Thursday, April 3, 2008; 1:00 PM
Post columnist Dana Milbank, who serves as the capital's foremost critic of political theater in his Washington Sketch columns, was online Thursday, April 3 at 1 p.m. ET to take your questions and comments about the things politicians say -- and the absurd ways they find to say them.
The transcript follows.
Dana Milbank: Hello from room G-50 of the Dirksen Senate Office Building, where the Senate Banking Committee is holding a hearing into the Bear Stearns bailout. The senators are concerned about whether the $30 billion in Federal loan guarantees created a "moral hazard."
"I think we must guard against creating a moral hazard that encourages firms to take excessive risk based on the expectations that they will reap all the profits while the federal government stands ready to cover any losses if they fail," said Sen. Richard Shelby, the ranking Republican.
"I have received letters from my constituents with concerns that it is a bailout of the big bank that creates a moral hazard," said Sen. Tim Johnson (D-S.D.)
"I worry that as quickly as the federal government moved to save Bear Stearns from complete failure, it has moved at a snail's pace, if at all, to save homeowners from foreclosures, where the same types of moral hazards, like and not, existed," added Sen. Chuck Schumer (D-N.Y.)
Speaking of moral hazards, here's another one to ponder: lawmakers on the committee passing judgment on Bear Stearns have, collectively, taken in more than $20 million in campaign contributions from securities and investment companies. And, for the most part, they do not seem terribly troubled about the Fed's actions to help Bear Stearns.
"Let me just say," Chairman Chris Dodd (D-Conn.) said before a word of testimony was received, "that I want the witnesses to know, and others, that as a bottom-line consideration, I happen to believe that this was the right decision." Dodd, according to the Center for Responsive Politics, has taken $5,796,000 from the securities industry, including $319,300 from Bear Stearns employees and $92,300 from J.P. Morgan, the company that bought Bear Stearns.
Let's now get to your questions on this and other moral hazards.
And now for something completely different: Seriously, that picture of Keith Richards on the front page of washingtonpost.com is possibly the scariest thing I've seen since I first saw KISS without their makeup on.
Dana Milbank: That is what we call an amoral hazard.
Denver: Are we watching the end of the "Roaring '20s?
washingtonpost.com: Belatedly, the Bad-News Bearer (Post, April 3)
Dana Milbank: There is certainly an end-of-days feel to the hearing today, and the one yesterday. When you hear Bernanke say something, you have to apply a pessimism multiplier to it to compensate for his tendency toward cheerleading -- so when he said "possible recession" I went home and put my cash in my mattress. Unfortunately I have one of those sleep number beds, so I discovered that I couldn't put the cash in the mattress without popping the air cushion.
Miami: What type of shotgun do you recommend?
Dana Milbank: In addition to suggesting the money-in-the-mattress routine, I also recommended in today's Sketch that readers purchase shotguns to defend themselves against the anarchy. My father-in-law works for Mossberg, so I recommend that brand. I plan on buying several and installing a gun turret on the roof of my house as soon as the Supreme Court overturns the D.C. gun ban.
Chicago: Great columns and great book. I'm an on-the-fence McCain supporter -- he easily would have had my vote in 2000, but this year I don't know because I can't tell what he believes in. His embrace of most things Bush in the past several years make him seem like he would say/do anything to be electable to the far right. I want to vote for the principled maverick John McCain. I know you talking heads look positively on the fact he is virtually tied with either Democratic candidate. I wonder why, given all the nonsense from the Democrats, he isn't way far ahead.
Dana Milbank: A McCainiac in Obama's hometown!
I actually think it's a miracle for McCain that he's even tied in the horse race polls. Given the external environment -- a recession and an unpopular war -- the Democrats should be far ahead. It's a measure of McCain's appeal, and the Democrats' self-destructiveness, that the race, at this early stage, looks even close.
Worcester, Mass.: Does the length of this year's Democratic Primary and the Michigan/Florida troubles have any impact of the possibility of changing the schedule next time, especially the idea of rotating the first caucus and first primary?
Dana Milbank: One hopes the Democrats will learn their lesson this time and finally take control of the primary chaos. But there's no sign of any centralized control at the moment. Journalists covering the campaign will be putting forth a proposal to have the first caucus in Hawaii and the first primary in Florida. Michigan and Ohio will go last, if at all.
Minnesota: If you could have your own avatar, what would it be?
washingtonpost.com: Goofy Characters and Weird People -- Sounds Like a Hearing (Post, April 2)
Dana Milbank: I actually do have an avatar in Second Life. She is a very fat lady who wears a red bikini. I created her to attend the virtual town-hall meeting held by Mark Warner when we thought he would run for president. The avatar at first did not even have a bikini but my editors thought that created a moral hazard at the town-hall meeting.
Nativeofpennsylvan, IA: Dana: Sorry about the phony town -- it's a bad habit I picked up on Weingarten's chat, where lots of people do it. So Obama admits on "Hardball" that he really hasn't kicked the nicotine habit. To those of us who tried to quit many time before succeeding, no big deal. Except that Jake Tapper wonders why his campaign lied when he asked them directly. Big deal, little deal?
Dana Milbank: I'm afraid this is three strikes against Obama: First he bowls a 37 -- with that dainty, girlish delivery, then he tells off an autograph seeker, and now he's fibbing about nicotine addiction?
Any one of these could doom him. Recall, if you will, that John Kerry's campaign was doomed when it was learned that he wore Turnbull & Asser shirts and kept his fingernails long so that he could better play the classical guitar.
San Francisco: Hello Dana, thanks for chatting today. It sounds like the new bipartisan housing bill has something for every big campaign contributor -- builders, bankers, speculators -- but very little for families who actually are losing their homes. Isn't Chris Dodd ashamed to bring a bill forward that so clearly favors the moneyed interests at the expense of the little guy?
Dana Milbank: I'm looking at him right now in room G-50. He does not look ashamed, but he looks as if he wants to eat lunch. Also, on a positive note, his eyebrows appear to be graying, so they don't clash quite so violently with his white hair.
Westcliffe, Colo.: Isn't a good thing that rich people appear on C-SPAN so we know where the bank vaults are and where the gold bullion is stored when the coming collapse of Western civilization occurs? Another good thing George W. Bush has contributed, thanks to his time and "studies" at Yale and Harvard. Maybe the washingtonpost.com could come up with a map of the stars showing where the Federal Reserve board of governors live, their Bear Stearns buddies, their JP Morgan/Chase appreciants ... you know -- the Hamptons crowd. Perhaps you could put one to five stars for "credit worthiness" to aid in "recapturing" the loot. Bring on the apocalypse! Mossberg you said?
Dana Milbank: I am forwarding this to the Department Of Homeland Security, Westcliffe.
But on the subject of Bear Stearns, I should point out to you the sad news that Alan Schwartz, the chief executive, is trying to rent out his 7,850-foot home in Purchase, N.Y., overlooking the ninth green of a golf course. Fortunately, he still has his 11,000 square foot home in Greenwich and a condo near you in Edwards, Colo..
New to Indiana: This is cool -- I'm watching C-SPAN coverage of the Senate Banking Committee and you are there. Can you shout out something so the camera will show you being asked to leave the hearing? Or, if you really want to stay and witness all this spellbinding dialogue, then tell me, is Evan Bayh related to Mitt Romney? He seems so ... I don't know, Teflon, in a Democratic sort of way.
Dana Milbank: I'm in the back, where the seats are now mostly empty. Even the Code Pink protest ladies seem bored.
Interesting observation in re Bayh/Romney. They are both well-coiffed scions of powerful dads, the former the senator son of a senator and the latter the governor son of a governor. Bayh went to Washington's St. Albans, while Romney went to Detroit's Cranbrook. But I like Bayh much better, mostly because he said hello to me before while on his way to the men's room.
Arlington, Va.: The (sadly) funny part of the Yoo memo is that it purports to uncover an exception to anti-torture treaties if you are torturing the prisoner in order to extract information about pending attacks. That is actually the exact reason for these agreements. It is like arguing that speed limits do not apply if you are in a hurry.
Dana Milbank: Who knew? Yoo is back.
I have missed Yoo since Yoo left town for academia, so I am delighted to have this chance to talk about Yoo again. You are quite right about Yoo's views, and I suspect any day now a Freedom of Information Act request will reveal a memo Yoo wrote for the Department of Transportation demonstrating that speed limits only apply to other people.
Thank you -- and Yoo! -- for the Yoo question.
Bethesda, Md.:"One hopes the Democrats will learn their lesson this time and finally take control of the primary chaos." But wasn't that the whole point of stripping Michigan and Florida of their delegates in the first place? It was their insistence on jumping to the front that nearly backed New Hampshire into Christmas. Given the problems with enforcing the rules that it does have in place, what could the Democratic National Committee do differently to "take control"?
Dana Milbank: How about a smoke-filled room? Really. I think if you compared the Democrats' success rate in winning the presidency before and after the modern primary system came into being in '68/'72, Democrats would be better off cutting out the voters entirely. Except, as mentioned earlier, voters in Hawaii and Florida.
Washington: Dana, I am a huge fan -- thanks for capturing the absurdity and silliness of a town that takes itself far too seriously. You are a breath of fresh air, and without question the most valuable asset at The Post. Have you ever considered syndication?
Dana Milbank: Thanks, mom. I hadn't considered syndication. Are there any newspapers left?
Bulletin: Dodd just tried to end the first panel of the hearing, but Corker interrupted to ask one more question. Now we're finally on break.
McLean, Va.: While you're watching the committee hearing, I'm using the celebrity morph site recommended by Liz Kelly to watch you morph into John Cusack.
washingtonpost.com: Celebritology: Workday Waster -- Just Call Me Paris (washingtonpost.com, April 3)
Dana Milbank: I'd prefer if you could morph me into Alan Schwartz so I can use his remaining homes in Greenwich and Colorado.
He bowled a 37?!: I bowled a 23 the first time I tried, and I was seven years old.
Dana Milbank: And he took these too-dainty steps. It was like watching a pelican bowl.
Bloomington, Ind.: Dana, isn't it time for you to do a "it's 3 a.m." ad video?
washingtonpost.com: The Trail: Clinton Unveils New 3 a.m. Ad (washingtonpost.com, April 2)
Dana Milbank: Yes, I plan to do that as soon as this hearing ends -- which will be at about 3 a.m. Jamie Dimon from J.P. Morgan has just started talking, to be followed by the world's wealthiest welfare recipient, Alan Schwartz.
I must sign off now and resume my search for moral hazards. Thank you for chatting.
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