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Monday, December 8, 2008

Senator Dodd to the Autos: Pot this is Kettle You're Black

Chris Dodd made this stunning announcement yesterday.

General Motors Corp should replace its chief executive if it receives emergency
government loans to avert likely collapse, a U.S. senator drafting bailout
legislation said on Sunday.

Another senior Democrat involved in the matter said negotiators expected a final deal by Monday, but he was less sure whether there was enough support in Congress to help GM, Ford Motor Co and Chrysler LLC.

"Obviously, that's a much more complicated question as to whether the votes
are there," Sen. Carl Levin of Michigan told "Fox News Sunday."

Senate Banking Committee Chairman Christopher Dodd of Connecticut said on
CBS's "Face the Nation" that GM and Chrysler, also facing a likely near-term bankruptcy without help, should probably merge.

Now, this annoucement isn't stunning because it isn't accurate, I think it is very accurate. It's stunning however for it unbelievable chutzpah. Personally, I think that any company that asks for a bailout has inherently shown total failure of its upper level management inherently. The mere act of asking for a bailout means that the CEO has failed in their duties and needs to go. You have proven incompetence when your "leadership" means your company is begging the government for money.

That said, for Senator Chris Dodd to complain that someone else needs to be removed from their position of power is the ultimate pot calling the kettle black. This is the same Chris Dodd that as head of the Banking Committee received not one but two sweetheart loans from Countrywide while investigations of Countrywide were ongoing. Talk about a leader with conflict and one that has been compromised, that leader is Chris Dodd.

Beyond this, I have written often of the corrupt bill that his name on it passed this summer. This bill which had the fingerprints of both Countrywide and Bank of America (which wrote major parts of the bill after providing Dodd with thousands in campaign contributions) would have had the FHA take over $350 billion worth of troubled loans from troubled borrowers. So far, thankfully, this bill has been an abject failure. While about $350 billion has been allocated, so far only about 100 loans have closed on this bill. While that is better than the alternative which is to unleash the fury of this corrupt bill, its abject failure speaks to the lack of effectiveness of its author, Chris Dodd.

Finally, as head of the Banking committee since 2007, he has overseen the meltdown in the industry. While he has overseen it, he has done nothing to warn, stem the tide, or in any way shape or form contribute to making the situation any better. Instead, he has gotten into bed with most of the corrupt players that made it happen.

While I agree that the CEO of GM, and every CEO that asks for a bailout, must go, so to must Chris Dodd. I hope to see him out the door of the Banking Committee right behind the CEO of GM.

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