Krugman: Phil Gramm would be ‘just the guy’ to lead us into a Great Depression

Think Progress
Tuesday, September 16, 2008

Last night on MSNBC’s Countdown, New York Times columnist and Princeton economics professor Paul Krugman pinpointed Phil Gramm as one of the architects of the current financial crisis, and the “odds-on favorite to be the Treasury Secretary” in a McCain administration. Asked by Olbermann what Gramm’s nomination would mean for the economy, Krugman suggested it could lead to another Great Depression:

KRUGMAN: Ben Bernanke and I think Hank Paulson understand that we could manage to have another Great Depression if we work at it hard enough. I think Phil Gramm might be just the guy to do it.

Watch it:

Gramm orchestrated the Gramm-Leach-Bliley Act in 1999 which “destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies.” He also pushed the Commodity Futures Modernization Act in 2000, which made legal “the mortgage swaps distancing the originator of the loan from the ultimate collector.” The Nation writes that “those two acts effectively ended significant regulation of the financial community.”

Hunter at Daily Kos writes, “Given that…Phil Gramm has been credited as mover and shaker behind the very law that allowed the current financial meltdown to happen, I’d love to hear what McCain and Gramm think should be done to solve this crisis. … What’s your advice to America this time, Gramm?”

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7 Responses to “Krugman: Phil Gramm would be ‘just the guy’ to lead us into a Great Depression”

Abel Says:
September 16th, 2008 at 5:53 pm
Krugman is an idiot. Why anyone would listen to him is beyond me.

In regard to the text and not the video, Gramm may be evil incarnate, but the partisan leftys blaming this on less regulation and not even mentioning the Fed lowering interest rates to 1% for a year to inflate us out of the last bubble is hilarious.

Of course everyone ignores the elephant in the room of inflation. No one but the wealthy would care what happened to these big investment houses if the rest of the country wasn’t heavily invested in 401ks and IRAs in a futile attempt to not lose the value of their retirement money to inflation.
neon Says:
September 16th, 2008 at 7:04 pm
“inflation” is a word that sheeple use to sleep at night.

“The elite and the bankers have taken over the monetary system and are running it into the ground”….. is too painful to consider.

This system is a “debt money system” with “fractional reserve banking” practices. It HAS to fail.

And WHILE it’s failing….. just click your heels together three times and say “it’s only inflation…it’s only inflation…it’s only inflation..”

” the fed will save us!” LMFAO.

http://video.google.ca/videose.....&aq=f#
Paulson is an idiot Says:
September 16th, 2008 at 10:27 pm
Its not complicated.

There are exactly TWO things that can happen if we continue to follow the destroyed system.

1) Every bank in the nation fails and therefore there are no more banks.

2) The financial institutions are bailed out by the government, and a hyper-inflationary breakdown makes the dollar 100% worthless (except as a fire starter; I wouldn’t use them for toilet paper because they are normally very dirty).

Who has spent most of his life trying to warn about this broken down economy? One man. Yes, only ONE. http://www.larouchepac.com/

Everybody else is relatively very late to the party.
Paulson is an idiot Says:
September 16th, 2008 at 10:45 pm
I knew these people were stupid before watching this video.

But I had no idea just HOW clueless they really are.

They totally and utterly lack a CONCEPT of what the nature of this crisis really is. They have a second grader’s understanding of it. Its breathtaking.

They’re understanding of “economics” is that it is largely “psychological”?

Its like a farmer from Salem Massachusetts thinking his crops have failed due to Witches and evil spirits.

Stupidity can last for quite some time if it is supported. But EVENTUALLY, stupidity has a PRICE. We are now paying that price. But if this stupidity continues, you WILL NOT have to worry about Gramm, because the dollar will not be worth a damn thing in 6 months.

http://www.larouchepac.com/
jonny Says:
September 17th, 2008 at 12:00 am
I am an Ambassador from the Kingdom of Heaven created by G-d for his purpose and the Bible is Basic Instructions Befor Leaving Earth .. I have no use for wealth of Land or Gold NOTHING TO WORRY ABOUT …
MAR Says:
September 17th, 2008 at 2:09 am
Abel: Are you a professor? Do you know what you are talking about or only an opinion? Are you a learned person or just some guy talking? I would like to know about your schooling background…you sound like a Partisan? Answer please…
Abel Says:
September 18th, 2008 at 1:33 am
@MAR

No, I’m not a professor. Do I sound that smart, or that stupid? Do you have an issue with what I wrote? Do you want to defend Krugman? I am studying economics, though not institutionally. Most of the important writings are online or at the library. You just have to read them. I’m still working on it. Most of what I’ve read so far has been from the Austrian school. I find Keynesianism hard to swallow after reading Bastiat’s “What Is Seen And What Is Not Seen”.

I didn’t think I was saying anything too controversial, nothing that would brand me a partisan, by calling Think Progress and the Daily Kos partisan leftys. Maybe you see it differently, but all the talk I see on leftist blogs is talk about not enough regulation, the evils of deregulation. No mention about how the current crisis could also be blamed on monetary policy, which it could. No mention about how the laws and regulations still in force could also be blamed, which they could. Think Progress might be better, but most of the lefty blogs I read spent a bunch of time getting anti-war Dems elected in 2006 only to roll over when it was clear Congress wasn’t going to do anything about the war. It became clear to me then that the majority of the blogs were partisan when I thought they were principled. Not that I think being partisan is inherently bad, I just thought most of those writers cared more about ending the war than about being Democrats.

My last point was maybe a bit off topic, and, in light of the magnitude of the current crisis, possibly irrelevant. The point is, if we had hard money, or even just a much less inflationary monetary policy, average middle americans would just save money for retirement. Inflation had been so high, though, that average americans are putting their retirement money into the stock market in an attempt to get a return that actually keeps their money from losing value to inflation. By definition, I mean “inflation” as an increase in the money supply. It’s my own idea, though I’m sure someone else has thought of it, and it kind of parallels the statistic that the saving rate goes down as the inflation rate goes up. Please blast it apart if you think it’s wrong.

Please argue if you disagree. But asking for someone’s credentials on Prison Planet seems odd to say the least .