The fact that John McCain's primary economics advisor, former Sen. Phil Gramm (R), is probably as responsible for setting the stage for this crisis as anyone in the country through his legislative role in the deregulation of the financial services industry.
The NYT has a nice article on the credit mess, "What Created This Monster?", and provides this background:
A milestone in the deregulation effort came in the fall of 2000, when a lame-duck session of Congress passed a little-noticed piece of legislation called the Commodity Futures Modernization Act. The bill effectively kept much of the market for derivatives and other exotic instruments off-limits to agencies that regulate more conventional assets like stocks, bonds and futures contracts.
Supported by Phil Gramm, then a Republican senator from Texas and chairman of the Senate Banking Committee, the legislation was a 262-page amendment to a far larger appropriations bill.
The Times also provides this graphic, which I can't get my mind around (click for larger version)
and provides this explanation:
Like C.D.O.’s, which few outside of Wall Street had ever heard about before last summer, the credit default swaps market is conducted entirely behind the scenes and is not regulated.
The contracts act like insurance policies designed to cover losses to banks and bondholders when companies fail to pay their debts. It’s a market that also remains largely untested.
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