When it comes to derailing Obama's proposed reforms of the financial sector, big banks have no bigger ally than Corporate Whore Christopher Dodd. The Connecticut Senator is leading the charge to water down these reforms, which he describes as trying to do too much and threatening beloved bipartisan progress with Republicans. While Republicans are corporate whores on principle, Democrats are corporate whores because they are corrupt. In Dodd's case, it appears likely that, with his tenure in the senate coming to an end this year, that he's auditioning for a lucrative private sector job in the banking industry. Details below.
Obama's point man on the new proposed regulations is Paul Volcker, without a doubt the smartest and most credible voice in the entire administration on financial matters. At the first hearing about the proposed reforms, held by the Senate Banking Committee, Republicans were of course skeptical that strong bank regulations were really needed, arguing for weaker regulations whereby regulators had the discretion to prohibit Bank's proprietary trading (speculation with their own money), instead of just forbidding it outright. Volcker responded that this puts regulators in an impossible position - that it's foolish to think that regulators will stand up to banks fighting for fat profits in boom times.
With Republicans a minority on the Committee and in the Senate as a whole, their view shouldn't carry the day, as long as Democrats stand up for the stronger reforms. But alas, no. Chris Dodd, chairman of the committee, took the time after the hearing to completely undercut the administrations position and argue strongly that Obama was asking for too much. In an article titled "Dodd Calls Obama Position too Grand", the man who is not running for re-election because of scandals related to his cozy relationship with banks, is quoted as saying that the Obama proposals were "adding to the problems of trying to get a bill done". You see, Dodd was already at work on wonderfully bipartisan (meaning ineffectual) reforms, and this would make them start over.
It seems to me that the biggest problem in trying to get a good bill done is Corpora-Dems that won't fight for real reform. As shrewd financial analyst Barry Ritholtz says:
Dodd proves that the only thing more corrupt than a congressperson whoring for a campaign donations to get re-elected is a congressperson not seeking re-election, whoring for a job.
LATE ADDITION: The Wall Street Journal has an awesome quote from Volcker to Republican Senators questioning the need for these reforms:
I tell you sure as I am sitting here, that if banking institutions are protected by the taxpayer and they are given free reign to speculate, I may not live long enough to see the crisis, but my soul is going to come back and haunt you.