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Wednesday, March 4, 2009

Transcript of "Democracy Now!" interview with Robert Weissman on March 4, 2009

“Sold Out”: New Report Follows Lobbying Money Trail Behind Deregulation that Helped Cause Financial Crisis

In a new report, Robert Weissman, Director of Essential Action and editor of the Multinational Monitor points to twelve deregulatory steps that led to the financial meltdown. It also does an analysis of the amount of money Wall Street poured into Washington in campaign contributions and lobbying over the last ten years. Their answer? A staggering $5.1 billion over the past decade.

Transcript:

AMY GOODMAN: The Obama administration is making a concerted effort to boost confidence in the US economy amidst waves of continued layoff announcements, negative economic data, downward-spiraling markets. On Monday, the Dow Jones Industrial Average dropped below 7,000 for the first time in eleven years. The market has now lost almost a quarter of its value this year and more than half since its high in October 2007.
Speaking to reporters yesterday after meeting with the British Prime Minister Gordon Brown, President Obama said he was sure the US economy would rally back.
PRESIDENT BARACK OBAMA: I’m absolutely confident that credit is going to be flowing again, that businesses are going to start seeing opportunities for investment. They’re going to start hiring again. People are going to be put back to work. What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing.

AMY GOODMAN: The Obama administration officials appeared before Congress Tuesday seeking to reassure lawmakers about the economy. Treasury Secretary Timothy Geithner and Peter Orszag, the director of the Office of Management and Budget, testified before separate House committees that the President’s massive spending bill would benefit working Americans. Meanwhile, Federal Reserve Chair Ben Bernanke testified before the Senate Budget Committee about the potential impacts of stimulus.

While the Obama administration is looking to turn around the economy with its stimulus plan and budget proposal, what about the issue of financial regulation, what some people point to as the fundamental cause of the crisis? A new report points to twelve deregulatory steps that led to the financial meltdown. It also does an analysis of the amount of money Wall Street poured into Washington in campaign contributions and lobbying over the last decade. Their answer? A staggering $5.1 billion over the past decade.

Rob Weissman is the author of the report. It’s called “Sold Out: How Wall Street and Washington Betrayed America.” He is director of Essential Action, editor of the Multinational Monitor, joining us from Washington, D.C.
Good morning, Rob Weissman. Talk about what you think were the steps that brought us here.
ROBERT WEISSMAN: Well, we saw over the last decade and really the last three decades, with both parties in power in Congress and the executive branch, this long series of deregulatory moves. And as you go step-by-step through them, you see that those are the things that really paved the way for the current financial collapse.
Perhaps the signature move was the 1999 repeal of the Glass-Steagall Act, which had prevented co-ownership of commercial banks and securities firms, investment banks. That was precipitated by and directly authorized the creation of Citigroup, which is now sucking so much public taxpayer money and has really been at the cutting edge of driving the financial crisis we’re now in.
You can go forward another year and see that Congress, with the Clinton administration authorization, prohibited the executive branch agencies from regulating financial derivatives, the instruments that no one can really understand or get a handle on but which have multiplied the problem from the housing crash many-fold over. So we now have $600 trillion in financial derivatives being traded around the world, with no one having a handle on what they are, who owes whom, and all of this requiring us to pour tens of billions of more dollars more every day, it seems, into AIG.
You can step forward and look at the failure to enforce rules against predatory lending, beginning with the Clinton administration, but really accelerating in a really terrifying way with the Bush administration, so that there were about three actions taken by federal regulators in the peak period of predatory lending—three—against some of the commercial lenders and mortgage brokers who were undertaking some of the most abusive predatory lending activities. And on and on it goes.
And there was, of course, over the last three decades a real surge in deregulatory ideology. And perhaps the people who were putting this stuff forward believed in it. But it also makes sense to think that, maybe a little bit, they were influenced by the staggering amounts of money that the financial sector was pouring into Washington, as you said, more than $5 billion in campaign contributions and lobbying money. And, you know, they got a good return on investment, and it was good for them while it lasted. It’s turned out to be quite a disaster for them but, more importantly, for the rest of the country and the world.
AMY GOODMAN: Rob Weissman, I want to keep going through these steps and then talk about the money that Wall Street’s poured into Washington. The SEC’s voluntary regulation regime for investment banks?
ROBERT WEISSMAN: Yeah, there have been, for a couple of decades, a rule in place that required the big investment banks to hold onto a certain level of capital, so they couldn’t be—they couldn’t rely on too much borrowed money if they engaged in their speculative activity. In 2004, the SEC repealed that rule at the request of a consortium of the leading investment banks, led at the time by Goldman Sachs and Henry Paulson, soon-to-then-be the Treasury Secretary. And what that rule—what the new rule said was, well, let’s let the investment banks set the standards on their own for how much borrowed money they can use, based on their own internal risk assessment models, which no one could understand and turned out not to do a very good job. As a result, they were much more leveraged, that is to say, they used much more borrowed money, so they could gamble at much higher levels, and they created a much bigger house of cards, which we saw topple starting in 2007.
AMY GOODMAN: Glass-Steagall?
ROBERT WEISSMAN: Sorry?
AMY GOODMAN: Glass-Steagall?
ROBERT WEISSMAN: Glass-Steagall was this Depression-era law from 1933, adopted because of the crisis—in response to the Great Depression and the previous bubble through the 1920s. And it said commercial banks and investment banks, and then later commercial banks and other financial service entities, ought to just be separate entities. Commercial banks have too important a role. They are husbanding depositor money, and they ought not to be engaged in speculative activity. They shouldn’t be using the depositor money for high-risk gambles that could endanger the depositors and the well-being of the financial system.
Under the guise of financial modernization, there was a decade-long effort by the investment banks and the big commercial banks to repeal that law. In 1998, Citibank and Travelers Group, the insurance company, announced that they were going to merge. That was a merger that was illegal under existing law, but they got a two-year exemption under a regulatory loophole. They then proceeded to force the repeal of the law that had prohibited their merger, and then the merger was subsequently consummated. Robert Rubin, who had been the Treasury Secretary, at the time was negotiating a new deal with Citigroup and then went on to be an executive with the now-merged Citigroup, was the central player making sure the Glass-Steagall repeal took place, that Citigroup moved forward, and with all the disastrous effects we are now familiar with.
AMY GOODMAN: Close adviser, of course, to President Obama. And what about Larry Summers and Timothy Geithner in that?
ROBERT WEISSMAN: Well, Geithner didn’t have such a central role, but Summers was really involved in the Clinton administration in a lot of these key decisions. Geithner was in the Clinton administration, more focused on international issues. But Summers, for example, was a very vociferous opponent of regulating financial derivatives. There was an effort within the Clinton administration’s executive branch to impose some really modest standards on financial derivative regulations—on financial derivatives, which at the time were beginning to explode but still weren’t at the level that we’re now familiar with.
Summers, Rubin and Greenspan banded together with Republicans in Congress, led by Phil Gramm, to prevent the efforts within the executive branch to regulate derivatives, and then in 2000, they passed a law—Congress passed a law, which Clinton signed into law, prohibiting the federal government from regulating financial derivatives at all, with the result that not only are they not regulated, not only are they not required to register to show that they serve some social purpose before they’re allowed onto the market, but no one has a sense of who owes what to whom.
In the course of—we’re bailing out AIG, because they have engaged in so many of these—hundreds of billions of dollars worth of these financial derivative arrangements. It’s clear now that AIG itself did not know who they owed—who they were going to owe, who they had entered into all these contracts for. They were engaged in such a wild speculative frenzy that they’d cut a deal with anybody. It turns out that the executives at AIG literally thought they would never have to pay out any money on these whatsoever. So they thought they were being paid to do nothing. Money for nothing, we’ve called it. And that turned out to be wrong. Unfortunately, the money that’s coming is not just coming from the AIG shareholders, but now, to the tune of almost $200 billion, from the US taxpayer.
AMY GOODMAN: I brought up Glass-Steagall again, because, well, I think it was seventy years ago—it was on this date that—or seventy-five years ago—that FDR was inaugurated and gave his “nothing to fear but fear itself " address. Rob Weissman, your current piece that talks about the amount of money that Wall Street poured into Washington—who did it? Over how many years? This number, $5.1 billion.
ROBERT WEISSMAN: Well, what we did is look at the entire financial sector—so it’s the commercial banks, the investment banks, the insurance companies, the real-estate companies, the accounting firms, all of whom are heavily intermingled now, by the way—looked at their campaign contributions over the last decade. That total is more than $1.7 billion. They spent about twice that much, $3.4 billion, on lobbying, with the results that we’re talking about. So, more than $5 billion, and that is a way understatement on what they spent. It doesn’t include the money they’ve poured into state-level activities. It’s a narrowly defined definition of lobbying, only people who are officially registered lobbyists.
We saw that they had 3,000 separate people working as lobbyists for them in 2007. We looked at twenty different top firms in the financial sector. We found 144 who formerly had high-level positions in the US government. I mean, it’s epitomized by people like Rubin and Paulson, who came from Goldman Sachs, went into government—in Rubin’s case, he went back into the private sector—and who were driving policy on behalf of Wall Street and the big financial sector to the massive detriment of the American public and, as we now know, really the entire world.
AMY GOODMAN: What are the recommendations that you make, Rob Weissman?
ROBERT WEISSMAN: Well, the first thing is that all these deregulatory moves ought to be repealed. But beyond that, we think it’s time for a big picture look at this stuff, and we’re worried that, although Wall Street is obviously on its heels right now, they are not—they are not absent from Washington. This lobbying activity is ongoing, including on a variety of small things being debated in Congress today. But in the big picture, we think there has to—we can’t just get mired down in some of these details.
The financial sector itself ought to be much smaller. In the preceding three or four years, the financial sector was taking about a third of all corporate profits in the United States. It was way too big relative to the rest of the economy. It shouldn’t be more than ten percent. So it should be shrunk down.
There is a range of activities that ought to be prohibited altogether. A lot of these exotic financial derivatives, which serve no social purpose, should be just banned. Any new instruments that are put on the market ought to be required to get pre-approval from government regulators, just the way a new pharmaceutical product has to get pre-approval, be shown to be safe and serve some social benefit before it’s allowed on the market.
We ought to erect again regulatory walls and barriers that prohibit institutions from doing different kinds of things. Banks ought not to be engaged in these exotic derivatives. They should not be putting taxpayer-insured money at risk in this kind of stuff. Consumers need to be directly empowered to organize themselves, so that they are a counterbalance to the influence of the commercial financial sector.
And I think we ought to have a financial transactions tax, a speculation tax, so we slow down the level of speculative activity. That kind of tax would be highly progressive, because it’s only rich people who are engaged in mass transactions on Wall Street. It would bring in a lot of money, have major social benefits.
And finally, I think if you look back over what happened in the last four or five years or the last decade, it’s clear that a huge amount of money was made on Wall Street, but the firms themselves are now in complete crisis. They’re needing the taxpayer money. Some of them are going bankrupt. They’re being merged out of existence. So the companies themselves destroyed themselves.
Why did they do that? What were the incentives that led them to take such crazy risks that they actually destroyed themselves? And it’s very hard to avoid looking at the way individual people were compensated. They got massive bonuses, sometimes five, ten, twenty times their regular compensation level, based on what they did in the previous year. So I think we have to have compensation caps, for sure, on executives and others. But even more importantly, the incentive mechanisms can’t be that they get paid on how they did that year, when they can manipulate it or they can benefit from a bubble. It has to be, any compensation incentives that are going to be in the form of bonuses have to be tracked to a very long-term performance by these companies.
AMY GOODMAN: Rob Weissman, President Obama got millions from the finance industry, one of his largest contributors. Do you see this regulation happening? We only have about thirty seconds. Where do you see the pressure come from?
ROBERT WEISSMAN: Well, it’s up for grabs. His advisers, actually, of course, are very terrible on this. But we’ll see. They’re going to have to do something that’s very serious and to restrain the financial sector if they hope to bring the economy out of the problems it’s in. There were some good pieces in the budget. The financial sector is fighting them like crazy right now. For example, they want to eliminate the ability of companies to manipulate their taxes by relying on offshore subsidiaries. The insurance companies are going berserk and lobbying on Capitol Hill to try to stop that. The Obama administration, in this case, is trying to do the right thing.

AMY GOODMAN: Are the companies that are getting bailed out using some of that money to lobby in Washington right now or make campaign contributions?

ROBERT WEISSMAN: Well, they’re not using that money, but what’s the difference? They’re using some other money. So they’re still very engaged. There is an effort, for example, right now to—

AMY GOODMAN: Five seconds.

ROBERT WEISSMAN: —crack down on predatory lending. They are trying very hard to get that language eliminated from the appropriations bill that just passed.

AMY GOODMAN: Rob Weissman, thanks very much for being with us. His report is called “Sold Out: How Wall Street and Washington Betrayed America.”

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Transcript of Democracy Now! Interview with Jeremy Scahill, March 4, 2009

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Transcript of Democracy Now! For March 4, 2009

Friday, February 27, 2009

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Senate Backs D.C. Voting Rights, But Some Local Activists Call For Statehood

The District of Columbia has moved a step closer to getting a vote in the House of Representatives. On Thursday, the Senate voted 61-to-37 to expand the size of the House by two seats, giving Washington, D.C. a single seat and giving Utah a fourth seat. Democracy Now! hosts a debate between D.C. Vote’s Eugene Dewitt Kinlow, Public Affairs Director for DC Vote Coalition, who calls the Senate’s vote as a historic victory, and Anise Jenkins, president of Stand Up! for Democracy in DC, who opposes the bill because it falls short of making Washington, D.C. the nation’s fifty-first state.

Transcript:

AMY GOODMAN: We move now to another debate, a debate that’s taking place right there in Washington, D.C. Juan?

JUAN GONZALEZ: Well, the District of Columbia has moved a step closer to getting a vote in the House of Representatives. On Thursday, the Senate voted 61-to-37 to pass the D.C. House Voting Rights Act. The bill will expand the size of the House by two seats, giving Washington, D.C. a single seat and giving Utah a fourth seat. The House is expected to soon pass the measure, and President Obama has said he will sign it into law.

The Senate approved the bill only after Republicans added an amendment to throw out Washington’s gun control laws, including its ban on semi-automatic weapons.

AMY GOODMAN: We’re joined now by two guests from Washington, D.C. Eugene Dewitt Kinlow is the public affairs director for DC Vote. On Thursday, the group hailed the Senate’s vote as a historic victory. We’re also joined by Anise Jenkins, president of Stand Up! for Democracy in DC. She opposes the bill before Congress. She says it falls far short of making Washington, D.C. the nation’s fifty-first state.

Let’s begin with Eugene Dewitt Kinlow. You are celebrating now with the Senate vote. Explain exactly what you get.

EUGENE DEWITT KINLOW: Well, you know, we’re celebrating with some mixed emotions. One, we are happy that there is a bill that has moved forward in the Senate and that actually passed a committee in the judiciary, the House, just two days in support of D.C. voting rights. We think that the residents of the District of Columbia, a city of nearly 600,000 residents, a city where people fight and die in wars, will finally have a vote and a voice in the people’s House. We are happy that a vote moves us in that direction. We are not as happy about the attachments of the amendments that was sponsored by the gun lobby to diminish our own laws in Washington.

JUAN GONZALEZ: How does removing the ban on guns have anything to do with the bill that was being voted on?

EUGENE DEWITT KINLOW: Well, you know, in the House, there’s probably a germaneness. You know, when you attach amendments, they must be germane to the major bill. That rule does not apply in the Senate. But this was directly an effort by the gun lobby and probably the NRA to relax our gun laws in Washington, D.C. You know, people want to use us as a test case, so to be able—for the gun lobby to say that, “Hey, there’s a city, Washington, D.C, people can walk around with guns, semi-automatic weapons.”

I don’t think it’s a good idea. I think that we have our own elected officials. We have a mayor and a city council that has written and has actually crafted very progressive legislation based on the will of the people. You know, for years in Washington, D.C., we’ve had a progressive gun law that says you could not have a gun. And that’s because that’s what the citizens of the District wanted. Now, for Congress to come in and say, “We will tell you what’s best for you,” when we have our own elected officials, is ludicrous.

AMY GOODMAN: Eleanor Holmes Norton, the delegate from D.C., is supportive of this legislation. Anise Jenkins, you’re not, with Stand Up! for Democracy. Why not?

ANISE JENKINS: The fact that the Senate attached the challenge to our handgun law is a perfect example. This bill for one vote, in exchange for an extra district for Utah, demonstrates what will happen if D.C. does not become a state. We will still be subject to congressional rule. Congress will still be able to overturn our laws. Our budget, our local budget, made of our local money, tax money, will have to go to Congress every year for review. If we don’t have the protection of statehood, full statehood, we will never have the equal rights that other American citizens have. That’s why we oppose the bill.

It hurts to oppose this bill. There’s been a lot of enthusiasm drummed up for this bill. There’s been a lot of money backing this bill to go through. But the bill is weak. The bill is a compromise. Statehood is the answer. Statehood is what will protect us and give us our rights.

JUAN GONZALEZ: And the reasoning for why Utah was included with an extra congressional district in addition to D.C.?

ANISE JENKINS: It was presented to the D.C. residents, who, by the way, voted for statehood in 1982, which has been the only referendum about what form of government we should have—1982 we voted for statehood. It was explained to us that Utah was being included, because Utah was the complete cultural, political opposite of D.C., and it would be easier for D.C. to get a vote if Utah got an extra congressional district, which also, by the way, gives it another electoral vote. In Stand Up! for Democracy’s opinion, this is too much of a compromise.

This was done when the Republicans controlled the Congress. This was done when Bush was president, and he said he would not even sign this bill. We need to switch tracks on this train. This train is out of control. We need to switch tracks and go to statehood. We don’t need Utah to balance us out. We don’t need Utah to cancel out our vote.

EUGENE DEWITT KINLOW: Let me just say that—and this is—

AMY GOODMAN: Eugene Dewitt Kinlow?

EUGENE DEWITT KINLOW: Let me just provide a little background. And Anise did indicate that this is a compromise. Yes, I agree. This is a compromise bill, and that’s what happens on Capitol Hill. Generally, for bills to pass, you need people who are Democratic and Republican to support the legislation. Let me be clear, this legislation that’s proposed is a bipartisan piece of legislation, which is great. We need more bipartisanship on Capitol Hill.

The bill provides for a vote in Washington, D.C., a city that is a majority Democratic city, and also provides for a vote—it doesn’t specifically say Utah, but the assumption is that it will be Utah. Utah, at the last census in 2000, narrowly missed getting another congressional seat. Now, why is this? It’s because in Utah, they have a tradition of, those who are of the Mormon faith go out into the states and do their missionary work. They were not in the states when the census was taken, and thus they were not counted. They went to court, and they lost. The compromise was to provide for a one-way, in one fell swoop—it’s not a perfect match, but it is one way of, one, enfranchising the citizens of the District of Columbia, who need this opportunity to participate in the political process fully, and one, for Utah to be made whole for their—for not having that seat at the last census.

AMY GOODMAN: You also don’t get senators here without statehood.

ANISE JENKINS: That’s absolutely true.

EUGENE DEWITT KINLOW: No, right. And the bill, clearly, in front of us is not about statehood. I think that if we talk about the statehood debate, that—there was an effort about in 1983 that failed. And it failed when there was a—you know, despite having a city that is majority Democratic and that supported President Barack Obama by about 93 percent, it failed in the House and the Senate, by two-to-one.

ANISE JENKINS: I would—

EUGENE DEWITT KINLOW: And a lot of those conditions still exist. Back in ’93, when you had a Democratic House, Senate and White House, those same conditions exist right now. And I would say if we had to put it up for statehood, that the votes do not exist for statehood.

ANISE JENKINS: I would add to the—

JUAN GONZALEZ: Anise Jenkins, I’d like to let you respond, but just to throw in a question, as well, to respond to, as well—the argument can be made that at least Congress, by voting now to grant a member of Congress, has recognized the right of political representation for D.C. and that presumably a greater Democratic majority in the future might be able then to pass, as well, the—adding two senators, as well, to the District.

ANISE JENKINS: If they vote for this bill and the bill says, specifically—there’s efforts to make amendments to this bill to say specifically, and it already implies, that this bill will not let us have senators. The Congress could see this as voting for “Case closed. You have your representative. You have your delegate. Your delegate is now a representative in the House. You will not have any senators.”

The bill even says that if we have a larger population—against the Constitution, which says if your population increases proportionately, your representatives will increase—this bill even cuts that out for D.C. So, if we go from 600,000 to a million, we still do not get two representatives. We’re still limited to two representatives and perhaps no senators. So what would the Congress be saying? We have to be very careful about what we’re putting before Congress. Is it constitutional? Is it what the residents of D.C. want? Is it what the residents of D.C. deserve?

EUGENE DEWITT KINLOW: Yes, yes, yes.

ANISE JENKINS: This bill—let me say one more thing. There has been no effort by DC Vote to go out, after they’ve raised over several million dollars, to go out into the community, hold town hall meetings, to go out and talk to the D.C. residents. This is coming from the top. We want what D.C. residents voted for.

EUGENE DEWITT KINLOW: OK, OK, let me be clear—

AMY GOODMAN: We’re going to have to leave it there—I hate to say it—but we will continue this debate. Anise Jenkins, president of Stand Up! for Democracy in DC, and Eugene Dewitt Kinlow, public affairs director for DC Vote Coalition. Just in terms of populations, to let you know the states all have under 700,000, equivalent populations to D.C., Wyoming, Vermont, North Dakota, Alaska; under a million, South Dakota, Delaware, Montana.

Friday, October 12, 2007

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Transcript of 'Democracy Now!' for October 12, 2007

Friday, August 3, 2007

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Following Bridge Collapse, New Scrutiny for Privatizing U.S. Roads

Transcript:

AMY GOODMAN: In the wake of Wednesday’s fatal bridge collapse over the Mississippi River in Minneapolis, the condition of the nation’s highway system is coming under increased scrutiny. In 1990 the US government rated the Minneapolis Bridge as structurally deficient and possibly in need of replacement. That rating was contained in the Department of Transportation’s National Bridge Inventory database. More than 70,000 bridges across the country have also been rated structurally deficient. The American Society of Civil Engineers estimates it would take nearly $190 billion to fix these bridges over the next two decades.

In Minnesota, many residents have begun questioning the spending priorities of the state and the nation. Nick Coleman of the Star Tribune wrote a column yesterday entitled "Public Anger Will Follow Our Sorrow." He points out the motto of Governor Tim Pawlenty has been “No New Taxes.” Last spring, Pawlenty vetoed a five-cent gas tax increase, the first in twenty years, that would have produced millions of dollars in revenue to help fix roads. Nick Coleman wrote, "At the federal level, the parsimony is worse, and so is the negligence. A trillion spent in Iraq, while schools crumble, there aren't enough cops on the street and bridges decay while our leaders cross their fingers and ignore the rising chances of disaster."

On the national level, the highway trust fund is about to go broke. When President Bush took office the fund had a $23 billion surplus, but it’s expected to be running a deficit by next year, in part because Bush killed an increase in gas taxes two years ago.

The columnist Jim Hightower recently accused the government of deliberately defunding these vital infrastructure projects in an effort to open the door to privatization. Investment firms including Goldman Sachs, the Carlyle Group, Merrill Lynch and Morgan Stanley are forming large funds to purchase publicly owned infrastructure projects.

And the privatization of the nation's roads has already begun. In Indiana, Governor Mitch Daniels has leased the 157-mile Indiana Toll Road to a foreign consortium from Spain and Australia for $3.85 billion over the next seventy-five years. By one calculation, the Toll Road will generate $11 billion over the life of the lease. Indiana's Governor Mitch Daniels has been nicknamed “Mr. Privatize” by some for his willingness to sell off public assets. Before coming to Indiana, Daniels served as the President Bush's White House budget director. And Indiana is not alone. In Illinois, officials signed a ninety-nine-year, $1.8 billion lease to hand over the Chicago Skyway.

To talk more about the privatization of the nation's highways, we’re joined by two reporters from Mothers Jones magazine: James Ridgeway and Daniel Schulman. Earlier this year they co-wrote an article entitled "The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads.”

We welcome you both to Democracy Now! And I want to begin with Daniel Schulman. Why don’t you start off by giving us the background on the privatization -- or the building of US highways. You talk about President Eisenhower.

DANIEL SCHULMAN: Right. Well, he signed into law the Federal Aid Highway Act in 1956, which really brought the federal interstate highway system that we know now, and it was supposed to be free, and it was supposed to be accessible to everyone, and it was supposed to interconnect the communities in this country. It was really one of the major initiatives of his administration.

AMY GOODMAN: And so, what happened from there?

DANIEL SCHULMAN: Well, over time, there hasn’t been very much commitment at the federal or state level to funding infrastructure projects. As you see in Minnesota, people are very afraid to raise the gas tax. They’re afraid that this is going to impact -- I’m talking about elected officials -- this is going to impact their reelection chances. So, over time, it’s just become a lot easier for them to look to get a big upfront payment. They can use that in the interim to pay down debt or, in the case of Indiana, to put towards other infrastructure projects. And down the road, you know, people are going to have to bear the costs of that, because this asset is not going to be under their control anymore.

AMY GOODMAN: Jim Ridgeway, the piece is called “The Highwaymen: Why You [Could Soon] Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads.” Explain who the players are right now. Who’s taking over US highways?

JAMES RIDGEWAY: Well, you know, it’s all in process. I mean, the thing is that the major Wall Street investment companies are trying to link up with various international partners in Australia, in Spain, elsewhere, to essentially buy this sort of decaying -- or infrastructure that is in need of repair. And this is -- you know, it’s appealing, as Dan, I think, mentioned. It’s appealing to the local politicians, because it looks like they’re getting some cash from these guys on Wall Street, and they’re not going to have to raise taxes to fix the roads, and there’s the illusion that sooner or later these roads will get fixed. Now, you know, whether that happens or not is like anybody's guess, because when this actually takes place, when the actual improvement of the roads is done, it's going to be when all these politicians are dead and gone.

AMY GOODMAN: Daniel Schulman, in the piece, you write, “Fifty years to the day after Ike put his pen to the Highway Act, another Republican signed off on another historic highway project. On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers. The last of eight wire transfers had landed in the state's account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (mig) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years.” And it goes on from there.

Talk about the political climate. How did people in Indiana, how did Hoosiers feel about this?

DANIEL SCHULMAN: People were absolutely -- I went to Indiana shortly after that, and people were absolutely outraged. If you travel that toll road even now, I think, and talk to people, they still don't understand why this road that really is part of their, you know, cultural -- it's just like the rest of the roads in this country, we really feel a deep affinity for them -- why this is in the hands of a foreign consortium. And some of it is xenophobia. Some of it, they don't want foreigners running their roads. But some of it is also, they've got -- you know, they’ve asked really hard questions about this. “Are we getting a good deal?” And, you know, frankly, a lot of people are saying no.

You cited the figure before that some say that Indiana -- over the life of this contract, the road could have generated $11 billion. So that's a $7 billion net loss for the taxpayers of Indiana. No, people in Indiana are outraged, and elsewhere, too. You’ve seen in New Jersey recently, there was a backlash against the potential plan to privatize the New Jersey Turnpike, which some said could bring in as much as $20 billion. I was driving that road recently, and there was a big sign, a big billboard, you know, against this privatization plan, and the plan has been pulled at this point.

AMY GOODMAN: You write, “In fact, Daniels argued in a paper he wrote for the Reason Foundation last spring, ‘any businessperson will recognize our decision here as the freeing of trapped value from an underperforming asset, to be redeployed into a better use with higher returns,’” Daniel.

DANIEL SCHULMAN: Yeah, well, that's kind of the euphemisms that they’re using right now, but there are other ways to do this. If a state wanted to -- if the state needed to generate more money, they could try to refinance the road, and they could get their $3.8 billion, put it into infrastructure, and still keep control of the road. So, yes, you'll hear Daniels, and you’ll hear the investment bankers say it. I just don’t know if it’s completely true.

AMY GOODMAN: We're going to continue our discussion and talk about what Minneapolis has to do with this with Jim Ridgeway, Washington bureau chief for Mother Jones, and Daniel Schulman, associate editor of Mother Jones. And then we're going to go on to talk about Oklahoma City with Jim Ridgeway, and why talk about that more than a decade later? Stay with us.

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AMY GOODMAN: We're talking to Jim Ridgeway and Daniel Schulman. They have written the piece for Mother Jones magazine called “The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads.”

I want to take this back to Minneapolis and the horror that they’ve experienced now after the Interstate 35W bridge collapsed on Wednesday evening. Nick Coleman, in this very moving piece, "Public Anger Will Follow Our Sorrow," says, “Minneapolis suffered a perfect storm of nightmares Wednesday evening, as anyone who couldn't sleep [last night can] tell you. Including the parents who clench their jaws and tighten their hands on the wheel every time they drive a carload of strapped-in kids across a steep chasm or a rushing river. Don't panic, you tell yourself. The people in charge of this know what they are doing. They make sure that the bridges stay standing. And if there were a problem, they would tell us. Wouldn't they?

“What if they didn't?”

He goes on to write, “The death bridge was ‘structurally deficient,’ we now learn, and had a rating of just 50 percent, the threshold for replacement. But no one appears to have erred on the side of public safety. The errors were all the other way.

“Would you drive your kids or let your spouse drive over a bridge that had a sign saying, ‘CAUTION: Fifty-Percent Bridge Ahead’?”

Jim Ridgeway, can you put what happened in Minneapolis, as they’re still trying to dredge the bodies out, into context of this larger story, the larger story of highway and infrastructure privatization?

JAMES RIDGEWAY: Well, yeah. It's absolutely horrible. I mean, what's going on here is this horrible disaster is going to be used as yet one more reason to privatize all this stuff. They'll say, “Well, you know, we didn't have the money. These Wall Street guys will give us some money, and we'll fix this decaying infrastructure.”

But, look, what's going on in Minneapolis is exactly the same thing that happened with Katrina. What happened in Katrina is that after this storm, Bush goes down there and does his meet-and-greet, and then, under a plan devised by Rove, they start blaming it on the states.

So, what happens here in Minneapolis yesterday? You know, we find out that this bridge was basically marked as deficient years ago, beginning seventeen years ago. This is a bridge that’s under the control -- a highway system that’s under control of the federal government, the Department of Transportation. This is a navigable river, interstate river, which is dominated by the Army Corps of Engineers. It is policed and regulated by the US Coast Guard. And what happens? The President's press secretary gets up, and he says, “Well, we told the state what to do, and it's their problem.” That's exactly what they did in New Orleans. That’s exactly the problem here.

These federal officials get away with murder, and it remains to be seen whether the members of Congress -- and I'm talking about the Democratic members of Congress -- have the guts, you know, to call the Secretary of Transportation and the other appropriate officials before committees in Congress and in a public session ask them what in the world they were doing.

AMY GOODMAN: How much difference, Daniel Schulman, how much effect do you think this bridge collapse in Minneapolis is going to have on this trend right now? Talk about the major forces that could be held to account around the country.

DANIEL SCHULMAN: It's very hard to say what type of impact this is going to have on this trend, but it's definitely picking up pace. And what I think this horrible accident did is it really highlights the fact that the nation's transportation infrastructure is crumbling, and something needs to be done. And as Jim says, hopefully this forces members of Congress to take a better look at this, because right now -- you mentioned the federal highway trust fund earlier. It's going to run out of money in 2009, and not very much is being done about that. And if it does run out of money, then you're going to see this privatization trend pick up, because we're going to no longer be able to afford to keep up these interstate highways, and they will have to go into the hands of multinationals and investment banks.

AMY GOODMAN: Finally, Jim, before we go on to your story on Oklahoma City, what does the infrastructure of this country have to do with war, have to do with the war in Iraq?

JAMES RIDGEWAY: Well, it has everything to do with the war in Iraq. I mean, first of all, I mean, we're spending all the money in Iraq we ought to be spending on infrastructure. This infrastructure has been going down the slope since 1970s. There’s nothing new about any of this. We've been told since the 1970s -- it’s been on and on and on -- and no one's done anything about it or have done very little about it.

The second thing is, that Eisenhower knew, that the infrastructure of the United States is absolutely crucial if you’re going to defend yourself in a war. And we’re supposedly in this war on terrorism. You know, I mean, the terrorists could attack any number of these, you know, susceptible targets, which are scattered around the infrastructure, on railways, bridges, tunnels, etc. So it's in our own, you know, very best interest to make sure that this infrastructure of ours, which is a public endeavor, after all -- it’s not an endeavor of Wall Street, it’s something that the citizenry owns -- that this is, you know, kept up to snuff.

AMY GOODMAN: Well, I want to thank Daniel Schulman for joining us, editor for Mother Jones, D.C. bureau, co-wrote the article with Jim Ridgeway of “The Highwaymen: Why You Could Soon Be Paying Wall Street Investors, Australian Bankers and Spanish Builders for the Privilege of Driving on American Roads.”