Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California’s electricity prices in 2001.
try democracy's excellent diary, "McCain: We're all tainted" posted today got into McCain's acceptance of Enron campaign funds, but when you bring Phil Gramm into the mix, things start looking much, much worse. As Jason Leopold states, McCain is looking to one of the primary architects of the Enron mess to be his "econ brain". Remember the good old days of rolling blackouts? Well, it turns out that Phil Gramm was a senator from Texas back then...
In 2000, with the Republicans in charge of Congress and Gramm chairing the Senate Banking Committee, the exemption on electronic trading was approved without a Senate hearing.
Internal Enron documents, which were released in 2002, revealed that the Houston-based company helped write the legislation, which was signed into law by President Bill Clinton in December 2000.
Freed from regulatory interference, Enron then used manipulative trading practices to game the California electricity market and drive up electricity prices across the state...
... Less than a month later, California began to experience rolling blackouts due to artificial electricity shortages which, according to documents later released by federal energy regulators, were the result of manipulative trading practices employed by Enron.
The California crisis centered on Enron’s energy trades through a new platform called EnronOnline, which had been freed from regulatory oversight by the legislation pushed by Gramm.
Just in case you were wondering about any possible conflict of interest Gramm might have had:
Gramm received more than $34,000 in campaign contributions from Enron and served as one of the company’s key legislative allies in Washington, including his help in 2000 removing federal oversight from energy trades on electronic platforms.
Gramm’s wife, Wendy, also had played a role in the anti-regulatory policies that contributed to the Enron scandal.
On Jan. 14, 1993, in the final days of the first Bush administration, Wendy Gramm – as chairwoman of the Commodity Futures Trading Commission – pushed through a key regulatory exemption removing energy derivatives contracts and interest-rate swaps from federal oversight.
That was a major financial boon to Enron, where Wendy Gramm landed five weeks later as a member of the board of directors. She also became a member of the audit committee that signed off on another one of Enron’s fraudulent schemes, partnerships that hid the company’s growing debt.
So aside from this being a sordid piece of American economic history, how does this affect us today? How about this:
The "Enron loophole" also has become part of the debate over the soaring price of oil. Last week, a study sponsored by Sen. Carl Levin, D-Michigan, concluded that speculative futures markets were partly to blame for the surge in oil prices that have pushed gas at the pump toward $4 a gallon.
At a May 15 news conference, Levin said the skyrocketing price of oil is "not the result of supply and demand. Speculators have taken over most of the futures market."
So, while he holds out a flimsy $.18/gallon "gas tax holiday" to voters, McCain is voting against help for America's farmers (during a freakin' food crisis!) so that we can relive the Enron days every time we go to fill up at the pump.
So, rural America, still feel like voting Republican?