McCain Economic Advisors

A brief post on the McCain economic advisory team:

1) Phil Gramm - ex U.S. Senator from Texas. Author of Gramm-Leach-Bliley Act (1999), which essentially cancelled most of the post depression era legislation designed to prevent another depression by establishing "firewalls" between commercial banking, investment banking and the insurance industry [Glass-Steagall Act]. Co-Sponsor of Commodity Futures Modernization Act of 2000, heavily lobbied for by Enron, which essentially eliminated government oversight of "credit default swaps." [A CDS is essentially an insurance policy bought against the failure of a Collateralized Debt Obligation (CDO), which in turn is a bundled package of investments, primarily mortgages, in the subprime mess.]

Gramm's spouse, had previously served as Chairperson of the Commodity Futures Trading Commission (the government oversight agency), where she successfully passed a Commission rule exempting energy trading from oversight. Following her service on the Commission, she joined the ENRON board of directors, where she served on the audit committee. Gramm received between $1.0M and $2.0M in campaign contributions from the financial services industry, over his last ten years in office. He resigned his seat around the same time as ENRON failed and a few months prior to end of his term to allow appointment of another Republican Senator, who then was able to retain Gramm's seniority and avoid an election. Gramm now serves as a Vice Chairman of the United Bank of Switzerland, which has - thus far - declared subprime mortgage losses approaching $40B. In 1996, McCain served as campaign chairman for Gramm's unsuccessful Presidential bid. McCain, who has admitted he knows little about economics, told the Wall Street Journal, in a 2005 interview, he considers Gramm his "economic guru."

2) Carly Fiorina - ex-Chairperson and CEO of Hewlett Packard. Fired by a revolt of the HP board for poor performance. Currently serves on the board of the Taiwan Semiconductor Manufacturing Company. Supporter of globalization and serves on a committee of the World Economic Forum. Supports outsourcing and more H1b visas, for foreign high tech employees.

3) Jack Kemp - former football player, ex-Congressperson, ex-Cabinet member, ex-VP candidate on Dole-Kemp ticket. Big proponent of supply side economics. Currently runs a lobby firm.

In the wake of the subprime mortgage mess, even the Bush Administration has conceded that one cause of the losses was a lack of government oversight of both lending practices and the new financial instruments created to package, insure and resell the resulting subprime mortgages. As on Iraq, McCain seems to be running somewhere to the "right" of the Bush Administration.