Know why McCain wants to distance himself from former Senator Phil Gramm? It's not because of Gramm's obnoxious remarks calling Americans "a nation of whiners" who are in "a mental recession." Those remarks were so ascerbic that they may've been made just to give McCain an excuse to distance himself from Gramm. This issue is a lot deeper than it looks on the surface.
When Gramm was a Senator he was Chairman of the Banking Committee. He pushed through the legislation known as the "Enron Loophole." This loophole allowed US investment banks to bypass Federal regulations governing futures trading, and is the reason why investment banks were able to falsely inflate the prices of oil, wheat, corn and other commodities through massive futures trading, causing your costs of gas, heating oil and food to go through the roof.
Gramm also created the Gramm-Leach-Biley Act, which got rid of the laws that seperate banking, insurance and brokerage activities in America. The Gramm Act was touted as a new way to protect consumer privacy, but the real meat on the Act's bones was banking deregulation. Essentially, this Act did away with laws written after the Great Depression to protect us from another Wall Street/Banking Industry collapse. That's right, Gramm stripped the system of it's safe guards nine years ago, and guess what? The value of the dollar has nose-dived, four major economic institutions have failed, Wall Street is unstable, and we are in a worsening recession.
Notably, the US investment banks that gained the most from the Enron Loophole and from the Gramm Act contributed more than a million dollars to Gramm's campaign.
Currently Gramm is Vice Chairman of UBS, the Swiss Bank that came up with the idea of "death bonds." Worse, though, UBS is involved in a scam where they sold auction rate securities to American customers. Auction rate securities are supposed to be as safe as cash, but the way UBS did it, the fees garnished by their in-house investment bankers were intentionally higher than the return on the securities, ripping off their American customers. The Massachusetts Attorney General has already filed charges against UBS, and private brokers world-wide have dropped UBS stock. UBS is forecasted to lose 82.91% of it's value in 2008. We are talking about the corporate bank where Gramm is Vice Chairman. Looking at his track record there and at the havoc he has wrought on the US economy through the Senate Banking Committee, it's clear that either Gramm is a criminal or grossly incompetent.
Now McCain wants nothing to do with Gramm, wants us to forget Gramm has been a key player on McCain's team. Gramm was McCain's campaign CO-CHAIR and LEADING ECONOMIC ADVISOR. Previously, McCain had said that he planned to appoint Gramm as SECRETARY OF THE TREASURY.
With Gramm as McCain's leading economic advisor, now you know why economists and analysts say that McCain's economic policy plans are untenable.
McCain's Power Outage
Contradictions and misstatements short-circuit McCain's energy policy pronouncements.
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Summary
McCain has spent the week focusing on energy policy, making some surprising, and inaccurate, statements.
Among them:
He said that ending a moratorium on offshore oil drilling "would be very helpful in the short term in resolving our energy crisis." But according to a government report, offshore oil wouldn't have much of an impact on supply or prices until 2030. (Update, June 24: At a town hall event on June 23, McCain didn't claim that offshore drilling would lower prices in the short term, but that it would provide "psychological impact that I think is beneficial.")
McCain tried to paint Obama as an opponent of nuclear power, yet Obama has said he is open to nuclear energy being part of the solution and has supported bills that contained nuclear subsidies.
He has soft-pedaled the "cap" portion of his cap-and-trade proposal for greenhouse gases, even denying that it would be a mandate. The cap is a mandatory limit, however, and McCain even says so on his Web site.
McCain's new ad, running this week, rightly says that he bucked his party in supporting action on climate change years ago. But its images of windmills and solar panels are misleading in that he supports subsidies for nuclear power, which isn't pictured, and opposes them for wind and solar energy.
McCain continues to say that a suspension of the federal gas tax will lower prices for consumers, though hundreds of economists say he is wrong.
Analysis
Sen. John McCain spent much of the week focusing on energy policy and the pain that drivers are feeling every time they fill their tanks. He outlined his solutions in speeches on Tuesday and Wednesday, and he began running an ad touting his early willingness to break with the GOP on the issue of climate change.
On Board for Offshore Drilling
On Monday, McCain told reporters that permitting offshore drilling "would be very helpful in the short term in resolving our energy crisis." Tuesday, he formally unveiled the proposal in a speech to oil industry executives.
What McCain wants to do is expand the offshore areas, commonly referred to as the "outer continental shelf" that are open to oil exploration and drilling. The OCS is composed of the "submerged lands, subsoil, and seabed" under the seas extending from 3 to 9 nautical miles from the U.S. shoreline, depending on the state, to at least 200 nautical miles outward, according to the federal government.
Since 1981, there has been a federal moratorium banning any new drilling in these areas. Any rigs that were already up were permitted to continue extracting oil, and many are still operating in the Gulf Coast.
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