Phil Gramm resigned from John McCain’s campaign today, but it’s far too late. He’s already kept him long enough to make it clear that Gramm’s economic positions are a major cog in his political machine, such as it is. McCain has already admitted in the past that the economy isn’t his strong suit, and he had a wide array of economic experts to choose from. So what does it say about
John McCain that he chose Phil Gramm, of all people, to be his surrogate on the economy?
That’s not to say that Gramm has no qualifications on the economy. He has a Ph. D. in Economics, after all. But in a 1995 review of Gramm’s doctoral dissertation, written in the late 1960s, James K. Galbraith notes that Gramm shows a "skeptical attitude toward data and evidence," and that his theories, such as they were, dated back to the 1940s. But even assuming that he’s qualified on paper, based on his doctorate, he is not the only economics expert McCain could have chosen. And given his record since his dissertation, one has little choice but to question McCain’s judgment regarding the appointment of experts to his campaign, which should call into question his judgment regarding Cabinet or other appointments, should be become president.
In other words, when he had the choice of many economic experts to fill in those gaps of knowledge that he himself claims, he chose Phil Gramm, who is one of the sleaziest politicians in US history. His penchant for financial corruption is practically legendary, although it was looked upon with awe by the Republicans when they ran Congress.
As Gramm’s statements and actions go, calling Americans "whiners" is actually rather mild. Phil Gramm (and his equally sleazy wife Wendy) is John McCain’s choice to advise him on the economy, and will definitely have a role in a McCain Administration, should he get that far. Therefore, everyone should know about the man who leads John McCain’s "finance team," and why you should be scared to death at even the prospect of this guy leading the economy in the near future.
Here’s what everyone needs to know about Phil Gramm, best economic buddy to John McCain…
Phil Gramm likes to think of himself as a self-styled "economic genius," probably because of the Ph. D., but the fact of the matter is, one of his earliest investment decisions was a failed investment in soft-core porn. You see, Phil had been shown a soft-core film by his brother-in-law, and after a lengthy discussion, he decided that a little soft core pornography might be a great investment. So, he invested $15,000 in a movie called "Beauty Queens," which was never made and for which he never recovered his money. It’s actually a damn shame he didn’t make any money, because his failure to make it in porn subsequently led to most of the economic problems we now find ourselves experiencing. Though he’s not nearly as famous, this early business failure may actually one day rank with Hitler’s failure to sell paintings or the New York Yankees’ failure to draft Castro as one of the great inadvertent tragedies of all time, because this failure led him on a path that took him to politics, where his path of destruction is in the process of becoming legendary.
Strangely, for a guy who’s supposedly some sort of "economic genius," Phil Gramm’s career subsequent to his failed soft-core porn venture has seen him advocate for every predatory, anti-consumer practice known to man, which we’ll get to. But worse, he seems to have no moral core. Economists are usually wrong about the economy; we all know that. But most of them tend to have at least some semblance of concern for the economy as a whole, and not just the filthy rich elements of the economy. Most economists, even those who tend to lean to the right, politically speaking, acknowledge the obligation of the government to keep business honest. But Phil Gramm has always been a sleazy politician first, and an economist second, apparently, because the emphasis has always been on sleaze.
There are so many examples of sleazy behavior, it’s hard to know where to start; they certainly won’t all fit into one column. For instance, in 1979, while serving in Congress, a series of letters bearing Gramm’s signature were sent to a Texas parole board, asking for the release of Bill Doyle, who was a repeat offender on drugs and weapons charges. Doyle was released, and has been imprisoned several times since. When Mother Jones produced the letter years later, Gramm blamed it on a staff member, who "forged" his signature.
In 1987, Jerry Stiles, a Texas savings and loan operator, as well as a Gramm campaign contributor, helped Phil build his vacation home on the Chesapeake Bay. Stiles wasn’t just any S&L operator; he had been heavily involved in three failed thrifts that had cost taxpayers $200 million. But Gramm didn’t flinch at the potential conlict when Stiles paid a contractor to fly his workers from Texas to Maryland (because we all know there are no qualified contractors in Maryland) to finish the two-story home. More than $117,000 worth of services were provided, but at least $57,000 of that amount still has not been paid by Gramm to this day.
But that particular story doesn’t end there, of course. Months later, Stiles met with Gramm to discuss oversight matters regarding S&L regulators. Gramm dismissed the meeting, claiming that he met with Stiles as an economist, not a Senator, but Stiles characterized it differently, saying that the meeting was "nothing but political," and letters were sent to regulators on Gramm’s Senate stationery, not his "economist" stationery.
(By the way, Stiles is now serving a 55-year sentence on federal bank fraud charges in El Paso, Texas. Wonder if a McCain pardon might be in order should he ever have that power?)
By 1992, Gramm was in charge of the Republican Senate Campaign Committee, which meant that he was in charge of all fundraising for Republican Senators. The infamous Bob Packwood diary notes a meeting on March 6, 1992, in which Gramm promised to funnel $100,000 in "soft money" to Packwood’s campaign. The party donation limit at the time was $17,500. According to Time magazine:
A March 1992 entry by the Oregon Senator puts himself, Gramm–then head
of the G.O.P. committee that finances Senate candidates–and two of
their aides in a brief discussion about funneling an illegally large
amount of national-party money to Packwood’s re-election campaign. "And
what was said in that room would be enough to convict us all of
something," Packwood wrote to himself. "[Gramm] says, now, of course
you know there can’t be any legal connection between this money and
Senator Packwood, but we know that it will be used for his benefit.
[The Gramm aide] said, oh, yes. God, there’s [Packwood chief of staff
Elaine Franklin] and I sitting there. I think that’s a felony, I’m not
sure. This is an area of the law I don’t want to know."
When confronted by the Senate Ethics Committee, Gramm claimed that the $96,500 released to Packwood’s campaign just days after that meeting was for legal party-building activities, such as voter registration and getting out the vote. Well, of course it was.
Then there is the time Gramm aided his neighbor and tax lobbyist J.D. Williams. It seems that Williams was under a little pressure from wildlife officials for illegal hunting on his property, so Williams asked Gramm to intercede and ask the officials to ignore the law, so that he could break it. Gramm called a meeting with Williams and Frank Dunkle, who was the director
of the U.S. Fish and Wildlife Service, to discuss wildlife
law enforcement on the Eastern Shore of Maryland. Under pressure from Gramm, Dunkle issued
a new policy, that only applied to the nearby Blackwater refuge, which forbade wardens from enforcing waterfowl laws on neighboring properties.
Well, apparently, the wildlife officials Williams had originally dealt with weren’t happy with the new law, because about six months later, one wildlife official was transferred
unwillingly to Georgia’s Okefenokee Swamp,
and a wildlife official who had initially refused to transfer him
was also reassigned.
And for those of you who think this is no big deal, well, it turns out that Gramm’s property was under surveillance at the time for illegal hunting, which means Gramm shouldn’t even have been talking to wildlife officials, let alone negotiating deals that took him off the hook for breaking the law.
All of these incidents point to a pattern of sleaze that is a hallmark of Gramm’s life in public service, but they are nothing more than a prelude to his exploits in the latter years of his public career.
You see, Gramm is almost single-handedly responsible for the infamous "Enron Loophole," which will rank as one of the most destructive elements in the history of our economy. For those of you wondering why so many homes are being foreclosed upon, and why we’re looking at $150 per barrel oil, not to mention predatory practices which have consistently taken huge bites out of our savings and investments, look to Phil and Wendy Gramm.
The Enron Loophole was a last minute amendment, added as the Senate was trying to pass an omnibus appropriations bill in December 2000. Late on a Friday evening, as the Republican-led Senate prepared to finish up in time for a Holiday recess, Gramm tacked a 262-page amendment to the bill; an amendment that has essentially caused our economy to head south over the last few years. Of the amendment, at the time, Gramm said:
“The work of this Congress will be seen as a watershed where we turned
away from an outmoded Depression-era approach to financial regulation
and adopted a framework that will position our financial services
industry to be world leaders into the new century."
What it actually did was to create an atmosphere in which Congress abdicated its Constitutional responsibility to regulate commerce. This amendment, combined with the Gramm-Leach-Bliley Act, passed in 1999, served to largely destroy the regulatory scheme put in place in the 1930s, to prevent another Great Depression. From 1995-2000, while Gramm chaired the Senate Committee on Banking, Housing, and Urban Affairs, Gramm received more than $1 million from the Securities & Investment industry. Strangely, he didn’t run for another term.
The effect of these laws can hardly be overstated. These laws took away the regulations that made the market honest, and replaced it with a lack of regulation that gave the markets over to the crooks. Here’s a simple question to ask yourself. If there were no rules and regulations, how secure do you think you’d feel about any financial transaction you entered into with another person? Let’s face it; even with a lot of regulation, there are always people looking for a way around them. But with no regulation in place, they don’t even have to make the effort, and all financial transactions become suspect. So, what Gramm did, in order to pay back his financial supporters, was to make it far easier to screw the average consumer. I’ll have more on this in other posts, but suffice it to say, the falling value of your home, the shaky foundation of the financial industry, the declining value of the dollar, and the tripling of gas and oil prices in the last few years can all be traced to Phil Gramm’s virtual elimination of government regulation of financial markets. Gramm paid back political favors worth millions of dollars, but the end result is a system that will cost taxpayers trillions of dollars before this is all over.
There are so many other aspects of Phil Gramm’s public life that deserve scrutiny. For example, Wendy Gramm was on the Board at Enron, when Gramm passed the "Enron Loophole," and she made out like a bandit, almost literally, even as Enron was using these new laws to screw old ladies out of their retirement, and to jack up the price of electricity for everyone else. Essentially, his law made Enron’s excesses possible, at a time when, ethically speaking, he shouldn’t even have been making law dealing with such things.
And I haven’t even gotten into Phil and Wendy Gramm’s exploits on the part of MTBE producers back in the 1980s. They are almost solely responsible for the Reagan-era laws demanding that MTBE be used, in addition to ethanol, to cut smog emissions in gasoline.
This is what we have to look forward to with a McCain presidency, folks. Because John McCain has admitted to having little or no knowledge of economics, it can be presumed that he will be relying on the expertise of others for economic advice, and thus far, he’s chosen a man who masterminded the economic conditions we now find ourselves in. It’s beyond rationality to believe that McCain would hire someone as his major economic adviser whose economic philosophy is the opposite of his, and yet that is exactly what is needed to get us out of our current economic mess.
Here are some Phil Gramm quotes,
“If I bought groceries the way I buy health insurance, I’d eat a lot better – and so would my dog."
“I have the most reliable friend you can have in American politics, and that is ready money.”
“I’m carrying so much pork, I’m beginning to get trichinosis."
(When Clinton enacted his middle class tax cut) “The reality is (Clinton’s) so-called tax cut is
basically giving money to people who largely don’t pay taxes, so that
it’s really spending rather than a tax cut."
“It’s not fair to say that people who work with their
head or with their hands ought to pay taxes, but people who earn their
living with capital ought not to.”
Phil Gramm’s economic philosophy IS John McCain’s economic philosophy. Whoever replaces Gramm will believe in the same sort of predatory economic strategy that Gramm specialized in. And even if Gramm himself doesn’t serve in a McCain Cabinet (and there is no reason to think he won’t, just because he’s resigned now). someone else just like him will take his place. So, the question you have to ask yourself is this; can we afford four more years of rampant foreclosures, high energy prices, a declining dollar, and "speculators" who take the rest of us into the poor house with them?