http://thinkprogress.org/economy/2016/03/22/3762291/ted-cruz-phil-gramm/
[h=1]
How Ted Cruz’s New Senior Economic Adviser Paved The Way For The Financial Crisis[/h]
On Friday, Republican presidential candidate Ted Cruz snagged the endorsement of former Texas Senator Phil Gramm and
announced that Gramm will serve as a senior adviser to the campaign on economic issues.
Gramm has a long history of railing against regulation, particularly in the financial industry, and the legislation he helped pass through during his time in the Senate have been connected to the financial crisis.
[h=3]Deregulating banks, paving the way for the financial crisis[/h] Gramm was perhaps Congress’ biggest proponent of financial deregulation,
allegedly telling former Securities and Exchange Commission (SEC) Chairman Arthur Levitt, “Unless waters are crimson with the blood of investors, I don’t want you embarking on any regulatory flights of fancy.”
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Gramm was one of the fathers of supply-side economics, and along with David Stockman, worked tirelessly to get the GOP Congress to accept supply side economics and enact Reagan' economic program based on that concept. Gramm never wavered even as the US ran up huge deficits. A worse economic advisor could not be found except maybe Arthur Laffer himself.
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Weakening Glass-Steagall was just one of the ways Gramm can be tied to the financial crisis, however. He inserted a provision in the Commodity Futures Modernization Act in 2000 that exempted complex derivatives — such as credit-default swaps — from regulatory oversight by the Commodity Futures Trading Commission. The lack of regulation meant that as the use of credit-default swaps grew in the lead up to the crisis, banks weren’t required to create backstops in case they failed, and once they all came crashing down amid the housing bubble’s burst, it left financial institutions exposed. Credit-default swaps
took down AIG, leading to its bailout.
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Gramm is an idiot. Cruz is an idiot.
