Phil Gramm Takes No Blame

Former Senator Phil Gramm published a piece in Friday's Wall Street Journal exculpating himself from any serious role in the credit crisis-and his fell Republicans, of course. It was government bleeding hearts who did it all.

This is of course now the accepted line of the Republican stalwarts, mouthed by policymakers and some well-placed media pundits alike. Encouraging Fannie Mae to make some mortgages to low income Americans apparently somehow forced investment bankers to borrow forty times their capital, cajoled credit agencies to give almost anything a triple-A, made Washington Mutual and Countrywide give countless interest-only mortgages to individuals they knew could not pay unless housing prices kept soaring, and gave the green signal to Citigroup, Lehman Brothers, Merrill and so on to borrow short (commercial paper) and lend long (CDOs).

What's with these guys? Do they care not a bit for logic or the future of the system? Are they constitutionally incapable of taking any responsibility?

Here's one of Gramm's jokes. He argues it couldn't have been the deregulation bill that he co-authored back in 1999 -- and that Bill Clinton happily signed, by the way -- that led to any of this. The bill allowed commercial banks and investment banks to merge, remember -- mostly to allow older line commercial banks to act like investment banks. To prove his case, Gramm writes smugly that it was the sole investment bank, Lehman, that went under, not the diversified conglomerate JP Morgan. Did Gramm suddenly forget about the travails of those other highly diversified banking conglomerates, Citigroup or, now, Bank of America -- both beneficiaries of his deregulationist good graces?

When you are desperate to defend yourself, this transparent gambit is what you come up with. Also, when you are merely preaching to the converted. JP Morgan was simply smart enough to avoid many of the mindless, greedy trades -- it had nothing to do with diversity. So was the non-bank Goldman Sachs.

The main reason investment banks are now becoming bank holding companies is to get the FDIC insured deposits that are stable. They want federal regulation to protect them.

Gramm now works for the investment banking arm of UBS, the Swiss bank. UBS may have to fork over the names of 52,000 depositors who may have been trying to avoid paying their incomes taxes in the U.S. No doubt, Gramm will blame government for that, too. After all, if America didn't have any income taxes at all, UBS wouldn't have been forced to hide all that money illegally.

Gramm's deregulationist spirit is all over this crisis.

Comments

[CaptainStormfield]

http://oxdown.firedoglake.com/diary/543
Remember Elliot Spitzer got charged right after he wrote an editorial
condeming sub prime loans and detailing how the Bush Admin. would
not let states persue shady loan practices.

[jqcitizen]

Phil 'Cowboy' Gramm is still pretending his wife was not on the Board of Directors of ENRON {Kenny-boy) corporation.

[realpolitic]

Gramm takes no blame. The neocons take no blame. It is so common for those on the right to put in place their scorched earth policies and then to walk away taking no blame. I guess the blamelessness goes with having no self-awareness at all.

[armadillo]

Try living in Texas with this crew. I do and everyday I wonder how we managed to have this many jerks in one state. Be patient with us. We are working on it.

[MajorKong]

Molly Ivins once called Texas "The National Laboratory for Bad Government".

[Dazed By It All]

Did you really expect the man sold out the American Dream for a cushy banking job and a pocket full of gold to take any responsibility for it?

[1will]

Phil Gramm is not alone in deserving blame for deregulation. While it's true that he did lead the way in repealing Glass-Steagall it is also true that Demcrats and Republicans almost universaly supported him. The Bill passed 90-8. Two Senators abstained. There was no fillibuster from the Dems. They were on board. Where was Clinton's veto? Everyone in the Senate was ok with repealing this law with the exception of the 8 Senators that voted nae and the two that abstained. Btw, the Dems had 44 seats in the Senate at the time. They could have blocked this Bill easily. Look at our Stimulus Bill of the past several days.
This was a bipartisan screwup and only the blindly loyal, such as the author, would place blame on one party.
You can't fix a problem if you are blind to the issues and those involved.

[loganhunter]

It's mostly the commodities futures modernization act that caused these problems Republicans would love to share the blame but it all points right as Phil Gramm. Dems tried in vain against the GOP over the past 8 years to stop predatory lending as well.
I refuse to let the GOP get away with passing the blame onto dems. All the evidence points right at Phil Grammn and GOP ideology. It's time they owned up to these facts. GOP policy , trickle down economics is pure crap.

[1will]

You don't think that Barney Frank and his pushing for more and more loans to those that could not pay them back had anything to do with bank failures. I had 2 family members that worked as loan officers. They could not turn a minority down for a loan. The application had to be reviewed by 3 layers of management before the loans could be turned down. Then there's Freddie and Fannie. That's the Democrat's trainwreck.
There is plenty of blame to go around. It doesn't all rest on the Republicans. Hell, I doubt half rests with them.

[sufi66]

A sociopath never takes any blame. This is why he is a sociopath.

[greatlakesgirl]

Gramm was also working at the swiss company in a different role yrs ago when McCain and Gramm set up McCain's offshoot company with funds from this to help bundle mortgages. They did come close. That is why it is necessary to do your homework on all of them seeking public office. This is what also Kept Hillary Clinton a shade away from the WH, but with Diane Feinstiens help, she is managing to still breath politics. She is an unexperienced 'load of baggage' with another deceitful heart. Always check your local officers of public service with furver and endurance. Never believe the bluster until your heart and head reconcile.

[booker52]

I am so glad someone remembers that Gramm is the bad guy in this mess and well yes so is his wife. Let's not forget her either, let's thank her for the Enrron mess. Yes those two can be thanked for quite alot of the mess we have today. With that comment I would like to know if either will pay for their crimes?? For I consider what really a crime on a massive scale.

[waynesmyer]

Phil Gramm and wife Wendy are both members of the" Barbados Secret 200" off-shore,­numbered,t­ax f ree accounts said to have been funded by the retirement accounts stolen from ENRON by the insiders Also said to include members of F-U Cheney's :Secret Energy Committee!
Check it out: Wikipedia : Barbados Island Off-Shore Accounts, The release of the names of the ownersof the Swiss "secret" accounts should be extended world wide to include all secret accounts!

[Dystopic]

you know nothing of Enron.

[MajorKong]

I know a little bit about Enron. I worked on some of their billing systems (as a subcontractor) back when I worked in IT.

[numbnuts]

What scares me is how close Gr@mm and McCa/n came to being in power.

[HST]

Show me a Phil Gramm and I'll show you a person who needs to be in jail

[ssb752]

By applying Brosemer's First Law of Ecomonic Reality to the situation, i.e., "Things are the way they are so that those that have can get more," one can easily see that Mr. Gramm is certainly to blame and sitting pretty at the same time.

[deke4]

It might be interesting to determine how many wealthy men were influenced into tax avoidance schemes at UBS by Gramm. It would be even more interesting how much Patriot Gramm received from these wealthy patrotic depositors who think it perfectly legal that some one who makes 30 or 40 thousand a year pay 20% in federal taxes, usually spent on programs they don't support (Iraq War) and these wealthy tax evaders frequently pay nary a cent for programs they do support (Iraq War). With just such patriots we would have lost the Rev. War.

[deke4]

There are not enough foul words to depict this greedy slime ball. I would imagine he would throw his wife to the lions to protect himself from any culpability. Oops I forgot she is already in the arena with the lions because of Enron. What we need is an independent counsel with unlimited resources to chase the evidence in all these boondoggles and have those responsible pay dearly for their crimes.