You have to admire America’s hard-love volunteer analyst Phil Gramm. He may be a mean sumbitch
Gramm both looks like a snapping turtle and has the personality of one. When he ran for president in 1996 and finished fifth in Iowa, all the profiles written of him included the line "Even his friends don’t like him." Self-righteous and strident, Gramm demonized his opponents and used bitter, polarizing rhetoric. During a Senate debate over Social Security, a member pointed out that the proposal under consideration would hurt 80-year-old retirees. "Most people don’t have the luxury of living to be 80 years old," Gramm scoffed, "so it’s hard for me to feel sorry for them." Well, there is that.
but he’s a mean sumbitch with convictions
Since Gramm launched his political career in the late ’70s, he has benefited from one of the strangest prejudices of politics: that meanness is a synonym for integrity. The Gramm Fallacy—which he has cultivated relentlessly (with, for example, jokes like these)—is that his coldness, orneriness, and homeliness signify principle and purity. No politician this unappealing could be anything less than worthy.
Gramm rose from a hardscrabble Georgia childhood to an economics professorship at Texas A&M. In the mid-’70s he thrust himself forward into Democratic politics on a platform of "Government Is the Enemy." (Why Democratic politics? Because that was the way to get ahead in Texas.) He bulled his way into Congress in 1978. He came as close to libertarianism as party politics permits, arguing that all Americans needed to wean themselves from the public teat. He would make rich and poor suffer so that all might live in greater freedom.
a real stand on his own two feet kind of guy
Gramm, the great crusader against government spending, has spent his entire life on the government tit. He was born at a military hospital, raised on his father’s Army pay, went to private school at Georgia Military Academy on military insurance after his father died, paid for his college tuition with same, got a National Defense Fellowship to graduate school, taught at a state-supported school, and made generous use of his Senate expense account.
who’s willing to pay the price of his principles
It’s no surprise that Gramm would stiff his fellow Republicans: His guiding Phil-osophy has always been, What’s good for Phil Gramm is good for the USA. The classic example is of course Gramm’s military record: rather, his non-military record, which consisted of courageously beating the drums for empire, war, and military pork-barrel spending, while studiously avoiding military service himself. As William Saletan put it in the July 1995 Mother Jones, "After graduating from a military high school in 1961, [Gramm] used five consecutive student and teaching deferments to escape the Vietnam draft. He explained that he spent most of the war teaching at A&M because he ‘preferred it’ to joining the Army."
That particular hypocrisy is only a special case of Gramm’s broader legislative record, which happily contributed to the Texas political lexicon the word "grammstanding." Grammstanding is taking public credit for some legislative action — particularly some home-state spending program — which you either directly opposed or else had nothing to do with. The speed with which Gramm’s self-congratulatory press releases hit the wires following the passage of some expenditure he had in fact obstructed or ignored achieved legendary status among reporters: hence the honorific which, like "gerrymander," will survive him.
At the start of his career, as my Slate colleague William Saletan argued in a 1995 Mother Jones story, Gramm preached a conservatism in which all Americans would have to sacrifice. But over time, Gramm has shucked any pretense of libertarianism. Gramm spoke of belt-tightening, but forced it only on folks he didn’t need, notably immigrants and the poor. He began his career railing against corporate subsidies, but he never pulled the trigger. Instead he became one of the biggest recipients of campaign contributions from energy, banking, health-care, and insurance companies. As an economist, Gramm knows that farm subsidies grossly waste taxpayer money, but he has never moved against them. And Gramm became one of Congress’ leading pork dealers: He once bragged that he steered so much government spending to Texas that he was getting trichinosis. Gramm, who once claimed that all Americans needed to sacrifice, excluded anyone who gave him money, voted for him, or lived in Texas: They never had to get off the wagon.
Let’s face it: it’s been rough for Phil. After all, he paid $20 million for 8 delegates in his ’96 race for president (which was run, in what I dearly hope is a bit of cheap historical irony, by John McCain) and then lost his Chairmanship when Democrats retook the Senate because Sen. Jeffords hopped the aisle, just like Senator Phil did once (which is how he got his Chairmanship to begin with)
But did Phil repine? He did not. When life handed Phil career lemons, he made career lemonade with them (well, the million dollars his wife got from Enron when they named her to the board after she deregulated them probably softened the blow a bit, particularly since when things started to go bad for them she sold out her stock with the rest of the insiders for an extra $250k or so)**
“Countdown with Keith Olbermann” reported Tuesday night that lobbying disclosure forms, filed by the giant Swiss bank UBS, list McCain’s campaign co-chair, former Texas Sen. Phil Gramm, as a lobbyist dealing specifically with legislation regarding the mortgage crisis as recently as Dec. 31, 2007.
Gramm joined the bank in 2002 and had registered as a lobbyist by 2004. UBS filed paperwork deregistering Gramm on April 18 of this year. Gramm continues to serve as a UBS vice chairman.
Gramm’s UBS lost money on the mortgage meltdown, but again Gramm didn’t let it get him down. He went out looking for new opportunities to add value
Gramm is not a paid McCain adviser, but his day job—vice chairman of a U.S. division of Zurich-based financial giant UBS—could pose new tests for a candidate who has promised high ethics standards and ditched advisers who failed to meet them.
UBS has recently written off huge losses in subprime-mortgage-based securities, and last week liberal bloggers noted that Gramm was a registered UBS lobbyist on mortgage-securities issues until at least December 2007.
NEWSWEEK has learned that UBS is also currently the focus of congressional and Justice Department investigations into schemes that allegedly enabled wealthy Americans to evade income taxes by stashing their money in overseas havens, according to several law-enforcement and banking officials in both the United States and Europe, who all asked for anonymity when discussing ongoing investigations. In April, UBS withdrew Gramm’s lobbying registration, but one of his former congressional aides, John Savercool, is still registered to lobby legislators for UBS on numerous issues, including a bill cosponsored by Sen. Barack Obama that would crack down on foreign tax havens. "UBS is treating these investigations with the utmost seriousness and has committed substantial resources to cooperate," a UBS spokesman told NEWSWEEK, adding that Gramm was deregistered as a lobbyist because he spends less than 20 percent of his time on such activity. Hazelbaker said the McCain campaign "will not comment on the details … of ongoing investigations and legal charges not yet proved in court."
which, dedicated Gramm watchers will remember, is just another opportunity he and his Republican friends in congress made for themselves, without whining (they’re all about the bootstraps)
"Republicans lead by Sen. Phil Gramm of Texas and the accounting industry’s trade group are working to kill a Democratic measure that would impose new rules on auditors, companies and investment banks in the wake of Enron’s collapse," reports The New York Times. That would be the same Phil Gramm who got $101,350 in contributions from Enron and $927,055 from the financial industry while chairman of the banking committee. (By way of contrast, the late Henry B. Gonzalez of Texas, a populist, accepted no contributions from the financial industry while serving as chair of the House banking committee.)
This cheerful effort to scuttle mild financial reforms comes amid regular updates on Enron’s frauds and felonies — – rigging the market during the California "energy crisis," playing games with Global Crossing to disguise loans and other financial facts, etc. Try these exercises in financial fakery:
— "Using prearranged but undisclosed plans, executives may sell stock without being accused of insider trading. Now regulators, worried about the use of fake plans, may force advance disclosure of them." (New York Times)
— "House Republicans are blocking an effort by Democrats to force a vote on a measure that would prevent companies from avoiding income taxes by reincorporating in Bermuda and other offshore tax havens." (New York Times)
David Cay Johnson of the Times reports that despite corporate claims that moving to Bermuda is done to benefit shareholders, the biggest beneficiaries are often the chief executives on the companies.
and, of course, this
McCain’s campaign is already distancing itself from some of Gramm’s other work for UBS: his involvement in attempts to sell financial products known as "death bonds," which BusinessWeek described last summer as one of "the most macabre investment scheme[s] ever devised by Wall Street." Not long after joining UBS, the Houston Chronicle reported, Gramm helped lobby Texas officials, including Gov. Rick Perry, to sign on to a UBS proposal in which revenue would be generated for a state teachers’ retirement fund by selling bonds, whose proceeds would in turn be used to buy annuities and life-insurance policies on retired teachers. UBS would advance money to the retirement fund, then repay itself, compensate bondholders and pocket profits when insurance companies paid off on retirees who died. According to a banking-industry source, who asked for anonymity when discussing a sensitive matter, Gramm was involved in efforts to pitch similar UBS products to other financial institutions.
Newsweek may know them as "death bonds," but per Molly, they have another name
According to The Washington Post, President Bush wants a new economic team. Can’t imagine why. Oh, here it is: It’s "part of Bush’s preparation for sending Congress an ambitious second-term domestic agenda." He wants someone "who can better relate to Congress and be more effective in dealing with financial markets and television interviewers."
There you have it – Phil’s perfect for the job. Mr. Charm. And he knows how to talk those seniors into getting rid of Social Security. He’s in practice. He’s been back here in Texas lobbying to make it legal to sell "dead peasant" life insurance to the Teacher Retirement System.
"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.
Gramm is currently vice chairman of UBS Investment Bank. Under the UBS plan, the Retirement System would buy annuities and life insurance policies on retired teachers and keep the proceeds when they die.
See, that’s just brilliant. Private industry, working with the government, can monetize grandma and grandpa. Of course, that means that it could potentially be quite profitable for the state administering grandma and grandpa’s medical plan if, say, grandma and grandpa didn’t get the most aggressive care. Problem?
"Most people don’t have the luxury of living to be 80 years old," Gramm scoffed, "so it’s hard for me to feel sorry for them."
Ladies and gentleman, the man who’s writing John McCain’s economic policies. Don’t let them get their hands on your grandparents.
* a kind of bacteria. Intestinal, for example, or STD-causing. It’s a, y’know, whatchamacallit. Pun. Does having to identify a pun actually make it less funny than having to explain it? Is that even possible? Don’t mind me, it’s been a long week.
**Christy and MyDD and Obsidian Wings and David Corn already covered how Gramm’s actions as the chair of the Senate Banking Committee (and his wife’s deregulatory efforts) arguably paved the way for Enron and the mortgage crisis and, according to at least one report, a significant chunk of the rise in gasoline prices.