Mortgages and Christopher Dodd

Where was Senator Christopher Dodd, chairman of the Senate Banking Committee, while the mess in the mortgage market was brewing? The easy answer is that he was ignoring his job and his constituents while attempting to beat the margin of error in presidential polls. Despite the problems happening on his watch, he moved his family to Iowa in a bid that even at the time everyone (except possibly him) knew was futile.

But it turns out he wasn't simply stroking his ego in Iowa. While Countrywide Lending was involved in predatory lending and charging prepayment penalties and steering home buyers to more costly loans, Senator Dodd got preferential treatment from them on not one, but two loans. Yes the chairman of the banking committee was getting lower interest rates than were available to the public, as well as $21,000 in campaign donations, from the poster child for the mortgage crisis.

According to Portfolio.com "The lower rates save the senator about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home." Additionally, he received services form the bank, like a float-down to a lower interest rate for free, where regular customers have to pay for these services.

The only response to these allegations from the Senator's office at the time of this writing is that they are preparing a statement.

Ignoring his job was bad enough. This moves Dodd to a whole new realm. It's time for him to retire from public office and spend more time in those homes he saved so much money on.

Senate Fails To Raise Gas Prices

Yesterday, the Senate failed to pass a bill that would raise gas prices. That's not a typo, I said raise. Why would the Senate want to introduce a bill that would raise gas prices above their already ludicrous levels? Well they didn't want to, they has good intentions and thought they were helping. Unfortunately the road to hell is paved with good intentions.

Senate Democrats put forth an energy bill with a key component being a windfall tax on oil company profits that were not reinvested in alternative energy sources. The thinking behind this is that it would help wean us off of our dependency on foreign oil. Unfortunately, that's not what would have happened.

Oil companies are responsible to their shareholders. The shareholders want profits. A windfall tax means an extra cost to the company. In order to offset the cost, the company must either cut costs somewhere else (i.e. layoffs) or raise prices. So the effect of this bill would have been greater gas prices or greater unemployment.

Now I see the scowls on some faces out there. You're thinking, "Why should I care if the shareholders make money? That's not helping me any." Well it probably is. If you have a pension, you're one of their shareholders. Most pension funds, from private mutual funds to city, state, and federal retirement plans are all heavily invested in oil companies.

Do you have kids? Their teachers' benefits are paid for by investments in oil companies. If you think it's hard to find good teachers now, imagine what it would be like if they had no benefits. Police, fire, ambulance, all these municipal workers have benefits paid for by investments in oil companies. Would you like to make it harder to attract good people for those positions?

Now I'm not saying that oil companies alone are paying for all this, they're just a large part of it. I'm also not saying I like high gas prices. I am saying that we need a feasible, economically-sound energy policy. If the senate (and congress) really wants to do something about the high prices, they need to take steps that will actually amount to lower prices. What can they do? Open more lands for oil drilling, allow more nuclear plants to be built, focus on strengthening the dollar. Each of these will lower the price of oil. None of them is a magic bullet, and none of them will work overnight, but unlike the tax plan, they will help.

Does Obama Know Who He Is Running Against?

Listen to Obama's speeches. You will be amazed at the number of times he mentions George W. Bush. Does he think he's running against Bush? Does he think voters are stupid enough to think he's running against Bush? Actually there's a good reason for him to keep bringing up Bush. Bush is easier to beat than McCain.

The truth of the matter, if you check the Congressional Record, is that McCain's voting record is closer to Hillary Clinton's than it is to Bush. In fact, McCain's voting record is closer to Clinton's than Obama's is. That's the fact Obama wants voters to miss. That Hillary supporters have more in common with McCain than they do him.

McCain and Clinton both actively try to work across party lines, where Obama prefers to stay rigidly to the left. He is, after all, rated as the most liberal senator. But he's going to have to work harder now. Everyone who drank the kool aid came out in the primaries, and it still took him all 50 states to win the nomination. If he expects to appeal to the mainstream voter, Obama will have to get his act together and remember he's no longer preaching to the choir.