Bad News On The Economic Front

The bad news on the economic front (Bear-Stearns, AIG, Merrill Lynch, Lehman Brothers, Freddie Mac and Fannie Mae) simply underscores the severity of the nation's deficit and debt problems which I have outlined recently in a number of posts. It is very, very frightening.

Is John McCain ready to lead us out of our problems? I don't think so. His proposal to cut taxes without a committed plan to pay for them with spending cuts will speed us on our way to national bankruptcy. His economic advisers are a joke - a point is which is clarified for us by Progress Reports.

Former senator Phil Gramm is known as McCain's "Econ Brain." Recently, he has called America "a nation of whiners" who are in a "mental recession." While in the Senate, he was behind the Commodity Futures Modernization Act and the Gramm-Leach-Bliley Act. The former made legal "the mortgage swaps distancing the originator of the loan from the ultimate collector," while the latter "destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies." As The Nation wrote, "those two acts effectively ended significant regulation of the financial community." After leaving Congress, Gramm worked for the Swiss bank UBS. Politico reported that while at UBS, "Gramm lobbied Congress, the Federal Reserve and the Treasury Department about banking and mortgage issues in 2005 and 2006. During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages." McCain has also voted against discouraging predatory lending practices.

Read more on the McCain's panel of "economics experts" in the Progress Report for September 16, 2008.