Demme, at the festival to show "The Manchurian Candidate," was asked by journalists to draw a connection between the politics of his movie and real-life politics.
"As an American, I really feel my country is in a lot of trouble," Demme said. "I think our leaders have taken us in a really bad direction on so many levels."
Demme did not mention the Bush administration by name. He said American leaders want to "own" the world.
"One, there are endless profits from owning the entire world," he said, "and because if you own and control the world, there is a relief from fear."
Meryl Streep, who stars in "The Manchurian Candidate" as a domineering U.S. senator, sidestepped questions about whether she based her character on such figures as former British Prime Minister Margaret Thatcher or U.S. Sen. Hillary Rodham Clinton, D-N.Y.
"We all have our political opinions that we could sit around and talk about all day," she said.