Dennis Kucinich, maybe, I could understand. Even John Edwards, with his populist
streak. But Chris Dodd? I know the chap’s presidential campaign is
struggling, but has he forgotten that he’s chairman of the Senate Banking Committee?
would seem so.
Senate Banking Committee Chairman Chris Dodd said on Tuesday that U.S. Treasury
Secretary Henry Paulson needs to clear up questions about his former employer’s
role in originating securities related to subprime mortgages.
Dodd, who also is a contender for the 2008 Democratic presidential nomination,
said he was concerned about issues raised in a New York Times column on Sunday,
December 2, about the activities of Goldman Sachs in reportedly selling collateralized
mortgage obligations (CMOs) while Paulson led the Wall Street firm…
The article, by columnist Ben Stein, said Goldman also was selling the securities
Dodd said he was concerned because it appeared that Goldman Sachs was "aggressively
pushing subprime mortgages that they knew to be of concern while simultaneously
shorting collateralized mortgage obligations."
If so, it could raise suspicions why the Bush administration’s waited until
recently to begin initiating a plan to help homeowners who took out subprime
mortgages and now face losing their homes because their mortgage loans are
due to reset at higher rates, driving up their payments.
Dodd said Paulson should "address the concerns" raised by the New
York Times article and added a warning: "Failure to do so may be cause
for a formal investigation."
(There’s similar coverage at Bloomberg
I swear that just reading this makes me feel nauseous. This is worse than a
common-or-garden abuse of political power. The Senate is meant to be the more
statesmanlike and deliberative of the two houses of Congress. And the Banking
Committee, especially at a fraught time like now, is not the place
to be launching a distracting, polarizing, and cowardly attack on a Treasury
secretary who’s finally waking up to the need to do something about the housing
I am going to try my hardest to keep Ben
Stein out of this. He’s a newspaper columnist who is good at pushing bloggers’
buttons, my own included. Dodd’s initiative has nothing to do with Stein, and
everything to do with creating a sideshow which can’t help but hurt Paulson’s
attempts to get to grips with the subprime crisis. I sincerely hope that all
the other Democrats running for president will quickly and publicly distance
themselves from this complete and utter idiocy.
But for no end of detailed explanations why Dodd’s thesis is insane, you might
as well start
(Thanks to Colin Barr
and Alea for the heads-up.)
Update: Dealbreaker has the
Dodd statement in full:
"I am deeply concerned about the questions raised by Mr. Stein’s story
in the New York Times yesterday about the activity of Goldman Sachs in aggressively
pushing sub-prime mortgages that they knew to be of concern while simultaneously
shorting collateralized mortgage obligations. If these facts are indeed true,
the Administration’s inaction when this crisis began to emerge earlier this
year, is increasingly suspect. It is in the best interest of resolving this
crisis if Secretary Paulson, who was leading Goldman at the time in question,
addresses the concerns raised by Mr. Stein’s article. Failure to do so may
be cause for a more formal investigation."