9-30-08, 10:04 am
Editor's note: Sam Webb chairs the Communist Party USA. Here the audio version of this on the latest PA podcast here.
PA: Let me begin by asking about something that Bush said the other night. He gave an explanation for the cause of the financial crisis, and basically blamed both irresponsible homeowners and irresponsible lenders for the crisis. Are you satisfied with that explanation?
SAM WEBB: Not in the least. It takes a lot of chutzpah to blame homeowners for this crisis, given all we know about how the housing crisis developed and all the predatory lenders involved. I blame this crisis on both the Bush administration and the rightwing Republicans in Congress, along with the major players both off and on Wall Street. They have allowed this financial system to extend and develop in all sorts of different directions, to the point where we can now see that is very fragile, very risky, and that it’s built on debt. It’s a gaming system really. It’s almost like a casino. It’s not Las Vegas, but basically it’s nothing but gambling. It has no connection to the real economy for the most part, but we have players on Wall Street and elsewhere who are making tons of money, and they have been doing this now for decades. Now it has reached the point where the system is collapsing. Of course that endangers every person on Main Street. So we are going to have to find some way to get out of this crisis, because we do need a financial system that is stable and working in an orderly fashion. The problem is that when it is in the hands of the financiers and their supporters in Washington, we get in a pile of trouble.
PA: Progressive groups and labor are circulating a letter to Congress in which they describe what is happening on Wall Street as a “banker’s strike.” Have you seen the letter? And what do you think about their description of what is happening?
WEBB: Yes, I saw the letter, and I support the thrust of it and the demands connected to it. I do think we are seeing Wall Street financiers on strike now. They are attempting to run a tough bargain on the American people, and Bush and Paulson are too. They are holding a gun to the head of the American people and to the Congress and saying, “Meet our demands, bail us out, throw nearly a trillion dollars in liquidity into the financial system and into our banks, take responsibility for the things that we did – and if you don’t do all that, we’re going to bring the whole thing down!” This is now a very dangerous moment in the life of our country, because if the financial system did collapse, it would have all kinds of repercussions all over the country, and we don’t want that. On the other hand, we cannot allow Wall Street and the Bush administration to push through a bailout package which meets only their needs and takes them off the hook, and puts all that money back into their bank accounts.
PA: What specific conditions do you think should be imposed on any kind of bailout package coming out of Congress?
WEBB: This package that they are coming up with now, and I suspect that eventually in the next day or two they are going to come to agreement in the Congress and move ahead on it, does have some features to it that are an improvement on what was offered in the first place by Paulson and Bush, but any kind of package that is going to restore the functioning of the economy, that’s the main thing, to restore the functioning of the economy – for that to happen, there has to be a lot more added to it. I think it’s probably not going to be added to this particular bill or package. There will have to be continuing struggles on the part of the people’s movement, the labor-led movement, and their allies in Congress, to address the underlying crisis in what I call the “real” economy. Because if we cannot address the real economy, then we can pump liquidity into the financial system and it won’t help that much.
One thing that has to be addressed is the housing crisis. If we don’t solve that, then I think that will continue to be a drag on the economy. This is what precipitated the crisis, and as the housing crisis spreads and deepens, it continues to bring the economy down. Unemployment is increasing, people are losing their homes, and conditions are generally getting worse. That is what has to be addressed. I think it is one of the core issues. What will the specific demands be? I think one thing that needs to be considered is a moratorium on foreclosures. Another thing that needs to be considered is for homeowners to be forgiven the back debts, so they can negotiate new terms for their mortgages going forward that are reasonable and affordable. No matter what, the desperate plight of homeowners is a big area that has to be addressed by Congress.
Then there is the whole issue of regulation and straight-jacketing the power of Wall Street, the financiers, the investment houses and the banks. That needs to be addressed, because right now, for all practical purposes, there is no regulation.
We have to have a stimulus package negotiated by Congress in order to rev up the whole economy. That would include infrastructure work, green jobs, all the types of things that will put money in the hands of the people who will spend it. At any rate, I think there is a lot of additional work that will have to be done by the people’s movement and Congress in the wake of an eventual agreement on this bailout package. Some of it can be done between now and election day, although I think, realistically, most of it will have to be done after the elections. Hopefully we are going to have a good outcome in November, and that will put us on a new ground to go forward in this country.
PA: What are your thoughts on John McCain's role in this process?
WEBB: McCain’s role in this was a big, big publicity stunt. I think it shows the weaknesses of the McCain-Palin ticket. They aren’t doing well. Their numbers are going down in the polls, and I think they were hoping to exploit this. He said he was going to shut his own campaign down, that it’s not a Republican or Democratic Party issue, it’s an issue for the American people. That’s a thin veneer. I think, in fact, that what he has tried to do is really politicize the issue by turning it into an issue that he can exploit in order to win support among the American people for his effort to become president in November. I think it is backfiring, however. But for McCain, I don’t know if he sees any other path to the White House except by being somehow able to manipulate this very critical situation, a dangerous situation that could affect tens of millions all over the country. He is trying to manipulate this for his own partisan purposes. I think it’s falling flat, but it does show the reckless nature of John McCain and his ultra-right character.
On the regulation issue, of course, he has a very poor track record. His running mate Sarah Palin was asked to name one regulatory measure that John McCain has supported in his 26 years in Congress, and she couldn’t come up with one! She said she’d get back to Katie Couric later. He has a very poor track record. McCain has greased the wheels of the financialization process that has put our country on such a dangerous and unstable economic path. Of course, on taxes he has been nothing but kind to the wealthiest Americans – one of whom is his wife – putting money into their pocketbooks, while turning his back on Main Street. He cuddles up to Wall Street, but he turns his back on Main Street. That has always been his record in Congress.
PA: Turning to the post-election period, how do you think this bailout will affect the ability to win need reforms for health care, education, investments in renewable energy and so on?
WEBB: I believe it will have an effect. It will put some constraints on the new administration and on the movement, although I don’t think these constraints are insurmountable. We are going to have to invest in health care, education and rebuilding our infrastructure. We are going to have to put people back to work, provide extended unemployment benefits and food stamps, and aid to homeowners, all the sorts of things we need to do to stimulate the overall economy and get it going again. But I can just hear it. As soon as Barack Obama is elected president and the Democrats increase their majorities in Congress, I can hear the right wing Republicans in the Senate and House, and their megaphones on the TV and radio airwaves, calling for fiscal integrity and fiscal responsibility – that we can’t do anything now to address the problems of the American people, that we have to be responsible. I can hear that easily.
But I think that with the combination of a new political situation and the continued activities of this labor-led movement, as it works with the progressive forces in the nation’s capitol, we can make some real headway on the really urgent and critical needs that the American people want to see taken care of.
PA: Finally, on the ideological front, are we witnessing the end or near-end of rightwing economic policies and ideas, or is it too early to come to that conclusion?
WEBB: I don’t think we have seen the end of right-wing neoliberal ideas. I do think they have suffered an enormous defeat ideologically and politically. That doesn’t mean that those who advocate such policies are going to simply and voluntarily walk off the political stage. Historically things have never happened like that. They will look for ways to mount a counter-attack. They will look for new openings to move the country back in a right-wing direction. But I think they are going against the tide now. There is a groundswell of anger and a feeling in this country that we are going in the wrong direction (80 percent of the people according to the opinion polls think so). I think people generally do want to go in a new direction that is away from neoliberalism, away from right-wing ideology and practice, and in the direction of really putting people before profits, putting peace before war, and putting people’s needs before corporate and Wall Street needs. I think that’s the general direction that the country wants to go in.
Of course, it has to have leadership, but I think that, given the right kind of outcome in November – and I do think we are going to have a good outcome – that that will be a big factor in helping to move the country in a new, more peaceful, more secure and democratic direction.
