Phil Gramm is the sort of revolving door politician-lobbyist-straightTalk campaign official that Barack Obama says will not be in his White House, even if Gramm were a Democrat which Gramm once was...Here is a brief synopsis of the career of the 'general-chairman' of McCain's campaign, Phil Gramm (and his wife), courtesy of wikipedia.
In 1981, Gramm (a twice elected Democrat congressman) attended Democratic Caucus budget meetings and then secretly shared their strategy with Republicans to help pass newly inaugurated President Ronald Reagan's budget In response, the House Democratic leadership stripped him of his seat on the committee..
In 1984, Gramm was elected as a Republican to represent Texas in the U.S. Senate. He had defeated Congressman Ron Paul in the primary
Gramm served on the Senate Budget Committee from 1989 until leaving office in 2003. Gramm and Senators Fritz Hollings and Warren Rudman devised a means of cutting the budget through indiscriminate, across-the-board spending cuts if deficit-reduction targets were not met. They were successful in making the Gramm-Rudman-Hollings Act law, but portions were ruled unconstitutional and other sections have largely been superseded by other budget-controlling mechanisms. Later in his Senate career, Gramm spearheaded efforts to pass banking reform laws, including the landmark Gramm-Leach-Bliley Act in 1999, which modernized Depression-era laws separating banking, insurance and brokerage activities..
Gramm was partly caught up in the Enron scandal when it emerged that his wife Wendy had in 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 (for 1.85 million dollars). Phil 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 (actually the largest) to his campaigns.
Phil Gramm in like manner, followed the money trail to his campaign investment and securities contributors and ended up working on the books, this time, on behalf of a large investment banker when he no longer was an elected official..
A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS's new investment banking arm.
Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and Treasury Department about banking and mortgage issues in 2005 and 2006.
During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages..(Great timing!)
For his work, Gramm and two other lobbyists collected $750,000 in fees from UBS's American subsidiary. In the past year, UBS has written down more then $18 billion in exposure to subprime loans and other risky securities and is considering cutting as many as 8,000 jobs.
McCain delievered an economic speech Tuesday that had Gramm's input, but it was written by domestic policy adviser Douglas Holtz-Eakin. (I wonder if it had any imput from McCain?)
In his speech on Tuesday, McCain rejected the type of aggressive government intervention in the economic meltdown that has been embraced by his Democratic opponents -- and even some Bush advisers.
They have been good friends for years. Their feisty tempers suit one another. Gramm has been described by a colleague as "meaner than a junkyard dog", and McCain was Gramm's National campaign chairman in 1996 when they ran a poor campaign, and Gramm finished 5th in Iowa, prompting his withdrwal from the race.
Gramm probably has more influence into the mind of McCain's economic thinking than even John McCain. He has been called McCain's "foremost economic guru" whom he brings along to most, if not all of his important economic meetings. McCain has admitted he "doesn't really understand econmics."
Paul Krugman, this week wrote " I'd argue that aside from Alan Greenspan, nobody did as much as Mr. Gramm to make this crisis possible,"....Hillary wants Alan Greenspan to fix the crisis and and McCain wants Gramm, who is expected to be McCain's Treasury Secretary pick. This why we need a new broom in Washington..a change from the way the revolving door of politics and special interests have been conducted in the past, where the taxpayer foots the billion dollar bailout bills, the bankers receive their miliion dollar bonuses, the lobbyists gets his hefty commisions, and the politicians receive their large campaign contributions and everyone gets to change jobs every few years in the carousel of Washington.
Note: Wizbang Blue is now closed and our authors have moved on. Paul Hooson can now be found at Wizbang Pop!. Please come see him there!