David Rodeback's Blog

Tuesday, September 23, 2008

Is the Doddering Dud the Real Dodd?

. . . Or is the helpless handwringing by the chair of the Senate Banking Committee a diversion?

CNN.com has published an interview with Senator Christopher Dodd that helps us understand how the current large-scale financial woes came to be. Dodd is chair of the Senate Banking Committee, but he doesn't sound as if he has any specialized knowledge or understanding of the industry his committee is supposed to regulate. And he doesn't seem to think before he talks.

Or maybe the senior Senator from Fannie and Freddie -- I call him that because he has taken even more in campaign contributions from Fannie Mae and Freddie Mac than Senator Barack Obama (though admittedly over many more years than Obama) -- maybe he is just reading the Democratic talking points his staff pulled off the fax machine.

Or maybe he's just playing innocent.

We'll start small and work our way toward a stealthy election prediction at the end.

Notice that in speaking of the proposed $700 billion bailout, Dodd doesn't seem to know the meaning of "blank check." When you give someone a blank check, you let that person fill in the amount. It requires a great deal of trust or foolishness, or both, on the part of the account holder. (The bold type in quotations hereafter is not in the original.)

We'll have Secretary Paulson and Ben Bernanke, the chairman of the Federal Reserve, before the banking committee to explain this plan, why it's necessary and where we go from here. They basically have asked for a blank check of $700 billion for the next several years here to buy a lot of bad instruments out there in these institutions.

Now note how he speaks as if he is a complete outsider, observing things that have happened on someone else's watch. And see if these lines also conjure visions for you of the man wringing his hands, maybe even whining a little:

I'm angry as well. This didn't have to happen. It was not a natural disaster. It was a preventable, avoidable situation. We are where we are. Our economy is teetering. We've been warned we're very fragile. There could be a complete collapse. It needs to be straightened out or it could get worse.

What I cannot quote for you from the interview is when the journalist asks next, "Senator, doesn't your committee, and for that matter don't you personally, bear some responsibility for this debacle? A lot of lawmakers, you most of all, seem to have taken a lot of campaign money from Freddie Mac and Fannie Mae over the years in order to look the other way." I can't quote it, you understand, because it's not there.

I also can't quote Senator Dodd saying that we need to do something. His language throughout is more passive than that: "Something needs to be done here. . . . Clearly something needs to be done." "It needs to be straightened out." This is Senatespeak. It detaches the Senator from any active connection with, responsibility for, or personal duty to solve a problem.

Here's a howler:

I'm not going to write this at the end of the day [and] watch a handful of chief executives walk away with multimillion-dollar contracts.

Yet he was happy to receive a large chunk of Freddie's and Fannie's lobbying budgets over the years in exchange for looking the other way while executives there committed large-scale fraud and walked off with enormous amounts of money. (See Slate's list of villains.)

Later, when it suits him, Dodd knows exactly how this happened: the Bush administration did it.Never mind the well-documented fact that this bipartisan travesty began years before President Bush took office, under a Democratic administration, and the fact that the biggest beneficiaries were prominent Democrats. And let's not mention the fact that it's Dodd's committee's job to make sure these things don't happen. The key words are "eight-year coffee break."

I know the history very, very well. When you had cops on the beat not doing their job, basically an eight-year coffee break by and large. Where you had legislation on the books and legislation not being enforced. Where you had regulators sitting back as loans were being made with no documentation, luring people into subprime mortgages, predatory lenders taking advantage of the situation that's how this all unfolded. It's not a mystery.

Finally, read between the lines here, and you'll see that Dodd is not confident that the Democrats will win the presidential election. He thinks the next Treasury Secretary is likely to be part of another Republican administration.

I'm prepared to act quickly, but I'm not going to act irresponsibly. If it takes longer, so be it. We'll have a new election in 41 days, and a new secretary in a matter of five or six weeks, and we can't begin to guess who that might be. Turning over a check of this magnitude not only to this secretary, but his successor, I think would be the height of irresponsibility.

The chair of the Senate Banking Committee should be -- should have become, if he didn't begin as -- one of the  nation's experts on banking and finance. The picture here is of something else entirely: a partisan hack, an intellectual lightweight, a passive hand-wringer. Maybe that's an accurate picture of Senator Dodd; maybe it's not. Maybe he thinks it plays better than looking knowledgeable, which in this case would automatically include appearing to be one of the major culprits in the current financial debacle, which he is.

Take your pick.

Who elects these people?

* * * * * * * * * * * * * *

Meanwhile, back at the presidential election campaigns, the sometimes bitter, often insightful Christopher Hitchens is linking Senator Barack Obama with the D-word. No, not Depression; we're not even in a recession. A scarier word, if you're a Democrat: Dukakis, as in, "Is Obama Another Dukakis?"

Ouch.

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