One thing I like about Barney Frank is his candor. But this raised my eyebrows a little. Barney Franks says he is in favor of inequality?
Representative Barney Frank has proposed in a series of meetings with business groups a “grand bargain” with corporate America: Democrats would agree to reduce regulations and support free-trade deals in exchange for businesses agreeing to greater wage increases and job benefits for workers.
Frank, the Newton Democrat who is in line to chair the House Financial Services Committee, has struck a conciliatory posture with financial-industry leaders in recent years. But since the morning after Election Day, he has moved quickly to lay out an ambitious plan to try to end the political stalemate between Republicans and Democrats on broad economic issues.
“What I want to do is break that deadlock,” Frank said in an interview. “A lot of policies that the business community wants us to adopt for growth are now blocked. On the other hand, the business community is successfully blocking the minimum wage [increase] and created a very anti union attitude in the Congress.”
Frank proposes that if businesses support a minimum wage increase and provide protection for workers adversely affected by trade treaties, Democrats would be more willing to ease regulations and approve free-trade deals. Frank also would support changes to immigration rules favored by businesses, and noted that allowing more immigrants would put needed funds into the Social Security system.
Frank casts his proposal as a way for capitalists to quell some of the populist fervor that was expressed in last week’s election, when many Democrats vowed to crack down on companies moving jobs overseas.
“I’m a capitalist, and that means I’m for inequality,” Frank told Boston business leaders on the morning after Election Day, in a speech about his grand bargain. “But you reach a point where you get more inequality than is healthy, and I believe we’re at that point.
“What we want to do is to look at public policies that’ll get some bigger share of the increased wealth into wages, and in return you’ll see Democrats as internationalists. . .. I really urge the business community to join us.”
I think I understand what he meant. I’m a capitalist too. I wouldn’t use this particular talking point, though. If Frank can get better wages and benefits for American workers and fight off the assault on labor unions, then I guess he might be justified in making compromises.
Barney Frank always keeps the debate interesting.
Well, ain’t that the truth…
As a practical matter, we have to work within the current capitalist system. That being said, it should be the other way around – businesses have to work with us, not us groveling before them.
There was an article a week ago or so that said Pelosi was planning on cutting back the Sarbanes-Oxley act a bit. That pissed me off. Grace period is over for the crew in charge, and I’m going to write a blog entry about it (should I have the time) over my break. This is no time to start playing nice on corporate regulation.
The key word being “practical.”
The only way to effectively defeat free-trade horrors is to help raise wages abroad. Otherwise, if we only raise them at home, we help drive out the jobs we hope to keep. This is indeed a “practical” compromise I’d support as a politically necessary interim measure. We can’t get planet-wide justice overnight – it will take centuries. But it’s important we realize the interconnectedness and work to support more democratic regimes abroad (and not work to overthrow those already stable and democratic, as we did in the fifties and sixties).
Moving towards Free Trade accelerates this process of American Job loss, so long as the Inequality between nations persists. While regulation can work both ways, it can be used to slow the loss of jobs. I don’t believe Regulation can create job growth over the long, long term, but it can certainly slow loss until better global economic conditions exist. Perhaps this is the Inequality, our very standard of living, Mr. Frank wants to continue to indulge?
Under a purely Free Trade regime, in some distant future, the global economy would eventually level out for the most part and that sounds great on a gut level. And it is great when it’s over. But this is not the rising tide that raises all boats model. The people of an advantaged economy (us) would be brought low and the disadvantaged would be brought up.
Think about tanks of water in a row, all at different levels. if you connect the tanks at the bottom with wide open tubes (Free Trade), the water will immediately seek the same level in all tanks. That is fine for the tanks with little water (developing nations) whose levels raise a bit, but for the full tanks (especially ours!), the change will be drastic and entirely in the negative direction, as ‘rupture’ becomes an understatement.
From the perspective of an American worker, I would the leveling take 100 years, rather than the recovery from it. Only limited and reasoned Regulation can even hope to slow the flow.
The problem for American workers is that averaging our salaries with the rest of the worlds translates to earning about $2000 a year. Sounds good to Capital, but for me and my kids, a little protectionism to slow the process of Global flattening would be nice. Maybe 100 years is indeed a good amount of time.
Rapid change is too chaotic to manage, no matter how well thought out the Purpose (see Iraq). Free Trade introduced quickly into an unequal system will necessarily create painful chaos. Like jumping off the roof instead of taking the stairs, just because you want to meet your friends on the ground floor. We need to take steps or the American worker will be broken by the fall.
Some interesting reading: http://ucatlas.ucsc.edu/income.php
Just look at this graph, and think about how far to the left you would move if we all were averaged together:
http://ucatlas.ucsc.edu/income/chart.gif
I hope this isn’t a preview of things to come. Saying “I’m a capitalist” is meaningless. Pretty much nobody in the US is agitating for the government to build trucks or grow apples. All the social democratic nations of Europe and elsewhere are capitalist. So are the bloody dictatorships of Africa, Asia, and elsewhere. So, for that matter, are China, Vietnam, and most other places labeled as socialist.
If Frank means we should rely on business to replace the social safety net, he’s full of shit, but he might just be trying to leverage business fear of the electorate to win some New-Deal-type change, who knows. In any case, this kind of coded coyness is not something we need from the new Congress. I’ve always liked Frank, so I hope this was just a top-of-the-head tossoff, which would be kinda typical for him.
The “talking point” he champions just caused many “liburl lefties” to lose their lunch. When I read farther, I see what he means, but we have been waiting twelve years to gain a voice in D.C. This smacks of capitulation after “our” victory of a couple of weeks ago. Excuse me, if I am not overjoyed by his remarks. I thought most Dems viewed free trade agreements with disdain. In S.E. Michigan, even some conservative Republicans do.
Rep. Frank may be referencing the policy fight that led to the creation of the workers’ compensation system. Way back in the day at the beginning of the industrial revolution workers were getting mangled at an atrocious rate, but could almost never recover from their employers (link [ ).
Workers comp was a “grand bargain” between the progressives and big business that stripped injured workers of the right to rare, but unlimited, jury awards in exchange for business being responsible for the workplace injuries of all employees.
Deregulation in exchange for wage increases and strengthened union representation seems to be in the same vein as the earlier “grand bargain”
I like the idea of the deal Barney has on the table- let’s see if it can be a “fair” trade.
This goes back to some of those old debates with the Brothers Libertarian, eh, Boo?
Do you think he is talking on the systemic scale, the personal scale or what?
Is Capitalism really dependent or defined by a bias of government budgets towards the needs of Capital, and perhaps all the other advantages Capital enjoys aren’t enough?
or was he saying that Capitalism derives Value from Inequality and therefor Inequality should be promoted?
Either way, I think this is just the part of the conversation where a discussion of systemic sustainability should enter, but seldom does (Mr. Gore?).
Perhaps Mr. Frank would agree with the thought that Value was derived from human suffering. I heard he is into spanking.
Just because Barney is a gay liberal doesn’t mean he’s some kind of Leftie.
What I am is not an “ism” yet, but it will be one day. See the quote below.