The Revenge of Phil Gramm?

By David Corn | January 13, 2009 3:18 PM | | Comments (12)

There's a lot going on these days: a presidential transition, numerous confirmation hearings, various appointment announcements, and assorted megabucks bailouts--not to mention a couple of wars. But my favorite item of the day came from the publicity office of the American Enterprise Institute. AEI sent out an email announcing an event next week:

Is Deregulation a Cause of the Financial Crisis?
During the recent campaign season, the Democrats blamed the financial crisis on "Republican deregulation," in particular the Gramm-Leach-Bliley Act of 1999 (GLBA) and the Commodity Futures Modernization Act of 2000 (CFMA). The GLBA repealed the provisions of the Glass-Steagall Act of 1933 that prevented affiliations between commercial and investment banks, and the CFMA, among other things, exempted credit default swaps and other derivatives from regulation by the Commodity Futures Trading Commission. Although both acts were backed by the Clinton administration, Senator Phil Gramm (R-Texas)--then the chairman of the Senate Banking Committee--was the key congressional sponsor of the legislation. Is it plausible to connect the GLBA and the CFMA with the current financial crisis?

And guess who is going to address this question? Yep, Phil Gramm.

I think I can safely say that a piece I wrote last year put into political play the notion that Gramm, who had been an adviser to McCain, helped grease the way to the subprime meltdown by using a backroom maneuver in late 2000 to pass the Commodity Futures Modernization Act, which deregulated swaps, a complex financial instrument used to support various sorts of financial deals. And there's not much question that the rapid growth of the nontransparent swap market contributed to the subprime debacle.

These days, Gramm is a well-paid executive at Swiss banking giant UBS, which has blamed its own financial troubles on swaps.

When I was working on that article last spring, I contacted Gramm. But he declined to talk--and he went on to become something of a lightning rod for McCain in the summer when he dismissed Americans' concerned with the economy as "whiners." Now that the campaign dust has settled, he's ready to discuss all this. I'll make a bold prediction and say that his presentation is going to go something like this: it wasn't me.

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Tags: deregulation, financial deregulation, Phil Gramm, swaps, Wall Street, Wall Street bailout

    Comments

  1. DC,

    I wonder if Phil and his cohorts are actually proud of what they have done.

    Posted by: capt Author Profile Page | January 13, 2009 5:08 PM

  2. Off topic - BOYCOTT MORNING JOE!

    I am very disgusted about Joe Scarborough's views on torture on his show. I don't have a link for it - I am sure Capt will provide if needed - but he basically pulled statistics out of thin air to support his position and he is very dangerous in his rhetoric.

    I have already written MSNBC, Morning Joe, Joe Scarborough, NBC Nightly News and will find out which advertisers to write to as well. I will never watch that show again and I am hoping if we get some heat on him, maybe we can get him to recant some of what he said - not that I would ever watch his show again, however.

    Please pass this on to everyone you know

    BOYCOTT JOE!!!

    Posted by: flan Author Profile Page | January 13, 2009 5:22 PM

  3. Joe Scarborough's 6-minute defense of torture.

    http://www.youtube.com/watch?v=7Hf8r6H71nc

    ****

    There ya go.

    I have boycotted all infotainment and cable news-o-tainment for years now.

    Posted by: capt Author Profile Page | January 13, 2009 5:57 PM

  5. Twisted History: False Claims of Bush's Success on WMD

    [...]

    Here, we just want to set the record straight on the 10 big wins claimed on nuclear weapons. Rather than making us safer, President Bush leaves office with nearly every proliferation problem more dangerous than when he entered. Here are the claims and the facts.

    http://tinyurl.com/96ek9e

    Posted by: capt Author Profile Page | January 13, 2009 8:38 PM

  6. We learned nothing from Enron either. I can't escape the feeling that everything that has happened so far was premeditated.

    With the possible exception of Obama's election.

    Posted by: Titchaba Author Profile Page | January 14, 2009 3:58 AM

  7. Sociopaths always claim that if they had been stopped by others nothing bad would have happened. It is not their fault that no one put a stop to whatever depredations they committed. The fault lies with those who failed to stop them.

    Posted by: kalpal Author Profile Page | January 14, 2009 9:10 AM

  8. Eggggggactly!

    Posted by: capt Author Profile Page | January 14, 2009 10:48 AM

  10. The problem with the news we get is the Media we get it from. Morning Joe the Cacophony wants to change how we accept torture. Hannity, Gibson and others want to change how we remember Bush. Bush is spending more effort taking his bow than he took avoiding, or facing the problems around him. Suddenly we should look back and say we all wanted the War, the torture, the fictional economic assessments, and we wanted Social Security to go to the stock market and W saved us just in time.

    Waterboarding of Khalid Sheik Mohammed got him to confess to everything. There is no way he was behind everything. He can't be tried and convicted of everything, so we gain nothing.

    And the Media still want us to buy into the 911 theory that an Arab in a cave with a cell phone attacked the United States.

    I will contradict myself and say I do support Rendition and Waterboarding in one instance. I think that in 30 minutes we could get Bush and Cheney to tell us what really happened, and never even turn on the water.

    ON TOPIC. What a bunch of Whiners! There's nothing wrong with the economy. What we need is more deregulation! Think of the economy like a Barn. The livestock have all run off. But they left in the direction away from the existing regulation and had there been no doors and no walls they would have stayed. Phil Gramm.

    Seriously, has congress even broached the topic of putting walls back on the Barn?

    And could Osama, with a free pass and 100 billion budget possible wreak more havoc and cause more damage than 28 years of deregulation and 8 years of George W Bush? This guy cost us 60 trillion dollars and he still has 6 days left. Tomorrow he hosts the former Prime Minister of Australia - why? Is this a myspace visit because neither one of them has a job?

    60 trillion cost in 8 years. 10% of what the next 6 days could cost is still 12 Billion.

    Posted by: geof01 Author Profile Page | January 14, 2009 2:21 PM

  11. Well maybe we can get some warmonger action in Lebanon?

    I bet we could do that for about half what Iraq costs?

    (sarcasm)

    Posted by: capt Author Profile Page | January 14, 2009 3:32 PM

  12. I'm surprised it took so long for Hezbollah to join in.

    Have you seen the night clips from Gaza? Those are not Fireworks, the Israelis are using cluster bombs. Gee, just like we used in Iraq and Afghanistan.

    A war crime is a war crime is a war crime.

    I don't believe Bush has read anything about Lincoln (unless he picked up a penny), but I bet he can sing the Marine Hymn.

    Six more days, send in the Marines. On to Tripoli!

    Posted by: geof01 Author Profile Page | January 14, 2009 5:01 PM

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