Introducing ... Treasury Secretary Phil Gramm?

Guess who made sure the U.S. government wasn't watching when Wall Street went bonkers with credit derivatives.

Published May 29, 2008 5:50PM (EDT)

David Corn has the goods on Phil Gramm's role in facilitating Wall Street's woes in Mother Jones. As David Kurtz notes at Talking Points Memo, it's a must-read.

And it requires me to clarify a slight misstatement I made in my own post on Gramm yesterday.

I wrote that Gramm "spearheaded legislation deregulating energy futures trading (which facilitated Enron's misdeeds)." Actually, this was a Gramm family affair. In 1992, Wendy Gramm, then chairwoman of the Commodity Futures Trading Commission, managed to get trading in energy derivatives -- a business Enron came to dominate -- excluded from government oversight. Eight years later, Phil Gramm pushed through the much more comprehensive Commodity Futures Modernization Act, which not only sweepingly exempted all energy trading carried out on electronic exchanges from regulation, but also kept the government out of the business of regulating such relatively new financial innovations as credit swaps.

I should have mentioned this, as I edited an article for Salon in 2002 by ace reporter Damien Cave that lays out the whole sorry story -- and quotes the same people David Corn quoted in his article yesterday. But the basic story line is unchanged: McCain's top economic advisor, considered on the shortlist for a possible McCain administration treasury secretary, is as responsible as any other single person for encouraging the reckless behavior of Wall Street over the last decade.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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