turbo36
Veteran Member
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- Apr 20, 2004
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- JD X739 AWS (3), 2016 Toolcat, JD 2038R
Actually he was pandering to McSames econominc advisor Phil (this country is just a bunch of whiners) Gramm.
Subprime crisis
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.
"His fingerprints are all over a lot of pretty serious economic fallout from deregulation he championed and continues to do so," said Obama adviser Jared Bernstein, an economist with the liberal-leaning Economic Policy Institute.
But Wayne Abernathy, staff director of the Senate Banking Committee under Gramm, said the exact opposite is true.
"The current financial difficulties would be worse if there had not been Gramm-Leach-Bliley in place today," he said.
Peter Van Doren, an economist at the libertarian Cato Institute, said Gramm simply modernized outdated Depression-era banking laws that had contributed to the savings and loan crisis of the '80s.
Gramm says he fought consistently against the kind of risky practices that led to the subprime mess.
"Nobody in the past quarter-century has argued louder against making downpayments lower and making (mortgages) riskier," Gramm said.
