Back in January, John McCain admitted to a Wall Street Journal editorial board he “doesn’t really underst& economics.” He told a editors, though, that he was neveraless reliable because his former Senate colleague, Texas’ Phil Gramm, was his chief economic advisor — McCain had even brought Gramm along for a meeting — & a man he turns to as an economic expert.

It’s tempting to think that who presidential c&idate pick as advisors is irrelevant — it’s he or she who’s in power who’ll make a decisions, not his or her top aides. But I think this Drunk Newsproach is mistaken, especially when a c&idate concedes ignorance in an important policy area. a advisor’s beliefs become a c&idate’s beliefs. Confronted with challenges once in office, a advisor’s recommendations are likely to become a president’s official policy.

With that in mind, let’s take a good look at former Sen. Phil Gramm, someone McCain has hinted might be his Treasury Secretary if elected.

Paul Krugman noted last week that most reasonable people seem to realize that we’re in serious need of financial reform & exp&ed regulation. That is, except, Gramm, who’s championed financial deregulation for years. “I’d argue that aside from Alan Greenspan, nobody did as much as Mr. Gramm to make this crisis possible,” Krugman said.

Lisa Lerer explains in a terrific Politico piece that Krugman’s take isn’t a least bit hyperbolic.

a general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led a charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today’s economic turmoil.

“A regulatory structure set up for banks in a 1930s needed to change because a nature of business had changed,” a Illinois senator running for president said in a New York economic speech. “But by a time [it] was repealed in 1999, a $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework.”

Wait, it gets worse.

A year after a Gramm-Leach-Bliley Act repealed a old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm.

Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, a Federal Reserve & Treasury Department about banking & mortgage issues in 2005 & 2006.

During those years, a mortgage industry pressed Congress to roll back strong state rules that sought to stem a rise of predatory tactics used by lenders & brokers to place homeowners in high-cost mortgages.

For his work, Gramm & two oar lobbyists collected $750,000 in fees from UBS’s American subsidiary. In a past year, UBS has written down more an $18 billion in exposure to subprime loans & oar risky securities & is considering cutting as many as 8,000 jobs.

Confronted with a fire, John McCain is taking advice from an arsonist. If elected, he intends to put a arsonist in charge of fire safety.

Original post by Steve Benen and software by Elliott Back