cars filed a suit in federal district court
postponed its decision on whether in order to compete. last April 25 demanding that the
to release $ 1 .5 billion in federal " U . S . automakers are now be­ Chrysler Loan Guarantee Board
l o a n g u a r a ntees fo r t h e a i l i n g ginning to lop off their big car conduct its meetings in pUblic. The
auto maker. Whether Chrysler gets facilities," he commented. "You group, which contends that the
the loan guarantees or not (it prob­ may have noticed that all the major board is subject to the Sunshine
ably will get them in the end) the plant closings announced recent­ Act o n p ublic disclosure, won a
die is already cast for Chrysler and ly-such as the Ford plants in Los temporary restraining order; all
the U . S. auto industry. Angeles and northern New Jer­ the proceedings of the board's
"Detroit has been living too sey-are big car plants." meetings are now being recorded
much in the past," Lester Brown, As of this week , Chrysler-al­ on tape or otherwise pending the
president of the W orldwatch Insti­ ready in default on some $60 1 mil­ outcome of the law suit.
tute, told a financial reporter last· lion in current obligations-will "There is a lot at stake here,"
week . "The auto industry is run by not h ave sufficient cash to meet its an attorney for the group ex­
an aging bureaucracy . But, fortu­ regular payroll. The need for the plained. "There is a lot of taxpay­
nately, circumstances are forcing loan guarantees has become criti­ ers' money involved and some very
the in dustry to adj ust." cal. The guarantees have been held critical economic issues . We want
Brown, the ubiquitous environ­ out as the "carrot" to get Chrysler to make sure that Chrysler is
mentalist and doomsayer, recently to streamline itself into a much forced to meet federal standards
coauthored the book Running on smaller automobile company pro­ on air pollution and fuel efficiency,
Empty: the Future of the A utomo­ ducing much smaller cars. To win for example. We firmly believe that
bile in an Oil-Short Wor/d. Last approval of the loan guarantees, Chrysler is no longer viable in its
week , he predicted that with the Chrysler announced within a space present size and in its present in­
decontrol of domestic oil prices of ten days last month: tentions to remain a producer of a
now underway, "it is quite likely • A cut-back in its automobile full line of cars."
that on Oct. 1 the price of gasoline lines from three families to two . On the similarity of the group's
with be $2.00 plus-probably clos­ As of four months ago, Chrysler views on Chrysler to those of many
er to $3 .00. You can extrapolate hoped to keep five families in pro­ Wall Street investment bankers,
the effects on American driving duction . Now it will maintain only the attorney noted that there was
habits and the automobile indus­ its Omni/Horizon compact model a tremendous interest in the suit
try . There may be ebbs and flows and its new front-wheel-drive " K­ from Wall Street. "As soon as
in interest rates . However, a gen­ car" due out next fall . word got o ut about our suit we
eral transformation of the econo­ • A 20 percent slash in its white got a lot of calls, including from
my is now under way." collar staff and blue collar support financial reporters. Judy Miller of
Brown added that in testimony staff (including everyone from jan­ the New York Times called. She
before Congress he has repeatedly itors to scientists and engineers). had been talking to people in the
opposed the placing of any restric­ The layoffs will reduce the size of financial community who were
tions on auto imports, because in these staffs by 35 percent from very interested in our suit. It seems
his view the rising level of foreign January 1 979 levels. that they share many of our views
car imports has had the salutory Last s u m m e r , R ep . H e n r y about Chrysler. "

14 Economics EIR May 1 3 , 1 980

TracIe RevieW'
NEW DEALS

Cost Principals Project/Nature of Deal Financing Comment

1.3 bn Rumania from Iran Iran will sell Rumania 5 mn. metric
tons per annum of crude oil

275 mn Poland from West Poland has placed orders for a wide Under umbrella
Germany variety of machine tools with a large of $1.1 bn. 1977
group of West German engineering credit issued by
firms Dresdner bank­
led consortium,
originally for
coal-gasification
(Poland cancelled
this)

1 00 mn Taiwan/U.S. GM will participate 45 percent with GM

plus Taiwanese interests in construction announcement
and ownership of plant in Taiwan that
will produce medium and heavy-duty
trucks and buses, and diesel engines.

9 1 mn United Kingdom British Airways has ordered an all­

from U.S. cargo Boeing 747 jumbo jet.

41.7 mn Mexico from U.S. Mexico's Comision Federal de Electri­ $35.4 mn

cidad will purchase 10 gas turbine elec­ Eximbank credit
tric power generators (6 from GE, 4 at 8 percent
from Westinghouse)

34.43 mn Argentina from U.S. Hidroelectrica Norpatagonia S.A. Eximbank credit

(HIDRONOR) will purchase four 250 of $29.27 mn at
megawatt turbines and engineering 7.8 3 percent
services for the 1 ,000 megawatt ALI­
CURA power plant in Nequen prov­
ince. Winning contractor for turbines
is Chalmers

33.8 mn Singapore from U.S. Northrop Corp is selling six F-5E Approved by
fighters to Singapore U.S. Defense
Department;
Congressional
approval
expected

20mn India from France Peugeot will supply manufacturing

technology for diesel engines to the
Mahindra and Mahindra company.
An output of 25,000 engines per year
is anticipated.

11.4 mn Yugoslavia from U.S. Iskra Commerce will build a plant to Eximbank $2.8 cancelled
manufacture microelectronic integrat­ mn credit at 8.75
ed circuits and a compressor motor percent
plant, and will expand a collector mo­
tor plant. Supplier is American Micro­
systems Inc. of Santa Clara, Calif.

54.8 mn Morocco from the Bos Kalis, the Dutch construction co.,
Netherlands has indefinitely postponed its contract
to build a Western Sahara harbor proj­
ect-despite Moroccan government
opposition to the postponement. Bos
Kalis says Polisario guerrilla activity
has made the company's activity un­
tenable.

EIR May 13, 1980 Economics 15

Construction: how
Volcker brought
the house down
by Lydia Schulman

When Federal Reserve C hairman Paul V o lcker i naugu­ i ca ntly below 17 percent b y this coming October, these
rated phase one o f his credit restraint p rogram last Oct. builders report, there will be a sh arp ratchet in both
6, the National Associ ation of Home B uilders (NA H B ) commerci al and industrial contract con struction.
responded with di sbelief a n d braced for the worst. The Cutbacks in federal spending since 1 9 75 have leveled
association stated that the entirely p redictable results of public spending on hospitals, schools, and other essentia l
the credit measures would be a precipitous drop in n ew i n fr as tr ucture. T h e bulk of the cuts proposed in the Fiscal
housing starts down to 1 m i llio n units per year-50 1 9 8 1 bu dget are to come out of federally funded con­
percent drop from 1 9 78 levels-and mass unemployment struction p rojects: A rm y C orps of Engineer proj ects,
in the construction industry. wa ter resource p rojects, airp ort construction grants and
Those predicti ons h ave come true with a vengeance. road building. B ut even before these budget cuts hit, the
Those types of construction i m m ediately rel ated to main­ Federal H ighway Admi nistratio n is expected to run clear
tai ning an d enh ancing the standard of living o f the U.S. out of money by this summer, leaving states in the l urch
population-the single- fa�ily home, mi ddle and l ow fo r $ 1 .4 billion in let contracts.
income apartment dwellings, h ospital and schools, and
nuclear power plants-are in a nose dive. Housing: a calculated collapse
In M a rch, starts o f new private homes fel l to a One of the first calculated consequences of the Volck­
seasonally a dj u sted annual rate of 1 .04 million, down 42 er credit s qu eeze was to dry up mortgage money, or,
percent from M arch 1 9 79. The number o f con struction wh at amounts t o the same thing, t o p rice it o ut of the
workers employed i n residential constr ucti on has plum­ reach o f m ost p rosp ective h o m e b uyers. I n the state of
meted b y o ver 1 63 ,000 since a pea k l ast A ugust-a 28 California, one of the 24 states without usury l aws,
percent dro p. No one i s pretending that this is a m erely m ortgage rates were holding firm at 1 7.5 percent at last
"season al" phenomenon. Record high interest rates and count, even tho ugh certain other interest rates have come
the collapse o f t he bo nd market have been the coup de down a b it.
grace for the U.S. nuclear industry. Besieged alternately T he dizzying rise in m ortgage rates this p ast winter
by unwashed greenie demonstrators and spiraling inter­ has resulted in a n even more dizzying r ise in mon thly
est rates, the Public S ervice Co. o f N ew Hampshire was mortgage payments. I n Jan uary 1 9 79 , the median price
forced to begin laying off half of the 4,700 constructio n of a single fam i l y home in California was $79, 599, the
workers at Seabrook i n M arch. Plans for at least 1 3 prime mortg age rate was 1 0�8 percent, and the monthly
nuclear facilities were cancelled o r s helved for the same m ortgage payment was $577. In January 1 9 80 the p rice
reasons this past winter. of the same ho use w as $97,957 , the mortgage rate was 1 3
In dustrial and co mm ercia l con structio n h ave not percent, and the m o n thly mo rtgage p ayment was $ 1 , 1 70.
been significantly affected-yet. I n these areas o f the (These figures are fro m an in-ho use report in preparation
con struction ind ustry, where projects h ave long lead by Crocker N ational Bank in San Francisco.) Over the
times and co nstruction spans several years, builders re­ 30 year l i fe of the mortgage, the h om eowner will have
port that they a re still working off contracts that were paid $4 1 4 ,000 in interest and principal p ayments for the
signed in early 1 9 79 before the V o lcker tight m o n ey $97 ,957 h o use!
regime began. If interest rates do not come down signif- In m a ny states mortgage money has simply been

16 Eco nomics EIR M ay 1 3, 1 98 0

nonexistent. Unpublished figures compiled by the Fed­ time about $ 1 billion in synthetic fuel-related construc­
eral Home Loan Bank Board indicate that the federally tion contracts are in progress or have been let out in what
insured savings and loan institutions made fewer mort­ is known as the "overthrust belt," the mountainous
gage commitments to prospective homebuyers this past region encompassing parts o f M ontana, I daho, Wyo­
March than at any time since such statistics started being ming, Utah, and Colorado. This figure could easily triple
kept in 1976. In the first quarter of the year the S& Ls had by the end of 1 98 1 , according to area contractors .
the lowest net inflow of deposits in a decade, a situation Also on the agenda in Utah: construction of the
which is not likely to improve, because, even if interest Intermountain Tower Project is expected to start up next
rates ebb and flow over the months ahead, high interest year . When completed , the ITP will be the largest coal
rates are here to stay . processing plant in the country. Projected time of the
project is seven to eight years and the cost $4 billion .
The possibility of the $ 5 0 billion MX missile system
The "growth" areas also holds out the promise of billions of dollars in future
The Carter administration does have a construction construction projects for Utah , according to some. The
program of sorts-one which is guaranteed to feed the cost analysis study done by the General Accounting
nation's double-digit inflation since it adds nothing to Office on the system indicates that 60 percent of the $50-
the production of tangible wealth. to-52 billion in projected costs will be in construction .
In Housto n, Texas, in a pattern typical of the oil The basing of the missile system in Utah has been
producing and refining regions of the country, a new opposed by forces in the state who do not like the war­
"growth" area has opened up for construction in the preparation implications of the system and who do n ot
maintenance and refitting of old oil refineries. At the want to see their state torn up to house it. The "race­
present time, approximately one-third of the industrial track" design for the system advanced by the Airforce
construction workforce in the area-around 1 0,000 involves the construction of a vast underground railway
workers-is engaged in the maintenance and revamping system in the Utah desert over which the missiles would
of refineries to outfit them to process domestic crude oil be constantly moving-ostensibly out of reach of Soviet
with its high sulphur content. bombers . Currently making the rounds in Utah is the
The state of Utah-an open shop state like Texas, has joke that there is really no need for this elaborate subway
been promised billions upon billions of dollars in future system ; the Airforce should just give the missiles to
construction contracts related to the production of syn­ Amtrak and then the R ussians will never be able to find
thetic fuels and the MX missile system. At the present them .

Construction by sector

Housing Starts Public Educational Buildings Public Hospitals

( ••a son a lly a dj u sted in millions 01 units) (seasonally adjusted, in millions 01 (seasonally adjusted, in millions 01
constant dollars) constant dollars) constant dollars)

2.2
8,000
2.0 1 ,300

1 .8 1 ,200

5,000
1 .8 1 ,1 00

1 .4 1 ,000

1 .2 4,000 900
2nd round of �.
1 .0 800
Volcker measures �
.8 700
3,000
.8 800

0.0 '--___________ o �_____________________ o � ______________

EIR May 1 3 , 1 980 Economics 17

Business Briefs

who will continue to absorb inflationary M inerals and Mocatta Metals, both of
Agriculture
processing and marketing costs. The which have close ties to the Anglo­
retail price of food is expected to con­ American financial elite, and who co­
Farm prices collapsing tinue to climb until it "takes orr' again ordinated with the Fed and the board
later this year when, for instance, live­ of the New York Commodity Exchange.
The u . s . Department of Agriculture stock supplies snap. As part of his avowed "controlled dis­
announced today that farm prices had integration" policy, V olcker is now ap­
plunged by 4.6 percent-or a 54 percent plying credit controls selectively to
annual rate-during the month of April. break up the H unt empire and dismantle
Domestic Credit
The April collapse follows a 1 .7 percent any other business institutions which
drop in March, and was led by livestock, may be the least bit independent of the
corn and wheat. Tight credit has forced Volcker crushing the "Groton crowd." According to a rumor
the livestock industry to retrench-the Hunt brothers circulating in the Chicago financial dis­
price of beef and hogs is falling as trict, First Chicago chairman Robert
producers rush to slaughter animals they Abboud' s approval of loans to the Hunt
The H unt brothers may be forced to
can't afford to feed. Bumper crops of brothers j ust before the silver shakeout
liquidate much of their silver holdings
wheat and corn this year were turned was used as a pretext for his tiring.
as a condition for receiving bank fi­
into a liability for farm producers by the
nancing, Federal Reserve Chairman
Carter administration's grain embargo
Paul Volcker told a House Banking
and related export policy.
subcommittee on April 30.
This ought to put an end to Secretary International Credit
The Hunts are currently negotiating
Bergland's attempt to "talk up" farm
a $2 billion loan from a group of banks
prices with encouraging propaganda,
led by Morgan Guaranty and First Na­ IMF postpones relaxation
and just plain lies. Such a precipitous
drop in prices could also trigger a break
tional Bank of Dallas which will be used of conditionalities
to finance extensive silver-trading debts.
in land prices and the unraveling of the
It appears that one condition of the
entire farm credit structure. The Interim Committee meeting of the
bank loan is that the Hunts eventually
The price drops guarantee that ear­ International Monetary Fund ended in
sell much of their silver. In the words of
lier Agriculture Department predictions Hamburg April 28 without concrete ac­
Paul V olcker, the terms of the loan "will
of a 20 percent drop in farm income tion on the Group of 24 less-developed
enhance the prospects of that lump of
during 1 980 will be conservative-and countries' demand for a relaxation in
silver being dispersed." .
in fact the department is already talking I M F lending conditions. The matter was
The H unts have also been forced to
about a probable 25 percent income deferred to the autumn General Assem­
mortgage most of the oil and gas prop­
drop. bly meeting of the I M F and World
erties owned by the Hunt family concern
There is no way that the farm sector Bank.
Placid Oil as collateral for the Morgan­
can stay afloat when costs of production The French business daily, Les Echos
First Dallas loan.
are soaring by as much as 50 percent, claimed April 28 that "a more attentive
According to metals market sources,
when loan funds costs have doubled and ear" is being bent toward the LDCs,
the Federal Reserve has conducted a
income is drastically contracting. however. As part of the effort to expand
near vendetta against the Hunts during
In terms of impact on the rest of the the I M F' s role, even friends of Henry
the last two months, using its enhanced
economy-already farm equipment sales Kissinger' s have recently conceded that
credit control powers to make it impos­
have plummeted. The Farm and Indus­ the Fund "won't fly politically" unless
sible for U.S. banks to lend to the
trial Equipment Institute, a trade asso­ something is done; the London Times
brothers, except on the most onerous of
ciation, reported that sales of farm trac­ proposes extending the terms of I M F
terms. Lamar Hunt complained to the
tors dropped by 28.9 percent in M arch, loans a n d "improving the supply side"
Wall Street Journal that the Fed "put a
bringing total tractor sales for the first of debtor economies.
clamp on us" and even put "the strong
quarter of 1 980 to 18 percent below the The hard-liners on the subject are
arm on the major European banks."
year-earlier period. Other reports indi­ exemplified by the Sunday Times, whose
Since the Hunts were unable to obtain
cate that since at least the begin ning of H a m b urg correspondent, M a lcolm
a bank loan themselves, they were forced
the year, farm equipment manufacturers Crawford, wrote April 27: "The IMF
to borrow indirectly through Placid Oil.
have been increasingly forced to finance has plenty o f money outside the Supple­
their own sales to get business at all. As EIR has documented in previous mentary Financing Facility, which bor­
What' s more, as the Agriculture De­ issues, the M arch silver market crash rowers have preferred (despite interest
partment itself pointed out, the drop in which took such a heavy toll on the terms which are virtually at market
farm prices will not help the consumer, Hunts was stage-managed by Engelhard rates) because the conditions concerning

18 Eco nomics EIR May 1 3 , 1 980

 Briefly
• CITIBANK last month began
to cut back sharply on its loans to
consumers . Has the bank now be­
gun to "borrow" money from its
domestic economic policies are not so though steel unemployment is heavily customers? O n e i r a te C i ticard
tough as on the I M F's general loan concentrated in pockets around steel holder reported to us that a pay­
facilities . Soon, the developing countries plants closed because of dramatic de­ check she duly deposited in a "24-
will have to face up to these, conditions clines in orders, the companies m ust hour" Citicard machine a week
and all. The deflationary I M F condi­ now begin to shut down blast furnaces earlier still hadn't appeared in her
tions cannot be relaxed much, because at major plants, spreading the layoffs. account-and this wasn't the first
IMF loans are meant to be repaid, not The question remains, can the indus­ time a check had been "lost in the
rolled over." try restore production when orders flow system. " Citibank customer serv­
Unlike the South Koreas and Mexi­ in again? U.S. Steel executives may not ice said they couldn't promise
cos, Crawford adds, "the countries with find this an interesting question . They anything. "You could have put an
two-thirds of the population of the may intend to leave the steel making empty envelope in the machine."
Third World which rely almost wholly business altogether like the Penn Central
on international agencies" are "the most Co. left railroads. The remaining com ­ • DISQUE DEANE, senior part­
exposed to acceptance of its loan con­ panies might then expect enormous ner of Lazard Freres, may intend
ditions. For the poorer countries, there profit from the ensuing shortage of steel. to ride out the depression on LSD
is no solution except deeper poverty." and vitamin pills. Deane is one of
the prominent fi nancial commu­
nity members on the board of
trustees of the Huxley Institute
Industry Banking for Biosocial Research. The insti­
tute, originally founded by Al­
Steel Capacities Exim-OPEC financing d o u s H ux ley, eschews costly
·"classical" psychotherapy, and in­
collapsing plan proposed stead promotes "orthomolecular
psychiatry," using hallucinogens,
The steel companies now boast that they The U . S . Export-Import Bank chief vitamins, and psychotropic drugs.
prepared well for the present downturn John M oore has proposed that the sur­
by reducing inventories, closing obsolete plus countries of the Organization of • JOHN J. BLASCO, Vice Pres­
plants, eliminating expansion plans, di­ Petroleum Exporting Countries (OPEC) ident for Administration at M ack
versifying into other, unrelated fields, participate with the Exim bank in fi­ Trucks, recently returned a copy
and suing more productive, foreign nancing projects in the underdeveloped of EIR's special report, The In­
manufacturers for "unfair" competition. sector. In the past, American private dustrialization of India, "since it
But when U.S. producers like U.S. Steel banks have pursued the OPEC nations does not fit into our current mar­
find the present slump much deep �r than for recycling their surpluses into joint keting o bj ecti ves . " G i ven the
they had expected and, worse, that they financing of projects in third countries, company's steep sales slump and
are unable to recover those production but the conservative Arab governments cutbacks one is inclined to ask
levels they may desire to fill government have refused this approach as too risky. Mrs. Blasco, what exactly is Mack
defense and synfuel plant construction Moore argues that since 1 934, the Ex­ Truck' s marketing strategy, and
orders, they may find that they have imbank has generated 5 1 00,000 million does it involve selling trucks?
only prepared their own bankruptcy. in lending, and lost only 520 million .
• JUDE WANNISKI, intellec­
At present, the industry appears to The Saudi Arabian government's
tual arbiter of the U . S . tax revolt,
lack even the capacity to produce steel central bank, the Saudi Arabian Mone­
wrote a letter appearing in · the
they enjoyed during World War 11- tary Agency (SAMA), this year has be­
Wall Street Journal April 28 to
more than a third of a century ago . gun to make sizeable loans to certain
express his "profound admiration
U.S. Steel rel'orts that in the last advanced nations. Saudi Arabia is ex­
and affection" for pop singer
three weeks its orders have dropped an pected to buy up to 52.7 billion worth
Frank Sinatra, despite his low
incredible 40 percent, while Bethlehem, of West German government debt this
opinion of Sinatra's latest album.
the nation's number two steelmaker re­ year . Japan is slated to receive between
In his book The Way the World
ports a similar precipitous, but unspec­ 5 1 to 5 1 . 5 billion from Saudi Arabia.
Works, Mr. Wanniski compares
ified decline. In the first quarter of this West German Finance Minister Hans
year, total steel shipments in the nation Sinatra to Leonardo da Vinci.
Matthoefer, upon announcing the Saudi
fell by approximately 10 percent, largely "Both have given the world enor­
agreement with his country, stated that
mous pleasures while using up
due to the auto collapse which last week SAMA, during the first quarter of 1 980,
only trivial amounts of planetary
took that industry to the low-point it will recycle petrodollars into other oil
resources, i.e., physical capital."
reached in the 1 974-75 recession. AI- consuming countries in the West as well.

EIR M ay 1 3 , 1 980 Economics 19

�TIillSpecia1Report

The Aquarian Conspiracy's

road to Orwell's 1 984
by Criton Zoakos, Contributing Editor

A t present. the Executive Intelligence Review staff is Every unwashed environmentalist has come out of a
contributing to the preparation of a pamphlet and a book. social engineering laboratory. Every drug addict is the
from whose materials the following Special Report has product of some government-sponsored or foundation­
been compiled. These publications have been prompted by sponsored brainwashing project. Every yoga-freak,
our discovery of the exact manner in which the population every transcendental meditationist, every biorhythm
of the United States of A merica is being brainwashed. kook is m erely the human refuse that has been excreted
methodically and patiently. by a large corps of expert from some government-sponsored, foundation-funded
social psychologists deployed out ofresearch institutes. the project somewhere. There are no exceptions to this.
communications media. and government and private agen­ In the 1 940s, the very same group of powerful inter­
cies. ests who are today commanding the evil forces of social
This is the "A quarian Conspiracy. " as the brainwash­ engineering, then launched an irrational Cold War and a
ers refer to themselves. domestic McCarthyite witchhunt. Suddenly, rational ar­
Our report is essentially a combat manual . Brainwash­ gument in policy formulation disappeared from national
ing depends on the ignorance of the victim. A ll A mericans life. The traditional debate that American citizens histor­
not members of the conspiracy perceive their nation disin­ ically conducted to determine their foreign policy, i.e.,
tegrating. and can report the facts in terms of day to day. the special mOJal and practical weight of this nation
personal experience. But no coincidences. no accidents are among the )litions of the world, was abandoned and
involved. A mericans must come to know this as deliberate; replace �.¥Y the unchallenged, axiomatic, pervasive irra­
they must come to know who is doing what to them. and tiompity of the Cold War. The result was that the moor­
why. IfA mericans know what they mustfor efficient action ings of national moral purpose collapsed; the citizens
against the brainwashing process. in theface of the "stress­ who m ake up the nation and share its m oral purpose
ful situations" and "social shocks" directed against them. surrendered to a m orally indifferent irrationality.
then the A quarians. however vast their network and re­ Armed with this moral indifference and irrationality,
sources. can be crushed. young adults entered the decade of the 1 9 50s in pursuit
of private goals and petty career concerns. And the
children of this generation began growing up without
The central conclusion that you will reach upon finishing clear ethical moorings . What followed was the notorious
the examination of the facts in this report is that the "generation gap" and the large-scale manipUlations of
moral, material, cultural and intellectual decay that you the social engineering establishment, from the Rand
are witnessing every day in America's cities and towns is
not accidental, not a "sociological phenomenon," not an Photo: A scene from the broadway version of " Hair "­
"act of God," but a deliberately induced social crisis. the A ge of A quarius.

EIR May 1 3, 1980 Special Report 21

Corporation, the Stanford Research I nstitute, etc. The
"New Left," the Vietnam War and the antiwar move­
ment were all social-engineering projects. Watergate,
environmentalism and the slow and deliberate destruc­
tion of American technology, as we shall show, were also
pre-planned social engineering projects.
What is under assault is the institution ofthe "nation­
state," and the form of republican constitutional govern­
ment inaugurated in world affairs by the successful con­
clusion of the American War of Independence. The
philosophical, political and economic doctrines embed­
ded in the American Constitution form the basic core of Tavistock: 'mother'
that fundamental conception of human affairs which the
"Eastern liberal establishment" that commands the de­ of planned madness
ployments of the entire profession of social psychology
regards as its axiomatic philosophical enemy.
A best-selling book was published during February The Tavistock Clinic in Sussex, England is the world's
of this year called The A quarian Conspiracy by one center for mass brainwashing and social engineering
Marilyn Ferguson , the publisher of a weird magazine programs and activities in the postwar period. During
called The Mind/ Spirit Bulletin . This book boasts that all the war Tavistock was the headquarters of the British
the various kook outfits in the country, from drug freaks Army' s Psychological Warfare Bureau which, through
to environmentalists, to yogi groups, Jesus freaks, left the arrangements of the Special Operations Executive
radicals, right radicals, libertarians, "cosmic conscious­ also dictated policy to the United States Armed Forces
ness" groups, etc., are all parts of one, centralized, in matters of pshycological warfare. At the end of the
coherent conspiracy . The book is a fraud in a special war, the Tavistock personnel took over the World Fed­
sense, though its claim of a conspiracy is, of course, true. eration of Mental Health and the Psychological Warfare
It is a fraud because its author merely plagiarized an in­ I?ivision at the Supreme Headquarters, Allied Expedi­
house study of the Stanford Research Institute of May tIOnary Force (SHAEF) in Europe.
1974 . Ms. Ferguson took the .c ontents of that study, put
them in popularized form and put her name under the
product. The Social Policy Director of SRI, Dr. Willis
Harman had asked Ms. Ferguson to produce a popular­
ized version of their study under her n ame. The book is
part of a massive social engineering program currently How we know what
conducted by the Stanford Research Institute and others. the Aquarians are
An essential part of that program is to come out publicly
and reveal key aspects of the conspiracy, though not the
EIR is well qualified to make this report. Lyndon
really important aspects. We shall explain why later.
LaRouche, EIR 's founder and a Contributing Editor
So , the question arises, what is SRI up to?
is considered by m any the greatest scientific thinke;
Stanford Research is one of the more prestigious
America has so far produced . By contrast, the "ex­
subunits of a much larger, integrated network of centers
perts" in the Aquarian camp are kooks. The principles
of applied social psychology and social engineering that
of science, which the Aquarians oppose and reject,
emerged in the aftermath of the Second World War. Its
define the evil aspect of their conspiracy, but also their
sister think-tanks include Rand Corporation, the Ad­
weakness. Their resources far outweigh the institu­
vanced Center of Behavioral Sciences at Palo Alto , the
tional resources associated with LaRouche, but the
Institute of Social Research at the University of M ichi­
crude, plodding social engineering and social psychol­
gan, the Wharton School of Business, the Harvard Busi­
ogy crowds lack the capacity to even comprehend the
ness School, the National Training Laboratories, the
conceptual weapons LaRouche has thrown against
National Institute of Mental- Health, the National Insti­
them in a decade of bitter political battle.
tute of Drug Abuse, the Office of Naval Research and
In the 1950s, LaRouche m ade his fundamental
many others covering the entire country. The job of all
breakthrough by successfully applying the concep­
these social research centers is to conduct mass scale
tions of advanced Riemannian geometry to economic
social-psychology projects on the entire U . S . population;
processes. The primary measure of an economic sys-
they began to do so in 1 947, approximately, when m ost
of the network was founded.

22 Special Report EIR May 1 3, 1 980

 Other important colleagues of Kurt Lewin, such as
Eric Trist and John Rawlings Rees of Tavistock, as well
as H . V . Dicks, W . R . Bion, R. Crossman and others,
took all the personnel from the Strategic Bombing Sur­
vey, the Committee of National Morale and others, and
from this pool, founded the Rand Corporation , the
Stanford Research Institute (which produced the Aquar­
ian Conspiracy), the Wharton School, the National
Training Laboratories, the National Institute of Mental
Health and others . The United States government started
contracting m ultimillion dollar projects with all these
outfits . Over a period of thirty years, tens of billions of
dollars have been allocated by the federal government to
fund the work of these groups; other tens of billions of
Tavistack 's Eric Trist and the late Margaret Mead. dollars found their way into these institutions from pri­
vate foundations. Over the years, these outfits grew and
Tavistock' s chief theoretician in America, Dr. Kurt the scope of projects they contracted grew.
Lewin, organized the Harvard Psychological Clinic, the Every aspect of the mental and psychological life of
MIT Research Center for Group Dynamics, the Institute the American people was profiled, recorded and stored
of Social R�search at the University of Michigan; Lewin into computer memories . The personnel of these centers
also played a pivotal policy role at the psychological of social psychology grew m assively in numbers and year
department of the OSS, at the Office of Naval Research, after year it penetrated deeply into every nook and
the Strategic Bombing Survey and the Committee on cranny of federal, state and local governments. Their in­
National Morale. M orevoer, a large number of influen­ house specialists and graduates were called in to develop
tial people at the top policy level were trained in Dr. policies for welfare departments, labor mediation
Lewin's theory of Topological Psychology, which is to boards, trade unions, the Air Force, the Navy , the Army,
this day, the world's most advanced method of behavior the National Education Association, psychiatric clinics,
modification (brainwashing) . the works.

tern is the rate ofgrowth in scientific and technological publications by EIR 's publisher, New Solidarity Inter­
advances, whose principle of causality-creative men­ national Press Service, stretching back to 1 968, ex­
tal activity-is the epistemological equivalent of the posed the "New Left," "international terrorism ," and
ontological existence of negentropy as the fundamen­ the drug-rock "co unterculture," as nothing more than
tal law of the universe. The resulting thermohydro­ "social engineering proj ects" created and controlled
dynamic theory of economic systems has massive, by "research institutions" identified in the present
direct implications for advanced research in every report .
branch of science, from high-energy physics, to biol­ Also exemplary was the pUblication of the book,
ogy, physiology, psychology, and the social sciences Dope, Inc , by the U . S . Labor Party of which La­
.

incl uding political processes. Rouche was a founder. The heavily documented, pri­
The institutions associated with LaRouche have mary fact of international drug traffic, proven in that
elaborated this knowledge for political battle, to trig­ publication, is that the aristocratic English and conti­
ger creative insight wherever the Aquarians seek to nental European "noble" families otherwise control­
trigger "disassociation." The LaRouche network has ling Tavistock are the principal masters of narcotic
employed this knowledge and formidable intelligence and psychotropic drug smuggling internationally . Or,
and counterintelligence capabilities to destabilize the as the book's subtitle reads: "Britain's Opium War
Aquarian command itself. Against the United States."
Exemplary was the publicati()n iri January-Febru­ EIR and its editors and staff ha ve played a key role
ary 1 974 of two reports under the title, "The Tavistock to date in crushing many of the Aquarian Conspira­
Grin," which uncovered both the Tavistock network cy's operations, their "movements," and their "social
and the methods of brainwashing and psychological engineering" proj ects. Now, we are issuing a combat
warfare then being adapted for application to large­ manual to all Americans. We intend to crush the
scale social engi neering proj ects. Those and related Aquarian Conspiracy itself.

EIR M ay 1 3 , 1 980 Special Report 23

 Over the years, c lose cooperative relations were de­ M oo n ies, and n u m erous other exotic religious cults. You
veloped between these think-tanks and the key polling have seen o r heard about the "charismatic m o vements , "
organizations in the country, a n d between them and the "liberation theology," t h e new religious fun damental­
major medi a . G a llup Polls, the Y a n kelovich-CB S-New ism, the PTL (" Praise the Lord " ) shows on television,
York Times p o l ls, the National Opinion Research Center and of course you have " I slamic fun damentalism" com­
and others are incessantly con ducting psychological pro­ ing out of your ears.
files of the entire population and s h are them for eval ua­ You have also, in one w ay or another heard or come
tion and processing with the ubiquitous social psycholo­ in contact with "yoga," "transcendental meditation , "
gists . W hat the public sees printed i n the newspapers as "ying-y ang ," "sufism ," a n d other cult p ractices . Y o u
opinion po lls is only an infinitesimal portion o f the work have heard about biorhythms, telepathy, E S P , telekene­
that the po llsters really d o . sis, astro logy and o ther fo rms of kookery . You have
Above t h i s closely cooperating grouping of social heard o f or k n own people who a re seek i ng to gai n
psych ologists , poll sters and media manipulators, pre­ "cosmic ex periences" and "co nsciousness raising" by
sides the elite of "powerful patrons" the "gods o f Olym­ means of a wide variety of chem i cal substances; and of
pus" as they delight in being referred to . These are a co urse you are will aware that this country right now is
cluster of corporati o ns and families on top of the elec­ going through the worst drug epidem ic in h um a n histo­
tronics , communications and related sophisticated-tech­ ry.
nology in dustries . The core cluster consists o f the follow­ Fewer am ong you have n oticed that i n the 1 970s a
ing: ITT, ATT, Xerox, Rank Organization, Bendix , drastic shift occu rred in school curricula at all levels to
Raetheon , A . D . Little, Eagle Star Group , RCA, B echtel , the point that youngsters are now rewarded school cred­
Textron , Reliance Group, Prudenti a l Insurance, A m eri­ its for such co urses as "TV soap opera," "soci ally rele­
can Express, Lazard Brothers, Kuhn Loeb , Blythe- East­ vant basket weaving," and vari o u s environmentalist s ub­
m an-Dillon (now owned by Paine-Webber ) , Petro-Can­ j ects . An epidemic of culti sm , ko okery and Sodom and
ada, Standard Telep hones and Cables, and their subsidi­ Ghomorra h as o verwhelmed t he co untry, accompanied
ary , affi liated and interlockin g corporati o n s . by pseudo-science, charlantani sm and superstitfon in our
A l l in all, it is estimated that t h i s group , which on education institutio n s .
matters of long-term strategy ten d s to act i n a very This picture is o nly the r a w emp i rical evidence side of
disciplined and unified way , commands over sixty o f the
top " Fortune 500" companies in the U S A . I t has swal­
lowed up all the other, older historical "power groups"
of earlier U . S . history, such as M o rg a n , Rockefeller,
Cabot-Lodge, etc . , etc.
I n the deeper recesses of t he intelligence establish­
ment in W ashingto n , veteran intelligence o fficers refer to
this awsome gro up in hushed tones and mysterious lan­
guage as the "Committee of Three Hundred . " The group
prefers to be called "The Olympus . " These are the real
power in the land, the depl oyers of our social engineers
and social psychologists .

What is "Aquarius?"
W h at is meant by the " A quarian Conspiracy" and
the "New Age" o r "Age of Aquarius" w hich the entire
social psychology esta blishment is now m o bilized to
impose upon o ur society?
First, let us survey the terrain of physical evi dence,
what o ur eyes see and ears hear every hour of the day a n d
night o ver at least the l a s t fifteen years: Every o n e of y o u
h a s heard a b o u t sex education p rograms i n w h i c h little
grammar school children are instructed in masturbati o n ,
"a lternate life styles' , s u c h as homosexuality , transvesti­
tism , lesbianism , pro stitution, and so forth . You h ave
seen "gay rights" groups and parades either with y o ur The bibles of the
own eyes or in newspapers a n d magazines . Y o u have A quarian Conspiracy.

heard , or seen , or lost relatives to the Hare Krishna, the

24 Special Report EIR May 1 3 , 1 980

 the story, the surface impressions that every citizen gets
by merely observing what is going on around him . A
slightly closer examination of the matter, statistical com­
pilations and so forth, indicate the following: approxi­
mately 15 million of our citizens are participating in one
active form or another in the outfits of this organized
insanity; millions are habitual drug users; millions more
claim to have had "mystical experiences" with cosmic
forces; millions believe in "faith healing," and so forth.
There are literally thousands of "co unterculture" news­
papers and magazines which proclaim the coming of the
"New Age," the "Age of Aquarius. "
The President of the United States believes in U FOs.
Stanford Institute's
His National Security Advisor, Zbigniew Brzezinski
makes speeches proclaiming the advent of the "New 'images of man'
Age" and has written a book about it, called the "Tech­
netronic Era ." The Joint Chiefs of Staff every morning The technical study proposing the complete extirpation
read so-called intelligence reports on the biorhythm and of mankind's inner sense of identity, the tearing out of
horoscope status of the members of the Soviet Politburo. mankind's innermost soul and the placement; in the
Senator Harrison Schmitt of New M exico is using tax­ vacant space, of an artificial, synthetic pseudo-soul, was
payer money to conduct an investigation into the possi­ prepared in M ay 1 974 by the Stanford Research Institute.
bility of extraterrestial beings having invaded the South The contents were later used in popularized form in
West ! M arilyn Ferguson's book.
The House of Representatives has established a new The study is entitled Changing Images of Man (Con­
congressional committee, the Congressional Clearing­ tract Number URH (489)-2 1 50, Policy Research Report
house On the Future which holds day long encounter #4/ 4.74, prepared by SRI Center for the Study of Social
sessions with futurologists and other kooks like M arilyn Policy, Willis H arman , Director) . The 3 1 9-page mimeo­
Ferguson, Elizabeth Kubler-Ross, the death cultist, and graphed report was prepared by a team of fourteen
Isaac Asimov, the science fiction seer. Congressmen researchers and directed by a supervisory panel of 23
come away proclaiming to the press that they have controllers, including Margaret Mead, B . P. Skinner,
experienced a personality transformation. Ervin Laszlo of the United Nations, Sir Geoffrey Vickers
To top all this, in the coming June of this year, a of British intelligence, and others .
major international conference will be held in Toronto, The study begins with the argument that the funda­
Canada, under the title "First Global Conference of the mental concept of what mankind is, and the "image"
Future," which will be attended by over 4,000 social that mankind has of itself, determines the behavior of
engineers, cybernetics experts and futurologists from all mankind. To change mankind' s behavior away from
the think tanks we have mentioned above. The purpose industrialism into "spiritualism," one must force first a
of the conference: "The time has come to move from change in mankind' s "self image," its fundamental con­
thinking and dialogue to action. This conference will ception of what mankind is. To quote:
become the launching pad for that important action to
occur in the 1 980s," said the Chairman of the conference, Images and fundamental conceptions of human
the multi-billionaire Maurice Strong, Chairman of Pe­ nature and potentialities can have enormous power
tro-Canada, high-ranking British intelligence officer in shaping the values and actions in a society. We
during World War II, one of the Chief executives of have attempted in this study to:
Dope, Inc., and former director of the United Nations ( I ) Illuminate ways our present society, its citi­
Environmental Program . One of the chief speakers will zens, and institutions have been shaped by the
be Dr. Aurelio Peccei , Chairman of the Club of Rome, a underlying myths and images of the past and pres­
NATO thinktank on which we shall say more later. ent.
Close investigation of the preparatory activities of (2) Explore with respect to contemporary socie­
the conference participants and the in-house studies of tal problems the deficiencies of currently held im­
the social-engineering think-tanks that will participate, ages of mankind and to identify needed character­
has confirmed conclusively that the "decisive action" of istics of future images.
which Maruice Strong is speaking is nothing less than (3) Identify high-leverage activities that could
the mass scale brainwashing oi the entire human species . facilitate the emergence of new images and new
All the kooks of the world are coming out in the most policy approaches to the resolution of key prob­
impressive Witches Sabbath yet in Toronto. lems in society (p . xxii)

EIR M ay 1 3 , 1 980 Special Report 25

 We use " i m age of man" (or m an-i n-the-uni­
verse) to refer to the set of assumpti o ns held about
the human being's origin, n ature, abilities and
characteristic, relati onships with o thers and place
in the uni verse. A coherent i m age m ight be held by
any individual or group, a political system , a
church or a civi lizati on . . . most societies have an
image of man which defi ne h is soci a l nature, for
example. . . . an image of m a n is thus a Gestalt
perception of humankind, both individual and col­
lective, in relation to the self, others, society and
the cosm os . . . For m ost, however, assumptions
abo ut the n ature of human beings are held subcon­
scio usly . Only when these hidden assum p tions are
recognized and brought into awareness is an i m age
of man contructed . Then the image can be examined
carefully and with perspective. to be retained. dis­
carded or changed.

Then the S R I repo rt proceeds to declare that in our

present society , the " i m age o f i n d ustri a l and technologi­
cal man" is obsolete and m ust be "discarded . " :

Many of o u r present images appear to h ave become

dangerously obsolescent , however . An i m age may
be app ropriate for o ne p hase in the development o f
a society , b u t o nce that stage i s accomplished, the
use o f the image as a continuing guide to acti o n
w i l l l ikely create m o re problems t h an it solves . . . The Stanford Research Institute: " a new image of man " and a
Science, technology and economics h ave m a de p os­ "life-style of the future. " Ph o t o : C. W esley / N S I PS
sible really signi ficant strides toward achievi ng
such basic human goals as physical safety a n d
security , material comfo rt and better health . But
i dentifies no less t h an ni neteen " i m ages of m an" that
m any of these successes h ave brought with them
dom i nated in various epochs . From each one of those it
problems o f being too successfu l-prob lems that
extracts such features as are useful i n replacing the
themselves seem insoluble within the set o f societal
"in dustria l-techn ological image , " i .e . , totemism and
value-prem ises that led to their em ergence . . . our
identificati o n with anim als in the Upper Paleolithic era is
highly developed system of technology leads to
useful fo r today; the " farmer son of G oddess earth" of
higher vulnerabi lity and brea kdowns. I ndeed, the
the n eolithic era is useful; the Sumerian image of subm is­
range and interconnected impact o f societal prob­
sion to ruling elites must be retained in the post-in d ustrial
lems that are n ow emerging pose a serious threat to
i m age; the Old Testament im age of man having "domin­
our civilization . . . if (our) proj ections of the future
ion over nature" is d a ngerous and m ust be dropped; the
prove correct , we can expect the associated prob­
Zoroastrian im age needs to "be wo rked o n ; " the Indian
lems o f the trend to become more serious, more
image o f yogi is good, will contribute to the "self-reali­
universal and to o ccur m ore rapidly .
zatio n ethic ; " the Chi nese Confuci us i m age will contrib­
Therefore, SRI concludes, we m ust change the industrial­ ute to the "ecological ethic" o f our future society; the
technological i mage of man fast: Greek dio nysi an / m ystical i mage can co ntribute to deem­
"(Our) analysis of the n ature of contemporary socie­ phasize m a terial o verconsumption; the G reek apollonian
tal problems leads to the concl usi o n that . . . the i mages image can help com bat t he "technological ethic;" the
of man that dominated the l ast two centuries will be Christian i m age of the New Testament m ust be re­
inadequate for the post-industrial era . " worked; the Christian i m age of the Gnosti c Gospels can
Therefore, the im age of m a n appropri ate t o that new contribute a new "self-realization ethic;" but, the image
era must be sought, synthesized and then wired into that emerged fro m the Italian Renaissance , the "eco­
mankind's brains. The SRI report then cond ucts a sum­ nomic m an , " individualist, rationalist, m a terialist, seek­
mary review of the " d o m inant i m ages o f humankind i ng o bj ective knowledge, this is i nappropri ate and m ust
througho ut history" from 2 5 0,000 B . C . to n o w , and i t be dropped.

26 Special Report EIR M ay 1 3 , 1 980

 Following this, the SRI planners point out that the
industrial nation-state is the one supporting the image of
"economic man," but:
The industrial state at this point has immense drive
but no direction, marvelous capacity to get there
but no idea of where it is going . Somehow the
breakdown of the old images has seemed to lead
more to despair than to a search for new images.
Despite the pessimism implied by a lagging domi­
nant image, there are numerous indications that a
new, anticipatory image of hum ankind may be
emerging:
Crisis management:
• Youth involvement in political processes. Aquarius goes public
• Women's liberation movement; black con­
sciousness, etc.
The ordinary citizens react with horrified incredulity
• Youth rebellion against societal wrongs.
when presented with this situation . They simply refuse to
• Emerging interest in social responsibility of
believe that this conspiracy is at work. This in scientific
business.
terms is called hysterical reaction formation . On many
• The generation gap implying a changing par­
occasions, for instance, when in past years I have dis­
adigm .
cussed these matters with generally well informed and
• The anti-technological bias of many young
influential citizens, the virtually universal reaction was
people.
"Lies ! I don't believe it. I don't accept conspiracy theo­
• Experimentation with new family structures
ries . Where are your facts ! "
and interpersonal relationships.
When in the co urse of time the facts were produced,
• The emergence of communes as alternative
and the conspirators themselves took to writing books,
lifestyles .
magazine articles and research papers to publicly pro­
• The emergence of the conservation/ecology
claim that they have been for all these years engaging in
movement.
this far flung, multibillion dollar conspiracy, most of our
• A surge in interest in Eastern religious and
good interlocutors were still speechless .
philosophical perspectives .
The decent majority of citizens of the U . S . must force
• A renewed interest in "fundamentalist"
themselves to get acquainted with the facts of the con­
Christianity.
spiracy. Because the conspirators depend on producing
• Labor union concerns with quality of the
a paralyzing shock-effect in order to succeed. In part, the
work environment.
reason that they have decided to come o ut and openly
• An increasing interest in meditation and
proclaim the conspiracy is to produce such paralyzing
other spiritual disciplines.
shock-effect.
• The increasing importance of "self-realiza­
The strategic fo undation for the current form of the
tion" processes .
Aquarian Conspiracy were laid down during the 1 966-67
These disparate trends do not, when taken in­
period in a series of high level NATO conferences which
dividually, signify the emergence of a new image of
at the time involved, among others, a famous NATO
human being; yet when they are considered collec­
official, Aurelio Peccei, the then little known Dr. Zbig­
tively, they suggest substantial societal stirrings
niew Brzezinski in his capacity as a staff member of the
which may eventually emerge into a new and guid­
State Department' s Policy Planning Group and most of
ing image.
the leaders of those multinational corporations we men­
This was published in May 1 97.4 , and the authors were tioned earlier . The final decisions of those NATO delib­
careful not to fully reveal their direct involvement in erations were to apply a series of long . term policies
artifically manufacturing all these · hideous, inhuman throughout the Western World for the purpose of induc­
forms of countercultural zombie-ism . Six years later, ing a transition to a technologically "steady-state,"
however, in February 1980, Dr. Willis Harman, the "zero-growth" "post-industrial society ."
Project Director of the SRI report, after lengthy collab­ The Soviet bloc was supposed to be skillfully induced
oration with M arilyn Ferguson, induced her to come out to gradually evolve toward a similar type of "steady­
fully into the open and boast that all this Sodom and state" equilibri um system . Dr. Brzezinski, in the after­
Ghomorra was from the beginning the work of a delib­ math of those NATO meetings wrote his famous essay,
erate conspiracy. the "Technocratic Era" and Aurelio Peccei his famous

EIR May 1 3, 1980 Special Report 27

"Chasm Ahead." Following that, McGeorge Bundy and very frustrating to merely modify the behavior of the
the Council on Foreign Relations attempted to start the victim case-by-case and they started puzzling over doing
"inducement process" with the Soviets by jointly estab­ something drastic and permanent like altering the deeper
lishing the Vienna International Institute of Applied structures of human personalities . Thus, brainwashing
Systems Analysis. moved from the era of "behavior modification" to the
The SALT and "non-proliferation" processes also era of "identy change."
got underway . The NASA program was gradually ter­ The theory for this type of activity again relied upon
minated and a massive increase in world drug traffic got the original formulations of two Tavistock theoreticians,
underway . Aurelio Peccei went to Tavistock Institute at Dr. William Sargeant' s theory in his Battlefor the Mind,
Sussex England and there he launched, the notorious and Kurt Lewins's own work on personality regression .
Club of Rome j ointly with Tavistock . Again in summary, Lewin observed that the inner self of
The brainwashing specialists of the Tavistock net­ individuals displays certain reactions when under tension
work internationally went to work . The era of govern­ from the environment. When there is no tension, then the
ment by "crisis management" had arrived . Some basic normal "inner self' of a person is well differentiated,
things ought to be said now about the social-engineering balanced, multifaceted, versatile. When a reasonable
technique of "crisis management." amo unt of tension is applied from the environment, then
all the various abilities and faculties of the inner self go
Kurt Lewin and topoligical psychology on alert, ready for effective action. When a intolerable
The technique derives from the "topological psychol­ amount o f tension is applied, then this geometry collaps­
ogy" doctrine of Dr. Kurt Lewin, the seminal theoretical es into a blinded, undifferentiated "schwarmerei," a
influence in the entire field of social-paychology, the primitivization, a regression of the personality occurs.
patron-saint of all the Tavistock-related think-tanks and The person is reduced to an animal, the highly differen­
the man upon whose theories the psychological warfare tiated' and verstaile abilities disappear. The controlled
battles of World War II were fought . environment takes over the personality.
To summ arize the matter of Lewin's doctrine: all
psychological phenomena occur in a domain defined as
"psychological phase space" or "life space." This space
is composed of two interdependent "fields," the "envi­
ronment" and the "self." Life space is the domain in 'Crisis management ' theory
which human behavior occurs and that behavior depends says we have a 'contro lled
on both environment and "self' or B = f(E.P) (meaning
Behavior is a function of Environment and Person.) This environment, ' so what
is accompanied by a tremendous amount of misplaced happens to peop le when we
emphasis on mathematical/topological interpretations introduce "environmental
of psychological relations none of which makes any
contribution to scientific knowledge but which is admi­ turbulence ' ? . . Disassociation.
rably suited for transforming psychological problems
into computer-programmable problems, which was
promptly done .
The concept of "controlled environment" arose from From this bit of nastiness emerged the theory of
the common-sensical observation that if you have a fixed government by "crisis m anagement." The social psy­
personality (one susceptible to being predictably pro­ chologists reasoned, more or less, in the following fash­
filed) and if you want to elicit from this personality a ion: "since we are already in control of a 'controlled
particular type of behavior, then all you have to do is environment,' what will happen to the P (person) en­
control the third variable of the equation and thus pro­ trapped inside it when we introduce 'social environmen­
duce the desired behavior. This was the standard social­ tal turbulence'?" The deliberately directed "turbulence"
psychology formula used for years in every type of will create tensions for the P (person) and under those
situation from labor negotiations to army counterinsur­ conditions we shall examine the effects of directed ten­
gency operations, to major diplomatic maneuvers, until sion upon the personality and character structure of large
apparently some time in the 1 960s . From that point on populations.
the greater emphasis of social-psychology practice and A senior psychiatrist of the Tavistock clinic, Dr. Fred
theory was placed on the problem of using the technique Emery, now at the National University of Australia and
of "controlled environment" to produce not the desired formerly a member of President Johnson's Kerner Com­
B (behavior) but the desired P (personality) in the equa­ mission, describes the following symptoms that large
tion. It can be speculated that our brainwashers found it popUlations display under conditions of this sort of

28 Special Report EIR May 1 3, 1 980

"social environmental turbulence" i.e. the social crises
Interviews
that "crisis management" causes:
There will be three phases of reaction to social crisis.
The first is "Superficiality" in which the threatened
pop ulation will react by adopting some shallow sloga­
neering ideals to which, however, it shall not attach any
serious "ego investment." This is a passive "maladap­
tive" response. Maladaptive because it fails to identify
the causes of the crisis and therefore the crisis (tension)
Willis Harman
will persist. The second phase of reaction, since the crisis
continues, will be "fragmentation" in which panic begins
to strike, social cohesion breaks down and small social
'If you canforce
groups try to protect themselves from the crisis at the
expense of other small and fragmented social groups.
changed life-styles . . . '

This is also a "passive maladaptive" reaction and, failing

to identify the causes of the crisis, it degenerates further Willis Harman of the Stanford Research Institute, men­
into a third phase: "disassociation" the victim turns away tioned as a leading "A quarian conspirator" in Marilyn
from the source of tension, from the induced crisis and Ferguson 's book, The Aquarian Conspiracy, was the lead­
goes into a fantasy trip of introspection, obsession with er of the study group that produced SRI's 1 974 report,
self, the so-called "self-realization" process of the Stan­ " The Changing Images of Man . " This interview was
ford Research Institute's report. provided to EIR by an investigative reporter.
Subsequently, Dr. Emery's Tavistock report adds
that these three "passive" maladaptive responses are Q : When did your group at the Stanford Research
each accompanied by an "active" but equally maladap­ Institute get involved in this line of study?
tive response . Superficiality is thus paired with "synoptic Harman : We started in 1 967, but we sharpened up our
idealism" as its opposite; "fragmentation" with "author­ line of analysis in 1-969. That is when we issued our first
itarianism"; disassociation with "evangelicism . " The re­ report. By then, it was clear to us that changes were
port then goes on to summarize the results of the last occurring of a very profound nature.
thirty years of combined applied social psychology and The way it happened was this: the U . S . Office of
"crisis management: " Education asked us to do a study on "The Generation of
In the decade of the 1960s we had the "superficiality" Alternative Futures. " We stayed away from computers,
of the New Left movement paired with the "synoptic since we were analyzing value shifts. It was very expen­
idealism" of the Great Society. sive. We studied how to generate alternate futures: We
In the decade of the 1 970s we had the "fragmenta­ came up with 40 paths to the future. Among them , there
tion" of "community control " m ovements paired with were very godamned few that anybody would want to
the "authoritarianism" of the Nixon era. live through. We all said, ' Holy Cow ! ' So we looked
In the decade of the 1 980s we have the "disassocia­ around for other ideas, and we saw the counterculture,
tion" of "self-realization," "transcendental meditation," and so we began to input values from that direction.
drugs etc, paired with the "evangelicism o f all forms of I can with confidence say that we were the first
mass religious fundamentalism . futurist group that began to talk in these value-change
So all these scenarios are in the computers of our and transformation term s .
pervasive social engineering think tanks. The scenarios For a couple o f us, t h e whole experience w a s pretty
are in operation at the present time. What is supposed to traumatic. It was gut-wrenching. One of the senior re­
emerge out of the pair of "disassociation" and "evange­ searchers at the institute left. He j ust couldn't take it!
licism" of the present national crisis is the "Age of What we are talking about is much more than j ust
Aquarius." "alternative life-styles." Only recently have we heard
The snag in the whole project is that the brainwashers much talk on what really matters: What has to happen
of our society are co unting exclusively on the popUlation on the institutional level to meet what the Third World
responding with only "maladaptive" responses, i .e., re­ calls a new global order.
sponses to the crisis which fail to identify the causes of
the crisis or "environmental turbulence." Q : This sounds very much like the current direction of
Should the population, or even significant minorities work by the Club of Rome.
of the population, be able to identify what the causes of Harman : There are a lot o f groups out there more
the crisis are, the whole social engineering operation of important than the Club of Rome. For example, there is
the last thirty years will collapse . the Geneva-based International Foundation for Devel-

EIR May 1 3, 1980 Special Report 29

opment Alternatives . You must understand that there
are two foci for this: first, changes needed in the United
States; and second, the global order. For the global
order, most of the important people are in and out o f the
United Nations circles. For the United States, they are
scattered . Read Ferguson. She has all the groups. She is
not tied to us institutionally, but the ties are very close
with individual people at SRI.
Dr. William Whitsun
Q: I have seen a reference to an SRI study on "voluntary
simplicity ." What is it about?
Harman : That was a report which has since been picked
'The key is how to
up by the Co-Evolution Quarterly. It is about life-styles
and beliefs, but it is low-key. We have j ust finished a
attract the energies '
more important study, for the California Energy Com­
mission . It's not public yet. It was an expensive study, The following interview conducted by telephone with Dr.
and deals with the energy situation for the next 70 years. William Whitsun was made available to EIR by an investi­
It is the most elaborate scenario yet constructed, cross­ gative journalist. Dr. Whitsun is the founder of the Califor­
gridding energy with economics, lifestyles and values. nia-based institution called Novus (for "New Age"), which
It is very critical. We discovered that with even a he describes as part of the A quarian Conspiracy. Dr.
modest change of values, if held over half a century, you Whitsun is also the Director of the military and defense
can bring about a remarkable difference! That is, even if policy division of the Congressional Research Service.
less than one-third of the population undergoes a change
less monumental than what the counterculture represent­ Q : Is it true that you are now working full-time to inject
ed, and sticks to that change, there will be a 2: 1 difference "new age" ideas into the presidential campaign?
in energy usage by the year 2050. By then, we can be Whitsun : I and Judy Skutch (of Washington's Founda­
using only 70 percent of what we use today! With legis­ tion for Inner Peace) have spent a great deal of time
lative help, this can be accomplished. talking about this. We are concerned with translating the
The point is that major life-style changes mean abso­ ongoing shift in values into an institutional framework.
lutely nothing over a year. The question is one of decades. This process of change is going on whether or not the
Before then, you can show nothing. By the end of dec­ candidates want it. Most candidates are looking back­
ades, you can engineer a shift in the capital goods base, ward, using the paradigms of the 1 930s or 1 950s, not the
and change the meaning of what capital formation itself 1 980s. John Anderson had this problem until five years
represents, by forcing the use of solar power, and so on. ago, but his courage lies in his ability to change.
I worked very closely with Jerry Brown in Wisconsin;
Q : Is this tied into Jerry Brown' s Novus advisory group? many of his ideas parallel those of Anderson. Anderson's
Harman : Interesting you should mention that. William only problem now is that he doesn't entirely believe what
Whitsun is the key figure, the co-founder with Judith he is saying; m aybe he doesn't fully understand the ideas
Skutch . he' s in fact pushing . I may meet with him the next time I
head East .
Q : Then you agree with Brown's contention that Califor­ You should consult the book, The A quarian Conspir­
nia is a test-tube laboratory for new-age ideas? acy, by M arilyn Ferguson . Let me lay out some statistics
Harman : There is definitely something to that. Brown is for you: The Gallup Poll of 1 979-you can call George
continuing to use Whitsun and Novus . In fact, Whitsun Gallup, Jr. at Princeton on this-outlined that 1 5-20
is more than ever a continuing consultant to Brown now percent of adult Americans have engaged in mystical
that Brown has dropped out of the race. What this tells disciplines. They have essentially abandoned the rituals
me is that Brown has good ideas. He' s no flake. He j ust of traditional religion, are seeking an inner path, and are
has trouble in forcing us to get where we have to soon not satisfied with the aridity and sterility of traditional
enough . Through Whitsun , we can get Jerry Brown' s religion. Politically, on the surface, this seems to be not
collaboration with anything. important. But: that adds up to 30-40 million Americans.
Whitsun's idea is to work on alternative defense We at Novus alone have a mailing list of 1 00,000 and
strategies. He is seeking the ultimate resolution, but not we have a potential mailing list o f 2 million. What
so fast that it is naked. He's done a paper called, "Alter­ characterizes these people is they are fed up with the
native Defense Strategies," which has had a lot of impact institutions, so fed up that until now they've copped out.
into Congress. That is, until now .

30 Special Report EIR May 1 3, 1 980

 and conservatives . I n both categories are people who are
fed up, who haven ' t participated in the campaign s . An­
derson ap peals to b o th parties; that' s why he' s important.
Our em phasi s i s on small groups. Novus, you see, is
a network o f the netwo r k s . That network has already
parti ally o rganized the 30 m illion . We take people out of
the anti n uclear or the anti-abortion m ovements, and we
say, "convert fro m b ei n g 'anti , ' be p o sitive . " This can
con verge on Ferguson ' s idea o f the entry-point. We w a nt
to link personal transformations with social transforma­
tion s . When you hit the entry point, you have the person­
al experience of realizing that there is a lot m o re to you
Transcenden tal meditation: millions of government than you thin k . We' re not j ust entities linked to a com­
dollars are going to see if it can stop an ICBM. puter with central nerv o us system s.
This notion i s getting around. SRI h as physics people
To ro u n d it out, A nderson is loo king for a new involved in crucial p sychic research , looking into them­
constituency . He is really attracti ng the genuine inde­ selves . There is a group o n this at Princeton U n iversity
pendent vote . You k n ow, in 1 976, the overall v o te was u n der Bob J o h n . H arman at S R I also heads the I n stitute
way down . M ost o f these 3 0 million did not vote. of N oetic Sciences, which does psychic research . People
Pardo n me a seco n d , my wife is n ow bending her keys are realizing that there' s another dimensi o n , which is
l i ke Uri Geller [an Israeli 'psychic'-ed . J I h ave to re­ mystical-sp i ritual .
strain her when she is under stress.
Where were we? Yes, the independents . You h ave a 'Psychic intelligence'
30-million-people boundary line that defi nes this layer. What is now appealing to our government is the
The question is, how do you reach these people? How do stun n i ng accuracy of intelligence derived from this. The
we b ring value-struct ures into the presidential campaign? govern ment has been i nvo lved , investi ng i n "distant
There is a n ew paper o n this by D a niel Y a n kelovich , viewi n g . " You don't h a ve to be there to see something!
"Values, Work and the New B reed . " He argues that 5 2 This idea is key. As you explore human potential, you
percen t of the American population a r e a " n e w breed . " rea lize that if I were to s ay to you, "Tell m e what' s on
These are the 1 8- 3 2 age layer a n d those i n their 40s to lateral x and l ongitude y, close your eyes , thi n k . Watch
som e extent . They no lo nger meas ure s uccess in material the movie in your mi n d ! " What you could come up with
terms. The hallmark of the group i s they don't think would be remarkably accurate!
material rewards are important, a n d they are dubious This is the angle SRI physicists have been involved in
about candidates who are concerned with m aterial val­ for three years. They ' ve written two books on i t recently .
ues.
Another report to be aware o f is by Peter Schwartz at Q : I s this what you refer to by your work o n " a lternative
the Sta n ford Research Institute. A ny company could give defense strategies?"
it to you. Schwartz is a futurist at S R I , head of the Whitsun : To a certain extent, yes. There is a whole new
division on American V al ues and Life-Style C h anges . line of technol ogy com ing up which co uld render defense
What he has d o ne fi lls o ut Ferguson ' s work. weapons o b so lete. We a re a lready deal i ng with the peo­
A central problem fo r a presidential candidate is to ple who are making decision s . Consider thi s : The target­
sound coheren t . As values change rapidly, there a re ting mech anisms fo r our I C B M s are on m agneti c tape.
problems fo r a candidate in addressi ng the ch anges . H o w By an active mind, Uri Geller h as already wiped out
c a n h e transl ate all this i n t o val ues? He' ll s o u n d l i k e a information on such tapes . What happens if, as a war is
kook if he moves too far o u t in front on i ssues l i ke initiated, you discover y o u ' ve lost the guidance program
defense, inflation, and taxes . That problem dogged Jerry because o f enemy wiping out o f the key parts o f the tape?
Brown. I t ' s not easy to fo rm ulate a program that can Here, too, the key is the p rocess o f values, of shi ft s . It
incorporate this. I ' ve travelled with Judy S k utch on the is a m atter o f shifts in who we think we are. This is like
N o vus proj ect around the country . We don't have a 1 00 years ago , with the b reakthroughs made at the time
progra m , but we tell groups to use their own creativity, in psycho logy .
their own building ideas . As Novus talks of the process All this is lin ked to the politi cs o f the 1 980s, because
of handling major issues, we say , "A shift is occurring peop le are disgusted with the old p aradigm . Thus, in
away fro m m a cro-m a n agement, " but we d o n ' t i m p ose effect , we have the capabilities fo r entry points on a wide
one way t h at this process can occur. sca le . Read ch apter 1 2 o f The A quarian Conspiracy . W h at
What this mea n s is that we can appeal both to liberals happens is that individuals begin to explore their in ner

EIR M ay 1 3 , 1 980 S peci al Report 31

space, and to move away from values of the American The whole approach reflects the growing Congres­
Dream. sional interest in alternatives. Two years ago, the Joint
John Anderson h as been working his way around to Economic Committee asked me to s tudy the social dis­
the same notions as M arilyn Ferguson. He is becoming locations of the 1 980s. But I was asked to stop the study
the social and political expression of that social theme. when it became too unsettling for some people. I decided
There is another book by William McLaughlin, the to take a leave of absence. I explored the country with
Brown University historian , who is tracing out the prec­ Judy Skutch for months . It has been a stunning revela­
edent for an Anderson presidency. His book, Revivals. tion to do this, to see the mood of the country. You see,
A wakenings. and Reform, shows there have been four , Carter was elected as an advance person, in effect, prof­
great awakenings in the U . S . , each of 30-year duration . iting fro m the kind of spiritual tone of politics . We're
The first was 1 730- 1 760. The second was the Civil War. right on the eve of a bigger thing now .
The third was the 1 890- 1 920 McKinley period. The Anderson now believes it, or he listens, and is picking
fourth was the 1 960s-and we're right in the middle of up that kind of energy. A lot of Congressmen are now
that one. All the periods are very similar, and we can trying to pick up on that energy . In the Congress, a lot of
clearly see what' s now happening in respect to the past. individuals are pursuing a private path, not an evangeli­
We are now entering a very violent period . There is cal one. Some meet in groups to participate in transcen­
no way of avoiding it. It will be a conflict that will have, dental mediation. This is neither crazy nor weird. It is
on one side, the traditional Republicans, along with just a new version of the old group prayer idea .
some Democrats who believe in the old line. In this You see, the fear in Washington is palpable. Fear of
category, I include the neo-Keynesians . On the other side
are the "new economists." A key one is Francis Kelly,
who was director of research at Blythe Eastman Dillon .
He is excellent. He deals with Ferguson' s conspiracy idea
from the economic standpoint. They show the power of
a few minds being applied to particular problems. " John A nderson
could be the
Q: One thing that worries me about this is that if we lig htning rod to
denigrate basic science and math, the Soviet Union is
attract all the
going to take over the whole show, aren't they?
Whitsun : Not really . What you're leaving out is that the energies of the
societal transformation is happening very fast over there. Aq uarian
They invited me to the U . S . S . R . to discuss some of this in
Conspiracy. . •
1 979 . Curiously, in the Soviet Union, there is funding
and support for psychic research . In fact, their athletes,
when they train , are brought to the Institute for Yoga in
Tashkent. This creates some interesting problems: How the Soviets, fear of inflation , and so forth. There is not
can athletes be atheists when they're told to study yoga? much inspiration. Congressmen are paralyzed by the
You should talk to Michael Murphy over at Esalen confusion, by the fear. The same is prevailing in the
Institute. He's writing a novel about a Soviet athlete with Executive Branch. Therefore, we must more than ever
psychic skills . He knows about small groups like Novus turn our attention to the grassroots, to the citizens, who
in the U . S . S . R . They're in Moscow and Leningrad. can provide direction and guidance.
Novus , you see, is Qot an organization, but is rather
A : How many Congressmen do you think have been horizontal . It brings into it m any "new age" groups:
brought into all this? citizens groups, consciousness groups, the California
Whitsun : There are many very aware Congressmen. group, Citizens for Economic Democracy, the Oregon
They'll see the impact of the Aquarian Conspiracy on Fair Share group, and others . It is happening all over the
them as they meet their constituents in the 1 980 elections. country: meditation, Werner Erhardt' s "est" and others.
There is a transcendental meditation group on Capitol These groups reflect the search for a better way to solve
Hill. But the center of the effort there is the Congression­ problems. Novus is the catch-all. We tell all the individ­
al Clearinghouse for the Future. They use futurist tech­ ual groups: Become coherent by thinking of yourselves
nologies such as Harman's ideas . There is also a more as a mOl!ement. Don't think of violence and confrontation
important private institution, the Congressional Institu­ since these are part of the old paradigm .
tion for the Future. It is correct to say that the Clearing­
house is the creature of the Institute. Charles Rose (0- Q : It amazes me that a military-advisory professional
NC-ed.) is a key guy in this. like yo urself could be against violence and confrontation.

32 Special Report EIR M ay 1 3, 1 980

Isn't that what military strategy and war are all about? Q: What corporations would you say are farthest along
Whitsun : Look, remember what I said about the "awak­ in pushing the Aquarian Conspiracy?
ening" process. In any such process, there is a' split, Whitsun : The best are those corporations modeling
between two groups: Those who say, we refuse to use the themselves after Japan. They are achieving the break­
old, against those who are against the new . There is a throughs in productivity. Tenneco is one. Several insur­
polarization going on. Novus' s job is to do the bridging. ance companies are doing it. A lot is done out of H olly­
This means that we see, for example, in the Proposition 9 wood and by the film industry. Television, too . Also,
movement and related phenomena in the Reagan camp good science fiction lays the foundation for change, even
a possible bridging into the Aquarians . if the author is not completely aware of it. You should
There is no Novus opinion or consensus. There is only talk to Dale Phillips of the Public Broadcasting System
a consensus on the process o f the decision, on the neces­ and ABC. Tell him you spoke to me. He is preparing for
sity of self-reliance. There is less and less faith in macro­ 1 98 1 -season futurist films, looking to the year 2000.
management. This is true among corporate executives, There is also an important book called Europe 2000 by
who are thinking more and more of decentralization. Peter Hall . Oxford University Press published it.
Small groups, citizens groups are the key.
The power of the network is something that most Q: Which thinktanks are most involved?
leaders are not aware of because of the obsession with Whitsun : Stanford Research Institute is getting into this
the macro, with the vertical . Something powerful is very deeply. Schwartz and H arman, in particular. Other
happening. McLuhan is right when he sees the medium, thinktanks are too hooked on the old paradigm , but SRI
the means, as the message. All of this fits together. We is different. The American Enterprise Institute is out of
have talked directly to 1 0,000 and are otherwise reaching it. Rand only has a few good people. I was there for four
1 million. The process of networking requires catalysts. years and I don't think much of it.
That is the importance of the Anderson campaign . Will In terms of military-strategic thinktanks, there is
he be successful as the lightning rod to attract the ener­ BDM, for Braddock, Dun, and McDonald in Washing­
gies? ton . It is doing a lot of work on alternative energies.
By 1 982, I can tell you, we will see the impact of all Another good consulting outfit is Booz, Allen and H am­
this. Anderson could be the lightning rod for the Aquar­ ilton. A third is Arthur D. Little. Jim Gavin (Gen. U . S .
ian Conspiracy, because we are transcending the two Army ret.-ed.) there i s very interested in these things.
political parties. Not so much the new consciousness as such-it's too
specific to put it that way. The reality we are in is too
Computerized Aquarians multidimensional to put Gavin in a box that way. It is a
We are eager now to see the same happen in Europe. matter of value structures, institutions. You cannot focus
Do you know the Green Movement of Europe, in France, on any one dimension.
Germany and England? It, too , is attracting people from It sounds kooky and silly but we are dealing with
the traditional parties . The Greenies are the Novus of some very big numbers whose reality has not yet been
Europe. We'll contact them soon to make this more manifested . The old precedents are being eroded. A
formal. They'll bej oined by computer networking. These typical awakening, remember, takes 30 years o f ferment.
networks will be linked by a computer. We are now only slightly m ore than midway . And the
For example, if you want to know about holistic last decade of the awakening is the most tum ultuous.
medicine, you input that request, and you get it out. Smug media, j ournalists, and television men who
There is one system already doing this, The Source at used to think otherwise will start j oining the new wave.
M acLean, Virginia. Right now in Los Angeles, San Francisco, and Sacra­
We are getting into this now so that we can get an mento, things are changing. Reporters I know there are
inventory of skills and viewpoints. Because of this, we hitting entry-point ! Why? The specific catalyst is hard to
will have quite a valuable campaign mailing list for the identify.
new presidential campaigns. The media will change. I j ust spoke to Brendan
The political parties aren't important anymore. Peo­ Stoddard, ABC-TV's president, and he said: "I'm trying
ple in both parties are saying that the parties are dead, to get spiritual and consciousness-raising themes · into
they're j ust skeletons. Congressmen no longer feel an shows . " This is a powerful guy, who shows little of his
obligation to party discipline. This is an expansion of intentions to his masters, out of fear of hurting the
what David Broder wrote in his 1 972 book, The Party's ratings. But the new show, "It's Incredible," which deals
Over. We have moved much further since then. with psychic research and psychic shifts of the mind is at
The network is pervasive. The next step is the com­ the top of the ratings! It is an awakening program .
puter link-up. After that, will we form one big group? A Television will make things happen very fast. Televi­
third party? I don't know yet . sion is the m aj or catalyst .

EIR M ay 1 3 , 1 980 Special Report 33

The difference between
their science and ours
by Lyndon H . LaRouche, Jr., Contributing Editor

Over the most recent period, the combined intelligence The Olym pians may play with the world, and so come
resources of my associates has been conducting probes to del ude themselves that they are all-powerful. They
to determine the extent to which the self-styled A quarian have thus ignored the higher order of lawfulness which
Conspiracy has so far succeeded in transforming business actually rules this universe.
leaders, responsible military officials, members of Con­
gress, as well as others, into deranged kooks. What are the Aquarians?
The preliminary results are horrifying. The popular book cited above implies that the "Age
More than 100 members of the U . S . Congress are of Aquarius" is relatively a new phenomenon.
being transformed currently into kooks. Not only is the Their argument to this effect, as the book more or
Pentagon a hotbed of this same sort of brainwashing, but less accurately reports that rhetoric, is that recent devel­
there is a special unit, called the "delta group," which opments have superann uated the entire sweep to date of
concentrates on transforming the Joint Chiefs of Staff Christendom ' s commitment to scientific and technolog­
into a deranged group of such zombies. ical progress. Now, they insist, the evidence ostensibly in
The Dionysian cult-conspiracy outlined in the book support of the "neo M althusian" doctrines of the Club
"The Aquarian Conspiracy" is not, unfortunately, some of Rome has put a period to approximately 2,000 years
egregiously wild piece of fantasy-fiction. It is not only of the Age of Reason .
the drug-ridden, unwashed varieties of "environmental­ With that, they propose to usher in the Age of
ists" and terrorists whose minds have slipped into the Unreason. In a word, the ancient Manichean doctrine­
watery coma of the "Age of Aquarius ." The topmost gnostic guises of the Isis-cult and its Dionysian sub-cult
command-structure of government and business is being fully in bloom .
transformed, rapidly, into a collection of such zombies. There is nothing new in fact in this scheme. It is as
Exemplary is the mental condition of former astro­ ancient as its earlier appearance in Sodom and Gomor­
naut, Senator Harrison Schmitt (R-N . M .), who is report­ rah, the ancient magicians of the Whore of Babylon, the
ed to have introduced a proposal into the Congress: to Phrygian cult of Dionysus, the ancient cult of Isis, the
determine whether injury to some cattle in his state might cult of Apollo, the Peripatetics, Stoicism , and the Roman
have been perpetrated by extraterrestials! It appears that Caesar' s "mystery religions ." In fact, this policy has been
Senator Schmitt' s formerly respectable mental condition the continuing commitment of the descendants of the
has not been exactly improved since his exposure to the ancient senatorial families of Rome, as centered in recent
notoriol1s controller of Senator Jacob Javits, resident centuries in the creation of the pseudo-Christian Isis­
British intelligence "asset," Arthur Ross. cult, the Society of Jesus .
Senator Schmitt's aberration is, unfortunately, typi­ It is not properly astonishing that the centers propa­
cal of the drift toward lunacy among the congressmen gating the Aquarian cults within the United States today
and others subjected to the Aquarian programming. are the New York Anglican Cathedral of St. John the
It used to be said, that whom the gods would destroy, Divine and Georgetown University.
they first drive mad. It should be added, with emphasis, Nor is there anything original in their program . The
that there is nothing extraterrestial, excepting delusions prom otion of the combined brainwashing techniques of
such as those of Schmitt, in the agencies behind the anti-ind ustrial "environmentalism," "recreational"
current spread of lunacy among the leading circles of a drugs, rock-like dance-orgies, terrorism , pornography
doomed United States. The authors of this plunge into leading into proselytizing homosexuality, and "charis­
Erebos may be Olympians in their delusions; they only matic" religious irrationalism like that of Jesuit "Liber­
imagine themselves also to be gods as well. ation Theology," are all as ancient as the identical pro-

34 Special Report EIR May 1 3 , 1 980

 In the early I 960s . u. s. space
explora t ion. and the prospect of their
children becoming scien t ists captured
the imagination of the popula t ion.
Today . th rough an induced
social crisis. a genera t ion has
become addicted to drugs. rock music.
environmentalism . and hor05 copes.

gram of the Phrygi a n cult of Dionys u s . o f the n ature of those laws of the u niverse which the
The m o s t recent o f the com p rehensive studies o f the A nglican s , Jesuits, and o ther satan i c Aquari a n s are in­
ways in which this program deg rades the moral and solently p roposing to violate today.
mental powers o f the credulo us is Dante Alighieri ' s It is those laws of the u n i verse, so accessible to the
sy stem atic analysis o f t h i s in t h e " I n ferno" canticle of his informed mental powers o f any sane perso n , w hich warn
"Com media," b ack at the o n set of the 1 4th cent ury. unequivocally and u ndeb ata b ly of the doom symptoma­
U nless this Jesuit-Anglican sodomy is stopped cold, t ized by Senator Schmitt's cited aberrati o n .
here and now, the U nited States is doomed to die as
surely as Sodom and Gomo rrah died as a consequence of What i s knowledge?
the earl ier version of this Jesuitical progra m . T h at doom Take the psych oanalysts, the mystics and the rest o f
i s not a matter o f t he l o ng term . I t is imminent fo r the the corrupt lots o f fakers to o n e side. W h a t i s t h e empiri­
months, or, not lo nger than a very few years, immediately cal test o f a sane m i n d, the test o f which kinds o f ideas
ahea d . and beliefs a re sane, w hich delusions?
A n a t i o n w h i c h tolerates t h i s becom es q u i c k l y mor­ The question of s anity is a practical questi o n : What
ally unfit to survive, and will n ot s u rvive. kinds of ideas. developed as beliefs by wh at method. prove
adequate to enable the h uman species to perpetuate its
The laws of the universe existence?
I f one comprehen ds actual A p osto lic Christian the­ This is not, a n d could not, be a questio n of the actual
ology adequ ately, in opposition to the sata nic cultisms o f o r approximate i m m ortality o f the i n d i vi d u al qua i n d i­
the Jesuits and their kind, one u n derstands exactly h o w vidual . Civi lizatio n s are s aved by the self-sacrifice of
Christianity d i d save M e diterranean civilizati o n , a n d soldiers . I ndeed, the survival o f o u r species, o f nati o n s , i s
do ubtless a l l h u manity , from t h e d o o m intrinsic to the a consta n t activity o f self-sacrifice by parents, a n d by
Roman imperial political o rder and culture. W hat C h ris­ i n dividuals i n other ways . I t is the s urvival of o u r species,
tianity resc ued mankind from w as precisely what the of enti re h u man c ultures , which i s the irreduci ble, pri­
satanic Jesuits are proposi n g today-as a n "Age o f m a ry fact to be considered in determining what is truth,
Aquarius . " w h at i s sanity.
This is not an opinion, b ut a scientific, empirically The fun damental q u estion o f sanity is p o sed i n fi rst
demonstrated fact. The m o st d irect proof of that fact is approximation b y testi n g which ideas, as the g overn ing
secured by rej ecting the i ncom petent s o rt of doctrines feat ures of the ch aracteri sti c i n formed co nscience of the
taught as "economics" in u n iversities today, for a scien­ ruling i n s tituti o n s of societies , ena ble those societies to
tific eco n o mics whose A BCs are almost axiom atically perpetuate their p op u l ations on at least the same demo­
com mon sense in their simplicity . graphic levels and at least a c o n stant level of the m aterial
This analysis leads, step by step , to a co ncl usive proof preconditions of exi stence of such a populati o n? It i s the

EIR M ay 1 3 , 1 9 80 Special Rep o rt 35

kinds of ideas which enable mankind to survive which al of a growing population of at least equal per capita
are symptomatic, in the first approximation, of the inter­ degrees of power over nature generally.
related qualities of truth and sanity. We divide the population's households as a whole
Yet, particular ideas are, generally speaking, outlived into two approximate parts. This need be only a consist­
over the course of time. This informs us that our first ent method of approximation, for reasons we shall give
empirical tests for truth and sanity are but a useful first below. One part is represented by those households
approximation . It is something deeper which is enduring. which , as an aggregation, supply the labor-force for
As societies progress, the successful particular ruling production of tangible, useful wealth . The residue repre­
ideas of yesterday are replaced by a new set of ruling sents waste, administration, and services. This residue
ideas. Insofar as that succession correlates with demo­ may perform useful, even indispensable functions, but it
graphic progress in man's power to survive, this succes­ does not produce wealth. At best, it merely organizes and
sion of ruling ideas within successful branches of culture services the productive process.
reflects something deeper. It reflects an un/olding method This analysis is properly reduced to the equivalent of
of developing ideas . in conj unction with that aspect of modified versions of the acco unting categories associ­
society' s practice which determines the successful pro­ ated with David Ricardo . There are three categories of
duction of the material preconditions for survival. output of wealth, as follows:
Looking at this matter more rigorously, we compre­ ( 1 ) Symbol " C": the portion of output which must be
hend that the pattern described by such a method of alloted to maintain productive capacities in the equiva­
ordering progress in particular sets of ruling ideas is lent of status quo ante: improvements of land and live­
what might be termed otherwise a principle of scientific stocks, plant, equipment, machinery, semifinished goods
progress. By such "scientific progress" we mean a grow­ inventories, materials, supplies, and energy .
ing correspondence between the actual lawful ordering (2) Symbol " V": the portion of output which must be
of our universe, and man's method, through ideas, of alloted to maintain all the households supplying the
mastering the application of such laws . productive component of the labor-force, both actually
It is ideas which are a coherent expression of such a employed and potential.
self-perfecting body of scientific progress which are rel­ (3) Symbol "S": The residue, or gross profit, of total
atively true. It is minds which are governed by the prin­ output, after deducting C and V.
ciples appropriate to such progress which are sane. All of the overhead expenses-waste, military costs,
All contrary tests of truth and sanity are false. All administration, and services-can be symbolized by "d."
ideas developed in opposition to such tests are false, and The allotments for "d" are secured as portions of S, such
the minds which cling to such false methods are insane. that (S-d) = S', or "net profit" of the total output of that
This does not mean that no psychiatry is useful. It society.
means that competent psychiatry must begin with the The idea of "natural resources" as such is an absurd­
principles of truth and sanity we have summ arily identi­ ity. For example, a cubic mile of the earth's surface
fied here. It means that the function of clinical psychiatry contains somewhat more or less than a current year' s
is to uncover and neutralize those impulses which cause requirement of global mineral requirements. The recy­
the victim of such impulses either to act contrary to cling of junk combined with this would mean an unend­
knowledge of relatively valid ideas (neurosis), or acts ing supply of such "natural resources ." However, a
upon delusional beliefs (psychosis). It must be stressed natural resource for a particular economy is defined by
that the tests of sanity are not provided by normative social cost of extraction of useful forms .of semi finished
tests of beliefs per se; no psychiatrist is competent unless product. Those sources which cannot be economically
he or she proceeds from comprehension of and fidelity to exploited are not considered usable natural resources .
the principles of truth and sanity we outline here. So, "natural resources" is actually only a relativistic
notion, correlated with a certain backwardness of tech­
nological progress. If we can raise the energy flux density
Demographic economics of controlled energy sources sufficiently high, at a suffi­
The question of whether or not a society's practice is ciently low social cost, everything becomes an economi­
sane or not is manifest in the most concentrated and cal natural resource .
comprehensive manner in the varieties of economic anal­ So, the notion of relatively finite natural resources is
ysis which proceed from the sort of dem ographic criteria merely a way of reflecting the underdevelopment of an
to which we have referred above. existing productive technology. In a "zero technological
We take the society as a whole as our primary unit of growth" society, the depletion of the kinds of natural
empirical study . We examine the society's ideas by ob­ reso urces correlated with the fixed technology would
serving the way in which the society organ izes its practice mean the collapse of the society.
to produce for itself the material preconditions of surviv- Increased costs of C would deplete S, while the rise in

36 Special Report EIR M ay 1 3 , 1 980

 social costs of overall production would also lower the misinformed, notion of such a breakthrough is the trans­
ratio of national productivity, S/(C + V). The resulting formation of our ideas concerning the lawful organiza­
shrinkage of S', toward even negative values, would halt tion of the universe through the emergence of the notions
the possibility of population growth , and would lead to of "relativity ."
a condition of famine, epidem ics, and homicidal social It is the notion of a developmental unfolding of
chaos. The parameters of demographics would decline, successive, ever higher-ordered hypotheses, each advance
and an absolute spiral of decline toward savage depopu­ corresponding to a crucial-experimental breakthrough,
lation and savagery would ensue. which is the proper notion of science, and of truth . The
Thus, the culture whose ruling ideas directly or other­ transfinite conception which defines a subsumed, or­
wise efficiently prevent technological progress is the dered sequence of hypotheses corresponding to crucial­
typification of an insane culture which has lost the moral experimental breakthroughs, is the proper notion of
fitness to survive. science and of truth .
This is not a mere opinion. mere alternative "explana­
The physics of truth tion. " but is the only judgment which corresponds to the
The transformation of productive technologies which empirical evidence.
correlates with a society's continuing ability to survive Therefore, the ordering of the universe which corre­
signifies both an increasing per-capita energy through­ sponds to this notion of truth and of science, is the only
put overall, and also an increase in the flux density of the true, scientific conception of the lawful ordering of that
energy-sources of production (the equivalent of energy­ universe. The correlative of science is the ordering of the
sources of higher temperature equivalent) . In secondary universe which, itself a transfinite, subsumes rising values
school chemistry's language, a twofold increase of this for the hydrothermodynamic values of S' I(C + V).
sort is the "reducing power" of the society. Human practice proves that no other knowledge can
This cannot be the simple energy of scalar primitive­ be true. This is the knowledge which corresponds to
ness. The expansion and the energy-intensity of produc­ continuing human mastery of the lawful ordering of the
tion are to be measured, as combined, indispensable universe. It is, otherwise stated, the degree to which
developments, as an "investment" of S' in capital for­ human behavior and knowledge corresponds to that
mation, correlating with a secular increase in the capital­ lawful ordering that human behavior is in efficient agree­
intensity ratio, C/V. The simplest expression of the rate ment with the lawful ordering of the universe.
at which a society can effect this is the rate of profit, S'I Therefore, ideas about the universe and its lawful
(C + V). Hence, what is required is not only increasing ordering which correspond to the conceptions j ust devel­
magnitudes of energy at rising energy flux densities. This oped are the only conceptions which are real, which
must be expressed in rising relative hydrothermodynamic represent truth and sanity.
values for the "rate of profit," S' I(C + V). The energy­
throughput is alloted, as consumed, to S', C, V . The theology of physics
This cannot b e reduced t o labor-time equivalents, These are the principles which are to be traced
contrary to Ricardo's and M arx' s schemas. The potential through Leibniz and Carnot's circles into the emergence
for rising productive-power of productive labor corre­ of the Riemannian physics of the multiply-connected
lates not merely with a rise in the equivalent consumption manifold. As conceptions of a more general sort, they are
of labor (relative to a preceding interval of production), very old, at least as old as Plato's dialogues, and also the
but with V shrinking as a percentile of the total. of S, V, characteristic conceptions of Apostolic Christianity.
C. They are also the outlook of Rabbi Philo Judaeus, the
S' must rise faster than C/V. collaborator of St. Peter at Rome.
So, the analysis of this process of improved reproduc­ In Plato, these conceptions center around the notion
tion of the productive processes of society m ust be ex­ of the "hypothesis of the higher hypothesis," which is the
pressed as a problem in hydrothermodynamics. Logos (Holy Spirit) of the Gospel o f St. John. The notion
Therefore, the lawful organization of energy in the of consubstantiality, the central ontological-theological
·universe which corresponds to hum an survival is of the conception of Christianity involves a strictly Platonic
form of rising values of the ratio S' /(C +V). conception of physics. The Christian God is not a pagan­
This rise is effected as successive forms of technolog­ like, irrational anthropomorphic providence, but a crea­
ical progress. That succession is defined as the realization tive intelligence, consubstantial with the universe as a
of basic scientific progress. whole, and also with a lawful princ iple of continuing
Basic scientific progress is not defined by ordinary creation (enumeration of higher-order domains in a
discoveries, but only by those special cases of discovery manifold) which is described by the notion of the "hy­
which are commonly described as crucial-experimental pothesis of the higher hypothesis. "
breakthroughs. The popular, somewhat distorted and It is from this vantage-point of unequivocal Apostolic

EIR M ay 1 3 , 1 980 Special Report 37

Christianity that we report, with absolute certainty that
the cited Jesuits' conceptions are not Christian, but are a
nominal, counterfeit Christianity based in the ontologi­
cal and cultist charismatic conceptions of both the Isis
cult and of what St. John describes as the "Whore of

Clearinghouse:
Babylon." Theirs is the doctrine of the "fallen angel,"
Satan, the semitic name for Dionysus.

The Aquarians
The characteristic doctrine of the satanic cults over
the millennia has been centered around what is most
the 'new age'
rigorously termed "the oligarchic model," and known
during the middle of the 4th century B.C. as the "Persian in Congress
model."
The function of the cults , including the cults of Dozens of Senators and Congressmen are members .
Dionysos, Apollo, and Isis, as well as of the Mesopota­ Hundreds have attended its meetings . And it is one of the
mian magicians, is to degrade mankind into a lunatic most influential institutions on Capitol Hill, not only
condition in which the oligarchists' slaves will not only shaping specific pieces of legislation, but shaping the
accept, but will work to bring into being the "oligarchical very way America' s legislators view the world.
model ." That model is a "zero technological growth" This is the Congressional Clearinghouse on the Fu­
form of antiurban society, combining what popular ture, an "Aquarian Conspiracy" organization that,
opinion would identify with rule by allied feudalist and along with the Congressional Research Service, is effi­
rentier-financier forces, mixed with the sodomic lunacies ciently brainwashing U . S . lawmakers into supporting
of Aldous Huxley's Brave New World. the Club's zero growth perspective.
Aquarius is but a new name for Satanism, overlap­ The Congressional Clearinghouse specializes in "im­
ping the Liberation Theology of the Jesuits . ages of the future," or "futurology." Its staff and lectur­
This problem is not only unoriginal in the span of ers feature a number of science fiction writers of notorie­
human history. It is not original to this century. The last ty-Isaac Asimov, Ray Bradbury, Hal Clement-and
expression we had of this, until now, was Nazi Germany . such oracles of "a new dark age" as Barbara Tuchman
The sort of lunacy which Nazism represented in (A Distant Mirror), Marilyn Ferguson ( The A quarian
practice could not be effected by sane people. The Odin Conspiracy), and Alvin Toffler (Future Shock. The Third
and Th ule cults are exemplary of the "Aquarian" ideol­ Wave) . They have in common a disbelief in the arguments
ogy which permeated the Nazis generally. To transform of science, and a hatred for economic growth and scien­
the United States into a fascist horror, the Jesuits and tific progress, which their "images of the future" seek to
their Anglican partners had to eliminate the last efficient eradicate from the minds of Congressmen.
vestige of the American dedication to scientific and Says Clearinghouse director Ann Cheatham, describ­
technological progress from the controlling institutions ing the transformation of elected officials into mystics,
of society . "in some way I don't even understand, we have addressed
So, typified by the conceptions of the allies, H . G . a deep need in Congress to speak to people' s sense of
Wells and Teilhard d e Chardin, the one-worlder Aquar­ frustration and pain, to the awareness that you don't
ians destroyed first much of the youth of the United have to pretend you know exactly what to do, because
States-through the C h a r d i n e s que- H u x ley " e n try nobody knows what to do right now ."
point" of drugs, and used the drug-destroyed minds of a Amid the worst crisis in the history of the nation,
youth lured into pornography, disco orgies, and homo­ over 200 members of the Ho use and Senate, through the
sexual cuitisms, into "post industrial society" antitech­ seminars, dinners, newsletters, and discussion groups of
nology, hooligan cuits, and thence into lurid "sensitivi­ the Clearinghouse, are now celebrating the fact that they
ty" cults, "charismatic" forms of satanism, often in the "don't know what to do right now." The crux of the
name of Christianity. process, however, is that Clearinghouse personnel quick­
The decay of the United States' leading circles is so ly assume the role of telling Congressmen what to do.
bad that a mentally unbalanced Carter is tolerated as "It is impossible to measure what has happened to
nominal President, and that a wholesale assault on the the members of the House and Senate who have attended
very idea of Reason appears almost unopposed in those these monthly dinners," says Congressman Charles Rose
strata. (D-NC), "but surely we are not the same as we were
Either we end this Jes uit-Anglican lunacy, or we shall before we heard them ."
not long survive. Subtlely, the Clearinghouse convinces its Congress-

38 Special Report EIR May 1 3 , 1 980

men that they themselves have developed the new "dark death cultists, environmentalists and witches and devil­
age" perspective the Clearinghouse was created to pro­ worshippers around the country, they, too, are members
mote. "The key to adaptation is people' s perception of of "the Aquarian Conspiracy,"
reality," reports Arnold Brown, a staffer who developed "She was very well received," says Gore.
a program by which Clearinghouse participants arrive at
"consensus" decisions favoring precisely what the Club A wide scope
of Rome proposes. "There is no reality, just perceptions . The effectiveness of the Clearinghouse is indicated by
I developed the TEAM approach for the Clearinghouse. the activity of Rep . Henry Reuss, now a believer in
TEAM starts from the view that most people fear transcendental meditation who sits on the Clearing­
change-even when it' s good. It upsets them and threat­ house' s advisory board . Chairing the House Banking
ens them , because they have to change their view of Committee, from which he launched his "Omnibus
themselves and the way they relate to the world . TEAM Banking Bill" and other legislative parts of his "Reor­
tries to get people to view ideas for change and informa­ ganization for the 1 980s" package, the Wisconsins Dem­
tion as things they thought up themselves . At the Clear­ ocrat has done more dam age to American industry than
inghouse, we get people together from all over Capitol any other figure on Capitol Hill .
Hill, and help them perceive information they're given as Reuss thinks of himself as facilitating "the transition
their information, and upcoming changes as their from abundance to scarcity. "
changes. Information becomes non-threatening to them In mid-April, with Reuss playing a key role, the
and they believe they have a stake in it." Clearinghouse began to orient strongly to determining
The Congressional Clearinghouse was created in specific legislation , rather than simply the "friendly fas­
1 97 6 by Aurelio Peccei' s Club of Rome. Director Ann cist" o utlook in general. Reuss is directing a series of
Cheatham is one of 1 50 select members of the U . S . monthly Clearinghouse dinners featuring leading cor­
Association of the Club of Rome, and she a n d her entire porate executives . At the first of these on April 1 6,
staff are also members of the World Futures Society. Citibank chief Walter Wriston called for complete bank­
The World Futures Society is an umbrella association ing deregulation and elimination of the McFadden Act,
for "futurist" organizations around the nation . These which protects regional banks against take-over by out­
organizations are designed for "raising new states of o f-state maj or banks . Reuss has the legislation prepared.
consciousness" enabling persons to "see new dimen­ But the Clearinghouse' s target is broader. "This year
sions" in reality. Any "dimension" will do, if it disposes we are trying to prepare a 'Futures Agenda' for every
one to passively accept stagnation and decay, death and subcommittee in Congress," explains Congressman
economic disintegration . The organization is blunt about Gore. "We are working with all the Congressional sub­
this objective. Their conference this July in Toronto committee staffs . "
features panel discussions under the titles, " Death and "There are many very aware Congressmen," declared
Dying" and "Friendly Fascism ." Dr. William Whitsun, director of military and defense
The Congressional Clearinghouse, whose entire staff policy at the sister Congressional Research Service. A
and membership will attend that Toronto conference, leading figure in futurology circles , Dr. Whitsun is cur­
turns Congressmen into Malth usians who will view the rently doing well-funded research into "psychic war­
collapse of the U . S . economy as merely "a change in life­ fare"-with the perspective that mind-waves might be­
style," the spread of psychotic cults as merely "a new come an anti-ballistic missile weapon ! Says Whitsun, all
consciousness, " and the proliferation of drugs and sado­ of the nation's lawmakers "will see the impact of the
masochistic homosexuality as desirable instances of Aquarian Conspiracy on them as they meet their constit­
"mind-body awareness." And recently, when the Clear­ uents in the 1 980 election. The Clearinghouse is j ust the
inghouse held a seminar on "new dimensions in science," center of the effort on Capitol Hill."
the focus was the revival of Nazi race science undertaken The very government structure will be changed by
by geneticist William Shockley . the Clearinghouse Aquarians, say their spokesmen: Last
"This will influence whether Shockley will be allowed month, the Capitol Hill group sponsored a gala dinner
to continue his work," to create a new master race for Barbara Tuchman, A Distant Mirror' s author. Tuch­
through genetic engineering, explained an aide to Rep. man stressed the need to rewrite the Constitution, and
Albert Gore, Jr., now Clearinghouse chairman. called for a Constitutional convention . At a Clearing­
According to Gore, one of the most popular speakers house dinner one month earlier, Alvin Toffler declared
at the Clearinghouse was M arilyn Ferguson, author of that the Constitution was written when America was
The A quarian Conspiracy. After her talk, Ferguson met passing through its "agrarian phase." America then
privately with representatives Gore, Long, Rose, Fan­ passed through its "industrial phase" but is now in its
cell, Schroeder, and Mississippi Senator Cochran . She "informational phase." The Constitution is no longer
informed them that, as in the case of homosexual cultists, appropriate, in the Age of Aquarius.

EIR May 1 3, 1 980 Special Report 39

 The Iran rescue caQer

The wreckage of the

Carter administration
by Robert Dreyfuss

The resignation of Cyrus Vance in public disagreement government, said bluntly that the Vance departure
with the White House, an almost unprecedented occur­ proves that not only Europe "but even the Americau
rence in V . S . history, has knocked the remaining props secretary of state" disagrees with Carter policy .
out from under American foreign policy and sent V . S . The impetus behind the Vance departure, according
allies and friends scurrying t o duck the debris. Domesti­ to insiders, was the fact that Vance seriously believed
cally, the resignation of the Episcopalian aristocrat has that the Carter-Brzezinski policy would lead to World
once and for all shattered the illusion of national unity War III. Just before his resignation, Vance reportedly
that had been carefully cultivated since the start of the told a friend, "We haven't begun j ust an attack on Iran.
Iran crisis last November. We may have started World War IlL" Together with a
The news of the Vance "resignation hit the summit particular Anglo-American faction associated with for­
meeting of the European Economic Community like a mer New Yark G overnor Averill Harriman and former
bombshell . For weeks, especially since the April 8 Carter V . S . V ndersecretary of State George Ball, Vance ditched
announcement of economic sanctions against Iran and the Carter administration in the belief that the regime
the V . S . break in diplomatic relations, America' s NATO was heading over the brink.
allies and Japan had been caught in an increasingly In this sense, the Iran crisis and the rescue action were
uncomfortable squeeze. Knowing that the proposed V . S . mere ephemerals in a much broader strategy leading to
meastttes against Iran would b e counterproductive and what Ball described this week as a "pattern of escala­
dangerous, they were also aware that Washington was tion." The New York Times, in an editorial on Vance's
making their acceptance of such measures a litmus test resignation, said what m any others were thinking, that
of their loyalty to the Atlantic Alli ance. With Vance's m uch more than Iran per se was involved in Vance's
resignation, which reportedly stunned the European decision . " Duty will not be done until Mr. Vance tells the
leaders only j ust recovering from the shock of the failed nation what he finds so reprehensible about . . . rescuing
V.S. rescue action, the Europeans felt relieved of any hostages ," wrote the Times. "If Vance so feared the
responsibility for what many French and West German failure of the rescue mission-and perhaps even m ore the
leaders considered to be knee-jerk solidarity with the success-it m ust be because he knows more than the rest
Carter administration. Le Figaro, the conservative of the co untry about the President' s mood and the drift
French daily which often reflects the views of the Giscard of his policy in these days of frustration."

40 I nternational EIR May 1 3, 1 980

Iranian soldiers look o ver the wreckage of a u.s. helicopter in the Iranian desert . Photo: Sygma

New York Times colum n ist J ames Rest o n , close to

Vance ever since the secretary se rved o n the board o f the
Times company, repo rted that what V ance sought was
the dismantling o f the powerful N ati o n al Security C o u n ­
c i l and i t s downgrading from a policym a k i ng to a s i m p l e
coord inating body.
What i s certain is that the fai led raid o n Iran a n d the
Vance resignation have p l unged the country i n to the
most profound fo reign policy crisis in this century, cou­
pled with a complete fragmentation and disin tegration
of political leadership. What is much less certain i s the
actual course of events i n and around the attack on I ran
itself.
At this point, what can be said with some ass u rance,
according to EIR ' s sources, i s the fol lowing:
First, the mission was not aborted beca use of the
failure of th ree helicopters . I n formed m i litary experts
assert that the cha nces of those helicopters fail i n g sim ul­
taneously was approximately I in 1 0 ,000 . Further, ac­
cording t o reliable reports, the Soviet U n i o n was in­
volved in direct military action against the U . S . raiding
party . During the operatio n , CIA sources rep ort, a Soviet
M ig jet fighter was shot down by U . S . forces. According
to other i n formati o n , the Soviet air force carried o ut a
lim ited air strike agai nst the exposed U . S . fo rce on the
Iranian desert, while one source asserts that the S o viets
did not act ual ly attack the U . S . party b ut simply sent Cyrus Vance: Wha t does h e k n o w? Photo: U.N.

EIR May 1 3 , 1 980 I n ternational 41

several Mig-25s over the landing area "and someone in strengthen the grip of the clerical regime by providing a
the field command panicked," thus aborting the mission. rallying point for them against their growing opposition,
Second, several sources, including published reports much of which is getting powerful backing from Iraq.
in the Kuwaiti A I- Qabas, claimed that the Kremlin got To the extent that the operation was a rescue action,
on the "hot line" with the White House to warn against it co uld only have succeeded with the collaboration of
continuing the attack on Iran. Despite Pentagon denials the Iranian leadership, many of whose leading figures
of such reports, U . S . assertions that the Soviet Union did would like to be rid of the hostages in a manner that will
not know about the raid until the U . S . told them 30 not open them to criticism for having made a compro­
minutes beforehand are not credible, and intelligence mise with "the Great Satan ."
specialists agree that Soviet intelligence would have de­
tected the raid even while it was in the planning stage.
Israeli intelligence leaks that appeared one day before Policy vacuum
the raid, concerning U . S . air activity from bases in The wake of the attack on Iran, has created a policy
Egypt, indicates that the raid itself was no secret to vacuum in Anglo-American circles. While key forces in
insiders. New York and London have realized that the Brzezinski
Third, it is certain that the U . S . government and White House is heading for war, in both the rest of
I r a n i a n auth orities, i n cl u d i n g F o reign M i n i ster Western Europe and for the Soviet Union the scenery is
Ghotbzadeh and President Bani-Sadr, acted in full col­ dominated by the common understanding that the situ­
lusion with the United States, as the report below makes ation is out of all control. In fact, at this writing, reports
clear. Th us, the action could not have been designed in continue to come in with evidence that Brzezinski is still
order to overthrow the Khomeini regime-since, in fact, building up forces in the area and keeping options open
the impact of the U . S . action would have been to for more military action in the immediate period ahead.

general U . S . strategic alert called during the opera­

tion.
While there has been , as of this writing, no confir­
mation of this last hypothesis, reports have begun to
surface in the international press that the U . S . and the
Soviets were very close to W orId War III last week.
u.s. - Soviet hotline According to an acco unt in the May 1 A I- Qabas,
invoked during Iran crisis? "When Cyrus Vance was shown the range of options
involved in the action, he told Carter, 'Mr. President,
Five top-level European sources reported to EIR this you are not carrying out a rescue mission. You are
week that President Carter and Soviet President firing the first shot in World War III.' It was at that
Brezhnev were on the "hotline" between Washington moment that Vance tendered his resignation."
and Moscow during last week's Iran "rescue opera­
tion" crisis.
This report was propelled into the international
press as well by an account in Kuwait' s A I- Qabas, What aborted
datelined Paris, that the two leaders had been in
"hotline" comm unication during the peak of the cri­ the 'rescue mission'?
sis.
The consensus among these sources is that some­ Three high-level U . S . policymaking sources indepen­
thing "much bigger" than a rescue operation was dently reported their assessments M ay 1 that the
going on last week . While the conventional wisdom reason that last week's Iran "rescue mission" had been
from these circles is that the Soviets were irate- over aborted by President Carter and/or the on-site com­
the massive dimensions of the U . S . operation being manders was that the Soviet Air Force moved in force
launched, another school of strategic thinking surmis­ against the planes at their staging-ground, either at­
es that the Soviets would not "go to the brink" in this tacki ng them or threatening to mount an attack. Once
way unless they were responding to some kind of the Soviets made their move, these sources concur, the

42 International EIR May 1 3 , 1 980

 From this standpoint, the British intend to take ad­
vantage of the very fact of the appearance of a crazed
White House in order to attempt to strengthen their own
in fluence in continental Europe. Essentially, the British
argument is that the "special relationship" between Lon­
don and Washington will allow the British-whose Lord
Carrington arrives in Washington this week-to repre­ THE RESCUE RAID
sent the interests of all Europe in taming the American
monster.
Thus, within the co uncils of the EEC the British have
Will Brzezinski
been arguing, albeit with questionable success, that they
be allowed to become the arbiter and spokesman for
try it once more?
Europe.
But along with the wreckage of American helicopters The Carter administration's aborted raid into Iran last
and C- 1 30s on the Iranian desert is the wreckage of the week has set the stage for gradually escalating, low­
painstakingly cultivated U.S.-British strategy for putting intensity operations in Iran and throughout the region,
cumulative pressure on Western Europe. Whereas only leading inexorably to a follow-up U . S . military adven­
last week the Europeans were caught up in a process of ture that could well trigger a cutoff of oil supplies and a
step-by-step capitulation to NATO, since the Iran events, full-blown military confrontation with the Soviet Union.
the entire geometry of European politics has shifted . The first in this series of escalating incidents occurred
Which direction Paris and Bonn will now take is an open early April 29, when U . S . Air Force fighter planes at­
question . tacked an Iranian reconnaissance j et over the Gulf of
Oman . Although the Pentagon denied the affair stating
that the incident involved only a routine "shadowing" of
the Iranian plane, the Iranians claimed that an alterca­
U.S. command panicked and the escapade was called tion took place, with their air force successfully repulsing
off. the U . S . j ets .
According to one leading New York-based for­ National Security Council chief Zbigniew Brzezinski,
eign policy adviser to several presidential administra­ the loose nut of the Carter administration, is the architect
tions, "the only information that I have seen that of Washington's suicidal policy to go to the brink-and
makes any sense at all is that the mission was aborted beyond-in Iran in the interest of taking on the Soviets
because of an actual Soviet attack or because of the "once and for all . " In a nationwide television interview
threat of such an attack. " April 27, Brzezinski made this all but official by an­
A Washington-based expert on Iranian affairs nouncing that an aggressive "long reach" policy would
provided the following account of the chain of events: henceforth characterize America's posture abroad.
"On� the Soviets got wind of the dimensions of the Brzezinski' s Operation Long Reach is taking the
operation being launched inside Iran, they immediate­ dimension of the largest military buildup ever by the
ly began overflights into Iranian territory in the vicin­ U . S . in the Indian Ocean-Arabian Sea theater. The U . S .
ity of the staging-ground. They sent M IG-25s up there aircraft carrier Forrestal has entered the Indian Ocean
as a warning . When our people realized what was area and, later in the week, the nuclear-powered carrier
going on, they panicked, they lost their nerve and Eisenhower will also j oin the deployment, as the fourth
called a retreat." aircraft carrier poised for action in the strategic Persian
One well-in formed oil industry source added an Gulf. A total of 44 warships are now positioned at the
important twist to these accounts: "My information is entrance to the Gulf and are reportedly assuming battle
that the Russians probably j ust blew the planes up. formations. In addition, U . S . Airborne troops are being
There was a Soviet air strike that wrecked the mission, airlifted into Bahrain and other "suitable areas ."
that caused panic in the command. The Soviet action In short, everything is primed for a showdown.
was not based on hostility to our getting the hostages The Soviet armed forces newspaper Red Star has
out; that they can go along with. What they can't charged that the United States may try military actions
stomach is the dimensions of the operation that we in Iran again. Such actions "will inevitably lead to a
mounted-especially with Zbigniew Brzezinski at the further heightening of the danger of hostilities in the
helm of American policy."
Middle East and a further aggravation of the interna­
tional situation ," the paper warned.

EIR M ay 1 3 , 1 980 International 43

 There is no doubt that the entire military operation war . Last week , the first of a series of bomb explosions
into Iran, including its aftermath, is being coordinated ripped through Teheran-the first such terrorist actions
tightly between Washington and the Teheran govern­ since the revolution. Several Revolutionary Guards at
ment. According to well-placed Paris-based intelligence the U . S . embassy in Teheran were wounded by shots
sources, the April 24 "rescue attempt" was plotted in fired from a passing car. The incidents, a first for the
detail at a meeting in Paris of Iranian Foreign Minister capital, mark the degree to which Bani-Sadr and com­
Ghotbzadeh and First Secretary Murphy of the U . S . pany are losing control over the deteriorating internal
Embassy i n Paris . I n addition, reports i n the Syrian and situation . Outside the capItal, heavy fighting has erupted
other Arab-language press attest to the fact that U . S . between anti-Khomeini Kurdish rebels and government
government ,o fficials are conducting intensive, ongoing forces, which are leveling the Kurdish provincial capital
discussions with the Muslim Brotherhood, the secret of Sanandaj in an attempt to crush the Kurdish resist­
society of Islamic fundamentalists behind Khomeini and ance.
related revivalist movements in the region. , The U . S . raid into Iran and the threat of further
According to Iraqi state radio, the U . S . attack was action are serving to radicalize the entire region against
"play acting carried out in orchestration between W ash­ the U .S. and into the arms of the Muslim Brotherhood.
ington and Teheran." On April 25, when asked about As a result of the raid, a number of Arab states are being
rumors of prior coordination between the U . S . and forced by growing internal pressure from "anti-West"
Iranian officials such as Ghotbzadeh and Iranian Presi­ factions to become "more Muslim ." The Kuwaiti daily
dent Bani-Sadr, White House Press Secretary Powell A l-A qba denounced the raid as a "blatant violation of a
answered with a stony "no comment," thus causing CBS M oslem state's sovereignty ." Expressing Saudi aliena­
to speculate about the existence of a "fifth column" tion as a result of the U . S . intervention, the Saudi daily
inside Iran. Sen. John Glenn stated explicitly that there Madina cited a recent statement by the Islamic Confer­
must have been a "fifth column in or near the embassy ence against the use of force in Iran or any Muslim
that we have developed ." country . What is significant about the Madina report is
Coordination between the U . S . and Iran continues. not so m uch the denunciation of the U . S . action but
Following the sabotage of the mission in which three more the adoption of the Islamic Conference position
helicopters "broke down," the Iranian air force rushed since it is a front for the Muslim Brotherhood.
to bomb the U . S . helicopters and the disabled C- 1 30
transport left behind by the Americans. The operation Iran conspires against its neighbors
was carried out so fast that two Revolutionary Guards Taking ample advantage of the growing polarization
guarding the site were killed because they were not in the area-a polarization viewed favorably and nur­
informed of the air force decision to bomb the planes. tured by Brzezinski as the number one weapon against
The Iranians are now doing their utmost to create the the Soviets in the region-Ghotbzadeh embarked on a
climate for "Take 2" of the Iran invasion. Following the tour of the Arab world scarcely 48 hours after the aborted
aborted raid, Ayatollah Khalkhali, the head of the Mus­ rescue mission. Ghotbzadeh's aim is to stir up Shiite
lim Brotherhood in Iran (the very same Muslim Broth­ Muslim Brotherhood militancy against moderate Arab
erhood with which the Carter administration is collud­ leaders in the Gulf. His principal targets are the govern­
ing) displayed the charred remains of the dead U . S . ments of Iraq and Saudi Arabia.
servicemen left behind. The display was part of a delib­ The operation against Iraq is particularly intense.
erate effort on the part of the Iranian leadership to play Coinciding with Ghotbzadeh's Arab tour, Iran media
into Carter's attempts to rally the American population launched a vicious propaganda campaign against Iraq,
around a confrontationist course of action. In his m ost reporting as fact the outright lie that Iraqi President
"anti-Iran" statement since the beginning of the crisis, Saddam Hussein had been killed in a coup d'etat. In a
President Carter "denounced" Khalkhali's actions as Damascus news conference, when Ghotbzadeh was told
"ghoulish" and "horrible," saying, "This has aroused that the report had not been confirmed, Ghotbzadeh
the disgust and contempt of the rest of the world and stated: "H ussein and his regime can go to hell." .'
indicates quite clearly the kind of people we have been Arriving in Kuwait, Ghotbzadeh became the "vic­
dealing with. " tim " of a phony assasination attempt, which he rapidly
blamed on the Iraqis. The "proof' put forth by Ghotbza­
A short fuse deh that the Iraqis were involved was that a car, purport­
to civil war edly used by the would-be assassins, was found planted
Setting the stage for U. S . follow-up military action in front of the Iraqi em bassy in Kuwait filled with arms !
into Iran are a chain of violent incidents-all activated The provocations against Iraq signal an imminent
by the raid-that have placed Iran on the edge of civil new round of Iran-Iraq clashes.

44 International EIR May 1 3 , 1 980

 niew Brzezinski some years ago out of concern for what
his influence might be on U . S . policy . We profiled Brze­
zinski as susceptible of a problem , a neurosis which is
called in military science 'flight forward' . . .
�.
"One of the great fears in military science is that this
THE FALWUT kind of flight forward . . . might occur at the command
level, or the level of head of state.
"That's exactly what' s happened. The Carter admini­
Why Secretary stration, which has been out-gunned, whose policy has
been a failure, is responding to its failure-the bankrupt­
Vance resigned cy of its Middle East and its China policy-by going into
a ' flight forward' assault against the forces of the Soviet
Union."
The resignation of Secretary of State Cyrus R . Vance The announcement late Sunday of Vance' s resigna­
yesterday removes from the inner circle of presidential tion was but the opening shot of protest within the
counsel the only Carter advisor who had retained any administration. The first stage of what could be an
remnant of sanity on the ways and means by which the avalanche of resignations has now begun.
United States may avoid war in the short term. On April 30, Deputy Secretary of State, Warren
What Vance realizes is that the policies of the Carter Christopher, the No. 2 man at State, announced his
administration have brought the United States to the resignation, also in protest over Carter policies. Highly
brink of a thermonuclear showdown with the Soviet reliable sources in Washington expect U . S . ambassador
Union . Vance's sudden departure from the administra­ to the Soviet Union and former IBM Chairman, Thomas
tion has created the conditions in which a break in the Watson Jr., to resign in protest any hour now . Watson
psychotic national unity that has bound the U . S . popu­ has known Vance intimately for years-the two were
lation to Carter's lunatic policies since last November's codirectors of IBM prior to 1 976, and both, along with
seizing of American hostages in Teheran may come. other prominent figures such as Clark Clifford, Paul
Vance submitted his resignation not only as a protest Warnke, and j ust-appointed Secretary of State, Edmund
against Carter's military rescue caper, but also against Muskie, are figures who developed in political life as
the general confrontationist bent of administration for­ proteges of FDR's former ambassador to Moscow, Av­
eign policy. Although this news service has been Vance's erell Harriman. Watson arrived from Moscow today, in
most severe critic on the domestic political scene, we can a surprise move, citing "personal reasons."
report that his position, that the Carter administration Amidst the resignations, the first calls for the com­
should take "no military action in or around Iran," was mencement of a "Cartergate" process have surfaced,
based on an understanding of a reality that Carter, from individuals and institutions that speak for oligarch­
Brzezinski, and other administration officials are consti­ ic Atlanticist fam ilies.
tutionally incapable of understanding: that a U . S . mili­ Henry Reuss, long identified as congressional point
tary move into the Middle East region guarantees a m an for City of London financiers, has called upon
thermonuclear confrontation with the Soviet Union, Carter to follow in the footsteps of LBJ and declare he
from which the Soviets will not back down, and therefore will not seek the nomination for reelection. David Brod­
the very high risk of general nuclear war by miscalcula­ er, columnist for the Washington Post, today echoed
tion. As Vance was aware, the very best a U . S . military Reuss's call with the assertion that only by "ending his
move into the region could portend was a U . S . back­ status as a candidate can (Carter) gain the freedom of
down to the Soviets, full-scale strategic humiliation, and action and credibility he needs to deal with the deepening
the threat of a Soviet invasion of Iran . crisis in Iran . "
Vance' s denunciation of Carter' s lunatic policy Following the Vance resignation, the New York
course, therefore, has forced into the open the fact that Times ran a lead editorial demanding of Vance-a for­
the United States is in the middle of the gravest strategic mer director of the Times-that he publicly relate the full
crisis of its history. account of why he resigned; "If Mr. Vance so feared the
The immediate cause of the national crisis was pin­ failure of the rescue m ission-and perhaps even m ore the
pointed for the American population by Democratic success-it must be because he knows m ore than the rest
Presidential candidate, Lyndon LaRouche, in an ex­ of the country about the President' s mood and the drift
traordinary half hour national television broadcast on of his policy . . . if Mr. V ance wishes to head off reckless
Jan . 27 . LaRouche told his audience: "Now, the Carter adventure, it is not enough to j ump ship . . . a defeated
administration has another feature. We profiled Zbig- statesman speaks his mind."

EIR May 1 3, 1 980 International 45

 lost. It is doubtful she will get a second chance. Schmidt, -

with the support of Giscard , made the final offer: to

reduce Britain' s net contribution to the EEC in 1 980
from $2.2 billion to $750 million. Schmidt later said at a
press con ference that he would not repeat the offer, and
his Finance Minister Hans Matthoefer declared that
THE EEC SUMMIT
since the proposal would require West Germany to up its
own contribution by $700 million, "Schmidt can't make
Europe resists Iran the offer twice without my agreement . . . If I say don't do
it, then he won't do it again."
caper manipulation The Commission of the EEC, its supranational body
in which the British play a dominating role, is now
issuing dire predictions of the Community being "para­
The two-day meeting of the European Common M arket lyzed" as a result of the failure in the talks.
heads of state ended Monday, April 28 with results wildly
different from what the British press and spokesmen had Shattering the aura of unity
been predicting throughout the preceding week . Instead Few signs pointed to such an outcome on Sunday,
of a newly unified Europe patching up its differences for when the heads of state first gathered in Luxembourg
the sake of Western "solidarity in this time of crisis," the ready to come to terms with Anglo-American pressure
profound rift that has long existed between the Franco­ on Europe to back President Carter's Iran policy . It
German alliance and Britain was left gaping wide. seemed that the ongoing fight between the continent and
Worse yet for the British gamemasters who had London would be hastily resolved in the name of Euro­
planned to emerge from the summit as the anointed pean unity and solidarity with the United States in a
"mediators" between continental Western Europe and serious crisis period . By Monday evening, however, the
the Carter administration, well-informed press circles are tenuous aura of unity had been shattered .
now predicting that French President Giscard d' Estaing What had happened in the interim was the resigna­
and West German Chancellor Schmidt will be renego­ tion of Secretary of State Cyrus Vance over the aborted
tiating the Treaty of Rome, the EEC's founding docu­ Iran rescue mission. This broke the myth of a monolithic
ment, to create a two-tiered Europe: a Franco-German America gathered around its President and dem anding
directorate running policy, and Britain and its client the same from the European allies . The French conser­
states relegated to second class membership status. vative newspaper Le Figaro 's report April 29 of the
That informed speculation is going this far is a clear impact of Vance' s announcement, echoed the rest of the
indication of the state of affairs when the talks ended . European media: "Cyrus Vance' s resignation is in some
After Giscard and Schmidt bent over backwards British sense the official confirmation o f Jimmy Carter' s incom­
Prime Minister M argaret Thatcher refused generous petence . . . Americans can no longer ignore this essential
offers to settle dis'putes revolving around Britain's mon­ fact: for the first time, the President is not j ust criticized
etary contributions to the EEC and agricultural prices, by double-faced adversaries or overly cautious allies
Giscard uncustomarily lost his temper . Slamming his fist afraid of endangering their selfish interests. He is con­
into the negotiating table, Giscard ended the talks stat­ demned by one of his closest collaborators, the chief of
ing: "Under these circumstances, Madam, there is noth­ American diplomacy ." Furthermore, "with Vance, it is
ing more I can do for you." The French delegation issued the 'establishment' that is deserting Carter."
a statement calling the summit a failure because of "the The British had been cleverly and systematically us­
English position, characterized by unreasonable intran­ ing the argument of the unity demanded since the Iran
sigence." Giscard added that "I will not allow such a crisis combined with the dangers inherent in Carter's
contemptible spectacle in Venice," the next European obvious instability, to position themselves in a mediating
summit in June. role between the United States and Europe as a whole.
Giscard did not even atten d the concluding press Because of the special Anglo-American relationship
conference, leaving his ally Helmut Schmidt to explain dominant throughout the postwar period, Britain ar­
to the gathered reporters that much to their regret, he gued, differences within the EEC would have to take the
and Giscard considered Britain's policy a blow against a back seat because the increasingly desperate Europeans
common European policy. needed the British to help control Carter .
As for the British Broadcasting Corporation, it de­ As the London Guardian gloated in its lead editorial
scribed the aftermath: "Britain is alone o ut in the cold April 28: "redefine Europe as an entity and as an inter­
. . . it was a hard and horrible discussion . " national force . . . Not we the British, or we the Germans
Maggie Thatcher played the game of chicken, and or even . . . we the French . We the Europeans. Outside

46 International EIR May 1 3 , 1 980

1. .
Europe . . . we could realistically seek to operate as little
more than Washington's cheerleader across the water . . .
As an entity . . . Europe offers an infinite variety of
opportunities . . . For the moment, in the quaking after-
math of the Iranian fiasco, the potential of a more unified
Europe does not need to be argued point by point. It is What the press is saying
an obvious necessity ."
The signs of acquiescence to Carter's policies that
began to emerge when the administration threatened The following is an excerpt of Le Monde's editorial
military intervention in Iran if the "allies" didn't tow the of April 30, entitled " The Post-Rome Treaty?"
line, now appear to be dissolving. West Germany's press, Can the Community be m ade to function without
which is by no means known for being disrespectful to London? . . . The Germans and the French have in
the American President, launched a j oke campaign at the mind a "two-tiered Europe" . . . which means -a
expense of Carter. At the same time, Helmut Schmidt' s profound change in the nature of the Community. In
maneuvering room appears to have grown . While he has fact, this solution-the nightmare of the orthodox
recently painted himself into a corner with electoral Europeans-has always been practiced implicitly.
considerations, a poll taken by his own office indicates a Doesn' t the European M onetary System only regroup
solid mandate for the independent policy course he had eight out of the nine member states o f the comm unity?
been mapping out. Fourty-nine percent of those polled The idea launched by Giscard d' Estaing . . . to
indicated that they think West Germany should be more redefine a new financial mechanism for the Commu­
independent from the United States, with only 29 percent nity, based on the heretical rule of "j ust return,"
opposed. Sixty percent said they oppose the deployment announces a new era, that of the post-Rome Treaty . . .
of more nuclear weapons on German territory. No one really knows whether Giscard d' Estaing
That very issue, which came to the fore with NATO's and Schmidt aren't just using this weapon as a scare­
Decem ber decision to deploy Pershing II missiles in the crow for the benefit of the smaller countries . . . (But)
BRD, is bound to be a top item on the agenda of one thing is certain: the French and German leaders,
Schmidt's talks with Leonid Brezhnev when he goes to are seriously thinking about a reform which would
Moscow this June. have a certain logic for them . . .

The following is excerpted from the lead editorial of

Corriere della Sera, April 30, by A lberto Cavallari,
Die Zeit Paris correspondent.

'The super-bomb in the All the European capitals tried yesterday to undra­
American White House ' matize the collapse of the Luxembourg summit . . . But
this is a pious lie to hide . . . the brutal news that the
crisis has reached its lowest point.
The following article appeared under the headline " The
. . . What counts is that the EEC has been reduced
Bomb in the White House" and the byline of Wolfgang
to a multinational ship without a rudder; it is entirely
Ebert in the April 30 edition of the West German daily Die
paralyzed . . .
Zeit.
The very technical solutions advanced by the
French and Germans in Luxembourg to resolve the
The Americans have the bomb . The Superbomb . It is
British problem through a new financial arrangement
in Washington . M ore precisely stated: in the White
foreshadow the end of (EEC) solidarity, the birth of a
House.
"two speed" Europe, the superseding of the Treaty of
When it goes, it will be all over. It m akes no distinc­
Rome. But if financial solidarity is abandoned, it will
tions between good and evil. That is why we are all so
mean the destruction of the cornerstone of Europe . . .
afraid. A few lonely shepherds in New Zealand, they j ust
It is perfectly legitimate to say that the governments
might survive it. But even that is not certain. The radius
of Bonn and Paris, profoundly skeptical about the
of the effect of the bomb is supposedly very large, and no
Community and disillusioned by Community misad­
one cen feel safe from it. The Americans call it, tenderly,
ventures, are dreaming of a reform of the Treaty of
"Jimmy ."
Rome that would put Britain and the smaller countries
What makes the bomb in Washington so dangerous?
at a grade B level.
It is so incalculable. It is a time bomb, but no one knows
when it is set to go off. There is also a version in the form

EIR May 1 3 , 1 980 International 47

of a missile. The firing ramp for the missile is just in back
of the Rose Garden of the White House. Since it is a
missile, it can also backfire.
The point is only whether or not we can survive the
bomb. That is the point that all the responsible authori­
ties in Bonn are concerned with . Even there, people are
shuddering about the bomb in Washington . THE KREMLIN
D r . End-Game, as we visit h i m in h i s new, a n d we
hope bomb-secured, alarm station, characterizes the
bomb as "Bombenerfolg (a bombastic success), that is
'The U . S . is on the
the bomb in Washington looking around for successes."
"We are in the special department exclusively dealing brink of madness'
with keeping the bomb in the White H ouse under obser­
vation," he explains to us. The Soviet Union's immediate response to last week's
"Is there any protection against the bomb in Wash­ aborted rescue o f American hostages in Iran was to
ington?" I ask. describe it as an action "on the brink of madness" which
"That is what the whole world is working on feverish­ could easily have led to war over the Persian Gulf. The
ly. It is a race against time," he tells us . "According to news agency TASS on April 25 blamed Western Europe
the recent experience with American technology there is for failing to prevent Carter' s actions.
still a certain chance that it might not function when the Soviet spokesmen then began to hint that a much
going gets tough ." Dr. End-Game nods to himself ab­ bigger operation was afoot in Iran than a simple surgical
sent-mindedly and observes a telex machine. " But you rescue of the hostages, aborted due to mechanical failure.
can't absolutely rely on that either," he then opines. While M oscow is not telling everything it knows-and
"What are you doing concretely agai nst the bomb?" Soviet Foreign Minister Andrei Gromyko admitted that
"We are having it observed and we are continuously he is bewildered by what the United States is doing­
informed of any change in its condition," we hear Dr. some indications of the larger dimension of the affair
End-Game say. have begun to emerge.
"W ouldn't that be easier if it were done from Wash­ TASS issued a release April 27 charging that the raid
ington itself?" I ask . "Then if Bonn or anyone else was was intended to spark a coup against the Ayatollah
interested they could be informed that there was a danger Khomeini, while the Italian Communist Party daily Un­
that the bomb was about to go off?" ita reported April 28 that high-level Soviet circles in the
Dr. End-Game laughed: "Surely you mean the much­ Foreign Ministry and the Communist Party believe that
cited obligation to consult among alliance partners. No, the United States was and may still be planning a larger­
in Washington, they think it suffices if we take corespon­ scale invasion of Iran, using base facilities in Israel,
sibility for a decision which was made previously without Egypt and Pakistan .
us . Besides, what you suggest would take away the Unita also reported April 27 that the Soviet Union
surprise effect . And after all what are radio and television was quite well informed of U . S , moves throughout the
for?" period of the military operation, by radar monitoring in
"Is there a chance of defusing the bomb?" Armenia, Turkmenia and Azerbaij an, and that Soviet
"What do you think Schmidt and the other allies are diplomatic intervention to block the intervention may
continuously trying to do? T h e problem is that hardly well have taken place .
have they managed to get the trajectile which had once Some sources report that Soviet President Brezhnev
again lost its orientation back on course, disarmed it, was on the telephone "hot line" with President Carter
when a new horror report comes in . H ere, thank you," during the mission .
he then said, and took a telex report.
We read: "Insecurity advisor Brzezinski had just
entered the Oval B omb Room with a kalaschinikoff in Vance's resignation
his hand, muttering 'God stand by us.' " The first Soviet public reaction to Secretary of State
"Dr. End-Game, one last question: H ow long do we Cyrus Vance' s resignation was a TASS comment April
have to live with this bomb?" 28 that "Carter administration policy will be showing
"If we are lucky, only until the end of the year." ever more manifestations of adventurism whose symbol
"And if we are not lucky?" Brzezinski is. "
"Much shorter." A Soviet television commentator said that the resig-

48 International EIR May 1 3, 1 980

nation "underscores the recklessness of the United States
administration's course, which failed to heed his advice."
Vance had tried to slow "Washington's slide into an anti­
Soviet rut," the commentator said.
Again, Moscow knows more than it is letting on. The
stereotyped description of "hawk" Brzezinski vs. "dove"
THE PRESS
Vance disappeared in the Soviet press several months
ago, as Pravda declared that both are committed to a
policy of confrontation against the Soviet Union. Soviet Some predictions
journals earlier this spring described this confrontation
policy as deriving from such institutions of the "financial
oligarchy" as the New York Council on Foreign Rela­
and post-mortems
tions, the Trilateral Commission, and the Bilderberg
Society. The press has played a critical role in the unfolding of the
Soviet analysts are now trying to piece together in Iran crisis scenario . First the press hailed Europe and
more profound terms what Vance's resignation will Japan's capitulation on the sanctions issue to predict an
mean . Although the Soviet press has not pointed out indefinite postponement of any U . S . military action. On
Vance' s specifically British political ties and the fact that April 25 j ust such a military action, scheduled to take
Great Britain is now seeking to lead Europe into a new place, was aborted . Press post mortems, advertising the
Atlantic consen s us i n the a ftermath o f C arter' s "madness" of the Carter administration, emphasized the
debacle an article in the government daily Izvestia April necessity of rallying Europe and Japan around an alli­
26 described Britain's years-long effort to dominate con­ ance against the Soviet Union .
tinental Europe. Washington and London both hope "to
strengthen the Atlantic orientation of capitalist Europe,
to undermine the position of those circles in France and Times : European capitulation
other countries in the European Community which have means no military move
advocated an independent foreign policy," wrote Lon­ The follOWing is excerpted from a New York Times front
don correspondent V. Skosyrev. page article, U. S. hints at delay in decision to act militar­
..

The article, which described Great _Britain as Wash­ ily on Iran, " which appeared April 24.
ington's "Troj an Horse" in the Common M arket, de­ The United States today welcomed the backing it has
clared that, so far, efforts to "relegate detente to the received from the European allies against Iran and indi­
archives" have failed, since West Germany and France cated that the Common Market decision to invoke sanc­
"are convinced of how dangerous the adventuristic ac­ tions next month might defer into the summer or later
tions of the present Washington administration are for any consideration of American military moves aimed at
world peace." freeing the hostages in Teheran . . . .
Moscow is by no means viewing the prospects for a . . . The European Economic Community decided to
continuation of detente sanguinely, however. TASS reduce immediately diplomatic ties . . . and to ban all ex-
April 25 warned Europe that "It might have been expect­ ports to Iran except food or medicine. . . .
ed that the U.S. allies would try to stop the Carter In Tokyo , the Japanese government decided to j oin
administration in its reckless action, but quite the contra­ Western Europe in imposing an initial phase of economic
ry happened . . . .It can certainly not be ruled out that, and diplomatic sanctions against Iran . . . .
following Atlanticist logic, the White House will demand A senior White H ouse official said that the timing of
from its allies not only applause, but also the dispatch of the allied moves made it all but inevitable that the
British, West German and other military forces to Iran . . . "reassessment" of American policy toward Iran, previ­
The leaders of the West European countries will not ously set for mid-May, would be postponed. Moreover,
'
be able to keep silent indefinitely, they will have to the allies, soon to be partners in sanctions against Iran,
determine their position . " are expected to press for a delay of as much as several
Pravda April 27 linked the Iran fiasco t o NATO's months in any further steps . . . .
decision last December to deploy medium-range nuclear
missiles in Western Europe: "Can anyone in NATO A long-term strategy
countries still hope after all that the White House would to rally the allies'
consult them if it thinks of !-, sing the missiles deployed in The following is an excerpt from an OpEd " Carter's
their territories?" 'Fiasco ' in Iran, " by Stanley Hoffmann, professor of go v-

ElK M ay 1 3 , 1 980 International 49

ernment at Harvard University, appearing in the New record would command the confidence of Congress, the
York Times April 26. American people and the NATO allies .

In this country, paradoxically, the spectacular dem­ Financial Times : 'Carter weakened'
onstration of presidential bungling will, after the ritual Following are excerpts from the Financial Times's edito­
rallying around the flag has passed, only reinforce the rial of April 26.
chorus of simple-minded believers in force as the only
solution to international problems-people whose com­ The failure has weakened President Carter as a Pres­
ing to power could provoke the biggest inter-allied crisis ident. It has caused further divisions among the Western
ever and bring the world much closer to the nightmare of allies and it has enhanced the image of the Soviet Union
a new 1 9 1 4 . as a power that can-as it did in Afghanistan-demon­
This new crisis confirms the flaws of the foreign­ strate its strength with success . . . .
policy making process in the administration. Divisions . . . The maj or task now before the European leaders
among the principle actors produce paralysis, but secret at this weekend' s Brussels summit must be to explore
moves planned by an apparently small group of activi­ what means are most appropriate and to see how the
tists turn o ut clumsy and rash . It is not only the organi­ damage to the alliance and its image in the world can be
zation of the government that is bad-the absence of a repaired . . . . The first priority must be to maintain the
long-term integrated strategy capable of rallying o ur alliance intact.
allies and of resolving, rather than exacerbating, crises . . . The U . S . preoccupation with the hostages is de­
has now become a p attern . It casts a pall over almost all flecting attention from the more important strategic
of our foreign policy . issue of preventing the extension of Soviet influence in
the region beyond Afghanistan . . . . The issue of the hos­
tages must become o ne in which policy is set after full
'The madman theory consultations with the allies . . . . The hostage issue thus
of foreign policy becomes a test of U . S . willingness to submit to the
The following is excerpted from the OpEd column, discipline of an alliance.
.. ' Where do we go now?' .. by A rthur Schlesinger, Jr.
appearing in the April 26 New York Times. London Times : 'Lawful, but not wise'
Following are excerpts from the London Times editorial
The best defense of the Carter adventure is Richard of April 26.
M. Nixon's old Madman Theory. As Mr. Nixon ex­
plained to H. R. Haldeman: "Bob, I want the North American policy has, or ought to have, two objec­
Vietnamese to believe I've reached the point where I tives . The first and inevitably more important is to
might do anything to stop the war." One of the few maintain the independence of Iran and to keep the Soviet
voices of approval yesterday came from Henry A . Kissin­ Union from dominating the oil supplies of the Middle
ger, who s eems to argue that our adversaries will behave East. The second is to restore the freedom of the hostages
with more circumspection if they think that the President and to save their lives . . . .
is crazy. This argument is not likely to appe�l to our In their dealings with Iran and with the other Islamic
allies, or even to impress the Iranians, who after all are powers, European countries should make two points .
led by a madman of their own . . . . The first is not to underrate the United States . . . . The
No one can question the need for rigorous secrecy in second point is that the U . S . is not a threat to the Arab
such an adventure, but that need does not have to exclude and Islamic culture and the Soviet Union is . . . .
reponsible and experienced persons who can be counted During the period of danger ahead, while the hos­
on to raise the tough question . . . . Did Mr. Carter call tages are still held and American confidence is convales­
in Harriman, Ball , McNamara, Fulbright, Scranton, cent, Europe should be quick to settle her own problems,
Galbraith, Kennan, Yost, and other senior figures with including the fraternal problems between Britain and
long experience in international crisis? France. Europe must make herself effective in world
. . . When a leadership starts down the road of exploit­ terms. . . . The United States is the natural and inevitable
ing international crisis for domestic benefit, this is exactly leader of the alliance but this is a moment when the rest
the kind of mess in which it is likely to end. In a of the alliance can help her in that task.
parliamentary regime, Mr. Carter would be finished. . . . Now that the raid has failed, there is no course left
Responsible leadership, if any survives in Washington, but conciliation; it sho uld be based on understanding.
would throw out the team that conceived this misbegot­ And the effort of Europe should be to improve that
ten adventure and bring in people whose experience and understanding.

50 International EIR May 1 3, 1 980

 The Bogota alIair

Why the terrorists

were the winners
by Cynthia Rush

On April 27, the Colombian terrorist M- 1 9 released the were far less provocative to the right wing . But in meeting
13 diplom ats it had held hostage in the Dominican those demands, Turbay opened Colombia' s door to in­
embassy in Bogota since Feb . 27 . The terrorists had ternational human rights organizations which moved in
revised their original "nonnegotiable" demands for the to help "manage" the crisis.
release of 3 1 1 of their j ailed comrades, accepting instead From the initial two government officials originally
$5 millio n . The M- 1 9 released their hostages in Havana, involved in talks with the M- 1 9, the number of negotia­
Cuba and then flew on to Austria where they have been tors swelled to include foreigners and members of the
granted temporary asylum . political opposition summoned by the guerrillas.
The crisis was resolved peacefully enough . In fact, the Dr. Erik Kobel, a Swiss physician who works for the
M - 1 9 was given a hero's welcome in Havana by the International Red Cross, was given unlimited privileges
dignitaries of the Cuban Communist Party and, incredi­ in Colombia allegedly to ensure that the human rights of
bly, was asked by Colombia's President Turbay to return the hostages as well as the suspected subversives were
to function as a legitimate political party . being respected . Kobel visited the occupied embassy
What transpired to give a group which has assissinat­ whenever he wished, held private interviews with the
ed leading political and labor figures in Colombia, kid­ guerrillas and the hostages, and even held "group thera­
napped hundreds of others, took over a foreign embassy py" sessions with the hostages !
and threatened to assassinate all the hostages credibility For having cooperated so willingly, the Turbay gov­
as a maj or political force within Colombia? ernment is now being warmly congratulated. President
The crisis was in fact an experiment during which a Carter sent Turbay a letter thanking him for his "firm
professional "crisis management" team successfully in­ and patient leadership" during the two-month occupa­
tervened on Colombian national sovereignty and inter­ tion of the embassy. Some of the hostages who were most
ests to impose "international law ." As a result, represen­ adamant that Turbay adhere to "international law" in
tatives of the International Red Cross, the Human Rights resolving the crisis-such as the Venezuelan ambassador
Commission of the Organization of American States to Colombia-are now proclaiming Turbay' s "marvel­
(OAS) and other supranational "human rights" agencies ous" behavior.
are now, for all intents and purposes, running t he gov­ The evidence of brainwashing of the hostages them­
ernment' s trial of M- 1 9 suspects in Bogota under the selves, however, is the most pathetic aspect of this oper­
guise of defending their democratic rights . ation. Upon their release in H avana, several of the
At each point in the crisis, the Colombian govern­ ambassadors expressed only praise and admiration for
ment, already cowed by the constant threat of a right­ the M - 1 9 terrorists, building up its image as a "nation­
wing military coup , succumbed to the methods of classi­ alist, patriotic" and very Catholic group, seeking only to
cal brainwashing which alternately saw the Turbay gov­ ensure real democracy for Colombia. The New York
ernment attacked for not moving fast enough to resolve Times reported April 28 that the guerrillas held a farewell
the hostage situation and then rewarded when it made party for the ambassadors the night before their release,
concessions to the M- 1 9 . At the same time, the M - 1 9 and all bade each other "emotional" goodbyes.
abandoned its "hard-line" demands and asked instead While the U . S . Ambassador Diego Ascencio was
that the government accept the presence of international reported giving a fond goodbye kiss to o ne of the female
"human rights" agencies as observers at the court mar­ guerrillas, Mexican Ambassador Ricardo Galan ex­
tials of their j ailed comrades and as participants in the plained that "in 60 days of living together you learn to
negotiations. admire people as people, if not to admire their ideas . . .
In the eyes of the Turbay government, these demands As people, some of them [the M - 1 9 ] were excellent."

EIR May 1 3, 1980 International 51

 -

DatelineMexico by Joesfina Menendez

Kennedy and the Virgin of Guadeloupe

demonstrated, Fuentes and Paz are
The Massachusetts senator got enough press during his the country's two leading enemy
Mexican visit to win some Chicano votes in the southwest, agents organizing for the Iran-style
destabilization of Mexico . They vi"
but below the Rio Grande, he is no amigo. olently object to President L6pez
Portillo's strategy of rapidly indus­
trializing the country with the use
of the most modern technology.
The point was not lost on Ken­
nedy's official hosts-always par­
ticularly sensitive to such diplomat­
ic nuances . "It's very simple," one
source told us; "if Kennedy is with
" I don't think Mexico has a in the United States. If the latter Fuentes and Paz, he is against
very favorable view of Kennedy, is done, Kennedy' s 20 hour Mexico Mexico ."
since his is a dangerous approach . stop-over might turn out to be an Third, Kennedy locked horns
With a conservative you at least u n expected b o omerang fo r h i s with Mexico on the migrant worker
know what you're up against; but Presidential ambitions. question. He chose to repeat in
with a liberal, let alone a Kennedy Mexico his long-standing position
liberal, nobody knows what he has What went wrong? of calling for "an amnesty for the
up his sleeve." First, he went straight from the undocumented (Mexican) work­
This was the view offered to airport to the Shrine of the Virgin ers" who live in the United States.
EIR this week by a Mexican gov­ of Guadalupe-Mexico's holiest Within 24 hours of his departure
ernment o ffi c i a l ch arged with religious center-where he attend­ from Mexican shores, his direct
monitoring the electoral process in .ed mass. Kennedy was undoubtedly host and the head of the Mexican
the United States. He added: "But trying to remind one and all of his Senate, Joaquin Gamboa Pascoe
we too are playing our cards in the C a t h o l i c i s m , b u t fo r o ffi c i a l retaliated: "the Mexican govern­
complex game of U . S . politics. " Mexico-which adheres t o a strict ment will never support an amnesty
Candidate Kennedy arrived i n constitutional separation of church for the undocumented workers,
Mexico City on April 27 for a 20 and state-it was a sour opening since this would be like accepting
hour visit, designed primarily to note. Only three weeks earlier, a that they are delinquents ." Mexico
puff his presidential possibilities in 5,000 person march of leftists, ho­ has always emphatically insisted
the heavily- H i s p an i c p r i m a ry mosexuals, and radical priests es­ that the illegal migrant phenome­
states of Texas and California. The pousing the "Theology of Libera­ non must be treated as an economic
abundant media coverage which · tion" marched to the same shrine to a n d s o c i a l - n o t a c r i m i n a l­
Kennedy received, both inside and protest alleged repression of politi­ phenomenon.
outside Mexico, may well help him cal prisoners in Mexico . Kennedy's There were other significant-if
in that regard, but his brief stay in stop there was widely read as sup­ more subtle-rebuffs of Kennedy
Mexico certainly didn't improve port for the demonstrators, as well in the course of his stay. Typical
his standing in the eyes of the as p o ssi b le a ffi n i ty w i t h their was the sarcastic coverage afforded
Mexican government. specific causes. him by the Mexico City daily, EI
The interesting question at this Second, in the course of his brief Dia:
point is whether Mexican leaders allocution before Mexico's Har­ "As he left (the Shrine of Guad­
will let Kennedy's "amigo" image vard Club, Senator Kennedy made alupe), the few Catholics that were
stand, or if they won't instead de­ three separate references in praise at church applauded the visitor . . .
cide to "play their U . S . cards" and of the well-knewn Mexican intel­ Outside, a deserted street awaited
communicate their distaste for the lectuals, Carlos Fuentes and Octa­ him , free of all traffic, so that Ed­
Massachusetts Senator to Mexi­ vio Paz. Although scarcely noticed ward Kennedy and his entourage
can-American layers they influence by most commentators, as EIR has could go to their hotel to rest. "

52 Intern ational EIR May 1 3, 1 980

•

Middle East Report by Robert Dreyfuss

Can OPEC be reunified?

and Royal D utch Shell to pull out
Saudi Arabia and Iraq are acting in concert, which may of Iran's oil market and shortly
thereafter Japan followed suit.
undercut the renegade price-hawks in the oil cartel.
As a result, the Rotterdam Spot
M arket for the first time in months
has begun to show increases in the
price of petroleum products and
crude oil. ' According to industry
R ecent announcements from the OPEC. Earlier this year the Com­ sources j ust back from 5audi Ara­
oil exporting giant Saudi Arabia mittee met in London to draw up a bia and Europe, the "mood is
and its newfound ally Iraq to joint­ series of proposals for the cartel to clear-we are in for another round
ly increase their oil producing ca­ stabilize both world oil prices and of price hikes." "If Europe goes
pacity by 1 million barrels a day world oil availability. with the sanctions against Iran"
by the end of this year represents An extraordinary meeting of the source noted, "hold on to your
a challenge to a renegade faction the cartel was to have convened on hat."
of price hawks within OPEC led M ay 5 to consider the proposals, The sanctions are slated to be
by Libya and Iran. now two years in the making. Sud­ imposed on M ay 1 7. The Interna­
The calculation on the part of den ly l a st week Y a m a n i a n ­ tional Energy Agency meets M ay
Riyadh and Baghdad is that a dra­ nounced that some of the Ministers 24, when sharing the shortage will
matic production hike by these two were unable to attend the meeting. be discussed by the Oil M inisters
largest producers in OPEC will Informed sources are speculat­ of the member states.
enable them to flood an already ing that the Saudis pulled back Under such conditions, Iraq
glutted market, and in so doing from going through with the meet­ and Saudi Arabia would make
undercut the chaotic price boosts ing because of doubt that the Oil available over the coming months
which have for the first time left Ministers of OPEC would accept several hundreds of thousands of
OPEC pricing unity in shambles. the proposals. For Riyadh the ac­ barrels a day of crude to select
Since last December's oil price set­ ceptance of the plan is something consuming nations on a direct sale
ting meeting in Caracas, the car­ of a test of its traditional domi­ basis bypassing the m ultis. Yester­
tel's prices have continued to rise nance over OPEC . day Iraq assured France that it
' on a producer by producer basis The key challengers t o Saudi would get an additional 10 m illion
leaving the Saudi benchmark far Arabia's efforts to stabilize world tons of oil a year. Saudi Arabia
behind. oil markets are the radical govern­ announced it will make another
The pricing anarchy within the ments of I ran and Libya. Both 500,000 barrels a day of oil avail­
cartel erupted during 1 979 right at share a strong anti-western Ideol­ a b l e on a state-to-sta te b a s i s .
the time when Saudi Arabia was ogy colored by the dominant pres­ Europe, Japan, and certain devel­
attempting to impose a system of ence of the secretive M u sl i m oping nations are expected to be
pricing which had been devised by Brotherhood . Both have been re­ the beneficiaries of this new oil.
OPEC's Long Range Planning sponsible for price rises calculated While these new arrangments are
Committee led by Saudi Oil Min­ to spark pricing leapfrogging in­ being m ade, 'both Iraq and Saudi
ister Sheikh Zaki Yam ani. Accord­ side OPEC and outside, fed by Arabia are expected to adopt a
ing to this plan, the cartel would Great Britain's North Sea oil. breakneck momentum in installing
institute small q uarterly price hikes Iran's eccentric Oil Minister Ali new producing capacity to insure
adj usted to world inflation, elimi­ Moinfar refused to even attend the a sustainable output of 1 6 million
nating unpredictability in pricing Long Range Committee Meeting b arrels a day of oil-over half
and open the door to greater co­ in London attacking the Saudi OPEC's output-by next year. The
operation with the consuming na­ plan as an imperialist plot. Follow­ question is, will these efforts be
tions. Both the French and West ing the meeting, Iran enacted a adequte to turn the tide of the oil
German governments considered new price hike to over $35 a barrel . price rise spiral and reunify the
the plan a favorable move by This prompted British Petroleum cartel?

EIR M ay 1 3 , 1 980 International 53

International Intelligence

nity the shutdown presents to "social of material civilization." Technology is

Europe engineers" was heralded by the follow­

ing passage in the May 2 New York
the key to both working conditions and
genuine conservation of energy.
Times:
Sweden �hocked' by "M any Swedes, who had long re­
garded their way of life as a model of
lockout of entire social j ustice and the triumph of reason A Zionist lobby
labor force in solving industrial disputes, seemed
saddened and stunned by a return to for France ?
Swedish workmen, 770,000 of them, confrontations that they believed they
had learned to put aside forever. For A new Zionist organization was inau­
have been locked out of their work
some, the strikes and lockouts appeared gurated in France this month. The
places in what the international press is
in the Swedish context almost as a com­ "Jewish Renewal," European sources
billing as "the end of a long era of labor
_

plement of the more threatening big­ say, is the first step to building a Zionist
peace" in the nation. In a country of 8
power rivalries of the times." lobby machine in France to undercut
million, about one quarter of the total
French President Giscard d'Estaing's
workforce was effected. At present, in­
pro-Arab Mideast diplomatic initiatives.
dustries completely shut down include
The movement, headed by Haghdim
shipping, mining, forestry, metallurgy,
Burg, is allied with Israel's ultra-right
textiles, and all heavy industries.
wing Herut Party, a faction of the ruling
The only job categories in the private
French minister calls for Likud Party, and is close to Israel's
sector not affected are chimney sweeps,
ultra-hardliner Yuval Neeman.
barbers, musicians, and insurance in­ advanced R and D
The French Jewish Telegraph Agen­
dustry employees. Government workers
cy has released a report challenging the
remain on the job. All maritime traffic The impact of space programs on med­
"Jewish Renewal" and another of its
has stopped with the exception of one ical research, and the spino ffs for spe­
key organizers, Avi Prim or, for trying
ferryboat to Denmark. ciality steel from work on nuclear fast
to set up a machine which would include
Spokesmen on both sides of the dis­ breeder reactors, are two examples cited
an Anti-Defam ation League chapter
pute say that the shutdown of Sweden's by French Industries Minister Andre
and a B'nai B'rith chapter. The views
economy will last for five full workdays Giraud in a speech at a European Par­
being voiced by the JTA are reportedly
"at minimum," in the words of an em­ liament colloquium in Strasbourg April
those of the powerful Rothschild family.
ployers' representative. Gunnar Nihl­ 28. His theme was the necessity of
The JTA release condemned Prim or for
son, a labor spokesman, proclaimed, NASA-style crash programs of ad­
publicly attacking the Rothschilds, who
"The Swedish model is dead," to a rally vanced research for leading nations.
from time to time have backed a softer
of 40,000 workmen in Stockholm. "La­ "Planetary ambitions and grand de­
policy towards the Arabs than the Israeli
bor and capital can no longer cooperate signs are not dead," Giraud declared,
leadership.
in the fine old spirit." despite the tendency to attack them as
The decision to force a shutdown of "gobblers of capital" ; they are "motors
the economy was clearly taken some of industry and innovation" with direct
time ago at a very high level, perhaps benefits in upgrading the economy, and
outside of Sweden. The country has long
been treated as a "test-tube" for the
this upgrading should be accompanied
by "a systematic effort to favor the
Mideast
mass-scale "social engineering" and transfer of technology" to developing
Brown denies Soviet role
"crisis management" projects of the nations. It would be "a m ajor error," he
Tavistock Institute in London, the cen­ added, to measure the impact of massive in raid cancellation
ter of the British intelligence psycholog­ progra m s by o r d i n ary acco unting
ical warfare division. The immediate methods. Speculation that there may have been
cause of the lock-out was labor's anger Science, he continued, is essential to much more than helicopter malfunctions
when Swedish management, remarka­ national independence, strategy, and involved in the scuttling of the U.S. Iran
bly, refused to offer Swedish workers forums on the "industrial tissue" of an mission was fed dramatically Thursday
more than a 2 percent wage increase. economy. A government must know when top Pentagon officials took the
The "crisis management" opportu- how to use it as "the vectors of progress trouble to issue a public denial that

54 I nternational EIR May 1 3, 1 980

 Briefly
• JAPAN'S PREMIER M asa­
yoshi Ohira and President Carter
signed a five-year agreement on
direct collaboration in a broad
array of basic scientific research
M ay 2 in Washington . No new
research or funding for existing
research is provided, however .
Soviet military intervention had played the Shi'ite communities in Saudi Arabia
Rather, ongoing research projects
any role in that decision. which work primarily in the Saudi oil in both countries will become
Acco rding to Defense Secretary fields, not far from Bahrain. joint projects through direct par­
Harold Brown, it is a "flat untruth" that The s u dden resignation o f the ticipation of both countries' sci­
the Soviets had forced the canceling of United Arab Emirates Foreign Minister entists. The Carter administration
the mission by threatening to send Mig- Ahmad K halifa Suweidi is seen as a indicated that it feels that the most
2 1 fighters to attack the rescue aircraft. setback for the moderate Arab leader­ important aspect of the agreement
"The way they (the Soviets) found out ship in the gulf. Suweidi resigned as a is the provision for "consulta­
is that we told them" after it was over, result of a rivalry with the Prime Min­ tions" before the results of the
Brown insisted . ister of the Federation whose state, Du­ '
research are commercially ap­
Brown's denial did little to stifle the bai, maintains close ties to Iran. plied-give the U . S . potential
rumors which abounded in Washington veto over advances in Japanese
and European capitals of a U . S . back­ applied technology coming from
down in a Carter-Brezhnev hotline con­
U.S.S.R.
the resea r c h s t i p u l a ted in the
frontation. In fact, the failure of Brown agreement.
to accompany his flat denial with any
credible explanation for the precipitous
haste of the U.S. withdrawal, during Gromyko attacks Zia for • SADEGH GHOTBZADEH,
Iran's foreign minister, said that
which equipment and documents were fostering hostility his country "would not negotiate
left behind along with the bodies of U . S .
with terrorists" in response to the
servicemen, h a s only fanned the flames Andrei A. Gromyko, the Soviet Foreign raid on Iran's embassy in London
of such speculation. Minister, while appearing before the where Iranian diplomats are being
French press, delivered a scathing attack held hostage. Armed Iranian Ar­
on Pakistan's President Zia ul-Haq for abs seized Iran's London Embassy
allowing Pakis�an to be the training this week to demand the release
g r o u n d fo r " fo reign interference"
Khomeini militants riot of 9 1 Iranian Arab prisoners held
against Afghanistan. Gromyko repeated b y t h e K h o m e i n i reg i m e .
in gulf emirate Moscow's charges that Pakistan is sys­ Ghotbzadeh said that the pris­
tematically arming and training rebels oners would be executed if the
The same day that the U . S . invasion with the help of representatives from seige of the London Embassy was
into Iran became public, riots broke out "certain countries"-and he claimed not soon ended. He did not men­
in the Arab emirate of Bahrain, a tiny that the U . S . knows who those "certain tion the fate of the 53 American
island state j ust off the Saudi Arabian countries" are. Gromyko also charged diplomatic hostages being held in
coast in the Persian Gulf. The riots were Pakistan for continuing "hostile rela­ Iran .
led by pro-Khomeini Shi'ite fundamen­ tions" with Afghanistan promoting cal­
talists and were sparked by erroneous culated destabilization of the area. II A GAS CARTEL may soon
reports from Radio Israel and then Ra­ Gromyko's remarks have no doubt emerge as a sister to the Organi­
dio Teheran that the Bahrain govern­ constituted a serious intensification of zation of Petroleum Exporting
ment had allowed the U.S. to use its Soviet criticism of Pakistan's continuing Countries (OPEC ) . That's the
naval facilities to conduct the interven­ provocation of the Afghanistan situa­ word from Algiers, where six
tion. The U.S. press similarly misrepre­ tion. Recently, President Zia had turned members of OPEC met last week
sented the facts. down Afghan Premier Babrak Karmal's to draw up an agreement on gas
The Shi'ite population which domi­ friendly proposal to defuse the crisis and pricing and production policy.
nates Bahrain and their religious breth­ expedite the Soviet troop withdrawal by The agreement will be submitted
ren in other Arab emirates that share holding a trilateral talk between Iran, to the next OPEC ministerial
the Arabian peninsula with Saudi Ara­ Pakistan, and Afghanistan. The reason meeting in June. Gas producing
bia have been the focus of agitation by behind President Zia's rejection of Kar­ members of OPEC have recently
Khomeini to overthrow the various mal' s proposal is reported to be the U.S. been raising gas prices to bring
Arab royal families ruling these emir­ State Department pressure on Zia to them in line with crude oil prices.
ates. This agitation, according to Wash­ accept a 4-point U . S . proposal to "neu­
ington sources, could "spill over" into tralize" Afghanistan.

EIR May 1 3 , 1 980 International 55

�lIill National

How EIR knew where

Volcker was leading
by Vin Berg

In a presentation that stunned the 30 economists, busi. effect, or that their effect would be offset by other factors .
nessmen, and foreign diplomats present, Uw� Parpart We said that these measures would themselves be a major
reported that the "anti-inflation" policies of the Carter contributing factor in turning inflation into Weimar­
administration are intersecting its "energy conservation" style hyperinflation by February 1 980. This has now
policy to assure that a hyperinflationary collapse of the happened. Did we just make a lucky guess?"
American economy will occur within three to six months.
Parpart, director of research for the Fusion Energy Two kinds of inDation
Foundation and a contributing editor to the EIR. spoke Two distinct but interrelated phenomena constitute
at a symposium on the LaRouche-Riemann economic inflation . "First, there is structural inflation," said Par­
model j ointly sponsored by the Fusion Energy Founda­ part. "The long-term trend in the U . S . economy has been
tion and EIR April S in Washington, D.C. for a shift into 'service-oriented activity' away from
Parpart, an expert on the work of 1 9th-century employment in production of tangible, useful industrial
mathematician Bernhard Riemann, based his analysis output . Whereas 58 percent of the labor force was pro­
of the Carter-V olcker measures on the groundbreaking ductively employed after World War II, only 38 percent
Riemannian economic model employed by FEF and are so employed now; the rest, however necessary or
EIR and developed in collaboration with economist unnecessary their service, constitute pure 'overhead'
Lyndon LaRouche. He prefaced his talk by challenging costs," which must be financed.
his audience to name "any other voice" raised that had "If you ' view the economy as a whole, as a single
predicted the inflationary effects of the highly restrictive corporation, and measure the growth of the totality of
credit policy Federal Reserve Chairman Paul Volcker indebtedness in the economy against the growth of the
announced last October. totality of o utput, we clearly see the economy heading
Analysts working with the Riemannian model were toward insolvency ."
alone in understanding that those 'measures, as well as But this, he said, accounts for only "the single-digit
the new steps announced by the president M arch 14, component of inflation," the rate of inflation obtaining
would worsen in flation, not attenuate it, Parpart said. when Jimmy Carter took office.
"How did we know this?" asked Parpart, referring to Parpart directly related a second source of inflation
the climb from 7 percent to an annualized average 20 to the decline in the value of the U . S . dollar. "It is
percent inflation rate since Carter assumed office. fashionable to argue that a lower value of the dollar will
"Everyone called these measures anti-inflationary. Mind increase U . S . exports, by making their price more com­
you, we did not say Volcker' s measures would have no petitive. On the contrary, it is empirically the case that

56 National EIR May 1 3, 1 980

 India, plagued by back ward­
ness, but the ninth most pro­
du c t ive e c o n o my in the
world. Said Dr. Parpart, the
full development of such na­
tions is " the primary task "
of the next t wo decades.

the dollar's decline has occurred b ecause o f and in direct to real trade, and prim arily, i nvestment in the Third
co rrelation with the decline in U.S. exports." Worl d." If U.S. industrial o utput is geared up, then by
Currency speculation allows dollars abroad to earn augm enting the lending capacity o f the Export-Import
profits, he said. But although dollar earni ngs may gro w , Ban k , " U.S. i n dustri a l growth can be directly tied to
there is no co nnection to reality. "Nothing h as occurred world development thro ugh exports."
to increase p roductio n and trade volumes sustained by
Why collapse
these dollars. There a re nearly a trillion footloose
dollars not tied to trade in any way." is imminent
The shi ft from productive to no npro ductive "serv­ The most foolish and dangerous feature of Carter
ices" m ust be reversed by a combi nation of "interest rate po licies, said Parpart, is "energy co nservation" in the
and tax policy pleasures placing the premium on long­ fo rm associated with the recommendations of two H ar­
term , capital-i ntensive , technology-vecto red investment vard economists, H u dson and Jorgenson. They propose
to increase both industrial o utput a n d pro ductivity," that the eco nomy will not suffer if human labor is substi­
said Parpa rt. " H o w can this be done under Volcker's tuted for energy use.
po licy !?" " But if you substitute l abor for machinery," Parpart
At present, Parpart said, "anyone who were to come said, "what you do is decrease the energy intensity of the
by some funds m ust invest them speculatively , to get econ om y and effect a decline in labor prod uctivity. It is
quick returns in order to cope with the pressure of that sim p le. An d 1 0,000 years o f human h isto ry b ack up
inflation and high interest rates. Volcker's measures that assertion."
penalize the kind of fixed capital investment needed to " But what does recovery fro m inflation depend on if
end structural inflati on, precisely b eca use that kind o f not adj ustm ents in the economy to increase p roductivity?
investment takes t h e longest time t o m ature." Th us, as Carter and Volcker have p u rsued short-term
I f we restore incentives for U.S. industrial growth , he pol icies in the domestic and foreign eco nomic realm
continued, the problem of inflation is red uced to restor­ producing hyperin flati on, they are p ursuing an energy
ing the dollar "to the kind o f currency it was before J o h n conservation p olicy that is destroying the basis in the
Connally took it off gold b a c k in August 197 1 . " p roductivity o f labor for any potential recovery."
"Gold-backed notes issued by European M onetary " I n sum," Parpart concluded, "this economy, as
System nations, the Treasury, and possi bly regional things now stand , without a quick and directed reversal
pools of Third World n ations could absorb Eurodollars of these policies, will be destroyed within three to six
and convert them to usefu l investment, connecting them months."

EIR M ay 1 3 , 1 980 N ational 57

 committee and his reorganization Scholar trained at Oxford, attended
Nunn opens organized of the staff, direction of the sub­ the I n terp a r l i a m entary U ni on
crime hearings committee has been toward empha­ meeting in Oslo over the congres­
The Senate Permanent Sub­ sis on the Italian mafia, so-called, sional spring recess and was one of
c o m m i t tee o n I n v e s t i g a ti o n s and cover-up of the Zionist ele­ a select gro up of congressmen to be
opened up a three-year-Iong series ments who sit above them such as invited to Ditchley's annual gath­
of hearings on organized crime and Max Fisher o f Detroit, and the Ja­ ering on NATO . While avoiding
its connection to labor racketeering cobs family of Buffalo , and the attributing a direct linkage between
and narcotics trafficking on April London-linked financial elements ;,is proposal and his attendance at
28 with a first ro und series of hear­ who sit above them . Committee th,,: Ditchley meeting, Pressler did
ings on organized crime and its use sources have made no secret of the say that Europe will not voluntarily
of violence. fact that their ultimate target be­ offer to increase their support of
The first day of hearings saw hind the organized crime investi­ NATO , "if they can get it for free.
FBI director William Webster and gation is labor unions such as the We may have to force them over the
Drug Enforcement Administration longshoremen, the teamsters, and course of gradual talks ."
director Peter Bensinger discuss the the constituency-based politicians
kind of legislative remedies needed who support them .
for the federal government to fight
"organized crime" more effective­ B ank takeovers supported
On April 16 Citibank President
ly. Among the legislative changes
they suggested were: amending the Pressler calls for reduced Walter W ri ston propo sed to a
tax reform act so that law enforce­ U.S. support of NATO closed meeting of congressmen at
ment agencies can use tax informa­ Fresh from a trip to London for the Congressional Clearinghouse
tion and work more closely with the the Ditchley Foundation's meeting that the McFadden Act be abol­
IRS in tracking illegal activities; on NATO, South Dakota Senator ished. The act prevents the New
making murder for hire a federal Larry Pressler introduced a Senate York banking giants from branch­
crime; giving judges greater flexi­ resolution calling on the U nited ing across state lines . Under Wris­
bility in their ability to make sen­ States to reduce its commitment to ton's proposals , which also called
tence reduction offers to criminals NATO and to Japanese defense by for deregulation of all U .S. bank­
in exchange for turning govern­ two percent . I ntroduced on April ing, the 1 4 ,5 00 regional b anks
ment witness . 25 , Republican Pressler's resolu­ which now serve local U.S. industry
But those legislative proposals tion is couched in budget-cutting and agriculture would be gobbled
provide a kind of cover for the In­ rhetoric about American taxpayers up if they run into economic trou­
vestig ati o n s Subcom m i ttee to bearing a higher per capita burden ble, a very live possibility thanks to
launch another M cClellan-style in­ for NATO support than the Euro­ the monetary policies of the Federal
vestigation of "organized crime." pean members of NATO. Capitol Reserve Board. "We are trying to
The second day of the hearings fo­ Hill observers pointed out that help along the birth of the brave
cused on the Justice Department's Pr.essler's action came on the heels new world ," declared Wriston to
Organized Crime Division's "defi­ of U . S . envoy Robert Komer's the Journal of Commerce a day lat­
nition" of organized crime as large­ thinly veiled threats to the Europe­ er. Wriston's congressional audi­
ly equivalent to "La Cosa Nostra," ans to back the U . S . on the ques­ ence included the members of the
or the Italian mafia . tions of Iran and Afghanistan or House Banking Committee, who
Capitol Hill observers have not­ face a reduction of U . S . support to had been invited by chairman Hen­
ed that since the beginning o f NATO. ry Reuss (D-Wisc.), a leading mem­
Nunn's chairmanship of the sub- P res sl er , a former R h o d es ber of the Clearinghouse .

58 National EIR May 1 3 , 1 980

 The day after Wriston spoke, promised. Mark-up of a House ver­ the essential trade routes. The Sen­
Senato r W i l li am Proxmire (0- sion of the Senate bill was expected ate bill legalizes shipping councils
Wisc. ) chairman o f t h e Senate to occur quickly after the April 8 and makes the right of independent
Banking Comm ittee introduced passage of the Senate bill. . action by the conferenc� members
legislation that would allow for ex­ opti onal, while the H o use bill
actly this process to occur. Accord­ moves toward closed conferences.
ing to Proxmire, his bill, S .2575 C onference committee The Senate bill also speeds up
would "allow a large bank, savings completes work on Energy the regulatory processes o f the Fed­
and loan association or mutual sav­ Mobilization Board eral M aritime Commission. The
ings bank in receivership to be ac­ The House-Senate Conference main focus of the Senate bill is to
quired by another financial institu­ Committee, working on the Energy detail policy for regulating the in­
tion across state lines." The bill, Mobilization Board, has just about dustry and the bill specifies nine
which was also introduced in the concluded their work, with o nly a policy objectives to serve as the
House Banking Committee, was in­ few remaining technical difficulties standards for the Federal M aritime
troduced at the request of the bank to be ironed out. Commission's evaluation of ship­
regulatory agencies, particularly T h e E nergy M o b il iz a t i o n ping agreements, clarifies and af­
the Federal Reserve. The Senate Board as envisioned would speed firms the exemption of concerted
Banking Committee is waiting until up construction of energy projects activities in ocean shipping from
their hearings May 21 on the con­ targeted by the administration, es­ antitrust laws, sets procedures and
dition of the banking system before pecially synthetic fuel plants and time limits for FMC approval of
they act on the legislation. They coal programs. The major differ­ agreements and allows greater flex­
will have the heads of all the regu­ ence between the House and Senate ibility in the type of patronage, dual
latory agencies, including Federal had been whether the board would rate contracts o ffered by carriers
Reserve Chairman Paul Volcker, be allowed to waive federal laws and conferences.
testify and make the case for why that held up projects. The conferees The H ouse bill would reopen
such legislation is needed. agreed that the board could waive the essential trade routes, allowing
such laws . The conference commit­ them all to be renegotiated . This
tee will n ow issue a final report on has sparked concern that · major
Trucking deregulation their work and send the legislation
to both houses for final passage.
ports would be closed and shipping
seriously disrupted. The H ouse bill
scheduled for House mark-up also allows for the Secretary of
Trucking industry sources re­ Commerce to review collective bar­
port that legislation to largely de­
regulate the industry is scheduled S hipping bill passes Senate gaining contracts to ascertain if
they contribute to the "efficient
to go into mark-up on M ay 8 and 9 The Senate unanimously passed use" of vessels. The bill also allows
in the transportation subcommittee the Ocean Shipping Act of 1 980 shipbuilding abroad to be eligible
of the House Public Works Com­ S.25 85 on April 24, a bill which was for subsidies. The House M erchant
mittee. President Carter met with largely the work of Senator I nouye Marine and Fisheries Committee is
committee chairman " Bizz" John­ (D-Ha.). The bill is vastly different receiving much opposition from
son (D-Cal.) and subcommittee from the omnibus shipping bill now ship owners, ship- builders and
chairman James Howard (D-N .J.) being reviewed by the House M er­ unions. Rep. McCloskey (R-Cal.)
on April 30 in an apparent attempt chant Marine and Fisheries Com­ one of the prime sponsors of the bill
to ensure congressional passage of mittee. The Senate bill is considered noted it had one chance in five of
deregulation legislation by June 1 , a regulatory bill and does not deal being enacted in the drastic form it
as congress i o n a l leaders h a v e with subsidies for ship-building nor is now in.

EIR May 1 3 , 1 980 National 59

Campaign 1980 by Kathleen Murphy

Cronkite and Anderson : Reagan, or John Anderson-a

grinning Ball respon ded: "Con­
new Hollywood sitcom? gressman Anderson."
For those of you who were I nterestingly, Ball had just re­
wondering back in February why turned from a European meeting
CBS-TV's national news anchor­ of the secret Bilderberg Society
man Walter Cronkite seemed to be which , according to unconfirmed
spending an inordinate amount of reports, discussed with much inter­
time covering John Anderson's est the campaign of fellow member
underdog presidential bid-the Anderson .
mystery may now be solved . Ball's long-time political asso­
Cronkite is angling for a vice­ ciation with Cyrus Vance h as pro­
presidential spot in Anderson's voked speculation that the ousted
newly launched independent cam­ Secretary of State might also jump
paign, according to the latest issue on the A n de r s o n b a ndwagon
of New Republic m agazine. sometime soon .
"I'd be so honored to be asked,
I wouldn't turn it down ," Cronkite
said in an interview with M orton Muskie for President?
Kondracke, the magazine's execu­ Washington political insiders
tive editor. Cronkite-who will re­ are putting out the word that one
tire early next year from his CBS reason Jimmy Carter named Ed­
post-told Kondracke: "Well, I mund Muskie to replace Cyrus
don't know. I haven't been asked. Vance as Secretary of State was
I'd like to be asked before I said that he feared the M aine Senator
anything . I wouldn't turn it down . was planning to put himself for­
It would be the right party . I've ward soon as the "compromise
been an independent all my life. candidate" for the Democratic
. . .1 admire Anderson very much . Party's presidential nomination. A
He's brought a fresh breeze to the named to Reagan's Policy Com­ liberal with strong ties to the
scene." mittee, has long been in the fore­ hawkish Jackso n-M oynihan wing
Another former CBS bigwig, front of schemes to destroy orga­ of the party, chairman of the pow­
Frank Stanton, h as lent his name nized labor, including the repeal of erful Congressional Budget Com­
to the Citizens Party which is run­ Davis-Bacon which requires the mittee, and a former presidential
ning environmentalist Barry Com­ payment of prevailing area wages candidate, M uskie was reportedly
moner as its presidential candidate. for work on all federally fi nanced being pursuaded by certain advis­
construction in a given locality. ers to begin soliciting support for
Reagan : all-out war a possible presidential bid. Ac­
George Ball endorses cording to one source: "Carter
on unions nearly hit the ceiling when he got
Ronald Reagan may have set John Anderson wind of what M uskie was up to .
back his campaign to win the blue­ John Anderson has chalked up He figures he can handle Kennedy,
collar workers to his presidential another big name endorsement: but Muskie is another story alto­
bid when he called for putting former Under Secretary of State gether . So he decided to kill two
trade unions under antitrust laws George Ball . Appearing on NBC­ birds with one stone and bring
during a South Bend, Indiana, TV's "Meet the Press" April 27 , Muskie on board, knowing
speech April 22. Ball wound up a gently phrased, damned well M uskie couldn't re­
Reagan's proposal bears all the but nonetheless scathing indict­ fuse ."
earmarks of an all-out union-bust­ ment of Jimmy Carter's disastrous Carter's gambit may well back­
ing drive. The proposal's author, hostage rescue mission by endors­ fire . M uskie's expected high-visi­
Murray Weidenbaum, director of ing Anderson . Asked who he'd bility profile in his new position
Washington University's Center prefer to see running U . S . foreign co uld well make him even more
for Business Policy, and newly po li cy-J i m m y C arte r , R o n ald attractive as a candidate.

60 National EIR May 1 3, 1 980

Energy Insider by William Engdahl

Will Carter use Iran to ration?

500,000 bpd "to meet any new
Iranian oil means virtually nothing to the United States, but demands" in the face of Iran cut­
since when did the facts influence administration energy offs . Kuwait recently reduced out­
planning? put by 500,000 barrels per day,
although they j ust agreed to sell
Japan an additional 1 00,000 bpd.
Nigeria h as also reduced output
from 2.4 million to 2.2 million bpd
T he recent Carter administration power and to sabotage. because of the glut, which, b y the
operation to heighten tensions in The loss of this Iranian oil will way, is largely due to the relative
the strategically vital Persian Gulf mean almost nothing, unless Cart­ economic collapse in the industrial
led me to do some investigation er foreign policy under Brzezin­ countries . U . S . consumption is
into the possible impact of total ski's Arc of Crisis is as successful down fully 8 . 5 percent over the
and prolonged loss of Iranian in Saudi Arabia and Iraq as it has same week of last year.
crude oil production on the world been in Iran in fomenting chaos. It's quite clear that Saudi Ara­
oil markets . We have j ust learned from re­ bia and Iraq would have to be the
When the Japanese govern­ liable sources that S audi Arabia next target of Islamic "fundamen­
ment obliged the Carter admini­ has quietly been working at break­ talism" a la Brzezinski's "Arc of
stration a week ago by refusing to neck speed to increase their oil Crisis" if Henry Kissinger's long­
buy Iranian crude at record high production capacity by a whop­ dreamed-of l EA energy rationing
$35 per barrel prices, horror stories ping 20 percent over present levels. regime is to be imposed on the
went out in the editorial pages of Already, according to these re­ U . S . , Western Europe and Japan .
the New York Times on the pros­ ports, the Saudis, OPEC's largest Otherwise, the Iranian losses have
pect of imposing domestic ration­ producer, are able to sustain pro­ already been "prediscounted" by
ing to honor Carter's reputed com­ duction up to 1 1 million bpd, up the rest of the oil-producing world.
mittment to make up Japan's loss from t o million some months ago, In light of all this, the Wall
of Iranian crude. through improvement of equip­ Street Journal on April 29 carried
The spectre of Henry Kissin­ ment. In addition, a multibillion an ominous story on how the Jap­
ger's International Energy Agency dollar investment program in new anese loss of I ranian oil is having
(l EA) i m p o s i n g i ts emergency equipment will give them 1 2 mil­ a "psychological" impact on world
sharing agreement was raised. lion bpd capacity by the end of oil spot m arket prices, despite the
I decided to track down the next year instead of the original glut. One of the m ain reasons now
actual impact of Japan's loss of 1 985 target. This is a devastating as last year when the tightly con­
500,000 barrels daily of Iranian refutation of what certain factions trolled Rotterdam spot market led
crude, some 1 1 percent of Japan's of the royal family have recently the world price spiral, is Henry
total consumption. At this junc­ called for: reduced output . Recent Kissinger's International Energy
ture, the oil producing and con­ Saudi production has averaged 9 . 5 Agency. The spot market price ex­
suming world has all but written million bpd, making u p the entire plosion of last year that forced
off Iran as a source of oil. From a Iran export deficit of 1 ,500,000 OPEC to up its prices could have
high of over 6 million barrels per barrels. been avoided if the l EA agree­
day during the reign of the Shah, But, what of the other coun­ ments among 20 leading industrial
current export is estimated at be­ tries? On Iran's border, I raq low­ nations had not prevented flexible
tween 800,000 to 1 , 500,000 bpd. ered its p r o d ucti o n in recen t sharing of the increased Saudi pro­
Total production hovers at a max­ months to 3 . 3 million bpd from 3 . 7 duction among those hardest hit
imum of 2.5 million bpd, down million because of the unprece­ by the Iranian cutoff. The rigidity
from an average of 3 . 5 million last dented glut on the world oil mar­ forced crude-short buyers to feed
fall. Much of this is due to lack of kets, A recent statement from the at the Rotterdam trough . Are the
maintenance of pumping equip­ Iraqi government indicates they same forces attempting a rerun
ment and lack of competent man- are prepared to increase output by amid a record world stockpile?

EIR May 1 3 , 1980 National 61

----------------------___________
'i

National News

Citizens groups in New Jersey have a Palestinian state and the MX missile.
•
branded the program pornographic and But he said he favored President Carter's
charged that the curriculum is designed "mobile strike force" for intervention
Pentagon reduces Carib to change the "values" and "life-styles" into Third World "hot spots." Report­
of school-age children . The program edly, his campaign will be run by
naval maneuvers reportedly treats homosexuality, sodo­ Wertheim & Co., the investment bank­
u . s . naval maneuvers in the Caribbean my and prostitution as "life-styles" as ers.
scheduled to begin next week have been legitimate as any other.
substantially cut back, according to a Among other measures, children at
spokesman from the State Department. the elementary school level are to be
"Solid Shield 80 as the maneuvers are
' ", instructed in "techniques" of mastur­
called, were originally intended to in­ bation with emphasis on masturbating Kennedy worships
clude massive deployments in the Guan­ in front of a mirror!
tanamo Bay area, as well as the landing Strong testimony opposing the man­ Guadalupe Virgin
of troops on the beach and simulated date was given by the President of the Arriving in Mexico City two days ago,
evacuation of civilian population cen­ Baptist M inisters Conference in New­ presidential candidate Ted Kennedy
ters. The exercises will now steer clear ark, and by a number of Right to Life made a beeline to M exico's cult temple:
of Cuban waters and center around groups, as well as Citizens for New the shrine of the Virgin of Guadalupe.
Florida and the North Carolina shore. Jersey, which mass distributed a leaflet Recently, the Virgin of Guadalupe has
Official spokesmen cite "humanitarian exposing these outrageous features. been used as a symbol of unity by the
reasons" for the divergence of an un­ The New York Times editorially en­ radical left and "liberationists" in the
specified number of Atlantic Fleet ships dorsed the program M ay l . It is also Catholic church who want an Iranian­
from the war games to aid the Coast supported "in principle" by the New style revolution against Mexico .
Guard in dealing with the refugee prob­ Jersey Conference of Catholic Bishops, Kennedy brought a 50-man delega­
lem . although this is not interpreted as an tion to attend mass at the shrine.
Just days before the Pentagon made endorsement of homosexuality or pros­ Kennedy'S high profile visit to Mex­
its decision to reduce the scope of Solid titution at this time. ico was broadly characterized as an ef­
Shield '80, the Cuban government had fort to gain the vote of the Mexican­
issued an official communique warning American com munity . "Uno mas Uno,"
that the maneuvers were intended to mouthpiece for the "Theory of libera­
cover for a mining of the Caribbean Sea tion" Jesuits in Mexico was the only
around Cuba preparatory to an invasion
Enter Lindsay's face paper to give Kennedy an explicit en­
of "an island in the Caribbean part of in New York Senate race dorsement.
whose population would allegedly re­ John Lindsay, the former M ayor of New Although the Mexican President
quest U:S. military aid in liberating itself York City, announced that he will enter agreed to a meeting with the candidate,
from foreign domination." The Soviet the race for the Democratic nomination the Senator was reportedly coolly re­
Communist Party daily, Pravda also is­ to run for the Senate seat currently held ceived .
sued its own warning that "Cuba is not by Jacob Javits, a Republican. Lindsay
alone," declaring that "the Soviet Union made the announcement May I at a
and other countries of the socialist com­ tavern in New York. His Democratic
munity all declare: H ands off Cuba ! " opponents will be Rep. Elizabeth Holtz­
man, a creature of New York's Zionist
Lobby, and Bess Myerson, a "girlf­ DEA sees 'worst ever'
riend:' of current New York M ayor Ed heroin epidemic
N.J. "sex life-styles" Koch, who is reliably reported not to
in the cards
like girls.
plan under attack Lindsay could not specify any polit­ The United States will be in undated by
A controversial program mandating sex ical differences with his opponents on a heroin epidemic this summer, resulting
education throughout the New Jersey the Democratic side. Senator Jacob Jav­ in "the addiction of millions of Ameri­
school system was the subject of a leg­ its, who is controlled by mobster Meyer cans," according , to prominent drug re­
islative hearing before the State Senate Lansky through British intelligence op­ habilitation officials and the federal
Education Committee M ay I . The Com­ erative Arthur Ross, Lindsay called "a Drug Enforcement Administration. In­
mittee acted to table legislation which good friend." vestigators of the National Anti-Drug
would have instructed the State Board Li ndsay attacked President Carter as Coalition, who have recently obtained
of Education to review the implications "not providing leadership," echoing copies of the DEA's confidential intel­
of the sex-program mandate. Senator Kennedy . He said he opposed ligence report on the expected heroin
•

62 National EIR May 1 3 , 1 980

 Briefly

. flood, report that the DEA predicts an shortages, restraInIng of workers for • A CAMP DAVID Powwow
epidemic 2,000 times worse than at the critically short skills and phasing out shaping up with Lord Carrington,
height of the heroin wave of the late useless skills, and the recruitment of the British Foreign Secretary, this
1960s and early 1 970s, the worst in the workers to necessary industries includ­ weekend? A minimally two day
nation's history. ing relocation." meeting starts Friday between
The source of this astonishing threat Carter, newly appointed Secretary
is the prodrug Khomeini regime in Iran of State M uskie, and Warren
and its Islamic fundamentalist allies in Christopher, to be joined on Sat­
Afghanistan and Pakistan. According to urday by Brzezinski and Harold
officials, the 1 980 opium crop from these Brown . On that day Lord Car­
three countries alone, which is already McCormack fusion rington is scheduled to arrive in
being harvested and processed, is 1 500 Washington for talks with Carter.
request victim of
metric tons-almost ten times the total
opium harvest of the "Golden Triangle" austerity fever • DOUBTS as to Carter's re­
area of Southeast Asia. Before the sud­ The House Science and Technology nomination prospects rose follow­
den growth of "Islamic" opium produc­ Committee, bowing to the fiscal auster­ ing the White House announce­
tion, the Golden Triangle accounted for ity ideology of its senior Republican ment naming Senator Edmund
approximately three-quarters of the en­ member, scaled down Rep. Mike Mc­ M uskie (D-Maine) as Secretary of
tire world-s exportable opium crop. Cormack's requested $45 million in­ State. Following the announce­
crease in the Department of Energy's ment, M uskie, the object of per­
fusion request to $30 million . sistent rumors sweeping the capi­
McCormack had proposed that the tal over the past two weeks, that
DOE's fiscal 1 98 1 budget for fusion be he could be a candidate at a bro­
FEMA plans relocation increased from $403 million to $448 kered Democratic convention,
million as the first, necessary step to­ commented; "This job will only
of U.S. labor force ward instituting an Apollo-style ap­ be for 8 months." Carter was seen
The Federal Emergency Management proach to the production of a commer­ to visibly blanch.
Agency (FEMA), created by the Carter cial fusion generator by the end of the
administration one year ago, now has century. McCormack has introduced • NAVY DISGUST at Carter
on the books a national labor policy for separate legislation mandating such a and Harold Brown is close to
the United States which will fully repli­ national effort, but felt that an increase open warfare. Chief of Naval Op­
cate the Employment Service Board of in the FY8 1 budget was necessary to erations, Admiral Thomas Hay­
the Nazi Third Reich Ministry of Labor. keep the programs intact and capable of ward in a recent interview de­
FEMA's "National Labor Mobilization the kind of expansion he envisions. His clared that till recently "6 or 7"
Plan," as disclosed to EIR by sources $45 million increase passed the Subcom­ ships on average were laid up at
inside FEMA itself, calls for the top­ mittee on Energy Research and Produc­ Norfolk for insufficient crews,
down national "retraining, relocation, tion, which McCormack chairs. and now the total has skyrocketed
and certification" of all U.S. workers by But on April 23, the full committee to 20. Hayward pledged he would
FEMA in the event of any national voted up an amendment offered by fight Carter and Brown's defense
emergency. ranking Republican John Wydler of po licy a n d b u dget w i t h " a l l
FEMA's labor program follows the New York which cut back the proposed means" available.
principle laid down by Adolph Hitler's increase from $45 million to $30 million
Finance Minister Hj almar Schacht when u n d er the g u i s e of " b u dgetary re­ • THOMAS J. WATSON, JR.
he founded the Employment Service straint." Wydler, a self-admitted sup­ U.S. ambassador to the Soviet
Board: Under conditions when the econ­ porter of McCormack's Apollo-project Union, may be the next to resign
omy, and the labor process, breaks style legislation, argued that unless the in protest following Vance and
down , a central agency, above popular committee itself showed some restraint
Christopher. Watson, reportedly
control, must be established to make in the midst of massive and across-the­
infuriated at being frozen out
and implement decisions on the deploy­ board budget cutting, it would be im­
from any substantive role in U . S .­
ment of labor throughout the economy. posed on them by the rest of the House.
Soviet relations, is the former
"FEMA and the Department of La­ Sources report however, that further
chairman of IBM, and a close
bor" said an agency source, "have es­ "restraint" is in the offing as the House intimate of Cy Vance. Prior to
tablished a totally centralized program Appropriations Committee may attempt 1 976, he and Vance were co-direc­
for the mobilization of the U.S. work­ to scale the budget back to the original tors of IBM.
force. It covers wage and salary stabili­ DOE proposal, despite Wydler's at­
zation, determination of critical skills tempted "self-discipline."

EIR May 1 3 , 1 980 National 63

Facts Behind Terror by Jeffrey Steinberg

Environmentalists look to Iran

• From April 24-28, 1 980, the
The anti-nuclear movement and all shades of MFS and Coalition for a Non­
environmentalists are coalescing with the outright terrorist N uclear World held a series of
organizations, and the author of the merger is one of the joint antinuclear antidraft rallies in
Washington, D.C. in conjunction
architects of the Khomeini revolution. with the Coalition against Regis­
tration and the Draft (CARD), etc.
The demonstrations were planned
to end with a "direct action" oc­
T he environmentalists and anti­ erandi is to prepare the agenda of cupation of the Department. of En-
nuclear groups in the United States activities for the environmentalist ergy on April 28 .
are merging with the entire spec­ movement as a whole, then pro­ • On M ay 24, the entire ex­

trum of terrorist support organi­ v i d e u p d ated i n fo r m a t i o n a n d panded antinuclear coalition will

zations nationwide, to create a marching orders t o all the local launch a two-pronged assault on
mass movement modeled on the "alliances . " the Seabrook, New H ampshire nu­
"Iranian revolution." The archi­ I n M arch 1 979, the MFS tested clear plant site, with the object of
tect of the merger is Professor its strength and was able to mo­ occupying the site and wrecking
Richard Falk of New York City's bilize virtually every group to hold equipment and sections of the
Institute for World Order who has press conferences and demonstra­ plant already under construction.
devoted his work in the U . S . to tions within 48 h ours of the March The Coalition for Direct Action
bringing under one unified com­ 28 sabotage incident at the Three will lead the attack.
mand all the environmental, cul­ Mile Island nuclear power plant • The final phase of the merger

tural and social groupings . near Harrisburg, Pa . This nation­ will occur at mass demonstrations
During a recent speech, Falk, wide mobilization succeeded in against the Democratic National
who helped create the Iran model building for a May 6, 1 979 mass Convention in New York City be­
for terrorism, explained the "ide­ dem o n st r a t i o n i n W as h i ngto n , ginning Aug. 1 1 . Environment�ist
ology of nuclear energy. " The D.C. which drew nearly 200,000 groups were well represented at the
Shah of Iran was so repressive, people . The rally had representa­ Youngstown planning conference
Falk claimed, because he was ded­ tion from groups outside of the where a Chicago 1968-style dem­
icated to developing nuclear power traditional antinuclea,r movement .. onstration was planned for the
fo r I r a n . T h e same rep r e s s i o n Since the M ay 6 demonstration New York convention, including
caused b y nuclear power develop­ the following developments h ave the M FS, Black H ills Alliance
ment will also occur in the United taken place: from North Dakota, and the Co�
States if it is not stopped, Falk • On Oct. 6, 1 979, the Revo­ alition for a Non-Nuclear World.
continued. lutionary Communist Party sent a
The central coordinating ap­ new front group, Student Coali­ * * *
paratus bringing the antinuclear tion Against Nukes Nationwide
movement behind the Iran model (SCANN), to the Coalition for
is the Mobilization for Survival Direct Action assault on the Sea­ For up-to-date intelligence in
(M FS) . The MFS was created in brook, New Hampshire nuclear the fields of terrorism, drugs, and
1977 by Falk's Institute for World plant site . organized crime subscribe to Inves­
Order as the coordinating center • In February 1 980, several en­ tigative Leads, the twice-monthly
for every environmental group in vironmentalist organizers were intelligence report published by the
the country. MFS is composed of taken to Iran for training by Nor­ EIR . Send $50 with your name and
over 400 groups, run by the Insti­ man Forer, including Lucille Gun­ address to Executive Intelligence
tute for World Order, I nstitute for derson of the New H ampshire Review, 304 W . 58 St. , New York,
Policy Studies in W as h i ngto n , Clamshell Alliance, and Randy N.Y. 1 00 1 9 (M aster Charge and
D.C., and the American Friends Goodm an of the Boston Coalition Visa accepted). For more infor­
Service Committee. Its modus op- for Direct Action at Seabrook. mation call (2 1 2) 247-8820.

64 Facts Behind Terror EIR May 1 3 , 1 980