INTERESTING - FIORINA BLAMES GRAMM

Indirectly, of course, and only if you know Gramm's background as a rabid deregulator. David Corn gives us the scoop:

On Thursday, Portfolio magazine released an interview with Carly Fiorina, the former Hewlett-Packard CEO who is now a top adviser and surrogate for McCain. In that article interviewer Lloyd Grove asked Fiorina "who and/or what is to blame for the souring economy?" Her answer:

Well, I think there was a situation where there was greed on Wall Street, there was a lack of transparency around a new set of financial instruments, there were a whole new set of financial instruments, there were a whole new set of financial players who were less regulated than banks, and all that together created a situation, which now is rippling through the economy.

She added: "in this particular case, the financial instruments that were being used, when I say they lacked transparency, people didn't understand all the connections."

Today's economic troubles, Fiorina was saying, were caused in part by insufficient regulation and lack of transparency regarding the latest financial instruments. And who bears some responsibility for that? Phil Gramm.

It was Gramm who used a sly legislative maneuver in late 2000, when he chaired the Senate banking committee, to pass the Commodity Futures Modernization Act--to which practically no one but financial industry lobbyists were paying attention in Washington. This bill prohibited federal agencies from regulating financial products called swaps, which have been used to back up the mortgaged-based securities that caused the subprime crisis. Michael Greenberger, who directed the Commodity Futures Trading Commission's division of trading and markets in the 1990s, says these unregulated swaps have been at "the heart of the subprime meltdown." He and others point to Gramm as being chiefly culpable for their deregulation.