"I'm very aware of my present political standing," he said in announcing his decision to retire. I was reminded of his unusually -- and refreshingly -- candid statement this morning, when Taegan Goddard flagged comments made by Joe Lieberman and Kay Bailey Hutchison, both of whom recently announced retirement plans of their own, on Sunday's "This Week":

"I believed I would have won re-election. Obviously, it would have been a tough campaign. But, you know, as I said, so what else is new?"

-- Sen. Joe Lieberman (I-CT), in an interview on This Week.

"I think that, if I had run, I would have won. It would have been a tough race, for sure, but I think I would have won."

-- Sen., Kay Bailey Hutchison (R-TX), also speaking on This Week.

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• He had pubic lice.
• There was a bug on his head during a debate and he didn't seem to notice.

Obviously there's also other stuff like AIG and Countrywide and moving his entire family to Iowa to run for president and then losing and also he dated Bianca Jagger and Carrie Fisher, but those are the important facts. And to that list I can add this: Someone loves torturing him with this shit, according to Twitter.

What is this shit? And who is torturing him with it? We may never know -- his staff quickly deleted the tweet and apologized for it. It was, obviously, a misfired direct message, and it was probably drafted not by Dodd but by a staffer. But just for a minute, it looked like maybe the retiring senator was just going to cut loose during his last month in office.

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But the New York Times magazine sure has a funny way of looking at the race. The premise of Matt Bai's exhaustive piece in Sunday's issue is that McMahon is succeeding in part because of the decline of powerful party institutions. There is, obviously, something to this, in the sense that party machines everywhere aren't what they used to be.

But Bai suggests that the unwillingness of state Democratic leaders to coax the scandalized Sen. Chris Dodd into seeking another term this year is a sign of that decline, and that in the day of John Bailey, the long-departed state party boss, there would have been a full-court press to get :

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Dodd acknowledged he wanted FDIC Chairman Sheila Bair to consider heading the consumer bureau, but he confirmed that she is not interested.

He also recognized that consumer groups were lobbying to have Harvard professor Elizabeth Warren head the agency, but he said she would have difficulty being confirmed.

"If the administration goes through an eight-month debate over who is going to run this, you are going to do damage before you start," Dodd said. "You need to have a good-quality individual, and if [Warren] can be confirmed, then step up and do it. I just think it's a problem, but I could be wrong."

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Dennis also writes that to her opponents, Warren is a "power-hungry headline seeker ... a fiery zealot disguised in professorial glasses and pastel cardigans," but only backs up that overheated rhetoric with a nasty quote -- "I get disgusted every time I hear her speak" --  that was originally reported by Reuters a couple of weeks ago.

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Faced with this confluence of Democratic retirements, the instant and overwhelming pundit consensus was that terrified Democrats were fleeing the battlefield in panic and that a wave of retirements would soon follow, creating new and unexpected openings for Republicans to pick up congressional seats and governorships. "Democrats are dropping like flies," ABC's The Note declared.

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Take the crucial Pennsylvania Senate contest, where Republican Pat Toomey essentially spent the last year running ahead of Arlen Specter, who had been the presumed Democratic nominee. The Democrats who were propping up Specter insisted he would be the party's best general election bet, even though his 30 years in the Senate seemed to clash with the public's anti-incumbent mood. Specter, of course, lost last week's Democratic primary to Joe Sestak -- and Sestak has, at least in the initial post-primary polling, opened a small lead over Toomey.

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Polls in Arkansas don't close until 8:30 pm ET, but most observers are already predicting that a June 8 runoff election between Senator Blanche Lincoln and challenger Bill Halter will be necessary. Meanwhile, Lincoln's left-pleasing derivatives-regulating amendment to the Senate bank overhaul bill was supposed to bolster her support with the Democratic base, so it couldn't be killed until she won or lost her primary.

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The biggest question right now: whether bank holding companies and other financial institutions that take advantage of various forms of federal support should be allowed to trade derivatives. As it stands right now, the Dodd bill includes Sen. Blanche Lincoln's notoriously strong proposal requiring bank holding companies to completely spin off their derivatives trading operations.

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But something else is scheduled for next week -- Sen. Blanche Lincoln's Arkansas primary, in which she has been challenged from the left by state Attorney General Bill Halter. According to a story by Carrie Budoff-Brown in Politico, Senate Democrats may be holding off any action to weaken the derivatives language until after Tuesday's primary.

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Time's Jay Newtown-Small was quick to label the decision a Republican "cave." If true, that's something of a stunner: The Democrats threaten to keep the Republicans up all night, and minutes later, the GOP waves the white flag.

But it's quite possible that the opposite is true -- that it's the Democrats who caved. We don't have enough details  yet to be sure, but if the assurances that Shelby received from Dodd included a decision to drop the $50 billion bank "orderly liquidation fund," then the real winners here are the GOP and the banks.

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It’s good we finally have an SEC on which three out of five commissioners are willing to enforce laws already on the books. Hopefully other enforcement agencies (CFTC, FDIC, and the Fed) will follow suit. But we also need to make illegal the recklessness that’s now legal.

The Dodd bill now being considered in the Senate is a step in the right direction. Yet despite the hype, it’s a very modest step. It leaves out three of the most important things necessary to prevent a repeat of the Wall Street meltdown.

1. Require that trading of all derivatives be done on open exchanges where parties have to disclose what they’re buying and selling and have enough capital to pay up if their bets go wrong. The exception in the current bill for so-called unique derivatives opens up a loophole big enough for bankers to drive their Ferraris through.

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The Financial Times' Tom Braithwaite dropped this intriguing bomb:

The new proposal would bar appointments of Wall Street bankers as directors at the New York Fed.

I hadn't seen this news elsewhere, and it took a little digging to find the relevant text in the bill. And having done so, it's unclear that the bill specifies exactly what the FT is reporting.

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One section likely to be of great interest to both the banking industry and its critics starts on page 492 of the "Restoring American Financial Stability Act of 2010": Title VII, "Improvement to Regulation of Over-the-Counter Derivatives. "

I'm working my way through it, but I was caught up short right at the start. In Subtitle A: "Regulation of Swap Markets," Section 711: "Definitions," part (a): "Amendments to Definitions in the Commodity Exchange Act," sub-section (2), the Act provides a five part definition of what kinds of derivatives are considered "swaps." Part three is characterized by a certain mad financial poetry.

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Negotiations with Tennessee Republican Bob Corker appear to have broken down, possibly over the issue of whether payday lenders should be regulated by a proposed Consumer Financial Protection Agency.

Sound familiar? Just one month ago, Dodd announced that bipartisan talks were at an "impasse" and Democrats would go it alone. Back then, Alabama Republican Sen. Richard Shelby played the role of recalcitrant GOPer. But then, a few days later, word trickled out that Dodd had started negotiating with Corker.

Who's next?

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The first says America is paralyzed by a political system that is too democratic -- too responsive to citizens' whims. This is the religion of almost everyone in the permanent Washington elite, regardless of party. Its canon mixing paeans to noblesse oblige with shrill authoritarianism is most clearly articulated by high priests like the Washington Post's David Broder and the New York Times' Tom Friedman. The former has said democracy threatens to make "official Washington altogether too responsive to public opinion"; the latter dreams of Chinese-style dictatorship.

"One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages," Friedman recently gushed, adding that the chief "advantage" is the ability of despots to "just impose" policies at the barrel of a gun.

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Congressional Quarterly reports:

Bipartisan negotiations over a financial regulatory overhaul are at an "impasse," Senate Banking Committee Chairman Christopher J. Dodd said Friday, adding " have instructed my staff to begin drafting legislation to present to the committee later this month.The Connecticut Democrat said in a statement that while the panel's ranking Republican, Richard C. Shelby of Alabama, "assured me that he is still committed to finding a consensus ... it is time to move the process forward."

Translation: The Republicans are refusing to budge on their determination to block any meaningful reform. And why not? They've made the political calculation that preventing the Obama administration from governing is their best electoral strategy -- and it's been working like a charm.

But in our dysfunctional government, an "impasse" may actually be a sign of progress. Bipartisan consensus in this Congress is impossible. Now is the time to bring a solid bill to the floor, and force Republicans to filibuster. If the Democrats want to have any chance of salvaging the midterm elections, they need to show voters that they are willing to fight.

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In other words, it isn’t Congress’s fault. It isn’t the Senate Banking Committee’s fault. It certainly isn’t Dodd’s fault. The reason more than a year has passed since the biggest bailout in the history of the world and nothing has been done to prevent a repeat performance -- even as the biggest banks are doling out more than $30 billion of bonuses, even as Goldman Sachs is awarding its big traders $16 billion in bonuses (more than the $13 billion Goldman collected from taxpayers via the bailout of AIG), even as AIG itself is handing out bonuses -- the reason is … what, exactly, Senator? Because the Street has sent an army of lobbyists to Capitol Hill?

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But if the Financial Times is to be trusted, the Volcker Rule is already dead on arrival, because Richard Shelby, the ranking Republican senator on the Banking Committee, doesn't like it, the Democrats no longer have 60 votes, and Chris Dodd, the chairman of the committee, wants to play nice.

Don't read any further if you have blood pressure issues.

From the FT:

A Dodd staffer said the senator is likely to quietly drop or modify many of the recommendations in the Volcker rule to ensure Republican support for regulatory reform.

"Chris is retiring so he wants to end his career with an important regulatory reform bill and he wants to make the bill bipartisan," the staffer said. "He is not going to risk bipartisan support to make the White House happy."

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At a certain point, I guess, you start figuring: Hey, we're already months late, what's another month or two? That must be it, because even with the midterm elections creeping ever closer, senior Congressional Democrats are sounding very casual about the pace at which things are proceeding now.

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