Politics, Banking and Congressional Gridlock: A Q&A with Barney Frank

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I was talking with former Rep. Mike Oxley and he said, "Barney really believes in the institution of Congress." Is that right?
Yes. One of the things I'd like to do later on is I'd like to teach a course on Democracy.

Democracy has been the motivating factor in my life — Emmett Till, McCarthy — I just believe very strongly in democracy as a moral imperative. That people have a right to run their lives and that Democracy is very important.

And the embodiment of that Democracy is the Congress and the House of Representatives. So yes, I believe very much in the institution of Congress, not in itself, but as the institution of American democracy.

But people feel now like Congress doesn't work.
That's true, but that's only since the Tea Party came. Did you feel that way in 2009 and 2010?

In 2009 and 2010 — go back — read Hank Paulson's book — we worked very closely together. We did the Tarp with the administration. In the most political part of our history, we did the auto bailouts.

First of all, bipartisanship stopped when Obama came in.

Nancy Pelosi did a stimulus with George Bush in 2008 in January — people forget that — which we worked with him because the economy was turning down.

We didn't say go ahead and screw up and we'll beat you bigger in 2008.

In 2009 and 2010, we got health care, we got financial reform, we got Lily Ledbetter, we got the repeal of Don't Ask, Don't Tell — it was very productive, including some foreign policy cooperation.

What then happened was that the Tea Party took over the Republican party. So that lack of functionality is very recent, it's a two-year period.

The other thing about it is, and people forget this, it's the American constitution.

In England, if you are the candidate for prime minister, and your party wins the majority of seats in the House of Commons on Wednesday, you are the prime minister on Thursday or Friday and you run the whole government.

But in America, at any given time, we are governed by the product of three elections. You have senators who are elected in 2006, a president from 2008, representatives from 2010.

Now the public rarely changes its verdict as radically as it did between 2008 and 2010.

The gridlock is a result of the voting public in America drastically changing its mind and electing Barack Obama and Democrats in 2008 and then the most right-wing faction in American history to control a party in 2010.

That's where the gridlock came from.

Is this something that changes on its own?
I think it's going to change. You have people now that don't believe in governance in charge of one chunk of the government. But I urge people. Go back: read [former Treasury Secretary] Hank Paulson's book.

You had two years of a Bush presidency and Democratic control of Congress and there was a great deal of cooperation over the economic crisis.

There is nothing institutional and permanent. There is this overlap problem but it's a combination of three sets of elections and the public making a drastic shift between 2008 and 2010.

You have a real passion for banking and housing issues. What started that?
It started out with housing. I care a lot about poor people.

My passion has been to end discrimination, protect freedom of expression — promote freedom in general, like marijuana and gambling — and keep people from being too poor.

So I worked in the legislature.

When I got to Congress, Tip [O'Neill] was very careful to make sure that we had Massachusetts people on all the important committees. So when I got there, we had people on Appropriations, Ways and Means, Energy and Commerce, but nobody on Banking.

And I said, "Okay, that's what I want to do" and called Tip. But I went onto banking to do housing.

For years, I was one of the few that would pass up the capital markets subcommittee. I was never that involved, including with Fannie and Freddie — that was in the capital markets subcommittee.

I didn't really have an interest in that. I had very little to do with Sarbanes-Oxley. I was No. 2 on the committee, I just followed [former Rep.] John LaFalce on that.

Then I became ranking member. As ranking member, I had to take on that activity. But even at first as ranking member, I was spending most of my time on housing.

My involvement with the financial markets came with the crisis.

In 2006, Paulson calls me and says, "You guys are probably going to be in charge, we have some serious issues here."

Prior to Dodd-Frank and Tarp, what is your biggest banking accomplishment?
It's low-income housing. Charlie Rangel and I — this goes back to 1986 — the creation of the low-income housing tax credit program. The single most important source of affordable housing and very much a public-private thing.

The second action I care about is trying to make the international financial institutions more concerned with equity.

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Comments (2)
Frank as senator? NOT!
Barney Frank has built his career and "personal" life on the misery of twelve million Americans who now face foreclosure.
Frank's only regret is that he didn't rip off enough from middle-class taxpayers.
Frank's philosophy is from the "we'll get ours" school of thought.
There is nothing warm and fuzzy about a crooked Marxist who created the real estate housing mess and whose goal was to disenfranchise the American middle class.
Massachusetts voters are sick of the Champagne Socialism Frank represents. As a representative, Frank refers to his constituents as "nobodies" who are "pieces of furniture."
The twelve million Americans who are facing foreclosure want to know when Frank is going to be convicted.
If Frank had the guts to visit the people whose homes he has put into foreclosure, they would SPIT on him.
Posted by libertyfreedom | Saturday, December 22 2012 at 4:55AM ET
The root of the problem is that politicians confuse "shelter" with housing, then seen mortgage finance as a tool to address shelter issues. That bankrupted savings and loans a generation ago and when lending then moved to the capital markets it bankrupted them as well, including Fannie and Freddie.
Posted by kvillani | Wednesday, December 26 2012 at 10:46AM ET
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