"Cleaning Up" Wall Street With A Dirty Broom

Sen. John McCain appropriated huge chunks of populist rhetoric Monday in a speech about the Wall Street meltdown, promising to "reform the way Wall Street does business and put an end to the greed that has driven our markets into chaos."

He even used a label for the climate set by Wall Street executives used by our own Robert Borosage when he declared, "We'll put an end to running Wall Street like a casino."

Huh? David Corn at Mother Jones [1] reminds readers that it was a top McCain advisor, former Texas senator Phil Gramm, who helped set the stage for Monday's Wall Street meltdown.

As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm's legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions.

Gramm was famously dispatched from the McCain campaign in July when he dismissed as "whiners" people who said they were being hurt by today's economy, but Corn points out that Gramm and McCain are still in cahoots [2]. And, as Bill Scher pointed out earlier this month [3], Gramm made clear that he was willing to make one qualification of his earlier "whiner" comment: He wasn't referring to the group of CEOs in the room who supported the right-wing economic policies of the past eight years and who were bankrolling the candidate who would continue them.

MCain's promise to reform Wall Street lacks credibility when, as Corn notes, his campaign is "being assisted by 177 lobbyists and the guy who greased the way to the current crisis with a backroom legislative maneuver."

As the Wall Street crisis continues we'll hear a lot of rhetoric on the campaign trail intended to fool voters into thinking that at least some people in the conservative political camp have seen the errors of their ways. But the old adage, "follow the money"—and its corollary, "follow the campaign advisers"—still applies. If the people who built the Wall Street casino are inviting everyone to a Gamblers' Anonymous meeting, don't be surprised by the winks and nods when people slip out of the room to resume gambling when they think the coast is clear.