The Shadows of Power: The Council on Foreign Relations and the American Decline
- James Perloff, 1988
Chapter 11 - A Second Look at Ronald Reagan
Reagan and the Establishment
After Mao Tse-tung took power in 1949 with help from the State Department, the cry in America was "Who lost China?" In the Autumn 1979 Foreign Affairs, editor William P. Bundy wrote a piece called "Who lost Patagonia? Foreign Policy in the 1980 Campaign." Bundy patently feared that Jimmy Carter's foreign intrigues world revive deep scrutiny in the U.S. Government and its Establishment connection. His article contended that our allies were falling apart on their own; that it was happenstance that this occurred "on Jimmy Carter's watch"; and that there should be no "reckless charges," like those raised about postwar China.
Many Americans, however, had different ideas. Even those unfamiliar with the Establishment and its modus operandi sensed something very wrong with Jimmy Carter's foreign policy. Though the major media kept mum, smaller publications joined with conservatives in stripping the Trilateralist of his farm boy mask.
Even campaigner Ronald Reagan hopped on the bandwagon, addressing Trilateral monopolization of the Carter regime. (See, for example, the February 8, 1980 New York Times.) This help Reagan win the backing of Main Street conservatives and primary victories over George Bush, who was known as the Establishment's Republican in 1980. David Rockefeller, Edwin Rockefeller, Helen Rockefeller, Laurence Rockefeller, Mary Rockefeller, and Godfrey Rockefeller all gave the maximum contribution allowable under law to Bush, a true Establishment scion. His father, along with Robert Lovett, had been a partner in Brown Brothers Harriman - Averell Harriman's international banking firm. George Bush was a Skull and Bonesman, a director of the Council on Foreign Relations, and a member of the Trilateral Commission. He shrewdly resigned from the latter two as he initiated his campaign.
Ronald Reagan thus began by playing the Goldwater of 1980. But soon he proved that his Hollywood training was not for naught. Carey McWilliams noted in the Los Angeles Times in July of that year:
It is my belief that the Establishment - that elusive but very real force in American life - has of recent weeks opted decisively for Ronald Reagan.
In the August 1980 Playboy, Robert Scheer reported:
Prior to the New Hampshire primary, David Rockefeller convened a secret meeting of like-minded Republicans aimed at developing a strategy for stopping Reagan by supporting Bush and, failing that, getting Gerald Ford into the race. Reagan heard about the meeting and was, according to one aide, "really hurt." This aide reports that Reagan turned to him and demanded, "What have they got against me? I support big oil, I support big business, who don't they trust me?" ...
In any event, when Reagan scored his resounding triumph in New Hampshire in February, the overtures to the East began to work. New York establishment lawyer Bill Casey (CFR), who became campaign director the day of the New Hampshire victory, began building bridges and promising that a more moderate Reagan would emerge after the Republican Convention.
In any event, when Reagan scored his resounding triumph in New Hampshire in February, the overtures to the East began to work. New York establishment lawyer Bill Casey (CFR), who became campaign director the day of the New Hampshire victory, began building bridges and promising that a more moderate Reagan would emerge after the Republican Convention.
Indeed, one did. Reagan picked Bush for his running mate, and after the election, put together a transition team that included 28 CFR men, among them the eternal John J. McCloy. As President, his appointed more than 80 individuals to his administration who were members of the Council, the Trilateral Commission, or both.
For his Chief of Staff (later Treasury Secretary), Reagan designated James Baker, who had been Bush's campaign manager.
For Treasury Secretary (later Chief of Staff) he chose Donald Regan, a Harvard-Wall Street-CFR man.
His original Secretary of State was Alexander Haig, a former assistant to Cyrus Vance and Henry Kissinger. When Haig joined Kissinger's staff in 1969, he was a colonel; by 1972 he become four-star general, in a leapfrogging career reminiscent of Marshall and Eisenhower. Later he became supreme commander of NATO and was, of course, a member of the Council on Foreign Relations.
Succeeding Haig at State in 1982 was George Pratt Shultz, a director of the CFR and a member of the Pratt family of the Standard Oil fortune (it was Mrs. Harold Pratt who donated Pratt House to the Council). His appointment seeming pleasing to back-to-back authors in Foreign Affairs, to which the Secretary contributed the lead article for the spring 1985 issue. Known as an advocate of accommodation with the USSR, it was he who, years earlier, had signed the accords resulting in the Kama River truck factory being built for the Soviets by the West.
When Shultz picked retired banker John C. Whitehead for Deputy Secretary of State, the New York Times commented: "Mr. Whitehead brings to the job no apparent expertise in international diplomacy... In describing his attributes for the job, Mr. Schultz said that Mr. Whitehead was a member of the Council on Foreign Relations and was regularly invited to dinners given by Henry A. Kissinger, former secretary of state."
As Secretary of Defense, the President named Casper Weinberger, who had been a Nixon administrator and belonged to the Trilateral Commission. He was replaced in 1987 by Frank Carlucci of the CFR.
In 1985, Winston Lord, president of the Council on Foreign Relations and a former Kissinger aide, became Reagan's ambassador to the People's Republic of China.
When Lord left Pratt House to assume his new responsibilities, the Council need a new president. One of the three final candidates under consideration was Robert McFarlane, who had been Ronald Reagan's National Security Adviser.
Reagan chose Malcolm Baldrige (CFR) as Commerce Secretary, William Brock (CFR) as Labor Secretary, Alan Greenspan (CFR-TC) as Federal Reserve Board Chairman, and on the list goes.
Reagan Policy
Ronald Reagan has been billed as a thoroughgoing conservative. But history bear witness that, like Eisenhower's and Nixon's, his conservatism rarely goes beyond his speeches.
Campaigning in 1980, Reagan said he intended to balance the budget by 1983. Jimmy Carter's annual federal deficits ranged from $40.2 billion to $78.9 billion. Under Mr. Reagan, the red ink came to a record $127.9 billion in fiscal 1982, then skyrocketed to $208.9 billion in 1983. The subsequent deficits, in billions of dollars, were as follows:
1984 - $185.3 billion
1985 - $212.3 billion
1986 - $220.7 billion
1987 - $173.2 billion (estimated)
Reagan's annual deficits have actually exceeded the annual budgets of Lyndon B. Johnson, who had a Vietnam War to pay for as well as the Great Society. He has chalked up government debt than all the Presidents before them combined. It is true that Congress shares in the responsibility for this, but the blame cannot simply be offloaded on them; the President's own budget proposals have contained estimated deficits in the $100-200 billion range since fiscal 1983.
Reagan is touted as an enemy of taxation and big government. Yet during his first term, although he did cut tax rates, he also pushed through the largest tax increase in our nation's history, as well as boosts in the gasoline and Social Security taxes. And his big government got bigger: the civilian work force in the executive branch grew by nearly 100,000 between 1981 and 1986.
In 1983, Walter Heller, former economic advisor to Presidents Kennedy and Johnson, was prompted to write a column in the Wall Street Journal entitled "Mr. Reagan Is a Keynesian Now." In 1984, economist Richard Parker echoed this conclusion in the Los Angeles Times, noting: "While he proclaims Reaganomics' success, Reagan also owes Americans a shocking confession: He's become a born-again Keynesian." That same year, economist Lester Thurow observed in Newsweek that "President Reagan has become the ultimate Keynesian."
He continued:
Not only is the Reagan Administration rehabilitating exactly the economic policies it pledged to bury when entering office, it is applying them more vigorously than any Keynesian would have dared. Imagine what conservatives would be saying if a liberal Keynesian Democratic president has dared to run a $200 billion deficit.
Supposedly a proponent of military strength, candidate Reagan criticized Jimmy Carter for abiding by the Salt II treaty, which the Senate has refused to ratify. He called it "fatally flawed" and said he would spurn it. Yet as President he complied with Salt II until late 1986, even after the treaty would have expired had it ever been ratified, and despite numerous Soviet violations. In 1986, he ordered two Poseidon ballistic missile submarines dismantled to ensure we would stay within Salt II limits.
The President agreed to no increase in defense spending in 1986, whereas White House hopeful Walter Mondale had advocated increases of at least three percent annually. This Reagan's defense budget that year was actually smaller than the one proposed be this liberal Democratic rival. In The New American in 1986, William F. Jasper summed other holes in the President's warrior reputation:
The Reagan administration has also cut back construction of new Trident submarines; refused deployment of Minuteman III missiles despite its authorization by Congress; reduced MX missile planned deployment; continued deactivation of B-52 strategic bombers; cancelled production of air-launched cruise missiles; cut back production of the B-1 bomber; and failed to reconstruct our dismantled anti-ballistic missile (ABM) system. In short, Mr. Reagan's policies have been disastrous for America's defense capabilities.
Today, while prospect of SDI is becoming increasingly remote, few Americans seem to realize that the nuclear deterrent of the United States still consists principally of: antiquated B-52 bombers, designed under Truman and constructed under Eisenhower and Kennedy; ICBM's from the Kennedy-Johnson-Nixon years (after sitting in their silos for two decades, no one really knows how well they would work); and Poseidon submarines built before 1967. Ronald Reagan has reinforced these with some new B-1 bombers, MX missiles, and Trident submarines, but in very limited quantities - considerably less than the rates of attrition would call for. In contrast, the Soviets have never stopped expanding and modernizing all segments of their nuclear forces. Reagan's most significant strategic advance was probably the placement of a medium-range missiles in Europe - and these he agreed to withdraw completely when he signed the INF treaty in late 1987! Contrary to the popular impression, the Reagan administration has left America on the brink of decisive nuclear inferiority.
Most people consider the President a determined anti-Communist; this was an image he established early on with his well-publicized description of the Soviet Union as an "evil empire." But here again, his actions have fallen short of his words.
* When Communist Poland defaulted on its interest payments to American banks in 1982, Ronald Reagan didn't pressure Warsaw - instead, he bailed out the banks by having the U.S. taxpayers pick up the tab.
* The Reagan administration channeled money into El Salvador to help José Napoleón Duarte win his 1984 election over the anti-Communist Roberto d'Aubuisson. Duarte is a Socialist; he has seized the nation's banks and large farms; in fact, when he previously ran to president in 1972, his running mate was Guillermo Ungo - current of El Salvador's Marxist guerrillas.
* When Jimmy Carter broke relations with Taiwan, Ronald Reagan called it an "outright betrayal of a close friend and ally." As President, however, he did not attempt to restore relations with Free China. Furthermore, in August 1982 he issued a joint communiqué with Peking stating that the U.S. "does not seek to carry out a long-term policy of arms sales to Taiwan." Under Reagan, trade with Red China has greatly multiplied; in 1986, the administration pressed through Congress the sale of $550 million in advanced avionics equipment, giving some of the mainland's fighters in all-weather capacity Taiwan's air force lacks.
* In Angola, Jonas Savimbi's UNITA freedom fighters are trying to unseat the pro-Soviet ruling regime, which is kept in power by nearly 40,000 Cuban troops. Much publicly has been accorded the $15 million in military assistance given Savimbi by Reagan - but overlooked is the more than $200 million in credits granted Angola's Marxist government by the Export-Import Bank. Tens of millions in aid have also been sent to Communist Mozambique, even though it is using Soviet weapons to suppress a liberation movement by the pro-Western RENAMO (Mozambique National Resistance).
* When the Philippine crisis reached its climax in 1986, Ronald Reagan joined hands with the international left, withdrawing support from President Marcos. Foreign Affairs, which had previously served as a forum for Beningo Aquino, anticipated the situation in its winter 1984/1985 issue:
The article stated that the fate of the Philippines must remain an internal affair, but added: "U.S. leverage should not be underestimated; U.S. efforts to shape the setting for the inevitable Philippine transition can almost certainly have some benefit."
Ferdinand Marcos was no saint, but he may look like one compared to the Communists, if and when they wrest the islands from Corazon Aquino.
* In response to the Afghanistan invasion, Jimmy Carter embargoed grain to the Soviet Union. But Mr. Reagan approved sale of our wheat to Moscow again - at heavily subsidized rates. On December 27, 1986, the President warned that Soviet leaders "must be made to understand that they will continue to pay a higher and higher price until they accept the necessity for a political solution involving the prompt withdrawal of their forces from Afghanistan and self-determination for the Afghan people. The very next day, however, administration officials said they were ending most controls of the export of oil and gas equipment and technology to the USSR. Reagan did allow Afghanistan's brave freedom fighters, the Mujahideen, some weapons, but he pledged the cut these off during his negotiations with Mikhail Gorbachev in December 1987! The curtailment had in fact been brewing as much as two years earlier. At that time, according to William Safire in the New York Times:
After exposure led the public protest, the President began to disavow the policy. But a UPI story dated March 21, 1988 carried this incredible report:
* The Reagan administration channeled money into El Salvador to help José Napoleón Duarte win his 1984 election over the anti-Communist Roberto d'Aubuisson. Duarte is a Socialist; he has seized the nation's banks and large farms; in fact, when he previously ran to president in 1972, his running mate was Guillermo Ungo - current of El Salvador's Marxist guerrillas.
* When Jimmy Carter broke relations with Taiwan, Ronald Reagan called it an "outright betrayal of a close friend and ally." As President, however, he did not attempt to restore relations with Free China. Furthermore, in August 1982 he issued a joint communiqué with Peking stating that the U.S. "does not seek to carry out a long-term policy of arms sales to Taiwan." Under Reagan, trade with Red China has greatly multiplied; in 1986, the administration pressed through Congress the sale of $550 million in advanced avionics equipment, giving some of the mainland's fighters in all-weather capacity Taiwan's air force lacks.
* In Angola, Jonas Savimbi's UNITA freedom fighters are trying to unseat the pro-Soviet ruling regime, which is kept in power by nearly 40,000 Cuban troops. Much publicly has been accorded the $15 million in military assistance given Savimbi by Reagan - but overlooked is the more than $200 million in credits granted Angola's Marxist government by the Export-Import Bank. Tens of millions in aid have also been sent to Communist Mozambique, even though it is using Soviet weapons to suppress a liberation movement by the pro-Western RENAMO (Mozambique National Resistance).
* When the Philippine crisis reached its climax in 1986, Ronald Reagan joined hands with the international left, withdrawing support from President Marcos. Foreign Affairs, which had previously served as a forum for Beningo Aquino, anticipated the situation in its winter 1984/1985 issue:
If Marcos cannot or will not accept the reforms necessary to ensure stability, them we must be willing to call his bluff, and look even further down the line, toward the inevitable emergence of a new Philippine leadership.
The article stated that the fate of the Philippines must remain an internal affair, but added: "U.S. leverage should not be underestimated; U.S. efforts to shape the setting for the inevitable Philippine transition can almost certainly have some benefit."
Ferdinand Marcos was no saint, but he may look like one compared to the Communists, if and when they wrest the islands from Corazon Aquino.
* In response to the Afghanistan invasion, Jimmy Carter embargoed grain to the Soviet Union. But Mr. Reagan approved sale of our wheat to Moscow again - at heavily subsidized rates. On December 27, 1986, the President warned that Soviet leaders "must be made to understand that they will continue to pay a higher and higher price until they accept the necessity for a political solution involving the prompt withdrawal of their forces from Afghanistan and self-determination for the Afghan people. The very next day, however, administration officials said they were ending most controls of the export of oil and gas equipment and technology to the USSR. Reagan did allow Afghanistan's brave freedom fighters, the Mujahideen, some weapons, but he pledged the cut these off during his negotiations with Mikhail Gorbachev in December 1987! The curtailment had in fact been brewing as much as two years earlier. At that time, according to William Safire in the New York Times:
[T]hree State Department functionaries cooked up a plan to accommodate Soviet demands about withdrawal from Afghanistan. The key concession: permit the Russian to continue arms shipments to its puppet Governments while US cut off aid to the Mujahideen ...
The secret letter assured Moscow that upon the day its troops withdrawal began, "foreign interference" would stop - meaning that the C.I.A.-channeled aid to the [Afghan rebels] would be terminated ...
It is known to insiders as "the Day One deal": American aid to the Afghan resistance, but not Soviet aid to the puppet Kabul regime, would stop on Day One of yearlong Soviet troop pullout.
The secret letter assured Moscow that upon the day its troops withdrawal began, "foreign interference" would stop - meaning that the C.I.A.-channeled aid to the [Afghan rebels] would be terminated ...
It is known to insiders as "the Day One deal": American aid to the Afghan resistance, but not Soviet aid to the puppet Kabul regime, would stop on Day One of yearlong Soviet troop pullout.
After exposure led the public protest, the President began to disavow the policy. But a UPI story dated March 21, 1988 carried this incredible report:
The United States and Soviet Union, seeking to ensure an orderly Soviet troop withdrawal from Afghanistan, are sharing data on radical Islamic guerrilla factions viewed as a threat to a settlement, according to administration officials ...
Such maneuvering may mean curbing U.S. support for the Islamic rebel factions the administration has so relied on during the 8 1/2-year old guerrilla war against Soviet occupation forces, they said ...
A CIA source, speaking of the rebels, confirmed a shift in the US position, [and] said, "We want to see some groups fed to other groups" - intelligence terminology for neutralizing undesirable elements ...
Asked about US-Soviet discussions about the Mujahideen, a State Department spokesman declined comment on grounds it is an intelligence matter.
Such maneuvering may mean curbing U.S. support for the Islamic rebel factions the administration has so relied on during the 8 1/2-year old guerrilla war against Soviet occupation forces, they said ...
A CIA source, speaking of the rebels, confirmed a shift in the US position, [and] said, "We want to see some groups fed to other groups" - intelligence terminology for neutralizing undesirable elements ...
Asked about US-Soviet discussions about the Mujahideen, a State Department spokesman declined comment on grounds it is an intelligence matter.
Conservatives have been pleased with some facets of Ronald Reagan's performance, such as his judicial appointments and the Grenada rescue mission. There is, of course, the controversial "Contra aid" he has sought. But this, despite energetic Congressional opposition, is far less than the Nicaraguan freedom fighters would need to defeat the Sandinistas, whose army takes to the field with heavy tanks and helicopter gunships from the Soviet Union. At best, they are being allowed to fight a "no-win" war of containment. Furthermore, the administration has backed ex-Sandinistas and other former opponents of Somoza (such as Eden Pastora and Adolfo Calero) as headers of the Contras, giving the whole operation the smell of a sellout. Even Pastora, known as "Commander Zero," has been a guest at Pratt House. (As this book went to press, the Contras had been forced into a cease-fire on Sandinista terms, with a de facto surrender in the works.)
The Reagan record shows that, all things considered, his policies are the same ones that have steered our nation for over 50 years. That the Establishment has tolerated him for two terms tends to suggest that it may be more comfortable with a conservative-image Republican as President. This allowed its program to advance relatively unhindered, and puts Washington watchdogs to sleep.
In 1971, Lyndon Baines Johnson said of President Nixon: "Can't you just see the uproar if I had been responsible for Taiwan getting kicked out of the United Nations? Or if I had imposed sweeping national controls on prices and wages? Nixon has gotten by with it. If I had tried to do it, or Truman, or Humphrey, or any Democrat, we would have been clobbered." Walter Mondale must have similar thoughts about Ronald Reagan.
In an article in Foreign Affairs in 1981, former Kissinger aide William G. Hyland wrote foreseeingly: "Just as Nixon had the anti-Communist credentials to develop an opening to Peking, so Reagan has the credentials to initiate a new relationship with the U.S.S.R." That, presumably, applied to the rest of the Establishment agenda as well. We presume Mr. Hyland is familiar with the Establishment agenda. In 1984, he replaced William Bundy as editor of Foreign Affairs.
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