Posted on 10/08/2008 3:57:35 AM PDT by Libloather
Banking on Dodd
Ralph Nader blames "The Senator from Wall Street" for the financial mess we're in
Thursday, October 09, 2008
By Andy Bromage
Chris Dodd, the populist hero? Chris Dodd, the protector of taxpayers? Chris Dodd, the Sheriff of Wall Street? Puh-leeze.
How about, Chris Dodd the guy who helped steer us into this mess in the first place? Or, Chris Dodd the guy who spent a career passing laws friendly to banks and taking gobs of their money whenever election time rolled around?
Connecticut's senior senator enjoyed a moment of collective amnesia last week when pundits and the press gushed all over him for taking the Bush Administration's sucky, three-page bailout package and making it a little less sucky. A Hartford Courant headline blared "He Shined in Bailout Talks." The story hailed Dodd's "finest hour."
Not that Dodd doesn't deserve credit. The $700 billion bailout, er rescue, bill approved in the House and Senate last week was an improvement over the blank check power-grab that Treasury Secretary Henry Paulson wanted, the extra $100 billion in pork notwithstanding.
But Dodd's record is marked by votes to loosen controls over the banking and securities industries that his Senate Banking Committee was supposed to be overseeing. Most notably, Dodd voted to repeal the Depression-era Glass-Steagall Act, therefore allowing commercial banks, investment banks and insurance companies to merge into the risk-taking goliaths such as Washington Mutual, at the heart of this recent meltdown.
Over a career, Dodd's raked in more than $13 million from finance firms and their employees for his campaigns, the Courant reported last week, including almost $6 million in the last two years.
Independent Presidential candidate Ralph Nader, the consumer advocate whose independent research groups have long monitored Washington power brokers, says the senator should have seen this coming and done more to prevent it. We spoke by phone last week:
Advocate: Chris Dodd played a key role in shaping the final bailout bill. How did he do?
Nader: He was a bit too effusive on the floor last night. I heard the whole thing on C-SPAN radio. The one good thing he said was there's a lot more work to be done. They're going to have a major effort to re-regulate. He helped expand the bill from three-and-a-half pages to 44. He didn't mention much about the pork and the tax breaks, but he talked historically, patriotically and bi-partisanly.
The more he soared in his language, the more I was going to say, Chris, come down to Earth here. You may say (the bill has) taxpayer equity, but it's pretty ambiguous. You may say there are controls on executive compensation, but it's pretty loosey-goosey. You may say there's oversight, but it's just the good old boys watching over the good old boys.
What you haven't done is comprehensively re-regulated. And you didn't give any authority to shareholders who own the company but don't control it.
For the ($1.5 billion) Chrysler bailout (of 1979), they had volumes of congressional hearings. If they had Congressional hearings (now), they would have gotten the best ideas, the best caveats, heard from people representing taxpayers and consumers and alternative rating agencies and it would have been a better package.
Dodd has suggested the economy couldn't wait for hearings on the bill. Do you agree?
The more Washington says that, the more panic there is. There's a Catch-22 here. Bush and Paulson and Dodd and (Congressman Barney) Frank, in order to get this bill rammed through without full comprehensive evaluation, without rewriting, full of pork and ambiguous enforcement they had to raise the alarms about the economy.
Is there something Dodd should have done as Senate Banking Committee chairman to help avert this crisis?
He's held 70-plus hearings since becoming chairman. Everybody knew what was coming. All you had to do was look at the stock market, read some of the smart columnists. He should have had comprehensive hearings. Instead, they were ambushed by George W. Bush, just like they were ambushed on Iraq. It's all stampede time. The longer the deliberative process of Congress, the more outrage, and the less likely the Wall Street greed hounds will like the result.
The other thing that's important: What does it say for the next round? First they bail out management hedge funds. Then they bail out shaky banks. Now they are bailing out moral hazard. If you are a speculator on Wall Street and you think you're being bailed out, you're going to do it again and again. Where's the next $700 billion coming from?
Dodd says campaign contributions he gets from Wall Street have no influence over his decision-making. Do you believe him?
No, because he's been getting them for 25 years. And he told me once he didn't even have to raise money in Connecticut in the Democratic Party because he gets so much from the securities industry. He gets their mind set. He knows how to be panicked when they panic. He supported the Private Securities Litigation Reform Act (of 1995), which insulated the corporate law firms and accounting firms from security class actions. He was the big protector.
This is a great story: Chris Dodd was co-chair of the Democratic National Committee, which means usually they are loyal to their president. The minute Clinton vetoed the Securities Reform Act, Dodd raced over to the White House to mobilize an override. The firms wanted immunity and Chris Dodd gave it to them.
Does this crisis all go back to the 1998 repeal of the Glass-Steagall Act?
Sure. And Chris Dodd supported the repeal. That broke the barrier that historically for decades prevented mixing of securities banking and commercial banking.
I noticed when laying blame for this mess in a Senate floor speech this week, Dodd didn't mention President Clinton or the Democratic Congress.
Of course not. He laid the blame on some reckless borrowers, like you as some borrower should turn down a bargain.
Frog march this turd into Federal Prison.
The ARSONIST is going to put out the FIRE??? Don’t think so.
Securities and Investment......$ 5,822,625.00
Lawyers and Law Firms........$ 2,885,231.00
Insurance................................$ 2,150,646.00
Real Estate.............................$ 1,821,433.00
Commercial Banks.................$ 1,261,413.00
Accountants..............................$ 937,753.00
Total $14,879,101.00, an average of almost $ 744,000.00 per year. Is there any question as to where his loyalty lies?
“The ARSONIST is going to put out the FIRE??? Dont think so.”
Well said, Ann!
What bothers me most is how not understanding how and why this happened means that we will have to have more and more of these experiences. There are a couple more that are as big or bigger than this crash, social security and the push to nationalize health care.
It all feels like we are sitting on the roof of our house surveying the aftermath of a horrific flood and planning to re-build a bit closer to the water just as soon as the water recedes, all the while ignoring reports of a monsoon rain approaching. If only we had more sandbags and someone to blame. Luckily, we've got windbags who blame the weather, and Bush, of course. And we seem to believe them.
I’m from Ct (hangs head in shame)
Dodd’s father was a petty crook. Dodd got revenge by being an enormous crook.
Signed,
A constituent.
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