Excerpts: John McCain's Phil Gramm problem
"In the late 1990s, former Texas Senator and economics prof engineered financial reform. He led the effort to break down the barriers between traditional banking and investment banking. In a pure economics sense, he was right. Economies of scale, economic growth and wider markets were the byproducts. But deregulation was viewed as king and regulatory oversight became a curse word. Anyone who mentioned the need for balanced regulation was shouted down as a backer of Big Brother/ Big Government. Therein lies McCain's problem."
"Not that long ago, Gramm said the economy was sound and Americans were whiners. Now McCain -- on the day Wall Street implodes and stocks crash -- says the nation's economic fundamentals are sound. I think not."
"The late 1990s and early 2000s gave rise to the era of the Bush Administration's first Securities and Exchange Commissioner, Harvey Pitt, whose claim to infamy was his attempt to allow Corporate America police itself. He also was slow to acknowledge the depth of corporate accounting scandals, and saw no perceived conflict in conducting private meetings with former accounting clients under SEC investigation. And over the years, the SEC -- before and after Pitt -- has been budget compromised, weighed down by too many companies and not enough staff. The pushback to those abuses? Sarbanes-Oxley Act of 2002."
"I think it is telling that the SEC has not been a major player, that the Federal Reserve and Treasury are carrying the burden during this financial crisis. I will be interested in seeing how McCain plans to balance the free market with oversight without re-erecting some barriers or giving regulators more authority to proactively address pending financial threats to the economy."
(Read the whole article at: http://dallasmorningviewsblog.dallasnews.com/archives/2008/09/john-mccains-ph.html)