176 THE END OF THE COLD WAR
All the American agencies agreed that the Soviet economy faced
severe difficulties. The disagreement was about the scale of the prob-
lem. CIA researchers had been quick to recognize the consequences of
falling prices of oil on the world market; but their settled opinion was
that the USSR remained in a ‘healthy financial position’.^42 Ambassador
Hartman too judged that Gorbachëv’s early economic measures were
achieving a degree of success.^43 If this was the reality, it strengthened
the case for America’s need to keep up its financial allocations for
military research and development.
But how reliable was the CIA’s analysis? Harry Rowen, a former
president of the RAND Corporation and recent chairman of the
National Intelligence Council, challenged the idea that the economy in
the USSR was achieving any growth at all. He circulated a paper to
interested officials – Shultz, Weinberger, McFarlane and Casey – and
got it published in the National Interest.^44 In April 1986 Rowen and
four Soviet experts of like mind secured the opportunity through pres-
idential aide Charles Fortier to brief Reagan and Shultz. The CIA
assumed that economic output was growing in the USSR. Rowen con-
tended that growth was at best negligible and that very possibly there
was a yearly fall-off in output. He advised that the President was there-
fore in a strong position to face down Gorbachëv in any forthcoming
talks.^45 Shultz, as both politician and business economist, welcomed
this analysis.^46 He thought that Casey and Weinberger were talking up
the USSR’s industrial performance chiefly because they disliked the
prospect of completing a disarmament treaty with Moscow. He asked
for intelligence reports untainted by political bias. He surmised, in
contrast to the CIA, that the Soviet reformers recognized that an eco-
nomic emergency was imminent in the USSR. He sensed that their
current overtures reflected their panic about the prospect.
Although Rowen’s observations had much cogency, their implica-
tions were anything but clear-cut. If the USSR had an ailing economy,
the time could be right to talk robustly to its leaders just as Shultz
suggested. But it was equally possible for Weinberger to use the same
data to argue that America should not rush into negotiations and
agree to compromises. Weinberger and Casey failed to see their
opportunity. They instead opted simply to keep a wary eye on the
forays that Rowen made into the press.^47
Not even the CIA was claiming that the USSR had no budgetary
problems;^48 and Shultz, Weinberger and Casey did at least concur on
the need to seize the initiative from Gorbachëv. On 5 March 1986