Like most Americans, I haven’t seen the specific details of what’s in Sen. Chris Dodd’s (D-Conn) financial regulatory restructuring bill, currently being constructed in the Senate. I’ve read news accounts and talked with some of those on the periphery of the bi-partisan negotiations, which have been far more commodious than many assumed.
The one descriptive phase—in a variety of ways—which I’ve heard most often is that, so far, in these Senate discussions, “Wall Street and the big banks are getting their heads handed to them!”
“Danger Will Robinson, Danger”
Before anyone runs off and praises the Lord for “chickens coming home to roost,” the “Devil getting his due,” or the big financial players getting whacked, I would wait to see the specific language in the Senate bill and what inevitably will get added in the “managers amendment,” a package that Dodd and ranking Republican Dick Shelby (R-Ala) will offer to “fix up” small and large things discussed “off line.” That admonition applies also to the final package agreed on by House and Senate negotiators.
Don’t weep just yet for the big banks and investment bankers. They often don’t lose or lose easily and no matter what becomes law, they’ll likely still make lots of money because that’s what they do.
Whenever it’s voted on—possibly this week--the final Senate package will go to a “conference committee” of House and Senate Banking Committee members--with the legislation that Rep. Barney Frank (D-Mass.) wrestled through that chamber-- and the two “packages” then will be reconciled into a single “conference report” which both chambers will have to approve.
“Reconcile” is polite language for “ugly horse trading,” when issues and provisions get dumped or included, with few willing to answer the why and how of either situation.
Traditional legislation procedure argues that what is in each bill become the outside parameters for the provisions which get into the final conference report. But, the reality is clutch your wallets and your underwear in conference. Lots of details can get ignored or dropped, from the House or Senate bills—including by vengeful staff--if you don’t have a major political “horse” (advocate) in the room when the matter comes up, ideally among the sitting conferees.
The flip side applies as well. Just because a provision didn’t make it into either bill, it doesn't mean that a conferee can't seek its inclusion, possibly battering his support/opposition on other provisions about which he cares less. There are “squeaky wheels” in legislative conferences, too.
So, at this point, engaging in high fives, weeping, or gnashing of teeth, no matter what you read in the paper or on the Net, is premature.
In lobbying, it’s never over until it’s over and that process often includes what regulations get issued—months and months after the legislative fact--to implement or weaken the legislative language the President signs into law.
A Major Loss
The defeat of Sen. Bob Bennett (R-Utah), earlier this month, in the Utah Republican Convention, by right wing elements who felt that the conservative junior Senator wasn’t conservative enough, is a loss of a fine public servant to the entire nation.
Democrats and Republicans alike lamented Bennett’s defeat because they knew Bennett to be a principled individual who may not always agree with you but gave you a thoughtful hearing on your issues. He is a smart and capable public official who easily could find bi-partisan support among Democrats for of his positions and vice versa.
I don’t know if he would take it, but the Obama Administration could do a lot worse than to offer Bennett a slot where his keen business sense would come into play.
If Bennett’s rejection is a reflection of what kind of representation is the goal of the “Tea Baggers”--who filled the GOP convention crowd--then reason and intelligence may be foreign qualities to any Tea Bagger-supported candidates who get elected in November.
What Did the White House Know, When and What Did It Do?
“Bush Administration economist
Jason Thomas sends Steel an
email in which he attaches a
report identified as the source for
the March 10, 2008 Barron’s
article accusing Fannie Mae of
overstating its financial results
through accounting improprieties.”
The little snippet above comes from a Wall Street Journal “Washington Wire” blog, containing “timeline” information (five pages)-- provided to the WSJ by the Financial Crisis Financial Inquiry Commission--examining issues which caused the nation’s 2008 financial services system implosion, including disastrous events at Fannie Mae and Freddie Mac in 2007-2008.
One of the items which garnered my interest, as someone who continues to believe that the Bush Administration and its conservative allies helped to ambush Fannie and Freddie, was the fact that on March 8, 2008, the White House/Treasury seemed to have a damaging report given to the WSJ’s Barron’s publication—at least two days in advance of Barron’s publishing a story--suggesting that Fannie Mae engaged in accounting manipulations and was bankrupt. The article started a run on Fannie’s stock and a ton of subsequent short selling, exacerbating already bad financial and economic news.
If such a report fed the Barron’s article, it would seem at odds with some Administration ideas, as expressed in the same “timeline,” where Fannie and Freddie were variously seen as part of the solution to help the failing mortgage market or at least deserving of some type of capital relief, which the GSE regulator and other Admin officials seemed to be considering.
Who wrote the report? Was the White House or Treasury part of the production team or just the same old crowd of GSE haters? Did Barron’s contact the Bush Administration for comments about its accounting allegations? If the Administration didn’t join the story, did it try and dampen the suggestions? If the Admin knew that Fannie didn’t have accounting problems, why didn’t it say that to Barron’s writers?
It’s hardly a smoking gun, but it wouldn’t shock me to see Bush White House or Treasury DNA on the report attached to an email sent to “Steel,” whom I assume was Robert Steel, Bush undersecretary for domestic finance and one of the architects of the Bush Fannie/Freddie policies as well as actions to Wall Street’s private label subprime debacle.