Chris Dodd versus the banks?
One reason to be optimistic about financial regulation legislation in the Senate is that the committee chair with relevant jurisidiction is Connecticut's Chris Dodd. Dodd is in electoral trouble thanks to his tight connections to the financial industry, including a special VIP mortgage from Countrywide, and some home state slights like moving to Iowa during the 2007 presidential primaries. But Dodd knows he's in trouble, and in trying to change his image, has become a dedicated proponent of tougher regulation. He compares his goals to one of my favorite D.C. statues, above, which symbolizes harnessing trade and is found outside the Federal Trade Commission.
"I want a muscular financial services sector," he said. "But I want a muscular restraint so that it doesn't run wild."
Getting there...
In the wake of the financial crisis, however, Dodd has concluded that the government should impose unprecedented constraints on those firms, limiting their profits to better protect consumers.
He has become a leading advocate for the creation of a new federal agency to protect consumers of financial products such as mortgages and credit cards, an idea the industry opposes. His staff has been urging him to take clearer public stands on consumer issues.
... "The best antidote" to political trouble, he said, is to give voters "a chance to see that you're fighting on their behalf."
That's the stuff. I'm not sure there's any other member of Congress, perhaps with the exception of Henry Waxman in the House, who has so many incentives to separate himself from the special interests under his committee's jurisdiction. Dodd has a very tough election ahead either way, but if he doesn't produce some serious reform for Connecticut voters, it's almost a foregone conclusion. In an ideal world, of course, Dodd would not have become so interconnected with the financial sector in the first place, but it is nice to see populist political pressure having some effect now.
-- Tim Fernholz
