Chris Dodd As Fall Guy?

Over the weekend, the story began to bubble up that Chris Dodd may have neutered the Stimulus Bill language restricting the bonus payouts of firms getting bailout funds. I gather that this is the thing on cable news this week, though it wasn’t much on NPR this evening. I was pretty pissed at this when I did read it at the NYT — Dodd is not unlike our own Carper or Biden in his fealty to financial institutions — although he does have a somewhat better progressive track record than either. And like Biden and Carper, Dodd’s constituencies certainly include banks and insurance companies including some of the famous residential enclaves of the masters of the financial universe.

Except that when the Stimulus Bill was clearing Congress, one of the big conversation pieces was about Executive Compensation caps (including bonuses) and its retroactive reach — a provision added by Dodd.

From here, I’ll refer you to Jane Hamsher at FireDogLake who has done the work to track down the contemporaneous reporting and put together what looks like Geithner and Summers as being the guys who pushed to have this provision watered down or removed. Glenn Greenwald has even more on this, noting that while Dodd certainly capitulated on the compensation issues, the pressure to do so came directly from Geithner and Summers. (And you really should go read both of them — this is excellent work.)

Ignoring the fact that the NYT or even CNN could have put this story together (it is just barely a month old!), I guess we have to note that the so-called liberal media still can’t follow the thread. Dodd apparently told CNN last evening (well after the Dodd was Responsible story had been through the Stenographic Media, who kept repeating it without digging in) that it was the Administration who wanted the the pay caps weakened. Dodd should have still held his ground on this, certainly. The story doesn’t feel like its done yet, but the story that I would love to see is how the Secretary of the Treasury’s job has apparently transformed into being the consigliere of the Too Big To Fail crew. Because it certainly seems to me that these guys are more concerned with the daily goings on at these firms than in what goes on in their own buildings. There might be more to this Dodd story, but at the end of the day, no matter the Congressperson, the people to watch are Geithner and Summers.

Everyone is angry about these bonuses, mainly because these banks and insurance companies don’t act like failed institutions — certainly they aren’t on the forced austerity that many other struggling firms (not on the Government dole) are. There is a real disconnect between people who are paid a very great deal and who never have to account for either risk or performance. Muscle out regulations you don’t like, take outrageous risks with other people’s money, break it all and still get paid. Accountability is never something you’ll have to live with. There is some anger (mine) because these bonuses are evidence that there is just no one who is running this thing (from Paulson who we know had no intention of really looking our for taxpayers to Geithner so far) with any eye for a real taxpayer upside. Sooner or later, someone will get to the bigger story here — that $170B just went to pay off several big banks in a second and quite unnoticed massive bailout to these firms, making them rather completely whole on their CDO bets.