|
||
The Real Legacy of the 'Reagan Revolution'
McCain campaign co-chair Phil Gramm is right: We have "become a nation of whiners." But who is whining more than the bankers that former Sen. Gramm's financial deregulation legislation benefited? The very bankers who now expect a government bailout, such as those at UBS Investment Bank, where Gramm found lucrative employment.
As chair of the powerful Senate Banking Committee, Gramm engineered passage of legislation that effectively ended the major regulatory restraints applied to the financial industry in response to the Great Depression. The purpose of the Gramm-Leach-Bliley Act -- co-authored by Gramm, passed in 1999 by a Republican-controlled Congress and signed by President Bill Clinton -- was to liberate the banks, stockbrokers and insurance companies from restraints imposed on their activities more than seven decades ago. It was legislation that the financial community, which contributed heavily to Gramm's campaigns in the previous five years, desperately wanted and obviously has abused. So why now bail these institutions out?
Hows about some "tough love" for those bankers suddenly in trouble? You know, the sink-or-swim approach of "welfare reform" that Gramm and Clinton applied to poor people to end their addiction to government handouts. Or, perhaps a heavy dose of "faith-based" personal responsibility initiatives to get those knaves who messed up our entire housing market back on the straight and narrow. Sounds ridiculous I know, because nothing but the bleeding-heart, big-government, throw-money-at-the-problem approach will do when it comes to salvaging corrupt corporations.
That is the real legacy of what has been ballyhooed as the "Reagan Revolution," which Clinton went along with, but which found its full flowering in the administration of George W. Bush. The bookends of the Bush years are the Enron debacle and the federal bailout of bankers drunk on their own greed. And no two people in this country are more responsible for enabling this sordid behavior than the power couple Phil and Wendy Gramm.
Enron, lest we forget, was their baby. Then-Sen. Gramm sponsored the Commodity Futures Modernization Act of 2000, which allowed Enron's scamming to happen. As Ken Lay, who was chair of Gramm's election finance committee, put it quite candidly when asked for the secret of Enron's success, "basically, we are entering or in markets that are deregulating or have recently deregulated."
Part of that deregulation involved rulings of the U.S. Commodity Futures Trading Commission, then chaired by Wendy Gramm, who upon retiring from that post became a highly compensated member of the Enron board of directors, serving for eight years. She even was on the board's audit committee during the time of the corporation's despicable financial shenanigans. While on the Enron board, Wendy Gramm also chaired an anti-regulatory think tank that received funding from Enron and other corporations that benefited directly from the policies her institute espoused.
My point here is not to expose the dubious ethics of the Gramms' various business ventures but rather to question why Sen. John McCain turned to Phil Gramm for leadership in his presidential campaign. Indeed, until his verbal gaffe, Gramm was highly visible and rumored to be the choice for secretary of the treasury should McCain win.
McCain has long promised voters that he learned the hard lessons provided by his being one of the infamous Keating Five in the nefarious savings and loan scandal that cost taxpayers hundreds of billions of dollars. Yet he chose as his campaign co-chair a former senator whose push for government deregulation facilitated the far deeper scandal we now are experiencing. Here is a man whose legislation created what financial guru Warren Buffett termed "financial weapons of mass destruction."
Why in the world would you designate as your key economic adviser someone who left the Senate to become an officer of the bank that is at the very center of this mess, a former senator who not only secured highly paid employment with a banking giant that benefited from legislation he helped pass, but who then lobbied Congress for even more of the deregulatory breaks that got the bank into such deep trouble?
The answer cannot simply be that McCain doesn't care much about economics, as he himself has indicated. Perhaps that would explain his having voted for all of the measures pushed through the Senate by Gramm. Perhaps it even would explain McCain's having been chair of Gramm's own failed presidential bid. But indifference to economics does not explain the prominence of Gramm in the McCain campaign as the top economic adviser during these past months of the U.S. financial crisis. Indifference to the folks losing their homes is a more plausible explanation.
Robert Scheer is the author, most recently, of "The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America," published by Twelve Books.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
Great post, Mr. Scheer, thanks.
What I love best about a post like this, Robert is to see so many people get educated about something that so many of us had no real idea of until we had to watch it all unravel on top of us. It has absolutely been a massive "Where the hell did this come from?" on the part of millions of Americans realizing how awful the MSM has done us, how in the dark we have been kept by the powers at be, and how they are absolutely regretting having the light shown on them and all their greed.
Phil Gramm is a strong believer in Milton Friedman's economic principles of shock and loss, with the effects being that when this happens, the elite can come in and take over, applying basic government services to be run by the private sector. Reagan was a strong supporter of these principles, and he applied them, but had to back off because he was worried it would be rejected if applied too strongly.
Bushco was run by greed, however, and it has been full-tilt ever since. Friedman's policies are the neocon's bible. it was applied in Chile, Argentina, where it was seen that this system says it's ok to torture, spy on, and even kill your own people if you have to, and give everything to the private sector.
In other words, absolute greed.
.
My personal question is this: Why don't conflict of interest provisions prevent lawmakers and their immediate family members from serving on the boards or buying stock in companies who their legislation benefits -- even after their term of office ends (say a 5-year waiting period for every term served in office)? That would take at least part of the incentive to draft legislation in favor of one's future "consulting gig" (or the like) out of the equation.
The real legacy of the Reagan Years is the total disrespect for anything that realy smacks of being American:
1. The Constitution of the United States and the rule of law, which all citizens are expected to abide by.
2. The American people; women in particular.
3. Fairness in word, spirit and deed; hence all the lack of regulation, the fraud heaped on many unsuspecting Americans with regard to homeownership.
4. The lack of accountability by the people who insist they should make decision for all of us; when things go bad, refuse to stand up and take responsibility; instead call us whiners.
5. Lying about absolutely everything, especially this aweful war;
6. Financial irresponsibility on a global scale; they wouldn't tolerate ordinary Americans being this riddled with folley.
7. The making of respectability for chickenhawks and the sullying of the reputations of citizens who have served honorably in the military; both in war and peace-time.
8. Unfairness of the tax burden on citizens who have little access to the corridors of power.
9. General hatefulness towards anyone who isn't a white male and a member of their boys' club.
The saddest thing of all is that the so called liberal media will rant on about what a swell guy Reagan was and how Bush will be remembered as one of our great Presidents. And that every thing that has gone wrong with our country over the last fifty years was Carter's and Clinton's fault.
the media isn't liberal; it is white male dominated, which ain't liberal by anyone's standards, except maybe a person with a caveman attitude and an inability to see things clearly. Reagan was one of them; the media gushes over their "own" no matter how stupid, bias, sexist or hyper they are. Carter and Clinton were part of the solution, not the problem; get your facts straight.
He was being sarcastic, rockerbabe.
Your intentions are well founded, though. as there needs to be a mximum of revulsion towards what the MSM has done to paint the picture of our last generation of leaders so disingenuously.
Don't ya just love this web? so different from what we had to put up with as recently as '04.
It just never trickled down.
This reminds me of the saying" don't piss on me and tell me it's raining..."
The only legacy is bankruptcy and corruption.
I agree.
The REAGAN LEGACY is Republican DEREGULATION, CORRUPTION, LIES, DECEPTION, CHEATING, STEALING and KILLING our USTroops in FOR-PROFIT INVASIONS.
The "war on terror" is BY THE RICH against Middle Income Americans.
They've crashed the economy with their corruption and profiteering.
Who have Beush-Cheney benefited??
LOOK AT THE BOTTOM LINE.
Big Oil, corrupt war-profiteering corporatations, republican campaign donors, and their own
personal billions-dollars portfolios upon exiting the WHouse.
Middle Americans are screwed by Bush-Cheney's nanny state for the rich and corporate welfare queens walking away with billions while ROBBING AMERICANS.
I totally agree with everything that you said, and I don't see why McCain is on this bandwagon of being a footsoldier in the Reagan Revolution, because although people call them Reagan Democrats, I don't know any Dem. past or present that had anything to say about Reagan when I talked to them at all.
Those times were just as bad as when H.W. was in office, and I know that it won't get any better while G.W. Bush is in office, and when Obama takes the throne, then hopefully we will start to see progress, but not until then , because the GOP is the party of disaster and fear-mongering.
It's really pitiful at how things have gone, and now they are trying to use a lot of nonsense to have people believe stuff about Obama, that isn't true, but it won't work for people who have common sense, and I believe that McCain is a good person at heart, but I will never support him for President, or anything else for that matter, but hopefully he can have more barbecues in Arizona for the Elite that he and his Wife hang out with.
Ghost!
The final legacy of the "Reagan Revolution" will ultimately be the rise of America's 2nd Revolution of Independence. Independence from a rapacious capitalistic class, independence from an unrepresensentative Congress, independence from a dictatorial Executive, independence from a corrupted judiciary and independence from a corporate media that is complicit in crimes against the American people.
Robert Scheer, you are a brave and eleoquent man. You're like the George Carlin of investigative journalism, your language stripped of his obvious verbal scatology, but still parsing the Neo-cons cover stories and clarifying the motives of the Vampire Class, untangling their desperate obfuscations into plain English.
The Reagan legacy in a word: Beehive.
Manuel
best kept secret in america capitalism will self destruct all on its on.
reagan put capitalism on steroids.
that speeded up the self destruct process.
the end result bye bye middle class
and to think many lined up to vote for him
pure genius pure genius on reagan's part
check and see how well the have mores have made out since the reagan years
and as the country self destructs under the weight of deregulated capitalism the repubs want more not less of deregulation.
oh the power of paradigm paralysis
For God's sake, researcher, keep that to yourself. If the corporate interests in this country thought they were in real trouble, can you imagine what would happen? Banks would fail, even GE would be in trouble, investment banks would have to salvaged by THE GOVERNMENT, the FEDERAL government. Real estate would go under and there would be a run on foreclosures. Any thought of a creeping socialism could bring the conditions mentioned about.
We have our choice: Creeping socialism vs. creeping plutocracy. Either way, that's money out of Middle Class pockets and into the hands of the elite. When you strip everything else away, you aren't left with politics only human nature. It is in human nature to take something good and turn it to the advantage of the few. That's why the Founding Fathers tried so hard to make our system of government bullet proof via a system of checks and balances that would not lend themselves quite so easily to collusion. But it is doubtful the Founders anticipated Special Interest Groups being viewed by the legal system as individuals. Just as the press is viewed as the "Fourth Estate", the special interest groups are the Fifth -- and most powerful players since their members hold the campaign purse strings. As long as groups are more powerful than individual voters, this kind of thing will continue. Corruption knows no party affiliation -- it only takes plain old common greed, avarice and selfishness. The only defense against the inevitable is vigilance. But as someone else pointed out, talk radio, among other sources, has got us fighting amongst ourselves instead of putting our heads together to solve real problems. That is the real genius and deception at play: Divide = Conquer.
Great post, Mr. Scheer. I agree 100%. Reagan policies began what the current Bush / Republican policies cemented: a new Robber Baron age.
In the 80's their deregulation led directly to the Savings and Loan disaster. http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
Fast forward to 1999 and the Phil Gramm sponsored bill you refer to: http://www.myprops.org/content/McCains-chief-economic-adviser-Phil-Gramm-is-the-man-most-responsible-for-the-repeal-of-banking-regulations-that-have-led-directly-to-todays-economic-turmoil/
The current and ongoing "sub-prime mortgage" crisis can be directly traced to that bill. This will likely end up costing 1.6 TRILLION dollars, which of course will not be paid by those who made millions, nay billions, but by the taxpayers.
Fast forward again to today, July 16th 2008, and we have this:
http://www.rgemonitor.com/blog/roubini/252996/bloomberg_tv_interview_worst_financial_crisis_since_the_great_depression_and_worst_us_recession_in_decades
Billionaire investor Jim Rogers talks about this stuff... he has pretty much given up on the U.S. and is now living in China.
http://www.rgemonitor.com/blog/roubini/252996/bloomberg_tv_interview_worst_financial_crisis_since_the_great_depression_and_worst_us_recession_in_decades
Oops.. here's the Jim Rogers link: http://www.youtube.com/watch?v=FwGUTGCvz7I&feature=related
Thank you!
Richard Nixon ended trading of gold at the fixed price of $35/ounce.
The cost of wars can't be measured that way.
Although it can be said that if the US is going to wage war, and not peace, it should pay cash.
Manuel
Even though it was at urging of his republican friends, Bill Clinton is guilty in what is happening today in the financial market. He had safeguards [placed after the dirty thirties] removed, and once again Wall street showed it has no idea of how money is generated [workplace and farmers]. Their greed is pulling the country down. The Taxpayer should not foot the bill of their screw-ups without owning something. This would be against their own laws [no matter how they spin it].
Wallstreet certainly knew of NASA's black box: the whole nine yards of the NASDAQ.
Manuel
It was no Revolution it was a pathetic Reactionary Movement.
"Why in the world would you designate as your key economic adviser someone who left the Senate to become an officer of the bank that is at the very center of this mess, a former senator who not only secured highly paid employment with a banking giant that benefited from legislation he helped pass, but who then lobbied Congress for even more of the deregulatory breaks that got the bank into such deep trouble?"
The fact that McCain is not at least 20 points behind Obama in the "poll of polls" despite stuff like this is absolutely mindblowing.
Thank a pathetic MSM and an even more pathetic electorate that can't be bothered with taking the time to understand the issues- they're far too busy watching Dancing with the Stars and would rather treat their upcoming vote like a chance to kick someone off the island, instead of the patriotic duty it ought to be...
The main stream media has so little to do with the dumbing down of America. It was and is totally due to the rise of talk radio. Don't believe me? Just look at the curve of rise of the talk radio generation and the lowering of the IQ of the American people...
UBS (and its three keys) has never been quiet the same since merger with Swiss Bank Corporation, when the three pillars of Switzerland became two.
With its program of digesting Bank Leu International, and mulling the impact of the SEC investigation of Bank Leu, its actions in this regard, given the stability of the EURO/USD cross-rate is hardly surprising.
That story is of course as interesting as the story of the Washington Times and the Reverend Sun Myung Moon who was prosecuted by Marty Flumenbaum -- Flumenbaum and Charles Carberry -- who were both central to the case of Dennis Levine.
Manuel
Mindblowing except to those who have followed politics in the United States of America.
"No one ever went broke underestimating the intelligence of the American people." attributed to H. L. Mencken.
As theAmerican New Heritage Dictionary of Cultural Literacy (a title that perhaps itself is an oxymoron) translates it "People can easily be persuaded to accept the most inferior ideas or useless products."
I ask myself that same question every day.
Sometime 4 or 5 time a day.
And try as I might, I will never understand
why it is that we continually
vote against our best interest.
There's only one way to look upon that creature phil gram,
He is a monster through and through.
He is a testament to the dark ugly side of the human race.
As author Robert Scheer points out, Sen. Phil Gramm's legislation opened the door to the corruption that first surfaced in the form of the Enron. That should have cost Sen. Gramm his career long before the credit crunch materialized. Instead it earned him a coveted spot in Sen. McCain's presidential election campaign.
Why is it that corrupt people prosper, and those with proven integrity -- public servants as diverse as Dr. Ron Paul and Congressman Dennis Kucinich -- suffer?
Either A) voters are not paying attention to what their representatives are doing with the power they have granted, or B) the media has failed us (the connections between the blackouts, electrical price hikes and the deregulation and Enron, for instance). Either way, the sad reality remains: Career politicians who craft legislation that makes abuse possible are rarely sent home for good at the end of their terms.
Lawmakers don't remember that the voter is their master because campaign funding is essentially corporate money "laundered" through pseudo independent think tank/lobby organizations who serve as a union of sorts for CEOs. The result is not unlike Mafia blackmail: Who do our politicians "owe" when campaign money doesn't come from people like us, but from well connected special interests who implicitly threaten to cut them off if lawmakers don't serve up the legislation they desire?
This mess started when courts recognized special interest groups as "individuals" with First Amendment Rights. Now those "individuals" have a much bigger voice than any of us. No
Republicans preach a one-sided capitalism better known as plutocracy. They want private citizens to fend for themselves in the jungles of the "free market", but then provide heavily subsidized corporate welfare for so-called "private industry". The bigger and more powerful the corporation, the more they are protected from the market by their bought and paid for politicians.
If American corporations lived by the same Darwinian rules that Everyman is supposed to live by, many of them would shut their doors today and be bought out by more competitive, honest and efficient players. Instead, these swine feed at the taxpayer expense and then return the favor with heavy campaign donations to keep their friends in power.
American corporations are the most corrupt in the world......that is why they are hated so much by most people in the world.
Great post, I agree with your astute observations completely.
You must be logged in to comment. Log in or connect with
