Wednesday, May 28, 2008

Meet McCain Adviser, Lobbyist Phil Gramm: He Gave Us "The Mortgage Crisis"

Yet another Phil Gramm scandal
Mother Jones: Phil's Felon

Phil Gramm is McCain's man on economic issues. Gramm is one of the most loathesome of the former Republican officeholders advising McCain. He's on the board of Swiss bank UBS and was registered as a UBS lobbyist until April 18th of this year. His wife Wendy was on the board of Enron when Enron imploded, stealing millions of tax dollars from California taxpayers. And Phil Gramm pushed legislation that helped Enron steal their money. The Gramms are Republican corporate slime of the highest order. Oh yeah, and they're rich from all the corporate money they've been pulling down.

As Senate Banking Chairman in the 1990s, Phil Gramm authored the bill that repealed the Depression-era mortgage regulations, and allowed basically any kind of corporation to give loans, without regulation, which lead directly to the mortgage crisis. The he quickly left the Senate and sold the remnants of his soul to Swiss banking giant UBS.

The Gramm-Leach-Bliley Act was signed by Bill Clinton in 1999, BTW, another of his centrist moves that I have a big problem with, like NAFTA and welfare reform. Why am I to believe that Hillary Clinton will not be just as much of a centrist, despite the very liberal positions she takes in front of Democratic audiences? But I digress. Now we are the middle of the subprime mortgage crisis, loans having being given to people who didn't have the income to pay them or the house not being worth what they were borrowing, and now the government is giving bad actors like Bear Stearns $30 billion bailouts. So what was John McCain's (and his lobbyist pal Phil Gramm's, as Gramm advised him on the speech) solution to the problem? Let the homeowners lose their houses, said McCain in March:

“I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” McCain said. “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.”

Fuck those little people, said Mr. Lobbyists-R-Us. Let them sleep in the streets. I can go to one of my eight homes. Phil Gramm can go home to his little house outside San Antonio, or to the vacation home in Maryland that he had renovated for free. Screw the little people.

Molly Ivins summed up Phil Gramm
the best (hat tip to Christy at firedoglake for this quote):

...Gramm, the great crusader against government spending, has spent his entire life on the government tit. He was born at a military hospital, raised on his father's Army pay, went to private school at Georgia Military Academy on military insurance after his father died, paid for his college tuition with same, got a National Defense Fellowship to graduate school, taught at a state-supported school, and made generous use of his Senate expense account. In 1987, a Dallas developer named Jerry Stiles flew a construction crew to Maryland to work on Gramm's summer home. Stiles spent $117,000 on the project but was kind enough to bill Gramm only $63,433. When Stiles got in trouble for misusing funds from a savings and loan he owned, Gramm did him some "routine" favors with regulators. Stiles was later convicted on 11 counts of conspiracy and bribery.

As a member of the Senate Finance Committee and the recipient of enormous banking contributions, Gramm did an even bigger favor for the financial industry in 1999 when he sponsored the Financial Services Modernization Act allowing banks, securities firms, and insurance companies to combine. The bill weakened the Community Reinvestment Act, which requires banks to help meet the credit needs of low- and moderate-income neighborhoods. Gramm described community groups that use the CRA as "protection rackets" that extort funds from the poor, powerless banks. The bill is also a disaster for the privacy of bank customers and weakens regulatory supervision. As Gramm proudly declared, "You're not going to find a single bank, insurance company, or securities company that will say they were hurt financially by this bill."

To be fair, Gramm occasionally found it in his heart to assist the poor -- like the time he suggested that mothers on welfare would be better off working for $2.50 an hour. A more typical Gramm vote, though, came on an energy bill that benefited oil and gas companies at the expense of consumers. "There are winners and losers in every economic decision," Gramm said portentously. He was then getting more oil and gas money than any other member of the Senate....

Here are some excellent posts outlining Phil Gramm's nefarious lobbying activities:

Christy Hardin Smith, firedoglake: McCain’s Cronies: Phil Gramm (R-Enron) And His UBS Lobbying Problem

dday at Hullabaloo: Lobbyists In The Closet

MSNBC: McCain economic policy shaped by lobbyist
Swiss bank paid McCain co-chair to push agenda on U.S. mortgage crisis

Here's Keith Olbermann last night on McCain's Gramm problem:

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