Seizing The Controls

This is a few days old, but still worth comment. Economics of Contempt notes that Bob Corker has jumped the line in the Senate Banking Committee and is negotiating an overhaul of finance law with Chris Dodd. This is a shocking turn of events because Corker is not - you might want to sit down for this - the Ranking Republican on the Committee, Richard Shelby is. I know, I'm sure the other courtiers are just as shocked as you are. EOC notes that Corker is taking a "massive" political risk: Bob Corker: Risk Lover

The biggest news of the day was that Sen. Bob Corker (R-TN) has agreed to break ranks and negotiate with Chris Dodd on a financial reform bill. This comes five days after Dodd said he and Sen. Shelby—the ranking Republican on the Senate Banking Committee—had reached an "impasse" on financial reform.

Let's be clear: Corker is taking a massive political risk here. He's a first-term Senator, and he's publicly replacing his ranking member at the negotiating table on the biggest, most important piece of legislation that the Senate Banking Committee has seen in a long time. And he's not crossing any ranking member, he's crossing Richard Shelby—the most vindictive, ruthless Senator this side of Tom Coburn. (As I said the other day, what you have to realize about Shelby is that he would literally bomb Oregon if it meant an Alabama company would get the contract to build the bomb.)

In the classic way of American politics, almost everyone agrees that there should some sort of reform of the nation's finance laws, but nothing can get done because the 70-year old ranking minority member of the relevant committee is at an impasse with the 69 year-old lame duck committee chair over the scope of "comprehensive" reform. Um, who gives a flying f***? It's a crying shame (not to mention reckless) not to at least have some sort of resolution authority established for an institution like Lehman Bros., so we don't have a repetition of the chaotic bankruptcy filing that led to, among other things, the improvised bailouts of the Reserve Fund and AIG. Why the hell should Richard Shelby have the final say on something as basic as that? Corker gives every indication

of at least recognizing that there needs to be some work done beyond just pulling rank:

What will be some of the goals?

Corker: “I think every American wants us to have a resolution mechanism in place, so it’s not in the situation again where citizens across this country are bailing out a large institution. I don’t think that’s something that meets anybody’s standards…At the very minimum we need to do that…Obviously there are some issues surrounding derivatives. There are some issues we are going to have to deal with on consumer protection. That has to be done with an appropriate balance…That will probably be the toughest issue…In business I used to always leave the stickiest issues to last. Let’s figure out what we agree upon first. Let’s build some trust among members.”

Shelby was righteous on the bailouts, but he is simply in the way here. People love to complain about the filibuster, as if removing that would enhance American politics. It would not because you would still be left with a Senate where the fate of legislation is left as much to the inertial pull of seniority and incumbency, as much as anything else. If Shelby doesn't want to get the deal done, then he ought to get out of the way. As EOC notes, Corker is well informed on the issues (for a Senator) and has a solid business background. I was impressed with the way he stood athwart of the late Bush-era attempts at bailing out the auto companies, so he would seem to be a non-squish in negotiating with Dodd. If Corker's better able to negotiate, let him do it and get it done.

This really tells you a lot about the warped values of the political class. Shelby's impregnable for standing in the way of even basic reform, yet Corker is the one taking the political risk? That formulation is worse than any filibuster.