Eric King:  “Dr. Roberts, you had predicted the economic collapse of the Soviet Union.  The CIA missed it (made the opposite prediction) and asked you to come and speak with them, is that right?”

Roberts:  “Yes, that’s true.  When the Soviet Union collapsed I was invited to come to the CIA and explain to them why they had gotten it so wrong.  The difference with the CIA dated back to the Reagan years.  After Reagan got the economy on its feet again with his supply-side policy, he then focused on ending the Cold War.  He wanted to end it, not win it....

Continue reading the Dr. Paul Craig Roberts interview below...


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“His approach was to first cure our economy so it would show the Russians that we were out of this stagflation mess.  They (Russia) still had their problems but we were back on our feet. 

Once they saw that, they would believe that the pressures that he kept threatening to put on them of a new arms race, of SDI (Strategic Defense Initiative) -- you may remember Star Wars -- none of this actually happened.  It was all Reagan propaganda to make the communists in the Soviet Union agree to negotiate to end the war, rather than to be drawn into an arms race that their economy, at the time, was no longer able to sustain.

So that was Reagan’s approach.  The CIA kept telling Reagan, ‘Oh, no, don’t threaten the Soviets with an arms race.  They will win!’  And Reagan couldn’t believe this.  Of course my book, published in 1971, 10 years prior to Reagan coming into the presidency, had concluded the Soviet economy had already failed. 

Reagan was aware of that (book), so when I left the Treasury he appointed me to a secret committee that had subpoena power over the CIA, and we were told to evaluate the CIA’s conclusion that the Soviets would win an arms race.

The main argument they (the CIA) had was that the Soviet Union could control investment, and therefore could put whatever percentage of the Soviet economy was necessary into the military in order to prevail over the United States in an arms race.  Whereas the American people wouldn’t stand for some unlimited amount of resources diverted into the Pentagon’s budget.  So that was the CIA’s position.

I don’t know whether they sincerely believed that or whether they just didn’t want the Cold War to end.  They had a lot of power and influence because of the Cold War and that would take a back seat if there was no longer a Soviet threat.  And of course the entire military-security complex made billions of dollars out of the Cold War and the Soviet threat.  So they didn’t want it to end either.

So Reagan was really up against the entire establishment on that.  Many of the Republicans themselves thought he shouldn’t be negotiating with Gorbachev because Gorbachev was one of those sneaky Communists, and Reagan was just an old man and the Communists would take advantage of him -- suck him into some kind of agreement that would end up with the Soviets winning.

So this was the whole milieu at the time when Reagan was trying to end the Cold War.  And the committee that he appointed me to, we concluded that the CIA was wrong.  People took my position in the committee.  And this would be an effective threat on the part of Reagan to put pressure on the Communist Party of the Soviet Union to negotiate the end of the war, and it worked!  And that’s what happened.  So that’s that story.”

IMPORTANT - KWN will be releasing interviews and pieces all day today with former US Treasury official Dr. Paul Craig Roberts, Egon von Greyerz, Art Cashin and many others.

UPDATE: The article above is just a small portion of Dr. Roberts’ remarkable audio interview.  This is truly one of PCR’s most powerful interviews ever and it is available now to listen to CLICK HERE.

© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with Dr. Paul Craig Roberts, Grant Williams, Andrew Maguire, Andrew Huszar, Michael Pento, Art Cashin, Rick Rule, David Stockman, John Mauldin, Eric Sprott, MEP Nigel Farage and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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