Don Michak at the Journal Inquirer had a good article on Thursday (read the whole article) pointing out yet another Chris Dodd hypocrisy. Though many may not remember, in 1999 Dodd was the “unsung hero” (according to Fortune Magazine) in passing the Graham-Leach-Bliley Financial Services Modernization Act, which repealed portions of the New Deal-era Glass-Steagall law that regulated the banking industry. It is exactly this type of deregulation that has frequently been blamed for the economic crisis we find ourselves in.
So, did this legislation Dodd had such an influential role in passing lead us to where we are? Some say yes, others say no, and Chris Dodd’s opinion depends on the political winds:
Dodd’s public comments about Glass-Steagall have evolved over the last few years, moving away from his initial defense of its repeal and increasingly blaming regulators for failing to do their jobs.
In 2003, when Dodd, who had yet to become chairman of the Banking Committee, was asked by the Journal Inquirer if the move was a good idea given a scandal in which top Wall Street firms were seeking to claim tax deductions for multimillion-dollar fines, the senator said he still thought it was…
Five years later, soon after Dodd took the helm of the banking panel, the senator acknowledged in another JI interview that he might have had second thoughts about brokering the repeal…
Dodd hewed to a similar line last month in his interview with Fortune.
“I regret we didn’t pay more attention to this at the time,” he said, referring to the regulatory framework. “We’re not going to go back and rewrite that. We want to be able to have those kinds of efficiencies in the system. But clearly the division between commerce and banking — that needs to be a bright line.”
Asked last week if he was saying the repeal was a mistake, Dodd ducked while admitting some regret.
“If I could have written the bill myself, I would have done it differently,” he said. “In fact, I along with almost every Democrat in the Senate opposed the bill when it went through the Senate at first. The language was changed through negotiations and compromise which improved on the original Republican bill, and we trusted that the regulators would do their jobs and make the system work.
“Unfortunately, that did not happen, which is partly why we’re in the situation we’re in today,” he added. “However, we are in a national crisis, and the time has come to put aside finger pointing. Now is the time to look ahead and develop comprehensive solutions to these problems.”
To recap: Dodd worked hard to pass this law, still supported it a few years later, it (possibly) leads to a financial collapse and all of the sudden it was a bad Republican plan on which he did all he could to water down. Then, after pointing fingers at the Republicans and regulators, he urges us not to point fingers at him because “the time has come to put aside finger pointing.”
The man has no shame.
Cross-posted at The Artful Doddger.