Last night on MSNBC’s Countdown, New York Times columnist and Princeton economics professor Paul Krugman pinpointed Phil Gramm as one of the architects of the current financial crisis, and the “odds-on favorite to be the Treasury Secretary” in a McCain administration. Asked by Olbermann what Gramm’s nomination would mean for the economy, Krugman suggested it could lead to another Great Depression:
KRUGMAN: Ben Bernanke and I think Hank Paulson understand that we could manage to have another Great Depression if we work at it hard enough. I think Phil Gramm might be just the guy to do it.
Gramm orchestrated the Gramm-Leach-Bliley Act in 1999 which “destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies.” He also pushed the Commodity Futures Modernization Act in 2000, which made legal “the mortgage swaps distancing the originator of the loan from the ultimate collector.” The Nation writes that “those two acts effectively ended significant regulation of the financial community.”
Hunter at Daily Kos writes, “Given that…Phil Gramm has been credited as mover and shaker behind the very law that allowed the current financial meltdown to happen, I’d love to hear what McCain and Gramm think should be done to solve this crisis. … What’s your advice to America this time, Gramm?”