When Will Senator Dodd Start Taking Yes For An Answer?

By Simon Johnson, co-author of 13 Bankers

Senator Chris Dodd is a tactical legislative genius – keep this clearly in your mind during the days ahead.  In terms of maneuvering for the outcomes he seeks, managing the votes, and controlling the floor, you have rarely seen his equal.

Senator Dodd wants some financial reform – enough to declare victory – but not so much as to seriously undermine the prevalence of megabanks on Wall Street.  You can take whatever view you like on his motivation – but Senator Dodd himself is quite open about his thinking and intentions.

Given the mounting pressure from many sides – including Federal Reserve Bank presidents – to implement significantly more reform (see also David Warsh’s Sunday evening assessment), for example using some version of the Brown-Kaufman SAFE banking act, how exactly will Senator Dodd prevail?

1)      He knows that the Republican leadership will mount a disinformation campaign, trying to muddy the waters by claiming that the Dodd bill “institutionalizes bailouts”.  This top-down Republican line is complete and deliberate misrepresentation – designed purely to prevent real reform.  Every time it is repeated, Senator Dodd’s position becomes stronger because people who really want reform need to rally to his defend his approach.

2)      The Republican attacks also justify the Democratic leadership and various pro-reform groups telling people: Don’t confuse the message.  Everyone in the center and on the left is lobbied to emphasize that Senator Dodd’s bill will completely “end too big to fail” – if you deviate from this line, you will be accused of falling in with Mitch McConnell’s dangerous views.  Expect this pressure to intensify in coming days – requests for responsible and transparent debate on policy options will be drowned out and pushed aside by the pressure for conformity (underpinned by the desire not to undermine Wall Street campaign contributions too much). 

3)      As the White House pushes back against the Republicans, this will further strengthen Senator Dodd – he is the congressional standard bearer, after all.  And everyone knows that he needs 60 senators on his side in order to prevail, so some weakening of the bill is presumed inevitable and must be accepted in the reasonable name of making some progress.

But this is where the pure genius of Senator Dodd enters the equation – with an audacity that makes you whistle with appreciation for the art (although not the substance).

The presumption is that Senator Dodd is negotiating with one or more Republicans who are the easiest to bring on board.  This would make sense if Senator Dodd wanted the strongest bill possible.

Senator Chuck Grassley voted for strong derivatives reform in the Agriculture Committee; Senator Olympia Snowe also seems on board with that agenda.  Senators John Thune and Bob Corker are saying in public that Republicans want to vote for reform (although it’s a good question what this means exactly).  Senator Jim Bunning voted with Senator Bernie Sanders in the Budget committee – on what is being seen as a test vote on breaking up banks (Sanders’s press release; Huffington Post coverage). Senator Scott Brown is wavering in broad daylight. Senator George Voinovich is retiring and rumored to be flexible on financial reform issues. 

But Senator Dodd is closeted in negotiations with Senator Richard Shelby – who stands for the most pro-Wall Street bill possible.

The goal is apparently not to give up as little as possible and still get a bill.  The goal is to bring as many supporters of Wall Street as possible on board with the legislation, at the same time as framing the issues so the pro-reform camp looks bad when it presses for more.

As we head into what is likely to be the decisive week, Senator Dodd controls the clock, can determine what is debated on the Senate floor, and – whenever he feels hard pressed – remind everyone to toe his line or fear the extreme Republicans.  At this point, only the White House can bring sufficient pressure for the Brown-Kaufman bill to get an up-or-down vote; the odds are against this being what the White House really wants to do.  But keep calling the White House and the Senate Democratic leadership.

79 thoughts on “When Will Senator Dodd Start Taking Yes For An Answer?

  1. I can’t imagine a less worthy thing to do than call the White House and the slime making up the Senate Democratic leadership to encourage their bringing a meaningless bill that will be nothing more and nothing less than the financial “reform” equivalent of the recently passed Insurance and Drug Companies Indemnity Act of 2010. Does anyone seriously believe that an industry bought-and-paid-for Chris Dodd would ever see to meaningful reform? You’ll sooner see Babe Ruth as president. Spend your time on something worthy. Organize a general strike.

  2. Dodd is a monkey, a creep, a douche, an ass.
    How does this guy look himself in the mirror?
    He should be forced to sign a contract stating that he will not leave the Senate for work in the finance industry, or face execution.

  3. Simon, you must be getting to ’em. I see your outspokenness is giving Krugman heartburn.

    I think he’s been sitting too close to George Will.

  4. I don’t think it has any connection to George Will. If you have a very large Ego and you see the rest of the class is giving another student more attention than you, what will you do???

  5. As this legislation stands now it is far from being significant change we can believe in. Rather than trying to ram something, anything through, get it right the first time.

    The Dems will get Chris Dodd’s toothless financial reform passed, and within five years at least one Wall Street firm will roll over and be ‘virtually bailed out’ at great cost to the taxpayers under its provisions. After he leaves office citizen Obama will say he should not have listened to Larry Summers’ advice and ought to have done more to reform Wall Street, despite determined Republican opposition. hi ho

    That is the usual outcome. It *could* change, Obama can change it and he doesn’t need the Republicans to ask the FBI and Justice to assist the SEC in their civil case investigation to look for evidence of criminal wrongdoing including Paulson and other hedge funds under the RICO statutes. That would show us something about him, at least differently from what I think of his character now. I don’t hold much hope for it given the enormous sums that Wall Street is contributing to the Democrats. But I’m prepared to be surprised.

  6. The White House e-mail machine leftover from the campaign sometimes prompts the minions to e-mail support or opposition to this or that representative or senator. They had an e-mail address for Scott Brown before his website had one. I am wondering if e-mails sent through such prompting get routed through White House filters on their way to the target. The White House offers boilerplate messages that I always eviscerate and begin from scratch. Ideally the White House could pilfer those e-mails and see what national constituents are trying to say. The President always want us to say up or down, never being wholly clear to us on WHAT the up or down is, since that is in flux.
    By the way, I haven’t seen discussion of the way the ratings agencies would intersect with newly legislated transparency (clearinghouses). Conflict of interest might wane if raters were paid by taxpayer versus bank. I see knowledgeable people agreeing on that.

  7. So basically, Dodd and the Senate are telling the US public that Goldman Sachs defrauded us, but they’re only going to put a little lipstick on the pig that’s eating our children’s inheritance?

    And Dodd and the Senate are telling us to ‘be patient’, because they won’t break up fraudulent financial institutions because the Senate doesn’t have the guts to face down financial extortionists?


  8. It is clear that voters no longer matter. What is next? Insurgency? A tax revolt?

    We have reached a point of absurdity.

    The Administration and Congress are no longer connected to the general populace.

    The economy is only minimally connected to the production of goods and services.

  9. I realize i messed some detail:
    Sen. Dodd’s toothless reform has apparently been replaced by Sen. Lincoln’s simple reform which amounts to a hard separation of banks from their casinos.

  10. Professor Krugman has a blog post today that I think, unfortunately, is correct. This site, in my opinion, has been the best most influential and instrumental in informing the public about the imminent danger we face if serious Wall Street reform is not enacted. However, in recent weeks, Professor Simon has fallen prey to emotion in his honest quest to see the right solutions enacted. I have been getting the sense from this blog that only Professor Simon’s view (which coincides with the Kaufman amendment) of how to go about this is correct and all other variations (whether its from Congressmen Frank, the Administration, Senator Dodd, or Prof. Krugman) are all corrupt solutions that only Wall Street would support. Moreover, any solution that would come to actually pass is by definition not worth supporting in view of the rhetoric from this site in recent days. Honestly, it feels like a tactic that the Republic Party would employ. My guess though is that Professor Simon rightly believes these are critical days and that he may have only one shot to influence the debate.

  11. As I read Mr. Simon, his fundamental point is that the banks/shadow banks must be broken because of their political power, not because of any particular financial chicanery they may dream up. You can limit derivatives, cap leverage, or whatever else you can think of, but if the banks’ political power cannot be broken, no effective regulation will be possible. Maybe you think you can chip away at their power, but it seems more likely that if you don’t get both thumbs in the eyes of the guy who’s trying to rape you right now, you might as well relax and enjoy it.

  12. Hey minion,
    We use the word ‘Congressmen’, ‘Senator’, and ‘Professor’ with a grain of salt in regard to Frank, Dodd, and Krug.’Administration’ actually sounds pretty right-they administer whatever the hell bank-chumps like you tell them to do.

  13. Shelby is the ranking member of the Senate Banking Committee. McConnell started in the Senate in 1985, Shelby in 1987, and Corker in 2007. I would tend to think that Shelby is more reliable to adhere to McConnell’s position; given the way you just described Dodd, it makes 100% sense to me why it is Shelby.

    I chose Corker or Shelby because Corker was involved in negotiations over the bill up until March in the Banking Committee. Bunning is also on the Banking Committee but I don’t think he’s one to negotiate with (see his blockage of unemployment extension). I like Bunning on that committee.

    I don’t know why you are so pessimistic. I’m worried that the Blanche Lincoln bill isn’t going to do what it promises as far as derivatives. I think the Democrats will hold the votes on this and pick off Republicans without making any significant modifications.

    All that is holding this bill up is the TBTF / bailout question. I’m puking while I type, but it should be commendable that Dodd made the strides he did from his original bill (October/November?) to the bill he introduced in March. In short: 90% of the bill was already agreed upon.

  14. I think many of the commentators are missing the point in their responses. Prof Simon is saying that Dodd is negotiating with a republican, Shelby who in the end is going to weaken the bill. There are at least 2 or 3 republicans (Snowe for example and few others) who are willing to vote for a stronger bill, why not negotiate with them? What’s Dodd motives behind this tactic?
    Another issue the professor touches is about the lack of support of Brown-Kaufman Safe Banking Act by Dodd thus why he is negotiating with Shelby. By not including this amendment on the floor, the bill is toothless. Basically, not only the safe banking act has dual purpose, economic and political. It limits both economic and political influences of too big to fail, which is good for the country. Remember 6 of the too big to fail banks control over 60 percent of the country GNI. Think of the consequences of their next failure to our economy and global economy. As for Krugman, he is just jealous because Simon is more articulate and does not look too partisan.

  15. Sorry should have edited before posting. Point, Brown-Kaufman has dual function, it has both economic and political effect on the big banks that represent over 60 percent of our GNI. It appears that Dodd will include Blanche’s derivatives bill in the main bill. If we can add or include Brown-Kaufman in the final bill, we have a somewhat chance to prevent another economic crisis. We must support a final product that has both Blanche and Brow-Kaufman bills.

  16. 1. He knows that the Republican leadership will mount a disinformation campaign, trying to muddy the waters by claiming that the Dodd bill “institutionalizes bailouts”.

    Yes, the Republicans are saying this, and they’re disingenuous to say so, because they want the same thing.

    But that doesn’t change the fact that it’s true.

    2. The Republican attacks also justify the Democratic leadership and various pro-reform groups telling people: Don’t confuse the message. Everyone in the center and on the left is lobbied to emphasize that Senator Dodd’s bill will completely “end too big to fail” – if you deviate from this line, you will be accused of falling in with Mitch McConnell’s dangerous views. Expect this pressure to intensify in coming days – requests for responsible and transparent debate on policy options will be drowned out and pushed aside by the pressure for conformity (underpinned by the desire not to undermine Wall Street campaign contributions too much).

    This will definitely happen, just as it happened with the health racketeering bill. The goal is to call scam “reform” real reform, and shout down the voices of real reformers.

    Therefore I have to correct one item: When you say “pro-reform” you really mean the scam anti-reform liberal astroturfs.

    3) And everyone knows that he needs 60 senators on his side in order to prevail, so some weakening of the bill is presumed inevitable and must be accepted in the reasonable name of making some progress.

    I wish people would stop repeating this fraud. The Dems can change that at will. They NEVER “needed” more than 51 votes for anything, and at least until next January they won’t need more than that.

    The “we need 60 votes” scam is just that – a scam. It gives them cover for what’s really their refusal to enact anything but kleptocratic, corporatist legislation.

    Umm, does anybody remember..I seem to remember a period of time where they had 60 votes…oh yeah, it was just last year!

    So what happened? It’s hard to tell. All I know is they still somehow couldn’t pass real reform legislation, they still had to supplicate before the Republicans, they still couldn’t do more than toss out a few sham crumbs. Biden was still saying we need several more Democrats, and then we can pass real reform bills…..Obama obviously let slip the truth right at the outset when he said he wouldn’t feel emboldened to ask for real reform unless he were guaranteed 80 votes.

    When are people finally going to see through this lie?

  17. Krugman:

    My sense is that too many people are taking the easy route of going for the cheap slogans instead of thinking things through; and some people are pushing their signature issues even when the evidence clearly shows that they’re wrong. And we can’t afford that kind of self-indulgence.

    Yes, that describes Krugman’s malevolent Pied Piping for the health racket bailout to a tee.

    And it well describes his straw man attacks against bank racket reformers, his misdirection tactics, and his push for this sham anti-reform bill.

    A basic rule for reading Krugman is, whatever he says about Republicans is

    1. true; and

    2. also describes what the Democrats are trying to do, and his own role in shilling for them.

  18. Political posturing aside, why would a business continue to pursue a failed business model? Isn’t this the time to start gradually breaking down the failures?

  19. Russ, I think you give give legislators too much credit when you call them kleptocrats and corporatists. These people do not care about ideology or about the people or finally about corporations. All they care about is getting re-elected. That’s it.

    Our political system is totally corrupt, finance capital is out of control, and one feels, really, that collapse is the only possible outcome.

  20. The Dodd bill is clearly a sick, perverse joke and only proves that the big Wall Street banks continue to have an iron grip around the throat of the American political system.

    However, while the Brown-Kaufman Safe Banking Act has an awful lot of good reform in it, it still only caps leverage at 15-1. That’s still waaaay to high.




  21. If Paul Krugman only has the testicles to go after Senator Inhofe and Senator Coburn, but going after the likes of scum like Senator McConnell and Senator Shelby makes him squirm in his seat, maybe he needs to take his little toy international payments playset and go back home.

  22. By the way, to this point, to this point, I have liked Krugman, been a fan, and I bought his books BEFORE he got his Prize and have one of the receipts I used as a bookmark to prove it. This is a major disappointment to me. What good is the man worth when his country is on the line and he wants to play hopscotch with the guys throwing it down the toilet????

  23. In reality, they are wrangling over 5-10% of the bill. If the debate is to pre-fund bailouts or simply fund bailouts like TARP as “opps we did it again.” They have won.

    Not that it should be a surprise; but the implicit position is that “there will be bailouts” in the future if necessary.

  24. Well, kleptocracy’s not an ideology but simply government by organized crime. Corporatism can be an ideology, to which I think Obama for one does subscribe, but for most pols it’s the outcome of their corruption, as you say.

    I agree completely that nothing can be done within this system, and it will have to collapse.

  25. Money does indeed make the world go round and when it is destroyed through wanton acts of ignorance, the world stops for a moment and then errupts into Anarchy until new monopolies of force carve out equilibrium between nations. To quote Pete Townsend…”Meet the New Boss, Same as the Old Boss.”

  26. So seeding the gov.(cabinet and agencies) and all that ensued was the business plan? Take it to Vegas and let it stay in Vegas!

  27. Just released form the WSJ….Democrats to Kill Derivatives Provision

    Senate Democrats agreed to kill a provision from their derivatives bill pushed by Berkshire Hathaway that would have allowed the company to avoid a significant financial hit.

    It’s nice to know that money still talks in Washington and that nothing has changed.

  28. This provision removes application of the collateral rules on existing contracts. It removes retroactive treatment to contracts existing on the effective date of any new act.

  29. Well, I always did imagine the “Welfare Oueen” as someone in a Cadillac, but these guys?

  30. My big worry in this whole deal is that the hedge funds will get pinched with this legislation. I mean what would America be like without these guys?? Hedge funds perform so many services and duties which benefit society so greatly. I don’t even know if liquidity existed before hedge funds, do you guys???? It boggles the mind how people could transact business inside of a 24 hour period, or buy and sell stocks before hedge funds changed all of our lives!!!! When I look back on the first day hedge funds entered the markets, sometimes I cry tears of joy. But then we ALL remember that day…. No need to worry, Super Republican Mitch McConnell to the rescue!!!

  31. The insurance companies are squealing like stuck pigs and laughing all the way to the bank after healthcare reform. Where will the banks go squealing after finance reform? Now, I remember, I learned the answer to that as a kid, and this little piggy stayed home.

  32. American Enterprise Institute (AEI) invites their good friend Republican Phil Gramm to educate them on Credit Default Swaps. Peter J. Wallison was also at this event. This was in January of 2009.

  33. My Apologies, this is the video I meant to upload, the above of course was McConnell again. This is Phil Gramm as I said above.

  34. Good one Ted K. What’s the income level below which the “ignorance” mea culpa doesn’t work?

  35. Barbara –

    While your general conclusion is correct. In this specific occasion, a big corporation’s money did not win. Berkshire was trying to AVOID putting up huge amounts of collateral for their old derivative positions by pushing for the passage of this provision. The Democrats actually told Warren Buffet “Thanks but no Thanks” to one of their biggest backers. It is one of the few (very few) instance of Dems showing spine.

  36. How is it that one of the creators of sub-prime mortgages can now put forth a bill that is being taken seriously? But wait, perhaps Chris Dodd was envisioning the crisis he would then be able to “reform” after lining the pockets of his buds at the banks….. Why does The Emperor’s New Clothes keep coming to mind when I read about the Finance Reform Bill?

  37. It doesn’t necessarily have to collapse, at least not until a real ‘crusader’ type gets in there and actually works for the other 95% of the population. Then they will use the usual extortion tactic of “Our way or we take you down, ALL OF YOU…

    Until then the huge banks become even more entrenched(like Insurance and Pharma), they take over Public Assets in state after state, and work judiciously to destroy Social Security. That’s what we’re up against. Hope where you live it’s warm enough to at least enjoy the weather(and your health if applicable)..

  38. There are certain facts that exist under any regulation regime that complicate and constrain any chosen regulation regime.

    Immediately after the effective date of any regulation regime total credit assets of all players still exist. The ultimate condition of the credit assets has not changed. No regulation regime will improve collectability of the credit assets. All credit assets derive directly or indirectly from retail debts. Only the debtor may improve collectability by finding ways to honor his/ her debt contract. Everyone involved in granting credit understands that only time after the credit collapse will provide the opportunity for credit collectability to improve. This opportunity has nothing to do with marketability of the credit assets or the values the credit asset is carried at on the books of the credit asset owner. It has to do with willingness of the debtor to chose to service the debt contract.

    All the while the political gnashing of the teeth and howlings for revenge go on, only actual efforts to improve credit asset collections make a difference. Only wiping out of debt to levels that debtors will actually be willing to service might make the remaining credit asset values serviceable and hence collectable.

    What we have going on in the financial system beyond it’s present and past deceitfulness is an attempt by holders of credit assets to unload their losses on others. Even that does not seem to have really happened since the worst assets have little or no value. On top of that, the value these assets have is way below the actual cash flows being serviced. Worst cases excepted, of course.

    Has time run out by inattention to what might be the most critical issue of all? Has the social system so degenerated that it is now incapable of addressing any critical issue?

  39. This explains why Dodd was practically on his knees sucking Shelby’s d**k on Meet the Press last Sunday.

  40. Re: @ Nemo____Who cares! The question,and answer is t wofold. Pressure from the public is needed now (quite similar to the upstart tea party) bringing a grassroots effort to simplify the legislation language that the average laymen (making it readily available for all free american’s to see,and read) can understand,and make an informed judgment. We must devise a short precise narrative without being inveigled with double-speak too humbly educate,and enlighten the general populus, “That This Time All Their Oxes Will Get Gored,and In Their Own Back Yards” explicitly,with a subtle sense of urgency! Secondly,..who benefits most from the legislation? I’m not talking the third parties. I’m talking about the individual Senators that oppose,and call them out(make these senators explain,not in group-think enviroments discourse, but as in a individual forum format) people. Aren’t they sworn to uphold the “Constitution” for the people,by the people for the overall good of the country? Ask them this/these question,and demand a pragmatic, reasonable,and rational answer! Is their individual state worth more than the entire whole/country? Are they willing to sacrifice the “Greatest Country in the Free World” for their personal selfish gain,…?

  41. Re: @ anon___Your always done,…if you think you are! America wasn’t built on fatalism – but realizing a dream come true that the entire world tries to emulate,…GOD Bless America,and Thanks Simon,please never stop “The Good Digging for America’s Sake”

  42. Re: @ Isefinecon07____Quote: Helen Rowland (1875-1950/A Guide to Men)…”The follies which a man regrets most,in his life,are those which he didn’t commit when he had rhe”opportunity”. PS. Wise words from a wise woman! Quote: earle,floria(4/26/10)…”being an opportunist is not blasphemy when you strike down the beast of prey; sharing the spoils on a round table; whilst satifying the hunger of the unfortunates” :^)

  43. All read up, thanks. I’m not sure what you’re getting at. They can change the filibuster rules at will, and in the meantime they can pass anything they want through reconciliation.

    The fact that they do neither of these proves that they simply don’t want to pass public interest legislation.

    (And please nobody make me laugh saying there are “rules” for reconciliation. As if the Reps would’ve let some parliamentarian stand in their way back in 2005 when they were planning to use reconciliation to authorize ANWAR drilling. The only reason they didn’t go ahead with it was because they lacked the votes in the House.)

  44. There you go again, Russ…cuttin’ through the crap.
    Pitch perfect, sir.
    P.S. Especially enjoyed #2.

  45. The reason Chris Dodd can get sweetheart mortgages as a “friend of Angelo” without risk of prosecution is because there was no quid pro quo, just a little wink and a nod. The quid goes in Dodd’a pocket and the pro quo gets buried in Chapter 200, Sec.15L, Part(b) on page 1031 of a 2000 page Bill. A “Reform” Act, no doubt.

  46. Actually, many vote through electronic machines that can be – and have been – fiddled with; FYI, Diebold, which is affiliated with a Republican-supporting company in Tennessee, has made some pretty flawed and easily hacked machines, as tested by Princeton University:

    (And there’s pretty good evidence…that Ohio went Kerry, but the voter tally was read…in Tennessee. Ooops.)

    Not to be outdone…Sequoia Voting Systems has markets in 17 states; the former v.p. of Sequoia was just appointed by Obama to be technical adviser to the U.S. Election Assistance Commission. So, what’s the big deal, you ask?

    Well, seems like those machines…have had just a few problems:


    Bottom line: I think it’s time to call in the U.N. to oversee elections here. No joke.

  47. Simon, want to tell you how much I appreciate your candor on this one…certainly telling it like it is in ways the general public usually isn’t privy to. The behind-the-scenes manuevering Dodd is doing – while orchestrating dazzling political theater out front that serves as a cover – so glad you named it.
    Please keep it up. It makes a difference.

  48. So the Republicans and Nelson blocked moving the bill forward today, but it’s all kabuki.

    Dems bash Repubs for “protecting” Wall St.
    Nelson gets sweetheart deal.
    Repubs bash Dems for bailouts.

    Obama finally steps in gets “reform” bill passes except “reform” bill doesn’t do a bleeping thing to fix the problem.

    Obama and Dems do victory dance. Repubs vow to repeal if voted back in power.

    Where have we seen this before?

  49. Re: @ Barbyrah…It is only the fraudulent mail-in-votes that sway an election. I’ve witnessed personally how candidates muster thousands of votes putting them over the top before the election takes place. There are too many eye’s overseeing the polls via highly trained electronic tech programmers. Independent of contracted voting machine manufactures ,and very proficient in the systems source code. PS. Contrary to what I’ve said, I also would like the U.N. to monitor/oversee independently our elections…confused in Florida. :^)

  50. Simon Johnson. You who were in the IMF should perhaps know.

    Where in the current proposals for regulatory reform is there a mention to how the Basel Committee should be governed and controlled and on what are the limits of its attributions with respect to the financial system in the US?

    I say this because in the 1706 pages of the Financial Regulatory Reform proposal that I read in http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/hr4173eh.pdf I can’t seem to find Basel mentioned not even once… could this be?

    I say this because for instance if you care to go and see one of the events detonating the crisis, April 28, 2004, the day when SEC explicitly delegated into the Basel Committee, and let loose the capital requirements for the large investment brokers, you must know (I assume) that was one of those pivotal events that led us into this horrendous mess.

    Some details of that day here: http://bit.ly/993jQB

    Sometimes I get the feeling that just as some defend their buddies on Wall Street, you defend some buddies in Basel… but then of course I could be wrong.

  51. It’s interesting to note our 2 times divorced, 3 times married Catholic Newt Gingrich, is also a member of American Enterprise Institute (AEI). He is SUPPOSEDLY one of the sharper Republicans. Apparently Gingrich’s first two wives didn’t think his high IQ was worth the negatives, but the Pope still accepts him lovingly into the church.

    He married his 3rd wife VERY SHORTLY after he divorced his second wife. No word yet on how the Pope feels about that.

  52. Senator Harry Reid’s vote was changed at the last minute to retain the option of forcing a vote…a calculated risk too move the legislation again for an up,or down vote. The motion to reconsider could come as early as (Tuesday)tommorrow. Democrtatic leaders were, as I write, considering filing a new motion to stem debate that could arrange another test vote on Wednesday.

  53. Amen, Krugman has become completely mealy-mouthed in his views regarding reform. It seems as though he likes to be seen on TV too much. I note that Simon has been many places during the debate, but main stream media seems to steer clear of him. But then, main stream media is substantially captured by the TBTF’s and their oligarch/plutarch allies. Its not so much that the rest of corporate America is opposed to strict reform. Its that they are worried about the tentacles of reform reaching them in the future. And Krugman, in supporting mushy, half-baked reform wants popularity not action.

  54. I agree with Simon. We’re not going to get Kaufman-Brown now, but Simon spoke, wisely, that the reform process will very likely happen in steps, much as it did in the 1930’s. This is only the first step. In the future, as things continue to trend as they have in ways that reform doesn’t touch, we’ll likely see the Kaufman-Brown solution passed, as well as likely seeing CDS’s either made illegal or required to be reserved fully as insurance (fully because actuarilly their outcomes are not predictable as with most insurance events). After the CFPA is located in the FED and isn’t used on a regular basis as it should be, the FED will be required to respect its independency or legislation will be passed to remove it from FED jurisdiction. There will be lots of things done as the loopholes are identified by future events. We want the half a loaf (at least) now, and will get most of the rest of the loaf later.

  55. And, by the way, tonight on the NewsHour (PBS), there were four “experts” on reform who commented on the legislation as it now stands. Two things were said which struck me as true and important. First, it was mentioned that even after the Senate concludes its debates and finalizes a bill, this bill will have to be merged with Barnie Franks’ bill in conference. That will result in some strenthening. Second, when asked to rate the bill on its strength, all but Yves Smith rated it a 7 or 8 out of 10, Yves gave it a 3 or 4. She is absolutely right. After conference it may rate a 5 or even 6. If we would rate it a 6, it is wildly successful, considering the nearly $117 million in campaign contributions given to BOTH parties in the last election cycle.

  56. Re: @ Bayard____Once a loaf of bread is halved,that half is gone forever,period! I’ll keep it simple – the remaining half is sliced up – parceled off,and what’s left is crumbs. I’ve seen this playout throughout my life. Once that camel gets that big nose under the tent your toast is gone,and the mice feast as they crave nothingness?

  57. Well, tactically, I can see why you wouldn’t want to let Republicans claim the Dodd Bill “insitutionalizes bailouts.” Let’s not kill the thing completely.

    However, it seems to me that unless the Dodd bill is stregnthened to break up the TBTF insitutions, then come 2010 and 2012, the Repugs do indeed get to claim that the Dodd Bill “insitutionalizes bailouts.” No one has this point more clear than Simon Johnson.

    True, Repugs will do nothing to alter that fact, but they’ll run on it in 2010 and 2012 just the same, and it will probably work. They can already run against the Obama health insurace bailout bill, milking both the mandate and the price tag for subsidies and the Medicaid expansion. The Dems delivered them quite a menu of options, frankly, while annoying their own base.

    So, it seems to me that for political purposes, the D-Party needs to stregnthen the Dodd Bill so that, ala healthcare, it actually doesn’t do what the Repugs claim.

    Right now, the Repugs are essentially correct and effectively positioning themselves to milk and keep on milking public outrage, at least until the re-gain power and lose it again.

    The D-Party has done stellar job doing itself in. Reminds me of how they failed to challenge the 2000 election. By now it’s clear that this really is deliberate. The D-Party actively works against its most loyal constituents.

  58. @ earle,florida — Americans, as they are won’t to do, voted with their guns when it was time to send King George III for a hike… Is the average American taxpayer anymore represented in today’s Congress than were the colonists who felt they were being taken to the cleaners by Britain?

    My comment is more a reflection that, to be clichéd, the more things change the more they stay the same… It’s just that this time around the stakes are much higher. The global economy is dangerously interdependant on finance and IT and the leaders of America and Europe are terrified by the outcome of this current phase of instability… Too many people are unemployed, there’s too much debt, there are too many insolvent entitlement funds… Furthermore, current economic indicators are based on opaque accounting practices..I was shocked when reminded that mark to market was still supsended which means all the reporting from Wall Street is tainted with the foul stench of optimism. The rally doesn’t make sense. I can’t help but think that markets are being goosed for the ultimate cash out before the roller coaster train is set loose, with no breaks and a hole at the bottom of the hill. Never mind the CDO/CDS market. Obama himself was sold by people who are hoping he fails. What better scapegoat than the first black president of the U.S. to be blamed for its destruction and with it, the Free World? Who’s shorting the President right now?

  59. How can you argue for giving the fed reserve yet more power? They cannot be allowed to take on a consumer protection role.

    Why would we allow the people who did not see this recession coming to be in charge of looking out for the next one?

  60. Re: @ Wyndtunnel____The Emperor George Bush Jr.(#43)for one. President Obama is his own worst enemy. Why? He has reneged on every promise to date (I really don’t care to elaborate,or embellish his short-comings,although in his defense he has gotten some bad advise,but?). Please don’t bring the race-card into the fray,its unseemly,and disingenuously pretentious. The world’s financial markets aren’t going to collapse,but rather learn a valuable lesson currently unfolding on both sides of the “Pond”. The “Great Golden Onion” worshipped by the ruling obligarchies (Central Banks)is being methodically peeled by the Plebian’s causing no harm,..but too shower great shame upon its masters! If we choose too ignorantly sandbag the truth,the flood of austerity will certainly be our doom,brought on by our cowardness. PS. Please take no offense,JMHO from a commoner. Thanks:^)

  61. Just another DEM Bank Care DEFORM version of STAB US in the Bax MockUS in order to get even a minute modicum of taxed Pay BACK! He’s Dodd to ME!!

  62. This is moronic. Shelby is the ranking Republican on the Senate Banking Committee and the point person for the Republicans on this issue.

    Just because you may not like the substance of the bill doesn’t mean you have to go around slinging baseless accusations and opining on who is the Senate’s greatest legislative tactician as though you are remotely qualified to.

  63. The only thing I don’t appreciate about The Baseline Scenario is when there is a political stance taken.

    I’d much rather hear the pros and cons of the various pieces of legislation, rather than a suggestion to call the White House and ask them to push for a certain thing.

  64. RE: @ Patricia Craven_____Is it right to stand idly by as your neighbor is being robbed in broad daylight? Mr. Johnson,and Mr. Kwak must remain proactive,and fight the good fight for any semblance of “Financial Reconstruction” too manifest itself!

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