Senators accept no responsibility, but politick for more

In reading and hearing the members of the Senate banking committee comment on the Obama administration's plan for financial regulation, one could be excused from coming to the conclusion that they are all freshman senators having entered Congress as the extreme financial crisis was already underway and unavoidable. Democrats and Republicans alike act as if Congress has no power and had no complicity in the regulatory choices and administrative laxity that led to the crisis. Somebody should add up the dinners, favors, sponsored speeches, campaign contributions, and general ass kissing that this group received from the financial services industry in the years leading up to the disaster.

Leading the charge of amnesia is Senator Dodd, Democrat and Chairman of the Banking Committee, undercutting his administration's efforts in a completely transparent effort to save his own political life in Connecticut. Shelby and Bunning, each with their own unique undercurrents of nastiness, are the most quoted on the Republican side. It was a surprise to hear Democrat Mark Warner of Virginia immediately voice negative concerns about the proposal.

This is not to say that there should not be a thorough discussion and debate about the Administrations proposals. Once a plan is passed it will have staying power and a long term impact. It is, however, disappointing to see such initial bias given Congress's general blind eye or contributing one (as in both Democratic and Republican initiatives over 12 years to mandate that Fannie and Freddie expand dramatically their lending to borrowers who were not credit worthy) to what occurred. The fact seems to be that Congress sees the Obama plan as one that will limit their power and legislative authority and they want no part of that.

If bills are ultimately put forward that give Congress a greater position of power to regulate our financial system there is no recent precedent that suggests that it would be a good thing. None. As recently as the last few months we have seen the TALF proposal to liquify credit markets sabotaged by Congressmen asserting regulatory power over any participant in the public/private partnerships envisioned by that creative and needed plan. So no go for that, of course.

Maybe this is just initial sparring and something constructive will come out of it. If not it will at a minimum be a wasted opportunity for needed change and at worst a guarantee of another financial crisis within in a few years.