Gramm was always Wall Street's man in the Senate. As chairman of the Senate Banking Committee during the Clinton administration, he consistently underfunded
the Securities and Exchange Commission and kept it from stopping accounting firms from auditing corporations with which they had conflicts of interest.
Gramm's piece de resistance came on Dec. 15, 2000, when he slipped into an omnibus spending bill a provision called the Commodity Futures Modernization Act
(CFMA), which prohibited any governmental regulation of credit default swaps, those insurance policies covering losses on securities in the event they went belly up. As the housing bubble ballooned, the face value of those swaps rose to a tidy $62 trillion. And as the housing bubble burst, those swaps became a massive pile of worthless paper, because no government agency had required the banks to set aside money to back them up.
The CFMA also prohibited government regulation of the energy-trading market, which enabled Enron to nearly bankrupt the state of California before bankrupting itself.
The problem with this exercise, of course, is that Gramm's relationship to McCain is not comparable to the relationships that Ayers or Wright have with Obama. The idea that either Ayers or Wright would have any impact on the workings of an Obama administration is nonsensical. But Gramm and McCain do have an enduring political and economic alliance. McCain chaired Gramm's short-lived presidential campaign in 1996; Gramm is co-chair of McCain's current effort.
McCain has not repudiated reports that Gramm is on the shortlist to become Treasury secretary if McCain is elected, even after Gramm labeled America "a nation of whiners."
If we are to believe his managers, McCain will charge into tomorrow night's debate seeking to "change the subject" from the economy to Obama's dangerous liaisons. It's not, however, likely to be a winning tactic. Obama will argue that in a time of deepening economic crisis, the public deserves a debate in which the candidates focus on their ideas for recovery rather than tendentious attacks on their rival's presumed associates. If pressed, though, he can mention that it is McCain's senior economic adviser who has diminished American solvency and power beyond the wildest dreams of anti-American terrorists.
This last month is going to be nothing but ugly from the Republicans. They've got nothing - nothing - so stand for after eight years of greed, theft and murder. That means facing the worst of the Karl Rove machine. Don't get distracted. Their bullshit only works if you allow yourselves to be distracted by the trivial, the fake, and the stupid. Don't fall for it. Not this time.