Chris Dodd in Action – Too Little, Too Late

Pam Meister

Chris Dodd wants swift action regarding the financial pickle that Wall Street is in after a string of failures of key financial institutions, including the government agencies Fannie Mae and Freddie Mac.

Upon suggesting an alternative to the Bush administration’s proposed $700 billion bailout, Dodd says, “Nothing has been resolved but, overall, I think members believe we need to do something.” He added, “We understand the gravity of the moment. We don’t have a lot of time. We want to act, but we want to act responsibly.”

I’m pleased to know that Dodd, head of the Senate Banking Committee (and my senator as well), is ready to take the lead. But why now, when the horse is already out of the barn? I realize the self-proclaimed “dark horse” candidate in the Democrat primary was busy campaigning for the presidency for a year or so, but he dropped out of the race back in January after a dismal showing in Iowa (despite having moved his family there in an attempt to suck up to Iowans). So he’s had plenty of time to get back in the saddle.

Connecticut’s “other” senator was among the first to begin bashing the Bush administration for its $700 billion bailout proposition. "It would do nothing, in my view, to let a single family save a home. It would do nothing to stop a CEO from dumping billion dollars of toxic assets on the back of American taxpayers," Dodd said.

Forgive me for being just a wee bit cynical. Dodd was the top recipient of campaign donations from Fannie Mae and Freddie Mac over the last ten years – to the tune of nearly $134, 000. Plus, where was he when the Bush administration proposed a new agency to oversee Fannie Mae and Freddie Mac back in 2003? Had it passed,

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

John McCain tried to spearhead reform too, back in 2006. Where was Dodd?

I feel like I’m reading one of those Where’s Waldo? books. Only instead of having to find Waldo in his silly striped hat in fun places like carnivals and circuses, one has to find the silver-maned Dodd in the maze of rats known as Washington D.C.

You’ll remember too, that Dodd was one of Countrywide Mortgage’s special customers who received a sweet deal on his mortgage. Dodd’s reaction when the news broke out? Outrage, of course. “There was no red flag to me that we were getting special treatment,” he huffed. What, the VIP tag didn’t tell him anything? Why didn’t he ask what VIP meant? Sure, it’s possible he really didn’t know. But this is the guy we’re supposed to trust in the Senate when it comes to financial matters. I find it a little disturbing that he didn’t ask this important question about his own finances, considering his high-ranking position in the Senate and a need to avoid any appearance of conflict of interest in his personal business dealings.

Certainly, Dodd is not alone in his culpability in this failure of oversight. There’s plenty of blame to go around. But considering his stature as a senior senator and the head of the Senate Banking Committee, he certainly is at the forefront of the problem, along with his House counterpart Barney Frank – who is busy blaming the private sector for the mess: “The private sector got us into this mess; the government has to get us out of it. We do want to do it carefully.”

Another interesting point, this from Cliff Kincaid:

Dean Baker of the Center for Economic and Policy Research says that “The government should impose a modest financial transactions tax, comparable to the one in the United Kingdom. This can both restrain excessive trading and raise more than $100 billion a year in revenue.”

One cannot exclude the possibility of such a proposal being slipped into the final legislation. It is being reported that Senator Christopher Dodd, Democratic chairman of the Banking Committee, has been circulating a 44-page version of the bill. But Dodd’s Banking Committee website only has a three-page summary. What is in the rest of the proposal?

Kincaid also wonders why the bailout is being described as such:

The American people have a right to know that President Bush and Congress are officially creating a socialist America.

As Rush Limbaugh pointed out on his show yesterday, Chris Dodd should beanswering questions about this debacle, not asking them.

I’ll let noted economist Thomas Sowell have the last word:

Why…is there such a mess in the financial markets? Much of that mess is due to the very people we are now turning to for solutions – members of Congress.