Monday, April 19, 2010

Dodd's Legacy

We think we know what made Dodd not run, but what makes him run? Over the last few months, U.S. Sen. Chris Dodd has been waving goodbye to the senate, a bittersweet farewell occasioned, some think, by plummeting polls and the perception on the part of some of his constituents that he stuck around too long, like some disintegrating, punch-drunk boxer dreaming of his glory days in the ring.

Then again, in the last few months, Dodd has been “born again” – this time as a reformer. Prior to his born-again experience, he was what Roll Call calls “the consummate insider.”

The senator after whom Dodd patterned himself, “lion of the senate” Edward Kennedy, was, to be sure, more “consummate,” beltway lingo indicating the congressional “virtue” of getting your way by playing between the keys of the political organ.

It is said by the chattering class that Dodd is “working on his legacy.” A politician’s legacy is what remains of him after he has left office, history’s verdict on his multifarious career. Someone who has served long in the senate acquires twists and turns that later, when he begins to assemble his legacy, prove useful in guiding the myth makers.

It helps a great deal if the politician is what flappers in the 30’s might call a “smooth talker.” Nixon was not a smoothie, though his career had in it more useful turns than the Mississippi.When Nixon left the presidency in disgrace, he immediately started work on his legacy. He stayed off the firing line and wrote books; soon headhunters in the media were heaping praise upon him, and he died buried under a mound of plaudits. Here and there a few commentators scattered critical remarks over the bones.

Bill Buckley once was asked what the real Nixon was like.

“Which one,” he answered. “There are about four of them.”

Dodd has had what funeral directors might call “a good run.” There were no drowned women in his life, no misplaced cigars. He had an easy time of it with Connecticut’s liberal-to-a-fault media, running afoul of the jaws that bite only when commentators feared he was romancing the right. He was divorced only once, falling far short of Lowell Weicker’s record. Even his fiercest critics would agree Dodd – not to speak of him overmuch in the past tense -- was a nice enough chap. The Ortega brothers appreciated his attentions in Nicaragua; Fidel Castro tossed no barbed words in his direction; and had Castro wannabe Hugo Chavez taken power in Venezuela when Dodd was off schmoozing with the Sandinistas, Chavez would have sniffed no odor of brimstone pouring off the sainted senator.

Dodd will be safe in the hand of his biographers. He need not fear his legacy will be less flattering than that bestowed on Weicker by his biographer in “Maverick,” once reviewed by Managing Editor of the Journal Inquirer Chris Powell under the critical title, “Mr. Bluster Saves The World.”

If the liberal Dodd faltered when he helped to dissolve any remaining restrictions imposed by the Glass-Steagall Act on large financial firms, he recovered somewhat by aggressively supporting President Barack Obama’s Health Care initiative. If he faltered when he supported President George Bush’s war in Iraq, after first opposing intervention in the Persian Gulf, he recovered somewhat by supporting Obama’s often stated campaign promise to bring the troops home from Iraq when doing so would have doomed to failure the military effort in that country -- Bush’s military effort. In yet another political pirouette, Dodd cautiously supported Obama’s war in Afghanistan, sometimes called by disappointed world conquerors “the graveyard of empires.”

The senator's cozy connection with Countrywide was a scar on his reputation. But few seemed to realize that his invaluable assistance to Fanny Mae and Freddie Mac, mortgage lenders too big to fail, may have been equally if not more problematic: One of the reasons large mortgage lenders were too big too fail was that congressional watchdogs such as Dodd and U.S. Rep. Barney Frank winked at their destructive lending practices. Indeed, Both Dodd and Frank rashly encouraged mortgage lenders to dole out tax dollars to recipients who could not afford mortgages.

We are told victory or utter collapse lie ahead of us, depending upon who is doing the telling. But history is not always a tale told by the victors. Sometimes it’s a tale told by an idiot, full of sound and fury, signifying nothing. That is more often the case when the powerful among us are permitted to shape their own legacies.


  1. "Dodd and Frank rashly encouraged mortgage lenders to dole out tax dollars to recipients who could not afford mortgages."

    What's the basis for this assertion?

  2. Basis? How about the entire history of the mortgage crisis, based upon the pressure from Fannie and Freddie over participating banks to give mortgages to people with poor credit ratings.


  3. Even if this were true, which it isn't, there were no "tax dollars" involved.

  4. There were (are) bailouts:[pointer]=6&tx_ttnews[tt_news]=22317&tx_ttnews[backPid]=12065&cHash=b8b6bf7cb7

  5. Interesting link:

    ACORN defunding ruled unconstitutional

    On December 11, 2009, the Honorable Nina Gershon, United States District Judge for the Eastern District of New York, granted a preliminary injunction to stop Congress from singling out a single organization for punishment without proper investigation or due process.

    On November 12, 2009, ACORN, represented by the Center for Constitutional Rights (CCR) filed a case challenging Congress's unconstitutional defunding of the Association of Community Organizations for Reform Now (ACORN). The case charges Congress with violating the Bill of Attainder provision in the U.S. Constitution, violating the Fifth Amendment right to due process, and infringing on the First Amendment right to freedom of association by targeting affiliated and allied organizations, as well.

    CCR attorneys say members of Congress violated the Constitution by declaring an organization guilty of a crime and punishing it and its members without benefit of a trial.

    ACORN CEO Bertha Lewis said: "Today's ruling is a victory for the Constitutional rights for all Americans and for the citizens who work through ACORN to improve their communities and promote responsible lending and homeownership."

    Still no evidence that: "Dodd and Frank rashly encouraged mortgage lenders to dole out tax dollars to recipients who could not afford mortgages."

  6. No tax dollars involved???? How about the $400 Billion dollars plus that we've spent bailing out Fannie and Freddie since they collapsed - money that is not counted in the official "cost" of the bailout, but which the CBO says should be.

    Is $400 Billions dollars not enough "tax dollars?"

  7. "Dodd and Frank rashly encouraged mortgage lenders to dole out tax dollars to recipients who could not afford mortgages."

    Focus, Vincent, focus.

  8. Focus, Jonathan. Fan/Fred go bust. Bailed out with tax dollars. The losses were due to Frank, Dodd and others pushing for wider access to mortgage credit. The losses would not have occurred without this pressure. They did occur. The taxpayer made good on the losses, for $400B. Thus, the $400B is payment for bad credit pushed by Dodd, Frank and others. What are you not getting? Anyone who co-signs another's loan is liable for it if unpaid. We in essence co-signed all these "bad credit risk" loans, and had to mnake good on them. Thus our "tax dollars" were "doled out" to persons who (at the time of application) "could not afford mortgages." Do I have to make this any clearer, or do you just not understand banking or accounting?

  9. 1. When the loans were made they weren't tax dollars.

    2. I still see no evidence whatsoever that "Dodd and Frank encouraged mortgage lenders to dole out tax dollars (or even mortgages) to recipients who could not afford mortgages."

  10. Even better, here's my column on a related topic for this week. Perhaps this will assist you:

  11. Jon,

    Here’s the point you’re missing: The support Fannie and Freddie received from the federal government created a moral hazard. Because financing institutions knew that both companies would be backed by the full faith and credit of the United States, they took deplorable risks they might not have taken had the support underwritten by Dodd and Frank not been there. Those risks and the lax banking standards that Dodd – who participated in the dismantling of Glass-Steagal – encouraged caused the mortgage collapse; and the mortgage collapse was the finger that pushed the first domino that resulted in the collapse of the entire system. DODD AND FRANK WERE RIGHT: Fannie and Freddie were bailed out, and tax money was used to bail them out. THEY KNEW THIS WOULD HAPPEN. I’m happy to make the clarification to your somewhat pedantic point.

    Just to be clear, this is what Pesci would have done if he were Bush-Obama: 1) He would not have bailed out Fannie and Freddie; 2) He would have permitted a bankruptcy judge to examine the assets and toxic assets of F&F and sell the sound assets, if any, to other banks, 3) He would have ordered the relevant authorities to investigate and arrest and prosecute anyone who had broken the law – and in this way moral hazard would not have been passed on to a new generation of frauds and risk takers, 4) He would have taken steps to break up all financial institution that are too big to fail, because the problem with such federally supported behemoths is not that they fail: The problem is THEY ARE TOO BIG.

    Finally, Pesci would have exposed those senators who encouraged moral hazard by saying, as Frank did many times, that there was no problem with these institutions and that those in the Bush administration who were pressing for regulations well before the collapse of Fannie and Freddie were just over excitable partisans who wanted to frustrate the poor from owning houses.

    All this would have caused much pain and dislocation – for awhile. But it would have fixed thing and sent a strong message to companies to big to fail: NO MORE BAILOUTS USING TAX MONEY. IF YOU SCREW UP, YOUR FINISHED.

  12. Hear, hear, Pesci

  13. It's not a pedantic point, but thanks for conceding that there is no evidence that "Dodd and Frank rashly encouraged mortgage lenders to dole out tax dollars to recipients who could not afford mortgages."

  14. It is what logicians would call "a red herring." That's a point, true in itself, that is inserted in argumentation to discredit a larger and more inportant point, also true. It's OK, you're a lawyer, I forgive you. I've played the red herring myself plenty of times. If there is a God, we shall hav to answer for it. And if there is no God, we shall have had some fun.

  15. Jon,

    By the way. Where the Hell is everybody? Are they on vacation? I don't mind telling you, I'm getting weary carrying all the weight here. And your shoulders must be aching too.

  16. I really wasn't just playing lawyer - I don't want to argue the larger point of Fannie and Freddie - just how much of the fault can be attributed to Dodd.

    We still have readers - just no one writing posts - we have lost Heath and Saramerica to other blogs - I guess we will just have to carry on - ACR - are you out there?

  17. Yeah yeah - I'm on the road part time (full time work, occasional "consulting" check) for a gubernatorial candidate.

    I'll have some stuff soon but have intentionally held back while trying to balance and not appear to be in the tank plus keeping a half dozen legislative candidates moving along too.