Phil ‘mental recession’ Gramm attempts to resuscitate his reputation.
Phil ‘mental recession’ Gramm attempts to resuscitate his reputation.
This month, Time released a list of the top 25 people to blame for the financial crisis. Second on the list (and leading its readers’ poll) is former Sen. Phil Gramm (R-TX). Gramm advised Sen. John McCain (R-AZ) during the presidential campaign, famously referring to America as a “nation of whiners” in a “mental recession.” In the 90s, he also played an instrumental role in deregulating the financial sector. Today, Gramm has an op-ed in the Wall Street Journal denying that the deregulation he promoted had anything to do with the financial crisis. Gramm relied on a series of tired conservative tropes — like blaming the Community Reinvestment Act and Fannie Mae and Freddie Mac — in an attempt to exonerate himself from well-deserved culpability. The Wonk Room has more.
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Fred Barnes Nominates Phil ‘Mental Recession’ Gramm To Be Car Czar
Fred Barnes Nominates Phil ‘Mental Recession’ Gramm To Be Car Czar
Last night on Special Report with Brit Hume, the Fox All-Star Panel discussed the possibility that a deal on the auto bailout would include the creation of a temporary oversight position in the executive branch dubbed the “Car Czar.” As Speaker Nancy Pelosi (D-CA) described it, the czar would be “charged with making sure the automakers retool.” According to the Los Angeles Times, the position would be given “far more authority than a bankruptcy judge would ever have.”
Noting that Obama will likely have to accept whomever Bush nominates, All-Star Panelist Fred Barnes called on President Bush to appoint right-wing darling Phil Gramm to the position:
BARNES: But the car czar, whether or not they will give the car czar that much power or not, I don’t know. I have a nominee: Phil Gramm!
HUME: One senses the Obama administration might not accept him.
BARNES: They have to.
Watch it:
While Barnes appeared to be at least half-joking, he inadvertently highlighted exactly why some progressives are so skeptical about the prospect of giving a Bush-appointed Car Czar nearly absolute authority to decide the fate of the Detroit automakers. While the current proposal apparently gives Bush the option of creating an entire oversight board, “[t]he widely held assumption is that Bush would appoint a single individual.”
As Ian Welsh explained:
The auto plan…gives the Auto Czar the absolute ability to decide if he or she likes the auto restructuring plan presented by the Big 3. If the Czar doesn’t, the loans can be immediately recalled. [...]
That person does not answer to Congress and is chosen by the current President: George W. Bush. As best I can tell, the next president will not be able to fire him, though Obama could ask for his resignation, I guess. I don’t think the Czar would have to give it, however.
As Jonathan Cohn notes, the plan — as currently written — appears to make the czar judge and jury of the bailout process. Cohn writes, the czar “would have the authority to decide how we should judge the automakers’ progress in restructuring–and then, as the effort proceeds, to make those judgments on his or her own.”
The Bush administration is still suggesting that the current plan may “fall short” of its goals, which Welsh interpreted as, Bush’s “way of saying ‘let’s make it even more explicit, just in case my auto Czar isn’t loyal to me once I’m gone.’”
McCain: I’m glad I deregulated Wall Street.
McCain: I’m glad I deregulated Wall Street.
In the wake of last week’s financial meltdown, Sen. John McCain (R-AZ) has been calling for more regulation and criticizing lax oversight of Wall Street, despite the fact that he and former senator Phil Gramm passed much of the deregulatory reforms that led to the current crisis. Interviewed on CBS today, however, McCain said he does not “regret” championing the deregulation of Wall Street:
Q: In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?
McCAIN: No. I think the deregulation was probably helpful to the growth of our economy.
Watch it:
Krugman: Phil Gramm would be ‘just the guy’ to lead us into a Great Depression.
Krugman: Phil Gramm would be ‘just the guy’ to lead us into a Great Depression.
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.
Watch 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.”
Gramm pressures Paul to endorse McCain.
Gramm pressures Paul to endorse McCain.
After former senator Phil Gramm said that America was a “nation of whiners,” the McCain campaign claimed that its top economic adviser would no longer be working with them. However, at a press conference today, Rep. Ron Paul (R-TX) revealed that Gramm had recently called and pressured him to endorse McCain — an offer that he refused:
According to Paul, Gramm asked him back to McCain, arguing that the Republican was closer to his positions than Obama.
”The idea was that he would do less harm than the other candidate,” Paul said.
But Paul said he made it known that he would not endorse McCain, whom he has disagreed with on a whole host of issues, including the war in Iraq.
Furthermore, Paul said ” I don’t enjoy getting two to three million people angry at me.”
Paul said Gramm ended the conversation with, ”well if you change your mind, call me back.”
Gramm: Unlike The Rest Of Americans, McCain Supporters Aren’t ‘Economically Illiterate’ ‘Whiners’
Gramm: Unlike The Rest Of Americans, McCain Supporters Aren’t ‘Economically Illiterate’ ‘Whiners’
In a July interview with the Washington Times, former senator Phil Gramm infamously decried the “constant whining” of the American people when it comes to the economy, saying it was nothing more than a “mental recession”:
“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.
“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.
Gramm, known as Sen. John McCain’s “econ brain,” was swiftly criticized. Today, Gramm stood by his comments that America was a nation of whiners, but made an exception for McCain supporters. From his remarks to supporters at a Financial Services Roundtable in Minnesota:
If you’re sitting here today, you’re not economically illiterate and you’re not a whiner, so I’m not worried about who you’re going to vote for.
When asked about his involvement in the McCain campaign, Gramm simply replied today, “I’m a supporter.” But he may actually be involved in a more active capacity. Recently, he was spotted with the campaign’s top advisers. He is also reportedly still serving as an adviser and a surrogate, speaking for the campaign.
Maybe McCain’s wealthy supporters aren’t whining because they’re set to receive millions in tax cuts under the senator’s plans.
Phil Gramm returns to McCain’s side.
Phil Gramm returns to McCain’s side.
Phil Gramm, who stepped down from the McCain campaign after revealing that he believed America had become a “nation of whiners,” is “back with the campaign’s top advisers this weekend.” Gramm was seated in the front row during a McCain event in Aspen, Colorado today. “I am a supporter of John McCain,” said Gramm. “I am helping him with fundraising. We have a fundraiser today and I will be with him today and tomorrow.” Gramm has been rumored to be a possible candidate for Treasury Secretary if McCain wins.
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