The recent comments of Senator Grassley that those who have wrecked our economy should apologize to the American People and then resign or commit suicide, preferably commit suicide strike me as an amazingly sensible notion, especially for Republicans.
What other block of Americans bears such responsibility for the wholesale wreckage of our economy than the Republican members of congress? Let’s start by demanding an apology from former Senator Phil Gramm. Then if he followed Grassley’s advice and committed suicide it might be a beginning of finding some solace in this wreckage.
So what did this Gramm fellow do?
1) As Senate Banking Committee chair, Gramm repeatedly refused to give the Securities and Exchange Commission the resources it needed to cope with fraud on Wall Street. In the 1990’s the SEC was overwhelmed with an 80 percent increase in its work, but it received only a 20 percent increase in staff. This is completely in keeping with the Bush administration’s willing underfunding of all kinds of regulatory agencies. Nothing new here, except that it was a clear and intentional effort to hamstring regulators who might have been able to reign in Gramm’s big Wall Street campaign funders. As a result, we have Wall Street wreckage of an unprecedented kind.
2) Gramm is responsible for securing the amazingly damaging Commodity Futures Modernization Act which like many Republican bills of the time was conceived and written by financial industry lobbyists. This sweet little act, co sponsored by Senator Richard Lugar (R. Indiana) who might also consider obtaining an especially sharp tanto and obtaining the services of a skilled kaishakunin, made sure that both the SEC and the Commodity Futures Tradition Commission were forbidden from regulating any of the new financial products then coming into fashion on Wall Street. As a result, the booming new market in these financial products called Swaps a $62 Trillion market—a market 4 times the size of the American Stock Market—was totally unregulated. What this meant was that no regulatory agency was there to ensure the Financial Institutions had the wherewithal to cover the risks they were taking. Only now are we discovering that the banks insured by the FDIC were functionally insolvent as they the funds to guaranteed the losses they now suffer.
3) As a result, Wall Street had access to our checking accounts, our IRA funds and many Pension funds to make unimaginable trillions of dollars of risky transactions completely in an unregulated shadowland. With no sheriff in town, every rascal with half a wit on Wall Street suddenly became a big player, earning huge bonuses as they took incredible risks with Main Street’s future.
4) Gramm is responsible for passing the Gramm-Leach-Bililey Act in late 1999 which repealed the Glass-Steagall Act of 1933 one of the major legislative regulatory efforts to ensure there would not be another Depression. The Gramm-Leach-Bililey Act allowed competition among banks, insurance companies and securities companies. This bill, signed into law by Democratic President Bill Clinton, represented massive corporate welfare and opened the flood gates to the kind of risk taking for which the American Tax Payer is paying Billions.
How satisfying it would be to see Phil Gramm take responsibility for his debilitating attack on our fiscal regulatory system. How lovely it would be to see him follow Grassley’s recommendation and immediately apologize to the American People and then promptly commit suicide. Gosh I love this Grassley fellow. He seems unusually wise for a Republican.