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Five views of Chris Dodd’s financial overhaul bill

Written by

Daniela Altimari

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No, they probably haven’t read all 1,336 pages of Dodd’s proposal yet. But several of the folks vying to replace him in the U.S. Senate have weighed in with their opinions.

On the right, financial pundit, author and Republican candidate Peter Schiff dismissed the sweeping reform bill as indicative “all that’s wrong with Washington” and a weak attempt by the lame-duck Banking Committee chairman to hone his legacy.
On the left, Democrat Merrick Alpert said the bill is emblematic of the Senate’s “culture of corruption” and shows why publicly financed campaigns are needed. (And Alpert once again relied on his favorite word to criticize his opponent.) 
On the other hand, Democrat Richard Blumenthal found much to praise in Dodd’s proposal, though Blumenthal says he wishes it included a proposal for an independent consumer financial protection agency. (I am assuming that Blumenthal was speaking as the state’s Attorney General and not as a Senate candidate because his statement on the bill came through the AG’s office and not his campaign staff.)
And Independent John Mertens said the bill is better than earlier versions, but still doesn’t go far enough. 
Ed Patru, spokesman for Republican Linda McMahon, did not offer an opinion (despite this.) “Neither of us have read the Dodd legislation yet,” Patru said in an email.
Republicans Rob Simmons and Vinny Forras did not respond; I will post their his comments as soon as they arrive.
Meanwhile, here are Schiff, Alpert and Blumenthal’s views:
  

Schiff (via email)

“Chris Dodd is searching for a legacy, which in this case is more federal bureaucracy and red tape. The last thing this country needs is to give the Federal Reserve more power.  The Fed has done enough damage with the power it already has.  Putting the Fed in charge of regulating systemic risk is like hiring a fox to guard your hen house.  The Fed was the principal risk creator that lead to the finance crisis in the first place. Chris Dodd helped engineer the bailout of Wall Street, Freddie Mac and Fannie Mae, and then forced taxpayers to pick up the tab for their outlandish bonuses.  This bill represents all that’s wrong with Washington and illustrates how politicians who don’t understand economics, are just making it worse.”

Alpert (via email)

“We need real reform to prevent the next financial crisis that is, in fact, already brewing.   Real financial reform means reinstating the Glass-Steagall Act to separate the low-risk commercial banking function, on which consumers and small business depend, from the high-risk investment banking function.  Real financial reform also means breaking up financial institutions ‘too big to fail’, so that the taxpayers do not have to again bail out the financial behemoths when they can no longer meet their obligations.  Real financial reform means establishing a strong, independent Consumer Financial Protection Agency to aggressively police the financial services community.


“As Senator Dodd has learned, none of this will pass in the current U.S. Senate for the simple reason that financial institutions have given millions to Senators in campaign contributions and have spent millions more on lobbying the Senate on a day-by-day basis.  We can end this culture of corruption in Washington by having publicly-financed Federal elections, disclosure of all contacts between financial industry employees and member of Congress and term limits for all members of Congress.

“Either we are going to be serious about reform or we need to accept that the tired, old incrementalism of career politicians will never produce a different outcome.”

Blumenthal (via email)

“The financial reform legislation proposed today is a significant, serious, and long overdue step toward curbing Wall Street excesses that led our economy to the brink of disaster. I will closely examine this complex and comprehensive bill.


“I am pleased that the proposed bill:

  1. For the first time regulates hidden and opaque derivative markets that led to the failure of insurer AIG and helped cause the financial crisis;
  2. Ends too big-to-fail by giving the FDIC authority to liquidate failing financial firms at industry expense, not taxpayer expense;
  3. Institutes the Volcker Rule prohibiting banks from making risky bets on financial securities for banks’ benefit, endangering themselves, their customers and federal taxpayers who insure deposits;
  4. Provides shareholders with some authority to rein in out-of-control executive compensation;
  5. Takes steps to restore state authority to curb predatory lending and financial practices.

“My hope is that the legislation will create a consumer financial protection agency with independent authority to write and enforce rules that protect consumers. I continue to believe that the agency should be a standalone entity, but I will study the committee’s proposal.

“I still hope that this bill may be the basis for a bipartisan consensus to correct fundamental failings in Wall Street practices that pose an ongoing threat to our entire financial system.”


UPDATE: Here’s John Mertens’ response (via email)


“It does do some good things, and is an improvement upon the November version (see “Too Big to Fail” on my website: www.Mertens2010.com). However, it does not go nearly far enough. We should reinstate the Glass-Steagall Act, to separate most commercial and investment banking activities. And, after causing huge damage to our economy, and requiring huge amounts of taxpayer-funded bailouts, it’s time to break up huge institutions like Morgan Stanley or Goldman Sachs into, say, five smaller (but still extremely large) institutions. Mr. Dodd says that ‘No legislation will stop the next crisis from coming.’ I do not agree. Stronger action to prevent entities from being ‘Too big to fail’ can do the job. I would vote for Mr. Dodd’s bill, but I would also fight hard for much stronger protections for us, the people.”
 

Republican Vinny Forras (via email)

After everything that Chis Dodd has done and been directly involved with,  including receiving insider, VIP loans from Country Wide, I find it inconceivable that this man is still in charge of the Banking Committee. It has been shown that Senator Dodd played a key role, along with his counterpart in Congress, Barney Frank as they FORCED banks to loan money to individuals who, under some sort of “Fairness Doctrine’,  had no business buying homes.
 
We are guaranteed, life, liberty and THE PURSUIT OF HAPPINESS… But we cannot guarantee that everyone who owns a home can afford the mortgage.   
 
 I feel that Dodd and his relationship with ACORN and other dubious organizations must be taken into account very seriously as we consider any legislation that this man is promoting, particularly after the animals have stampeded and now we are looking to close the barn door?
 
I am dubious of Dodd’s proposal, which may have good points inside but I am trying to understand what brought him to this “OH MY, OR MY GOD MOMENT”… If he was doing his job properly I believe that the mess we are in may never have happened, or if it did, it would have been of far less magnitude. 
I believe that our system is still the finest on the face of the earth, but once corrupted by influences such as ACORN or an administration or party that steers us into a socialist model, a bill like this is not worth the paper it is written on.
 
Those in any industry who do things that are against America and Americans in an illegal or immoral spirit should be punished and barred from such practices going forward. I find it sadly amusing that Mr. Dodd at this point, as I stated before, after perhaps the most terrible collapse in our financial history is offering such a proposal .
 
Also, for one who has been an insider at the highest levels for decades Dodd’s actions, knowing what he knew and what was happening behind the scenes, is guilty of MALPRACTICE and dereliction of duty to all Americans.  WE THE PEOPLE will be paying the price possibly for generations to come! You want to know one of the reasons that I decided to answer this emergency call for Connecticut first and America always? This was one of the issues that solidified my decision to run…. The career country club politician that Dodd is the poster child of…  And continues to be, in the face of all the injury to our economy that his actions have caused takes my breath away.   This is a parting scam, no doubt his last great drink at the public trough! I suggest that we let him sail off into the sunset and get on with repairing the enormous damage that he and his kind have caused….

  

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