Dodd Never Goes Against the Family

By Bill Wilson



Putting Chris Dodd in charge of writing the financial "reform" bill is like calling in Don Corleone to write an anti-crime bill. To expect anything but a whitewash that protects the real criminals is naïve at best.



In brief, Dodd is without a doubt the most corrupt individual to ever sit in the U.S. Senate, and that's saying something. Not only did he craft a bailout for Countrywide Financial after receiving generous mortgages through a VIP program, he was the top recipient of campaign donations from Fannie Mae and Freddie Mac employees and political action committees while he repeatedly stood in the way of attempts to rein in the failing mortgage giants.



To even let Dodd have the power to put a period in this bill — which purports to solve the financial crisis that he helped to cause — is disgusting.



But in many ways, Dodd's role in Congress' latest takeover of the financial system is fitting, since the "reform" bill itself does nothing to hold accountable the actual culprits of the financial crisis, including members of Congress:



1) It does not repeal the failed social policy to put people into homes they could not afford, in particular Clinton era regulations executing the Community Reinvestment Act that strong-armed banks into giving loans to low-income Americans;



2) It fails to rein in the Federal Reserve, whose easy money policies and lower-than-justified interest rates accommodated the housing bubble as it blew up, and then when it popped bailed it out with a $1.25 trillion bailout to investors who bought mortgage-backed securities;



3) It leaves the federal government in complete control of the GSE's Fannie Mae and Freddie Mac, who through the securitization of $4.7 trillion in mortgages and the mislabeling of Alt-A and subprime mortgages as prime spread the crisis like plague rats throughout the entire world.



In short, the Dodd bill does nothing at all to address the root causes of the crisis, all of which government created, as ALG News has previously reported. What it does instead merely amounts to a distraction from the real crimes that took place at considerable cost to taxpayers.



Although the system has been described as too-big-to-fail, in many ways it was designed to fail. And Chris Dodd now wants to institutionalize that failure — by leaving in place the government institutions, regulations, and policies that caused it.



Commenting on the floor of the U.S. Senate yesterday, Senate Minority Leader Mitch McConnell said, "The way to solve this problem is to let the people who make the mistakes pay for them." Amen.



That would naturally include eliminating Fannie and Freddie as GSE's and selling them off piece by piece. It would also mean being honest about the true taxpayer exposure posed by the government's guarantee of the GSE's debts. It would mean discontinuing the social policy of pushing home ownership on those without the means to pay for it.



And it would mean putting more restrictions in place on the use of monetary policy to advance such ill-conceived social policies in the first place, and bringing more transparency to the Federal Reserve's balance sheet.



And finally, to echo Senator McConnell's call, it would mean bringing an end to "too big to fail."

Said McConnell, "We won't solve this problem until the biggest banks are allowed to fail."



Sounds simple enough for the American people to understand. Those institutions that made bad bets do not deserve one cent of taxpayer money. Unless financial institutions are allowed to fail, the ones that make the worst mistakes will be perpetuated — only to make the same mistakes again.



But this requires an honest playing field in the first place — without government coercion. Unless these designed-to-fail government policies are repealed, the same mistakes will keep on being made by the institutions forced to participate in their folly.



And the real criminals will get away with it.



Bill Wilson is the President of Americans for Limited Government.




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DeMint Hold on Legal Contortionist's Nomination is Right



By Rick Manning



Obama D.C. Superior Court nominee Marisa Demeo is one of those uniquely liberal creations — someone with the philosophical flexibility to oppose a Hispanic nominee to the U.S. District Court of Appeals because he didn't meet an affirmative action litmus test.



Yes, that's right. Demeo as a regional counsel for the Mexican-American Legal Defense and Education Fund actually argued against the placement of a Hispanic onto the federal court that has proved to be a stepping stone to the Supreme Court because she feared that this particular Hispanic, Miguel Estrada, opposed creating forced guidelines for appointing other Hispanics.



It is this exact kind of tortured logic that Senator Jim DeMint is seeking to keep off the bench through placing a hold on her nomination. After all, Demeo supports affirmative action for Hispanics, but opposes extraordinarily qualified Hispanics from advancing on their own merits without the benefit of quotas.



Even more importantly, Demeo clearly wants to drown out the voices of conservative Hispanics, much like liberal black leaders fear the voices of Justice Clarence Thomas, Thomas Sowell and J.C. Watts, Jr.



Senator DeMint is to be commended for his efforts to prevent this ideologue from a permanent, lifetime spot on the federal bench.



After all, if Demeo did not find Estrada suitable, then she should certainly be held to the same standards.



Remember Miguel Estrada came to his nomination with one of those compelling American success stories that make most people feel like they can overcome any obstacle. Born in Honduras, Estrada came to the United States at the age of seventeen, not knowing a word of English. He learned the language almost instantly, and within a few years was graduating with honors from Columbia University and heading off to Harvard Law School. He clerked for Supreme Court Justice Anthony Kennedy, was a prosecutor in New York, and worked at the Justice Department in Washington before entering private practice.



Yet, Mr. Estrada was not good enough for Demeo as he didn't pass her litmus test for what a Hispanic should think and say.



Now, Obama wants the Senate to confirm Demeo, and hopefully, her meager background as a Hard Left advocate will be subjected to the same scrutiny that she felt appropriate for Mr. Estrada. Of course, those same Democratic Senators who decried Mr. Estrada's nomination stalling it until it died, are now fulminating about unnecessary delays imposed by Senator DeMint's hold on Demeo's nomination.



Ironic, isn't it?



Rick Manning is the Communications Director of Americans for Limited Government.