One need only look at recent headlines to see that bigotry is alive and well in the United States. Black college students are as likely to get hired as white high school drop-outs. Women are still paid less than men, even when their performance is equal or better. And the vast majority of people incarcerated for drug crimes are people of color, even though blacks and whites use drugs at roughly the same rate. But according to former Republican Senator from Texas Phil Gramm, the United States has already beaten bigotry, with one exception. “The one form of bigotry that is still allowed in this country,” according to Gramm, “is bigotry against the successful.”
Gramm’s comments came in a House Financial Services Committee hearing on Tuesday. The hearing was meant to evaluate the Wall Street Reform and Consumer Protection Act, or Dodd-Frank for short, which passed in 2010. In the hearing, Gramm was asked a leading question by Rep. Bill Huizenga about the CEO pay ratio rule, a yet-to-be-finalized rule that would require publicly traded companies to disclose the ratio of their CEO’s pay to that of their median worker’s pay.
In an answer that ran over the allotted time, he pointed to this proposed rule as evidence of “political demagoguery” and railed against the victimization of the wealthy in America:
He also quoted his “friend” Ed Whitacre, former Chairman and CEO at AT&T, who received a $158 million pay package when he retired in 2007. Gramm said of Whitacre: ‘If there’s ever been an exploited worker…he was exploited! It was an outrage!”:
It’s worth noting that former Senator Gramm had a very significant role in the financial crisis. He and his wife Dr. Wendy Gramm, who was an Enron board member at the time, helped pass the Commodity Futures Modernization Act (CFMA). The CFMA exempted some of the riskiest kinds of derivatives from any sort of regulation, and included what came to be known as “the Enron loophole,” an exemption that President Obama blamed for allowing speculators to drive up the price of fuel. After he left the Hill in 2002, Gramm went to work for Swiss bank UBS as a lobbyist, and as of 2012 still consulted for the firm.
Senator Gramm was also responsible for the Gramm-Leach-Bliley Act, which put the final nail in the coffin of Glass-Steagall, a Depression-era law that separated boring, commercial banking from the more casino-style investment banking.
Barry Ritholtz predicted in Bloomberg that Gramm would be unapologetic about his role in the financial crisis. What neither Ritholtz nor I realized was that, in addition to being unapologetic, Gramm would be so absolutely and completely tone-deaf.