Political Jackass

In 1999 Phil Gramm, McCain’s economic adviser, started legislation that would deregulate America. The theory would be that without regulation, the free-market would take over and everyone would be happy. The sad reality is, with deregulation, we’ve seen greed, corporate bailouts, and loss of jobs at the expense of the American taxpayer. No wonder John McCain is out of touch. He thinks the economy is doing well. Well, if you’re one of these CEOs that get $12 million for running your company into the ground and letting the tax payer bail you out, then I guess life is good for you. If you’re the average American, it’s not. We see now that deregulation is a terrible idea. Joe Biden, VP candidate for the Democrats, knew that and that’s why he voted against the Gramm Deregulation Act. McCain voted for it. Do you really think that McCain gets the economy?

In 1999, the Gramm-Leach-Bliley Act repealed 1930′s legislation that had separated commercial and investment banks. Commercial banks, where people deposit their paychecks and do personal banking, have regulation. Investment banks didn’t have that “fettering” as Republicans saw it.

John McCain voted for Gramm-Leach-Bliley. Joe Biden voted NO. The act passed 54-44, mostly a party line vote. Yes, Clinton signed the law. But Joe Biden was against it.

With the 1930′s Glass-Steagall Act repealed, the theory was competition could happen now in financial services. The evil enemy of regulation was gone, free markets would reign. Mergers happened that couldn’t before. A broader range of institutions could offer a broader range of products. Which grew to include obscure, unregulated financial products with no collateral to support them. Like sub-prime mortgages. Regulated banks couldn’t take those kinds of risks.  Unregulated companies could.

In March of this year, John McCain was reinforcing his “market solves everything” anti-regulation stance.

“I’m always for less regulation,” he told The Wall Street Journal last March, “but I am aware of the view that there is a need for government oversight” in situations like the subprime lending crisis, the problem that has cascaded through Wall Street this year. He concluded, “but I am fundamentally a deregulator.”

That same month Barack Obama gave his 21st Century Economics speech at Cooper Union not telling Wall Street what they wanted to hear. Including supporting new regulation of financial institutions:

First, if you can borrow from the government, you should be subject to government oversight and supervision.

McCain is extremely out of touch. While he’s preaching that the economy is strong Alan Greenspan is saying it’s the worse he’s seen in his career.

Speaking in Colorado Springs, Sarah Palin showed us exactly why she isn’t qualified to be VP. She has no idea how our economy works. No wonder the McCain campaign wants to hide her from the press. From The Washington Monthly:

Speaking before voters in Colorado Springs [yesterday], the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had “gotten too big and too expensive to the taxpayers.” The companies, as McClatchy reported, “aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.”

Economists and analysts pounced on the misstatement, saying it demonstrated a lack of understanding about one of the key economic issues likely to face the next administration.

“You would like to think that someone who is going to be vice president and conceivable president would know what Fannie and Freddie do,” said Dean Baker, co-director of the Center for Economic and Policy Research. “These are huge institutions and they are absolutely central to our country’s mortgage debt. To not have a clue what they do doesn’t speak well for her, I’d say.”

Added Andrew Jakabovics, an economic analysts for the progressive think tank, Center for American Progress: “It is somewhat nonsensical because up until yesterday there was sort of no public funding there. Even today they haven’t drawn down any of the credit line they have given to Treasury. ‘Gotten too big and too expensive’ are two separate things. The too big has been a conservative mantra for a while and there is something to be said of that in that they hold about half of the mortgage guarantees that are out there. And in the last year they have been responsible for roughly 80 percent out there. The ‘too expensive to tax payers,’ I don’t know where that comes from.”