Could the United States face another economic collapse? Writer and broadcaster Thom Hartmann looks back at past financial crises and comes to a startling conclusion. "As long as you don’t look too closely at our nation, things seem under control — the United States looks whole … but when you go around to the 'dark back side' of the nation, you see the shocking truth. There you see a nation whose core fundamentals have been hollowed out," writes Hartmann in his new book, "The Crash of 2016: The Plot to Destroy America — And What We Can Do to Stop It."
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: A new analysis by the Associated Press finds that budget cuts imposed this year under sequestration promise to to be far more painful in 2014. Spending is already frozen at 2013 sequestration levels, and the operating budgets of federal agencies could shrink by billions more. The cuts now in place will remain in effect for the next eight years unless Congress acts to change them. Federal funding for food stamps alone could face a nearly $10 billion reduction over the next decade as part of a compromise bill to break a House-Senate deadlock on spending.
Meanwhile, a new report by the Center on Budget and Policy Priorities finds the cuts outlined in the House Republicans’ version of the bill would disqualify some 170,000 U.S. military veterans from the Supplemental Nutrition Assistance Program, known as SNAP, which provides food aid to one-in-seven Americans. All of this follows the so-called "Great Recession," which began in 2007 and is the longest, deepest economic downturn since the Great Depression of the ’30s. Meanwhile, income inequality is at levels not seen since just before the 1929 Wall Street crash.
Well, our next guest argues in his new book that the country’s past financial crashes—in 1770, in 1856, in 1929—offer valuable insight into how the wealthy have hijacked the government’s response to the most recent crash. Thom Hartmann is the author of The Crash of 2016: The Plot to Destroy America—and What We Can Do to Stop It. He’s written more than two dozen best-selling books. He’s the host of the nationally syndicated show, The Thom Hartmann Program.
We welcome you to Democracy Now!, Thom.
THOM HARTMANN: Thank you.
AMY GOODMAN: And congratulations on the book today. So, the title is The Crash of 2016. Why 2016?
THOM HARTMANN: Well, we’re actually in this crash. It really started in 2006 when the housing market started falling apart, just like in 1927 when the housing market fell apart. And that crash lasted for quite some time, as Hoover did nothing. Now we have a situation where it’s not just do nothing. Obama was successful in the first few months of his administration at putting enough of a band-aid on it that they’re holding it back with baling wire and bubble gum. But Bush had hoped—he saw this coming. The Bush administration had hoped that they could wait until November of 2008, so it would be after the elections, so it wouldn’t hurt the Republican candidates. He was unsuccessful. The Obama administration is now—because they’re not doing the real structural change necessary, they’re hoping they can push it off to 2016. And that’s why we chose that date. There’s an enormous amount of effort in our government and in the Fed to try to hold this off until after the elections of 2016. Whether they’re going to be successful or not, I don’t know. It literally could happen next week.
AMY GOODMAN: What’s the royalist conspiracy?
THOM HARTMANN: We are seeing a repeat of what we saw in the 1920s, what we saw in the 1850s, what we saw in the 1760s and 1770s, which is, basically, very wealthy, very powerful interests rising up and—you know, they’re anti—fundamentally anti-democratic. They’re trying to create an oligarchic form of government, and in many cases succeeding. It’s the war of the rich against the poor and the working—the working people, the middle class, in short summary.
AMY GOODMAN: Name names.
THOM HARTMANN: Well, in this generation, you know, we see the Kochs and the Adelsons, and they’re the more visible ones. There are many more who are far less visible. You have—last year on Wall Street alone, you had 10 people who took over $2 billion in income. You’ve got—you know, the president of UnitedHealthcare has taken over a billion dollars in income, Stephen Hemsley. The guy before him, Bill McGuire, took over a billion-and-a-half dollars in income. There’s—there are a number of people, since the rules got changed during the Reagan administration. It was a real—a genuine revolution that set this up, and then the big changes at the end of the Clinton administration that Phil Gramm pushed through, the Gramm-Leach-Bliley and the Commodity Futures Modernization Act. Since then, these people have basically been unleashed. I mean, in the '20s it was the DuPonts and the Morgans and the Rockefellers, and now it's this new bunch. But it’s always the same group.
AMY GOODMAN: And how did they gain by the recession?
THOM HARTMANN: Well, the—some of the biggest fortunes in America over the last century were made during the last Great Depression. If you’re cash rich and everybody is desperately selling everything they have for almost nothing, because they—you know, they’re facing tax liens and they’re going out of business and things, it’s an enormous opportunity to get even richer. So, that’s—they’re benefiting—they are and will benefit from [inaudible].
AMY GOODMAN: In your intro, you’ve got several interesting stories, like about Joe Stack.
THOM HARTMANN: Yeah. Joe Stack flew—infamously or famously, I suppose—his plane into the IRS—into an IRS building and killed an IRS worker. He was a small businessperson who just got basically eaten by the recession. And we describe him as America’s first suicide bomber. I think that Joe Stack, on the one hand, the Occupy movement, and in some ways the tea party movement, at least at the grassroots where people don’t realize who’s pulling the strings, are all signs of this growing populist rage of a nation that is pregnant with, to paraphrase Jefferson, revolution—I’m not talking violent revolution; as I said, the Reagan revolution was a revolution, the FDR revolution, you know—that there is so much pressure right now to—you know, for something to happen. And we’re seeing this. We’re seeing this in the rise of suicides all across the United States. We’re seeing it in the rise of homelessness.
In 1920—in 1932, when Franklin Roosevelt came into office, the White House was occupied. There was an Occupy movement then; it was called the Bonus Army. And literally, from the edge of the White House all the way down to the Potomac River was a sea of people. FDR confronted this enormous occupation. It was the consequence, of course, of three years of the crash not being addressed. I would guess, had he not been able to get this very small stimulus, that stopped us from losing 700,000 jobs a month and took us to kind of a flat level—flat painful, but flat—that there would—you know, that the Occupy movement would have been 10 times larger now, and we’d be looking at something like that.
AMY GOODMAN: Let’s go back to FDR, his inaugural address in 1933.
THOM HARTMANN: Yes.
PRESIDENT FRANKLIN DELANO ROOSEVELT: Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our great natural resources.
AMY GOODMAN: That was President Franklin Delano Roosevelt, his inaugural address in 1933. You say President Obama is missing the FDR moment.
THOM HARTMANN: He missed it. I mean, he had—he had that during the first few months of his presidency. And before Scott Brown was put in in the Senate, he had a—I don’t know, I think it was about 13 weeks with a filibuster-proof Senate, and had an opportunity to do these things. But basic—in all probability, he got the same speech Bill Clinton got from Rubin and Summers—or Rubin and Greenspan, rather, when he—when he was installed after running on his "New Covenant" speech, which was a very FDR speech, and then governing as a—as basically an Eisenhower Republican.
The—on the one hand, it’s fairly easy to blame Obama for that. On the other hand, I don’t think that any president in a long, long time has faced such an implacable wall of opposition. And now, because of Citizens United, Buckley v. Valeo, First National Bank, because of these Supreme Court decisions, these politicians on the right—the Republicans, by and large—are funded massively, massively by these billionaires. And so, I think, much like in the '30s, much like in the 1850s, much like in the 1770s, it's going to take a major economic crisis to produce the political will necessary to create the fundamental changes, structural changes in our political and economic system that can make this country work again.
AMY GOODMAN: You relate crashes in the economy with war.
THOM HARTMANN: Yeah, I do. Arnold Toybee—it may be an apocryphal quote, but it’s often attributed to him—said that when the last man who remembers the horrors of the last great war dies, the next great war becomes inevitable, that we remember the glories but not the horrors. And you could say the same of economic disasters, when, you know, we’ve forgotten not only the horrors of the Great Depression, in many ways, but also the lessons that we learned out of them. Every one in the past, every one of these economic disasters, has been followed by a war—the Revolutionary War, the Civil War, World War II. Whether this one is—and each war has been horribly more destructive, because technology improves. Whether this one is is going to depend probably a lot on what is going on around the rest of the world.
AMY GOODMAN: Of course, it was a Republican president, President Dwight Eisenhower, who said in his famous farewell speech to the nation, January 17th, 1961:
PRESIDENT DWIGHT EISENHOWER: My fellow Americans, this evening I come to you with a message of leave-taking and farewell and to share a few final thoughts with you, my countrymen. We have been compelled to create a permanent armaments industry of vast proportions. Three-and-a-half million men and women are directly engaged in the defense establishment. The total influence—economic, political, even spiritual—is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development, yet we must not fail to comprehend its grave implications. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
AMY GOODMAN: That was President Eisenhower’s farewell address, January 17th, 1961. That’s an excerpt from the documentary Why We Fight. More than 50 years later, that speech, many argue, is—well, the arguments of the military-industrial complex are more relevant than ever.
THOM HARTMANN: And there’s what’s referred to in economics as a perverse incentive built into this, just like we see with the private prison industry arguing for longer drug sentences and laws because they want to fill up more beds. Ed Snowden worked for a company, Booz Allen, which was owned at one point in time by the Carlyle Group, which was in part owned at one time, ironically, by the bin Laden family. I mean, figure this one out. And we find that, you know, roughly 70 percent, apparently, of the intelligence budget of the United States has been outsourced. Massive chunks of the Pentagon have been outsourced.
So it’s not just, you know, is there going to be a war like, you know, military conflict, intra-country stuff, but we have an industry in the United States that is so powerful and that the Supreme Court has empowered to behave as if they were citizen lobbyists in ways that were unthinkable in—well, actually, has happened in past, but during Eisenhower’s day would have been much more difficult, and certainly after Nixon, that—I mean, for example, the wealthiest zip code in the United States is no longer Beverly Hills. It’s just north of Washington, D.C., where all the mansions of these defense contractors are.
So, there’s an enormous pressure to do something. And I was surprised that we didn’t go to war with Syria. I think the country has been so badly burned by George Bush’s lies and wars that—and that’s another thing that gives me some hope that this depression, this crash, might not be followed by a war. But we’re going to have to wait and see what happens in the Middle East and what happens with Taiwan and China and all these other things.
AMY GOODMAN: And what about the issue of climate change, that you also focus on and just made a video about—
THOM HARTMANN: Yeah, yeah.
AMY GOODMAN: —how this fits into the coming crash of 2016?
THOM HARTMANN: It’s another stressor. There—it’s a very, very significant stressor. And the video that we just did, Last Hours, which is over at lasthours.org, in that, we point out the thing that the IPCC is not talking about right now, but the scientists are, people are hysterical about, is the—or very concerned about, is that there are trillions of tons of methane hydrate, methane frozen up in ice in the Arctic and around continental shelves. If that melts, then there will be a sudden global warming. And when you look at the five past extinctions on the planet Earth, every single one was triggered by one of these methane releases. And that is the worst-case scenario. We’re hopeful that we can avoid it.
AMY GOODMAN: How does Arctic drilling fit into that? Because, of course, the Greenpeace, the Arctic 30, the 28 Greenpeace activists and the two journalists who are now being shipped across Russia, jailed, they were protesting Russia engaging in Arctic drilling.
THOM HARTMANN: Yes, and we’re also on the edge of doing that same thing, and other countries are, as well. The—NASA right now has an experiment called CARVE, Carbon in Arctic Reservoir Vulnerability Experiment. And in our video, we have Charles Miller, one of—the head researcher. And he pointed out to us that there’s over—they’re quite sure there’s over a trillion tons of methane in the Arctic, maybe as much as two and two and change in the Arctic; worldwide, somewhere between four and seven trillion tons. To trigger an extinction might take as little as one to two trillion tons being released. So, when you do away with the ice sheet, and then you—and the Arctic Ocean is rather shallow, frankly—and then you start running ships through there that are stirring the warm waters in, you’re playing with fire.
AMY GOODMAN: So how do you change all this? How do you prevent the crash of 2016? You have a chapter called "Democratize the Economy."
THOM HARTMANN: Yes. To prevent the crash of 2016, we would have to make the fundamental changes that we’re going to have to make afterward. You would have to start enforcing the Sherman [Antitrust] Act again. You would have to—
AMY GOODMAN: Which is?
THOM HARTMANN: Which says that—right now—it was passed in the 1880s, and it says that basically any company that gets so large that they dominate an industry is illegal. And not only the company gets broken up, but people in the company can go to jail, in the Sherman Act. And Reagan, in his second year of his presidency, stopped enforcement of it, functionally, and no president since then has made a serious effort. The last one was Jimmy Carter breaking up AT&T. So, now we have not just the media, but every significant industry in the United States controlled by two, three, four, five at the most, companies. This is—you know, when you look at biological systems, broad and diverse is strong. Top-heavy and narrow is fragile. So, our economy is insanely fragile in that regard.
So, bring back the enforcement of the Sherman Act, thus break up the big banks. Bring back Glass-Steagall, separate commercial banking from gambling banking. Do away with the Commodity Futures Modernization Act. Phil Gramm took us from virtually no gray or black market in these bets on bets on bets, these CDOs, to $800 trillion worth in 2008. And, you know, his wife Wendy was on the board of Enron. Ken Lay desperately wanted to be able to play these games. Phil Gramm got his legislation in 1999 and 2000. Bill Clinton, I think, had no idea what this would mean, just happily signed it. And that was when this was set. So, if we did these things, we could prevent this. There’s clearly not the political will, which is why I’m asserting that the crash will happen, and that will generate the political will.
AMY GOODMAN: What gives you the most hope, when you see grassroots movements, which you cover, too, on The Thom Hartmann [Program]?
THOM HARTMANN: Yeah. Oh, yeah. What gives me the most hope is the fact that young people are waking up. They’re getting it, particularly—I mean, you see it just on the ground in their student loans, that their parents, grandparents and great-grandparents never experienced, that the predator class in this country is eating everything in its path. And the Occupy movement was a great beginning for that. We’ll see what’s next. And then, on the other hand, you’ve got a lot of boomers who are still very politically active. It’s the people in the middle who are just desperately trying to raise a family and work that are—
AMY GOODMAN: You focus a good deal on the Koch brothers and what you call the Kochtopus.
THOM HARTMANN: Yeah, yeah. Well—
AMY GOODMAN: Why are they so significant today?
THOM HARTMANN: Because they fund so many different pieces of what has become the Libertarian/Republican machine, this notion that government is bad somehow, that Reagan introduced in his first inaugural. The thing that people have to get is, you know, if you don’t like government, that’s fine, but if you take government out of the way, if you take—if you stop administering the commons by the government, there’s an enormous vacuum. And there’s a whole lot of billionaires who are just waiting to step into that vacuum. So, if we don’t have government regulation, for example, of, you know, smokestack things, then the Kochs make more money, but all the rest of us get more cancers.
AMY GOODMAN: And their wealth comes from?
THOM HARTMANN: It’s interesting. Their father, you know, cut a deal with Joe Stalin to develop the oil fields in Russia. So—and today—I mean, there was a report a few weeks ago—we haven’t been able to confirm all of it—that if the Keystone pipeline is built, it goes to refineries in part owned by the Koch brothers, that they could make as much as $100 billion. That’s more than they’re actually worth right now.
AMY GOODMAN: Tell us the story of James Richard Verone.
THOM HARTMANN: The fellow who committed suicide?
AMY GOODMAN: The—he robbed the bank for one dollar.
THOM HARTMANN: Oh, yes! Yes, I’m sorry, there’s—
AMY GOODMAN: Many stories in the book.
THOM HARTMANN: I know the stories; I’m terrible with names. Yeah, this was a—this was a fellow who—he couldn’t find a job. He had a growth in his chest. He was concerned about, you know, "Where do I go? What do I do?" And he walked into a bank and gave the teller a—you know, "I’m robbing this bank for one dollar." And then he sat down and waited to be arrested. And it was because he needed medical care. And he said, you know, "If you don’t have your health, you have nothing. I’d rather be alive and in jail than be dying."
AMY GOODMAN: And get healthcare in prison.
THOM HARTMANN: Yeah, yeah. And he did, by the way. He got healthcare as soon as he was arrested.
AMY GOODMAN: We’re going to break. When we come back, I want to ask you about the secretary of state, John Kerry’s comments that he doesn’t think Lee Harvey Oswald acted alone, on this 50th anniversary of the assassination of John Kennedy. You wrote a whole book about this. We’re talking to Thom Hartmann, the nationally syndicated talk show host of The Thom Hartmann [Program]. His new book, out just today, The Crash of 2016: The Plot to Destroy America—and What We Can Do to Stop It. Stay with us.