A Straight Question
Lisa Lerer at Politico offers a useful probe into John McCain's tight relation to Phil Gramm, longtime (and well-paid) promoter of the banking deregulation that greased the skids for the housing calamity.
Which offers an opportune fulcrum for a simple question: "Senator McCain, since economics is not your strong suit, why is the senator who campaigned for the mergers that made the housing meltdown possible part of your inner circle? Why were you chairman of his 1996 presidential campaign? Why do you think further deregulation the wise path at this moment?"
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Todd,
I invited Phil to join my campaign because I felt his expertise in banking deregulation would be a strong complement to my own firsthand experience with Savings & Loan deregulation. Working together, Phil and I can ensure a steady stream of taxpayer funded bailouts of deregulated segments of the financial industry. We think that and a never-ending multi-trillion-dollar war in Iraq will provide all the fiscal stimulus we need to keep our economy humming.
Hope to get your vote this November!
Your friend,
John McC.
March 29, 2008 1:00 AM | Reply | Permalink
Didn't Gramm's wife have a hand in the bill or deregulation that allowed ENRON to get involved in what eventually caused the scandal at ENRON? And didn't she leave government after the bill passed to take a seat on ENRON's board?
I've come to the conclusion that the most corrupt people in this country are Texas Republicans.
March 29, 2008 8:11 AM | Reply | Permalink
Yes, Wendy Gramm was ideally positioned to "help" Enron. In particular, it is well known that she was not merely on the Enron board of directors, she was on the audit committee that approved not only the magical accounting tricks, but also supervised the Andersen audit!
http://www.rense.com/general19/en.htm
(If you don't trust that particular link, simply run a Google search using the terms "Gramm Enron audit". There are plenty more where that one came from.)
The relationships among the Gramms, the Bushes and Enron was one of the many many relationships that show us exactly how conservative deregulators actually work.
Every market, everywhere, every time is *always* subject to manipulation. The only question we need to answer is whether the manipulation is private and invisible to the general population (e.g. Enron, the mortgage crisis, etc. ad nauseam), or whether the manipulation takes the form of regulation by government.
The difference between the two is interesting: One is all but invisible, and not subject to assessment by the affected population, and the other is (ok, tends to be) visible and is therefore subject to change due to political forces.
Gee, I wonder why "government regulation" is so reviled by corporate executives?
March 29, 2008 8:55 AM | Reply | Permalink
lenski,
this shit all started with Reagan, he made it OK for the Sharks to come out from beneath their rocks. Whether its ENRON, sub Prime, S&L, or Corporate Executives getting paid 10s/100s of millions to run companies/Corps that lose money,
Reagan turned them loose.
But Reagan had help. He pandered to politically unsophisticated white, blue collar workers when he told them how evil the Welfare Queen in her Cadillac was, which sent a subliminal message to them, one that still gets Republicans elected, and the message was;
"get the 'niggers' off welfare," and the result was;
the Reagan Democrats built the gallows the Republicans used to hang them.
March 29, 2008 10:03 AM | Reply | Permalink
Sadly true, John. And the method hasn't died out.
Here in Missouri, our GOP boy governor was elected, in part, to cut the money being wasted on Medicaid due to the cheating in the system. Since most of the money was spent in the urban areas, the inference was that the city blacks were gaming the system.
So the cuts were made and the rules were tightened up. Caught in the net were a bunch of rural and small town folk who were appalled that folks would think they were cheating since only the blacks in the cities did that.
Needless to say, our boy wonder's approval dropped into the cellar and now we'll be electing a democrat as governor.
Too many believe this sort of nonsense. And, yes, the Reagan Democrats need to be called the enablers that they are.
March 29, 2008 12:07 PM | Reply | Permalink
I agree completely. Shortly after Reagan was elected, I recall becoming concerned for the structures that I felt had been helping this nation move toward improved balance between "power" and "people".
Beyond the examples you cite, I believe that Reagan started a trend that has not yet run its course, which I call Regulatory Inversion: Deregulate relationships where powerful but narrow interest groups could affect many individuals, and disable social mechanisms whereby individuals could seek redress for actions taken by powerful interest groups.
I believe Reagan's election was only one part of a well-organized and unfortunately successful attempt by a few powerful interest groups to reverse gains made through the 1960's and 1970's of individual people's capacity for self-determination.
March 29, 2008 12:58 PM | Reply | Permalink
Lenski,
I think prior to Reagan there were unwritten laws, some things 'you just didn't do', like use replacement workers for people on strike, or fire striking workers, or maybe you jsut didn't steal people's pensions, etc. There seemed to be a limit to how greedy one could be.
Reagan gave us the HUD scandal, the S&L scandal, he fired the Air Traffic Controllers, under him we saw the leveraged buy outs, where sharks would use people's pension funds to buy companies, then break the companies up into smaller pieces and sell them off, putting everyone out of work.
Reagan gave the green light to the "Greed is Good" Gordon Geckos of the world and they've been growing in numbers ever since. To me, Ivan Boesky and Michael Milken were the Sons of Reagan.
Today, Corporate America and Wall Street are full of Milkens and Boeskys.
Iran/Contra showed how Reagan had the same disdain for law as Bush does.
March 29, 2008 2:47 PM | Reply | Permalink
Reagan used the innate racist backlash in the country to take power, dismantle the financial and regulartory power, and increase the fortunes of the wealth at the expense of the average person.
The Democrats have so far not been effective at countering those actions politically. Bill Clinton, with his centrist approach, tried to steal the Republicans thunder, but in the end he basically advanced their cause by continuing their program of deregulation. Wouldn't it be ironic if the "Reagan Democrats" were brought back into the Democratic Party by a black President?
March 29, 2008 4:09 PM | Reply | Permalink
dhs asks:
"Wouldn't it be ironic if the "Reagan Democrats" were brought back into the Democratic Party by a black President?"
That's the best example of irony I've ever come across :-)
March 29, 2008 5:36 PM | Reply | Permalink
Yes, John1141, Wendy was heavily involved in the collapse of Enron. Here is a link to a Salon articlen her role at the SEC and then her resulting employment on the Audit Committee of Enron that approved those fraudulent financial statements in which Enron had to restate earnings for as far back as the law requires.
As for how crooked the Texas Republicans are, well, yeah.When I first voted for LBJ in 1964, politics in Texas was the Democratic Party, dominated by conservative Democrats but with a flourishing wing of Liberals. The Republican Party was the repository of the KKKer's too crazy to be accepted by conservative Democrats and bankers, John Birchers, a few American Nazi Party members (seriously - I knew several) and assorted other similar idiots.
But wealthy Yankees from Republican states were moving to Texas and remained Republican - like George H. W. Bush. Then when Nixon's Southern Strategy brought the racist Democrats into the Republican Party, that event sharply expanded the Texas Republican party, and the Democratic Primary stopped being the effective election.
Just over two decades ago the Christian Coalition decided to take control of the Republican Party. You might remember news reports of Conservative Baptists taking control of the Southern Baptist Convention during the 70’s. Those were and remain fundamentalists. Then they went political during the Reagan era.
Because the delegates to the state convention are selected in the caucuses that are now so famous, a church could organize four or five people in each precinct and take control of the county party easily, since few others attended. The state conventions has belonged to them since the late 80’s. Tom DeLay and Ron Paul are two examples of the politicians who were elected by the combined Reagan Democrats and the Christian Coalition fundamentalists, and they were the driving force that allowed George Bush to defeat the very popular Ann Richards as Governor in 1994.
Today that Republican coalition still owns the Republican Party as a review of the Texas Republican Party Platform will affirm. The last step in their domination was when the illegal corporate donations were laundered through the RNC by Tom DeLay back before the 2002 election and the Republicans took control of the State House of Representatives for the first time since Reconstruction.
It's not that Republicans here are crazy. It's that the crazy ones are organized primarily through the evangelistic churches and have control of the Republican Party. I think that it is largely a reaction against forced busing along with a reaction against the urbanization of what in 1950 was a primarily rural state but now has five of the largest metropolitan areas in America. The crazies are the leaders who have surfaced.
That's just my opinion, of course, based on my observations of what has happened here politically.
March 29, 2008 8:31 PM | Reply | Permalink
Richardxx,
thanks much for the excellent post/history lesson.
A couple of years ago I was at breakfast with a friend, a Republican. We were talking politics and I told him I thought the Bush/Cheney gang are destroying the Republican party for a generation.
That they had the help of a Republican controlled Congress seems to have greased the skids to perdition.
My prediction may have been prescient; since then the Dems took over Congress, and today, Republican incumbents are retiring by the boatload, many like old line Repubs. Tom Davis, and Denny Hastert. Maybe these retiring Congresspeople see the writing on the wall; minority status for the next 30 years.
March 30, 2008 11:58 AM | Reply | Permalink
Looking at the age of the House retirees, generally 60 plus, I'd say they were looking ahead about three to five terms. Six to ten years. Their financial options outside Congress will be a lot better than inside as minority committee members.
After the Great Depression the the wealthy conservatives were at first chastened, then because of the real progressive income tax could not find many new recruits. That, I'd guess, was the real effect of the Reagan Revolution. It returned political power to the wealthy and allowed them to grow great fortunes based entirely on the existence of their wealth rather than on their work or entrepreneurship.
My guess is that the sharply progressive income tax and a real inheritance tax were the largest factors keeping the radical conservatives out of political power for forty years.
I wouldn't count on that happening again right now, unless we get the Depression-level economic turn-down I expect and it has long-term political repercussions that cannot be spun by the possessors of great wealth. The conservatives will be back with a vengeance by 2012 at the latest without relatively radical structural changes that create a true industrial age society and economy.
And when the conservatives come back, they'll screw it all up again. It's their nature.
March 30, 2008 1:17 PM | Reply | Permalink
American conservatism is killing the country.
I don't really trust anyone who doesn't see it.
My faith is in the kids, they seem immune to FOX type BS manipulation.
March 29, 2008 8:58 PM | Reply | Permalink
Northern,
I believe that when the Liberals lost power, 85% of the public lost 85% of their representation.
The 15% of representation the 85% get these days consists of penny ante tax cuts, flag waving gingoism, tough talk about our enemies (real and imagined), righteous preaching; you know, the mile wide half inch deep bullshit you get from Reaganomics.
March 30, 2008 12:14 PM | Reply | Permalink
actually, though often unrecognized, the real creator of electricity deregulation[thus ENRON]was the harvard corporation[major shareholder in ENRON via the harvard endowment].
the deregulation scheme was pitched for many years at the KENNEDY SCHOOL. many conferences were conducted at this venue promoting the deregulation of the "grid". these conferences involved corporations, academics, investment bankers, politicians.
a major player in this game was a principal in the firm managing the harvard endowment. also a member of the harvard board of overseers. he also was a member of the ENRON BOARD OF DIRECTORS.
i think he was also a member of the board of a mercenary outfit known as DYNCORP. an entity that achieved its first seat at the looting table during the clinton invasion of bosnia.
the name of this individual: HEBERT WINOCUR.
some time after harvard exited ENRON at the top, before its crash, winocur left the board of overseers[i think he was replaced by clinton's secretary of the treasury, ex goldman sachs, robert rubin].
some think harvard is an educational entity. that is just the "front". never forget the underlying institution, the harvard corporation.
and if you can follow the money over the last 50-60 years, i think that you will find that it has been that "corporation" that has been the most corrupt in the USA. it is the founding "syndicate".
March 30, 2008 12:49 AM | Reply | Permalink
albertc,
over the years I've read a few stories about how some Universities are sitting on hundreds(?) of millions in investments. Reading of how large these piggy banks were I couldn't help but think 'what a waste'.
I can understand the value of a steady stream of income, but for Universities to have this much squirreled away is like Bill Gates working overtime to make another half million.
March 30, 2008 2:20 PM | Reply | Permalink
well, i think you may have missed my point.
some universities[harvard, for instance], with major financial interests, have been gaming the amerikan economy for years.
by the way, the harvard endowment goes way beyond millions of dollars. it goes into the BILLIONS of dollars.
by and large, amerikan universities seem to be exempted from much public scrutiny. i have found them to be shelters for the fascist state.
in massachusetts, there are at least two universities that function as agents for the state. one is harvard, of course. the other is MIT.
one should not forget that it was at harvard where the rockefellers parked henry kissinger.
so,similarly, they parked zbig brezinsky at columbia.
at the highest levels[probably at all levels] those who control the state use the amerikan educational system to manipulate public opinion.
it is often instructive to recognize the realities of the leaders of such educational institutions. for post-ww2 harvard it was james bryant conant[you can look him up]. columbia had a similar imperialist president in that era.
the long and the short of it is, we continue to live in a feudal era. amerikan universities are today's monasteries, kowtowing to liegelords.
March 31, 2008 12:49 AM | Reply | Permalink