McCain's Love Affair with Deregulators (and Another Lie)

Wednesday, September 17, 2008 at 09:28 PM

John McCain now claims that he wants to put the clamps on Wall Street speculation and overall dangerous antics. In particular, he now claims he will "reform Wall Street" and that "he's taken on tougher guys than this before." Question: how can he reform it other than by regulating it, and how can he regulate it when all his economic advisors have made anathema to regulation a pillar of their very lives?

Phil Gramm, for God's sake? Carly Fiorina? And let's not forget the new, blonde, Fox News-like face of Nancy Pfotenhauer. In fact, let's play "who is Nancy Pfotenhauer?" According to Sourcewatch:
Nancy Pfotenhauer (nee Mitchell) was formerly executive Vice President at Citizens for a Sound Economy, President of Independent Women's Forum (IWF) and Americans For Prosperity. She is currently working as an advisor to Sen. John McCain.[1]

She started her career as graduate research assistant to Walter Williams around 1980 at George Mason University, where she was taking an MA in economics.

Walter Williams? Really? Isn't that who Ron Paul thought would make a good running mate? And what exactly is the Citizens for a Sound Economy? Again, according to Sourcewatch:
Citizens for a Sound Economy (CSE) is a powerful industry-funded think tank, promoting deregulation. It was founded by Koch Industries interests and continues to maintain strong links. In 2003, an internal rift between CSE and its affiliated Citizens for a Sound Economy Foundation led to a split in which CSEF was renamed as a separate organization, called Americans For Prosperity.

In July 2004, CSE announced it was merging with Empower America to create FreedomWorks. [1]


CSE is often described as a "consumer group," but according to internal documents leaked to the Washington Post, 85 percent of its 1998 funding came from major corporations. "The 'citizens' in question [are] companies like Amoco, Bell Atlantic, Citibank, General Electric and General Motors", Washington Babylon explains (p. 15). "During recent years, the CSE, headed by C. Boyden Gray, who acted as counsel to the president under George W. Bush, has opposed health care reform and a rise in the minimum wage, while championing corporate tax cuts, deregulation and a balanced budget."



In 1984 Charles G. Koch, David H. Koch and J. P. Humphries asked Rich Fink to develop a concept for a new organization that could advocate free-market policies effectively in Washington. Fink (now executive vice president at Koch Industries) produced a 110-page business plan and the CSE, along with the CSE Foundation, started operations later that year. Fink became the first president. Ever since, Koch Industries and the Koch Family Foundations have continued to give substantial financial support to the CSE and the CSE Foundation.

Pfotenhauer beat the "McCain will reform them" theme during her appearance on Chris Matthews. SOOOOO, McCain employs Pfotenhauer to get out his economic message, part of which is purportedly that he wants to have reasonable regulation of Wall Street, despite the fact that Pfotenhauer learned at the knee of Walter Williams, has a long, unbroken history of opposing regulation per se, and was Exec VP at a group essentially started by the Koch brothers who couldn't be more hostile to government regulation if they were physically allergic to it. Not to mention that Koch Industries is an oil & gas giant--can you say "drill now, drill here, drill forever?"

Maybe it's a double negative kind of thing. You know, one anti-regulation adviser means you have a negative view of regulations, but two negatives is the same as a positive, so if you combine Gramm and Pfotenhauer, they advocate regulation? Maybe? Or maybe it's just another lie.

On a snarky plane, is there a robo-warehouse where they turn out the Coulter/Ingraham/Pfotenhauer model of attack dog?


You must have mentioned Ron Paul to attract Ron Paul trollers. Of course it worked. So heres my two cents-- regulators are bums, bums as big as the bum businessmen that pay them off. Do you really think that if we make the regulations more complex, that will make the regulators more honest? Nope. It will make them rush out for consulting jobs in major companies, helping them 'navigate' new regulations. They will get five times the pay and then maybe they will re-enter the regulatory bureaucracy in a few years, a little higher up the food chain, with lots of corporate friends to pay off. Elliot Ness was as rare as Ron Paul. Dont design an economic policy around the dream that all the regulatory agents are Elliot Ness. THey arent. They have the same debts and loans and weaknesses as the rest of us.

Actually, attracting Paulites wasn't a goal but I wasn't trying to avoid it either. And I appreciate the fact that you articulated your disagreement in specifics and with civility.

I agree with a lot of your concerns about regulation, but I don't think the solution can ever be to simply give up and let the corporate types reign free. That's a far bigger nightmare than trying to get the regulations to work. Do you think the solution to toxic products from China is to simply say "that's life" and leave everyone to fend for themselves?

The solution isn't "more complex" regulation; it's more effective regulation, which often means simpler regulation. For example, there was nothing complex about prohibiting banks from also engaging in the insurance and/or securities business. That was simple and it was effective for many, many years until folks who despise regulations bought their way out of Glass-Steagall.

I'm not naive enough to think that you simply pass a regulation and can then go to sleep as the reg somehow enforces itself. The regulations need to be simple enough for everyone to know what they mean, the regulators need to be watched (having intelligent people NOT from the regulated industry in high positions would help a lot), and the legislators need to have their own oversight actions open to scrutiny from the public. All these things can be accomplished if all the disgruntled voters could agree on the need for them and committed ourselves to finding and voting for candidates who will advocate for them.

But after all is said and done, my point in the post was not to prescribe what needs to be done to keep Wall Street from continually shooting itself and all the rest of us in our collective feet, but to point out the absurdly obvious contradiction between what McCain says he's going to do and what he's likely to actually do, given the philosophies that predominate in his inner circle.