Monday, September 15, 2008

Nailing the Crisis on McCain

So far, Obama has done a pretty good job of using the latest financial crisis to call attention to the utter inability of Walnuts Depends and Caribou Barbie to propose, much less achieve, changes to our profoundly dysfunctional economy.

But it cannot be emphasized enough how much McCain, his current advisors and the current leadership of the republican party are directly and personally responsible for creating an anything-goes financial environment that would embarrass the original robber barons.

At The Nation, Robert Scheer details the involvement of McCain BFF Phil Gramm.

As with any Ponzi scheme, the perps, who included the legislators as well as the bankers who exploited the loopholes they provided, expected to bail long before the bubble burst. The role of the legislators, Republican-led but with far too many Democratic running dogs, was critical to the success of the scam.

(More after the jump.)

The mortgage swaps distancing the originator of the loan from the ultimate collector were made legal only as a result of the Commodity Futures Modernization Act, which former Senator Phil Gramm, R-Texas, pushed through Congress just hours before the 2000 Christmas recess. Gramm, until recently co-chair of the McCain campaign, also had co-authored the Gramm-Leach-Bliley Act, which became law in 1999 with President Bill Clinton's signature. That gem, which Gramm had pushed for years with massive financial industry lobbying, destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies. Those two acts effectively ended significant regulation of the financial community, and no wonder we have witnessed an even more rapid and severe meltdown in housing values than during the Great Depression.

Not surprisingly, Gramm was rewarded for his service upon retirement as a senator and as head of the Senate Banking Committee with a top position at the Swiss-based UBS bank, which is close to drowning in the subprime mortgage nightmare he helped create. These folks have no shame, as was evidenced when the senator's wife, Wendy, was named a director of Enron, whose roiling of the energy market had been made possible only through yet another provision of Gramm's Commodity Futures Modernization Act.

While neophyte Palin can claim ignorance of such matters, that would be particularly difficult for McCain, who as a senator consistently lined up with Gramm in his deregulation crusade. Clearly McCain had not learned much from his previous involvement with the savings-and-loan debacle about the risks to consumers in unregulated banking.

McCain served as chair of Gramm's abortive 1996 presidential campaign, and Gramm returned the favor, providing critical support for McCain with the hard-line Republican base, including the editorial board of the Wall Street Journal. It was assumed in the business press that Gramm was the front-runner to be Treasury secretary in a McCain Administration. Gramm left his role as the top economic person near McCain only after he made an embarrassing statement blaming the current economic downturn on "whiners," an awkward reference to the victims of his disastrous legislation.

Republicans have been waging class war on working Americans for more than a 125 years, and except for the presidencies of those two class traitors Theodore and Franklin, pretty much succeeding.

Succeeding in no small part because every time a liberal objects to the latest attack on the middle class, the dems shush her, terrified they'll be accused of waging "class warfare."

As the immortal Molly Ivins wrote: "What do they think the republicans are playing? Mah Jong?"

Way past fucking time for Obama to say it like it is: Republicans in general and John McCain in particular have one economic policy and one economic policy only:

Strip working people naked and give everything they have to the parasitic rich.

Cross-posted at They Gave Us A Republic ....