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DN! interview: Wm Greider on the Economy and Stimulous Package

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  • Ed Pearl
    Hi. Tomorrow, the Senate takes up the stimulous package. Greider provides a down to earth assessment of what s at stake. Ed
    Message 1 of 1 , Feb 1, 2009
      Hi. Tomorrow, the Senate takes up the stimulous package. Greider
      provides a down to earth assessment of what's at stake.


      Economic Stimulus Moves to Senate Following House Approval

      "WILLIAM GREIDER: We're not there yet. I think more likely, to be blunt, is
      that Seattle will look like an organized and civil appeal of popular
      distress compared to what I think we're going to see. And by that, I mean
      you can't do this to people year after year-that is, upturn their lives,
      take away what they thought they had earned, and so forth and so on, without
      provoking rather intense political reactions."

      Interview with William Greider
      Democracy Now! January 29, 2009

      AMY GOODMAN: Obama's comments come at a time when the economy that is losing
      more than half a million jobs a month, including more than 65,000 layoffs
      announced just this week.

      William Greider joins us now, the national affairs correspondent for The
      Nation magazine; the author of several books, including The Soul of
      Capitalism: Opening Paths to a Moral Economy and One World, Ready or Not:
      The Manic Logic of Global Capitalism. His forthcoming book is called Come
      Home, America: The Rise and Fall (and Redeeming Promise) of Our Country. He
      joins us in our firehouse studio.
      Welcome to Democracy Now!

      WILLIAM GREIDER: Thanks, Amy.

      AMY GOODMAN: It's good to have you here in the studio.

      WILLIAM GREIDER: Likewise, yes.

      AMY GOODMAN: The state of the economy right now, what President Obama just
      said, the fact that they've pushed through this more than $800 billion
      economic stimulus package. The House at this point, with-as Boehner, I
      think, came onto the floor with a-holding his hand up in a big zero, saying
      the Republicans are not going to give them anything.

      WILLIAM GREIDER: The Republicans, it's very clear, they are staking out a
      sort of-what they think is a no-lose, hard-right position: "We will be
      against anything significant this new president is attempting, because we
      know it's going to fail, not because it's Obama's fault, but because this
      force, the negative forces bearing down on our economy and the world are
      overwhelming." So they think, you know, six months from now they will say,
      "We told you this was socialism," "We told you this was wasteful," etc.

      I think they're wrong on several-I think the President is doing what he said
      he would do. He's trying to be bipartisan. And I suspect he will keep doing
      that, regardless of the Republican position, because he understands that the
      country is in deep trouble, and people are not interested in another
      cat-and-dog fight. They want to see something happen. If it doesn't work, do
      something more, try something else. But the idea of just standing back and
      making their ideological speeches about socialism is ridiculous.

      AMY GOODMAN: Seems like the person who's leading the way now, who lost a
      little support over the last few years but is coming back with a vengeance,
      is Rush Limbaugh leading the charge.

      WILLIAM GREIDER: Is he pounding that drum? Well, he's welcome to it. I think
      there's a long-term political strategy that the President is following,
      which is good for him, and good for the country maybe, in which he said he's
      speaking not to Rush Limbaugh, not to John Boehner and the right-wingers in
      the Congress; he's talking to just folks all across the country, including

      AMY GOODMAN: Now, I'd like you to lay out what the terms of this bill are,
      what the package are. But then I want to go beyond the Democratic-Republican

      WILLIAM GREIDER: Yeah, yeah.

      AMY GOODMAN: -about what you think needs to happen. What's in this bill?

      WILLIAM GREIDER: A lot of really good stuff that will be stimulative, just
      because it keeps-either keeps people working or it creates new jobs and
      begins-only begins, but begins-these deeper reform imperatives the country
      faces, like energy conservation and conversion, like ecological protection,
      expanding healthcare for people, especially at the bottom end of the income
      ladder. In any other season, Amy, it would be quite extraordinary to stand
      back and see what they're doing. In our present circumstances, I have to
      say, it is probably not enough to-

      AMY GOODMAN: Well, you've said it's two or three times too small.

      WILLIAM GREIDER: Yeah. I mean, you can measure what's missing now in demand
      and business activity and lay it alongside this package, and this package
      looks way inadequate. I think the White House understands that, but they're
      not going to triple it. What they are doing is starting a process that will
      at least, perhaps, slow the hemorrhage. That's-I'm sure that's their hope.

      There are a bunch of obstacles that I think make it very difficult to get
      out of this ditch. One of them is scale, the scale of what kind of response
      you're-another is the financial system, which, despite the hundreds of
      billions pumped into banks, is still essentially dysfunctional. And they're
      now wrestling at the Treasury Department and the White House with, OK, how
      do we change the game that Henry Paulson and the Republicans played for six,
      nine months unsuccessfully?

      AMY GOODMAN: And do you expect someone like Timothy Geithner, who-yesterday
      we had on Independent Senator Bernie Sanders, who is opposed to his
      confirmation, saying he was part of this massive problem. Do you expect that
      he would be able to?

      WILLIAM GREIDER: Well, I am among those who urged our new president not to
      appoint him for that very reason. And-

      AMY GOODMAN: Did you talk to Obama about that?

      WILLIAM GREIDER: No. I'm just-in the pages of The Nation-I'm not sure he's
      a reader, but perhaps he will become a reader as things get worse. I've been
      writing for some months, the system is not just broken and not just injured;
      it is collapsed. And as long as the government continues to play putting
      Humpty Dumpty back together again, I think it will fail. That's not an
      ideological statement. It's just-I think it's the reality.

      And so, I hope, without great confidence, that Larry Summers, the economic
      adviser, and Tim Geithner and the President decide to take a deep breath,
      jump over the political barriers and say, "We are taking control of the
      banking system, temporarily, maybe for a few years. But we have to make this
      system function for the American economy right now." And handing them the
      money and asking them to do the right thing is not sufficient. We know that.
      It's not just their excesses; it's the fact that the banks have a very clear
      self-interest in not lending, in not beginning investment. They're hunkering
      down, trying to save themselves from total failure. Once the government
      makes that recognition, then it can direct things more forcefully and

      And I don't expect them to do that, but I just add this: I hope, I hope that
      the President is saying to his economic wizards, "OK, we're going to do your
      plan, your halfway steps and the many parts to it. But what's your second
      plan? When this doesn't succeed, what do I do then?" because if they don't
      do that, they're going to wind up caught in the same game that Henry Paulson
      and George Bush were caught in. You try this, you throw some money this way,
      you throw it that way, nothing happens, and then you come back with a new
      plan, and so forth.

      AMY GOODMAN: Bill Greider, we're going to come back to this discussion. I
      want to ask you more about nationalizing the banks. Bill Greider is with us,
      national affairs correspondent for The Nation magazine. His forthcoming
      book, Come Home, America. Stay with us.


      AMY GOODMAN: Our guest is Bill Greider. He is with The Nation magazine. His
      forthcoming book is called Come Home, America: The Rise and Fall (and
      Redeeming Promise) of Our Country.

      So, you're on the train yesterday. You bump into Bill Parsons, the-

      WILLIAM GREIDER: Richard Parsons.

      AMY GOODMAN: Richard Parsons, rather.

      WILLIAM GREIDER: You don't bump into Richard Parsons. He's-he was the leader
      of Time Warner. He's just now been made chairman of the board at Citigroup.

      AMY GOODMAN: And you've been calling for the nationalizing of banks like

      WILLIAM GREIDER: Well, I think they should just get it over with and close
      Citigroup down, because it's insolvent. And-

      AMY GOODMAN: Did you tell Richard Parsons this on the train?

      WILLIAM GREIDER: I didn't. That would be, first of all, impolite. But
      secondly, we were in what Amtrak calls the quiet car, where you do not talk.
      So that's my excuse for not badgering him.

      But you know what he was doing. He witnessed what happened to the three
      executives of the auto companies when they flew their private jet to
      Washington with their hands out for money, and he decided, given that
      Citigroup has now received, what, $45 billion straight up and another $300
      billion in guarantees, it would be awkward for him to fly in to his meeting
      with the President. Obama had a bunch of corporate execs in yesterday to
      lead cheers for them and get them going. And good for him, right? He's down
      with the folks. Of course, it was in Acela train, which is the fast train.

      AMY GOODMAN: Well, I guess the question is, is Citigroup down with the
      folks? And what has happened to the billions of dollars that have been given
      to bail out these companies that they are not accounting for? And it's not
      just President Bush. It's not just Henry Paulson. The Democrats joined with
      the Republicans in supporting this.

      WILLIAM GREIDER: Absolutely. This has been, up to now, bipartisan failure,
      and it continues not to have the crucial feature, which is answering the
      question: What does the public get for this money? And this sounds
      unbelievable, but it's literally true. The government, Treasury and the
      Federal Reserve pumps this money in and demands almost nothing in return, in
      terms of a prescribed behavior, guaranteed conduct-we will do this, we will
      stop doing that, so forth and so on.

      So these guys are all going out and-you know, Citigroup was embarrassed just
      last week, because somebody revealed that they had on order and were about
      to get a new $50 million executive jet. And that's why Richard Parsons is on
      the train this week, because as soon as the public finds that out, they're
      thinking, "Oh, no. They've done it again!" And it's just very simple
      political logic for Washington to say, "We have to exercise control over
      these institutions, at some level of penetration, to stop this misbehavior,
      first, and then to make them do some positive things that the country needs
      right now." And in the case of Citigroup, this is-

      AMY GOODMAN: You say it's insolvent.

      WILLIAM GREIDER: Yeah, that's not an opinion of mine. I mean, I talk to
      people who are really serious bank specialists, and they've been saying that
      for many months. It's the so-called toxic assets in their-and this is not
      unique to Citigroup-but the toxic assets that build up in a way that
      you-that the government-if it tried to do this for every one of the largest
      banks, it would make this stimulus package look like peanuts. It's huge.
      It's maybe a couple of trillion dollars still out there.

      I think you can get pretty old-fashioned about this. The bank examiners go
      in, and they make Citigroup lay it all out. And at some point, they can
      decide: "This bank is too gone to save. It's too big to save, and it's got
      too much failure already in it. So we will organize its liquidation."

      The other alternative is to nationalize it and begin to deconstruct the bad
      pieces and build new banks. I mean, to me, this is the exciting prospect.
      This is boring to a lot of people, but it's the heart of the matter. If you
      don't nationalize it, then you're simply sort of prettying up, you know, the
      old roses and hoping that they bloom again.

      What government should be doing now, and it's a long process, is rebuilding
      the banking and financial system across the entire country so that it serves
      the economy, serves the society, rather than being these little citadels of
      high profit and extraordinary salaries. What happened in the last
      twenty-five years is that everything got concentrated in big guys, including
      really strong regional banks that got swallowed up by the bigger banks.
      Thousands of smaller community banks got wiped out. Either they got sold or
      they closed down, etc. This is a huge project, and we won't get back to what
      Americans at large can regard as an equitable and prosperous economy until
      that structure is rebuilt. Citigroup is not going to do that. Even if you
      prop it up for ten years, it's not going to do that.

      AMY GOODMAN: What are the forces that would do that?

      WILLIAM GREIDER: Politics, actually. I mean, and people around the country.
      I've done a lot of reporting over the years, on the ground, with just people
      in different parts of this country trying to-as I described them in my
      earlier book, trying to reinvent capitalism, trying to make it not just
      humane but socially supportive to industry, small businesses, consumers,
      workers, etc. They're terrific people. They're very smart. A number of them
      are veterans of Wall Street. They did a few years making high salaries and
      ripping and running in the markets, and they said, "That's not what my life
      is about," and they went to Oklahoma or California or wherever and started
      firms, that are investment firms, that operate on very different principles.
      If I were king, or if I had the President's ear, I would say, "Get those
      people into the White House now." There are thousands of them.

      AMY GOODMAN: Can you think of examples?

      WILLIAM GREIDER: Well, the names are-there's a-I just heard from her. I'm
      going to blank her name, but she's from Portland or somewhere on the West
      Coast. She has-I think it's called 21st Century Investments. Don't hold me
      to the names. But she is one of those people, and she just sends out a
      report every once in a while: "These are the companies we've just invested
      in." And, of course, the investment standards of those companies-for those
      companies are the same standards any of us would want to apply. Are they
      sound ecologically? Do they treat their workers with equity and fairness and
      include them in the decision making? Are they viable? Do they have a future?
      Are they making something the country will need?

      All I'm getting at is, if we get our heads out of Washington for a minute
      and look across the country, there is enormous potential for reinvention and
      innovation, and not just in that area but in others. And that's what I'm
      hoping this president will get to.

      AMY GOODMAN: Bill Greider, I want to ask you what role economic
      globalization played in all of this. Right now, at the World Economic Forum,
      Wen Jiabao, the Chinese premier, said Beijing blames the United States for
      the economic breakdown, saying, "inappropriate macroeconomic policies [.]
      and [.] unsustainable model of development characterized by prolonged low
      savings and high consumption; [.the] blind pursuit of profit; [.] and the
      failure of financial supervision" all contributed.

      WILLIAM GREIDER: Wow! That's strong. That's very.

      AMY GOODMAN: And China is the largest holder of US government debt.

      WILLIAM GREIDER: Did he-China is our banker. I mean that literally. China,
      having accumulated huge trade surpluses and capital, has been the lender.
      It's not the only one-there are others-but it's the lead lender that has
      Americans going in the illusion that you could, year after year, borrow and
      spend more than you produced. Economics doesn't allow that, not forever-for
      a while maybe, but not forever.

      And so, we're in a position now where China-we have to get a bailout from
      China and Japan, the Arab oil states and some others to keep us going as we
      work through this huge global recession. And I think the deal that's
      possible is that the US can say to those creditors, "OK, give us the loans.
      We'll go a bit deeper in the hole of debt. But we-because we're such good
      consumers, we will be the lead engine that pulls the world out of this
      recession. In exchange, we are telling you now that the trade system, the
      global trading system, must be reformed and balanced. We can't go on like
      this. Ultimately, you can't go on like this."

      And by that, I mean bringing down the trade deficits, which have rung up
      more than $5 trillion in debt over the last fifteen years; imposing some
      rules on US multinationals, so that they can't just roam the world as free
      riders, moving jobs and production wherever they choose without regard to
      the home country. I mean, there's a long list of reforms, which I've written
      about and I write about in this new book. My point is, this is a moment. If
      the Obama administration has the nerve to go for a global compact that
      doesn't just help a recovery but actually rearranges the world in
      fundamental terms-I don't know if they're big enough to do that-

      AMY GOODMAN: And those terms are.?

      WILLIAM GREIDER: Well, you'd start with balanced trade, not perfectly,
      but-and you'd start with a new global institution for finance that
      represents both, not just the advanced countries with strong economies, but
      the developing countries, and balances their interests through currency
      exchange and other-it would begin to build a structure of global rights for
      workers and communities, which is, of course, absent, utterly now. And by
      that, I mean a way to mediate between the high-wage workers in countries
      like ours, in Europe, Japan, and those folks at the bottom who are in the

      I mean, the reality of our time, not so well understood, is that it's very
      much like the English Industrial Revolution. The workers are exploited on
      both ends. If you think of the-you know, William Blake, the poet, wrote
      about the "dark Satanic mills" in England in 1800. The skilled craft workers
      were thrown out of their jobs, and they were replaced with children. And the
      children, of course, were completely defenseless and exploited. But so were
      those other workers who had been cut out of the prosperity that their
      country was achieving. That's a small picture of what is happening globally
      now. And I'm among those who have been railing at this for twenty years,
      actually, without much effect.

      But now we're in a crisis that maybe will awaken the governing elites to the
      reality that they have to confront this and build labor rights and other
      protections into the system, or we'll go right back into that hole.

      AMY GOODMAN: It's interesting you talk about building labor rights, because
      last fall it was reported Bank of America received something like, what was
      it, $25 billion from the government. Three days later, according to the
      Huffington Post, Bank of America's top executives were busy. Were they
      trying to right the sinking ship? No, they were coordinating a conference
      call to organize opposition to the Employee Free Choice Act-

      WILLIAM GREIDER: Absolutely.

      AMY GOODMAN: -the top legislative priority of organized labor unions.

      WILLIAM GREIDER: Of course, yes. I was at a forum last night in New York
      City and talked. And a woman and her husband came up afterwards, who were
      employees of IBM, and they were saying, you know, IBM is at the White House
      meeting with the President and doing good talk about the economy and all
      that, and meanwhile is shutting down jobs and moving them to Asia.

      So what's the nature of this game? Are we trying now to revive the American
      economy for everybody? Or are we simply facilitating the process that's
      already underway, which is that the US multinationals, for the last
      twenty-five years, have systematically gutted high value-added jobs, the
      ones with the good wages, when they could, when they needed to, and gone to
      cheap labor elsewhere?

      AMY GOODMAN: Do you see the system-right now, the World Economic Forum is
      going on at Davos.


      AMY GOODMAN: The World Social Forum is going on in Brazil. Do you see going
      back to 1999, when you had those thousands of people in the streets of
      Seattle, with Bill Clinton coming in on a plane in the middle of the night,
      in the teargas, who had pushed so hard for so-called free trade-


      AMY GOODMAN: -really twisted the arms of Congress members, when NAFTA was
      clearly going down, to force it all to happen?

      WILLIAM GREIDER: We're not there yet. I think more likely, to be blunt, is
      that Seattle will look like an organized and civil appeal of popular
      distress compared to what I think we're going to see. And by that, I mean
      you can't do this to people year after year-that is, upturn their lives,
      take away what they thought they had earned, and so forth and so on, without
      provoking rather intense political reactions.

      We're just, just beginning to see a few bubbles like that around this
      country. They're rioting in eastern Europe and some places in Asia. I don't
      say we're going to have riots, but I think people will-and I hope for
      this-people, out of their own distress and anger, will organize their own
      politics, and they will make themselves seen and heard around this country.
      And we've seen some-sit-down strike in Chicago, which actually succeeded in
      getting the workers their rights. We're seeing the beginnings of a
      foreclosure, anti-, stop the foreclosure movement. The Nation has a terrific
      piece this week by Ben Ehrenreich describing that. That's what happened in
      the '30s, of course, that the people did not finally wait for Washington to
      do the right thing and solve the problem. They recognized that that wasn't
      in the cards, and they would take their action, as they could, on the
      ground, in the workplace, elsewhere, politics.

      This is-this gets messy really fast. And some of it gets ugly. But if people
      understand their own power as citizens and act on it-takes some courage-that
      will be the core of this politics we're in.

      AMY GOODMAN: Bill Greider, I want to thank you for being with us. He is
      national affairs correspondent for The Nation magazine. Forthcoming book,
      Come Home, America: The Rise and Fall (and Redeeming Promise) of Our
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