In the interest of credit where credit is due, we note that Mother Jones, while notable for its force and persistence, was not the first publication to have looked closely at Gramm’s history. Credit also goes to The Texas Observer, where a rigorous article by Patricia Kilday Hart, from last May, pinpoints Gramm as an architect of the financial crisis. Here is Hart on the circumstances of the 2000 legislation:
In the early evening of Friday, December 15, 2000, with Christmas break only hours away, the U.S. Senate rushed to pass an essential, 11,000-page government reauthorization bill. In what one legal textbook would later call ‘a stunning departure from normal legislative practice,’ the Senate tacked on a complex, 262-page amendment at the urging of Texas Sen. Phil Gramm.
There was little debate on the floor. According to the Congressional Record, Gramm promised that the amendment—also known as the Commodity Futures Modernization Act—along with other landmark legislation he had authored, would usher in a new era for the U.S. financial services industry.
And did it ever.
In a reminder that the core circle of Gramm critics is a somewhat select bunch, the Texas Observer quotes both Galbraith and former government regulator Michael Greenberger, another name that appears prominently in what there is of Gramm coverage. (We’ve flagged an interview with him further down.)
But we can also see the widening influence of these ideas in pieces like this one from last July. Dave Davies, of the Philadelphia Daily News, chose to spend his “few minutes with McCain” asking about
the fact that his campaign co-chair and economic advisor, former Texas Sen. Phil Gramm, was co-sponsor of the 1999 law that allowed commercial banks to get into investment banking. And the fact that Gramm was a prime architect of a 2000 bill that kept regulators’ hands off ‘credit default swaps.’
McCain’s answers are unenlightening. But what is important is that this local reporter asked the question. What inspired him? Well, he didn’t mention any publication by name, but he appeared to give Mother Jones and The Texas Observer a nod when he explained, “Liberal writers raised this issue a month ago.”
The fact is, both the Mother Jones pieces and the Texas Observer piece are part of a small but important batch of articles appearing over the past several months that examine Gramm’s place in financial deregulation, and the resulting effects of that deregulation on the economy. Mother Jones and the Observer stand out for their depth and focus, but other pieces that at least place Gramm in context include an excellent April 2008 interview on Fresh Air with Greenberger, and a March 2008 New York Times piece that focuses on deregulation more broadly but does mention the former senator.
As a side note, press criticism of Gramm has not gone unnoticed in Washington. On Sept. 17, Vermont’s Bernie Sanders demonstrated that politicians—or at least their aides—do scan the press. He went to the trouble of reading to Congress a Sept. 15 post by blogger Peter Cohan criticizing Gramm’s deregulatory schemes, and he also mentioned The Texas Observer. In addition, Democrats have compiled an information sheet on Gramm that is based in substantial part on press coverage.
In other words, information is out there for those with the motivation to look for it.
The effect of these articles in the political arena remains to be seen. But it is worth noting that the current crisis is not the first time the press has focused on Gramm and deregulation.
To bring in recent history: Gramm and his wife, Wendy, did get some high-profile attention—from an eagle-eyed Public Citizen, then The New York Times, The Chicago Tribune (“Sen. Gramm and Wife Deregulated Enron, Benefited from Ties,” Jan. 18, 2002, Robert Manor), The Washington Post (“For Gramms, Enron Is Hard to Escape,” Jan. 25, 2002, Dan Morgan and Kathleen Day)—several years ago, after the Enron debacle and California energy crisis, for their roles in energy deregulation. But, as will happen, the hubbub died down.