AMY GOODMAN: In a minute we will be joined by Kevin Phillips here in our Firehouse studio, but first I want to turn to President Bush. On Monday, he spoke about the war in Iraq in Ohio. After his address, he took questions from the crowd. The first question addressed Phillips’s book American Theocracy.

Q: My question is that author and former Nixon administration official Kevin Phillips, in his latest book, American Theocracy, discusses what has been called radical Christianity and its growing involvement into government and politics. He makes the point that members of your administration have reached out to prophetic Christians who see the war in Iraq and the rise of terrorism as signs of the apocalypse. Do you believe this, that the war in Iraq and the rise of terrorism are signs of the apocalypse? And if not, why not?

PRESIDENT GEORGE W. BUSH: The answer is — I haven’t really thought of it that way. Here’s how I think of it. The first I’ve heard of that, by the way. I guess I’m more of a practical fellow. I vowed after September the 11th, that I would do everything I could to protect the American people. And my attitude, of course, was affected by the attacks. I knew we were at war. I knew that the enemy, obviously, had to be sophisticated and lethal to fly hijacked airplanes into facilities that would be killing thousands of people, innocent people, doing nothing, just sitting there going to work.

AMY GOODMAN: That was President Bush addressing the Cleveland City Club in Ohio. Kevin Phillips, longtime Republican strategist, joins us now. His new book American Theocracy: The Peril and Politics of Radical Religion, Oil and Borrowed Money in the 21st Century. Welcome to Democracy Now!

KEVIN PHILLIPS: Happy to be here.

AMY GOODMAN: Quite way to launch a book. The President of the United States questioned about it in the first Q&A at this historic City Club in Cleveland.

KEVIN PHILLIPS: It’s really an appalling thing, because I — in the course of the last couple of days, as my book tour started, I’ve talked with a number of conservatives, people running conservative publications, old aides from the Republican campaigns back in the 1960s and 1970s, and everybody agrees, and some are even starting to say it semi-publicly: this man is a national embarrassment.

AMY GOODMAN: Conservatives?

KEVIN PHILLIPS: Conservatives.

AMY GOODMAN: On what grounds?

KEVIN PHILLIPS: Well, some just because they know him and don’t think anybody with his lack of qualifications should be president, others that think that the country has a black eye, others that think that conservatism is now being threatened as much as liberalism was in the late 1960s by the Johnson administration. This is just a convergence of the ineptitude of one man, of the complicity of a number of other senior people in the administration — I don’t know their exact motives — and a horrible situation for the Pentagon, because the Pentagon realizes that the American soldiery in Iraq is being brutalized in a way that then casts disrespect on the American army, that interferes with recruitment. I, two years ago, gave a talk near Fort Bragg in North Carolina, and already dozens of people from the military were saying that this was going to be a black eye. And it’s worse than a black eye. And you really have to say, and I have to say, that Bush and Cheney and Rumsfeld, if we had a parliamentary system, they would be there before the bar of the Congress, having to defend this. And that’s where they should be.

AMY GOODMAN: Kevin Phillips, you talk about radical religion, about debt, and about oil, about this being an oil war. You also talk about peak oil. That’s not talked about very much in the mainstream. Explain.

KEVIN PHILLIPS: The peak oil idea is that just as the United States oil production peaked in 1971, that we have a limited amount of oil globally, and that it’s something that can’t be re-created. It’s running out. And the expectation of some is that the oil production of the non-OPEC countries will peak at some point during the 2010s, and that then the production of OPEC itself will peak in the 2020s or 2030s. Now, some people think that Saudi production has already peaked.

Now, if you believe this, and it’s possible, then we face an enormous convergence, again under specific oil-related circumstances, of a global struggle for natural resources as the price of oil climbs, as we turn the armed services into a global oil protection service, which has been happening, and as we see the administration refuse to grapple with the need to really curb oil consumption in the United States, which is mostly through transportation and especially motor vehicles.

And I just have a sense, as many others on the conservative side do, this administration has no strategy to deal with these converging problems, be they foreign policy, military, oil, debt. They are like the three little monkeys on the old jade thing — the one sees no evil, one speaks no evil, and one hears no evil. Do they know anything? You know, that’s an open question.

AMY GOODMAN: We see in Washington an oiligarchy. I mean, you have President Bush, who is a failed oil man himself; Cheney, former head of the largest oil services corporation in the world, Halliburton; Condoleezza Rice was on the board of Chevron for more than a decade. And you can go on from there. But what is the significance of this for this country and the world?

KEVIN PHILLIPS: Well, what I would like to do is broaden that, because you’re absolutely right, and the Republicans are the principal vehicle of this. But they are by no means the only vehicle, when Lloyd Bentsen was the Vice Presidential nominee for the Democrats. He was somebody very closely connected to the oil industry. It turns out that Al Gore’s father was closely connected to the oil industry, and he continued the relationship with Armand Hammer of Occidental, and as a result, David Ignatius of the Washington Post wrote a big piece back several years ago saying we really had almost everybody in the 2000 election was oil-connected. It wasn’t just the two Republicans. It was Al Gore, too.

It is such a power center in the United States, especially now that the South and Sunbelt have become most important, because that’s where the bulk of the oil is, that they’re into both parties, enormously powerful in Congress. There is an oil and petroleum culture in the United States that extends back 150-200 years into probably half of our states. This is no criminal conspiracy or anything. This is just a major resource, having evolved as something that’s part and parcel of the American economy and American supremacy. And you can’t just wish it away. It’s a vested interest of the first order.

AMY GOODMAN: The war in Iraq was over oil?

KEVIN PHILLIPS: I think it was principally over oil. If you — and let me qualify that by saying I think a certain amount of the reason for the war in Iraq was a larger geo-strategic situation in which we were going to have to leave Saudi Arabia. And the way to develop an alternative oil supply and base was to aim at Iraq. Now, that went beyond purely oil as a consideration.

Another facet of the invasion of Iraq, in 2002, George W. Bush gave a speech in Texas, in which he talked about how Saddam Hussein had tried to assassinate his father. So there you have sort of the family aspect. And lastly, the Middle East is a battleground of biblical Armageddon and everything. And that’s swimming into play. A number of the religious right people talked about Saddam Hussein as the anti-Christ, and the Left Behind series, which is the Tim LaHaye 60 million sold context of the end times and Armageddon, while the Antichrist comes from New Babylon and Iraq, and the attempt was to portray Baghdad, Babylon, as the focal point of the end times, so that a whole lot of supporters of the administration, they didn’t care about weapons of mass destruction. This was part of the unfolding biblical epic of the end times and the war between good and evil. And this is something that I get into in the book; it’s hard to explain it just in a short conversation.

AMY GOODMAN: Well, we’ve got some time.

KEVIN PHILLIPS: Well, this is very central to the whole Republican constituency. What you’ve got is that 45% of American Christians believe in Armageddon, and the more religious ones, the fundamentalists and evangelicals more than anybody else. So, my assumption is that the Bush electorate is probably 50 to 55% people who believe in Armageddon and probably more or less the same numbers who believe that the Antichrist is already on earth. And when you have this backdrop and you have a president who got his start in national politics as his father’s liaison with the religious right back in 1987 and ’88, you just have an enormous exposure to this whole psychological context and an awareness on the part of people in the White House that this huge constituency interprets the Middle East in this very unusual way.

AMY GOODMAN: I mean, let’s go back to Reagan’s time. And, of course, Reagan’s vice president was George Bush, Sr. He also embraced evangelicals; for example, I mean, in Central America, Rios Montt in Guatemala. What’s the difference now?

KEVIN PHILLIPS: Well, there’s an enormous difference, because Ronald Reagan was in many ways an easygoing guy. He could make a reference to Armageddon. He could pursue a rightwing type of politics like you’re describing. But, personally, he wasn’t all that intense, shall we say? I mean, here was a man who was the first divorced president in American history, married to two different Hollywood actresses. He was not the incarnation of a religious right political outlook. Bush is.

AMY GOODMAN: And yet the right embraced him.

KEVIN PHILLIPS: The right embraced him, because that was at point in time — and here I go back more to my Republican antecedents — where, in my opinion, during the 1960s and 1970s, the left had pushed much too hard against religion in an attempt to create a more secular society. And this just grossly mis-underestimated the role that religion plays in the United States, and it created this huge backlash. So the balance was beginning to be restored in the 1980s, and now the pendulum has swung, so the abuse is on the part of the religious right, the people who were complaining about being abused 30 or 40 years ago.

AMY GOODMAN: So, explain where George Bush fits into this picture, George W. Bush, his own religion, how he embraces the right — the religious right.

KEVIN PHILLIPS: Let me pretend that we’re talking about painting in French impressionism, and I’m going to give you four or five impressionist scenes. We can’t do this very academically. Back in 1999 and 2000, as George W. was preparing to run, it’s been reported or acknowledged that he told three or four different groups of preachers, conservative organizations, that he felt that God had called him to run for president. Well, he gets in the White House, and he’s not doing terribly well, but 9/11 comes along, and this is a massive revitalization of his politics in the sense of a chance to create a conflict between good and evil and, in essence, rally his flock. And at that point in time, Dana Milbank of the Washington Post reported he did a survey of religious right leaders, and they agreed that God had chosen Bush for this moment. And he concluded the piece for the Post by saying this was the first time in history that the leader of the religious right nationally was the President of the United States. And I believe that’s how they felt.

And then we go — more impressionist paintings on the wall here — we go to reports from the Middle East. This came in several Israeli newspapers and others, that Bush at one point commented, although the White House denies it, that he said God told him to invade Afghanistan, God told him to invade Iraq. And then we get 2004, and when he was campaigning in several places, again he played the religious card. And the Lancaster New Era in Pennsylvania, the Old Order Amish country, reported that Bush talked to a group of Amish, the Plain People, and he said that he trusted that God spoke through him, and if that weren’t true he wouldn’t be able to do his job. Now, they reported this conversation, but their reporter had not been there, so he couldn’t substantiate it.

But this thread — and I come back to my impressionism — from a whole lot of people, many of them Republicans and people acquainted with the Republican Party — this has been in there — it’s this sense that he is the prophet and he’s telling us what God wants. And this, to me, is an enormously important backdrop to this mess in what is, after all, the Bible lands for Christians, the Middle East.

AMY GOODMAN: We are talking to Kevin Phillips, a former Republican strategist. His latest book is called American Theocracy: The Peril and Politics of Radical Religion, Oil and Borrowed Money in the 21st Century. We’ll be back with him in a minute.

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AMY GOODMAN: Our guest is Kevin Phillips, former Republican strategist. His new book is American Theocracy: The Peril and Politics of Radical Religion, Oil and Borrowed Money in the 21st Century. Phil Ochs was singing that when you were very much on the other side.

KEVIN PHILLIPS: Yeah. I was, I guess you could say, anti-establishment radical Republican. It’s interesting how the insurgent politics divided, and now you have such ironies as — I can’t mention the publications, but where you have conservatives talking about writing things for The Nation and so forth, because the old lines aren’t central anymore.

AMY GOODMAN: You dedicate this book, Kevin Phillips, to the millions of Republicans, present and lapsed, who have opposed the Bush dynasty and the disenlightenment in the 2000 and 2004 elections.

KEVIN PHILLIPS: Absolutely. And it’s a considerable number. I was always cheered to see people I knew in crowds and different cities and people who own publications that you would think of as conservative Republicans, but they love the book, so they wanted it reviewed. Things like that.

AMY GOODMAN: Talk about debt. Talk about the money aspect of American Theocracy.

KEVIN PHILLIPS: Well, this is a frightening thing, because its link to religion is there in a small way, which I’ll come back to, but its principal origin, obviously, is economic. As the United States entered the 1970s with inflation rising and oil prices skyrocketing and the Vietnam mess, budget deficits were rising, money was being borrowed. We no longer supported the dollar by buying — or allowing foreign central banks to buy gold in Washington, so what happened is debt started to skyrocket. And as debt skyrocketed, in the public sense, the budget deficit, we were having growing debt in the United States with mortgage, credit card, which was just starting in the 1960s, public and private debt in every dimension — corporations, finance.

By the 1980s, this was going ballistic, and all of the huge deficits under Ronald Reagan, the so-called current account deficit, which was the international credit balances affecting the United States, how much we net borrow each year, has skyrocketed. It’s now closing in on more than 7% of G.D.P. This is borrowed prosperity. I think it’s somewhat ineffective for the left to say that money isn’t being sloshed around in the American economy. It is. But not only is it going to people at the top, it’s going to people who have ties to the financial sector, mostly by owning financial assets, but also because the financial sector in the course of the last three or four decades has replaced manufacturing as the pivot of the American economy. The financial services sector now represents 21% of gross domestic product, and manufacturing is down to 14%.

Now, because we don’t make very much anymore, we have to import all kinds of things. Because we don’t have too much oil anymore, relatively speaking, more than half of our oil has to come from overseas. This creates a massive current account deficit. Each year it forces us to borrow. We become at the risk of foreign creditors. And this, from the party that supposedly stands for fiscal responsibility. Now, neither of the parties stand for fiscal responsibility. But for the Republican system, most outrageous transformation.

AMY GOODMAN: You quote the Times, talking about the borrower industrial complex.

KEVIN PHILLIPS: It really is. And the example I like to use is the rise of the credit card industry, which is now really a major industry. And in the course of the 1990s and the first couple of years in this decade, they succeeded in getting legislation and decisions from the federal courts, basically, that allowed them to charge any interest rate and charge any fee. And as a result now, somebody whose perceived credit risks seems to change, can all of a sudden wind up paying 28% interest on credit cards. The credit cards charge you fees for everything you can imagine. The low-income people get victimized the most. It’s a giant industry in the United States. After Enron went under, MBNA, which was a big credit card company, took its place as George W. Bush’s number one political patron in terms of contributions. So it’s rotten. It’s rotten. This is out of control. We are a money culture now.

AMY GOODMAN: If China, Japan called in the debt, what would happen?

KEVIN PHILLIPS: Well, they can’t call in the debt. But what would have to happen would be they would sell their U.S. securities basically, treasuries or — and so would some of the semipublic institutions in China, companies that are really government companies and so forth. You would have a massive crisis in the global financial markets. The assumption is they can’t do it, because they would lose so much of the value of what they hold. But they could do it slowly, and they could shift to the euro and possibly to the Japanese yen, a basket of currencies to gold. There are all kinds of things they can do. People who know a lot about this just sit and worry: when is something like this going to happen?

AMY GOODMAN: Alan Greenspan gave a surprisingly frank warning about the state of the country’s finances. He said the prospective increase in the budget deficit will place at risk future living standards of our country. Can you talk about this?

KEVIN PHILLIPS: Oh, they’re already massively at risk, and they’re already declining. And he knows it. For the last five years, you haven’t had a net after-inflation growth in real family income, because of the slow growth pattern. The slow growth pattern in the country comes because so much of the money is going to people who don’t need to buy certain things, and because there’s so much debt that it clogs the responsiveness of the economy to stimulus. And he knows it’s a total mess. Paul Volcker, his predecessor as fed chairman, has basically said there’s 75% chance of a financial crisis. Now, again, the major media don’t like to discuss this, but I think they are beginning to verge on a readiness to discuss it. And if there’s one thing you can be sure of, George Bush couldn’t describe all this intelligently if you spent 48 hours briefing him.

AMY GOODMAN: You don’t think he’s smart?

KEVIN PHILLIPS: No. He’s got a certain smart sort of fraternity boy, towel-snapping, would make a good second vice president of the First National Bank of Amarillo, but, you know, nothing particularly for heavy lifting.

AMY GOODMAN: We are talking to Kevin Phillips, former Republican strategist. His book is called American Theocracy. Sandra Day O’Connor, Supreme Court justice — former Supreme Court justice, gave a speech. It wasn’t recorded. It was in Washington, D.C. Of course, Sandra Day O’Connor, the reports were she was praying for a George Bush victory and helped hand it to him the last time so that she could retire, so that he would be the one to choose her replacement. And she is the person who earlier this month warned the U.S. is in danger of edging towards a dictatorship of right-wingers that continue to attack the judiciary. What do you think of this?

KEVIN PHILLIPS: It’s absolutely true. Tom DeLay, before he was pushed out, but Bill Frist, as well, and some of them have gone to conferences about how they can reshape the judiciary and who they can push through, and so forth. She’s obviously very concerned. There are just endless numbers of Republicans that are privately very concerned. And I really don’t know what’s going to happen here, but if I can make bold with your microphone for a minute, there should be some thought among everybody in the United States — progressives, conservatives, serious centrists, whatever you want to say — about how it becomes clear that this man really cannot function as president. We can deal with that situation. I don’t happen to believe impeachment is the answer. This has become so sort of trivialized after Clinton and Nixon and the “I’m going to get you because you got us” sort stuff. I think we have to think far beyond that.

AMY GOODMAN: What?

KEVIN PHILLIPS: We need some kind of coalition government now. Before I get into too much trouble for this, let me go back to Britain between the wars, World War I and II, when they were really on the skids. The old parties lost their validity. They were fragmenting. There were small parties, third parties coming up. So they frequently governed by coalition governments. They had one at the end of World War I. They had another for quite awhile during the 1930s. I don’t know exactly how we do this, but you have to dismantle this “I’m going to get you because you got us” impeachment business and the way in which they’re always zapping each other and they polarize, and the people in the middle represent only 15%, because they are stalwarts in both parties from safe districts. Now, it’s not that they’re all that unreasonable personally, but when they’re arraigned against each other politically, it doesn’t work too well. So, I think we’re going to face within a few years a further realization of how ineffective our institutions have become.

AMY GOODMAN: In 1982, you wrote a book entitled Post-Conservative American, and you warned against the country drifting toward what you described an apple pie authoritarianism.

KEVIN PHILLIPS: Well, the source of this, in terms of a concept of where it would come from, was the Sunbelt, which was a term I coined in the emerging Republican majority. And it’s exactly the sort of politics that would lend itself to a politics of patriotic militarism and support the troops and don’t worry about the dissidents, and we’re going to have flag-waving mega-churches in every suburb from Anaheim to Houston to whatever. This is the part of the country that that would generate from, and I think that’s some of what George W. Bush is trying to put together. But I think the antidote to that at this point is the extent to which huge percentages of the old Republican coalition, that gave Richard Nixon 61% in 1972 and Ronald Reagan 59% in 1984, are not going to play ball with us. Not at all.

AMY GOODMAN: I just wanted to correct the quote I attributed to Alan Greenspan. It’s actually his successor, the man who replaced him, Ben Bernanke, who said the prospective increase in the budget deficit will place at risk future standards of our country, the living standards of our country. But I wanted to ask you about the Dixie cup, as you refer to, talking about the United States in a Dixie cup, the new religious and political battlegrounds.

KEVIN PHILLIPS: Well, what’s happened is really that the Southern shift of the Republican Party, which was starting even during the New Deal as a kind of upper bracket economic shift, and then in the Dixiecrat movement in1952 became both racial and upper bracket economic, and then with Wallace and the effect of that insurgency shifted much more of the lower middle class and blue collar vote, slowly but surely the South became the mainstay of the Republican coalition. And you would have to say that was the case by 1984, when Reagan swept every Southern state, and it was going down below the presidential level. By the end of the 1980s, even George H.W. Bush, not a strong candidate, but a weak one in 1992, he did very well in the South. It had clearly becomes the Republican stronghold.

Well, the rise of the religious right and the Southernization of the Republican Party has created a role of religion within the Republican Party that is unprecedented in the 20th or 21st century. And this has become a central fact, the extent to which rank-and-file Republicans have a somewhat theocratic view of what government should do and how it should ally with religion, and the extent to which the Republican Party has become the favored party of the most religious conservative segments of Protestantism, Catholicism and Judaism, where you have the Orthodox Jews in the United States turned out in such number — and they’re growing anyway, because of large families — that that pushed up Bush’s share of the Jewish vote. So it’s the fire-eaters on the religious side, whether it’s some nut who’s the head of a mega-church outside of San Antonio who’s talking about Armageddon or Catholics who are connected to the sort of — I don’t know want to say — secret cabal wing that used to be associated with Rome, and then some of the Jewish elements, some of whom have gone back from the United States to Israel, so they can cause their trouble right on the front line.

AMY GOODMAN: And where does Israel fit into this picture?

KEVIN PHILLIPS: Well, I don’t want to carry water for APAC or any of the lobbies, because I know they go too far, but I would say Israel fits into this picture because of its biblical role. It’s about as simple as that. If you just had Jews taking up the cudgels for Israel, it wouldn’t do it. What you’ve had from the start is that the country in Europe that was most anxious to have an Israel in the 19th century was Britain, because that’s where you have — well, Israeli was prime minister, but you had a fair Jewish community, and there was this Protestant sense of to have the biblical prophecies come true, Israel had to be restored. And in the United States, the expectations among Christian evangelicals that foreign policy should serve a biblical aspect, in other words, that this should become part of American foreign policy, it’s huge. I don’t know the size of the American Protestant population that’s caught up in the future of Israel, but it’s so huge that somebody like Tom DeLay wouldn’t refer to portions of Israel by their current name. He would go back to the Bible.

AMY GOODMAN: You start your book, fuel, the national power, and you talk about the history of western fuelishness. You quote Henry Kissinger, “Control energy and you control the nations.” And you quote Secretary of Energy Spencer Abraham in 2002, “You and your predecessors in the oil and gas industry played a large part in making the 20th century the American century.” Do you think that the — what you describe, the American empire is headed for doom?

KEVIN PHILLIPS: It’s certainly headed for some degree of dismantling and loss of international power. Now, to say it’s headed for doom — even when Britain lost its place in the world, it wasn’t headed for doom, and it reconstituted itself, and a lot of people are happy and fairly prosperous in the U.K. right now. But we can’t go on in the imperial mode, in which we just demand the world’s natural resources and that the dollar be the vehicle for everything and that we be able to invade wherever we want. I don’t think that will last more than another ten years. I think the crisis builds up sufficiently in the 2010s, that the United States is really going to have to consider what resources it has in terms of energy, what resources it has in terms of the economy, how far it can push its military, a whole set of issues.

AMY GOODMAN: Kevin Phillips, thank you for joining us.

KEVIN PHILLIPS: Thank you.

AMY GOODMAN: Kevin Phillips’s book is called American Theocracy.