The Big Bailout involves not just numbers but people. One of those people is ex-U.S. senator Phil Gramm (R-Texas). This summer, as home foreclosures soared toward a rate unparalleled since the Great Depression, Gramm said that recession in America was "mental" and that his countrymen were "a nation of whiners." A close economic adviser to presidential candidate John McCain (though since July not officially designated as such), Gramm may be Secretary of the Treasury if McCain wins.
Since 2003, just after he left Capitol Hill, Gramm has been vice chairman of the American division of the Swiss bank UBS, and a lobbyist for UBS (though since April not officially registered as such). UBS, like Barclay's and other foreign institutions that invested in bad mortgage debt here, has been hard hit by the lending fiasco; between September, 2007 and March, 2008, that debt drained UBS of $37 billion.
When the U.S. government's colossal bailout plan for the financial industry first surfaced, it excluded foreign banks. But early last week the New York Times reported that lobbyists for those banks had gotten the rules changed so that the likes of UBS and Barclay's would get a cut of the U.S. taxpayer money that would finance the bailout.
It's all very nice for Gramm's job with UBS. But what do McCain's calls for "change" and for the firing of the head of the Securities and Exchange Commission mean in the light of Gramm's role in his campaign and possibly his cabinet?
Between 1989 and 2001, Gramm got over $100,000 in donations from Enron and over a million from the financial industry. He served the energy and financial sectors by pushing deregulation laws that contributed to the California energy crisis and to the current credit debacle. He helped kill a mortgage rewrite law UBS didn't like that would have helped homeowners in the current crisis.
The parlaying of Congressional seats into lucrative private sector jobs because ex-politicians can channel taxpayer money to their new employers is hardly to be encouraged by a presidential candidate claiming to favor change. And McCain has expressed outrage at what the financial industry has stolen from ordinary Americans. So what's Gramm doing on his team?"
