Creditworthy

Phil Gramm -- erstwhile Enron crook, who was last seen taking huge checks from UBS as its Vice Chairman, the giant bank writing off billions lost in the subprime mortgage shitpile and being pursued by federal investigators for criminal violations in that connection -- is John McCain's top economic adviser, as well as the campaign's national co-chair.

Good ol' Phil was caught expressing his true feelings the other day in an interview, when he opined that the country's economic problems are in our imaginations and that we are a nation of whiners. I don't think he actually said "let them eat cake", but this was certainly his intended message.

McCain's response: Phil Gramm "doesn't speak for me. I speak for me." Inconveniently however, at the exact moment that McCain said this, Phil Gramm was in New York explaining John McCain's economic plan to the Wall Street Journal's editorial board. On behalf of John McCain.

Most of the coverage I've seen of this story focuses on how this incident damages McCain in the "horserace" sense. No major newspapers appear to be pointing out that Gramm -- as the top economics adviser for a candidate that, by his own admission, knows next to nothing about economics -- has had, and will have, a key role in forming McCain's actual economic policies. And since Gramm believes there are no problems with the economy, it seems very likely that he also believes that nothing need be done to address these (nonexistent) problems.

Oh, and also, Phil Gramm is a complete moron. In addition to the rather salient facts that fuel costs have doubled within the last several months, the devaluation of the dollar continues, the Dow is below 11,000 for the first time in 2 years, homeowners have lost about $1 trillion dollars in equity over the last two years, unemployment numbers are the highest in years (and rising), and the federal deficit is huge and getting more monstrously huge with no end in sight -- I say, in addition to all of these facts which the expert economist Phil Gramm appears to not be aware -- just yesterday, I see this story in Fortune.

The article is entitled "The Fannie and Freddie doomsday scenario". It begins with this: "Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect you, the taxpayer?" (and today I see that these stocks have lost have their value in like 2 days.) Apparently they are already "insolvent" (i.e., cannot make payments as they fall due).

Fortune goes on to detail how these two companies are so crucial to the mortgage industry (and the credit market in general) that they cannot be allowed to fail.

The last paragraph of the article is as follows (Phil Gramm, are you paying attention?):

The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report [by Standard & Poor's] went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States. [!!!]