Phil Gramm's power of positive thinking

I wish to associate myself with Kara Hopkins' remarks on Phil Gramm, sparked by a conversation she had with a friend in Maine, who reports that Mainers are deeply worried about how they're going to pay heating bills this winter. Excerpt from Kara's blog:

Now as the vice chair of Swiss banking giant UBS, Mr. Gramm is probably too busy to shop for groceries or fill up his own gas tank. Maybe he hasn't tried to sell a house in a stalled real-estate market or checked on his retirement account lately. He does, however, manage to watch the news and is convinced that grim reports are a media concoction. "Misery sells newspapers," he says. "Thank God the economy is not as bad as you read in the newspaper every day."

So there's the solution to July's deep chill: stop reading and think positive. Clearly Mr. Gramm is more in touch with the American experience than a bunch of paranoiacs making up a recession.

I guess the Mainers are going to need to power their home heating systems this fall with positive thinking.

You know what chap's my bottom about Phil Gramm and all this? That he played a big role in creating the regulatory framework that led to this mortgage meltdown. David Corn tells the story in Mother Jones. Excerpt:

Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited--at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms--setting off a wave of merger mania.

But Gramm's most cunning coup on behalf of his friends in the financial services industry--friends who gave him millions over his 24-year congressional career--came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered dead--even by Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. "Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history.

It's not exactly like Gramm hid his handiwork--far from it. The balding and bespectacled Texan strode onto the Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could have followed what Gramm was saying. The act, he declared, would ensure that neither the sec nor the Commodity Futures Trading Commission (cftc) got into the business of regulating newfangled financial products called swaps--and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century."

It didn't quite work out that way.

Read the whole thing. Yet one more reason why even though I can't see voting Obama, it's becoming harder and harder to see voting McCain.