Phil Gramm did two things in 1999 that seem particularly relevant now.
1) He introduced and strongly supported the Gramm-Leach-Blily Act.
This act repealed part of the Glass-Steagal Act and officially allowed commercial and investment banks to consolidate for the first time since the New Deal.
Robert Kuttner wrote an article almost exactly a year ago explaining the effect that deregulation had on our current economic crises. Here's a snip:
quote:2) As chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, he helped to usher in the wave of subprime mortgage lending.
The Glass-Steagall wall was devised to prevent a repeat of the 1920s' scams, in which banks made speculative investments, turned the debts into securities, and sold them off to unsuspecting investors with the blessing of the bank. With Glass-Steagall, commercial banks were tightly supervised and given access to federal deposit insurance, to keep savings secure and prevent runs on banks. Investment banks, meanwhile, were not government-guaranteed and were free to do more speculative transactions for consenting adult customers. But Roosevelt's newly created SEC subjected securities markets to much tighter structures against self-dealing and insider conflicts of interest.
In this article from the NY Times back in 1999,
quote:The other relevant fact about Phil Gramm: until very recently, he was John McCain’s presidential campaign co-chair [source] and his most senior economic adviser [source], and continues to be an unofficial adviser on economic and financial matters [source].
In July [of 1999], the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
Obama campaign: could you please make and run this ad immediately?
