Dissembling Dodd's Subprime Sob Story

The CT press was trying to make sense of the utter collapse of confidence in our financial markets this weekend.

So they went seeking the story from Senate Banking Committee Chairman Chris Dodd, who proceeded to make no sense at all.

  http://www.stamfordadvocate.com/localnews/ci_10580864

http://www.theday.com/re.aspx?re=6170c810-d216-4cf1-af4d-64b821153459

Now Chris has a rather difficult task, since as I was told long ago being honest is easier than being deceitful, since it's hard to keep track of all your prior false statements.

Let's start with this one. 

   At the end of my tenure on this committee, I want it to be said that the safety and soundness of our financial institutions was not weakened on my watch," Dodd said.

Chris Dodd, February 15, 2007

Well, to his credit, he's not trying to claim that anymore, being objectively the least effective Banking Committee chairman since South Dakota's Peter Norbeck in 1929-1930.

Now on to today's whoppers

"I have supported reform of Fannie and Freddie for years,” Dodd said in the e-mail

The truth is Dodd and his allies engaged in a a concerted behind the scenes effort to gut reform efforts and then render the proposed reform bill too useless to pass. The words of Nixon's Attorney General, John Mitchell ring true here "watch what we do, not what we say"  

http://www.courant.com/news/opinion/commentary/hc-commentaryhubbard0914.artsep14,0,5673162.story

"In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill, and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation."

Conclusion: Falsehood #1

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"comprehensive GSE reform only passed when Senator Richard Shelby and I worked together along with our counterparts in the House. This bill passed despite repeated veto threats from the White House and six filibusters by some recalcitrant Senate Republicans "

First, perhaps those "recalcitrant Senate Republicans" opposed socializing the risk of failed subprime lenders like Countrywide Financial. The Dodd theory of "GSE reform" was to make the taxpayer the world's largest subprime lender by adding $400 billion of bad debt to the leaky balance sheets of Fannie Mae and Freddie Mac, who were swamped before  this program was even implemented.  http://www.marketwatch.com/news/story/dodd-urges-subprime-role-fannie/story.aspx?guid={70633668-7A43-4F1C-9947-F45C323DC2F2}&dist=hplatest, or perhaps the $8 Billion ACORN slush fund was a wee bit problematic.  http://biz.yahoo.com/bw/080710/20080710005819.html?.v=1

The real GSE reform came solely at the urging of Treasury Secretary Henry Paulson, who whaetver his flaws, seems like the only responsible adult grasping the gravity of this problem, starting in the fall of 2007 . http://www.marketwatch.com/news/story/paulson-urges-senate-pass-gse/story.aspx?guid={7B1D547E-4338-4E98-AA9F-F125C4FCAF07}&dist=hplatest when Dodd was busy campaigning for President in Iowa.

In fact. Dodd's original "housing rescue" (aka Countrywide Bailout bill) didn't even include GSE reform until Secretary Paulson made clear that was a nonnegotiable demand to get the President's signature. http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080714/REG/460402885/1012/REALESTATE Of course, at the same time Paulson was trying to protect the financial markets, Dodd was running around pretending the protection was unnecessary .

 In a conference call with reporters this afternoon, Senate Banking Committee chairman Christopher Dodd (D-Conn.) said both GSEs are “very sound and strong,” noting the $3 billion of short-term debt that Freddie Mac sold earlier today. Mr. Dodd said the Treasury proposals should be added to the current housing legislation for expediency’s sake and noted that he may add provisions to the Treasury’s plan

Conclusion: Falsehood #2

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I'm angry because, candidly, (for) 17 months ... I spent 65 hearings, most of which were done on this subject matter, pushing for the administration and others to work on work-outs for mortgages,” Dodd said Monday, between meetings on his revisions of Paulson's bailout provision. “That's the heart of the problem, and of course, the problem's only grown worse over 17 months, to the point where we are where we are today with this economic crisis

OK, Senator, you mouthed off a whole lot. But what did you do?

here's what the NY Times reported on March 23, 2007

Here's what happened after these hearings:

"But even as lawmakers expressed outrage at the problems being encountered by low-income homeowners, they signaled that they would not rush to impose new legislation on the industry.

Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said he did not know if new legislation was necessary, saying regulators could addresses most excesses under existing laws. "

http://query.nytimes.com/gst/fullpage.html?res=9E01EEDE1530F930A15750C0A9619C8B63

Evidently the presence of Countrywide Financial's COO at the hearing calmed the ardor for a legislative response, eh?

Conclusion: Falsehood # 3 Yer Out!

Maybe we shouldn't be so hard on Dodd, between campaigning in Iowa http://www.gwu.edu/~action/2008/ia08/doddiavisits07.html and visiting his vacation home in Ireland http://www.courant.com/news/opinion/op_ed/hc-rennie0817.artaug17,0,7481730.column  he just hasn't been able to keep up with the fiscal fiasco on Wall Street and in Washington.

It's been much easier to tell people there really isn't a problem. http://thehill.com/leading-the-news/dodd-seeks-to-quell-panic-over-mortgage-giants-losses-2008-07-11.html http://www.usnews.com/usnews/politics/bulletin/bulletin_080715.htm

Note : Kindly square these statements with today's revisionist claims that he was aware of the impending disaster prior to when it occurred. Not 

Thankfully, I am optimistic that the voters of CT will finally put an end to Chris Dodd's reign of error as lackey boy for any special interest throwing cash in his lap.  I think this is the sentiment in these parts these days. 

 "It wasn't a secret that this was going on, and had Congress done something to regulate this, it is not unreasonable to think we wouldn't have had the kind of collapse that we have had," Surrusco said.

You can't spin your way out of this one, Chrissie! We're onto you now!  Check the recent polling in CT

46% rated Dodd’s job performance as fair or poor, while 43% said he was doing an excellent or good job.  http://www.courant.com/news/politics/hc-ctpoll0926.artsep26,0,4404922.story

Time to "spend more time with my family"  mon frere

 

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I think more people should

I think more people should have at least used a basic mortgage calculator to figure out what they could afford to borrow considering how people spend with credit cards doesn't surprise me they lost their homes but since banks and companies also spent and lent money they couldn't afford and got a bail out these people should as well.