The chairman of the House Financial Services Committee has cultivated a pugnacious persona, but on financial reform he may be fighting for the wrong side.
For more on pruning back executive power see Pruning Shears.
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Barney Frank has become something of a darling on the left because of his feistiness, which heaven knows is in short supply among Democratic politicians. That quality seems to work best for someone who will go down with the ship on principle, all other considerations be damned; someone like Dennis Kucinich, who voted against the House health care bill under just that circumstance. (Phoenix Woman brilliantly articulated the hazards of this outlook.*) It does not work so well with someone who appears to be at least half in the pocket of the interests he ostensibly oversees.
His interview with Ed Schultz earlier this week gave a clear illustration of why. Schultz pushed on a couple of key points: Last year’s bailout came with no strings attached, and as a result the major players have gone back to the same reckless behavior. Frank turned prickly, which is what feisty looks like when you don’t like it, and almost immediately said “don’t condescend to me” when Schultz was obviously doing no such thing. He proceeded to condescend to Schultz throughout the interview; “the point I made to you several times” and “What’s the matter with you?” stand out. There was also this:
SCHULTZ: Congressman, why can’t you just admit that this was a serious misstep on the part of the Congress? You forked out billions of dollars to save the economy, I get all that, to get the structure back going again. But you didn’t ask them questions about how this…
FRANK: No, Ed. You’re wrong.
SCHULTZ: Oh, tell me I’m wrong.
FRANK: You’re wrong. And I’d like to be able to explain it.
Which he proceeds to explain via the non sequitur that his Say On Pay legislation would have prevented outrageous bonuses. Since it would “give shareholders a non-binding vote on top corporate executives” pay, it is almost incomprehensible that Frank actually believes such a mechanism would be effective. First, it is non-binding. Second, it is a single vote that the rest of the CEO-friendly board would likely overrule. Third, even as a vote of no confidence from the supposed owners of the company it is useless. Such an action only carries weight as a discouragement via shame, something we have yet to see the faintest trace of among the Titans Of Industry.
Frank also made a great show of the new tax brackets. Yes, adding them at the highest levels is a good thing, but to conflate it with financial services reform is ludicrous. It is not a proposal aimed at giving Wall Street firms less incentive to maximize their greed, except to the extent that such compensation as they were not able to shelter or hide would be subject to the higher rate. That obviously is not trivial, but it does not go to the root of the problem the way, for instance, a clawback provision would.
Note too that unlike TARP these wonderful reforms have not been signed into law. $700 billion gets hurried through Congress over a few days, but what can Frank say of his much-ballyhooed reforms? “we have legislation pending,” “We’ve been trying for three years to get that through. We’re going to get it through this year,” “I believe we will get that put into law,” “I’m trying to get legislation so it would stop it,” “we are trying to pass legislation.” Trying indeed.
The only attempt Frank makes to address any of Schultz’ points is infuriatingly disingenuous and obtuse. Now that obscenely rich executives are preparing to lavishly compensate themselves for so effectively looting taxpayers Frank claims Congress is powerless because “the people you just cited are in the non-TARP category right now.” They are in the non-TARP category because they paid back their direct government loans with indirect ones. They also now enjoy the implied guarantee of the United States government, since it has demonstrated it will not allow them to fail. That is an ongoing benefit of absolutely immense value. Tell me Congressman, how (and when) is that to be paid back?
Schultz did a very nice job in pressing him to justify his support of the current rotten state of affairs. Frank attacked, evaded, obfuscated and generally danced around the issues. Meantime, he is pushing – with White House support – a proposal that fellow Democrat Brad Sherman derided as “TARP on steroids.” In short, Barney Frank gives every impression of being a legislator on the side of those who created the mess in the first place. He is loudly advertising cosmetic changes while quietly working to not just preserve the status quo, but to make it even more entrenched. Scrappy doesn’t look so good when it’s used to champion the powerful and corrupt.
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For the record and the Google cache, since comment sections eventually purge:
If by ‘patron saint’ you mean ’someone who is largely ineffectual’, then I guess we are.
Instead of doing the third-party flirt, Kucinich should have raised money to set up the sort of patronage system for progressives that Republicans have for their people: If you run as a Republican, they will provide you with your own campaign staff (and later, congressional office staff), tons of money, professional groomers, etc. All you have to do is show up. (Of course, this means that you’re helpless without their aid, which is part of the plan – it’s easier for them to enforce loyalty that way.)
But of course doing that would take time, effort, organizational skills, and forbearance, as well as cash. Much more fun and far less work just to holler “Impeach Bush!” every so often to keep the shekels rolling in for your own campaign.
