Economists: Gramm To Blame For The Current Crisis

[ProSense]

Economists: Gramm To Blame For The Current Crisis

In recent days, Sen. John McCain (R-AZ) has been promising to “put an end to the reckless conduct, corruption, and unbridled greed that have caused a crisis on Wall Street.” This is an interesting development for McCain, who before this week was a champion of deregulation.

It is doubly interesting though, because McCain voted for the bill that deregulated Wall St. and allowed such “reckless conduct” to occur in the first place. And one of the bill’s architects was McCain economic adviser, former Sen. Phil Gramm (R-TX).

In 1999, Congress passed the Gramm-Leach-Bliley Act, which abolished “all of the significant rules put in place at the time of the Great Depression designed to prevent a repeat.” Specifically, this act “destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies.”

Yesterday, a group of economists, including Nobel Prize winner Joseph Stiglitz, slammed Gramm for having a “mentality that doesn’t understand the nature of systemic risks in financial systems,” and said that his bill helped create the current financial turmoil:

Economic experts say that Gramm and others are to blame for the current crisis that is shaking Wall Street.

Gramm’s successful effort to pass banking reform laws in 1999, which reduced decades-old regulations separating banking, insurance and brokerage activities, helped to create the current economic crisis.

“As a result, the culture of investment banks was conveyed to commercial banks and everyone got involved in the high-risk gambling mentality. That mentality was core to the problem that we’re facing now,” Stiglitz says.

Lakshman Achuthan, managing director of the Economic Cycle Research Institute, said that “we were setting up this bonfire years ago — the deregulation, the inordinate amount of liquidity given to the system all set the stage for the bubble and the bust.”

So McCain is promising to put an end to the “reckless conduct” that he voted to allow, while being advised by a team that still believes rampant deregulation is the way to go.

[yourout]

1. yes, yes, yes,........

[gblady]

2. oh yeah....

spread the word...
nail his saggy ol' a$$.

[ProSense]

11. Yes,

spread the word.

[FrenchieCat]

3. So say US Whiners!.......

Which is everybody including those who vote, I reckon!

[Trajan]

4. EXCELLENT coverage ....

But too bad this is not MSM, who will most likely ignore the nexus between McCain/Gramm/economic disaster ....

Gramm is an ass ....

[depakid]

7. That's about right

[BumRushDaShow]

5. Gramm AND Greespan were the ultimate architects. n/t

[whistle]

6. Gramm is the happy faced laughing fascist next to John McCain in that photo

...just in case the U.S. Flag has thrown some of you off!

[MannyGoldstein]

8. That's Why Bill Clinton Vetoed It

What? You say he signed it in a New York minute?

Nevermind.

[judasdisney]

12. Oh yeah. He signed it. Why?

[Cha]

9. Oh shit! gramm's actions back in 1999 have come back

to bite him in the ass just when his candidate mccain is already losing the hearts and minds of American Voters with his vp choice. Double Damn Whammy.

[ProSense]

16. There are some

working tirelessly to give McCain and Gramm a pass.

[grannie4peace]

10. i think so too

[RooseveltTruman]

13. Why

Why did Bill Clinton sign this bill?

[ProSense]

14. What does that have to do with

55 Republicans, including McCain and Gramm, pushing and voting to approve the bill?

John McCain's Gramm Gamble

The GOP presidential nominee is relying on the ex-senator who helped bring you the mortgage crisis and Rick Perry.

Patricia Kilday Hart | May 30, 2008 | Features

In the early evening of Friday, December 15, 2000, with Christmas break only hours away, the U.S. Senate rushed to pass an essential, 11,000-page government reauthorization bill. In what one legal textbook would later call “a stunning departure from normal legislative practice,” the Senate tacked on a complex, 262-page amendment at the urging of Texas Sen. Phil Gramm.

<...>

While the nation’s investment bankers are paying a heavy price for their unbridled greed (in billions of dollars of write-offs), Gramm has fared quite nicely. He currently serves as a vice president at UBS AG, a colossal, Swiss-owned investment bank, the post, no doubt, a thank you for assiduously looking out for Wall Street interests during his 23 years in public office. Now, with the aid of his longtime friend Arizona Sen. John McCain, Gramm may be looking at a quantum leap in power and influence.

Gramm serves as co-chair of the McCain 2008 presidential campaign. As one of the candidate’s chief economic advisers, he is mentioned as a possible secretary of the treasury in a McCain administration. Their friendship was forged in the Senate as they worked against the Clinton health care proposal, and cemented when McCain served as national chairman of Gramm’s own (ill-fated) 1996 presidential bid.

During McCain’s rocky road to the nomination, it was Gramm as much as anyone who helped smooth the way. Last July, when it looked as though McCain’s campaign would go bankrupt, Gramm, who once called money “the mother’s milk of politics,” advised him to slash his costs and assisted him with fundraising. Throughout the marathon primary season, Gramm has made numerous appearances with McCain and served as an ambassador to conservative groups. This spring, when conservative commentators attacked McCain as too liberal, McCain shored up his conservative bona fides by (according to The Huffington Post) bringing Gramm to a meeting with the editorial board of The Wall Street Journal.

<...>

In Gramm, McCain has chosen for a campaign adviser a former senator who espouses free market, conservative principles, but whose actions in public office served wealthy contributors and even himself. Exhibit A: Gramm’s cozy Enron Corp. connections. Not only did CEO Ken Lay chair Gramm’s 1992 re-election campaign, but Gramm’s wife, Wendy, earned $50,000 a year as an Enron director from 1993 to 2001 (not counting perks that included stock options). Meanwhile Gramm pushed the company’s aggressive—and ultimately self-defeating—political agenda to escape government scrutiny.

more

[RooseveltTruman]

15. It doesn't

It doesn't. I expect as much from McCain and the 55 Republicans. But I expect better from Bill, and it surprises me that he signed it. My point in asking was to find if anyone knew of a quote or of Bill's reasoning at the time. Because it's really disheartening to me that he signed on to this. After all, he was the president. He had final say. He could have vetoed this..."The buck stops here," as one of my namesakes used to say.

[uponit7771]

17. RIGHT ON!!! There's NO FUCKIN WAY Gramm should be walking the streets now