No one is, nor can anyone be, an expert authority on all things. That’s why the most successful corporate CEOs gather round them those with special expertise in the specific essential disciplines; marketing, finance, accounting, corporate law, engineering, and so forth.
Thus, when Senator John McCain acknowledged, concerning economics, that he wasn’t as “up on it as I should be,” I found it impossible to hold that deficiency against him, or regard it as a legitimate reason to not support his presidential candidacy.
My virulent opposition to McCain is premised on a slurry-load of issues that over the ensuing weeks and months I’ll elaborate in painful detail, but not a one of which is to the level of knowledge he may or may not have relative to economics.
Nonetheless, relative to the field of economics and John McCain, I am here going to rip the skin off the Arizona senator for the way in which he has attempted to compensate his acknowledged deficiency in this vital area with counsel from those who ostensibly do have the requisite expertise. Ex-Texas, Republican US Senator Phil Gramm is John McCain’s economic advisor.
Mr. Gramm’s wife Wendy was a member of Enron’s Board of Directors. In 2000, in the middle of the night that preceded the floor vote on the thousand-page farm bill, Senator Gramm inserted into the bill a for-all-intents-and-purposes highly inconspicuous subsection that has since become known as the “Enron Loophole.” The “loophole” was the brainchild of Enron’s Chairman Ken Lay, and it exempted from federal regulation the electronic trading markets.
Notes on Phil Gramm. From 1978 – 1983 served as a Democratic US Representative. In 1981, while attending Democratic Caucus budget meetings, Gramm secretly shared the party’s strategy with the GOP, so as to help pass newly elected President Reagan’s budget. Stripped by the Democrats of his committee seat, Gramm switched allegiances and became a Republican. Between 1995 and 2000, Gramm, as chair of the Senate Committee on Banking, received $1,000,914 in contributions from the banking industry. In 2002, Gramm left the senate to assume the vice-chairmanship of UBS Investment Bank, one of the primary — if not the primary player — players in the sub-prime mortgage fiasco. While advising the McCain campaign, Gramm remained a paid UBS lobbyist, pushing congress to roll back state laws against predatory lending tactics that put homeowners and buyers in high-cost mortgages. Finally, under the pressure of inconvenient scrutiny, Gramm was deregistered as a lobbyist on April 18, 2008.
In spite of the fact he has admitted knowing less than he should about economics, McCain has insisted he is an ardent supporter of “regulatory relief.” In other words, no matter the hard lessons taught by the S&L meltdown, by the collapse of Enron, WorldCom, et al, and into today’s miasma blend of sub-prime mortgage disaster and into-the-stratosphere fuel prices . . . McCain hasn’t merely joined himself at the hip with the senator most responsible for giving the country and the world Enron, McCain is either (1.) Phil Gramm’s Elmer Fudd dupe, or (2.) his fully-aware, co-conspiring accomplice.
Solid evidence on behalf of the former is McCain’s repeated calls to eliminate completely the Federal Estate Tax. McCain’s wife, Cynthia Hensley-McCain, is heiress to the Hensley & Co Anheuser-Busch distributorship fortune; estimated between $100 and $250 million. Repeal of the FET would pass that fortune directly to Mrs. McCain, and, by extension, to the presidential aspirant, completely tax free!
Every American community and financial markets around the globe are by now tragically cognizant of the product of the Enron Loophole’s blind spot facilitation of unregulated mortgage trading. What isn’t common knowledge by Americans is the leading role the loophole has and is playing in the fuel-price crisis.
Senate hearing testimony and GAO reports have repeatedly demonstrated that, contrary to what the oil interests want everyone to believe, the crisis is not one of only demand and supply, one that more drilling will ameliorate. During the past seven years the approval of gas and oil drilling permits has accelerated. But almost in lockstep, as the number of permits have grown, so too has the price of the commodity.
Clearly something else is also at work. That something else is the connivance of the commodity speculators, many of whom are ex-Enron employee speculators and all of whom are transacting their trades via the unregulated Enron Loophole, via the loophole that McCain very strenuously opposes closing!!! (See today’s [June 3, 2008] US Senate Commerce Committee Hearing on “Rising Oil Prices & Energy Markets.”)
Honing in on the intricacies of commodity speculator trading through black holes as a major cause of soaring fuel prices is not at all intuitive. On the other hand, thinking of the problem as a simple demand/supply matter is intuitive, and it’s why both the oil interests — without expending an additional dime, can earn billions and billions more at $125 a barrel than at $75 — and the speculators are getting away with it! And they will continue raping America so long as Americans continue to see the issue in purely simple “drill more” terms.
Today’s testimony pointed out that while the increase in energy demand has been a contributor, overridingly it has been unregulated speculation. The testimony pointed out that, as the US consumes almost a quarter of the world’s oil and gas supply, federal regulation of commodity futures trading would provoke an immediate drop to as much as 50% in the market price of oil. That may be extremely overly optimistic. What is inarguable, however, is that reregulation by the US of the markets would have a dramatic downward impact.
That considered, why then has congress been so lax in passing legislation that would eliminate the loophole? First of all, until the Democrats regained majority status in both chambers, all power was in the hands of a GOP that perceived itself as beholden, every step of the way, to an oil president and vice-president. Even as the Democrats do have majority status, they do not have the 60-votes needed in the Senate to overcome Republican filibusters that block such efforts, and they absolutely lack the two-thirds majority in the House and Senate that is needed to override a presidential veto.
So, where we are is where we are. The most important questions concern where we want to be, and whether we’ll turn away from the insipid television programming (ignorance and stupidity are choices, not predestined fate) for a few moments to do some basic research, and whether we’ll stand silent while an associate or relative regurgitates the propaganda he or she has swallowed.
John McCain, a “maverick”? a “straight-shooter”? a “moderate”?
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