Back in 1840, when William Henry Harrison was running for president, his campaign made a bold marketing push to reinvent the aristocratic candidate in order to gain popular support. Although Harrison came from a wealthy family, studied medicine at the University of Pennsylvania, spoke Latin and French, served in Congress and rose to the rank of general in the U.S. Army, his campaign handlers rebranded him as one of the common folk – the kind of a guy who would be happy sitting at home in a log cabin with a jug of hard cider. Not surprisingly, the electorate bought this manufactured image, and Harrison defeated incumbent President Martin Van Buren in the election.
I am reminded of the 1840 political reinvention of Harrison when reading about the 2009 political reinvention of Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee. In the past week, Dodd has sought to emulate Harrison by presenting a radical reinvention of his public persona – the one-time friend of Angelo is now the friend of the working-class homeowner.
Dodd, as you probably know, has begun advocating an extraordinary overhaul of the federal regulatory systems. His proposal, which took over 1,100 pages to spell out, completely rewrites how Washington will keep track of the financial services industry while supposedly protecting consumers from questionable loan products.
On its own terms, this is fascinating – not since the 1930s has there been such a sweeping attempt to overhaul the way that the federal government oversees the nation's financial services system. However, there are significant problems that give the Dodd effort a distinctive piscine aroma.
For starters, Dodd's proposals are out of sync with what the White House envisioned for this issue and what his colleagues over in the House of Representatives are offering as legislative solutions. Rep. Barney Frank, D-Mass., the head of the House Banking Committee, has a much milder opinion of what regulatory reform should encompass. Frank has also taken a significantly kinder view of the nation's community banks and credit unions, having thoughtfully removed them from the oversight powers of the proposed Consumer Financial Protection Agency.
Dodd, however, is also pushing for a new a single federal regulator called the Financial Institutions Regulatory Administration. This agency would force the elimination of the Office of the Comptroller of the Currency and the Office of Thrift Supervision, while simultaneously stripping the Federal Deposit Insurance Corp. of its oversight of state banks and the Federal Reserve of its supervisory powers over bank-holding companies. Over in the House, Frank's legislative agenda doesn't include this approach, nor is this particular strategy championed at the White House.
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Dodd, of course, has been in Washington long enough to know that such proposals will not go unchallenged. No Republicans have said that they will support his efforts, and the banking industry trade associations have already come out against such notions. And, of course, the regulatory bodies that are set to disappear or get chopped down by this plan won't take this challenge to their powers without a loud fight.
So what is the point of this? Is Dodd thinking about the future of the U.S. financial system? Or are his thoughts closer to home – or, to be blunt, closer to his home?
Next year, Dodd is up for re-election, and his current poll numbers with Connecticut voters shows that his popularity is at an all-time low. Much of the voter disapproval with Dodd circles back to his image of being much too cozy with the banking industry – a fact that is reinforced in any Connecticut cinema showing Michael Moore's new agitprop ‘Capitalism: A Love Story,’ which includes a section on Dodd's sweetheart mortgage deals.
So what better way is there for Dodd to counter that image of being the bankers' best pal than by smacking them with a 1,100-page proposal that no banker could possibly love? Never mind that there is very little likelihood that few of the 1,100 pages worth of ideas will become reality. The idea of Dodd fighting against the bankers (and, by extension, for the regular homeowners) will look good in his TV campaign advertisements.
Yes, it is a cynical view of things. But, really, Dodd has been at the helm of the Senate Banking Committee since January 2007 – why did he wait until now to enact anything resembling reformatory change in how the federal government regulates the financial services industry?
Whether Dodd can replicate the 1840 election and successfully rebrand himself via the William Henry Harrison approach remains to be seen. Personally, I think it will take the consumption of a lot of hard cider before any of the Connecticut voters will be fooled into thinking Dodd is offering log cabin-style values in his election year maneuvering.
– Phil Hall, editor, [b][i]Secondary Marketing Executive[/i][/b]
[i] (Please address all comments regarding this opinion column to hallp@sme-online.com.)[/i]
