Phil Gramm's Extreme Makeover
By Jon Perr Saturday Feb 21, 2009 2:00pm
As the crisis of the American financial system deepens, former Texas Senator Phil Gramm is a consensus choice as one of its chief culprits. In recent weeks, the New York Times, Time and Nobel prize-winning economists alike have suggested a warm seat awaits Gramm in Dante's inner circle. Which is why on the very day the UBS vice-chairman's firm was sued by the Justice Department for its role in a mushrooming tax evasion scandal, Gramm took to the pages of the Wall Street Journal to blame others for the economic calamity he helped create.
As ThinkProgress noted, Gramm in his extreme makeover pointed the finger at the right-wing's usual suspects. In Gramm's revisionist history, Fannie and Freddie, the Community Reinvestment Act and, above all, the poor are responsible for the nation's economic plight. Three months after the New York Times concluded "deregulator looks back, unswayed," Gramm insisted the 1990's deregulation crusade he led had nothing to do with it:
"I believe that a strong case can be made that the financial crisis stemmed from a confluence of two factors. The first was the unintended consequences of a monetary policy, developed to combat inventory cycle recessions in the last half of the 20th century, that was not well suited to the speculative bubble recession of 2001. The second was the politicization of mortgage lending."
Gramm's fingerprints, of course, have been all over the financial meltdown and steep downturn gripping the U.S. economy over the past year. In his role as an adviser to John McCain's presidential campaign, Gramm famously decried the "mental recession" and mocked the United States as a "nation of whiners." But it was his "Enron Loophole," codified in the 2000 Commodity Futures Modernization Act, which not only enabled the Enron disaster but opened "the door to unregulated trading of credit default swaps, the financial instruments blamed, in part, for the current economic meltdown." And the Texas Senator's machinations in the Senate to create the 1999 Gramm-Leach-Bliley Act helped produce the subprime mortgage cataclysm, including catastrophic losses at UBS since joining the company in 2002.
Which brings us to a final irony of Gramm's extreme makeover. As it turns out, before he became a UBS vice-chairman in 2002, a company which this week agreed to pay a $780 million criminal fine and admitted to conspiring to defraud the IRS, then Senator Phil Gramm helped lead the 1990's Republican war to gut the Internal Revenue Service. Perrspectives has the details.
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Phil Gramm is public enemy number one!
The unregulated Credit Default Swap and the Financial Gangster's that employed them are his army.
My previous comment, the government is completing the swindle. Here
View the little video with my comment in mind.
Time had Gramm at number 2. Here in HuPo David Fiderer deconstructs the Time Article and gets it right.
who claim a higher moral ground.
None of these assholes knows what an honest day of work looks like...
an honest day's work, as long as they don't have to do it.
We really need to get rid of the whole "career politicians" concept on all levels and parties.
wtf?
Phil Gramm's Extreme Makeover
Here's a glimpse:
http://www.youtube.com/watch?v=1plvBR02wDs
Ron Paul Asks McCain a ? @ Florida Repub.Debate:
> http://www.youtube.com/watch?v=oUZwL9GPcNw
douchbag extraordinare!
Turtle Blossom?
included some kind of retirement from public life on his part and if necessary, investigation followed by any prosecution warranted by said investigation.
At least 50% of the comments (via Yahoo) on the TIME article that named Gramm seem to come from outraged Wingnuts charging librul media bias. The global economy, by their logic, was destroyed by Barney Frank and his BOYFRIEND (his former patner from ten years ago, who was an exec at Fannie Mae) with a little help from Chris Dodd.
Fucking Lunatics.
Snip - "The Stanford Financial Group hired its first Washington lobbyists in 1999, at the time the anti-money laundering drive was gathering steam. And the company quickly learned how to cultivate pull in the Capitol -- between July 2000 and July 2001, Stanford and his employees doled out $448,000 in "soft money" contributions to senior lawmakers in both parties, according to a report by watchdog group Public Citizen.
Among the lawmakers benefiting from Stanford's largesse was Senate Banking Committee Chairman Phil Gramm (R-TX), who let a House-passed money laundering bill die a quiet death in his panel in the last months of the Clinton administration."
> http://tpmdc.talkingpointsmemo.com/2009/02/mr...
He's has a Ph.D in economics, but I think his ideology overrides the data when he espouses policy. At this point, I think Gramm is irrelevant going forward.
It's Obama, and what appears to be ideologically based opposition to the bank nationalization that I worry about. It's not the opposition, but rather, the reasons for the opposition I worry about. If it's simply "government can't run the banks", well, I would point out that they're not being run well now.
We have now allocated $75B for mortgage relief, yet, we've already poured down $120B (?) on AIG alone?
I think that we're not merely bailing out sub prime mortgages, but also a pyramid scheme involving these derivatives, including the credit default swaps that Gramm defends. If nationalization of the banks can help avoid paying off this derivative pyramid scheme, I'm all for it.
Gramm says “If this crisis proves nothing else, it proves you cannot help people by lending them more money than they can pay back.” There's the old Republican argument that these unfortunate banks had foisted upon them by the government, the obligation to lend to the poor. Of course, left out is the part where, if no one in their right mind would lend to these folks, absent the obligation being foisted upon them, how is it that the resulting securities comprised of these loans obtained the highest investment grading of AAA? Without that grading, it would have been impossible for the mortgage fiasco to scale to the point that it did.
It's a mess, and what we're hearing from Gramm is a lot of obfuscation. But then again, we're a nation of whiners.
I heard his master and doctorate papers were read by economic experts who claimed it was the worst sort of collegiate writing, too short, mostly quotes, not well sourced, with little personal view or interpretation.
It's a mess, and what we're hearing from Gramm is a lot of obfuscation. But then again, we're a nation of whiners.
____________________________________________________________
Funny, I thought we were:
http://www.youtube.com/watch?v=aNddW2xmZp8
If he has a doctorate in economics, then his culpability due to greed and corruption becomes even more heinous because it's not just an ideology; it's "premeditated".
Fucking morally-bankrupt Texans are the scourge of humanity.
I can't believe the number of corrupt Texas legislators and administration officials! Is it in the air down there? Hell, the moniker of "corrupt" is almost now a synonym for Texas. Maybe it's time for the Mexicans to take them all back?
John Cornyn's working overtime to buff up his public image. This is the MO just before they fall. I'm sure Cornyn is a crook.
At the bottom of this rigged cesspool of greed and filth we have found Phil (Gramm/Leach/Bliley) and his sidekick, Mr. DeRegulator himself in Congress, Johnny boy, McSleaze. (can't wait to see those UBS off shore account names, can you??).
Phil Gramm began writing copiously to every newspaper outlet who would publish him in order to deflect the responsibility for this economic disaster to other "players".
Many of us know that Phil Gramm is the "ringleader" and when he is put before a congressional committee, he will either perjure himself and become indicated for perjury or he will talk which, of course, points the evil finger of culpability squarely upon his shoulders.
He tanked McCain's campaign from the outside, this we also know. He's toxic - and always has been.
I hope Phil's "color me beautiful" color happens to be orange - orange jumpsuits as he is frogmarched directly to jail without passing Go.
and deliver him to the city square for public flogging! Phil Gramm is a crook.
Lugar was Gramm's partner in deregulation criminality. And Lugar is Obama's favorite Republican. That is bad news. Let me tell you, Roland Burris and Blogo are nobodies compared to these senate fleecers who have been around for nigh on 20 years.
Why does UBS only pay a fine? They deliberately defrauded the US government. Some poor slob who sells an ounce of pot gets jail and these white collar gangsters don't spend a day in the slammer AND get to keep the money they've made.
If these banks were allowed to fail, corporatism would die. It is being kept alive by our tax dollars. There should be no bailout for the banks and the multimillions of dollars of the failed CEOs should be confiscated as reparations. Their power is destroyed when they go bankrupt. I'd willingy go bankrupt myself if it would break the stranglehold corporations have on this country.
Phil Gramm, Dick Lugar, Robert Rubin, Dick Fuld, Alan Greenspan and others should remain on the front pages until everyone knows of their crimes. And let's not forget that Mr "It's all in your whiny head" Gramm was a soft core porno investor.
I think Obama should be called on the UBS fiasco. They were one of his campaign's biggest contributors. I say put Obama in the hot seat over it. "Mr President, why isn't anyone from UBS going to jail, sir? They deliberately committed fraud and hid it for years. If an average citizen did this, committed crimes of such high monetary value, they'd go to jail. Why is the war on drugs more important than the war on America's taxpayers? Is it because of their campaign contributions?"
I wish to God these thieving bastards were made to pay. But Mr Potter is still in charge of Bedford Falls. George Bailey would have landed in jail if he hadn't been bailed out by the little people while the real thieves got away scot free. Frank Capra wasn't such an optimist after all. He knew the Potters always get away with it in America.
C and L decided to write this as a separate post. When Phil Gramm left Congress, I thought that we were through with having to listen to his greedy little ideas... little did we know that he was worming his way into Americans' pocketbooks in other disastrous ways..
Phil Graham is correct on the first point (ugh!). Excluding other factors that I don't want to get into, the monetary policy of the past 6 to 7 years did help create a lot of this by attempting to manufacture growth and out-maneuver a recession that needed to occur.
I guess the joke is on him though, as this was Bush and company's monetary policy.
So in the end, yes, he is right in a "This is the reason it happened because WE DID IT. So THERE!"
it was Bill Clinton who signed this into law.
The fact Bill Clinton signed the bill does not make Phil Gramm and the rethugs innocent. Who has been in power in all branches of government since Clinton and if the rethugs are to claim it is not their fault, why didn't they reverse it while W and Cheney and the boys were riding high? Your excuse is complete bs.
I could be wrong, but I believe Newmoon's point is that this is a bi-partisan screw-up. Which I completely agree with. Both parties are incompetent, hence the need for legitimate 3rd, 4th, and 5th parties.
We have seen the .com bubble burst and the Enron bubble to burst and then the oil over the counter bubble last year as well as the mortgage fiasco since Clinton was president. If it was wrong and the repugs didn't do it, they had plenty of opportunity to fix it, did they? Hell no! They caused it. Phil Gramm had his dirty hands on all of it.
That was the point going right over your head.
BOTH PARTIES RESPONSIBLE.
That's exactly what I ment.
BC signed it. If you recall, the atmosphere back then was very hostile towards BC. The GOPers( with the help of one Dem) had a veto proof majority.
54-44. was the vote tally. Then by an overwhelming majority. As shown below. They're all a bunch of stupid fuckers.
See also Depository Institutions Deregulation and Monetary Control Act passed in 1980, the Garn-St. Germain Depository Institutions Act deregulating the Savings and Loan industry in 1982, and the Gramm-Leach-Bliley Act in 1999.
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate[11] and by a 343-86 vote in the House of Representatives[12]. After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bipartisan bill resolving the differences was passed in the Senate 90-8 (1 not voting) and in the House: 362-57 (15 not voting). Having majorities large enough to override any possible Presidential veto, the legislation was signed into law by President Bill Clinton on November 12, 1999. [13]
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.[6]
The argument for preserving Glass-Steagall (as written in 1987):
1. Conflicts of interest characterize the granting of credit – lending – and the use of credit – investing – by the same entity, which led to abuses that originally produced the Act
2. Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.
3. Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.
4. Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).
he argument against preserving the Act (as written in 1987):
1. Depository institutions will now operate in “deregulated” financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without much restriction from the Act.
2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms.
3. The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them – by diversification.
4. In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation.[6]
[edit] Financial events following the repeal
The repeal enabled commercial lenders such as Citigroup, which was in 1999 then the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. [14] It is therefore seen by some that the repeal of this act contributed to the Global financial crisis of 2008–2009[15]. However, such SIVs existed before the repeal of Glass-Steagall[16]
The year before the repeal, sub-prime loans were just 5% of all mortgage lending. By the time the credit crisis peaked in 2008, they were approaching 30%.
This thing (economic disaster (not economic crisis that Obama likes to call it)) is very very complicated. It is not for everybody to understand. the best economists in the world are trying to figure out how to solve it. rest assure that Phil Gramm is one of the people who are very responsible for this nightmare that we very well may not recover from. And credit default swaps and sub prime lending to anybody with a pulse is the basis for the meltdown. Make no mistake. If you want to get a handle on what went wrong start there. Phil Gramm made it all possible. I hope he dies a long slow painful death.
what happened to the good old days when they would just launch themselves out of high-rise windows?
He can't even state an important factor which had a huge impact and would have in any case.
Namely, that the "Big Pool of Money"* went from 32trillion dollars in 2000 to more than 70trillion dollars by the end of 2007. In other words, in the last eight years there was a huge increase in the demand for investment. That's what financed the housing bubble.
There is a good chance that even with tougher regulations the system would have gone in overdrive, but not as much as it did, which is the difference between a mild recession and a complete meltdown.
The Big Pool of Money is the sum of worldwide long term savings, mainly pensions and insurances, which need to be invested in order to compensate for inflation.
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