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Boxer: GOP, Gramm, Greenspan caused this mess

By Josh Richman
Monday, October 6th, 2008 at 4:59 pm in Barbara Boxer, John McCain, U.S. Senate.

U.S. Sen. Barbara Boxer, D-Calif., was at the University of California, Berkeley today to tour the new Stanley Hall; escorted by Chancellor Robert Birgeneau, she heard from Institute for Quantitative Biosciences researchers who’re studying ways of converting plant matter into fuel and using bacteria to do environmental cleanup.

Then she visited a Peace and Conflict Studies class, where talk quickly turned to the financial morass gripping the United States and the world. We’re in hard times, she agreed, but all the more reason to step up the fights for energy independence and against global warming, creating green jobs in the doing.

We’ve turned into “a country that’s built on paper,” a false wealth of securititized mortgages that put us in this “house of cards,” she said. “We’ve got to get back to the basics in this country of building things and taking care of ourselves.”

Asked why Congress didn’t see the crisis coming, she replied that it had, even way back in the 1980s when the “Keating Five” — five U.S. Senators including current Republican presidential nominee John McCain, whom she didn’t mention by name — moved to suppress bank regulators, leading to the savings and loan scandal and its $125-billion taxpayer-funded bailout. “I believe that was a clue as to what was going on,” she said, and conservatives’ desire to suppress meaningful regulation never went away.

Then-U.S. Sen. Phil Gramm, among McCain’s top economic advisers this year, crusaded through the 1990s for deregulation of Wall Street, Boxer charged. And even as Congress grew concerned about out-of-control mortgage lending and passed a 1994 law giving the Federal Reserve chairman power to oversee this field, then-Fed chairman Alan Greenspan “chose not to do it — instead he said, ‘This is wonderful!’ ” Congress should’ve been looking over Greenspan’s shoulder, she acknowledged, but lawmakers already had acted and it was the executive branch’s responsibility to conduct enforcement.

Asked about today’s yo-yo-like stock market action, Boxer essentially said the market will do what it will do, but investors should take careful, measured looks at the companies in which they buy and sell rather than just acting on fear.

Boxer had issued a statement Thursday after voting for the $700 billion bailout legislation which sounded as if she’d been holding her nose when she wrote it. She reiterated Monday that she was “angry” at having to support such a bill, but the Senate at least had added crucial oversight provisions so that money won’t be used without public accountability.

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