Stock prices are continuing to fall sharply across the globe today, following the collapse of Lehman Brothers and Merrill Lynch, two of the world’s largest investment banks. On Monday, the Dow Jones index fell 504 points. It was the Dow’s sixth-largest point drop ever. We speak with the Rev. Jesse Jackson, who heads up the Wall Street Project, about the crisis, as well as about Barack Obama’s historic Democratic presidential nomination and his pledge to escalate the war in Afghanistan. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: In the worst loss in seven years, the Dow Jones fell 500 points Monday evening after a weekend of dramatic upheavals on Wall Street. Bank of America took over the brokerage firm Merrill Lynch, and investment bank Lehman Brothers declared bankruptcy after Federal Reserve and Treasury officials refused to bail them out.
Meanwhile, Federal Reserve officials are working with the two remaining investment banks on Wall Street — Goldman Sachs and JPMorgan Chase — to put together a $75 billion rescue package for the flailing insurance giant American International Group.
Treasury Secretary Henry Paulson described the cause of the crisis at a news conference on Monday.
HENRY PAULSON: As I’ve long said, the housing correction is at the root of the challenges facing our markets and our financial institutions. I believe that we’ve taken very important steps with respect to Fannie Mae and Freddie Mac, and they’re amongst the most important actions we can take to work through this turmoil. There are going to be some real rough spots along the road, but I believe we’re making progress. And when I look at the way the markets are performing today, I think it’s a testament to the way the financial industry has come together, because they’re dealing with an extraordinary set of circumstances, and they’re dealing in a way we should all be proud of.
AMY GOODMAN: President Bush tried to reassure investors while speaking to reporters at the White House Monday.
PRESIDENT GEORGE W. BUSH: The policymakers will focus on the health of the financial system as a whole. In the short run, adjustments in the financial markets can be painful, both for the people concerned about their investments and for the employees of the affected firms. In the long run, I’m confident that our capital markets are flexible and resilient and can deal with these adjustments.
AMY GOODMAN: I’m joined right now in our firehouse studio by the Reverend Jesse Jackson, civil rights leader, founder of Rainbow/PUSH Coalition, organized a march on Wall Street, a number of them over the years, as part of the Wall Street Project, a march calling for federal intervention to protect homeowners from foreclosures.
Welcome to Democracy Now!
REV. JESSE JACKSON: It is a firehouse today on the Wall Street.
AMY GOODMAN: So, can you talk, Reverend Jackson, about the crisis?
REV. JESSE JACKSON: Well, first of all, the events that led up to the crisis were all legal, which means that law was perverted, where you globalize capital and don’t globalize workers’ rights, human rights, women’s rights. You have an imbalance at some point. That structural default just simply comes apart.
Second, it’s the result of unregulated banks without transparency, in some instances without integrity, and unenforced law, unenforced lending laws, which led to the housing crisis, as well as risky investments without any monitoring. So we see the logical conclusion of the lack of check and balance, the lack of transparency.
Now the government must intervene to protect the workers, the consumers and the economy itself, much like Roosevelt had to do.
AMY GOODMAN: What do you think of the Lehman Brothers going bankrupt, that the federal government will not bail them out?
REV. JESSE JACKSON: Well, it has to play some role, because it’s not just Lehman Brothers; it’s workers, it’s homeowners, it’s urban tax bases, it’s education, it’s healthcare, it’s cars. The whole economy seems to be unraveling. And so, the government cannot stand idly by and talk about a free market that’s not free or a balanced market that is not balanced. And so, it’s — it is Lehman Brothers, and it is Merrill Lynch, and it is AIG. I mean, it’s an unraveling process, requires real strong presidential leadership.
AMY GOODMAN: I wanted to read you a bit of Joseph Stiglitz, the Nobel Prize-winning economist, who wrote a piece called "The Fruit of Hypocrisy” in The Guardian. He said, “Houses of cards, chickens coming home to roost — pick your cliche. The new low in the financial crisis, which has prompted comparisons with the 1929 [Wall Street] crash, is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers.”
He said, “We had become accustomed to the hypocrisy. The banks reject any suggestion they should face regulation, rebuff any move towards anti-trust measures — yet when trouble strikes, all of a sudden they demand state intervention: they must be bailed out; they are too big, too important to be allowed to fail.”
REV. JESSE JACKSON: Well, in a bailout must mean — with it must be incentives to reinvest and to restructure. You know, it’s interesting that — you look at the — in the Wall Street collapse and government policy that led to it, there must be corrective measures. That’s part of what, when Roosevelt built in corrective measures after the Great Crash of the Great Depression, those corrective measures have large been ignored, undermined or circumvented.
And so, now it’s time for a kind of radical restructuring of banking, banking laws, a restructuring of manufacturing laws, because the — all the imbalance, which is about exploitation, where plants close, jobs leave, profits go up, wages go down — you go from GM, largest company in America, workers making $17 an hour twenty years ago with defined benefits, now to Wal-Mart, the largest employer, workers making $7 an hour without health insurance. That whole pattern of exploitation has now run its course. Therefore, we need some radical restructuring measures. And it’s not just about Lehman Brothers or Merrill Lynch; it’s about the workers, the consumers and the rippling effects upon the entire economy.
AMY GOODMAN: We’re talking to the Reverend Jesse Jackson. We’ll be back with him in a minute, and then Tariq Ali. He’s written a new book, The Duel: Pakistan on the Flight Path of American Power. Stay with us.
AMY GOODMAN: Our guest is Reverend Jesse Jackson, civil rights leader, founder of Rainbow/PUSH Coalition. What does this have to do with the house foreclosures?
REV. JESSE JACKSON: Well, first of all, let me say this to you. Can you imagine now the press having to ask VP nominee Sarah Palin her opinion of Lehman Brothers and Merrill Lynch and the meltdown, as if that is an off-limits question, (a)? (b), on the home foreclosures, what we found was that these banks, without regulations and without transparency, were able to do subprime targeting. Once they stopped redlining with the use of [inaudible] community reinvestment, they began to target people, in some instances by race and sometimes by class, with long-term low-interest loans, sometimes people not qualified to have them, sometimes people lied to and bamboozled.
We know that about 22 percent of those subprimes went to African Americans. About 22 percent went to Latinos. But the water came in the ship on the black and brown side. The water did not stay; the water kept coming across. So now what you have is whole communities without their — when one house goes, suddenly the houses lose value. And so, the value is leaving, tax base eroding, schools are suffering, all because unregulated banking up top and lack of fair lending laws. If you were to enforce fair lending laws at the base, the water — you know, the sink — the ship did not sink because chairs blew off the deck; water came in the bottom. And water came in the bottom, because the poor people and middle-class people in fact were taken advantage of and slaughtered.
AMY GOODMAN: I want to ask you about this news headline we read about the Michigan Messenger reporting the chair of the Republican Party in Macomb County in Michigan planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of an effort to challenge some voters Election Day, planning to challenge voters who have defaulted on their house payments — of course, disproportionately African American, overwhelmingly Democratic voters. In Michigan, more than 60 percent of all subprime loans were made to African Americans.
REV. JESSE JACKSON: Well, they want to try to do what has worked. And the targeting worked in Florida, so the winner lost and the loser won in Florida. Ms. Harris literally took the prison rolls and used them to manipulate names off the rolls in Florida and would not allow students who had the rights and the residency to vote where they went to school, so they stole an election.
Then in Ohio in 2004, you had the owner of Diebold declaring the winner would be Bush, and the Secretary of State being his co-chair, “We will deliver our state.” So you had long lines of wet people, because it was raining all day, and dry machines. I mean, this kind of dishonesty undermines the integrity of the democratic process.
In the big game, if you will, for the sports fan, between Dallas and Philadelphia last night, there’s a winner and a loser, but there was no rancor after the game, and that’s because, Ms. Goodman, the playing field was even. The rules are public, and the goals are clear; you could live with the outcome. There’s now a scheme to set more dishonesty, and so Democrats and others who care about democracy must at least be alert that there are forces trying to use electronic voting and other such schemes to deny the count of one person, one vote.
AMY GOODMAN: Senator McCain saying the economy is healthy. His adviser, [Donald] Luskin, writes a piece in the Washington Post over the weekend. It’s called "A Nation of Exaggerators: Quit Doling Out that Bad-Economy Line."
REV. JESSE JACKSON: Well, it’s sick and getting sicker. You know, an article written not long ago about what happened really at Bear Stearns is that there’s such a — it’s so paper-thin, until even the rumor, the suggestion, can undermine this house of cards, and we see evidence of it taking place. And so, until you balance off the playing field — that’s why globalization of capital, where you really close plants, erode tax base, have incentives to close plants, as opposed to save plants and reinvest in America, where you move to a cheaper, more exploitable markets, where you have less regulation on the environment, workers’ rights, women’s rights, children’s rights — the logical conclusion of that imbalance is what we have today, which is a house built on sand, and the sand is — the wind is blowing and the sand is eroding.
AMY GOODMAN: Let me ask you about Senator Obama’s Invesco speech. Were you there at the stadium? 84,000 people —-
REV. JESSE JACKSON: Indeed, I was.
AMY GOODMAN: —- in Denver. Your thoughts?
REV. JESSE JACKSON: Well, I was very impressed. I must admit that I had kind of one eye on him, and one eye was tearing. I kind of promised to not cry that night, because my mind was on August 28, 1955 — Emmett Till was lynched; August 28, 1963, Dr. King speaking about ending apartheid while living under apartheid Southern segregation. Here, we’re in 2008: what a magnificent journey from Mississippi to Memphis to Washington to Denver. So I thought about the martyrs, the murdered, the marchers who made that day possible.
In some sense, Barack really is the — running the last lap of a fifty-four-year marathon, from ruling race and gender supremacy illegal in 1954, to 1965, the Voting Rights Act, and then modifying it so as to lower the threshold and have proportionality. He’s running like any great, strong finisher a great, strong lap. But fifty-four years of struggle has led to this conclusion, and my heart rejoices at his success. And I think that the combination of Barack and Joe Biden is the best America has to offer, and I think it’s a good offering.
AMY GOODMAN: Well, let me ask you about one of the issues that Senator Obama addressed during that speech. Democracy Now! correspondent Jeremy Scahill, I think, caught up with you at the Invesco Stadium in Denver just after Senator Obama’s acceptance speech.
JEREMY SCAHILL: We heard Barack Obama invoke Martin Luther King’s name tonight in a speech where he also called for an escalation of the war in Afghanistan. Do you see a contradiction?
REV. JESSE JACKSON: No, the issue in Afghanistan is to stop war from spreading.
JEREMY SCAHILL: But Dr. King was a pacifist.
UNIDENTIFIED: Hey, how are you, Reverend? Good to see you, sir.
REV. JESSE JACKSON: Dr. King said he thought that stopping Hitler’s reign was worth the risk. He would say on more than one occasion, while he was a pacifist, he would have joined — he would have joined those theologians that sought to overthrow Hitler. So, he was not naive about war; he just thought we should not engage in unnecessary wars. And Iraq was an unnecessary war. Stopping the Taliban is quite necessary. Stopping nuclear proliferation in Pakistan is quite necessary. So, you kind of have to have a blend, I think, of tough mind and tender heart.
AMY GOODMAN: The next morning after the speech, we had Professor Michael Eric Dyson in, and we asked him about Senator Obama’s call for expanding the war in Afghanistan.
MICHAEL ERIC DYSON: The escalation in Afghanistan, that Dr. King would have supported that? Now, there’s a way to say that you could support that in this day and age. I don’t know if Dr. King would have supported the escalation in Afghanistan, because Martin Luther King, Jr., after all, is a moral leader and a political figure, insofar as he’s dealing with the distribution of resources. He’s not a politician. So I think Martin Luther King, Jr. would have been a handful for any president now, including Barack Obama. It would have been interesting.
And I, obviously, as a surrogate of Senator Obama and have supported him from the very beginning, because I’ve known him for a number of years, but to contend that Martin Luther King, Jr. would support the intensification in Afghanistan would be problematic. I think that Mr. Obama, himself, said, when asked the question, you know, during the South Carolina debate, “Tell us why Martin Luther King, Jr. would support you,” he said, “He wouldn’t. He wouldn’t support any presidential candidate. He would get America as a public to hold me accountable, because change happens from the bottom up, not the top down.”
AMY GOODMAN: That’s Professor Michael Eric Dyson. Both of you are supporters of Barack Obama. But your thoughts?
REV. JESSE JACKSON: Well, you know, in the Civil War to save the Union, to end slavery, Dr. King would have been with the Union; he wouldn’t have been in some neutral zone. In the war to end Hitler’s reign, I heard him say on more than one occasion, while he was against wars, that those theologians, Bonhoeffer and the others of them, who organized to overthrow Hitler, he would have joined that. He saw Hitler as consummate evil in the world. So he was — while he was a pacifist, always seeking reconciliation and seeking the live option out, he was not naive about war.
My concern here, as we try to reinvent Dr. King, as it were, is that, first of all, we went into Iraq unnecessarily and really unprovoked. But in the Afghanistan, the war shifting there, now you have the Taliban there, and al-Qaeda is there, and the impact upon Pakistan, which has nuclear weapons. We must have a strong position on the negotiation from strength and peace given very live options.
AMY GOODMAN: But do you think intensification of war is the answer, or diplomacy, support — shoring up the people of Afghanistan?
REV. JESSE JACKSON: Well, diplomacy — I mean, actually, Barack has been very strong on the issue of aggressive diplomacy. On the other hand, if al-Qaeda and Taliban, those forces, keep coming, you cannot sit idly by as they keep killing people and keep expanding the war.
AMY GOODMAN: But with this intensification, just over the last few weeks, the US-NATO bombings, the most recent controversial killing of ninety people, perhaps sixty of them children, and we’re seeing this increasing with this intensification.
REV. JESSE JACKSON: That is problematic, and going into parts of Pakistan is problematic. And obviously, that spread is not a good thing. It’s going to take some delicate use of strong diplomacy and military security, because the forces we are fighting seem to be playing by a very different set of rules. And that’s why, in these wars, you need allies. Bush gave us in Iraq an onion-thin layer of a coalition. And when the going got thick, they pull out; we’re left there by ourselves. The value, really, of having a coalition of nations together against the spread of terrorism and, in some sense, fighting terrorism not just with bombs, but with bread and medicine and healthcare and education and jobs, becomes our ultimate weapon, is to make people more secure, not make people extinguished.
AMY GOODMAN: I want to talk about the issue of race. There was a piece posted on Alternet by Adele Stan, “Christian Right Voter Summit Sells Racist ‘Obama Waffles.’” “At the annual Washington gathering of the Christian right sponsored by the political arm of the Family Research Council, the Republican Party’s top emissaries have come in past years to bow before some 2000 right-wing foot-soldiers and the leaders who command them. However, this year’s Value Voter Summit, a bit light on GOP dignitaries, made less news in its speaker line-up than it did for the sale of a particular brand of breakfast food: Obama Waffles.
“In the far corner of the exhibit hall at the Values Voter Summit two gonzo entrepreneurs hawked a product they described as ‘political satire’: a box of waffle mix emblazoned with a cartoon image of a bug-eyed, toothy, dark-lipped Barack Obama eyeing a plate of waffles. A pat of butter on the waffles is stamped ‘2008’. On the top flap, the Obama carton appears in a turban, next to an arrow printed with the text: ‘Point box toward Mecca for tastier waffles.’ The box of mix is a crude send-up of Aunt Jemima’s Pancake Mix, which once featured stereotyped image of a round-faced, turbaned black woman as its trademark.”
REV. JESSE JACKSON: You know, that’s a takeoff on Uncle Ben’s rice and Aunt Jemima and all of those stereotypes. But more Americans are becoming more mature in the course of race and gender. And I looked back this year, and I saw Barack in Mississippi and whites coming to Jackson State to vote for him, and men voting for Hillary. Clearly, they had become the conduits of which a new and more mature America is speaking. I mean, this is the state where Emmett Till was lynched; Schwerner, Goodman and Chaney were killed; Medgar Evers was killed. This year, as people sought to vote, there was no terrorism to resist to voting. So, in our growth, we hope that these kind of forces will be marginalized.
And I say that you fight this, not with counterattacking, but with bold leadership. For example, while they’re dealing with waffle — Barack waffle pancakes, I say have a press conference in front of Lehman Brothers. Make that the agenda. I say go to a coal mine where people are dying, because mines were not safe and people lost their lives. In Appalachia, every six hours a coal miner dies from black lung disease today. I mean, take the agenda to urban America, where a plant is closed, jobs left, tax base eroded, school closed, has high crime. I mean, you only fight the swift-boat schemers, I think, with a bold counterattack on issues that people cannot avoid.
AMY GOODMAN: Now, Senator Obama has raised as much money as Senator McCain from Wall Street.
REV. JESSE JACKSON: Yes, but he is facing an interesting cultural phenomenon in Governor Sarah Palin. Here’s a case where you have some women, where Roe v. Wade has been a deal breaker, they’re going to vote for her anyhow. You have some labor, where NLRB and the right to organize has been the deal breaker, they’re going to vote for him. And you have a case where most tourists have traveled more of the world than she has, and yet some people prop her up as a foreign policy expert. And they will think today to ask her about Afghanistan or Pakistan or Lehman Brothers is like off-limits. That’s stretching it. I think at some point the air will come out of this balloon, because people must know it’s not in our national interest to have such lack of understanding in high places.
AMY GOODMAN: Were you surprised by the Sarah Palin pick?
REV. JESSE JACKSON: I was surprised at first, and then I stepped back and began to watch the calculation. And the calculation was a real appeal to the women and about a 20 percent shift. So at the next end, it worked for many women, though obviously not all women. It was a calculation where you chose culture over issues of substance that matter. And Biden is less able to attack her frontally, which takes away some of his strength, so to speak. And she has kind of, quote-unquote, "rock star" quality. So she draws a crowd, and Barack draws a crowd, and McCain draws a little crowd, and Biden draws a little crowd. So you end up with Barack challenging her, in some measure, which, for them, is a scheme that works for them.
AMY GOODMAN: But, I mean, that’s the important point, about a scheme that works. For Republicans, when they’re in trouble, they appeal to their base. The issue of Sarah Palin appealing to Hillary delegates is probably not going to be the case. But what it does do, in standing there at the Republican convention in the convention hall when Sarah Palin spoke, I mean, she just galvanizes the base. And that’s what the Republicans do so well.
On the other hand, with Barack Obama, seeing him move more to the right on issues, everything from an issue he felt strongly about, FISA, the telecoms spying on American citizens, saying he’d filibuster and then ending up supporting retroactive immunity; the escalation of war in Afghanistan — what he does, what John Kerry did before him, what many criticized him for, is moving away from the base. But then they lose the galvanizing effect of people who know they can vote their values and have a candidate who represents them.
REV. JESSE JACKSON: Well, any such shift jeopardizes the base. You know, if you have the bigger tent —- and that bigger tent for me is the kind of audacity of rules about saying I have a New Deal for you, because even the Republican base wants jobs, even they want healthcare, even they want affordable education, even they want jobs to stop leaving and guns and drugs to stop coming. So I think you expand the tent and then use all of it, not just be, in some sense, limited.
AMY GOODMAN: Back to that question of Obama raising as much money as McCain from Wall Street.
REV. JESSE JACKSON: Well, that means that many Americans now know that through internet that they can make a contribution. And many relatively small contributions make for a big impact. And if those people who wear Obama -—
AMY GOODMAN: But I’m talking Wall Street. Yes, Obama raises a tremendous amount of money, small contributions from people all over the country —-
REV. JESSE JACKSON: Indeed.
AMY GOODMAN: —- but also raises a tremendous amount of money, like McCain, from Wall Street.
REV. JESSE JACKSON: And they certainly raise money from Wall Street, but the Wall Street base is collapsing. And the point is that he has, you know, the right to raise money from all these sources in a very legal way. But I want to judge him often by his vision and his policy priorities, in contrast to the McCain-Palin sort of option that we have before us. And I think that he has done a magnificent job of trying to balance and mend together a rather fragile coalition of women and workers and minority ethnics into a coalition. I thought we came out of Denver with a momentum I feel will expand after these debates. My agenda today is that there’s too much talk about middle class, not enough talk about poverty. Poverty, those —-
AMY GOODMAN: John Edwards’s message, as well.
REV. JESSE JACKSON: In the real sense, I was in Ohio last week campaigning. 13 percent of all Ohioans are in poverty. Twenty-five of the poorest counties in America are in Appalachia; thirty-three of them are in Ohio. 500,000 children need free food there, by the way, which means that their families are below the poverty level. A half of all children in that state are born needing WIC or nutritional subsistence. Then you have -— so you have the working poor, you have the unemployed poor, you have the recent poor, who have lost their house, lost their job, and now they are poor and don’t know which way to go. You have poor children and poor veterans.
So we must again, as Roosevelt embraced the poor, as well as to make them middle class, as Johnson embraced what they — war on poverty and a new society, great society, we must again not allow that body — because it also shows that 66 percent who make above $25,000 voted, and 31 percent of those who made less than $25,000 don’t vote, so the poorer people are, the less interested they are and the more cynical they are about politics. And so, Democrats have every right to argue for poor people, as well as working poor and working middle-class people.
AMY GOODMAN: Do you think Obama is focusing enough on the poor?
REV. JESSE JACKSON: Well, I think it becomes our job to make it more and more of an issue. He will make concessions based on this position. I found, in knowing him across the years, that Barack is smart, he is sensitive, he is a constitutional lawyer, he is pro-civil rights, he’s pro-workers’ rights. And, of course, now he is expanding his vision, his view. I think that in the inner circle, Barack is — Biden is having some impact upon him. But given the growth that he has gone through and the transformation the nation is going through, Barack and Biden will make America a great presidential team.
AMY GOODMAN: Well, on that note, thank you very much, Reverend Jesse Jackson, for joining us.