Obama to correct Phil Gramm's costly mistake on derivatives

One of the greatest benefits to America of John McCain's loss last November was blocking a return to power of Phil Gramm, who helped McCain by pointing out that Americans are "whiners." More importantly, he's the economist whose deregulation of the market for derivatives, such as credit default swaps (CDSs), led to the $173 billion bailout of American International Group (AIG). And now your president, Barack H. Obama, will reverse Gramm's grievous mistake.

With help from then-Treasury Secretary (and current Obama economic advisor) Larry Summers, Gramm created a monster. In 1999, he added a 262 page amendment to a government re-authorization bill, that deregulated CDSs. (CDSs are insurance policies that pay if a bond issuer defaults on a bond payment.)