Who let the Sharks Out?

Who Let the Sharks Out?

Senator John McCain’s “town hall” debate mortgage distraction isn’t new, isn’t his, and is not sufficient to stem the collapse of the U.S. economy. It is a another McCain tactical distraction meant to keep the discussion away from assessing blame for this financial debacle. Understandable, since the finger points to Senator McCain and those close to him who made “deregulation” an article of faith and pursued it with religious fervor. They got it, so we got this crisis.

The $700 billion financial rescue package already provides for mortgage mitigation. The current administration’s “Paulson Plan” is three-fold, calling for stabilization of the financial sector, removing bad mortgages from the picture, and launching some sort of general economic stimulus program. So much for the argument that a McCain Administration would not be a four-year extension of Bush policies.

Either the Senator hasn’t read the Paulson plan or he is counting on the fact that voters haven’t read it, either. Congress also passed legislation directing FHA to help defaulting homeowners — 400,000 of them — back in July.

But let’s give Senator McCain and his advisors their due: they wanted deregulation of the financial sector, and they got it. McCain Campaign Co-Chair (until he said the mortgage meltdown was a mental illness suffered by “whiners“) and McCain financial advisor Phil Gramm — ex-Senator, Aggie professor, and Swiss banker — pushed his Commodity Futures Modernization Act of 2000 (CFMA) and Gramm-Leach-Bliley Act (GBLA) through Congress. 

Then-Senator Gramm said these measures would “protect financial institutions from overregulation” and “position our financial services industries to be world leaders into the new century.” He was partly right. Gramm, McCain and company allowed unregulated U.S. financial services industries to lead the world — into economic disaster.

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com.

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