Obama’s search for an economic scapegoat either belies his utter economic ignorance or only seeks to manipulate the crisis for his political gain; a task the larger media is only too willing to assist.

His latest attempt is to blame Graham who pushed a deregulatory banking effort under the Clinton era (with strong Clinton and Democratic support). Conveniently Graham is an advisor to McCain.

Contrary to Obama’s ignorant rants, Graham’s reforms provided the backbone for the resolution of the current crisis, not its cause.

The 1999 Gramm-Leach-Bliley bank-deregulation bill eliminated the existing walls between financial institutions. Such diversified financial institutions have performed much better than most. Bank of America’s acquisition of Merrill Lynch would not have been possible before Gramm’s deregulation. J.P. Morgan wouldn’t have taken over Bear Stearns, and Barclays Bank would not have been allowed to buy Lehman Brothers.

Goldman Sachs and Morgan Stanley have become traditional bank holding companies. Investment banking is dead. Would we prefer to force these two strong companies to remain in a model that no longer works?

In fact the sectors with the most regulations have performed the poorest. The unregulated world of hedge funds and private equity seems to be performing much better than the more regulated world of commercial and investment banking.

In fact the one area of regulation most controlled by Congress,the oversight of Fannie Mae was in fact the biggest disaster of all. Obama will find his own party’s fingerprints all over this smoking gun.