Saturday, July 12, 2008

Never an honest word, but that was when I ruled the world.

(Great live version of Viva La Vida)

I worked at and gave guitar lessons at a music store from '68-'70. The owner, a nice fellow, was a John Bircher. He had his "Take my guns . . . cold dead hands" bumper sticker on the wall, and he knew I didn't share his political outlook, and we talked about it pretty openly. Essentially he was a Libertarian, but he didn't get the 'free' aspect of the '60 cultural changes.

He once told me "Spiro Agnew is the smartest politician around." I know he was a pompous prick. And I had left the store by the time Agnew's sorry ass was indicted for bribery, so I didn't get to ask my former boss how that was working for him.

I had the same reaction tonight when I read this idiocy at RightWingNutHouse:
Phil Gramm is still one of the smartest men ever to serve in the United States Senate. This despite his clueless statement that the US is in a “mental recession” and that Americans are a bunch of “whiners” about the economy.

Really? "Smartest" and yet "clueless"? Even the above writer seems to see that Gramm might be 'out of touch':
Well things may very well look that way to the former Chairman of mortgage giant USB and a guy who gets $50 thousand a crack to regale fat cat businessmen with stories of how stupid our government is and how the private sector is always smarter. I’m sure from the vantage point of someone whose idea of rough economic times is cutting back on the number of manicure’s he receives a week from 3 to 2, things are just peachy.

Ya think? For starters, it's UBS, you tool. And the irony is, as usual, lost since you know that Gramm "gets $50 thousand a crack to regale fat cat businessmen with stories of how stupid our government is and how the private sector is always smarter" and you can't seem to interpret your own writing to see that he's just plain, stupidly dismally wrong.

Ah the private sector . . .

Here's what Gramm did for the private sector:
As chairman of the Senate Banking Committee, Gramm was instrumental in pushing major banking deregulation in 1999 that critics say has contributed to the current mortgage crisis.

The bank deregulation law, known as the Gramm-Leach-Bliley Act, was the most important update in banking laws since the New Deal. Its most important feature: breaking down walls between commercial banks, investment banks and insurance companies.

Gramm's critics say the deregulation of commercial banks contained in the law made it easier for banks to push risky subprime mortgages on lower-income customers.


Gramm used his prominent position in the Senate to promote less federal oversight of the energy industry. Democrats single out a provision pushed by Gramm in 2000 that exempted energy trading on electronic platforms from federal regulation.

The provision was dubbed "the Enron loophole" because it was backed by the Houston-based energy trader Enron, on whose board Gramm's wife Wendy sat at the time. Democrats give Gramm full credit for the proposal; Gramm says that he used language that was "essentially the same" as a provision approved months earlier by the House.

California officials blamed the provision for precipitating the electricity crisis in California in late 2000 and 2001. More recently, Democrats say that energy traders have used it to drive up energy prices. Sen. Carl Levin, D-Mich., likens the action to taking "the cop off the beat."

Here's what a real economist says about Gramm:
Phil Gramm’s career was the most aggressive advocate of every predatory and rapacious element that the financial sector has. He’s a sorcerer’s apprentice of instability and disaster in the financial system.

And about Gramm's educational bona fides:

Thank you for sending the Gramm dissertations. I have read them through with considerable interest.

Phil’s is a curious document. It is mainly an exercise in the history of economic thought, though I doubt that Gramm thought of it in those terms at the time. His topic is an issue in the theory of consumer demand, namely, what is the precise meaning of the idea that consumers have well-formed and unchanging preferences? His method is essentially, a critical review of literature.

For a Ph.D. dissertation, especially one which is not mathematical (and it isn’t), this one at 79 pages is short. It contains no advanced mathematics, no data or analysis of data, no archival or otherwise original research. It is based solely on published sources available in any well-equipped library at the time, and there is only one reference to anything written after 1960, which for a thesis submitted in 1967 is astonishing. The writing style is for the most part graceless and involute, marred here and there by misused words like “fecundities.” It is belabored and repetitive, with chapters that overlap each other. It is basically an extended discussion of a single idea.

. . . On the whole, Phil Gramm’s thesis could have been condensed to an interesting article at some point in the development of twentieth century microeconomic theory. My guess is that the proper moment for that article would have come in the late 1940s, or some twenty years before Gramm actually wrote his dissertation. By the time he did write it, the mathematical character of the field had long since outpaced the very modest display of technique here, and the concerns Gramm writes about would probably have already been considered antique in most quarters. It would be interesting to know if Gramm got anything published out of this, and if so, where.

. . . It is equally clear to me that Phil got his degree in order to move on and do something else. Had he stayed in economics, he probably would not have prospered.

Except that he has prospered.

Meanwhile, back at RightWingNutHouse, a commenter explains what is causing the economic woes:

Gramm is correct. If Americans aren’t whinners than why do we sit still as the elites propose tax increase after tax increase?

If we aren’t weak minded cretins why are we watching the government bail out financial institutions who carried out their bidding when Congress passed the Community Redevelopment Act. An act intended to grant loans to blacks, hispanics, etc who couldn’t hope to meet the requirements for a normal loan.

So we now see 2,000 foreclosures daily, up 50% from last year but equal to only two tenths of a per cent of all mortgages. Yet this will cost American taxpayers a trillion dollars so our senators and politicians can have sweetheart loans.

And what do we get? More of the same manure from both parties. Amnesty? Restricted drilling? Earmarks? Unending deficits and printing presses rivaling Zimbabwe?

As usual, not hidden far beneath the surface, is racism. The Community Redevelopment Act? Um, no. And if Gramm isn't an 'elite', then I don't know who is.

Another commenter sets things straight:

The truth is that the federal reserve system (not part of our government, but a private monopoly) started the whole thing by flooding the market with liquidity – inviting debt, both good and bad.

We, as Americans have no say and either does our government. They print as much money and create as much liquidity as they want. They answer to no one and are siphoning off the wealth of the middle class.

When Americans begin to understand that we have no control over the federal reserve, then they will begin to realize that the federal reserve actually controls us.

Most in government and many in the media know this but won’t say a word.

The stupid, it just burns sometimes. No mention of a certain war in Iraq that costs $536 billion and keeps going up.