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John McCain’s Gramm Gamble The GOP presidential nominee is relying on the ex-senator who helped bring you the mortgage crisis and Rick Perry. By PATRICIA KILDAY HART Phil Gramm is the co-chair of John McCain’s presidential campaign. photo by Timothy A. Clary/AFP/Getty Images IIn the early evening of Friday, December 15, 2000, with Christmas break only hours away, the U.S. Senate rushed to pass an essential, 11,000-page government reauthorization bill. In what one legal textbook would later call “a stunning departure from normal legislative practice,” the Senate tacked on a complex, 262-page amendment at the urging of Texas Sen. Phil Gramm. There was little debate on the floor. According to the Congressional Record, Gramm promised that the amendmentalso known as the Commodity Futures Modernization Actalong with other landmark legislation he had authored, would usher in a new era for the U.S. financial services industry. 4 THE TEXAS OBSERVER MAY 30, 2008 “The work of this Congress will be seen as a watershed where we turned away from an outmoded Depression-era approach to financial regulation and adopted a framework that will position our financial services industry to be world leaders into the new century,” Gramm said. Watershed indeed. With the U.S. economy now battered by a tsunami of mortgage foreclosures, the $30-billion Bear Stearns Companies bailout and spiking food and energy prices, many congressional leaders and Wall Street analysts are questioning the wisdom of the radical deregulation launched by Gramm’s legislative package. Financial wizard Warren Buffett has labeled the risky new investment instruments Gramm unleashed “financial weapons of mass destruction:’ They have fed the subprime mortgage crisis like an accelerant. While his distracted peers