Harvey Weinstein (Getty Images)

Harvey Weinstein's Weinstein Company has apparently capitulated to the Motion Picture Association of America, cutting some profanity (though not any scenes in full) in order to obtain the PG-13 rating that will allow for wider viewership. Per the Los Angeles Times, the new version of the film is to roll out on April 13, when the film expands from limited to wide release. This ends a détente between Mr. Weinstein and the ratings board, during which Mr. Weinstein had previously decided to leave his film unrated rather than face the R-rating stigma. Referring to MPAA Chairman Chris Dodd and the film's subject matter, Mr. Weinstein said in a statement: "“Senator Dodd’s support gives voice to the millions of children who suffer from bullying, and on behalf of TWC, the filmmakers, the families in the film and the millions of children and parents who will now see this film, I thank him for recognizing that this very real issue cannot afford to go unnoticed.”"

Final Senate approval will come later this afternoon (see update), and a bill signing ceremony could be next week. "We won't know the full results of what we have done until the very institutions we have created, the regulations we have suggested and provided for are actually tested," said Connecticut's Christopher Dodd, the bill's main writer. "We can’t legislate wisdom or passion. We can't legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people—people who will make careers and listen and see to it that never again do we go through what we have gone through."

The bill won't break up the nation's enormous banks, and it isn't entirely how strict it will be. But its hundreds of new rules will redefine how Wall Street makes money from derivatives, credit cards, and trading, and it will create a new consumer protection agency.

"It's just unconscionable," the Arizona Republican Jon Kyl said just now from the Senate floor.

Update: And, as expected, it passed.

Following a brief but intensive reconciliation period, the House passed the conference report of the updated financial reform legislation Wednesday, June 30. The voting divided along party lines, with only three Republicans among the 237 representatives supporting the legislation. The newly christened Dodd-Frank Wall Street Reform and Consumer Protection Act now moves to the Senate, where it will likely pass its final hurdle in mid-July before making its way to the president's desk.

Senate passage is not guaranteed; the death of Senator Robert Byrd means that Democrats must lure one more Republican vote. Nor will passage into law bring financial reform to closure, since regulatory authorities must now decide on many specifics of implementation.

Bark Now, Bite Later

Even as many of its key provisions have been softened or eliminated altogether, the Dodd-Frank Act-which now includes more than 1,600 sections spread across more than 2,300 pages-has been heralded by its framers as the most significant overhaul of the financial sector's ground rules since the reforms triggered by the Great Depression.

In a prepared statement released by the White House just after Wednesday's vote, the president said that "it has been a long fight against the defenders of the status quo on Wall Street. ... Today's vote is a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions [of dollars] in wealth."

Perspective is everything. In contrast with the president's reading of the act, House Republican Leader John Boehner declared that the legislation "will actually kill more jobs, widen the gap between Wall Street and Main Street and force taxpayers to fund permanent bailouts." Republican Whip Eric Cantor was equally blunt. The New York Times on Wednesday quoted Mr. Cantor as saying that "this legislation is a clear attack on capital formation in America."

Only the most jaundiced eyes will parse through the legislation's labyrinthine text and uncover imminent threats or panaceas for the familiar order. Rather, divisive provisions with clearly defined implications have been the focus of intense lobbying efforts and partisan negotiations during the relatively opaque conference period. Provisions with muscle have struggled to survive the gauntlet; the meekest, on the other hand, have made their way through in extraordinary abundance.

For Senator Russ Feingold, the dilution of the legislation now precludes his support. In a June 28 statement, he wrote that "while there are some positive provisions in the final measure, the lack of strong reforms is clear confirmation that Wall Street lobbyists and their allies in Washington continue to wield significant influence on the process."

One example of the conditions of compromise, a late tax provision designed to offset the act's anticipated costs by raising approximately $18 billion from the nation's largest financial institutions, was eliminated in 11th-hour negotiations. In a June 29 letter to Senator Chris Dodd and Representative Barney Frank, Senator Scott Brown wrote that "if the final version of this bill contains these higher taxes, I will not support it. ... It is especially troubling that this provision was inserted in the conference report in the dead of night without hearings or economic analysis."

Under an alternative plan, the cost of the act will be partially offset with unused funds from the Troubled Asset Relief Program, which the new legislation would bring to closure months ahead of schedule. Since that authority might have otherwise gone unused, the abrupt change of plans could be seen as adding billions of dollars to the federal deficit.

For commercial real estate credit markets, the elimination of the Senate bill's Credit Rating Agency Board provision is one of the significant changes made during the conference period. This is a double-edged sword for opponents of the CRAB-as I detailed in my May 19 Lead Indicator column-since it leaves the door open for alternative proposals for oversight of rating agencies' relationship to issuers. Provisions relating to the enhanced regulation of rating agencies begin with Section 932 of the conference report (on page 1351).

Among the provisions, the act will establish an Office of Credit Ratings that will "promote accuracy in credit ratings" and "ensure that such ratings are not unduly influenced by conflicts of interest." As for how the new office will fulfill these mandates, the conference report focuses on rating agencies' reporting and disclosure requirements.

Delegation and the Act

A reading of the new legislation reveals that it goes further in setting up new regulatory powers and structures than in taking direct action. This might be appropriate except that it delegates decision making about industry structure to the empowered agencies. In the short term, this extends uncertainties about financial-services market structure. It also emboldens lobbyists and elected officials to engage in further horse-trading, this time outside of the public spotlight.

For the long run, the legislation raises serious questions about where major decisions pertaining to market structure, with potentially far-reaching economic consequences, are made: by our elected officials, who generally must act without the benefit of subject-matter expertise, or in a more erudite setting, where subject-matter expertise may be stronger but where decisions are even further removed from public scrutiny?

In a July 1 opinion in The Wall Street Journal, Daniel Henninger opines that the legislation "lets the actual meaning of the 'Volcker Rule' on banks' trading practices and much else pass into the hands of the translators at the Federal Reserve, FDIC, other federal agencies and the lobbyists who swarm around them."

There are meaningful changes that will result directly from the passage of the Dodd-Frank Act, some for better and some for worse. Still, Mr. Henninger is right to draw attention to the delegation of decision making.

In fact, this delegation is not specific to the Dodd-Frank Act but pervades legislative efforts on a host of complex issues for which our strained political process affords neither the time nor the forum.

schandan@rcanalytics.com

Sam Chandan, Ph.D., is global chief economist and executive vice president of Real Capital Analytics and an adjunct professor of real estate at Wharton.

"It's a good day," said Sen. Scott Brown, one of the Republicans who voted for reform.

In a statement, Sen. Carl Levin, whose subcommittee grilled Goldman Sachs last month, complained about the unbridled greed that created unheeded risk, which created an atrocious financial crisis. "Wall Street may not have learned the lessons of that story," he said, "but we must pay attention. We must act. We must return the cop to the Wall Street beat, or once again suffer the consequence."

Still, it will take weeks to combine the Senate bill with the House's version. The Times has an excellent run-down of the differences between the two, although their cores are similar. And Reuters and the Wall Street Journal both have good features on financial reform's cast of characters. It turns out, for example, that Senate Majority Leader Harry Reid, who won Sen. Brown's last-minute support, used to be a boxer.

The biggest intraday drop in the history of the Dow, nearly 1,000 points, didn't happen because of a calamity: No monuments had been burned and not a single colossal European country had defaulted. It just came. And then it went. The Dow was up above 10,500 by the end of the afternoon, and then back to 10,800 on Monday, after a trillion-dollar bailout package for Greece was announced. "We're on to the next freaky thing," a banking executive said this week, less than seven days after the Great Fall.

Is a terrifying and bizarrely opaque 1,000-point free fall another thing that is just going to happen on Wall Street every now and then? If so, will we know why? More pointedly, have we learned anything from the terrifying and bizarrely opaque events of the past year and a half? "We hope to be able to provide investors and the public with more information soon on the events that may have contributed to this volatility," the S.E.C. chairman, Mary Schapiro, told a Congressional subcommittee Tuesday, "but we should recognize that it will take time to fully analyze the data."

The night before, in a corner of the joint book party he threw for the scholars Ian Bremmer and Nouriel Roubini, the hedge fund manager Kenneth Griffin did not want to bother parsing the stock market's Thursday collapse. "Why did it fall on Wednesday? Why did it fall on Friday?" said Mr. Griffin, who is 68 slots ahead of Mr. Ross on this year's Forbes billionaires list. "People make up stories after the fact."

JAMES GORMAN, MORGAN Stanley's new chief executive, was alone in his 40th-floor office after a Thursday lunch when he saw the market wobbling. He called Suzanne Charnas, his head of investor relations. "Oh, God, what's happening?" they said. Mr. Gorman thought it must have been some kind of mistake.

Vikram Pandit was in a meeting at Citi headquarters. Another executive interrupted with the news. The chief executive stayed to finish the meeting, and then he collected staff in his office to talk. Steve Schwarzman was at Blackstone's annual conference with limited partners at the Waldorf Astoria. A senior executive at AIG had all-day meetings. "I was in a cocoon all day," the executive said. "Sometimes it's good to be in cocoon."

At 2:30, just before the crash, a former principal at Long Term Capital Management was walking out of a lunch with a hedge fund manager when he saw that the Dow was down a couple of hundred of points. "Not your best," he said. He went to another meeting, which lasted until 3:15, after the fall and rise. On his iPhone, he checked a couple of his stocks. One that normally trades for around $3.50 was down 20 cents. "And I took a look at the low, and the low was down 75 cents. And I said, 'No, that's a misprint. Then I looked at other stocks.'" He realized what had happened while standing in the street.

It was not particularly loud or chaotic at the suburban Kansas City headquarters of BATS, the third-largest exchange in the country, right behind New York's and Nasdaq. "Is it Greece? What's going on?" Joe Ratterman, the CEO, asked aloud.

At Goldman Sachs, gossip was floating around the investment management division that Citigroup had caused the fall with some sort of mammoth trading error. Silly Citigroup! An executive at another bank heard the same thing and told a newspaper reporter. CNBC heard it, too, and put up a story saying that a Citi trader may have inadvertently pressed a "b" for billion, not a "m" for million, in a trade that may or may not have involved Procter & Gamble. This was given a name: It was called the fat-finger theory. And the fat-fingered investigation had a focus: CNBC said there was a strange sale of 16 billion E-mini S&P 500 futures, traded on the Chicago Mercantile Exchange.

In Chicago, alongside the S&P 500 futures pit, a 38-year-old squawk-box broadcaster named Ben Lichtenstein, a man with a stadium-size voice of gravel and amphetamines, narrated the dive as it happened. "Guys this is probably the craziest I've seen it down here!" he shrieked. On a recording that was immediately passed around on Web sites like Zero Hedge, he narrated the fall number by number. It was pandemonium. "This will blow people out in a big way that you won't even believe!" he screamed in between a stream of numbers. After work, he went to his daughter's soccer practice, then his son's baseball practice, and then went out with a client.

THE NEXT MORNING, the Chicago Mercantile Exchange confirmed that Citigroup's activity did not appear to be irregular or unusual. And by late Friday, the Obama administration had sent out word that a fat finger did not, in fact, start the biggest collapse in Dow history.

So what did? Traders had been itchy about the Greek debt crisis and the British election-but nothing astounding had happened that afternoon with either. Was it hackers or terrorists? Ms. Schapiro said Tuesday that it didn't look like it.

The New York Stock Exchange blamed Nasdaq. Nasdaq blamed the New York Stock Exchange. Then Nasdaq blamed the Chicago Mercantile Exchange.

Was it the machines? On Friday, both The Journal and The Times had articles about high-frequency trading, the gargantuan but relatively new industry that uses algorithms to buy and sell. When the market falls to a certain level, both articles said, high-speed firms' computers are programmed to sell automatically to protect against more and more losses. The firm Tradebot Systems, another enormous Kansas City-based firm, even said that its computers shut down entirely. A "computer glitch at even just one firm could trigger a wave of selling that sets off huge losses across financial markets," a Journal story about the New York Stock Exchange's upcoming 400,000-square-foot high-speed hub in suburban New Jersey said last year. The new hub was nicknamed Project Alpha.

By Sunday, Senator Chris Dodd was on Face the Nation, complaining about "very fancy computers that can move in microseconds." At the book party the next night, Mr. Griffin, the hedge fund manager, held up a glass of Champagne with Maria Bartiromo to toast the Bremmer and Roubini books. "I think that it's much easier," he said in a conversation afterward, "to try and blame faceless computers."

The next day, another Journal article said that a $7.5 million trade for 50,000 options contracts from a hedge fund advised by Nassim Taleb, famous for the book Black Swan: The Impact of the Highly Improbable, "may have played a key role in the stock-market collapse." It did not mention that the paperback version of Mr. Taleb's book was released that morning.

mabelson@observer.com

But from a personal standpoint, his decision is rather surprising. Dodd, don’t forget, is the son of former Senator Thomas Dodd, whose career—and life—ended in public shame, with a Senate censure leading to his defeat in 1970 and his death following a few years later.

Young Chris Dodd ran his father’s final, doomed campaign and watched with awe and pride as the old man defied his tormenters and went down fighting. Even as scandal swallowed him up this past year, it seemed a given that Chris Dodd would follow that example and stay in the race to the finish line.

So why is he giving up—and giving his foes a chance to gloat?
   
Party loyalty may be a factor. One of Tom Dodd’s motivating factors for gutting it out in ’70 was his sense of betrayal by his fellow Democrats—those in the Senate who rebuked him and those in Connecticut who moved to deny him re-nomination. He ended up running as an independent in the fall, finishing a distant third but siphoning just enough votes from the Democrats to elect Republican Lowell Weicker.

This is not how Chris Dodd has been treated this past year. Yes, he’s been facing a primary challenge from a little-known businessman named Merrick Alpert, but it was going nowhere. All of the big players in the Connecticut Democratic Party were sticking with him, and the nomination was his for as long as he wanted it. National Democrats—publicly, at least—were just as supportive. Barack Obama headlined a Dodd fund-raiser not long ago, national donors rallied to his side, and the D.S.C.C. was prepared to pour serious money into his effort.

Mind you, that doesn’t mean that party leaders in Washington wanted him to stick around. By last month, it was obvious that Dodd was a dead candidate walking and that no amount of campaign cash would be able to undo the damage of the past year. Connecticut voters had made their minds up about Dodd and tuned him out.

But by offering vehement public support to Dodd, Democrats bought themselves space to maneuver behind the scenes. Recent reports suggested that the White House was. But privately urging Dodd to quit. Many of his old friends on Capitol Hill—politely and respectfully—were probably delivering the same message.

And for good reason: Connecticut is a state Democrats shouldn’t have to worry about in a Senate election. Since Joe Lieberman ousted Weicker in 1988, the G.O.P. hasn’t come close to winning a Senate race in the state (unless you count Lieberman’s 2006 re-election). But with Dodd running, Democrats were going to have to spend a fortune on a race—money that they’d much rather spend in swing states like Ohio and Colorado—they were going to lose anyway. Now, they can replace Dodd with a taint-free candidate, retain the seat, and spend their money elsewhere.

And who will that new nominee be? The right of first refusal will go to Richard Blumenthal, the state’s exceedingly popular attorney general. On the job since 1990, Blumenthal has the strongest poll numbers of any politician in the state and has been waiting—for years—for the right chance to move up. If he runs, the race will essentially end on the spot: No one will be able to touch him in a primary or in the general election.

It may be that Dodd is only exiting now because he and national Democrats have been given assurances by Blumenthal that he will run. Time will tell.

If Blumenthal were to pass, things could get tricky for Democrats. Presumably, U.S. Rep. Chris Murphy, an ambitious second-termer who unseated Republican Nancy Johnson in 2006, would be interested. But that would open up his Naugatuck Valley House seat, which in a year like ’10 could actually be winnable for the G.O.P. Or maybe Ned Lamont, who just jumped into the gubernatorial race last month, would reconsider and run for the Senate instead. Rosa DeLauro, the long-serving congresswoman from New Haven, could also be worth watching.

Whatever happens, though, Democrats are now very likely—if not certain—to hang on to Dodd’s seat, probably at very little expense. The ticking time-bomb that has been Dodd’s re-election campaign for his party for a year now has been defused.

PUBLIC SCHEDULE FOR ATTORNEY GENERAL ANDREW M. CUOMO

 

FRIDAY, OCTOBER 9, 2009

 

 

Attorney General Cuomo is in Washington, D.C.

 

1:15PM     Attends meeting with President Obama, Cabinet members, and Congressional leaders regarding financial regulatory reform

 

2:00PM     Attends President Obama's remarks on financial regulatory reform

 

Often these public schedules include an admonition of "for planning purposes only." This one doesn't. It's "for immediate release."

A Cuomo aide said the trip was made at the White House's invitation, and that he will be meeting with Larry Summers, Tim Geithner and Valerie Jarrett as well as Senator Chris Dodd and Representative Barney Frank. Cuomo is discussing a consumer protection agency, and how state lawmakers can enforce these tighter regulations; Cuomo has styled himself as "the people's lawyer" and taken many consumer protection actions as attorney general, including actions involving student loan companies and a health care billing company.

"It's about working with the administration to better protect consumers," said Benjamin Lawsky, a special assistant to the attorney general who is accompanying him on the trip.

This trip follows a big conspicuous sloppy kiss Cuomo got from Obama when the president came to an event in Troy. Obama aides have reportedly expressed to David Paterson that they do not support him for election next year; Cuomo insists "at this time" his only plan is to run for another term as attorney general. Period. The trip is entirely work related, Lawsky said, and Cuomo has no plans to meet with Patrick Gaspard, Obama's political director.

And Paterson? His public schedule indicates he's "in New York City and has no public schedule."

The incumbents most vulnerable to serious intraparty competition in 2010 include four Democrats—Kirsten Gillibrand in New York, Chris Dodd in Connecticut, Arlen Specter in Pennsylvania and Roland Burris in Illinois—and two Republicans, Kentucky’s Jim Bunning and Arizona’s John McCain.

Granted, they don’t all face the same degree of threat. McCain, for instance, has already drawn two challengers, each eager to exploit the independent streak that has made him an enemy to some on the right. But it’s far from clear that either of them will have the money and credibility to make McCain sweat next year. On the other end of the scale is Burris, who has almost no money and poll numbers that are beyond poisonous; he may not even run for a full term, and even if he does, he’d be almost certain to be routed in the Democratic primary.

So, by the time next year rolls around, the number of incumbent senators locked in competitive primary races may be down to two or three. But that would still be remarkable, given the scarcity of such challenges over the past three decades.

The potential bloodbaths most likely to pan out involve Democratic incumbents. The embattled Dodd is already being challenged by businessman Merrick Alpert. And even though hardly anyone in Connecticut knows Alpert’s name, Dodd only leads right now by a 44-24 percent margin. Gillibrand has struggled in the polls and could face a well-funded challenge from Representative Carolyn Maloney. And Specter, for all the White House glee over his April conversion, is now on course to be challenged from the left by Representative Joe Sestak.

If all three of these Democratic incumbents wind up in heated primary battles, it will match the total number of Democratic incumbents to face serious challenges since ’80. Two of those challenges—Ned Lamont against Joe Lieberman in 2006 and Carol Moseley Braun against Alan Dixon in Illinois in 1992 (with an assist from Al Hofeld)—were successful; a third, Representative Ed Case’s campaign against Daniel Akaka in Hawaii in ’06, failed. And should Burris somehow recover enough standing to wage a competitive campaign, there could be four Democratic incumbents in serious primary races next year.

Nationally, this could be problematic for Democrats, since all four of these seats would, at least potentially, be in play in the fall. Dodd, for instance, already trails the likely G.O.P. nominee in Connecticut, former representative Rob Simmons. And the shady circumstances of Burris’ appointment have opened the door wide for a G.O.P. victory in Illinois. Democrats now face the prospect of nominating bloodied candidates for these races.

Republicans, meanwhile, may be better positioned. Given his long-standing friction with the base, it remains possible that McCain will encounter trouble in his primary. And were he to lose, it would be a huge boost for Democrats—a far-right G.O.P. nominee would be a far weaker fall candidate than McCain. But this is not yet a very likely scenario.

The situation is reversed in Kentucky, where the erratic and grouchy Bunning would be a weak fall candidate. But, while he continues to insist he’s running again, there is rampant chatter that he’s bluffing and will eventually back out. If he were to stay in, a serious primary challenge seems certain.

Of the five credible challenges to Republican Senate incumbents since 1980, three succeeded: Al D’Amato over Jacob Javits in 1980; Sam Brownback over Sheila Frahm in Kansas in 1996; and John E. Sununu over Bob Smith in New Hampshire in 2002. Only Pat Toomey, who fell two points short against Specter in 2004, and Stephen Laffey, who lost to Rhode Island’s Lincoln Chafee by eight points in 2006, failed.

Even if next year does bring an explosion of primary challenges, it probably won’t signal a new trend. It would be more the result of an unusual mix of circumstances. For instance, Gillibrand and Burris are interim, unelected incumbents. Often, such incumbents succeed in heading off serious challenges—but ambitious politicians are much more likely to challenge appointed incumbents than elected incumbents. (Frahm, for example, had just been appointed to replace Bob Dole when Brownback took her out in 1996.) And Specter, while a duly elected incumbent, faces the skepticism of an appointed incumbent from Pennsylvania Democrats.

Dodd and Bunning, meanwhile, face intraparty threats simply because of their personal image problems—not for any ideological reasons. Dodd has been raked over the coals for his coziness with the financial services sector and the home mortgage industry, and Bunning’s belligerence and sport attendance record have created a damning perception of arrogance (if not plain craziness).

Without their personal issues, Dodd and Bunning would probably be immune from primary challenges, since they are ideologically in tune with their parties’ bases. Ambitious members of their parties would have no choice but to bite their tongues. But because Dodd and Bunning have accumulated such severe personal baggage, their party mates can now justify taking them on. Sununu’s challenge to Smith in New Hampshire ’02 is a good example of this phenomenon.

And if McCain ends up in a dogfight, it would merely represent the latest example of the G.O.P.’s restive base trying to purify the party by weeding out unsatisfactorily conservative incumbents—the same motivation for Toomey’s challenge of Specter and for Laffey’s race against Chafee.

Still, you’d have to go all the way back to 1978 to find the last election cycle in which more than two senators face perilous primaries.

Just like now, the presence of appointed incumbents was a main culprit that year. In Alabama, 52-year-old Maryon Allen was appointed to the Senate by Governor George Wallace in June ’78 after her husband, Senator James B. Allen, died. Allen drew a primary challenge from Donald Stewart, who had been waging a long-shot bid for the state’s other seat, which was also up that year (and was ultimately won by Howell Heflin).

Stewart’s challenge was initially regarded as an affront to Southern tradition (in which widows typically succeeded their husbands in office), but Allen had little knack for politics. She campaigned sparingly and skipped a debate, infamously explaining that she was too busy “washing my clothes home in Gadsden,” and Stewart eventually beat her in a run-off, 56 to 42 percent. (He went on to win in the fall, then lost his bid for a full six-year term in 1980 to Republican Jeremiah Denton.)

Montana’s Paul Hatfield was another appointed incumbent in ’78, chosen to replace the late Lee Metcalf in January of that year. Immediately, he faced a primary challenge from Representative Max Baucus, a fellow Democrat. At the time, Baucus was locked in a power struggle with Montana’s Democratic governor, Thomas Lee Judge, who chose Hatfield, the Chief Justice of the State Supreme Court, mainly to spite Baucus. But Judge’s unpopularity tainted Hatfield, and his subsequent votes for the Panama Canal treaties ruined him. Baucus won the June primary, 66 to 20 percent.

And then there was New Jersey, where liberal Republican Clifford Case became the first G.O.P. victim of the Reagan revolution, felled by 34-year-old Jeffrey Bell and his band of true-believer conservatives.

It takes a very particular set of conditions for senators to encounter serious primary challenges. Those conditions were in abundance in 1978—and may be even more plentiful next year. 

The news served as a reminder of the sad fate of John Edwards' political career. Not long ago, he was on the cusp of unparalleled power and glory; and even when his presidential ambitions fell short last year, he still seemed, at just 55 years old, to have a bright political future—perhaps A.G. in the Obama administration, or a return to North Carolina politics, maybe even one more shot at the White House sometime down the road.

But now he lives in exile. When he or his wife make the news, Edwards' affair with Rielle Hunter, and the lingering questions that surround it, features prominently in the coverage. Pressing ahead with a political career is hopeless. Any message he might have is drowned out whenever he shows his face. He's the man who cheated on his cancer-stricken wife. That's it.

Among the six major Democrats who sought their party's nomination last year, Edwards' fate is clearly the most pitiful. But he's not the only one of them whose political career is in a much worse place now than it was back in 2008.

Chris Dodd, first elected to the Senate in 1980, spent much of his career toying with running for president before finally taking the plunge in '08. Today, his standing in deep blue Connecticut is eroding by the day and his political career seems destined to end on Election Day 2010, if not sooner. And in New Mexico, Bill Richardson, who also made a long-anticipated presidential run last year, is facing a federal probe into a possible pay-to-play scheme involving his political action committee - a scandal that already forced him to withdraw as Obama's pick for Commerce secretary.

By contrast, the other three Democrats who ran in '08 are sitting pretty. Obama, obviously, was the biggest winner, but Hillary Clinton got about the best possible consolation prize—a posting as secretary of state that has already improved her national standing and will probably position her for another presidential run. And Joe Biden is enjoying a stint as vice president that has elevated his stature and that, at least in theory, keeps the presidential aspirations alive that he's nursed for decades.

The disparity between the haves and have-nots from the Democratic presidential class of '08 is startling. Three of last year's candidates reaped immediate and significant rewards. The other three are now facing shame and oblivion.

This is not usual. Sure, there have been past candidates, like Gary Hart in 1988, who were undermined by scandal and whose careers promptly evaporated. But his example is the exception.

Even losing candidates almost always emerge stronger from the experience. Lamar Alexander and Elizabeth Dole, for instance, put their names in the G.O.P. mix for 2000, only to be quickly pushed aside by George W. Bush. But they both ended up with Senate seats two years later. Paul Tsongas was a former senator with zero percent name recognition when he decided to run for the 1992 Democratic nod; he fell short, but emerged as a national voice on fiscal issues.

Or just look at last year's Republican field. Mitt Romney and Mike Huckabee both lost out to John McCain, but each is now a prime contender for 2012—and Huckabee even got a TV show out of the deal. And while Rudy Giuliani and Fred Thompson were both embarrassed as their high poll numbers vanished and their campaigns ended with little support, they each remain relevant national voices; they didn't win, but they weren't ruined, either.

What's most interesting about the cases of Edwards, Dodd and Richardson is that each man's post-campaign demise was triggered, at least in part, by the campaign itself.

Take Edwards, who offered the following explanation for his affair when he gave his only interview on the subject last summer, to ABC's Bob Woodruff: "I went from being a senator, to being considered for vice president, running for president, being a vice presidential candidate and becoming a national public figure, all of which fed a self-focus, an egotism, a narcissism that leads you to believe that you can do whatever you want. You're invincible. And there will be no consequences."

Dodd, for his part, is now being haunted by the way he financed his bid. With little grass-roots support, he leaned on his extensive contacts in the financial services industry—executives who knew his presidential campaign was going nowhere but who also knew that donating to the chairman of the Senate Banking Committee was never a bad idea.

As a result, Dodd, who didn't last past Iowa (where he finished with 0 percent), ended up leading all candidates, Democratic and Republican, in one category: contributions from AIG suits. This has made it ridiculously easy for his opponents to tag Dodd as the bought-and-paid-for symbol of the negligence that produced the current economic crisis.

Richardson, too, might have been undone by the quest for presidential campaign cash. A federal grand jury is now looking into how a California-based company received $1.5 million in fees from the New Mexico state government after donating $100,000 to Richardson's political action committee in 2004. That money didn't directly finance Richardson's '08 bid, but it did help lay the groundwork.

If they had it to do over, you can bet that Edwards, Dodd and Richardson would all think twice before giving in to the presidential bug.

"Are you serious?" Menendez asked the scribe. "Chris Dodd is going to be reelected. He's a great senator."

This is what his Democratic colleagues elected him to do, so Menendez's rally-around-the-incumbent fervor is perfectly understandable. After all, it was his sly backroom maneuvering last spring on behalf of fellow New Jersey Senator Frank Lautenberg—destroying a series of potentially crucial wink-and-nod agreements that Lautenberg's primary challenger, Representative Rob Andrews, had struck with key party leaders and, in so doing, turned the actual primary campaign into a carefree waltz for the incumbent—that helped satisfy Senate Democrats that Menendez was the rightful heir to Chuck Schumer's D.S.C.C. throne.

But, really, you need a sense of humor to appreciate Menendez's feint. Because the last time a Democratic senator faced the dire outlook back home that now confronts Dodd was in 2001 and 2002, when Jersey's own Robert Torricelli, subject of a federal investigation into the cash and pricey gifts that an imprisoned donor had showered on him, began racking up poisonous poll numbers.

Menendez wasn't the D.S.C.C. chairman back then—he was a member of the House, representing New Jersey's 13^th District. And he responded to the smell of Torch's blood not with an impassioned defense but with hints that he might challenge the incumbent in an '02 primary.

It made enough sense—Menendez craved a promotion to the Senate, detested Torricelli (who had blocked Menendez's attempts to run in 2000 by recruiting Jon Corzine into the race), and recognized the rarity of an opportunity to move up. But it never got off the ground. Torch had too much money and too many allies on the inside. Like every other ambitious Garden State Democrat in '02, Menendez decided the risk of running and losing wasn't worth it; better to wait for another day (which, for Menendez, came in 2006).

But that didn't undo Torricelli's supreme vulnerability in 2002, if not within his party then against the Republicans in the fall. And no matter how adamantly Menendez and every other Democrat on Capitol Hill and in Connecticut now rallies to Dodd's defense, there's no papering over the hideous political condition in which the Nutmeg State's senior senator finds himself.

The Quinnipiac University poll released on Tuesday shows Dodd, a 28-year veteran of the upper chamber, notching just 34 percent in a 2010 match-up against former Republican Representative Rob Simmons, who netted 50 percent—this in an emphatically blue state that Barack Obama just won by 23 points.

The culprit, fairly or not, is Dodd's emergence as the chief Congressional scapegoat for the AIG bonuses that nearly incited a peasant revolt last month. Add months of embarrassing scrutiny into the VIP loans he was given by Countrywide Mortgage, and Dodd is fast becoming a caricature of the bought-and-paid-for senator. This is not the kind of image that can be easily undone.

Overstating the severity of Dodd's political problems is impossible. Not a single Democratic Senate incumbent was defeated for reelection in 2008 or 2006, and only one—South Dakota's Tom Daschle, by a scant 4,000 votes—was unseated in 2004. Torricelli, who finally abandoned his reelection campaign when he fell nearly 20 points behind his Republican challenger in September 2002, was the last Democrat to face such bleak prospects.  

And for the foreseeable future, the Torch saga figures to haunt Dodd. Already, the question is being asked: When and how will Democratic leaders, fearful of losing a safe Senate seat, prevail on Dodd to pull the plug, just as they finally did with Torricelli '02? A high-profile ambassadorship or an appointment to head of the Peace Corps—in which Dodd served as a young man—have been suggested as potential parachutes.

It should be noted Torricelli hardly went eagerly in '02, and there's every reason to believe that Dodd will be just as stubborn—maybe even more so.

As his political troubles mounted in '01 amid a leak-happy federal investigation, Torricelli wailed that he was being "publicly raped" and worked furiously to pad his campaign account and shore up his support with key party and interest group leaders in New Jersey—where organizational muscle takes you farther than in most states.

This was enough to scare off would-be intraparty usurpers—like Menendez. Dodd, with deep ties to the Connecticut Democratic establishment that go back decades, will probably be able to resist a primary challenge, too—no matter how bad his autumn numbers look.

And though they had little personal regard for him, Torricelli's Capitol Hill colleagues stood by him. "When there is a candidate who is seen as vulnerable, people step over themselves to get into a race. That's just not happening here," Patty Murray, the D.S.C.C. chairwoman for the 2002 cycle, said as Torricelli consolidated his Democratic support in late '01. Dodd, far better liked by his Democratic peers than Torricelli ever was, can expect similar public support.

What finally drove Torricelli from the race, any savvy New Jersey Democrat will tell you, had a lot more to do with state politics than the trepidation of the party's national leaders.

Sure, Washington Democrats were apoplectic when, at the end of September '02, a devastating memo from prosecutors that described the most damning accusations against Torricelli as "credible in most material aspects" was released. Already in grave danger, Torricelli's poll numbers collapsed overnight. Just five weeks before Election Day, he fell behind Republican Doug Forrester by double-digits. With their party's tenuous control of the Senate on the line, national Democrats began agitating for Torch's exit.

New Jersey's Democrats were just as panicked. With a doomed senator at the top of their ticket, they risked fomenting a down-ballot tsunami—the kind that might sweep Republicans into all of those county and local offices that average voters don't care about but that are worth a fortune to a political machine. They sent word to Torricelli: If you stay in and take the party down with you, you'll never eat lunch in Trenton again.

Finally, Torricelli caved, clearing the way for state Democrats, after first being refused by four other choices, to replace him on the ballot with Lautenberg, then two years into an unhappy retirement from the Senate. When he left the Senate, Torricelli returned to Jersey and launched his own lobbying and consulting firm and, at least for a while, won a spot in then-Governor Jim McGreevey's inner circle—a valuable place to be for a new lobbyist, and something that would not have been possible had Torch not played ball at the end of September '02.

Dodd is just as proud a man as Torricelli, and just as insistent (without using the exact phrase) that he's been publicly raped. At the very least, this makes it unlikely that he'll be accepting any golden parachutes anytime soon. He'll press ahead this year and into next, and there's no reason to think he won't secure his party's backing for another term.

The question is what will happen if (or maybe when) it becomes clear that the race is a lost cause—that Dodd cannot win under any circumstances, but that the seat would be saved with a replacement candidate. Could Democrats, nationally or in Connecticut, dangle something over Dodd's head, the way they did with Torricelli?

Here's guessing the answer is no, because with Dodd, there's a motivating force that supersedes venality: family honor. Dodd was 23 years old in 1967 when his father, Senator Thomas J. Dodd, faced a humiliating censure from his Senate colleagues for using campaign money for personal purposes. Connecticut Democrats turned their back on the elder Dodd, shunning him three years later when his term was up.

But Dodd fought back, bolting the party to seek reelection as an independent—a campaign for personal redemption, not just another six years in the Senate. And his son Chris was at his side, serving as his campaign manager. Ultimately, the damage from the scandal was too much, and Dodd was handily defeated (although his presence siphoned enough votes from the Democratic nominee to hand the seat to Republican Lowell Weicker), and shortly after the election, he suffered a heart attack and died.

His father's demise fueled Chris Dodd with a sense of purpose. He entered politics in 1974, winning a House seat from eastern Connecticut, and in 1980 moved up to the Senate. Every feat he's notched, every rung he's climbed, he has regarded as a form of redemption, for his father and for the Dodd family name.

"Every time I walk on the Senate floor, I feel that he's vindicated," Dodd once said of his father.

Offer him an ambassadorship or threaten him with political isolation—it's hard to imagine any of this will keep Chris Dodd from fighting for his Senate seat until the very end, no matter how bitter it proves to be. Would you expect anything less from the son of Thomas J. Dodd?