Senator Phil Gramm (R-TX) and the mess they have made

[SHRED]

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Excellent MUST LISTEN interview with former CFTC regulator on the financial crises
Submitted by: Tony Wikrent on Sun, 04/06/2008 - 07:56

~snippet~

Greenberger explained that the sub-prime mortgage crisis was caused by financial derivatives, and that there are more crises coming, because there are many more financial derivatives out there. He notes that the one act of deregulation most to blame – even more to blame than the 1999 repeal of the Glass-Steagal Act (the law passed in the First Great Depression to separate commercial banking from investment banking)- is the Commodities Futures Modernization Act of 2000, introduced on the sly by then Senator Phil Gramm (R-TX), who is now the top economic advisor to John McCain:

it was a 262 page bill, and it was added as a rider to an 11,000 page omnibus appropriation bill as Congress was recessing for Christmas in 2000. I would say there was no one except the drafters of the bill who understood what the legislation did, and I can assure you that the drafters of the bill were not members of Congress. They were the lawyers for the investment bankers on Wall Street.

Greenberger notes that there is now more money invested in these unregulated financial derivatives than in stocks and bonds. (In my opinion, this is the root of everything that ails the U.S. economy, from the growing gap between rich and poor, to the bane of “free trade”, to the lack of investment in public infrastructure and a new, green economy.) He explains that the financial system today is focused not on actual investment in the economy, but on booking bets, just like a Las vegas bookie. He and interviewer Terry Gross use a sports team analogy: with stocks and bonds, you are actually putting money into the team. But with derivatives, instead of investing in the team, you're just betting on whether the team is going to win or lose.

Moreover, Phil Gramm’s Commodities Futures Modernization Act of 2000 prohibited the federal and state governments from regulating financial derivatives, so nobody really knows how big the problem is. That’s why
We don’t know if Bear Stearns is the mine disaster, or the canary in the mine warning us of a much bigger disaster.

MUCH MORE:
http://discuss.epluribusmedia.net/node/1256

http://www.npr.org/templates/story/story.php?storyId=89338743&sc=emaf

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[Warpy]

1. Bear Stearns was a canary

and the bailout delayed the cave in for a while.

Bad news is being parceled out very carefully right now to avoid a blind panic.

[TheCowsCameHome]

2. Phil Gramm can go straight to hell.

That no-good bastard, along with republicans helmet-head Trent Lott and Pete Domenici screwed America's railroad workers big time by refusing to act on a widely accepted railroad retirement bill a number of years ago. Only after Jim Jeffords changed the balance of power in the senate was the legistation brought to a successful passage by the new senate leader, Democrat Tom Daschele.

When Gramm kicks the bucket I will piss on his grave, no charge.

[Dr.Phool]

5. Let me know when you go.

We'll take Amtrak together.

As a retired railroader, I'm looking forward to it. We'll drink lots of beer first!

:toast:

[TheCowsCameHome]

6. Without Rule G to worry about it should be a blast.

:bounce:

[Democrats_win]

3. Republicans have made our "confusing" economy a crooked economy.

Gramm and his whole family have been deeply involved in the crooked financial industry for years. It's pretty bad when you can't trust anything but that's what the Republicans have accomplished.

[Greyhound]

4. $500+ TRILLION, 10X the entire global economy.

Is that a big enough disaster? Add to this that they are interlocked and beyond any national regulation or authority.

It even has Warren Buffett freaked out.

[bluesmail]

7. intentionally confusing and complicated

yes Phil Gramm is evil, and I don't like using that word. Shoving the bill in at the last minute before xmas break, is calculated evil.