McCain Campaign Advisors at Fault For Current Wall Street Crisis

Article courtesy of the Huffington post.

Don't let them tell you this economic meltdown is a complicated mess. It's not. Our national financial crisis is readily understood by anyone who has seen greed and hypocrisy. But we are now witnessing them on a profound, monumental scale.

Conservative Republicans always want the government to stay out of business and avoid regulation as long as they are making lots of money. When their greed, however, gets them into a fix, they are the first to cry out for rules and laws and taxpayer money to bail out their businesses. Obviously, Republicans are socialists. The Bush administration has decided to socialize the debt of the big Wall Street Firms. Taxpayers didn't get to enjoy any of the big money profits on the phony financial instruments like derivatives or bundled sub-prime paper, but we get the privilege of paying for their debt and failures.

Let's just consider the money. The public bailout of insurance giant (becoming a dwarf) AIG is estimated at $85 billion. According to one report, that's more than the Bush administration spent on Aid to Families with Dependent Children during his entire time in office. That amount of money would also pay for health care for every man, woman, and child in America for at least six months.

How did we get here?

That's pretty easy to answer, too. His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing.

This isn't small beer we are talking about here. The market for these fancy financial instruments they don't expect us little people to understand is estimated at $60 trillion annually, which amounts to almost four times the entire US stock market.

And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid lobbyists were done slinging their gold card guts about the halls of congress, every one from hedge funds to banks were playing with fire for fun and profit.

Gramm didn't just make a fairy tale world for Wall Street, though. He included in his bill a provision that prevented the regulation of energy trading markets, which led us to the Enron collapse. There was no collapse of the house of Gramm, however, because his wife Wendy, who once headed up the Commodities Futures Trading Commission, took a job on the Enron board that provided almost $2 million to their household kitty. And why not? Wendy got a CFTC rule passed that kept the federal government from regulating energy futures contracts at Enron.

If John McCain gets elected and chooses Phil Gramm as his Treasury Secretary, which many politico types see as likely, they will be able to talk about the good old days when Gramm was in congress and McCain was in the senate and they were in the midst of the Savings and Loan crisis.

The S and L scandal, which may look precious when compared to our present cascade of problems, isn't hard to understand, either. But it is impossible to take John McCain seriously on our current financial Armageddon since he was dabbling in the historic collapse of 747 S&Ls that occurred during Ronald Reagan's era. In the early 80s under the Republican president, congress deregulated the savings and loan industry in much the same way that Gramm made sure there were no laws hindering our current financial malefactors on Wall Street. S&Ls simply lobbied until they had less regulation and then began making rampant, unsound investments.

The guy who was going the wildest with financial freedom was Charles Keating, who headed up Lincoln Savings and Loan of California. Because the S&L industry had managed to get congress to increase FDIC insurance from $40,000 to $100,000 on deposits, the irresponsible investing of people like Keating began to put taxpayer insurance funds at great risk of loss. Keating placed money in junk bonds and questionable real estate projects and because so many other S&Ls started acting the same way the Federal Home Loan Bank Board (FHLBB) began to push for a regulation that limited these dangerous speculative "direct" investments to 10% of an S&L's assets.

And Keating didn't like it; he called on a private economist named Alan Greenspan, who promptly produced a study saying that there was no danger in "direct" investments.
But that didn't convince the FHLBB and as further scrutiny showed Lincoln Savings and Loan was making even more historically bad investment decisions, a federal investigation was launched.

So Keating called his home state senator John McCain.

McCain and four other US senators (known to history as the Keating Five) met with Edwin Gray, then chairman of the FHLBB. McCain had been hesitant to attend but had reportedly been called a "wimp" behind his back by Keating. The message to the FHLBB and Gray from the Keating Five was to lay off Lincoln and cool the investigation. Gray and the FHLBB did not relent but Lincoln stayed in business until 1989 when it collapsed with the rest of the S&L industry. The life savings of more than 20,000 elderly investors disappeared with the failure of Lincoln. Keating went to prison for five years.

Charles Keating was John McCain's pal. They met in 1981 and Keating dumped $112,000 in the McCain campaign bank accounts between '82 and '87. A year before McCain met with the FHLBB regulators, his wife Cindy and her father, according to newspaper reports at the time, invested about $360,000 in one of Keating's shopping centers. The Arizona Republic reported McCain and his wife and their babysitter took nine trips on Keating's private jet to the Bahamas to stay at the S&L liar's decadent Cat Cay resort. The senator didn't pay Keating back for the plane rides until years later when he was under investigation.

McCain wasn't found guilty of anything but bad judgment, which is an historic understatement. Republicans, who led deregulation of the S&L industry, delayed the bailout until after the 1988 election to make sure George H. W. won the White House. The cost to taxpayers for helping these 747 bad actors in the S&L industry was finally estimated at $1.4 trillion. If the bailout had begun in 1986 instead of after the presidential election, the cost would have been contained at $20 billion.

And now the Republicans who engineered our present crisis and got us into the S&L debacle of the 80s are before us saying the markets need regulation. No, actually, they don't need regulation. Why don't you Republican capitalists who believe in the free markets get out of the damned way and let them work and allow these various financial nuthouses be crushed by the weight of their own stupidity? When it is all over, we'll have sane and sober people create laws to make sure it doesn't happen again, assuming we survive this chaos.

Also, while you are handing out our tax money to idiots on Wall Street, save a little of the long green for the unemployed auto and construction workers and all of the other people who have lost their jobs because you were too stupid to notice what Phil Gramm was doing and you were convinced everything was going to be just fine because the markets work.

These, then, are the people -- the Republicans -- who want to run our government for four more years. John McCain isn't just one of them. He rides their jets. He takes their campaign donations. He makes them his campaign advisors. And he tells us to trust him.

He must think we are a nation of village idiots.

Hell, maybe we are.

Obama Campaign Reveals Science Advisors

Barack Obama has established a small but well-regarded inner circle of science advisors that includes a vocal critic of creationism, a Nobel laureate who has championed open-access research, and another laureate who used his prize money to defend academic freedom against the war on terror. Though their influence on the policies of a prospective Obama administration are unknown, they've played a prominent role in establishing his science platform to date.

Obama announced his science platform earlier this month in response to questions posed by ScienceDebate2008, a nonpartisan political education group. In response to a Wired Science follow-up, the campaign identified five people who helped draft Obama's statement: Harold Varmus, a Nobel laureate and former head of the National Institutes of Health; Gilbert Ommen, a former president of the American Association for the Advancement of Science; Peter Agre, a Nobel laureate and ardent critic of the Bush administration; NASA researcher Donald Lamb; and Stanford University plant biologist Sharon Long.

Republican candidate John McCain responded to the ScienceDebate2008 questions on Monday, but his campaign ignored multiple requests for the identity of its science advisors.

On paper, both candidates have outlined a generally strong approach to science. There are differences -- Obama emphasizes basic-research funding and proposes moderately more ambitious greenhouse-gas cuts, while McCain supports a new wave of nuclear power and would outlaw some embryonic stem cell research -- but they are generally small. And at this pre-presidential moment, neither platform may provide more than a hazy indication of what each man would do as president.

Non-binding campaign rhetoric may be less important than the advisors they assemble when you're trying to divine the realities of each candidate's presidency.

"Neither of the candidates is a scientist to start with," said Thomas Murray, president of the Hastings Center, a nonpartisan bioethics think tank. "We can presume that they're going to rely on experts in science and science policy. It is important to know who their advisors are."

In some ways, Obama's team is a mix of contrasting approaches: Lamb and Agre are both academics, while Omenn is a director of the biotechnology company Amgen and Long was a director at agricultural giant Monsanto. In other ways, their expertise is narrow: four of the five advisors come from the life sciences.

"There are a lot of excellent scientists in major fields that we're going to need research in," said Martin Apple, president of the Council of Science Society Presidents, a confederation of scientific societies whose membership spans more than one million scientists and teachers. "The inner circle would be much improved by increasing the range of disciplines."

Apple was confident that Obama would be able to assemble such a team. "He's certainly the kind of person who tends to build larger consultation groups," he said. "All of [the advisors] have networks of people who would be able to put high-quality appointments together."

The Team:

Harold Varmus: President of the Memorial Sloan-Kettering Cancer Center. He won a Nobel Prize in 1989 for breakthroughs in cancer genetics. Under Clinton, he directed the National Institutes of Health; the agency's budget doubled, but his legacy was tainted by his permitting NIH researchers to take excessive payments from pharmaceutical companies. A champion of open-access research, Varmus co-founded the Public Library of Science. He chairs the scientific board of Grand Challenges in Global Health, launched by the Gates Foundation and NIH to improve health in the developing world. Varmus was an advisor to the now-defunct Campaign to Defend the Constitution, launched to combat the political influence of the religious right. His political contributions and a list of industry ties are available.

Gilbert Omenn: Professor of internal medicine, human genetics and public health at the University of Michigan. Former president of the American Association for the Advancement of Science; during his tenure he denounced anti-evolution education laws, and has been a vocal critic of creationism. “The logic that convinces us that evolution is a fact is the same logic we use to say smoking is hazardous to your health or we have serious energy policy issues because of global warming,” he told reporters this year. “I would worry that a president who didn’t believe in the evolution arguments wouldn’t believe in those other arguments either. This is a way of leading our country to ruin.” Omenn is a director of Amgen, a biotechnology company, and served in the Office of Science and Technology Policy under President Carter. His campaign contributions and a list of industry ties are available.

Peter Agre: Director of the Johns Hopkins Malaria Research Institute. After winning a Nobel Prize in 2003 for discovering proteins that move water through cell membranes, he pledged to use the prize money to defend scientific freedom from the restrictions of the war on terror. He has been sharply critical of President Bush's climate change policies. "The Bush administration has been a disaster for the environment,"  he said in 2004. "If we wait until there's unequivocal proof that this is the cause of global climate change, it will be too late." Agre helped found Scientists and Engineers for America, a non-partisan science advocacy group. An advocate of increased government investment in science, he wants more scientists to run for public office. He has appeared twice on The Colbert Report.

Don Lamb: A University of Chicago astrophysicist and expert in stellar evolution, Lamb helped found the Sloan Digital Sky Survey, which has been described as "the most ambitious astronomical survey ever undertaken," and recorded the most distant explosion ever. A Mission Scientist on NASA's High-Energy Transient Explorer, he has fought to maintain NASA's research budget. "Science at NASA is disappearing — fast," he told the New York Times in 2006. Lamb has also argued against the privatization of commercial space flight. ''Space exploration,'' he told the Times, ''particularly manned space exploration, is just too expensive and risky to attract private enterprise, especially venture capitalists."

Sharon Long: Recently stepped down as dean of Stanford University's School of Humanities & Science to return to her research on the symbiosis of soil bacteria with alfalfa. Long resigned last year from the Board of Directors of Monsanto, an agricultural biotechnology corporation. A former MacArthur Fellow, Long is a member of the leadership council of the National Academy of Sciences. She has contributed to the campaigns of both Barack Obama and Hillary Clinton.

Images: Chad Davis; Harvard University; University of Michigan; Johns Hopkins; Stanford University.

Plan for Change

John McCain vs John McCain

Since it's always fun to listen to John McCain argue with John McCain, let's revisit McCain's two reactions to the Wall Street meltdown yesterday. First there was this:

And then, a couple of hours later:

Besides probably being the fastest flip-flop in political history, these two conflicting statements also provide some insight for undecided voters...they learned that that famous "straight talk" isn't all it's cracked up to be, and that John McCain is right...he really doesn't know too much about economics.

Fiorina: Palin Doesn't Have Experience To Run A Major Company

Carly Fiorina, a key surrogate for John McCain on economic issues, said on Tuesday that Sarah Palin does not have the experience needed to run a major company like the one that Fiorina formerly headed.

"Do you think [Sarah Palin] has the experience to run a major company, like Hewlett Packard?" asked the host.

"No, I don't," responded Fiorina. "But you know what? That's not what she's running for."

Appearing on the McGraw Milhaven Show on St. Louis KTRS Radio, Fiorina went on to stress that the Alaska Republican had more executive experience than anyone else on the ticket, specifically Barack Obama.

"I find it quite stunning actually that the Barack Obama campaign is questioning Sarah Palin's experience," she said. "She has more executive experience than he does and she is the vice presidential nominee and he is the presidential nominee."

But the admission that Palin wasn't prepared to run the very business that Fiorina once headed is a gaffe that could come back to haunt the McCain campaign. Certainly, when critics mainly argue that Palin lacks the gravitas to step in for McCain at a moment's notice, and when the economy is the major topic on the campaign trail, it is easy to see how Fiorina's comment could make its way into an Obama or DNC attack ad.

McCain Campaign: John McCain Invented The Blackberry

"He did this," Douglas Holtz-Eakin told reporters this morning, holding up his BlackBerry.  "Telecommunications of the United States is a premier innovation in the past 15 years, comes right through the Commerce committee so you're looking at the miracle John McCain helped create and that's what he did."

So now we know what McCain has been doing while missing all those votes in the Senate. He's been moonlighting as a Canadian MP -- RIM, the company that makes the Blackberry, is headquartered outside Toronto. Lets take a look at McCain's record on technology issues:

John McCain has at last turned in his answers to Science Debate 2008 (after peeking at Barack Obama's answers for a couple of weeks) there are some interesting tidbits hidden among his rambling responses.

Take this reply to a question about maintaining America's lead in innovation.

I am uniquely qualified to lead our nation during this technological revolution. While in the Navy, I depended upon the technologies and information provided by our nation’s scientists and engineers with during each mission.

Let's stop there for a second. Here John McCain insists he's uniquely qualified to discuss technology because... he used some. Forty years ago. This is the same kind of high standard by which he assured us that Sarah Palin knew more about energy than anyone else in America, and Phil Gramm was one of the smartest people in the world on the economy. At least he didn't claim any MacGyverite tech affinities developed in Hanoi.

Okay, let's continue.

I am the former chairman of the Senate Committee on Commerce, Science and Transportation. The Committee plays a major role in the development of technology policy, specifically any legislation affecting communications services, the Internet, cable television and other technologies. Under my guiding hand, Congress developed a wireless spectrum policy that spurred the rapid rise of mobile phones and Wi-Fi technology that enables Americans to surf the web while sitting at a coffee shop, airport lounge, or public park.

And, stop. There you have it, people. John McCain not only invented cell phones, he tossed in wifi as an afterthought.

Let's go back and see how McCain's hand guided that development.

With the Telecommunications Act of 1996, the Senate passed the first major revision to telecommunications law in 62 years which provided the foundation for much of the cell phone and Internet regulation over the next decade.  The bill passed 81-18 and was signed into law by President Clinton.  McCain voted against the act.

In 2002, McCain authored the "Consumer Broadband Deregulation Act of 2002" which eliminated the requirement of the 1996 law that telecommunication companies provide access to competitors.  It didn't pass.

In 2003, the Internet Tax Freedom Act was passed, putting in place a moratorium on taxes for activities on the Intenet. The bill had 11 cosponsors – McCain wasn't one of them. He did vote for the bill, but since it passed 97-3, that's definitely "guiding" with a small 'g.'  Granted, this wasn't directly a bill about wireless, but since McCain doesn't seem to have authored any law on wireless technology, I'm having to search for connections.

Of pending legistlation, McCain is not a sponsor of the "Connect the Nation Act" – though Senator Obama is. McCain is not a sponsor of Senator Rockefeller's call for a universal next generation broadband by 2015 – though Senator Obama is. And of course, McCain isn't a sponsor of the "Internet Freedom Act" that would ensure net neutrality – though Senator Obama is. That last is no surprise. McCain has repeatedly opposed net neutrality, saying that companies have a right to restrict speed or even limit access to sites "when you control the pipe you should be able to get profit from your investment."

So,  McCain's "guiding hand" seems to consist of opposing the legislation that laid the groundwork for the communications we have today, and authoring failed legislation designed to benefit big carriers. Of course, we should probably be glad that John McCain really didn't invent the cell phone or wifi, otherwise we'd all be getting our wireless services from one monolithic company free to restrict our access to only the pages that pay for the privilege. And we'd all be using "Jitterbugs."

Obama: If you believe that, I've got a bridge in Alaska to sell you

Obama tries out a few new lines in Colorado, Carrie Budoff Brown reports:

"But now suddenly, John McCain says he is about change, too. He even started using some of my lines. Suddenly he says he wants 'to turn the page.' He had an ad today that he started running that he and Gov. Palin would bring the change that we need. He had this in an advertisement. Sound familiar? Let me tell you something, instead of borrowing my lines he needs to borrow our ideas," Obama said.

He followed up with a dig at lobbyists, saying "if you think those lobbyists are working day and night for John McCain just to put themselves out of business, well, then, I've got a bridge to sell you up in Alaska."

Sarah Palin: The Bridge of Lies