Only days ago, John Mc Cain bragged about his leadership role in deregulating the banks. In the same breath, he promised to deregulate health insurance the same way. The poor man simply does not understand that policies he followed for 26 years have caused the greatest financial crisis since the Great Depression. No wonder he has Sarah Palin out on the stump calling Obama a terrorist.
The current looming economic recession is largely the product of what is called market fundamentalism or Republican economics, which emphasizes deregulation privatization, , tax breaks for the rich, massive borrowing, huge deficits, and eroding the safety net. The dollar has been badly eroded by endless borrowing and large tax cuts for the core of their constituency, the very rich. The weak dollar is a big reason for high gas prices, and the failure to regulate energy speculators is another reason
McCain has relied upon Senator Phillip Gramm, an advocate of market fundamentalism. McCain surrounds himself with lobbyists and has just appointed a prominent one to head his transition team to the presidency. A John Mc Cain Administration will produce much more of the same, risking massive structural damage to the economy.
The housing crisis is largely the result of Republican efforts to weaken economic regulations that were put in place under Franklin Roosevelt to protect us from another depression. Senator John McCain enthusiastically supported this demolition work and his pal Phillip Gramm crafted some of the legislation that opened the door to the unsafe practices that led to the housing disaster and placing 3,000,000 homes in danger of foreclosure. Phil Gramm’s Financial Modernization Act of 1999 gutted the Glass-Steagall Act, which was designed to protect our financial institutions. It removed the firewalls the New Deal had placed between securities firms, banks, and insurance companies. This led to a wave of mergers. Some say this act unleashed an epidemic of speculation that led to the bursting of the current speculative bubbles. As head of the Senate Banking Committee, Gramm had repeatedly turned down requests from the Securities and Exchange Commission to hire more people to investigate securities fraud.
Gramm is now a vice president and lobbyist for USB, a corporation that lost over 3o billion dollars this year.
Gramm’s Commodity Futures Modernization Act was a 261 page "Enron Clause" that was added to a huge omnibus spending bill December, 2000. Enron Corporation wanted this legislation and Gramm’s wife , Wendy, soon joined the Enron board. The act destabilized the California energy market. By deregulating energy markets, it paved the way for the Enron scandal and opened the door for abuses in energy trading, and accounts in part for high gas process. It also deregulated the trade in derivatives, which is based upon all the new debt instruments that Warren Buffett "financial weapons of mass destruction" designed by "madmen."
If Mc Cain is elected he might appoint his pal Phil Gramm SEcretary of the Treasury. Obama needs to indicate who will be his economic advisors and offer specific suggestions on how he would repair our economy.