Phil Gramm: McCain's Economic False Prophet (or Profit?)

THE JULY 18TH BUZZFLASH GOP HYPOCRITE OF THE WEEK

Phil Gramm

Welcome back to the BuzzFlash GOP Hypocrite of the Week.

Phil Gramm really lives up to the true meaning of hypocrite.  A professor of economics and top economic adviser to presumptive presidential nominee (yes, they already kissed and made up) Sen. John McCain (R-AZ), he showed last week that he really knows nothing about both free market capitalism and our country's financial system.  Or maybe he just doesn't want to admit that our current financial crisis is partly his own damn fault.

The part of Phil Gramm's glowing interview last week with conservative, Sun Myung Moon-owned newspaper The Washington Times that everyone is all hot and bothered about is Gramm calling the rest of us whiners.  But this portion may more clearly elucidate what is going on in that cash-addled brain of his.  Here's an excerpt from the article where Gramm talks about how great the U.S. economy is doing:

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years.

Indeed, that's true.  As long as the "we" Gramm is talking about is "me, myself and I" (and his wife and GOP buddies, of course).  And excepting the "natural" part: Gramm's advantages are all man-made.

One of the biggest problems with our economy today is the fallout from the subprime market, which Gramm helped right along both as U.S. Senator from Texas and later as vice president of Swiss bank UBS.

Gramm's bank deregulation bill of 1999 was recently described by presumptive presidential nominee Sen. Barack Obama (D-IL) as "more about facilitating mergers than creating an efficient regulatory framework."  Mergers such as the acquisition of Paine Webber by UBS, to name one of many. 

As soon as he left the Senate, Gramm got a job with UBS.  There he lobbied Congress, which passed the Responsible Lending Act (or Loan Shark Protection Act, as some would call it).  The act did away with state laws protecting consumers against predatory lending, while the Fed largely ignored the growing credit crisis.

He benefited greatly.  But those homeowners who can't pay ballooning mortgages that the banks talked them into taking?  Whiners.  Same goes for investors who bought into mortgage-backed securities that are now worthless.

But that's not the only time that Gramm used his economic "expertise" to benefit from the losses of others.  In 2000, Gramm sneaked an amendment into the omnibus bill which allowed the Enron scandal to happen by exempting energy trading from oversight.  Not only was Enron a major contributor to Gramm, but his wife brought home millions as a board member of the now-defunct energy giant. 

The bill also allowed for rampant commodities speculation, which many economists (and here I'm talking about actual economists, not fat cat Republicans with underutilized Ph.D.s in economics) blame for the extreme rise in the price of oil.

Gramm and his wife benefited greatly.  But those Enron employees who lost their jobs and pensions?  Whiners.  American families who can't afford the gas it takes to drive to the grocery store?  Whiners.

Honestly, there's way more to Gramm's duplicity than just economics and it amounts to a lot more than can be covered here.  Check out this excellent Mother Jones profile, which begins with this:

"Phil Gramm uses military rhetoric, but never served. He was a deficit hawk until tax-cutting was cool, a libertarian until gay-baiting was cool, and a poverty fighter until blaming the victim was cool."

But we think Gramm's doublespeak on economics alone qualifies him to be this week's GOP Hypocrite of the Week.

Remember our motto: So many Republican hypocrites, so little time.

See you next week!

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