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GEORGE NEGUS: Martin, the death toll in the Gulf is still unknown and rising and several cities have almost been wiped off the map.

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The political fallout from this Katrina disaster is quite enormous. I mean what is your take on the fallout because people are saying this has just been a good excuse for the left to kick Bush, other people are saying he’s in deep political trouble?

MARTIN WALKER, EDITOR – UNITED PRESS INTERNATIONAL: I think it’s somewhere between the two. The fact is this has been a kind of a tipping point. This disaster in New Orleans came at a time when there were already mounting problems in Iraq, when Bush’s approval ratings were down into the 40s, when it was clear that Iraq wasn’t getting better any time soon and so this new evidence of some kind of incompetence on the part of the Bush Administration has come at a very powerful moment. Now on top of that, you’ve got to remember that Bush’s claim to re-election last year was that he would keep America safer, he would take care of Americans better than the Democrats could and that’s been rather undermined by this crisis.

Now, the real danger for Bush is the demoralisation of the Republican party. Bear in mind that most of the southern states, Mississippi, Louisiana, they’ve been traditionally Democratic states that have turned Republican in the last 20, 30 years and it’s demoralising for them that their government, their own President can’t seem to be able to put any kind of assistance resources into those states, having voted for him for so long. And that’s going to impact the people like Hayley Barber, very powerful, possible heir to the Republican nomination in 2008, he’s governor of Mississippi. It’s impacting Trent Lott, also Mississippi, a powerful senator, impacting the leader of the Republicans in the lower house of Congress. It’s really hurting the Republican majority in Congress right in their heart – right in their core.

And the question is how much longer will the Republican party stick with President Bush when their interests are clearly diverging. Bush has no more elections to face. These guys have to face re-election next year.

GEORGE NEGUS: You’re not suggesting there could be a tilt at the leadership, it doesn’t really work that way in America, does it?

MARTIN WALKER: No, but what there can be is a deep reluctance to put through Bush’s agenda. A deep reluctance to vote the money for what Bush wants to do, particularly to vote the money for Bush’s continued war in Iraq.

We’re already seeing the Republicans in Congress giving up upon some issues, the Republican leader in the Senate, Senator Frist, made it clear today that the plan to try and end the inheritance tax, the death tax, as it’s called, that’s going to have to be put on hold, they can’t have the votes for that.

It looks as though Bush’s attempt to reform social security will also be a victim of Bush’s declining political clout.

Now if this spreads to the point where Bush is unable to get the money to keep going in Iraq, that’s really going to be devastating for him.

GEORGE NEGUS: Reading commentators, including people like yourself, over the last few days, there are some who say because of Iraq, the obsession with Iraq, as it were, that the Bush Administration have taken their eye off the ball and that partly explains something like New Orleans.

But others are saying this is a much longer thing we’re looking at here. A drift away from government over the past quarter of a century when Ronald Reagan said government’s not part of the solution, government’s part of the problem. That government has been denigrated to such an extent in America that this sort of thing can happen, that they can be incapable of handling a situation that is important and as disastrous as this.

MARTIN WALKER: Well, there’s a lot of blame on that to go round because remember that Bill Clinton, the last Democratic president, proudly announced the era of big government is over. And yet what I think Americans are starting to realise now is that there are times when the hurricane hits the fan when you do need a big government.

Only the government is able to do that kind of thing, is able to mobilise the adequate number of resources, and I think that among the Republican party, among fairly centralist moderate members, there’s a renewed sense that the pendulum has been swinging too far towards the right, too far towards government is bad, too far towards “We have to cut taxes at all costs,” and –

GEORGE NEGUS: The government can get too small?

MARTIN WALKER: Exactly.

GEORGE NEGUS: And that’s what’s happened here that the infrastructure is just not there because the support of government, of organisations like FEMA don’t really exist the way they used to.

MARTIN WALKER: Exactly so, but on top of that you’ve had the situation made worse by the Iraq war. After all it was – and by the war on terrorism. It was 9/11 that made FEMA change from being an independent cabinet agency that was very, very good at clearing up hurricane, it showed that with the Florida hurricane of the 1990s and I was turned instead into an adjunct of this massive Department of Homeland Security and told to focus upon terrorist attacks and not upon natural disasters.

At the same time, you’ve seen funds that were meant to be earmarked for the New Orleans levees, for the flood control of Louisiana. Those funds were instead being sent to the war in Iraq as were some members of the army corps of engineers, who were meant to be working in Louisiana, as were members of the Louisiana National Guard who are currently in Iraq.

GEORGE NEGUS: So you say you don’t have to be part of America’s mad left, if such a thing exists, to say that the situation in Iraq can be linked with their inability to handle a situation like New Orleans?

MARTIN WALKER: I think they’re as linked as Tweedle Dumb and Tweedle Dee and I think that’s a point that’s being made not by anybody on the left, but by mainstream people. I mean I’ve been spending a lot of today at a big conference on security and terrorism here in Washington.

We heard Senator Joe Biden, leader of the Democrats in the foreign relations committee, saying exactly that, Iraq, New Orleans are linked. We’ve heard the same thing from former general Wesley Clark. Indeed, I mean I’ve just been writing a column about the way in which Fallujah and New Orleans are looking to be twin towns in effect. They’re both been worked over by the Bush Administration.

GEORGE NEGUS: George Bush has said that he is personally going to oversee the Katrina inquiry, or Katrinagate, as we understand it’s now being called. After this length of time and what one columnist described as lethal ineptitude, do you think that sort of behaviour by Bush and his administration is going to make any difference to what you’re saying?

MARTIN WALKER: Well, he’s left it pretty late but bear in mind that in a way we’ve turned the corner today in these last 12 hours. In the last 12 hours they’ve closed the two big breaches in the canals and they’ve started the long, slow process of pumping out.

They’ve finally got the big sports stadium emptied, they’re finally getting some kind of handle upon putting together a basic list of all of the evacuees.

From now on, I think this is no longer an everything-is-going-wrong story, but a things-are-slowly-starting- to-get-better story. And that’s got to be good news for Bush but he really was staring into the abyss over the last 48-72 hours and he’s got to now try and find some way of riding the momentum of the changing new story and getting out ahead of the fact that more and more reporters and more and more media operations are looking into the way in which Bush deliberately ignored the warnings or the administration ignored the warnings.

We’ve now got on the record the former deputy director of FEMA of back in 2001 who briefed the Bush Cabinet in full and told them that there were three big immediate threats that they had to be – they had to be concerned with.

The first was a terrorist attack in New York City, the second was an earthquake hitting San Francisco and the third was the levees going down in New Orleans. He gave that warning in March of 2001. So far two out of those three things have happened and for neither one was the Bush Administration remotely prepared.

GEORGE NEGUS: Why would they ignore the warnings? Is it because as you say, that their eye was off the ball or why, was there some other subterranean political explanation for that? Why would you ignore warnings about the levees, for instance?

MARTIN WALKER: The first reason why you would ignore it was because the government’s eye was focused upon Iraq. The second reason was that they’d have these warnings before and it was like crying wolf. The worst had never happened. The New Orleans had dodged the bullet every time. The hurricane had turned aside at the last minute.

Don’t forget three times in the course of the last seven years we’ve had partial evacuations of New Orleans, we’ve had the big sports stadium filled before and we never saw the levees actually topped.

And so there was this sort of sense of “Ooh, we can get through it yet again.” And we’re not going – we don’t want to be spending anymore money after all with Bush’s tax cuts, there isn’t much more money to be spent.

GEORGE NEGUS: There are people now saying, some columnists and commentators now saying this could lead to what one of them called a progressive resurgence, which I interpret to mean a move back to bigger government and more important government and less denigration of government. Do you think in the wash up of this, as horrible as it sounds, that there may be a whole new look at what government in the United States of America is all about?

MARTIN WALKER: I think there will be if the Democrats can rise to the occasion. One reason why Bush has been able to be so powerful over the past five years and to push all before him, was because the Democratic party virtually gave up its constitutional government of being the opposition. They were terrorised of being accused of being unpatriotic over Iraq.

Well now you’re starting to see the Democrats making the case again. We’ve seen Bill Clinton coming out being very tough, we’ve seen Hillary Clinton also being highly critical. We’ve seen a whole number of the Democratic hopefuls for 2008, Senator Bie as well, for example, really slamming into the Bush Administration and making the point that there are things you do need government to do.

The Democrats I think have got a real opportunity now to come back, start being like an opposition and to keep punching Bush while he’s on the ropes. Whether the Democrats can find that political savvy and that courage to do it is an open question. But certainly the opportunity for them is right there and I think the stakes are very, very high. Not just for New Orleans, not just for rebuilding a rundown American infrastructure but probably in Iraq as well where it’s clear the Bush Administration is flailing around and doesn’t know what to do next.

GEORGE NEGUS: Martin, all sorts of countries you wouldn’t have expected like Cuba, for instance, and Afghanistan have offered help where Katrina and New Orleans is concerned. How do you think this leaves America’s image in the world? How do you think people will be feeling about them at the moment?

MARTIN WALKER: Well, pretty sick. I mean I’ve just come back from being in Europe and the feeling there was one of disbelief, that the world’s most powerful and rich country couldn’t do anything faster to save its own people.

There was also a real shock about the degree to which we suddenly thought looking at TV images from outside the USA that we were looking at, I don’t know, some devastating earthquake in Haiti or some coup in the Ivory Coast because almost all of the victims you could see tended to be black and this was, I thought, a pretty savage indictment of the way that things are clearly developing down in the American South.

I think America’s image has taken an extraordinary battering internationally, not just over this, over Abu Ghraib, over Guantanamo, over the Iraq war in general. George Bush really has presided over one of the saddest periods for the American international image that I can ever remember.

GEORGE NEGUS: Martin, always good to talk to you. Thanks for your time.

MARTIN WALKER: All the best, George.

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