All Gramm and No Leach?
Amidst the financial crisis, former Senator Phil Gramm has received a good drubbing in the press for his top billing on the legislation often claimed – perhaps inaccurately – to have laid the groundwork for Wall Street’s recent collapse: the Gramm-Leach-Bliley Act. The latter, of course, famously repealed the Depression-era Glass-Steagall Act and its wall of separation between investment and commercial banking.
By contrast, little criticism seems to have been directed at former Congressman Jim Leach (R-Iowa), long-time chair of the Banking Committee, and lead sponsor of the legislation in the House.
At first glance, one might credit this discrepancy to Gramm’s prominent role in Senator McCain’s presidential campaign. But Leach has arguably been no less important a figure in the present election cycle, as one of the two most prominent Republicans (along with former Senator Lincoln Chafee) to formally endorse Senator Obama’s candidacy – as well as a primetime speaker at the Democratic National Convention.
Various other factors might help to explain the relative focus on Gramm versus Leach: Gramm is a sharply polarizing political figure, while Leach is almost academic in his public demeanor. Gramm has been a far more visible surrogate for his candidate than Leach for his. And, of course, Gramm called us “a nation of whiners,” while Leach has managed to avoid such gaffes.
Most important, though, may be the relevant context: Gramm was a central player in the broad advance of deregulatory initiatives in the 1980s and 1990s. A former academic, he played an influential role in advancing that agenda, as an evangelist, as much as anything else. In a sense, then, critiques of Gramm-Leach-Bliley might properly – and far more significantly – be understood as wholesale critiques of the program of deregulation, a program far more closely associated with Senator Gramm than Congressman Leach.
And, in case you were wondering, Bliley really has disappeared…