The New York Times reports on the formidable resistance in Congress to Obama’s efforts to, among other things, create a new consumer protection agency to cover credit cards, mortgages, and other poorly-regulated financial products. It cites
. . . significant criticism from the financial services industry and its allies in Congress. Earlier this week, senior Democrats in the House conceded that they would not be able to complete work on the proposal to create a new consumer protection agency for financial products like credit cards and mortgages before the lawmakers left for their August recess at the end of next week.
The Democrats had hoped to complete action on the legislation this month. But because of opposition to the proposal, Representative Barney Frank, the Massachusetts Democrat who heads the House Financial Services Committee, said on Friday that the committee would work on the proposal in September.
A second major component of the Obama plan, to give the Federal Reserve more authority to supervise large companies for risks they may pose to the financial system, came under attack by senior Senate Republicans earlier this week. That proposal has also been questioned by Senator Christopher J. Dodd, the Connecticut Democrat who heads the Senate Banking Committee.
Dodd’s obstructionism toward a proposal of obvious public benefit warrants far more aggressive scrutiny. The tendency to mention the senator only in passing practically defines what is wrong with daily journalism: it is very good at reporting the war of words and the incremental blow by blow. But it does a poor job of repeatedly asking WHY? Why is Dodd reluctant to back this reform? The answer should be in every article from now until the final congressional votes are cast.
To learn more about the extent of funding Dodd receives from banking and financial services firms, look at an article that ran last September in his homestate paper, the Hartford Courant:
Financial-sector firms — mortgage firms, insurance companies, accountants, brokerage houses, hedge funds — are among the most generous political donors in America, lavishing more than $1 billion on candidates this decade. And in Congress, few politicians have fared better than Dodd. During the past 20 years, PACs and employees of finance-related firms have contributed more than $13 million to Dodd’s election efforts, including nearly $6 million in the past two years. Among members of Congress, only leading presidential candidates — Hillary Clinton, Barack Obama, John McCain and John Kerry — have collected more money from the sector.
Democratic U.S. Sen. Christopher Dodd still trails GOP frontrunner Rob Simmons, according to a new Quinnipiac University poll. In a direct match-up, Simmons beats Dodd, 48 to 39 percent, according to the poll released this morning, though Dodd fared better against other would-be GOP contenders. Despite a steady stream of television ads over the past six weeks highlighting Dodd’s recent accomplishments in the Senate, the beleaguered incumbent continues to have a credibility problem, with 55 percent of those polled saying he is not “honest and trustworthy.”
Ironically, Dodd is chiefly in political trouble not over the vast sums he has received from the industry, but over very modest preferential treatment he may have received from the controversial mortgage giant Countrywide when he refinanced a couple of his own mortgages. It is always the petty personal scandals that get a reaction.
Meanwhile, banking industry influence is never scrutinized enough. Usually, we are expected to figure out what is wrong with statements like one, in the Courant piece, where the president of the American Bankers Association, who personally donated a sizable sum to Dodd, described the senator: “[H]e doesn’t agree with us all the time . . . He’s very pro-consumer . . . “