Not a Gramm of change in credit market regulation expected under McCain

Now that an unprecedented 81% of Americans believe the country is on the wrong path, it’s easy to believe that both political parties will deliver change in the upcoming election.

An amazing interview with former Commodity Futures Trading Commission member Michael Greenberger on the NPR show Fresh Air yesterday described how former Senator Phil Gramm from Texas bears significant responsibility for the subprime mortgage and credit market crises and financial meltdown we now face. He cosponsored the Commodity Futures Modernization Act, passed quickly and quietly in the waning hours of the 2000 Congress as rider on a huge appropriation bill, when everyone’s attention was still on the ill fated election. This and other Graham sponsored legislation deregulated much of the financial sector and hastened the growth of risky new markets based entirely on gambling on how other markets will fare.

Wikipedia describes another role Gramm played in the meltdown of financial markets (also detailed here):

Gramm was partly caught up in the Enron scandal when it emerged that his wife Wendy had part written an exemption for Enron from federal oversight while she was serving on the Commodity Futures Trading Commission. She then accepted a directorship at Enron. Gramm was personally involved further when it came to light that he had helped to turn the exemption into law as well as push through the deregulation of energy markets that led in part to the Enron scandal. During this period Enron was a major contributor to his campaigns.

Gramm started out as a Democrat, but realized it would be more profitable to be become Republican after Reagan was elected in 1981. Operating as a spy for the Republicans until the Democrats cast him out, he resigned his House seat and then was reelected as a Republican in a special election. He beat Ron Paul in the Republican senatorial primary in 1984.

Soon to be Republican Presidential nominee John McCain admits he doesn’t know much about economics. His economics advisor is none other than Phil Gramm, now a vice chairman of Swiss Bank UBS, which lost 19 billion dollars in U.S. credit markets and real estate in just the first quarter of 2008! Gramm is rumored to be McCain’s likely choice for Treasury Secretary. Don't expect much change from Bush's economic policy from that ticket.

Update: Michael D. Donovan, a former S.E.C. lawyer, says, "Phil Gramm is the single most important reason for the current financial crisis." Gramm responded by blaming the crisis on "predatory borrowers" - those without the means to pay their subprime mortgages.