Phil Gramm: A Deregulator Unswayed
“Some people look at subprime lending and see evil. I look at subprime lending and I see the American dream in action. My mother lived it as a result of a finance company making a mortgage loan that a bank would not make.”
-former United States senator Phil Gramm
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There was a fascinating Sunday NYT article on the architect of much of the past few decades radical deregulation:Phil “mental recession/nation of whiners” Gramm.
The retired Texas senator claims that deregulation "played virtually no role" in the current economic turmoil engulfing the globe, nor the housing collapse or the credit crisis. The exempting of any regulation of derivatives, including state insurance supervision, reserve requirements or clearing information was not significant to the crisis. The nonfeasance of the Fed in supervising all of the non-bank lenders that lay at the heart of the housing boom and bust was not the cause either (it was "Predatory Borrowing"). And the payola scandals at the ratings agencies -- Moodies, S&P, and Fitch -- that slapped triple AAA ratings on paper that turned out to be junk would not have been prevented via better oversight.
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Monday, November 17, 2008 | 07:18 AM | Permalink
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