Category Archives: rick perry

Rick Perry’s anti-gay ad: The spoof videos! — PLUS: MSNBC host Mika Brzezinski slams Newt Gingrich in must-see rant

By Patrick
Looking for some comedy relief, we only have to turn to the Republican presidential candidates. They don’t seem to be provide real value as far as political and economic issues are concerned, but the comedic value they provide is immeasurable.
For a more serious look on the issue, however, I recommend the recent “review” of the whole Republican freak show in the German news magazine “Der Spiegel”, in which the magazine called the Republican candidates “A Club of Liars, Demagogues and Ignoramuses.”
A few days ago, Rick Perry has infamously released a campaign ad which has been immediately regarded by the public as anti-gay. Although in Rick Perry’s defence, he probably simply didn’t know what he was saying. In any case, here is the original:

This advert single-handedly broke the record on youtube (I believe) as far as the number of “dislikes” to a video are concerned:

Rick Perry’s memorable advert was followed by a number of hilarious spoof adverts. Here are some of the best of them, for your pleasure:

Jesus Responds to Rick Perry’s “Strong” Ad from DC Pierson http://www.facebook.com/plugins/like.php?app_id=138711277798&href=http%3A%2F%2Fwww.funnyordie.com%2Fvideos%2Fe23d1c26d4%2Fjesus-responds-to-rick-perry-s-strong-ad&send=false&layout=button_count&width=150&show_faces=false&action=like&height=21

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To get a little more serious again, MSNBC host Mika Brzezinski delievered an epic, must-see rant regarding Newt Gingrich on “morning joe.” She expressed her disgust at Newt Gingrich after he slammed the OWS-protesters.

This already happened in late November, but as Newt is now the new front-runner of the Republican freak show, Mika’s rant deserves more coverage:

Many thanks and a big h/t to all of our readers who put links to some of these clips in the comments!

Hopefully you all will have a great Saturday! Next week, we will be back with more exciting stories.

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BONUS:

AzureGhost just posted the following clip in the comments – yes, Newt Gingrich, you surely are a “mean one”:
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Dusty’s Corner — Dusty reads Gabby Gifford’s and Mark Kelly’s Story of Courage and Hope

with Illustrations & Pics by: KatieAnnieOakly

I finished reading the book Gabby A Story of Courage and Hope written by Rep. Gabrielle Gifford and Mark Kelly with Jeffery Zaslow last night. I highly recommend this book to anyone who enjoys reading a true story of a couple who love, respect and truly support each other.

This is what Love, Hope and Courage really looks like.
The voice is Mark’s throughout the book as he tells both his and Gabby’s story until you get to the last chapter which is all Gabby. If you enjoyed Joe McGinniss’s writing style you will enjoy reading this book.Mark has a wonderful sense of humor as he pokes fun at himself, his brother and Gabby. You will also finally know the answer to the question: What does an astronaut wear under that spacesuit? Don’t worry; you will learn this in a funny story told by Mark as a wonderful example of how to ease an embarrassing event of which one had no other option. Make sure to have a box of tissues handy as you will laugh and you will cry but at the end you will feel better knowing the real story of Gabby and Mark Kelly.
Moving on from reality to the nightmarish fantasy world that is the republican party and the media we now have the latest versions of Sarah Palin lighting up the airwaves. Only it is version 3.0 Herman Cain and version 4.0 Rick Perry. What is weird, but then again we are talking about Palin and the republican party, is usually when you upgrade a program it gets better with new features and functions, but with these Palin versions they just keep getting worse and worse. If this was truly a piece of software and after the 3rd upgrade it didn’t perform better most people would be uninstalling that program and moving on to something different.

Wow Mr. “I’m not supposed to know anything about foreign policy. Just thought I’d throw that out.” Herman “While making a mockery of this nation’s election process” Cain is proving that he does not have better comprehension skills than that of Sarah “In what respect, Charlie?” Palin.
Recently in the news it has been said that it is hard to read Herman Cain’s body language as he is a skilled public speaker. Well guys I think I have found one way to tell when Herman Cain is either lying or just making stuff up. Watch the Libya video, it is okay to watch with the sound off, and just watch his eyes. Did you see it too? Yep ole Herman’s eyes were blinking so fast it is a wonder he could even see anything other than the back of his eyelids. Remind you of anyone else whose eyes start to do the fast blinking and twitching when he is lying and making stuff up? Anyone? Think back to 2008. YES you got it John McCain! Poor Herman,his crew set up the interview and he only had 4 hours of sleep and golly gee whiz the reporter actually had the audacity to ask a real question that required a real answer instead of talking point. Yes Herman you are an idiot.You are an idiot v3.0. To answer your question most American do want a President who does know something about foreign policy and can speak in full, clear and concise sentences that expresses a complete (not a talking point) idea and that includes a subject and a verb. Just to be clear Herman, answering any questions claiming you’ll do the complete opposite of what President Obama did does not make you more likable it just makes you look just like a Palin-undereducated and willfully ignorant.
Houston, We have a problem!
Next up is Palin v.4.0 Rick “My wife is making me do this so she can be the First Lady” Perry. Yes Rick, amazing how President Obama makes public speaking look so easy that you and Palin thought you both could do it so much better. It is so easy to bash the use of a teleprompter or notes when you are not the one speaking isn’t it Rick? Whereas Sarah wrote her personal beliefs (cause gosh dang darn it those personal beliefs are so hard to remember) on her hand and reads the same prepared speech word for word over and over again, you took the more ‘manly’ (for lack of a better word) approach and thought you could just wing it didn’t you? I mean seriously Rick what American would actually want their leader to know what direction he\she would like to lead the country and then be able to articulate that vision. That is downright un-American now isn’t it Rick? I am pretty sure Texans are now suffering from the same illness as the Alaskans- Worst Governor Ever disease. Rick just because Todd Palin wanted to be the First Lady does not mean you have to try and do better. Let it go Rick just let it go sometimes it is better to just walk away. Enjoy living in that taxpayer rented mansion because your days as Governor are numbered and Texans are going to wake up and vote your undereducated and willfully ignorant Palin v4.0 butt out of that mansion.
Finally the media and its continuing wild fantasy love affair with Sarah Palin. The Today Show was covering the Penn State Sex Scandal and of course the show just had to include Sarah Palin and her ignorant opinion. Amazing how our media thinks that her opinion matters on any subject but to include her hate based inflammatory rhetoric is just wrong.Palin had this to say about Sandusky “Hang him from the highest tree. I’ll bring the rope.” Yep Sarah, let’s just go out and hang everyone and anyone from the highest tree and you can bring the rope without ever allowing that person to have their day in court. Regardless of your own personal thoughts and feelings are about this sex scandal this is still the United States of America and we have laws to protect the rights of everyone even those who break the laws and commit heinous acts against others.
Sarah, You are NO Gabby Gifford. Gabby will get stronger and she will be back! You Sarah are an Idiot!

This is the same hate based inflammatory rhetoric that worried Gabby Gifford when her district was targeted by Palin and her crew with gun sights in 2010. This hate based inflammatory rhetoric has to stop and it has to stop now. Mark Kelly had it exactly right when he talked about how Palin never called him or Gabby and he wondered what he would say to her if she did call. He said he would listen to her and then he would tell her she was not responsible for the shooting but that she was irresponsible. I would add to his thought that the media is, especially NBC, also irresponsible when they continue to promote Palin and her hate based inflammatory rhetoric.

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BONUS:
Watch the fascinating live stream by Tim, who is becoming an “OWS celebrity” due to his persistent coverage during the recent days, from the protest by OWS today in New York (courtesy of “the other 99”):

Much more info at the website “wearetheother99.com”.

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UPDATE:

A list of many of the “Occupy Live Streams” can be found here. Very useful when the action begins! 🙂

(h/t Bandit Basheert)

Friends of Rick Perry: Mr. and Mrs. Gramm 4/4

by Nomad

A Close look at Wendy Gramm
In this the final part of my investigation into the Gramms, I’d like to deal with Wendy’s relationship with Rick Perry and another influential power broker.

Dr. Wendy Lee Gramm

The Mercatus Center

As if Wendy Gramm’s role in the Enron scandal wasn’t enough to qualify her as one of the notable villians in a saga filled with some pretty odious characters, she’d really only just begun. After her jaunt through the world of academia and through the infested jungle of the private sector, Wendy now found herself stepping back into academia (or something very much like it).

If Phil Gramm represents one side of corruption, then some might claim his wife to be an example of a newer but far more insidious indirect kind.

Koch Industries- along with other corporations have developed a long term strategy to use think-tanks, paired with prestigious universities, to give support – with studies and surveys and expert opinions- to their agenda. In exchange, the universities benefit from large-dollar corporate support.


The Mercatus Center of George Mason University, where Wendy Gramm is a director of the “regulatory studies program”, is a case in point. Mercatus is an increasingly influential anti-regulatory voice-machine created and subsidized by Koch Industries. Over the years, the university and its associated institutes and centers has received more funding from the Koch Family Charitable Foundations than any other organization—a total of $29,604,354. Of that sum, The Mercatus Center has received $1,442,000.

Previously known as the Center for the Study of Free Market Processes, the Mercatus Center was founded by Richard Fink (an apt name if ever there was one)—with a grant from Charles Koch. Koch currently serves on the center’s Board of Directors—as does Fink, who is also an executive vice president and a member of the board of directors of Koch Industries, Inc.

Wendy Gramm’s ties to the Koch brothers go way back. Koch has had a cozy relationship with Wendy ever since she played a key role in deregulating oil speculation. As Lee Fang reported in Think Progress:

Like many oil companies, Koch uses legitimate hedging products to create price stability. However, the documents reveal that Koch is also participating in the unregulated derivatives markets as a financial player, buying and selling speculative products that are increasingly contributing to the skyrocketing price of oil. Excessive energy speculation today is at its highest levels ever, and even Goldman Sachs now admits that at least $27 of the price of crude oil is a result from reckless speculation rather than market fundamentals of supply and demand. Many experts interviewed by ThinkProgress argue that the figure is far higher, and out of control speculation has doubled the current price of crude oil.

(The next time you fill up your gas tank and your wallet feels lighter, you can thank Wendy Gramm.)

Mercatus, however serves a different function in the Koch machine.
Koch Industries has had a long battle with agencies that are charged with protecting the common property, the air and the water and natural resources in general. That, given its extensive commitment to oil and lumber harvesting should come as no real surprise.
Pollution into an Arkansas waterway

A Koch Industries paper mill is violating the Clean Water Act by pumping out massive amounts of pollution into an Arkansas waterway, according to an EPA enforcement complaint to be filed tomorrow by Public Employees for Environmental Responsibility (PEER) and the Ouachita Riverkeeper.The complaint alleges that a Georgia-Pacific paper mill on the Coffee Creek in Arkansas – owned by the billionaire Koch Brothers -emits 45 million gallons of paper mill waste including hazardous materials like ammonia, chloride, and mercury each dayCoffee Creek then flows into Louisiana’s Ouachita River where the pollutants have left the formerly pristine water speckled with odorous foam, slime and black pockets of water, said Jerry Johnson, who has been visiting the Ouachita River for 35 years.”People used to swim in it,” said Johnson, who now lives along the river. “In the summertime, it was the place to go.”

And this is by no means an isolated incident. Another report from 2000 in the New York Times,

A federal grand jury returned a 97-count indictment against Koch Industries today, charging the company, a subsidiary and four employees with environmental crimes at a Texas oil refinery.The defendants were charged with violating federal air pollution and hazardous waste laws at the Koch Petroleum Group’s West Plant refinery near Corpus Christi, Tex., conspiracy and making false statements to state environmental officials, the Justice Department said.

And, one more example, which is more important perhaps -given the links to the controversial ties to Koch and Governor Walker, Wisconsin.

Koch Industries operates twelve industrial facilities in Wisconsin: Georgia-Pacific and its wholly-owned subsidiaries in Green Bay (4 plants), Oshkosh, Phillips, and Sheboygan; and Flint Hills Resources in Green Bay, Junction City, McFarland, Milwaukee, Stevens Point and Waupun… (T)he data reveal that over the course of those three years, Koch Industries’ facilities emitted over 5.4 million pounds (PDF) of toxic discharges into Wisconsin’s air and water. Of these discharges, nearly 100,000 pounds (PDF) were of substances known or suspected to cause cancer.

The pattern is clear. But what’s this got to do with Wendy and Mercatus? Joining forces with other Koch-supported organizations, Mercatus has been a leader in the roll back of environmental regulations. Greenpeace has cited Mercatus as a chief source for climate change denying efforts. Moreover, Mercatus has specifically targeted the Environmental Protection Agency (EPA) in its de-regulatory drive. Jane Mayer from a revealing New Yorker article on the Koch brothers examines the role this group plays:

Thomas McGarity, a law professor at the University of Texas, who specializes in environmental issues, told me that “Koch has been constantly in trouble with the E.P.A., and Mercatus has constantly hammered on the agency.” An environmental lawyer who has clashed with the Mercatus Center called it “a means of laundering economic aims.” The lawyer explained the strategy: “You take corporate money and give it to a neutral-sounding think tank,” which “hires people with pedigrees and academic degrees who put out credible-seeming studies. But they all coincide perfectly with the economic interests of their funders.”

As a Businessweek headline proclaimed:

“Much corporate environmentalism boils down to misleading statistics and hype.”

Wendy Gramm’s pedigree- if you don’t look too closely- adds weight to her opinions to all of the Mercatus calls for de-regulation. That, coincidentally, ties in quite nicely with what the top donors to Mercatus expect.

It is important that you realize who funds the Mercatus Center. Since 1985, the Mercatus Center has received 513 grants totaling $45,347,884. Their top donors have been as follows:

Evidently unsatisfied with the work she has done unfettering markets, scrubbing regulations and ignoring the ethical codes and laws, all of which in one or another has lead to the meltdown, Wendy Gramm is now looking forward, on behalf of the corporations, to destroying the environment as well.

Wendy and the Pious Hospital Bed Maker

James Leininger
With so many fingers in so many pies, it’s often difficult to keep up with Dr. Wendy Gramm. In addition to Mercatus Center, she serves as the chairman of the board of another conservative organization “whose positions on issues can make the difference between life and death for major legislation.”

The Texas Public Policy Foundation (TPPF) “501(c) non-profit, non-partisan research institute” is run by a man Texas Monthly called “the most influential Republican in Texas” and probably a person most people have never heard of.

Austin Democratic political consultant George Shipley once called the shy and unassuming Dr. James Leninger, “ the sugar daddy and godfather of the Republican right wing in Texas.”

Besides the many groups with a local political interest, Leininger has funded national social conservative organizations, including the American Family Association (considered a hate group by the Southern Poverty Law Center) , Christian Pro-Life Foundation, Family Research Council, and Focus on the Family.

Molly Ivins reports:

Leninger tends to give his PACs and foundations innocuous names — Texans for Justice, the Texas Public Policy Foundation, the Texas Justice Foundation, Children’s Economic Opportunity Foundation, Texans for Governmental Integrity, the A PAC for Parental School Choice, etc. According to the Current (a weekly alternative paper), Leininger is also a major donor to, or plays a leading role in, at least a dozen major right-wing groups. Politically, he has given not only to Christian-right school board candidates and right-wing legislative candidates but also to Sens. Kay Bailey Hutchison and Phil Gramm, and he was Rick Perry’s largest campaign contributor ($500,000) in Perry’s race for lieutenant governor.
The mission of TPPF, founded by Leninger in 1989, is to “promote and defend liberty, personal responsibility, and free enterprise in Texas and the nation by educating and affecting policymakers and the Texas public policy debate with academically sound research and outreach.”

A conservative and devoutly religious Republican businessman, Leininger made his personal fortune through Kinetic Concepts, based in San Antonio, which makes and rents therapeutic beds for patients who are paralyzed or suffer from serious illnesses. As humble as that might sound, take note, KCI Revenue for 2008 was $1.88 billion, increasing to $1.99 billion in 2009 and in 2010 increased to $2.02 billion.

Incidentally, Rick Perry, before he ran for lieutenant governor developed a lucrative relationship with Leininger. According to a Houston Chronicle piece dated September 21, 1997:

On Jan. 13, 1995, Perry bought $38,875 worth of stock in Kinetic Concepts, a company owned by Jim Leininger, a San Antonio physician, conservative activist and major Perry campaign donor. Perry invested an additional $35,167 in the company on Jan. 24, 1996 — the same day he spoke at a luncheon that Leininger attended. Later that day, an investment firm bought 2.2 million shares of Kinetic Concepts stock, driving up its price. Perry sold his Kinetic Concepts holdings a month later for a $38,382 profit. Leininger and Perry acknowledged they spoke at the luncheon but denied discussing the stock.
Just a terribly fortunate coincidence? Back in 1997, Wendy Gramm also (coincidentally) had ties to Leininger’s company. Gramm earned a miniscule $25,000 a year as a member of the Kinetic Concepts board of directors. She also held stock options in the company when Kinetic Concepts Inc. agreed to sell most of the company to two San Francisco investor firms in a deal worth $850 million to $875 million.

It is no exaggeration to say that Rick Perry owes a lot to Leninger. There is the new report issued by Texans for Public Justice, a money-and-politics watchdog group.

Perry might never have been governor — nor now be a presidential candidate — but for James Leininger. In a game-changing 1998 race then-Texas Agriculture Commissioner Perry was elected Lieutenant Governor. That victory secured Perry’s automatic promotion to governor two years later when President-Elect Bush abandoned the Governor’s Mansion. Perry narrowly won his fateful 1998 race against Democrat John Sharp, capturing just 50.04 percent of the vote. This squeaker victory was secured by an eleventh-hour media blitz that Perry paid for with a last-minute, $1.1 million loan. Leininger and two other Texas tycoons guaranteed the loan, which supplied more than 10 percent of the $10.3 million that Perry raised for that election. Leininger’s family and company PAC contributed $62,500 to that Perry campaign. Leininger also was the No. 1 contributor at the time to the Texas Republican Party (then chaired by former Leininger employee Susan Weddington), which sank $82,760 into that Perry campaign. “I congratulate Leininger,” Perry opponent John Sharp said at the time. “He wanted to buy the reins of state government. And by God, he got them.”

Through the TPPF, Leininger has used his wealth to promote his own conservative-religious agenda in a variety of ways. Karen Olsson writes in Texas Monthly, Leininger was the driving force back in 2002 to influence the Texas Board of Education to re-write school textbooks.

… TPPF aimed to influence policy by publishing research reports on state issues; its early preoccupations mirrored several of Leininger’s own: tort reform, vouchers, and reduced government. Working in tandem with the new SBOE [State Board of Education] members, the TPPF began objecting to textbook material deemed liberally slanted or morally suspect. The Legislature retaliated in 1995, forbidding the SBOE to question any aspect of textbook content other than “factual errors.” Despite the restriction, the TPPF continued to analyze proposed books, hiring researchers to ferret out errors both of fact and of insufficient patriotism. Last winter the group helped bat down an environmental-science textbook (in large part because of a poorly written sentence linking democracy to pollution); this summer it criticized proposed social science and history textbooks for failing to disavow socialism.

While the TPPF’s involvement in Texas textbooks may seem like a very narrow agenda, its policy interests, in fact, are wide-ranging, covering many conservative causes. Teddy Wilson, progressive political activist and blogger notes:

The TPPF supports the predictable conservative line on a whole host of issues. The TPPF disputes the scientific evidence of climate changes and claims that the “scientific consensus has never been as broad as proclaimed,” and the compromised emails of climate scientists showed “data manipulation and fundamental errors now discredit a once broadly accepted body of science.” The “private sector can bring innovation and competition to the criminal justice system” is how the TPPF frames its advocacy of the private prison industry, despite that there has been no evidence to support that the privatization of the prison industry has provided any public savings. The TPPF even has an entire center dedicate to “Tenth Amendment Studies,” which is a favorite Constitutional Amendment among the Tea Party faithful.

If any of this sounds depressingly familiar, then there’s a good good reason. Two long time supporters of TPPF are foundations associated with Koch Industries (Charles G. Koch Charitable Foundation and Claude R. Lambe Charitable Foundation) which contributed contributing $383,125 in 2005-2009 and nearly a half million dollars between 1997 and 2009.


Rick Perry’s Wrong Approach

In Perry’s campaign book, Fed Up! the governor says that he knows of no other organization that is better positioned than Texas Public Policy Foundation to help “foster a national conversation” about “the proper role of government in our lives.”

However, last May, TPPF might have pushed its agenda a bit too hard. Its attempts to influence educational policy created quite a controversy. Seven breakthrough solutions to problems with the Texas’ high educational system were drafted by TPPF in its think-tank capacity, and promoted by Governor Perry.

It did not go over as well as expected. In response, five A&M faculty members from various disciplines drafted a letter to Richard Box, the chairman of the Texas A&M University System Board of Regents, laying out their concern regarding the lack of transparency in the board’s apparent intention to implement seven proposed “breakthrough solutions” promoted by the TPPF. The seven recommendations advocated “a business-style, market-driven approach under which colleges and universities would treat students as customers, de-emphasize research that isn’t immediately lucrative, and evaluate individual faculty by the tuition revenue they generate.”

Within a few days of the letter being posted online, more than 530 faculty members had added their names. The A&M Chancellor Mike McKinney eventually resigned.

All this is rather ironic of course since Wendy Gramm served on the board of Regents from 2001 to 2007, (as mentioned in Part 1) and serves as chairman in TPPF. Coincidence can quickly be discounted.

Put simply, this is the wrong approach… the classroom is not a marketplace. The proposals reviewed here will not promote effective learning or the responsible use of resources inside a laboratory, library or seminar room. The University of Texas at Austin’s bottom line is to provide a first-class education while spending our resources responsibly and efficiently. Separating those two goals is like separating research from teaching: it serves the wrong bottom line. Similarly, treating students as customers, offering them a “product” designed to win positive reviews and then rewarding the most popular instructors will neither challenge students in meaningful ways nor foster the deep learning and skills they will need throughout life.

Many feel the Perry’s close association with TPPF has damaged the university. This is turn has damaged the governor’s image. He would have Wendy Gramm, its chairman, to thank for that.

Texas A&M University has the support of its former students that is the envy of many universities. Aggies love their alma mater and it shows in many ways. One Aggie, however, should love his school less and, in fact, should stay out of its business. Gov. Rick Perry’s obsession and interference in A&M has caused great harm, damage some observers feel could take a generation to undo. From his appointment of regents with greater fealty to him than to the university system they are supposed to represent to his constant meddling in the day-to-day operations of the flagship university to his infatuation with the Texas Public Policy Foundation — an ultraconservative think tank that seeks to insinuate itself into every corner of state government — Perry has proven not to be a friend of A&M, but rather a hindrance.Never before has a governor of Texas had such deadly influence on a major state university, and Perry’s meddling blocks the way of A&M’s oft-stated efforts to achieve greatness.

The Texas Public Policy Foundation seems harmless on the surface, with its stated goals of limited government, individual liberties, free markets, personal responsibility and private property rights. Most Texans probably would subscribe to those goals. Dig below the surface, however, and you see just how radical its efforts are.

Founded by arch-conservative physician James Leininger, the foundation board is chaired by Wendy Gramm, former Texas A&M regent and wife of former Sen. Phil Gramm. Current Regent Phil Adams of Bryan is a board member, a clear conflict of interest to his responsibilities to A&M.The foundations website says, “The public is demanding a different direction for their government, and the Texas Public Policy Foundation is providing the ideas that enable policymakers to chart that new course.”

Unfortunately, thanks to Perry’s influence, those ideas become mandates, without discussion and input from the people of this great state….Perry has been in thrall to the Texas Public Policy Foundation and its backers since he began accepting generous contributions from them in his first statewide race. Texas cannot, however, be run by contribution and those most able to spend big bucks to help buy elections, no matter which side of the political spectrum they are on.

A&M is well on its way to achieving greatness. It would be a shame to let Rick Perry and his cohorts derail that with their interference.Rick Perry can love Texas A&M more by meddling less — preferably not at all. Beyond appointing the best regents he can find — no matter who they contributed to in the last gubernatorial election — and attending football games at Kyle Field, Perry should leave A&M alone.
Rick Perry Phil Gramm Nexus
Epilogue
In researching and writing this post, I was astonished at how much harm two people can do to the country. One would think that our system would be stronger than that. That our long established system of checks and balances would prevent people like the Gramms from ever inflicting too great a harm to the nation. But then the underlying purpose of all the de-regulation that the Republicans have called for (and have achieved) is really just a means to an end, a method of abolishing the safety checks that had, for the most part, protected our institutions. Once those have been removed, anything is possible.

Even this list of all of the misdeeds of Mr. and Mrs. Gramm, as comprehensive as it might seem, is partial. Still I should think this is enough information about Perry and the friends of Rick for most intelligent voters to help them decide who the governor of Texas owes his allegiance to.
I began this investigation with a quote from the first president of the United States and I shall end it with two quotes by its fourth, James Madison.

“All men having power ought to be distrusted to a certain degree”

And this is especially true when those that wield the power are partially hidden behind masks and puppets. When it comes to peoples like the Gramms- whose working relationship with a presidential candidate is not only acknowledged but applauded- it is simply not possible to be as vigilant as necessary. Since justice has apparently failed- not once but repeatedly in this case, the only option is to make sure than any candidate connected with such people is not elected to high office. We literally cannot afford it. Now is the time to make sure that Perry doesn’t come any closer to the White House than he is at this minute.

When reflecting on the various attempts by Phil and Wendy Gramm to by-pass, ignore or remove the regulatory powers of our government to protect its citizens, it is helpful to recall this other quote by Madison:

“If men were angels no government would be necessary”

And when you are dealing with a pair like the Gramms (along with so many other less-than- angelic types), it’s all the more reason that we need more regulations in place, not less. Ironically, despite having waved the flags of deregulation at every opportunity, Mr. and Mrs. Gramm themselves provide the best proof of the necessity, the vital importance of having tight regulations and the power to punish those that violate them.

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Be Sweet- Please Re-tweet

Friends of Rick Perry: Mr. and Mrs. Gramm 3/4

by Nomad

A Close look at Wendy Gramm
In this the third in the series, I want to take a moment to examine the life and deeds of the wife of Phil Gramm, Wendy Lee Gramm. I think you will find it- for want of a better word- breath-taking, but not in a good way.

Getting Started

Under normal circumstances, the wife of a senator would hardly be worth a second glance. However, Dr. Wendy Lee Gramm is no ordinary wife of no ordinary senator. As a study of modern politics, in all its corruption and ambition, perky Wendy Gramm is a fair enough study in her own right.


First let’s cover the early history, collected from various sources.

Wendy Gramm’s Korean grandfather immigrated to Hawaii as a sugar plantation laborer. Like her grandfather, Wendy’s father had originally started out as a laborer in the sugar fields. According to the story, he selected his bride from a series of photos of Korean women and sent her money to join him in Hawaii. He married in 1939 at age 25.

During the Depression, he left Hawaii for a university in Indiana where he earned an engineering degree. He later returned to Hawaii and found a job at a sugar processing plant where he eventually worked his way to the top of the company, later becoming a vice-president of a sugar company.

Born in 1945 in Hawaii, Wendy Lee got her education during the ’60s, graduating with a bachelor’s degree in economics from Wellesley in 1966. She then received her economics doctorate from Northwestern University in Evanston, Illinois, five years later.
As the Houston Press notes:

When she took a teaching post at A&M in 1970, she has said, Wendy Lee planned to spend only five years in Aggieland..then go teach at a small liberal arts college somewhere. That same year, she and Gramm were married. Gramm was promoted to Associate Professor in 1974 and also served as the Department’s Director of Undergraduate Programs. In all, Dr. Gramm taught economics at Texas A & M for more than eight years and has published articles in the American Economic Review and the Journal of Law and Economics.

The Gramms first met in 1969 when Wendy Lee was interviewing for a job in the economics department at Texas A&M, where Phil Gramm was already on the economics faculty.  They married about four months after her arrival. After her husband became a Congressman in 1978, Dr. Gramm was able to parlay her husband’s connections to find a string of increasingly important posts. When Democrat Phil Gramm resigned his House seat on January 5, 1983 and returned in a special election held on February 12, 1983 as a new and improved Republican Phil Gramm, it was met with smiling happy faces from the Republican crowd. And of course, it was bound to do wonderful things for both of the Gramms. Her political ambitions soared in the Reagan administration because ostensibly, she saw eye-to-eye with many of the core principles that Ronald Reagan espoused. As the Houston Press article notes:

She has regularly espoused an unfettered market as the solution to almost any of the nation’s problems you’d care to name. The answer for struggling mothers who need day care so they can support their families? Forget government programs or parental leave, she says, and look to free markets and a strong economy. What about helping minorities climb the economic ladder? Forget affirmative action or quotas, she says. The answer is free markets and a strong economy. Federal deficits? Environmental protection? Free markets and a strong economy.

Wendy continued to rise higher in the ranks when her husband switched hats once again, leaving the House of Representatives and took a seat in the US Senate in 1984. In that year, Dr. Gramm served as the Executive Director of the Presidential Task Force on Regulatory Relief and as Director of the Federal Trade Commission’s Bureau of Economics. From 1985 to 1988, Dr. Gramm was administrator for Information and Regulatory Affairs at the Office of Management and Budget. In 1988, President Ronald Reagan named her chairman of the Commodity Futures Trading Commission (CFTC), a position she held until 1993. (President Reagan called her “my favorite economist.” )
Conflicts and Obstructions
It was here that her habitual pattern of conflicts of interests truly began. As both CFTC head and the wife of an influential senator, she would have found herself in a difficult position. (Whether Wendy herself recognized or appreciated this fact, is a different matter.)
There were times when Senator Gramm sought the support of some of the same agricultural and business interests that she was regulating. On trips to Texas during his 1989 Senatorial campaign she worked both on CFTC business and for her husband’s reelection.
Clearly the proper ethical response would have been to choose one or the other. After all, in cases where the public trust is involved, where a fair and open arbitration is essential, even the appearance of improper influence is frowned upon. (Ask Clarence and Virginia Thomas.) But the Gramms were never a couple weighed down by charges of impropriety or held back by ethical concerns.

In fact, it was in that position that we have the first glimpse of the future Wendy Gramm. As a Washington Post article revealed back in 2010, one of two administrative law judges presiding over investor complaints at the CFTC, George H. Painter, claimed that Judge Bruce Levine, longtime colleague, had a secret agreement with a Dr. Wendy Gramm, chairwoman of the agency, to stand in the way of investors filing complaints with the agency.

On Judge Levine’s first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant’s favor,” Painter wrote. “A review of his rulings will confirm that he fulfilled his vow,” Painter wrote.Painter continued: “Judge Levine, in the cynical guise of enforcing the rules, forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case.”The CFTC oversees trading of the nation’s most important commodities, including oil, gold and cotton. The agency’s administrative law judges handle cases in which investors allege that trading professionals or financial firms violated the rules.

Was this the kind of “unfettered market” that Wendy Gramm sought? If her later record is any indication, the answer is quite clear. Anything it takes to get the prize is enough justification for Wendy.

However, this is an obvious case of Obstruction of Congressional or Administrative Proceedings (18 U.S.C. 1505) could have conceivably ended Wendy Gramm’s career early on. The effect on the system was to prevent a necessary oversight which might well have helped to prevent many clear cases of fraud in the whole sub-prime disaster.

After all, the stated mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets. Under Gramm’s supervisor, the exact opposite was achieved.

When Wendy Gramm left the CFTC in 1993, she began to explore the private sector by accepting directorships on the boards of several corporations, Invesco Funds, State Farm Insurance Companies.

An PBS Frontline investigation uncovered this excellent bit of foreshadowing, which occurred around the time Phil Gramm made his unsuccessful bid in the 1996 presidential election.
Another board Wendy Gramm sits on is that of Iowa Beef Processors (IBP), a large meat processing company. Based in Dakota City, Nebraska, IBP is a powerful corporation next door to a key election- year state, Iowa. Support for Senator Gramm at IBP came in handy last August at the Iowa straw poll in Ames. IBP sent a memo to its management level employees encouraging them to attend the straw poll, which is not restricted to Iowa residents, and informing them that $25 tickets and bus transportation would be provided by the Phil Gramm-for-President campaign. Gramm campaign buses picked up the IBP employees at eight separate locations in the states of Iowa, Nebraska, and Illinois and transported them to the straw poll, where their votes helped Gramm tie front-runner Bob Dole and gave the Gramm campaign an important boost.
In a written statement to FRONTLINE, an IBP spokesman said, “Many of the campaigns provided tickets and bus transportation to the event, some bringing in people from as far away as Kansas. While the Gramm campaign paid the way for the IBP employees who attended, our people were not told to vote for Senator Gramm or any other candidate.” FRONTLINE learned that the request for IBP’s help in the straw poll came from the late Alec Courtelis, the former finance chair of the Gramm-for-President campaign. .. Courtelis also sat on IBP’s board of directors and was responsible for bringing Wendy Gramm onto IBP’s board.While no one has accused Mrs. Gramm or anyone else of breaking any laws, the IBP case nonetheless shows how questions can arise when a candidate’s spouse is appointed to a well-paying corporate directorship and when that company helps promote the husband’s candidacy.
Small potatoes. There was another corporation where Wendy Gramm sat as a director. And its name was Enron.

Lessons of the Past and for the Future

On the one occasion that Phil Gramm and wife, Wendy paired up, the scale of the damage that followed was absolutely stunning, especially for the investors who lost more than $60 billion in the spectacular collapse of Enron.

The Village Voice, citing a report by a non-profit research organization, Public Citizen, explains the dubious Gramm involvement in the Enron affair.

In an apparent response to a 1992 plea from Enron, Dr. Wendy Gramm, then chair of the federal Commodity Futures Trading Commission, moved to exempt the company’s energy-swap operation from government oversight. By then, the Houston-based Enron was a major contributor to Senator Gramm’s campaign.

This decision also came about after intense lobbying by Koch Industries, several oil companies and Wall street speculators. This group has formed a coalition called “The Energy Group” which pressed the CFTC to allow oil derivatives to be traded outside of government regulation. As Think Progress notes:

On the final day of the [George H.W.] Bush administration, January 21, 1993, [CFTC chairwoman] Wendy Gramm … approved the rule exempting key energy futures contracts from government regulation and returned a great chunk of the energy market to the grand old days of unregulated futures trading,” writes author Antonia Juhasz in the book Tyranny of Oil. The move mirrored the demands made by Koch’s lobbying coalition, The Energy Group.

One might think that Wendy Gramm would have wanted to take a break from all that scheming. One would be wrong. The audacity of Phil Gramm is second only to his wife.
A few days after she got the ball rolling on the exemption, Wendy Gramm resigned from the commission. Enron soon appointed her to its board of directors, where she served on the audit committee, which oversees the inner financial workings of the corporation. For this, the company paid her between $915,000 and $1.85 million in stocks and dividends, as much as $50,000 in annual salary, and $176,000 in attendance fees, according to a report by Public Citizen, a group that has relentlessly tracked Enron, which in turn has called the report unfair.

Meanwhile Enron had become Phil Gramm’s largest corporate contributor—and according to Public Citizen, the largest across-the board donor in its industry. Between 1989 and 2001, the company tossed Gramm just under $100,000. In 1998, Wendy Gramm cashed in her Enron stock for $276,912. There’s nothing unusual about a Washington regulator quitting the government and going to work for a private company she was regulating. And people often get rich in the process. Wendy Gramm, whose office didn’t return Voice calls, has told reporters she sold the stock expressly to avoid any hint of a conflict of interest.

So, to recap: wearing her hat as a regulator, she gives one company an exemption, and then quits her job and becomes a director in that company. That company then delivers a contribution to her husband and then she quits before the whole she-bang collapses, with a tidy profit from her stock sell-out. Is that how this pretty little scheme worked?

By cashing out at this time- using the alibi of conflicts of interest, Gramm was able to profit just before Enron collapsed.

When Enron went over the cliff, the Gramms even portrayed themselves as victims: Wendy’s stand on her imaginary moral high ground led her to sell before Enron’s price peaked, they whined, so she forfeited some potential profits. Enron employees lacking Gramm’s finely tuned ethics, and the rest of the investing public lacking her inside knowledge of the company’s twisted finances, were left holding worthless paper.

Astounding, isn’t it? But the Voice article has even more:

But that’s not the end of the story. In June 2000, Senator Gramm co-sponsored the Commodity Futures Modernization Act, a measure aimed at deregulating certain kinds of futures trading, but not energy futures. That bill never made it to the floor, and thus quietly died.

Six months later, on December 15, Gramm curiously turned up as co-sponsor of a bill with the same name, the Commodity Futures Modernization Act, which did deregulate energy futures and which, without undergoing the usual committee hearings and preliminary votes, was immediately attached as a rider to an 11,000-page appropriations bill. It passed and was signed into law by President Bill Clinton six days later. Few lawmakers had likely perused the rider carefully, if they even knew it was there. And at any rate, Enron had given to the campaigns of over 200 legislators.

Enron Directors

So apparently, Phil Gramm successfully slipped this crafty bit of legislation unnoticed by other members of Congress or the president.

In the end, some cheap imitation of justice was offered to the public. Wendy Gramm did not escape unscathed.

After the Enron scandal, Gramm and the other directors of the energy company were named in several investor lawsuits. In particular, Gramm and other seventeen Enron directors agreed to a $168 million dollar settlement in a suit led by the University of California.

Speaking to the BBC regarding the Enron scandal, Robert McCullough – a consultant from Oregon and a professor at Portland State University- drew a parellel to events of the past. The emerging shape of the Enron scandal was almost identical to one of 70 years ago, which prompted the setting up of the first regulators to govern the way companies report their performance, he said. Following the collapse of Anglo-American innovator and investor Samuel Insull’s financial empire during the Great Depression,

The US set up the Securities and Exchange Commission to regulate companies’ financial reporting. “At the time, regulatory practices were set in force to avoid its repetition,” Mr McCullough said. “Their enforcement has been eroded over the intervening years, and today we are almost exactly reproducing that scandal. That regulation had been chipped away to the point where it is no better than it was in the 1920s, Mr McCullough said.

Enron’s Compensation (courtesy of Public Citizen)
Future historians will most likely look back at the Enron collapse as merely a small-scale rehearsal of the financial meltdown of 2008. Some analysts have said that Enron was a wake-up call in our era of postmodern capitalism, if so, clearly somebody hit the snooze button. The same elements were in play, corporations taking substantial risks, cooked books to hide losses and secret partnerships with those paid to oversee operations. Behind both of these disgraceful episodes, Senator Phil Gramm and his helpful wife. However, with Enron, it was the investors that lost their life savings, with the later events, it was to be the entire financial system of the West that took the blow.
Joshua Lee, wife and children
How Quaint the Ways of Paradox
Returning to the life of Wendy Gramm’s father, the sugar plantation worker turned vice-president of the company, a glaring paradox emerges.
Conditions on the sugar plantation where he grew up and worked were every bit as dire as any Brazilian slum of today. It was only through the concerted unionization of workers, culminating in the Great Sugar Strike of 1946 that conditions improved.

Before 1946, Hawai‘i’s economy, politics and social structures were completely dominated by a corporate elite known as the Big Five (Alexander & Baldwin, American Factors, Castle & Cooke, C. Brewer, & Theo. Davies). The leaders of these factor companies exercised absolute control over Hawai‘i’s plantation workers and the majority of the islands multi-ethnic workforce. The 1946 strike forever changed the balance of power between workers and the plantations. No longer would living and working conditions be set unilaterally by the plantation owners or their parent corporations..

The legacy of the great Hawaiian sugar strike of 1946 is the success we can see today of Hawai‘i’s multi-ethnic workforce to bridge ethnic differences and build trust based on worker solidarity. Hawai’i’s diverse workforce united in 1946 and began for the first time to form a single working class culture, unique to Hawai’i. Like today, the issues of housing, medical care, pensions and wages were key issues for the 1946 sugar workers. Previously the quality of housing, medical care and old-age pensions depended upon the whim of individual plantations. As a result of the 1946 sugar strike, the ILWU negotiated a new era for labor relations, establishing these important issues as contractual rights of workers, rather than as favors the plantations could wield to force worker compliance. Thus, the 1946 sugar strike is an event whose impact reaches beyond the sugar fields, into the lives of every worker in Hawai‘i.

Interestingly, according to an oral history interview conducted with Wendy Gramm’s father back in 1976, Joshua Lee recounts how, during the Great Depression, he found work through a government-sponsored work program. The National Youth Administration (NYA) was a New Deal agency in the United States that focused on providing work and education for Americans between the ages of 16 and 24. Without that offer of support at a crucial time in his life, it is possible that Wendy’s father might not have been able to better himself and allow his family the stability they needed to rise out of poverty.

Given her family history, one can only speculate how Dr. Wendy Gramm- who owes much to both unions and to government regulations and social programs, can reconcile her work on behalf of exploitative corporations. I suppose she has not given it a moment’s thought.
After all, she’s a very busy woman.

—————————————


In the fourth- and last part of this investigation, we shall be taking a close look at Wendy’s ties to Rick Perry, their shared friends and shared interests.

Friends of Rick Perry: Mr. and Mrs. Gramm 2/4

In part two of this four-part series, we will continue to look at Phil Gramm, mentor to Rick Perry, presidential candidate. At this point, we shall continue with Gramm’s career following his retirement from the Senate.

Uniquely Suited: Gramm at UBS

When Phil Gramm announced on September 4 2001 that he would retire at the end of his term in 2003, his retirement speech was filled with self-congratulatory flatulence.

Remarkably, the things I came to Washington to do are done. Now, I know that no victory is ever final…I will leave the Senate in 15 months, being very proud that I came, and extraordinarily proud in what I’ve done while I’ve been here… But I feel comfortable with this decision. I believe I’m making the right decision for me, for the 20 million people I represent, and for the things I believe in.

Despite the fact that he spoke to reporters with “his voice cracking and his tears filling red-rimmed eye,” he had no intention of spending his autumnal years, tending his garden and painting landscapes. In fact, he was about to begin a new career, one that would surpass all his other accomplishments from the past.

Within about a year, the Zurich-based financial giant, UBS announced that Gramm would join the firm as vice chairman of UBS Warburg. According to the press release by UBS, Gramm was to be in charge of advising clients “on corporate finance issues and strategy.” UBS Warburg CEO John Costas said in the news release, “Senator Gramm’s experience gained from more than 35 years in academia and government make him uniquely suited to assist our clients to meet the challenges presented by today’s business environment.”

Like most things related to Gramm, nothing is quite what it seems.

Earlier that year, Gramm showed his true colors by being one of the few legislators who refused to back the Sarbanes-Oxley Corporate Reform Bill. The bill, as weak as it was, sought to provide at least some degree of governmental oversight over corporations. This piece of legislation came as a result of collapse of Enron Corp.

(We shall go into the unique role that the Gramm’s played in the Enron meltdown in the examination of Wendy Gramm, who served as a member of Enron’s board of directors and a member of the board’s auditing committee.)

The appointment of Gramm to the UBS corporate family did not please everybody. In a scathing open letter, dated 17 March 2003, to the then Chairman of the Board of Directors of UBS, Mark Ospel, Andreas Missbach, foreign policy editor of the Swiss weekly Wochenzeitung, lists reasons why the decision to hire Gramm was inappropriate. The letter opens with:

We are troubled by the recent appointment of former U.S. senator Phil Gramm as a Vice Chairman of UBS. Mr. Gramm’s professional and personal connections to Enron have disgraced his reputation. We believe that UBS’s association with Gramm seriously undermines your company’s professed commitment to corporate responsibility. At a time when investors and the general public need reassurance that our financial institutions are scrupulous, we ask UBS to place Mr. Gramm on leave until all criminal and civil investigations into Enron’s wrongdoing are complete. During his tenure in Congress and as a member of the Senate Banking Committee, Senator Gramm was the most vocal advocate for Enron, pushing legislation that removed government regulatory authority over the company and exposing it to negligence and fraud..

Following a list of Gramm’s Enron connections, it concludes with:

Together, the Gramms facilitated Enron’s misdeeds, which victimized thousands of U.S. consumers. Ethical leadership was clearly lacking as well in that company. Especially in these economically beleaguered times, UBS has a duty to both promote and demonstrate corporate ethics—to truly make, as Mr. Ospel says on the UBS website, “corporate responsibility part of our culture and part of our identity.” As consumer advocates, civil society groups, and unions, we urge UBS to disassociate itself with the corporate deceit which Phil Gramm represented in Congress. We urge you, Mr. Ospel and Mr. Wuffli, to renew your company’s commitment to corporate integrity by removing Mr. Gramm from his position as Vice Chairman until he is cleared of any involvement in Enron’s transgressions.

This wise advice was ignored mainly because, over a year before that, according to a New York Times article, UBS Warburg had already won the bidding war for its energy-trading business, which was the crown jewel of Enron and was responsible for about 90 percent of its revenue. According to some, UBS Warburg was, in fact, the new Enron and it’s hard not to agree. As one source says:
In addition to obtaining the business, UBS Warburg acquired two Enron skyscrapers and took aboard 650 former Enron employees, including executives John Lavorato and Louise Kitchen, who had taken the company’s largest bonuses after the bankruptcy ($5 million and $2 million), and Greg Whalley, Enron’s former president.
In addition to his executive position, Phil Gramm worked with UBS as a lobbyist and was paid by the Swiss bank to lobby Congress on mortgage-related legislation. According to the nonprofit advocacy organisation Common Cause, the mortgage lending industry spent nearly US$210 million between 1999 and 2006 in lobbying activities as well as political campaigns contributions to both Democratic and Republican politicians that helped persuade the US Congress to refrain from passing regulation that would restrict predatory lending practices.

But for the moment, I’d like to concentrate on Gramm’s work with UBS as it relates to Rick Perry.
When One Hand Washes the Other
Phil Gramm’s relationship to Rick Perry is, by no means, merely a case of like-minded political association. Nor is it just a mentor and student relationship. Let me explain by giving an example..

When the Gramms contributed to Rick Perry’s campaign for governor, it was given not without expectations. When then-Senator Phil Gramm retired from Congress,, he transferred $610,000 – the largest same-day contribution of the governor’s political career. Dutifully, Governor Perry appointed Wendy Gramm to the Texas A&M Board of Regents and to the Texas Reform Tax Commission. Dr. Wendy Lee Gramm is, in fact, a stunning example of Perry’ patronage system at work. She sits at the top of a long list of high-dollar contributors who have been rewarded by Rick Perry with official appointments. And this wasn’t merely a favor to the Gramms. It was a well-established practice in the Perry administration.

According to a September 2010 study on Perry’s patronage system by Texans for Public Justice:,
Led by Wendy Gramm, Governor Perry collected more than $2 million from 14 of the 18 people he tapped as A&M Regents. Other A&M regents who gave the governor more than $200,000 apiece are:
  • Clear Channel Communications founder Lowry Mays (father-in-law of Congressman Michael McCaul),
  • insurer Phil Adams,
  • Ex-TXU Corp. chief Erle Nye, and
  • the late Dallas car dealer J.L. Huffines.
But there’s more to it than merely auctioned-off political appointments. And it was more than just finding a suitable hobby for a bored spouse.

At about the same time that Phil Gramm was finding work for his wife, he was also pitching a scheme to make it legal to sell “dead peasant” life insurance to the Teacher Retirement System. Basically, Gramm, the architect of the scheme, pitched the plan to Perry on behalf of UBS, which would “help Wall Street investors gamble on how long retired Texas teachers would live.” Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation.

The late writer Molly Ivins explained:

“Dead peasant” insurance is such a deal that Wal-Mart and lots of big companies do it. See, a company like Wal-Mart takes out life insurance on low-wage employees (that would be Texas teachers), then it gets to deduct the premiums from its taxes. And when the employee dies, the company gets a benefit between $64,000 to more than $250,000…Under the UBS plan, the Retirement System would buy annuities and life insurance policies on retired teachers and keep the proceeds when they die. Of course, the investment and insurance industries would profit from the premiums and brokerage fees.

Jose Montemayor
The life insurance idea plan was pushed hard by Perry’s office with teacher groups and retirement plan officials in November 2003. Insurance Commissioner Jose Montemayor, a Perry appointee, pushed the plan to point of outright misrepresentation, according to a Huffington Post article:

The meeting notes show Insurance Commissioner Jose Montemayor, a Perry appointee … claiming that “this arrangement” was already being utilized by “some very rich people” who had set up similar plans to benefit the University of Texas and Texas A&M….The source says the claim involving a similar program benefiting the Texas universities turned out to be untrue… Montemayor, as insurance commissioner, would have had to waive “insurable interest” regulations to allow the schools to buy life insurance on their professors. There is no public record that he did so. The University of Texas and Texas A&M did not return requests for comment.

When it comes to Gramm’s part in the insurance scheme, there is really no question of coincidence.

His role in the scheme had the appearance of banal corruption and cronyism. Although Gramm wasn’t in on the first meeting with teacher groups, he played an active role in subsequent efforts to push the scheme. It was Gramm who could make the plan a financial reality. He left the U.S. Senate in November 2002 for a lucrative vice president post at UBS. After Morrissey, Montemayor and Perry budget aide Brian Guthrie first articulated the plan on Nov. 12, Gramm came to Austin to help push the deal. That move eventually prompted Texas Democrats to file an ethics complaint against Gramm for making a the pitch without registering as a lobbyist.
Gramm was hoping to put together a new package of complex assets for speculators to gamble on. Corporations had been using mass purchases of life insurance policies on their employees for years as part of an elaborate tax avoidance scheme (the government doesn’t tax insurance premiums or death benefits). The employees themselves — affectionately referred to as “dead peasants” among insurance experts — received no benefit. Only the companies who bought the policies would receive payouts when these “peasants” died. Gramm wanted to convince investors to bet on peoples’ lives by purchasing pools of life insurance and annuities taken out on individuals.

The whole plan was fishy from top to bottom and almost immediately people began to question whether it was such a terrific idea.

It should be noted that the Perry-Gramm scheme is a take-off on similar private-sector plans… These private sector schemes also have come under fire from critics who note that they work only because of the tax breaks that accrue to the companies when they buy the life insurance. In effect, the companies are using the taxpayers to fund their benefit programs rather than using their corporate profits.It doesn’t take much imagination to realize that if the Perry-Gramm scheme is adopted, the Texas taxpayers will end up footing the bill not only to shore up the retirement system health plan, but also to pay millions of dollars in commissions and fees to UBS.

Some questioned whether it was even legal. But for that, Perry had his answer. According to state laws, the plan would have faced some legal hurdles Perry and his staff were prepared for minor obstacles such as laws. According to the article,

Montemayor was happy to bend the law. He agreed to grant a special waiver on insurance regulations that would allow the deal to go through, according to meeting notes.”There was some worry about the legality,” recalled the attendee. “[Montemayor] said ‘Don’t worry about it.’ He could take those questions off the table as the insurance commissioner.”

Ray Sullivan
Gramm wasn’t the only suspicious member in the insurance scheme. For another example of the blurred line between government official and paid lobbyist, take the case of Ray Sullivan. Sullivan got his start working under Karl Rove as the backup spokesman for then-Gov. George W. Bush.

Then, between 1998 and 2002, Sullivan worked in various roles the Perry operation, including as the governor’s deputy chief of staff, lieutenant governor’s communications director, and communications director for the 1998 and 2002 campaigns. However, when negotiations began on the insurance plan, Sullivan was working as a political consultant and lobbyist in Austin for UBS in May 2003. Eventually the deal fell apart in December 2003, after the plan was leaked to the press. So back Sullivan went into the political scene. By 2009, Gov. Rick Perry named Ray Sullivan as chief of staff again.

This revolving door between the private and the government sectors is a trademark of any Perry administration. If you are wondering if this legal the answer is probably not. But this is Texas and since practically everybody is on the take, it really doesn’t matter much.
When Texans Play, Texas Wins!

Another scheme Gramm as a federally registered lobbyist for UBS, attempted to foist on the good people of Texas was the sale of the Texas lottery to a private company. According to the New York Times,

Called “Project Lonestar” within UBS, a long-term lease of the Texas lottery could generate at least $10.1 billion for the state, according to an internal UBS document obtained through a Freedom of Information Act request from The New York Times.

For UBS, Gramm would be a key link to Perry. And the chain of contacts can easily be followed right to the governor’s office. Phil Wilson, a former aide to Gramm for nearly a decade, was now working in Perry’s office, first as communications director for a year and then as his deputy chief of staff. Wilson pushed the privatization idea to Perry after a conversation with Gramm, according to a New York Times interview.

At that time, the Texas lottery generated a little more than $1 billion a year in state funds which were earmarked for public education. By auctioning off the lottery, Perry stated that it could generate an immediate windfall of at least, $14 billion. Perry used his State of the State address to propose selling the state lottery as a way to fund cancer research and health insurance for as many as 600,000 low-income Texans.

However, according to critics of the plan,“the only way to generate such a humongous sales price is to aggressively offer new games to new players in new gambling venues across the state.” Furthermore, what Perry also failed to mention was that the proposal would also cut the earmark to education by $250 million annually.

Questions also arose about what part of the Texas population would be contributing to the revenue. The wealthy, who could afford it, or the poor who were prepared to gamble away whatever little they had for a dream win. According to Houston Chronicle,

The billions of dollars that investors would pay to run the Texas Lottery would come out of the pockets of Texas families. While some of the proposals that the governor’s office received say that they would target the middle class rather than the poor, the state has repeatedly failed to accomplish such a shift. Last year the Texas Lottery Commission introduced a $50 scratch-off ticket to attract higher-income players. Subsequent studies by the Houston Chronicle and the San Antonio Express-News showed that people residing in zip codes with median incomes of $20,000 or less were 22 percent more likely to buy these tickets than those who lived in zip codes earning more than $90,000.The bulk of the billions of dollars that Texas would make privatizing the Texas Lottery would come out of the pockets of Texas’ poorest families. And these Texans are the ones most likely to require additional public services when their pockets are picked.

With Gramm at the helm, UBS felt assured that it would have an advantage in the proposed auction of the lottery. And this effort by major financial institutions to corner the market on state lotteries was not restricted to Texas. California, Massachusetts, Illinois Indiana and others had been mulling over the same ideas. As the New York Times article points out:

Wall Street firms, which already enjoy close relationships with state governments nationwide as underwriters of municipal bonds, stand to earn at least $100 million in fees from leasing the California lottery alone — which is why they have quietly emerged as prime architects of the idea.

The reception to the privatization plan was lukewarm. Think lead balloon. According to the Houston Chronicle, even fellow Republicans called Perry’s numbers into question. Sen. Robert Duncan, R-Lubbock, who heads the Senate State Affairs Committee, where the proposal would likely land, raised questions about the numbers. Rep. Warren Chisum, who chairs the powerful House Appropriations Committee, said he didn’t know “anyone who’s supporting it.”


In the end, UBS has probably come to regret its decision to hire Gramm. Much of his promise as insider has not panned out. As Slate.com points out:

As this one-year chart shows, UBS’s stock lost nearly 70 percent of its value and now stands at levels not seen since 2002, when Gramm signed up.

But before you get out your hanky and attempt to shed your tears for UBS, it should be recalled that UBS’ forays into unregulated speculation- which has been the source of its present woes- came as a result of Phil Gramm’s legislative efforts in Senate. What goes around comes around but ultimately the profits usually stayed in the Gramm pocket.

Critics have charged that Gramm’s action as a senator helped lay the groundwork for some of the problems in the housing and oil markets. But it’s hard to pin any of the UBS debacles on the former Texas senator. At UBS, Gramm held the post of vice chairman, a position Michelle Leder dubbed in these pages as “the greatest job in business” for its combination of high status and low work rate. Gramm was a lobbyist and adviser, not an operating executive. And he had nothing to do with the forces that impelled banks and banking executives into foolish behavior in recent years; cheap money, greed, and a bubble mentality are far bigger than Gramm. But UBS’s continuing travails should lead us to wonder how effective Gramm is as an elder statesman. As an adviser, an economist, an expert in the ways of Washington and in the American financial system, part of Gramm’s job surely was to advise the bank how to stay out of investment and regulatory trouble.

But no matter how deep in the muck UBS might sink, there was always the American taxpayer to come to the rescue of a bank in trouble.
As Bloomberg reported in 2008, the Fed secretly provided selected banks, brokerage houses, and even non-financial firms (such as General Electric and Ford) with at least $1.2 trillion in loans, often with minimal collateral required and at below market interest rates.

UBS AG, Switzerland’s biggest bank by assets, received a capital injection of 6 billion Swiss francs ($7.12 billion) from the Swiss government in October 2008. The next month, the Zurich-based lender borrowed $77.2 billion from the Federal Reserve after customers removed a net 83.6 billion francs from its money-management units in the hree months through September… A UBS spokeswoman declined to comment on whether the bank also tapped the Swiss National Bank or other central banks for liquidity.

According to the article, the Fed made a great deal of effort to hide this questionable use of government money, burying it in 29,000 pages of documents and 18 Fed-prepared Microsoft Excel spreadsheets. (Much of the information came out as a result of “Freedom of Information Act requests by media outlets including Bloomberg News and related federal court orders.)

That’s understandable, of course. Bail-outs of American-based financial institutions are bad enough but Americans have every right to inquire how the Fed can justify bailing out foreign- banking giants as well. But, of course, according to what Phil Gramm assured us back in 1999, all this de-regulation was supposed to make American banking institutions more competitive to foreign banks- like UBS. Who would have thought they have to come begging for a hand-out too?
The Difference Between Love And Prostitution

Summing up Phil Gramm’s colorful and notorious career, which pretty much careens drunkenly from one act of wrongdoing and misconduct to the next, is not easy.

Here is an excellent story that seems to fit the bill.

The trial of George Ryan, a former governor of Illinois charged with fraud and racketeering, got a jolt on November 17th, thanks to the testimony of a former senator. In 1995, Mr Ryan, then Illinois’s secretary of state, endorsed the presidential campaign of Phil Gramm, a Republican senator from Texas. Prosecutors charge that Mr Gramm’s campaign paid Mr Ryan an $11,000 “consulting fee” in exchange for his endorsement; Mr Ryan claims he earned the fee by introducing Mr Gramm to local political figures. In court, Mr Gramm testified that he did not know his campaign was paying Mr Ryan for consulting, nor would he have approved such a payment, because, he explained, “it’s sort of like the difference between love and prostitution. You don’t pay people to like you.”The comment caused a ruckus in the courtroom and beyond: the judge asked Mr Gramm to curb his thoughts on prostitution, while Mr Ryan lashed out by telling television crews that Mr Gramm may have been involved in the scandal over Enron, adding testily, “If Senator Gramm wants to use the word prostitute, perhaps he should look within.”

Touche, Mr. Ryan!

Not unlike Cheney or Bush or Rove, Phil Gramm still walks freely among law-abiding citizens. Moreover he still considers himself a kind of authority about economics and politics. (Similar to Bristol Palin being permitted to discuss the need for abstinence.) When called upon to explain himself and his role in the economic meltdown, Phil Gramm refuses to take responsibility. He is still talking about de-regulation as the savior of the US economy. Still using meta-language and murky jargon of economists to cloud what is clear. And worst of all, still promoting his disastrous policies only now through the candidacy of his former student and partner in political corruption, Rick Perry.

“Why are you just so afraid to say this whole system is bankrupt and the whole thing should just be reorganized?” someone from the audience asked after Gramm finished his lecture. “Why don’t you just let it go?”
“First of all I think that’s a good question,” Gramm responded. But then he offered something of a personal credo: “I would be a little concerned about letting capitalism go, because it made me prosperous and free and it made my country prosperous and free.”

Hmmm. an interesting remark indeed. Capitalism, corrupted and sabotaged, has no doubt made Phil Gramm prosperous and it has made him, if not free, then relatively cheap. With regard to the second part of that statement, we must ask Mr. Gramm: Who exactly have become prosperous and free and who have lost their jobs, their homes and their life savings? I can’t imagine that is the freedom, Mr. Gramm is speaking of.

When Gramm announced his retirement from the Senate, Governor Perry put out the press release.

“In a state filled with tales of legendary statesmen, Sen. Phil Gramm stands in a league of his own. It’s hard to imagine where this state would be without the fearless, dedicated service of this man. He has been a spirited protector of the men and women of this state and the ideas they hold dear. I have been proud to call him my senator, and even prouder to call him my friend. I know without a doubt that even though Sen. Gramm is leaving his role in the U.S. Senate, he will continue to work for the greater benefit of our state and our nation.”

The statement is so full of hindsight irony that, if the mainstream media had done its job, it would instantly have rendered Rick Perry, the student, protege, and good ol’ boy of Phil Gramm, the 2012 presidential election’s laughing stock candidate.


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In the next posts, we will turn our spotlight upon Phil Gramm’s wife, Wendy, whose own extraordinary achievements, while nothing to be be proud of, at least, prove her to be a worthy match to her husband.

Friends of Rick Perry: Mr. and Mrs. Gramm 1/4

by Nomad

A Close Look at Phil Gramm

Bad Company


George Washington once said, “Associate with men of good quality if you esteem your own reputation; for it is better to be alone than in bad company.” While this might have been true in Washington’s day, as advice for the modern politician, it is hardly practical. In Texas politics, a rising star has to associate with a lot unsavory types, with a lot of money and political clout, the right connections etc. Yet, Governor Rick Perry’s association with Mr. and Mrs. Gramm is much more than a casual acquaintance. If Perry’s close relationship is anything to go by, Rick must not esteem his reputation at all.

As Think Progress puts it:

Former senator and current banker Phil Gramm of Texas — well-connected to big donors but controversial for his role in preventing tighter regulation of Wall Street — told The Huffington Post …that he is endorsing his former student and political protege, Texas Gov. Rick Perry…”I’m for Rick and I will do what I can to help,” Gramm said in an interview in Detroit. “He has been an effective governor. He is a determined guy from a small town who knows how to get things done.”

This kind of back slapping- a milder term than I would prefer- is merely an exchange of favorable reviews. Back in February of 1995, when Perry was the commissioner of agriculture in Texas, he stood at Phil Gramm’s side during his unsuccessful run for the presidency. Mother Jones states:

Years later, Perry would claim that the country “made a huge mistake” by not electing Gramm president. “I can’t fathom,” Perry said, “where we would be as a country had Phil Gramm led this country for eight years.”

There’s a ten gallon hat’s worth of irony in that statement to be sure. In any event, getting Gramm into the White House was unnecessary. As far as the power brokers of the 1% were concerned, Phil Gramm and others like him didn’t need to to be president at all. They had George W. Bush to manage things for them, thank you very much. For them, Gramm found his place in a slightly less high-profile (but critically important) role. As any Texan would tell you, there was more than one way to skin a cat.

Enough To Convict Us All

Phil Gramm was once described by Economics Nobel Laureate Paul Krugman as “the high priest of de-regulation” and listed him as one of the top persons responsible of the economic crisis of 2008, second only to Alan Greenspan. Krugmann was not alone in that assessment either. The New York Times, noted economist James K. Galbraith, The Texas Observer, Warren Buffet and many others have agreed.

Before we get into that, it would be helpful to see how such a person found himself in a position of influence.

First some biographical notes:


From 1967 to 1978, he taught economics at Texas A&M University, where Rick Perry was his “back of the class” student. Gramm found a kindred spirit in Perry and eventually made him his protege in the raw world of realpolitik. In Texas that world is all about who you know and how low you plan to go for them. In Perry’s case, it was a bit lower than everybody else. Gramm would be instrumental in setting Perry up with the right contacts who would, later fund, Perry’s campaign for Lieutenant Governor in 1998. Texas multi-millionaire James Leininger: Leininger contributed generously to that and to later Perry campaigns (We will throw a little more light on that man a bit later.)

In addition to teaching, Gramm founded the economic consulting firm Gramm & Associates (1971–1978) Ambitious Gramm had his eyes set on a much larger prize. In 1976, he challenged Texas Democratic Senator Lloyd M. Bentsen, in the party’s senatorial primary and lost but ran successfully two years later as a Democrat for Representative from Texas’s 6th congressional district.

Let’s push fast forward here.
  • 1981 – worked on Budget negotiations on a draft budget submitted by President Reagan.
  • 1982 – was dismissed from the House Budget Committee for supporting Reagan’s tax cuts.
  • January 5 1983 – Resigned from his seat
  • returned to the House of Representatives as a Republican.
  • 1984 – was elected as a Republican to represent Texas in the U.S. Senate
  • 1989- 2003 Gramm served on the Senate Budget Committee
Mind you, none of this time was wasted. Step by step, Gramm was making all the necessary contacts with corporations in the banking and financial sectors an contacts with the power players like Rove.

Between 1995 and 2000, Gramm was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.The agency oversees matters related to: banks and banking, price controls, deposit insurance, export promotion and controls, federal monetary policy, financial aid to commerce and industry, issuance of redemption of notes, currency and coinage. As Time magazine puts it:

As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played the leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act.

And it was in this position that Gramm really came into his own.

Now that we know the steps Gramm took to get into the position, it’s time for a word about Gramm’s sense of ethics and moral judgement. Certainly Phil Gramm’s history of questionable (putting it mildly) ethics runs back decades.
Back to his early days, for example, Gramm was investigated by the Federal Election Commission (FEC). It began investing Gramm’s campaign finances when it was learned that he had accepted a suspiciously low price on construction of a waterfront home in rural Maryland. The builder, Jerry Stiles, also ran three troubled savings and loans. About that same time, Gramm ushered through a bill that allowed sick Texas S&L’s (such as the ones Stiles owned) to stay open. He later urged regulators to give Stiles waivers — even after they found irregularities that led to Stiles’ conviction — and advised Stiles on new banking regulations. The Senate after an investigation, accepted Gramm’s explanations.

And, if this were but one example in a long political career, it would be easy to give the man the benefit of the doubt.

However, this is a politician with more than the usual skeletons in his closet.

In 1985, Gramm was linked to a campaign contribution shakedown run out of a Small Business Administration (SBA) office in El Paso. He was never subjected to a complete investigation or negative press coverage, however, because on February 19, 1988, a leased Rockwell Aero Commander 680 crashed and exploded shortly after taking off from El Paso International Airport. All aboard, the pilot, his wife and son, were killed. The pilot was local businessman Don McCoy who, a day earlier, had agreed to give testimony in an FBI investigation that had threatened both Senator Gramm’s protégé at the SBA, and some of the city’s most prominent business leaders.

Clearly, Gramm could pull in the financing, whether it was proper and legal or not. In fact, Gramm’s fundraising capabilities made him a valued commodity in the Republican party. According to NY Times news piece from September 9, 1995,
When Gramm was head of the Republican’s Senate campaign fundraising effort in 1992, Oregon Republican Senator Bob Packwood, running for re-election, recorded in a infamous diary of a March 6 meeting in which Gramm promised to funnel $100,000 in party “soft” money to Packwood’s campaign. Despite the fact the party contributions, limited to $17, 500, had already been supplied. “What was said in that room would be enough to convict us all of something,” Packwood wrote in his diary.

(Packwood’s career was soon to unravel when the Washington Post published a series of articles chronicling accusations against Packwood of sexual harassment. After the Senate Ethics Committee recommended his expulsion, on October 1, 1995, Packwood resigned from the Senate.)

All of this, as grimy and low-down as it may be, is nothing more than corrupt politics in action. Garden-variety dirty dealing. However, Phil Gramm’s real claim to fame is to be the one of the leading authors of legislation which would led to one of the worst economic collapses since the Great Depression.

Laying the Foundation
“Tonight we have laid the foundation to make history.”

So stated, quite accurately, Senator Phil Gramm back in 1999 when both parties had slaved feverishly to work out a compromise on a bill-one of a series- that would effectively repeal the last of the post-Depression era banking regulations. Additionally, the banking industry- with an eye on the prize- had lobbied for the greater part of two decades to de-regulate the sector which, they explained had made America less competitive in the global arena.

At the time, this newest piece of legislation was explained like this:

The new law would repeal parts of the 1933 Glass-Steagall Act, which prevented banks from moving into the securities business, and was considered an archaic symbol of government regulation no longer relevant in a high technology world.

From his high position in The Senate Banking Committee, Phil Gramm, starting in 1999, led the drive to de-regulate the finance industry through a series of critical legislative manuevers.

As Time magazine puts it:

As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played the leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act.

Of course, there was a very good reason why those regulations had existed and why they once were considered paramount. Furthermore, as an economist, Phil Gramm also knew the history of the Glass-Steagall Act and why it had been created in the first place. He simply didn’t care.


Franklin Roosevelt Signs The Glass Steagall Act -1933

In the days after the Great Depression, when one out of every five banks in the US closed, the survivors of the crash began taking a sober look at the factors that led to this economic collapse. Unregulated market speculation by banks, it was decided, was the chief cause and in 1933, Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) drafted historic legislation in order to prevent a disaster like this from ever happening again. It was known at that time as the The Banking Act of 1933. Investigative hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass–Steagall Act.

In an interesting article from LIFE magazine January 7 1946 issue about Wall street as “the Citadel to US Capitalism,” the new approach to banking and investing- brought about by this legislation- examines why this piece of legislation was so fundamental in making the country a source of dependable investment:

On Wall Street there are two principal kinds of bankers: Commercial bankers and investment bankers. The commercial banks, such as Chase and National City, make loans, accept deposits, finance foreign credits, buy government and state bonds. They also usually have a trust department which executes wills and acts as trustee. The investment bankers, such as Morgan Stanley and Kuhn, Loeb underwrite and distribute new security issues for corporations. They also have a brokerage department which buys and sells securities.

The Banking Act of 1933 made it illegal for one firm to act both as a commercial act and investment banking house. Until then, the two were often combined. In his triumphant days, J.P. Morgan, a banker, merged railroads and steel companies into nationwide corporations. In the 1920s, Wall Street made idols of men like Charlie Mitchell, chairman of National City Bank, who was also the greatest securities salesman in history and an adroit market manipulator. The 1929 crash exposed the dangers of these dual functions, With one hand, banks were taking deposits. With the other, they were financing new securities. When the business they were promoting failed, the depositors, security holder and the bank itself were in trouble. Today the very nature of Wall street bankers has changed. In place of the speculators and market manipulator there are sound, deliberate investors who by choice as well as by law are more interested in government bonds than in a flier in market.

In addition to the Banking Act of 1933- now known as Glass-Steagall, the Bank Holding Company Act was passed in 1956 which extended the restrictions on banks. According to this, bank holding companies owning two or more banks could no longer engage in non-banking activity and could not buy banks in another state. This prohibited banking institutions from becoming “too big to fail.” The law generally prohibited a bank holding company from engaging in most non-banking activities or acquiring voting securities of certain companies that are not banks. (Another protection that Gramm was responsible for repealing.)

All of this post-Depression legislation represented a “conservative” approach to banking along with a fair tax system. It served the nation well and was to lead to the longest sustained era of American prosperity. Government regulation of financial institutions, in effect, created a aura of trust and dependability. The stock market would no longer be a casino where precious few- especially those with inside information- would reap astounding fortunes while the vast majority would lose everything.

Still the temptation proved too great. The lessons of history soon faded from memory and the financial sector, for the sake of greater profits, began its campaign to remove the regulations that had safeguarded the nation. But it had not been an easy struggle and much of it had to be done step by step and by stealth.
These efforts really kicked into high gear under Reagan’s administration. Through lobbying pressures J.P. Morgan, Chase Manhattan, Bankers Trust, and Citicorp throughout the 1980s, aggressive and unrelenting attempts were made to repeal the major restrictions in Glass-Steagall. In 1984 and 1988, the Senate passed bills that would castrate much of the regulatory powers of the law, but in each case, the House blocked passage. Back to the drawing board, or should I say, board room?
It had been a long slow chipping away of the restrictions, along with installing former executives of the major financial institutions in positions of power such as the Federal Reserve Board. For example, In August 1987, Alan Greenspan — formerly a director of J.P. Morgan and a proponent of banking deregulation — became the chairman of the Federal Reserve Board. Treasury Secretary Robert Edward Rubin, (January 11, 1995 – July 2, 1999 ) had served 26 years at Goldman Sachs eventually serving as a member of the Board, and Co-Chairman from 1990-1992. Gary Gensler who was Secretary of the Treasury had spent 18 years at Goldman Sachs.

In 1991 under George Bush Snr., new repeal efforts had passed both the House and the Senate Banking Committee but died in a full vote.

Finally all of the pieces fell into place at the 106th United States Congress (1999–2001).

While it’s true that, over the years, most of the provisions in the Glass Steagall Act had been eroded, the Gramm-Leach-Bliley Act (GLB), otherwise known as Financial Services Modernization Act , was really the final nail in the coffin.

An Introduction to Investment Banks, Hedge Funds and Private Equity, by David Stowell, gives us this summary:

On November 12, 1999, the US Congress passed the Gramm-Leach-Bliley Act, which overturned the mandatory separation of commercial banks and investment banks required by the Glass-Steagall Act of 1933. The original reason for the separation was the concern that depositors’ holding would be used aggressively in risky endeavors by the investment banking side of the firms. The argument for joining the two types of firms is that it would provide a more stable business model irrespective of the economic environment.Another argument.. was that non US headquartered universal banks, such as Deutsche Bank, UBS and Credit Suisse, were not encumbered by the Glass Steagall Act. The banks had a competitive advantage over US-headquartered banks, such as Citigroup, JP Morgan, and stand-alone investment banks, such as Goldman Sachs and Morgan Stanley, because the non US headquartered banks could participate in both commercial banking and investment banking activities.

But it didn’t take a genius to predict the possible problems. Back in 2000 only a few months following the bill’s passage, J. Alfred Broaddus, president of the Hampton Roads Chapter of the Robert Morris Associates, a risk management firm, writing an analysis of the legislation, observed:

This brings me to the question of regulating and supervising the new structure the Gramm–Leach–Bliley Act (GLBA) will create. I think it’s worth noting at the outset that GLBA broadens the opportunities for diversification for large financial companies. Therefore, not all of the Act’s fallout will necessarily increase risks. But the potential size and complexity of at least some of the new financial holding companies could well increase risks in some cases, including not only risk to the company and its shareholders, but broader risks to the financial system and the economy. Too-big-to-fail is already a major public policy issue – perhaps the major public policy issue in banking and finance – and GLBA is not likely to change this.

On that occasion, the jubilant Phil Gramm declared to the American public:

We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom.

After that bill was signed into law by Bill Clinton, it took less than a decade to demonstrate what some economists had known all along and what our grandfathers had learned the hard way. Regulations, while they might seem to restrict an industry, serve to protect and prevent abuse; in this case a curb on wild speculation and, in turn, a disastrous collapse.

Passage of the bill set off a wave of mega-mergers among banks, insurance and securities companies. The party had really begun and after the celebration was finished, the country would be faced with the biggest economic hangover in its history. By then, however, this champion for regulation would have moved on to greener pastures in the private sector.

For Phil Gramm personally, the passage of the bill justified the $4.6 million he reportedly received by the Finance, Insurance, and Real Estate industries over the previous decade. And, furthermore, Phil Gramm hadn’t even hit his peak yet.

In part two of the series, I will examine Gramm’s adventures in the private sector, following his retirement as Senator.

Rick Perry channels his inner George W. Bush at the "Cornerstone Action Dinner" in New Hampshire – his "drunk" speech! UDPATE WITH FULL SPEECH!

By Patrick

MAPLE SYRUP

Rick Perry loves his Maple Syrup – amongst other things

It’s a slow news Sunday, and apart from snow storms in the Northeast of the USA, the type of event which has been used by Fox News as proof to show that global warming doesn’t exist, there seems little to report today. However, Texas Governor Rick Perry saves the day!
In what Huffington Post calls an “unusual speech” in which Rick Perry was “unusually expressive”, Rick Perry channelled his inner George W. Bush on Friday night in New Hampshire at the “Cornerstone Action Dinner” and in a weird performance presented a parody of himself. What happened? Alcohol, drugs or general stupidity? My bet is that is was alcohol! 😉
Somebody posted a clip on youtube with excerpts from the 25-minute speech, and the full clip doesn’t seem to be available yet. But these excerpts are more than enough to get a really good laugh! One of the Republican frontrunners making a complete mockery of himself is well worth watching:
I almost feel sorry for Rick Perry. He clearly was just at the wrong place at the wrong time. And my guess is that he has zero chance to beat President Obama. This man is an empty suit.
But if the speech was already very funny, the best part comes after Rick Perry has finished his speech. He is just standing next to the podium when one of the organizers makes some very simple closing remarks, which are actually not funny, and nothing should go wrong any more, wouldn’t you think?
Well, it seems that if Rick Perry is “in the mood”, a lot can go wrong. 😉
His behaviour at the end is so hilarious that I decided to make a screenshot collage, in chronological order, taken from the above video clip – enjoy, and have a nice and hopefully snow-free Sunday!
Perry funny speech 1

Perry funny speech 2

Perry funny speech 3

Perry funny speech 3a

Perry funny speech 4

Perry funny speech 5

Perry funny speech 6

Perry funny speech 7

Perry funny speech 8

Perry funny speech 9

Perry funny speech 10

Perry funny speech 11
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UPDATE!
Here is the full, uncut speech – as expected, the full speech includes many more hilarious parts :

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UPDATE 2:

“Think Progress” reports about more insanity by Rick Perry – President Obama’s decision to withdraw the troops from Iraq is “putting our kids lives in jeopardy”, according to Perry:

PERRY: The idea that a commander-in-chief would stand up and signal to the enemy a date certain of when we’re going to pull our troops out I think is irresponsible. You need to be talking to your commanders in the field. You need to be working with the experts who understand what is going on in those countries, for instance. We need to finish our mission in Iraq and Afghanistan. You better believe I want out kids home as soon as we can and safe. But to give that signal that we’re pulling them out is bad public policy and, more importantly, it’s putting our kids lives in jeopardy[…]
He has lost his standing from the standpoint of being a commander-in-chief who has any idea about what’s going on in those theaters. He’s making mistakes that are putting our kids that in theater and I think future issues dealing with whether it’s in the Middle East or the south China Sea with our allies, putting all of that in jeopardy because of this unwavering, or I should say this wavering or this aimless approach to foreign policy which he has.

Watch the clip:

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UPDATE 3:
Rachel Maddow and Jon Stewart both weighed in.

Maddow did an excellent in-depth piece about Perry’s speech:

http://www.msnbc.msn.com/id/32545640

Visit msnbc.com for breaking news, world news, and news about the economy

Jon Stewart presented a shorter segment, combined with the news about Herman Cain, and of course it’s as funny as expected:

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UPDATE 4:
Rick Perry commented on his speech in New Hampshire – and doesn’t acknowledge that the speech was bad. Just the opposite, he “felt good” and “got across the message very well”, according to Perry. And he says that one can apparently “do everything with a video.” No, you cannot, Rick…!

Saturday Night Live is also on the case:

http://www.nbc.com/assets/video/widget/widget.html?vid=1366649