Phil Gramm
Encyclopedia
William Philip "Phil" Gramm (born July 8, 1942) is an American economist and politician
, who has served as a Democratic
Congressman
(1978–1983), a Republican
Congressman (1983–1985) and a Republican Senator
(1985–2002) from Texas
. He was a senior economic adviser to John McCain
's presidential campaign from the summer of 2007 until July 18, 2008.
on July 8, 1942, and grew up in nearby Columbus
.
Soon after his birth, Gramm's father Kenneth suffered a stroke
and was partially paralyzed. He died when Gramm was 14. Gramm's mother, Florence Gramm, worked double shifts as a nurse to supplement the veteran
s disability
pension
.
Gramm attended public schools, graduated 1961 from Georgia Military Academy (now Woodward Academy
), and graduated 1964 from the University of Georgia
. He received a doctorate
in economics
from the University of Georgia
's Terry College of Business
in 1967
He then taught economics at Texas A&M University
from 1967 to 1978. In addition to teaching, Gramm founded the economic consulting firm Gramm & Associates (1971–1978).
, which stretched from the Fort Worth suburbs to College Station. He was reelected to his House seat as a Democrat in 1980.
In 1981, he co-sponsored the Gramm-Latta Budget
which implemented President
Ronald Reagan
's economic program, increased military spending, cut other spending, and mandated the Economic Recovery Tax Act of 1981 (the Kemp-Roth Tax Cut).
Just days after being reelected in 1982, Gramm was thrown off the House Budget Committee
for supporting Reagan's tax cuts. In response, Gramm resigned his House seat on January 5, 1983. He then ran as a Republican for his own vacancy in a special election held on February 12, 1983, and won rather handily. One of his opponents was the former and future State Representative
Dan Kubiak
of Rockdale
, Texas. Gramm became the first Republican to represent the district since its creation.
After he left the House the seat was retained for the Republican party by Joe Barton
.
.
He defeated Congressman Ron Paul
, former gubernatorial nominee Henry Grover
, Robert Mosbacher, Jr.
, of Houston
, and lots of other contenders in the primary
. He then faced the Democratic nominee, State Senator Lloyd Doggett
of Austin
in the general election
for the right to succeed retiring Republican Senator John G. Tower.
Gramm polled 3,116,348 votes (58.5 percent) to Doggett's 2,207,557 (41.5 percent). Gramm was the first U.S. Senate candidate in the history of Texas to receive more than three million votes.
Gramm served on the Senate Budget Committee from 1989 until leaving office in 2003.
Gramm and Senators Fritz Hollings and Warren Rudman
devised a means of cutting the budget through across-the-board spending cuts if deficit-reduction targets were not met.
They were successful in making the Gramm-Rudman-Hollings Act law, although portions were ruled unconstitutional.
In the years following the passage of the Act, other sections were largely superseded by other budget-controlling mechanisms.
In 1990 Gramm failed in an effort to amend the Iraq
International Law
Compliance Act of 1990.
An earlier amendment to the act, the D’Amato Amendment, prohibited the US from selling arms or extending any sort of financial assistance to Iraq unless the President could prove Iraq was in “substantial compliance” with the provisions of a number of human rights conventions, including the Genocide Convention.
After reading the D’Amato Amendment, Gramm introduced his own amendment to counter the human rights sanctions in the D’Amato Amendment.
Gramm’s amendment would have allowed the Bush administration to waive the terms of the D'Amato Amendment if it found that sanctions against Iraq hurt US businesses and farms more than they hurt Iraq.
In the end, the bill passed the Senate without Gramm's amendment only a week before Saddam Hussein
invaded
Kuwait
.
Gramm won his second Senate term in 1990 with a victory over Democratic State Senator and former Fort Worth Mayor
Hugh Parmer
.
Gramm polled 3,027,680 votes (60.2 percent) to Parmer's 1,429,986 (37.4 percent), again receiving more than three million votes.
Between 1995 and 2000, Gramm was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
During that time he spearheaded efforts to pass banking deregulation
laws, including the landmark Gramm-Leach-Bliley Act
in 1999, which removed Depression-era laws separating banking, insurance and brokerage activities.
As a senator, Gramm often called for reductions in taxes and fraud in government spending.
He employed his "Dickey Flatt Test" ("Is it worth taking it out of Dickey's pocket?") to determine if federal programs were worthwhile.
Richard "Dickey" Flatt owns a family run printing business started by his father and mother in Mexia, Texas, and is a longtime Gramm supporter".
In Gramm's eyes, Flatt embodied the burdens that a typical Texas independent small businessman faced in the realm of taxation and government spending.
Gramm ran unsuccessfully for the Republican Party nomination in the 1996 presidential election, for which he had raised $8 million as early as July 1994.
Although he began the race with a full war-chest and tied for first place with Dole in the 1995 Iowa Straw Poll, his campaign was fatally wounded when in an upset he lost the Louisiana Caucus on February 7, 1996 to Pat Buchanan (the final delegate count was 13-8). New Orelans Times Picayune political columnist Otis Pike noted the loss could be traced to the passion of the supporters for Buchanan compared to those for Gramm. "Gramm should have won the Louisiana caucuses - but didn't, because the religious right turned out to vote in larger numbers." This poor showing in a state adjacent to Texas plus placing 5th in Iowa's caucuses resulted in Gramm's withdrawal from the contest on the Sunday before the New Hampshire primary
.
He threw his support to senatorial colleague Robert J. Dole of Kansas.
Gramm, a proponent of free trade
, also lashed out at Republican Patrick J. Buchanan, arguing that Buchanan was a "protectionist
".
After exiting the presidential race, Gramm defeated Victor Morales
of Dallas
in November 1996 to win his third and final term in the Senate.
Gramm was one of five co-sponsors of the Commodity Futures Modernization Act of 2000
.
One provision of the bill is often referred to as the "Enron loophole
" because some critics blame the provision for permitting the Enron scandal
to occur.
In December 2002, Gramm left his Senate seat a few weeks before the expiration of his term in hopes that his successor, fellow Republican John Cornyn
, could gain seniority over other newly elected senators.
However, Cornyn did not gain additional seniority due to a 1980 Rules Committee
policy.
— was significantly to blame for the 2007 subprime mortgage crisis
and 2008 global economic crisis. The Act is most widely known for repealing portions of the Glass–Steagall Act, which had regulated the financial services industry. The Act passed the House and Senate by an overwhelming majority on 4 November 1999.
Gramm responded in March 2008 to criticism of the act by stating that he saw "no evidence whatsoever" that the sub-prime mortgage crisis was caused in any way "by allowing banks and securities companies and insurance companies to compete against each other."
Gramm's support was later critical in the passage of the Commodity Futures Modernization Act of 2000
, which kept derivatives transactions, including those involving credit default swaps, free of government regulation.
In its 2008 coverage of the financial crisis, The Washington Post
named Gramm one of seven "Key Players In the Battle Over Regulating Derivatives", for having "[p]ushed through several major bills to deregulate the banking and investment industries, including the 1999 Gramm-Leach-Bliley act that brought down the walls separating the commercial banking, investment and insurance industries".
2008 Nobel Laureate
in Economics Paul Krugman
, a supporter of Barack Obama
and former President Bill Clinton
, described Gramm during the 2008 presidential race as "the high priest of deregulation," and has listed him as the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan
.
On October 14, 2008, CNN
ranked Gramm number seven in its list of the 10 individuals most responsible for the current economic crisis.
In January 2009 Guardian
City editor Julia Finch identified Gramm as one of twenty-five people who were at the heart of the financial meltdown.
Time included Gramm in its list of the top 25 people to blame for the economic crisis.
’s presidential campaign and his most senior economic adviser from the summer of 2007 until July 18, 2008.
In a July 9, 2008 interview on McCain's economic plans, Gramm explained the nation was not in a recession
, stating, "You've heard of mental depression
; this is a mental recession."
He added, "We have sort of become a nation of whiners, you just hear this constant whining, complaining about a loss of competitiveness, America in decline."
Gramm's comments immediately became a campaign issue.
McCain's opponent, Senator Barack Obama
, stated, "America already has one Dr. Phil. We don't need another one when it comes to the economy. ... This economic downturn is not in your head."
McCain strongly denounced Gramm's comments.
On July 18, 2008 Gramm stepped down from his position with the McCain campaign.
Explaining his remarks, Gramm stated that he had used the word "whiners" to describe the nation's politicians rather than the public, stating "the whiners are the leaders."
In the same interview, Gramm said, "I'm not going to retract any of it. Every word I said was true."
as a Vice Chairman of the Investment Bank
division.
UBS.com states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."
He joined UBS in 2002 immediately after retiring from the Senate.
, outside San Antonio
, Texas. He is married to Dr. Wendy Lee Gramm
, a native of Hawaii
, who is associated with George Mason University
's Mercatus Center
in Virginia. They are the parents of two sons: Marshall Gramm, a professor
of economics
at Rhodes College
in Memphis
, Tennessee
, and Jeff Gramm, who has played in the indie pop band Aden
.
Politician
A politician, political leader, or political figure is an individual who is involved in influencing public policy and decision making...
, who has served as a Democratic
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
Congressman
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
(1978–1983), a Republican
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
Congressman (1983–1985) and a Republican Senator
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
(1985–2002) from Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. He was a senior economic adviser to John McCain
John McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
's presidential campaign from the summer of 2007 until July 18, 2008.
Early life and university career
Gramm was born in Fort Benning, GeorgiaGeorgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
on July 8, 1942, and grew up in nearby Columbus
Columbus, Georgia
Columbus is a city in and the county seat of Muscogee County, Georgia, United States, with which it is consolidated. As of the 2010 census, the city had a population of 189,885. It is the principal city of the Columbus, Georgia metropolitan area, which, in 2009, had an estimated population of 292,795...
.
Soon after his birth, Gramm's father Kenneth suffered a stroke
Stroke
A stroke, previously known medically as a cerebrovascular accident , is the rapidly developing loss of brain function due to disturbance in the blood supply to the brain. This can be due to ischemia caused by blockage , or a hemorrhage...
and was partially paralyzed. He died when Gramm was 14. Gramm's mother, Florence Gramm, worked double shifts as a nurse to supplement the veteran
Veteran
A veteran is a person who has had long service or experience in a particular occupation or field; " A veteran of ..."...
s disability
Disability
A disability may be physical, cognitive, mental, sensory, emotional, developmental or some combination of these.Many people would rather be referred to as a person with a disability instead of handicapped...
pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
.
Gramm attended public schools, graduated 1961 from Georgia Military Academy (now Woodward Academy
Woodward Academy
Woodward Academy is an independent, co-educational college-preparatory school for grades Pre-Kindergarten to 12 located in College Park, Georgia, within the Atlanta metropolitan area...
), and graduated 1964 from the University of Georgia
University of Georgia
The University of Georgia is a public research university located in Athens, Georgia, United States. Founded in 1785, it is the oldest and largest of the state's institutions of higher learning and is one of multiple schools to claim the title of the oldest public university in the United States...
. He received a doctorate
Doctorate
A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder to teach in a specific field, A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder...
in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
from the University of Georgia
University of Georgia
The University of Georgia is a public research university located in Athens, Georgia, United States. Founded in 1785, it is the oldest and largest of the state's institutions of higher learning and is one of multiple schools to claim the title of the oldest public university in the United States...
's Terry College of Business
Terry College of Business
The C. Herman and Mary Virginia Terry College of Business is the business school at the University of Georgia in Athens, Georgia. The Terry College is the flagship business school in the state of Georgia and one of 16 schools and colleges at the oldest state-chartered public university in the...
in 1967
He then taught economics at Texas A&M University
Texas A&M University
Texas A&M University is a coeducational public research university located in College Station, Texas . It is the flagship institution of the Texas A&M University System. The sixth-largest university in the United States, A&M's enrollment for Fall 2011 was over 50,000 for the first time in school...
from 1967 to 1978. In addition to teaching, Gramm founded the economic consulting firm Gramm & Associates (1971–1978).
United States House of Representatives
In 1976, Gramm unsuccessfully challenged Texas Democratic Senator Lloyd M. Bentsen, in the party's senatorial primary. Then in 1978 Gramm successfully ran as a Democrat for Representative from Texas's 6th congressional districtTexas's 6th congressional district
Texas District 6 of the United States House of Representatives is a Congressional district that serves an area including four counties to the south of the Dallas/Fort Worth area plus the southeast corner of Tarrant County. As of the 2000 census, District 6 represents 651,620 people...
, which stretched from the Fort Worth suburbs to College Station. He was reelected to his House seat as a Democrat in 1980.
In 1981, he co-sponsored the Gramm-Latta Budget
Gramm-Latta Budget
The Gramm-Latta Budget 1981 and the Gramm-Latta Omnibus Reconciliation Bill of 1981, sponsored by Representatives Phil Gramm and Delbert Latta , implemented President Ronald Reagan's economic program. This included an increase in military spending and major cuts in discretionary and entitlement...
which implemented President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
's economic program, increased military spending, cut other spending, and mandated the Economic Recovery Tax Act of 1981 (the Kemp-Roth Tax Cut).
Just days after being reelected in 1982, Gramm was thrown off the House Budget Committee
United States House Committee on the Budget
The U.S. House Committee on the Budget, commonly known as the House Budget Committee, is a standing committee of the United States House of Representatives, the lower house of Congress...
for supporting Reagan's tax cuts. In response, Gramm resigned his House seat on January 5, 1983. He then ran as a Republican for his own vacancy in a special election held on February 12, 1983, and won rather handily. One of his opponents was the former and future State Representative
Texas House of Representatives
The Texas House of Representatives is the lower house of the Texas Legislature. The House is composed of 150 members elected from single-member districts across the state. The average district has about 150,000 people. Representatives are elected to two-year terms with no term limits...
Dan Kubiak
Dan Kubiak
Daniel James Kubiak was an educator and businessman from Rockdale, Texas, who served as a Democratic member of the Texas House of Representatives from 1969 to 1983 and again from 1991 until his death in office...
of Rockdale
Rockdale, Texas
Rockdale is a city in Milam County, Texas, United States. The population was 5,440 at the 2000 census.Rockdale was the site of a large Alcoa smelting operation, which could produce 1.67 million pounds of aluminum per day. The ALCOA plant was closed in late 2008 - early 2009.Author George Sessions...
, Texas. Gramm became the first Republican to represent the district since its creation.
After he left the House the seat was retained for the Republican party by Joe Barton
Joe Barton
Joseph Linus "Joe" Barton is a Republican politician, representing in the U.S. House of Representatives since 1985, and a member of the Tea Party Caucus...
.
United States Senate
In 1984, Gramm was elected as a Republican to represent Texas in the U.S. SenateUnited States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
.
He defeated Congressman Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
, former gubernatorial nominee Henry Grover
Henry Grover
Henry Cushing "Hank" Grover , was a conservative politician from the U.S. state of Texas best known for his relatively narrow defeat as the Republican gubernatorial nominee in 1972. Grover was born in Corpus Christi. He died in Houston of Alzheimer's disease.Grover lived as a youth in San Antonio...
, Robert Mosbacher, Jr.
Robert Mosbacher, Jr.
Robert Adam Mosbacher, Jr. is a Houston businessman and is the former head of the Overseas Private Investment Corporation , a US government agency aimed at promoting development by working with the private sector. Nominated by President George W. Bush, Mr...
, of Houston
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
, and lots of other contenders in the primary
Primary election
A primary election is an election in which party members or voters select candidates for a subsequent election. Primary elections are one means by which a political party nominates candidates for the next general election....
. He then faced the Democratic nominee, State Senator Lloyd Doggett
Lloyd Doggett
Lloyd Alton Doggett II is the U.S. Representative for , serving since 2005. He previously represented from 1995 to 2005. He is a member of the Democratic Party...
of Austin
Austin, Texas
Austin is the capital city of the U.S. state of :Texas and the seat of Travis County. Located in Central Texas on the eastern edge of the American Southwest, it is the fourth-largest city in Texas and the 14th most populous city in the United States. It was the third-fastest-growing large city in...
in the general election
General election
In a parliamentary political system, a general election is an election in which all or most members of a given political body are chosen. The term is usually used to refer to elections held for a nation's primary legislative body, as distinguished from by-elections and local elections.The term...
for the right to succeed retiring Republican Senator John G. Tower.
Gramm polled 3,116,348 votes (58.5 percent) to Doggett's 2,207,557 (41.5 percent). Gramm was the first U.S. Senate candidate in the history of Texas to receive more than three million votes.
Gramm served on the Senate Budget Committee from 1989 until leaving office in 2003.
Gramm and Senators Fritz Hollings and Warren Rudman
Warren Rudman
Warren Bruce Rudman is an American attorney and Republican politician who served as United States Senator from New Hampshire between 1980 and 1993...
devised a means of cutting the budget through across-the-board spending cuts if deficit-reduction targets were not met.
They were successful in making the Gramm-Rudman-Hollings Act law, although portions were ruled unconstitutional.
In the years following the passage of the Act, other sections were largely superseded by other budget-controlling mechanisms.
In 1990 Gramm failed in an effort to amend the Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
International Law
International law
Public international law concerns the structure and conduct of sovereign states; analogous entities, such as the Holy See; and intergovernmental organizations. To a lesser degree, international law also may affect multinational corporations and individuals, an impact increasingly evolving beyond...
Compliance Act of 1990.
An earlier amendment to the act, the D’Amato Amendment, prohibited the US from selling arms or extending any sort of financial assistance to Iraq unless the President could prove Iraq was in “substantial compliance” with the provisions of a number of human rights conventions, including the Genocide Convention.
After reading the D’Amato Amendment, Gramm introduced his own amendment to counter the human rights sanctions in the D’Amato Amendment.
Gramm’s amendment would have allowed the Bush administration to waive the terms of the D'Amato Amendment if it found that sanctions against Iraq hurt US businesses and farms more than they hurt Iraq.
In the end, the bill passed the Senate without Gramm's amendment only a week before Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
invaded
Invasion of Kuwait
The Invasion of Kuwait, also known as the Iraq-Kuwait War, was a major conflict between the Republic of Iraq and the State of Kuwait, which resulted in the seven-month long Iraqi occupation of Kuwait, which subsequently led to direct military intervention by United States-led forces in the Gulf...
Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
.
Gramm won his second Senate term in 1990 with a victory over Democratic State Senator and former Fort Worth Mayor
Mayor
In many countries, a Mayor is the highest ranking officer in the municipal government of a town or a large urban city....
Hugh Parmer
Hugh Parmer
Hugh Q. Parmer is an attorney and Democratic politician in Fort Worth, Texas. He served in both houses of the Texas State Legislature, on the Fort Worth City Council, and as mayor of Fort Worth. In 1990, he was his party's unsuccessful nominee for the U.S...
.
Gramm polled 3,027,680 votes (60.2 percent) to Parmer's 1,429,986 (37.4 percent), again receiving more than three million votes.
Between 1995 and 2000, Gramm was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
During that time he spearheaded efforts to pass banking deregulation
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
laws, including the landmark Gramm-Leach-Bliley Act
Gramm-Leach-Bliley Act
The Gramm–Leach–Bliley Act , also known as the Financial Services Modernization Act of 1999, is an act of the 106th United States Congress...
in 1999, which removed Depression-era laws separating banking, insurance and brokerage activities.
He employed his "Dickey Flatt Test" ("Is it worth taking it out of Dickey's pocket?") to determine if federal programs were worthwhile.
Richard "Dickey" Flatt owns a family run printing business started by his father and mother in Mexia, Texas, and is a longtime Gramm supporter".
In Gramm's eyes, Flatt embodied the burdens that a typical Texas independent small businessman faced in the realm of taxation and government spending.
Gramm ran unsuccessfully for the Republican Party nomination in the 1996 presidential election, for which he had raised $8 million as early as July 1994.
Although he began the race with a full war-chest and tied for first place with Dole in the 1995 Iowa Straw Poll, his campaign was fatally wounded when in an upset he lost the Louisiana Caucus on February 7, 1996 to Pat Buchanan (the final delegate count was 13-8). New Orelans Times Picayune political columnist Otis Pike noted the loss could be traced to the passion of the supporters for Buchanan compared to those for Gramm. "Gramm should have won the Louisiana caucuses - but didn't, because the religious right turned out to vote in larger numbers." This poor showing in a state adjacent to Texas plus placing 5th in Iowa's caucuses resulted in Gramm's withdrawal from the contest on the Sunday before the New Hampshire primary
New Hampshire primary
The New Hampshire primary is the first in a series of nationwide political party primary elections held in the United States every four years , as part of the process of choosing the Democratic and Republican nominees for the presidential elections to be held the subsequent November.Although only a...
.
He threw his support to senatorial colleague Robert J. Dole of Kansas.
Gramm, a proponent of free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
, also lashed out at Republican Patrick J. Buchanan, arguing that Buchanan was a "protectionist
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
".
After exiting the presidential race, Gramm defeated Victor Morales
Victor Morales
Victor Morales may refer to:*Victor Morales , Democratic politician in Texas, see United States Senate elections, 1996*Victor Morales , member of the 1930 Chilean World Cup squads, see 1930 FIFA World Cup Group 1...
of Dallas
Dallas, Texas
Dallas is the third-largest city in Texas and the ninth-largest in the United States. The Dallas-Fort Worth Metroplex is the largest metropolitan area in the South and fourth-largest metropolitan area in the United States...
in November 1996 to win his third and final term in the Senate.
Gramm was one of five co-sponsors of the Commodity Futures Modernization Act of 2000
Commodity Futures Modernization Act of 2000
The Commodity Futures Modernization Act of 2000 is United States federal legislation that officially ensured the deregulation of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton...
.
One provision of the bill is often referred to as the "Enron loophole
Enron loophole
The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation....
" because some critics blame the provision for permitting the Enron scandal
Enron scandal
The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world...
to occur.
In December 2002, Gramm left his Senate seat a few weeks before the expiration of his term in hopes that his successor, fellow Republican John Cornyn
John Cornyn
John Cornyn, III is the junior United States Senator for Texas, serving since 2003. He is a member of the Republican Party. He was elected Chairman of the National Republican Senatorial Committee for the 111th U.S. Congress....
, could gain seniority over other newly elected senators.
However, Cornyn did not gain additional seniority due to a 1980 Rules Committee
United States Senate Committee on Rules and Administration
The Senate Committee on Rules and Administration is responsible for the rules of the United States Senate, with administration of congressional buildings, and with credentials and qualifications of members of the Senate, including responsibility for dealing with contested elections.The committee...
policy.
2007 mortgage and 2008 financial & economic crises
Some economists state that the 1999 legislation spearheaded by Gramm and signed into law by President Clinton — the Gramm-Leach-Bliley ActGramm-Leach-Bliley Act
The Gramm–Leach–Bliley Act , also known as the Financial Services Modernization Act of 1999, is an act of the 106th United States Congress...
— was significantly to blame for the 2007 subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
and 2008 global economic crisis. The Act is most widely known for repealing portions of the Glass–Steagall Act, which had regulated the financial services industry. The Act passed the House and Senate by an overwhelming majority on 4 November 1999.
Gramm responded in March 2008 to criticism of the act by stating that he saw "no evidence whatsoever" that the sub-prime mortgage crisis was caused in any way "by allowing banks and securities companies and insurance companies to compete against each other."
Gramm's support was later critical in the passage of the Commodity Futures Modernization Act of 2000
Commodity Futures Modernization Act of 2000
The Commodity Futures Modernization Act of 2000 is United States federal legislation that officially ensured the deregulation of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton...
, which kept derivatives transactions, including those involving credit default swaps, free of government regulation.
In its 2008 coverage of the financial crisis, The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
named Gramm one of seven "Key Players In the Battle Over Regulating Derivatives", for having "[p]ushed through several major bills to deregulate the banking and investment industries, including the 1999 Gramm-Leach-Bliley act that brought down the walls separating the commercial banking, investment and insurance industries".
2008 Nobel Laureate
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...
in Economics Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
, a supporter of Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
and former President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
, described Gramm during the 2008 presidential race as "the high priest of deregulation," and has listed him as the number two person responsible for the economic crisis of 2008 behind only Alan Greenspan
Alan Greenspan
Alan Greenspan is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC...
.
On October 14, 2008, CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
ranked Gramm number seven in its list of the 10 individuals most responsible for the current economic crisis.
In January 2009 Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
City editor Julia Finch identified Gramm as one of twenty-five people who were at the heart of the financial meltdown.
Time included Gramm in its list of the top 25 people to blame for the economic crisis.
John McCain 2008 presidential campaign
Gramm was co-chair of John McCainJohn McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
’s presidential campaign and his most senior economic adviser from the summer of 2007 until July 18, 2008.
In a July 9, 2008 interview on McCain's economic plans, Gramm explained the nation was not in a recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
, stating, "You've heard of mental depression
Depression (mood)
Depression is a state of low mood and aversion to activity that can affect a person's thoughts, behaviour, feelings and physical well-being. Depressed people may feel sad, anxious, empty, hopeless, helpless, worthless, guilty, irritable, or restless...
; this is a mental recession."
He added, "We have sort of become a nation of whiners, you just hear this constant whining, complaining about a loss of competitiveness, America in decline."
Gramm's comments immediately became a campaign issue.
McCain's opponent, Senator Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
, stated, "America already has one Dr. Phil. We don't need another one when it comes to the economy. ... This economic downturn is not in your head."
McCain strongly denounced Gramm's comments.
On July 18, 2008 Gramm stepped down from his position with the McCain campaign.
Explaining his remarks, Gramm stated that he had used the word "whiners" to describe the nation's politicians rather than the public, stating "the whiners are the leaders."
In the same interview, Gramm said, "I'm not going to retract any of it. Every word I said was true."
Current employment
As of 2009, Gramm is employed by UBS AGUBS AG
UBS AG is a Swiss global financial services company headquartered in Basel and Zürich, Switzerland, which provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland...
as a Vice Chairman of the Investment Bank
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
division.
UBS.com states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."
He joined UBS in 2002 immediately after retiring from the Senate.
Personal
Gramm lives in HelotesHelotes, Texas
Helotes is a city in Bexar County, Texas, United States. It is part of the San Antonio-New Braunfels Metropolitan Statistical Area. The population was 4,285 at the 2000 census; the July 1, 2009 Census estimate, however, showed the population had grown to 7,960.-History:According to...
, outside San Antonio
San Antonio, Texas
San Antonio is the seventh-largest city in the United States of America and the second-largest city within the state of Texas, with a population of 1.33 million. Located in the American Southwest and the south–central part of Texas, the city serves as the seat of Bexar County. In 2011,...
, Texas. He is married to Dr. Wendy Lee Gramm
Wendy Lee Gramm
Wendy Lee Gramm is an American economist and a distinguished senior scholar at George Mason University's Mercatus Center, a free-market think tank based in Washington D.C. She is also the wife of former United States Senator Phil Gramm...
, a native of Hawaii
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...
, who is associated with George Mason University
George Mason University
George Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
's Mercatus Center
Mercatus Center
The Mercatus Center at George Mason University in the United States is a non-profit market-oriented research, education, and outreach think tank affiliated with the Koch family. It works with policy experts, lobbyists, and government officials to connect academic learning and real-world practice...
in Virginia. They are the parents of two sons: Marshall Gramm, a professor
Professor
A professor is a scholarly teacher; the precise meaning of the term varies by country. Literally, professor derives from Latin as a "person who professes" being usually an expert in arts or sciences; a teacher of high rank...
of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
at Rhodes College
Rhodes College
Rhodes College is a private, predominantly undergraduate, liberal arts college located in Memphis, Tennessee, USA. Originally founded by freemasons in 1848, Rhodes became affiliated with the Presbyterian Church in 1855. Rhodes enrolls approximately 1,700 students pursuing bachelor's and master's...
in Memphis
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
, and Jeff Gramm, who has played in the indie pop band Aden
Aden (band)
Aden is a band currently based in Washington, D.C. which is heavily influenced by 1970s soft rock such as Steely Dan .-History:...
.
Quotations
- "If you are willing to tackle the tough issues, you don't need to worry about stepping on anyone's toes; they will stand aside and shove you to the front." — As quoted by former Gramm staffer Wayne A. AbernathyWayne A. AbernathyWayne A. Abernathy is a United States economist and congressional staffer who served as Assistant Secretary of the Treasury for Financial Institutions from 2002 to 2005.-Biography:Wayne A...
; September 12, 2002, before the Senate Committee on Banking, Housing and Urban Affairs.
- "I have as many guns as I need, but I don't have as many guns as I want."
- About Gramm, Representative Marvin LeathMarvin LeathJames Marvin Leath was a U.S. Representative from Texas.Born in Henderson, Texas, Leath attended the Rusk County public schools.He graduated from Henderson High School, 1949.He attended Kilgore Junior College....
said, "You can think whatever you like about Phil Gramm, but remember two things: He's smarter than you are, and he's tougher than a junkyard dog."
- "I wrote the first Reagan budget -- the Gramm-Latta BudgetGramm-Latta BudgetThe Gramm-Latta Budget 1981 and the Gramm-Latta Omnibus Reconciliation Bill of 1981, sponsored by Representatives Phil Gramm and Delbert Latta , implemented President Ronald Reagan's economic program. This included an increase in military spending and major cuts in discretionary and entitlement...
that rebuilt national defense and that laid the foundation for a program of peace through strengthPeace through strength"Peace through strength" is a conservative slogan supporting military strength for the purpose of creating peaceful international relations.For supporters of the MX missile in the 1970s, the missile symbolized "peace through strength." The phrase was popular in political rallies during 1988...
; the Reagan program that tore down the Berlin Wall, that liberated Eastern Europe, that transformed the Soviet Union and that changed the world."
- "In economics, we define labor exploitation as paying people less than their marginal value product. I recently told Ed Whitacre [former CEO of AT&T, who retired with a $158 million pay package] he was probably the most exploited worker in American history because he took Southwestern Bell, which was the smallest of the former Bell companies, and he turned it into the dominant phone company on earth. His severance package should have been billions."
- "We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness."
- "If we should vote next week on whether to begin producing cheese in a factory on the moon, I almost certainly would oppose it...On the other hand, if the government decided to institute the policy, it would be my objective to see that a Texas contractor builds this celestial cheese plant, that the milk comes from Texas cows, and that the Earth distribution center is located in Texas."