The Career of Reaganite Barney Frank

Most Democrats think that they belong to the party of the little guy, the party that attempts to constrain Wall Street.  Sometimes a Democrat won’t fight hard enough, or, like Obama, will make political calculations that shave off the better angels of their nature.  This myth says that Reagan deregulated, and Bush led us into the financial crisis.  In fact, that’s a fairy tale.  It was Jimmy Carter who began the deregulation of the financial services industry, who got rid of usury caps, and Bill Clinton that deregulated derivatives and ended Glass-Steagall.  The rush headlong into madness has been fully bipartisan, from the get-go.  It’s not a surprise that as both Republicans and Democrats shed their liberal wings, in favor of neoliberalism, financial instability increased.

The career of Barney Frank casts a large shadow upon the Democratic approach to financial matters, as he perfectly epitomizes how they behaved throughout this time period.  Frank was elected in 1981, as a quintessential Reagan-era Democrat.  He is frequently misunderstood, and cast as a liberal.  In another era, he would have been such.  But he was first and foremost interested in cutting deals, and to that end, his ideology ended up as that of a Reagan-lite.  It’s unfortunate, because by the time he had real power in 2008, he had no firm basis upon which to make decisions for the broad public, and ended up consolidating wealth into the hands of a smaller and smaller number of people.

Anyway, here’s a smattering of press statements picked at random:

New York Times: Barney Frank, a Top Liberal, Won’t Seek Re-election

“U.S. Rep. Barney Frank, a prominent 16-term liberal Democrat from Massachusetts and arch-enemy of political conservatives nationwide, announced Monday that he does not intend to seek re-election in 2012.” CNN Politics

Yet, Frank is and was no liberal.  He’s a bank-friendly Democrat who is believes in neoliberal ideas, but wants to ensure that there is some housing for the poor.  Let’s take this comment, which cuts to the core of how Frank sees the economy.

“These days in developed countries, everybody says you need a private sector to create wealth, you need a public sector to create rules by which wealth is created. Sensible people understand that.”

This is absurd.  The government creates enormous amounts of wealth, from the telecommunications industry to the computer to the internet, to infrastructure like the national highway system.  If you’re driving across any number of bridges or traveling over airports, that’s wealth.  That’s value.  And it’s government-created.  The Reconstruction Finance Corporation lent out a total of $55 billion in the 1930s and 1940s, it was a government-bank that financed infrastructure all over the country.  Liberals govern like wealth can be created in both the public and private sector, and destroyed in both areas as well.  Neoliberals like Frank put their faith in the private sector.

There’s more.  Here’s Barney Frank on activism:

And I believe very strongly people on the left are too prone to do things that are emotionally satisfying and not politically useful. I have a rule, and it’s true of Occupy, it’s true of the gay-rights movement: If you care deeply about a cause, and you are engaged in an activity on behalf of that cause that is great fun and makes you feel good and warm and enthusiastic, you’re probably not helping, because you’re out there with your friends and political work is much tougher and harder. I’m going to write about the history of the LGBT movement, partly to make the point that, in America at least, it’s the way you do progressive causes….

Pride Weekend was very important early on, because people didn’t know who we were, the hiddenness was a problem. Today, Pride has no political role. It’s a fun thing for people.

Frank consistently doesn’t believe in pressuring politicians, even though studies show that direct action techniques (especially in the environmental sector) are effective at moving policy changes.  This shouldn’t be a surprise, as Frank is first and foremost a political insider.  Activism, especially liberal activism, is simply irritating to someone like that.

From 1981 until this year, Frank served on the committee tasked with housing and banking, which was once called the Banking Committee and eventually morphed into the Financial Services Committee.  He rose to Chairman in 2007 when the Democrats took over, and presided over the passage of the bailout, and then the crafting of the Dodd-Frank financial reform package.  His primary skill, and a magnificent skill it was, was managing the politics of that committee.  Here’s how he did it.

Every so often you’re going to have to ask them to vote for something that wouldn’t be politically in their interest. To get them to be willing to do that, partly it’s because they have the solidarity with the party, but you want them to have this vested interest in you being good to them. And it’s not so much threatening them. Occasionally you do that, but that’s very occasional when you want it to be a good relationship. What you do is you are their servant, you are their constituent.

It’s very simple. Whenever anybody, any Democrat who’s on the committee, asks me to do something, if at all possible, I’d do it. I’d go to their districts, I’d show up at their fund-raisers, I had my picture taken with people who wanted to have their pictures taken with me, I’d support their amendments, I’d get little things for them.

Being an effective politician is a skill, and Frank was operationally competent at running the Financial Services Committee.  He could run the floor of the House like no one else, give a magnificent quip, and ensure that every amendment in the committee passed with the vote tallies he wanted.  He didn’t do any oversight, as far as I can tell, and was entirely reactive to what other officials wanted from Congress.  He wasn’t a leader in any sense, more an incredibly talented follower.  I suspect that early in his Congressional career, Frank realized that the big banks, Fannie and Freddie, and the Federal Reserve were the “adults” in the room, and that he wanted to be “serious” about policy-making with the adults.  So he eventually became more and more bank-friendly, until the capstone in his career was passing the $700 billion TARP.

Let’s be clear, though, Barney may have had sympathies for housing projects, but he was no liberal.  And he shouldn’t be remembered as such.

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About Matt Stoller

From 2011-2012, Matt was a fellow at the Roosevelt Institute. He contributed to Politico, Alternet, Salon, The Nation and Reuters, focusing on the intersection of foreclosures, the financial system, and political corruption. In 2012, he starred in “Brand X with Russell Brand” on the FX network, and was a writer and consultant for the show. He has also produced for MSNBC’s The Dylan Ratigan Show. From 2009-2010, he worked as Senior Policy Advisor for Congressman Alan Grayson. You can follow him on Twitter at @matthewstoller.


  1. jake chase

    The time to unmask this creep was when he was still running, but nobody could ever say a bad word about him without being tarred as anti-gay. All a politician needs is the protective coloration of some oppressed minority group and he’s home free to cheat, lie, steal with both hands.

  2. chris

    I’ve written the same things about Barney Frank for over a decade now. It’s not as if the truth was not known. But making these points in comments at Dailykos, the NYTimes, The Nation, etc – all the “liberal” places where Barney’s hagiography as the progressive he never was has gone mostly unchallenged, has proven to be an exercise in futility. The partisan tribe – and today’s Democrats are far worse than the GOP – will not condone taking down such a thoroughly “made” man. He had to take himself down…

    Good riddance.

  3. Goin' South

    Barney was not such a bad guy when he was a Mass House Delegate in the mid-70s. He had some Leftish convictions, and I’m not sure he lost all those by the time he was first elected to the U. S. House of Reps. It was a more gradual process.

    I’d say he’s a fine example of how the combination of Capitalism and “representative democracy” inevitably devolve to plutocracy. I’d like for someone to give me an example of a career politician who has NOT gone the way of Barney Frank.

    1. Kevin Egan

      Career politicians not turning into sellouts: a provisional list.

      (Note: not saying they’re perfect, or have never compromised; but these folks have continued to stand for progressive values against heavy opposition.)

      Russ Feingold
      Bernie Sanders
      Paul Wellstone (rest in peace…)
      Alan Grayson
      Jim McDermott
      Peter DeFazio
      John Lewis
      Keith Ellison
      Jerry Nadler
      Marcy Kaptur
      Dennis Kucinich (remained great on policy, though perhaps corrupted by Presidential ambition)

      I suppose you could add Ron Paul, who has been more consistent than most, and has opposed his party repeatedly on important issues. I have a soft spot for him because of his old-fashioned isolationism.

      It’s a pretty short list! Great system we’ve got!

      1. Lambert Strether

        If you consider flipping to ObamaCare from single payer after a single trip on Air Force One, and then actually whipping for it on the House floor, after vociferously claiming you’d defend single payer on principle, yes, then Kucinich is a fine example of “progressive values.”

        I consider, indeed, that Kucinich is a fine example of “progressive values.”

        Wellstone is another matter. These days, a willingness to go up in small planes is probably an excellent test for who the progressives really are. Or aren’t.

        1. Leeskyblue

          Please remember the context of the health care flip — our fine president who is too noble to dirty his image by whistle stopping for single payer or tough regulations, went into Kucinich’s district and flaunted a crippled child and a tearful mother praying for that nice Mr. Obama’s bill to be passed.
          Kucinich knew they had him over a barrel of dead babies. What could he say or do?

          to bad our president is just too nice a guy to go up against Republican “obstruction.” He’s had no trouble kicking Democrats in the groin.

          That vaunted health care law, thanks to the lack of regulation that Kucinich wanted, is aready becoming too expensive for most people.

          So you’re still going to vote for Obama because he is “not as bad” as “them”? He’s far more destructive because he pretends to be a Democrat. Focus on the man who is the real fraud. It isn’t Kucinich.

          1. Lambert Strether

            They’re both frauds though, granted, Kucinich is a revolving hero, which is a less repellent sort of fraud. Why in the world would you imagine I’d vote for Obama?

          2. different clue

            Someone named Al Giordano has an interesting pair of twinned-websites called Narconews and The Field Report. He also runs something called the Fund for Authentic Journalism.

            Regretably, he became a firm and early Obama supporter because of the Racial Uplift Narrative Obama ran on and which Giordano accepted. As such, Giordano and his followers became as devoted to the Cause of Obama as did Markos Moulitsas and his Blog Army of Koswipes.

            What makes that the least bit relevant? Giordano wrote a worshipfully approving article about the long-and-carefully orchestrated campaign of pressure and extortion the whole Obama team and its numerous collaborators throughout the House and Senate conducted against Kucinich.
            I don’t have the patience to try finding the article but it can be found by googling some combination of Al Giordano The Field and then looking at all the articles beginning the day after the vote Kucinich surrendered on. What was Kucinich afraid of losing? What did they threaten him with?
            I still have the feeling that he illustrates terminal fear and loss-of-nerve rather than corruption at the crucial squeeze-the-trigger moment. A tougher brass-ballsier Representative would have voted a combination of principals and hatred and revenge and destroyed Obama’s Presidency right there as a lesson to future Presidents. Then again, so could any one of several so-called “feminist” Representatives at key points during the votes on Bart Stupak’s anti-womanitic ammendments to the Baucus-Obama Romneycare Bill. And they didn’t take the one chance they had to destroy Obama’s Presidency as a lesson to future Presidents either. Were they too merely corrupt?

            So I don’t feel “betrayed” by Kucinich as “being corrupt”.
            I merely feel let down by Kucinich for not being tough enough to kill a Presidency which needed killing and deserved it when he had that Presidency in his cross-hairs.
            But how many Representatives or Senators can be that tough if they didn’t run on being that tough to begin with in order to be sent to Washington to be that tough?

      2. Alan Bickley

        And to go back a couple of decades, Wayne Morse, Ernest Gruening, Frank Church, Wright Patman, Ralph Yarborough. . .

      3. Blind Man Mouse

        Incidentally, to those leading “holy men” as your post implies, are they aware of 20 Million homeowners underwater, millions more out of jobs, endless wars and the draining of wealth for our military expenditures, loss of civil liberties, eventual loss of sense of deceny or safety net from another era. Keep them in office forever, don’t challenge the status quo, not a god$%man thing will change. All of these so-called liberals will support Ofraud, Lockheed, CitiGroup or whoever else shows up with suitcases of cash. The system is broken, it doesn’t work, give it up.

      4. Walter Wit Man

        Of the above people I’m pretty familiar with, like 2/3ds of them, I consider them all to be sellouts.

        Shocking, I now.

        But Feingold, Kucinich, Grayson, and even Sanders are sellouts in my book because they have failed to take the minimum first step . . . they are still Democrats or they caucus with Demcorats and fail to treat Democrats as the adversaries they are.

        They are more clever than the other Democrats. But there was no excuse for reneging on the progressive cuaucus pledge re Obamacare. That proves the utter uselessness of being a progressive Democrat. Failure to take the proper lessons from that experience, as kind of a ‘last chance’ opportunity for the Democrats, makes one a sellout. Or a perp actually. They are there to entrap liberals in the Democrat party.

      5. Hugh

        As lambert notes, the healthcare debate really showed us for the first time in a generation who was who and what they did and did not stand for. Wellstone was gone by that point but all the others caved on healthcare.

        If you scratch beyond the surface of any of those on your list, the air of progressivism about them quickly evaporates. Take Feingold. He was a deficit hawk. Abdicating the Senate’s role of advise and consent, he supported Bush’s reactionary choices for the Supreme Court because he thought a President should have the right to choose whomever he wanted for the Court.

        The truth is, as Walter Wit Man notes, you can be a progressive or a Democrat, but not both. All of those on your list are Democrats, except Bernie Sanders who caucuses with them.

        Another tell is that none on your list ever really tried to engage with and become spokespeople for the progressive movement. At most they confined themselves to the occasional star turns of the revolving heroes schtick, receive a few accolades from more gullible progressives, maybe pick up some cred and donations, and then back to business as usual.

        1. Kevin Egan

          This is what James Joyce called “refining yourself out of existence”!

          It’s unfair to say all these people are sellouts (which was the original comment that I was responding to) just because they had some positions you disagree with. Take Feingold: I think the deficit hawkery is wrong, the vote for Supreme Court misguided (that’s clearer now than it was then), but the point is he had convictions, you knew where he stood, and he took difficult stands. Who else voted against the Patriot Act? For that alone–in the month after 9/11–I think he deserves respect.

          You sound like you want Prophets, not Politicians: I’d suggest that’s a category confusion in this discussion. Prophets–and that includes Progressives in our era–belong outside the system, not inside, and we need them desperately. But that doesn’t mean that a politician with convictions who’s willing to lose his seat on a matter of principle–as Feingold did, when he wouldn’t accept outside money in his campaign–doesn’t deserve some respect and can’t be worked with.

          1. Hugh

            This is just a reprise of the lesser evilism theme. Feingold supports Obama’s reelection. That really tells you all you need to know about him.

            Being one vote against the Patriot Act doesn’t tell you who a politician is. It is rather all the Democratic votes for the Patriot Act which tell you what those politicians are. Now if Feingold’s vote on the Patriot Act had been the deciding vote on it, then that also would tell us where he really stood. But being the lone vote against something that passes overwhelmingly is just atmospherics. It doesn’t change a thing.

          2. Kevin Egan

            Rhetorical analysis of your answer:

            “This is just…”
            “really tells you all…”
            “it is rather all…”
            “where he really…”
            “it [changes nothing]…”

            You see absolutes, as your language clearly shows; I see shades of distinction here, and I don’t think John Lewis is the moral equivalent of Chuck Schumer. We have very different temperaments, so we’re not going to agree.

            I do have a question though: what’s your roadmap for getting past the Democratic Party and the two-party system? I’ll put my cards on the table: I’m voting for Romney, in order to exacerbate the contradictions, and also protect Medicare and Social Security from Obama’s planned destruction–because I can count on the Democrats, as feckless as they are, to oppose Obama’s plan if it’s put forth by Romney.

            That’s a first step, and I can’t predict what happens after that. Got a better idea? Please say! I’m happy to acknowledge better ideas, but I haven’t heard one yet.

          3. Hugh

            A vote for any Democrat or any Republican is a vote for kleptocracy. Vote for a third party candidate. It delegitimizes the two parties.

            Oh, and it is not absolutism. At some point, you have to decide to cut bait. If you think Establishment figures, like Feingold or Krugman or whoever, are going to show the leadership they had the chance to for years and never did, if you think they are the ones who will champion the reforms that actually will change anything, then you are going to be waiting forever. At some point, you need to understand that the kleptocracy, wealth inequality, and class war that are afflicting us are products of our elites, and Feingold, Krugman, state and federal officeholders are very much part of those elites.

          4. different clue


            The fact that Feingold supports Obama’s reelection doesn’t in itself tell me WHY Feingold supports Obama’s reelection. It could be out of Kleptist solidarity. But then again it could be out of misplaced and obsolete nostalgia for a Democratic Party which died decades ago and whose death the Nostalgiacrats don’t yet wish to accept.

            I remember a line from Hunter S. Thompson’s Fear And Loathing On The Campaign Trail . . . ” McGovern’s big weakness is that when the Big Whistle blows, he is still a Good Party Man.” Perhaps Feingold could be afflicted with that same weakness, thinking the “Democrats” are still a legitimate political party and that a “Democratic” labeled President is really Democratic and is the leader of a real party which really exists. John Dingell is certainly certainly afflicted with that weakness. He supports Obama in the mistaken belief that Obama is a Democrat just like Truman and FDR were Democrats decades ago because he bears the “Democratic” label.

            Anyway, someone is going to be President. I have my grubby survival to think of as well as my lofty principals.
            My grubby survival needs lead me to prefer Romney as a one-term President in hopes that a President Romney will be less
            able to destroy my slender threads of old-age-survival known as Social Security and Medicare. So if the election in Michigan looks split 50-50, I will vote for Romney to keep Obama’s “more effectively evil” hands away from my SS/M-care. And I will be reduced to hoping that the DemSenators feel the need to keep up the pretense of supporting SS/M-care. I know that the DemSenators privately hate both programs and would like to destroy them both. But I hope they still value their political label brand value and would find a President Romney too little and too threadbare a cover under which to perpetrate their Simpson-Obama Catfood Plan against SS/M-care.

            And in my private life I will try to make my personal economics a little more klepto-resistant in various ways.
            A hundred million other people could each lift a finger towards the same personal goal of personal klepto-resistance. All kinds of people are working out various ways to do versions of that. John Robb, Ran Prieur, Catherine Austin Fitts, Sharon Astyk, Woody Tasch, Dmitri Orlov . . . the list goes on and on.

      1. Valissa

        btw, LJ never claimed to have the tape, but to have a contact he trusted who did. An ex-CIA guy like LJ should have known better, but it appears he got conned… most likely by someone in the CIA (my other theory is that he made the claim to increase traffic on the blog). There were so many agents/operatives of misinformation and disinformation getting involved with political blogs the last election season, either as “sources” or commentors (as bloggers too) planting various memes that it was impossible to tell what the ‘truth’ was.

        1. Lambert Strether

          Well, one good way to sort out the trustworthy ones from the untrustworthy ones is to look for those who are very clear on the provenance of what they publish — and before they publish anything. (This is why live streamers are important, by the way.)

          1. Valissa

            I don’t now and never have “trusted” any blogger. I read blogs for educational purposes and intellectual entertainment and I always filter & sift (the same way I read the MSM). I look for good writers who seem knowledgeable in some area or another and who have interesting things to say about a subject area that interests me… but of course that is all highly subjective (which is the nature of most blogs).

            Since bloggers typically source MSM articles (or other blogger articles) and those are also based on opinions and biases for the most part (group think), I’m not sure why I should trust a blogger just because they have a lot of links (although I do like to see some links, context.)

          2. Valissa

            I agree that live streaming is important and valuable, but it’s only available for certain types of news events. In the olden days reporters actually went to where the news was happening themselves ;)

          3. Lambert Strether

            Of course one filters and sifts. That’s the operational definition of trust, for me. The untrustworthy one doesn’t bother with in the first place; opportunity cost!

        2. different clue

          I used to read Larry Johnson’s blog for a while. I found my way to it thanks to James Wolcott referrencing a Colonel Patrick Lang blogpost which guest-appeared on Larry Johnson’s blog. When Larry Johnson used his blog to highlight Birtherism (the first place I ever saw that theory), I got repelled and stopped reading it. I wonder how many people figured Johnson was a typical high-level Clinton supporter and converted to Obama because of the Birtherism and other sewage oozing from Johnson’s blog.

  4. Blunt

    A nice summary and analysis of Barney Frank, Matt.

    Having been through the LTBG wars disliking and being maddened by the man and his rough-justice ideas I find the analysis perfect. Barney has never been a leader, but he has been excellent at working political rooms and, as he said himself, “being a constituent” (for TPTB and his colleagues.)

    Barney was/is a manager and his viewpoints (except for the coincidence of his being a gay male) are certainly not now, nor ever have been liberal or progressive, let alone “left-wing.”

    To think of him in those terms is to consistently be mistaken about both his skill set and his commitment to a cause. This, I and many others have learned to our consternation and disillusionment over many long years.

    1. Walter Wit Man

      That is a good picture.

      They are like actors taking a final curtain call–getting ready to head for drinks somewhere to celebrate. The actors playing the villain and hero stand side by side to accept their applause.

    2. bob

      I have one somewhere of it being gift wrapped and handed to Pelosi.

      Beware bankers bearing gifts.

  5. S Brennan

    Barney was the epitome of a self-centered gay man…with nothing…nothing but distain for those who were not like himself…upper class, white gay men.

    Anybody who has worked with or been around the transgender community knows that those individuals who appear outside there biological gender role are the single most discriminated minority in the US. Regularly murdered, their deaths are openly mocked by salacious coverage in the media [think, New York Times]. The normal media trope employs the “she had it coming” meme almost without exception. As a group, transgender unemployment is far greater than any other minority, running upwards of 85%, sex work, is for all practical purposes their only choice.

    And yet, for all that human suffering, Barney stripped out the T from LBTG legislation. Yep, Barney…on his own, without any prompting…stripped out any legal protections for a group of Americans who are regularly beaten, murdered and denied employment. Only when Barney was dragged kicking and screaming did he include the T. Barney liberal? Hardly, just another pompous gay dude. Human Rights? Sure for himself…and his white gay friends who were just like himself. Apparently, without prompting, Barney had no idea Civil Rights are for all people.

    [1] A 1999 study by the San Francisco Department of Public Health finding a 70 percent unemployment rate amongst the city’s transgender population [that’s San Francisco, not Dallas Texas..folks]

    [2] 1 out of every 150 transgender people in the United States will die by murder vs 1 in 25,000 on average. Transgender people are 166.5 times more likely to die by murder in the United States than the average American.

  6. F. Beard

    “These days in developed countries, everybody says you need a private sector to create wealth, you need a public sector to create rules by which wealth is created. Sensible people understand that.” Barney Frank [emphasis added]

    Then let’s have a true private sector. That means ALL government privileges for the banks must be abolished.

    1. Johnny Clamboat

      Agreed but you shouldn’t stop at banks.

      Unfortunately, the typical congresswine reaction is to double down on their treachery with more laws to fix the problems with the previous ones.

      Good luck finding enough principled candidates to unwind their schemes.

  7. jsmith

    “And I believe very strongly people on the left are too prone to do things that are emotionally satisfying and not politically useful.”

    And I think putting all of you fucking war criminal/finanical thieves in jail for the rest of your lives and clawing back any ill-gotten gains would be both emotionally satisfying AND politically useful, don’t you, Barney?

    That’s where the nascent “real” left is slowly beginning to head, Mr. Frank, so live it up while you have time, you f*cking parasite.

    Right now, it might seem all fun and games but as things continue to get worse and worse for people in this country, don’t be surprised if that seemingly ineffectual “grab-assing” suddenly turns into something you and your cohorts don’t want to be in the way of.

    What a prick.

    1. Lambert Strether

      “emotionally satisfying and not politically useful.”

      Like letting a Gentleman Of Negotiable Affection run his small business out of your house?

      To be fair, I guess that is an example of “creating wealth.” Small business is the engine of the economy!

      1. Everythings Jake

        I think that’s kind of a cheap shot Lambert. All kinds of people satisfy a desire for love and belonging by lying to themselves about the true character of their mate. Gay men, often closeted and starving for affection at that time, were as prone as any. He was engaged in an adult consensual relationship, as I recall, his first. Barney was not (as I believe he confessed) comfortable in his skin nor confident sexually. The situation seemed more sorrowfully human to me than anything else.

        Barney faced it all pretty honestly and was willing to take his lumps, but as I further recall, many speculated that it was primarily Tom Foley’s fear that his penchant for pulling page boys into closets would be examined that ultimately shut down the ethics investigation.

        The swipe also relies on culturally pejorative attitudes to prostitution, which are ultimately belied by the number of reputable persons willing to pay for it even as they preach damnation. While more and more “decent” folk are forced to make compromising choices in the face of the elite’s indifference to the economic holocaust they are responsible for igniting (I understand child prostitution is increased to a frightening degree in the Northwest), we don’t need to be promoting the myth that those people are bad.

        1. Everythings Jake

          Fair game on his legislative record. I would note that I think Barney saw himself as a pragmatist (not in the Obama like perversion of pragmatism) but in the sense that compromise is, or was, what imposed on that body by its nature. And as best I know he seems not to have profited financially like his colleagues (though whether or not he pulls a Dodd remains to be seen). Though that may mean he sold himself cheaply, it may also mean he retained a measure of integrity.

  8. rajanv

    Matt, thanks for the courage to call a spade a spade. As long as you speak out about the hypocritical dems, I will read your columns. You did one better than even Big Tent Democrat (Armando) at TalkLeft (his famous line is: pols are pols!). Keep up the good work.

  9. liberal

    The government creates enormous amounts of wealth, from the telecommunications industry to the computer to the internet, to infrastructure like the national highway system. If you’re driving across any number of bridges or traveling over airports, that’s wealth. That’s value. And it’s government-created.

    That’s true, and it’s important, but it partly misses the point.

    The questions should be: who creates wealth, and who benefits from it, and are the two in some kind of unfair relationship?

    There’s plenty of value created by the private sector, nongovernmental workers, etc.

    The real problem is that much wealth/value is captured by entitities which did not create it.

    One such entity is the financial sector: it collects rents that accrue due to access to cheap money and implicit government insurance guarantees. Those are both privileges for which the sector either pays nothing or drastically underpays.

    But an even bigger sector is that of land ownership. Land owners in their role of owning land create absolutely no value, yet (as has been known as far back as John Stuart Mill, and perhaps even Adam Smith even though the latter was writing before Ricardo came up with his theory of rent) they capture much value in the form of increasing land values.

    The solution is to tax these privileges according to their value, at least in the case of land.

    1. different clue

      Landowners create no value? That depends on what they do with or about the land that they own. There have been some cases . . . I don’t know how typical . . . of farmland owners greatly enhancing the value of the farmland they owned. Ralph Engleken, Eugene Poirot, Gene Logsdon, Gary Zimmer and hundreds of others famous enough to be google-studied. And at least thousands of others less well known but still value-enhancing.

      1. J. Sterling

        My impression of these 19th century economists is that they were pro-capitalist anti-aristocracy liberals, so perhaps they over-emphasized the absence of value added by land owners, and the extra value added by capitalists. Just as we can now point to many cases of capital owners or managers (leveraged or otherwise), who add no value, we can also acknowledge land owners (mortgaged or otherwise) who do not just collect a rent in return for not taking a resource out of use, but actually labor to make that resource of more benefit to the world.

        The dog agrees not to sleep in the manger, in return for free bones. Landlords are a famous and visible example, but not the only one, and it’s not just land where that happens.

  10. Johnny Clamboat

    “This is absurd. The government creates enormous amounts of wealth.”

    You’re conflating creation with redistribution.

    1. F. Beard

      You’re conflating creation with redistribution. Johnny Clamboat

      Even wealth redistribution can create wealth. Ideally, that redistribution should be voluntary. However, if government privileges were the source of the wealth in the first place then redistribution of that wealth by government is justified.

    2. Blunt

      “You’re conflating creation with redistribution.” – Johnny Clamboat

      And you are conflating ideological purity and repetitive talking points with some semblance of real world fact.

      Think bridges, roads, airports, most hydroelectrical projects, national forests and national parks, museums, symphonies, public buildings, spaces and events. Now, tell me again how all those are “created” (and paid for) by the private sector.

      The private sector only depends on cost overruns, gouges, outright theft and fraud to “create” wealth by looting treasuries and communal resources.

      You may not like it, Johnny, but the truth is right there for all to see. The greediest calves on the government teats are the private sector “wealth creators.” You know the ones, doncha? The Kochs, Adelson, Dimon, Blankfein, Buffett to begin a list.

      1. Johnny Clamboat

        “Now, tell me again how all those are “created” (and paid for) by the private sector.”

        Through involuntary redistribution. You’re not going to tell me that the guys with the guns earned that money, are you?

        1. F. Beard

          Let’s say the banks steal about $100,000 per American over their life times. Let’s say the government steals $50,000 back and splits it with their victims. Has wealth been created? Yes, compared to doing nothing.

          Of course the optimum solution is not to allow the theft in the first place.

          We have a mixed economy. Theft by the rich is partially balanced by taxing and redistributing their loot.

    3. cwaltz

      The truth of the matter is that many “private” entities would not have been able to distribute their products without the financial help of government. Our government is responsible for funding infrastructure costs on everything from electricity to phone lines to the very roads that people drive to the store on or the rails companies get their products distributed on. Stoller has it exactly right. The government is responsible for alot of created wealth.

      Furthermore, I am so sick of hearing whining about “redistribution” as if money is something that is only supposed to be handed down from generation to generation like a family quilt rather than something that is DISTRIBUTED and REDISTRIBUTED over and over again in normal everyday economies. The money I give to Kroger is REDISTRIBUTED to its employees. The money I give to Walmart is REDISTRIBUTED to their suppliers. Redistribution is part of the economic process whether it be private or public. Currency changes hands. That’s the reality of commerce. And if we were going to get real technical since the government actually created the currency to begin with every single circulated dollar is redistribution. Hell, even with gold being the standard you’d have redistribution since anytime any currency changes hands that is grounds for calling it “redistributing.”

      1. Johnny Clamboat

        “The government is responsible for alot of created wealth.”

        Did they create wealth on a net basis? The opportunity cost of forcible redistribution must be considered.

        “The money I give to Kroger is REDISTRIBUTED to its employees.”


        “The money I give to Walmart is REDISTRIBUTED to their suppliers.”

        Voluntarily. Or VOLUNTARILY, if you will.

  11. Walter Wit Man

    The fact he is gay is what has really enabled Barney to sell himself as liberal.

  12. Congressional Record

    As a footnote, I recall Rep. Frank touting the empirical fact that in 1999 he voted against Gramm-Leach-Bliley. However, in the floor debates at the time, he openly said he agreed with the legislation, and that the only objection he had was the failure to add an amendment taxing the banks to fund a housing budget for low-income families. It was just a high-profile opportunity to raise an issue. There was plenty of room to maneuver (final vote was 362-57), and if the vote had been anywhere near jeopardizing the passing of the bill I doubt his dissent would have been sustained.

    Sometimes voting records don’t tell the whole story.

    1. Strangely Enough

      “Rotating villains” ensures you’ll always have the opportunity to vote/not vote for something you actually want and be able to justify it come election time.

  13. David Fiderer

    This published rant above shows a complete contempt for fact checking.

    Barney Frank voted against the repeal of Glass Steagal and he voted against the Commodity Futures Modernization Act (aka the Enron Loophole.) He consistently opposed all moves to deregulate financial services. The author’s claim otherwise is reprehensible.

    The allegation that he exercised no oversight is also baseless. Until January 2007, as a member of the minority, he was unable to exert an influence with regard to House Oversight, though he strenuously objected to the GOP’s failure to do the same.

    Check out the hearings conducted in the first few months after the Dems took charge, and Frank’s comments in particular, if you think he was careless about Congressional oversight.

    Hedge Funds and Systemic Risk in the Financial Markets

    Subprime and Predatory Mortgage Lending: New Regulatory Guidance, Current Market Conditions and Effects on Regulated Financial Institutions

    The Role of the Secondary Market in Subprime Mortgage Lending

    There volumes of other public documents to disabuse anyone of the false notion that Barney Frank was a “Reaganite.”

    1. Walter Wit Man

      You have not disproved any facts. You take issue with the interpretation of the facts.

      But frankly, your approach to analyzing politicians is incredibly naive because it accepts politicians’ statements at face value. Surely you can’t deny the pressure that the financial industry puts on politicians via lobbyists. Surely Barney Frank’s position is going to attract financial industry attention.

      Do you also unquestionably accept obama’s statements that he will end the Bush/Obama tax cuts for the rich, this time, double dog swear?

      Do you believe Obama when he says he wants to fight for the public option and support single payer?

      I’m sorry. It’s healthy to question authority. Especially when we have caught these criminals lying their teeth off in the past.

      People telling us there is nothing to see here are selling something themselves. These are legitimate questions.

      1. David Fiderer

        Walter Wit Man
        I suggest you pay more attention to reading and focusing.

        In terms of facts, my point was that the piece above offered zero facts to back up the claim that that Barney Frank was a Reaganite, i.e. someone disinclined to promote rigorous regulatory oversight of the financial sector. “Neoliberals like Frank put their faith in the private sector.”

        Anyone familiar with Frank’s record can point to a few hundred facts to refute that claim. It’s not about interpretation of facts, it’s about citing facts, or at least citing facts that are relevant.

        Similarly, what I believe about what Obama says about tax cuts for health care, or anyone’s attitude about questioning authority is irrelevant. Your claim — “The fact he is gay is what has really enabled Barney to sell himself as liberal.”–is also irrelevant.

        The issue is: Did Barney Frank put his faith in the private sector to police itself or did he not? If you take one position or another, you should show facts to back it up.

        1. Walter Wit Man

          Well, it’s easy for you to point to statements from Democrats about how liberal they are. Democrat politicians like Barney Frank know how to whisper sweet nothings in their lovers’ ears and it’s easy to point to those words and claim Democrats support these policies. Fox News has it easy too because they use these words to portray Democrats as liberals.

          Most readers of Matt’s piece have these various general pieces of evidence in mind. We know Fank and the Democrats passed weak “reform” and as Matt states, one of his biggest pieces of legislation was TARP. Also, while it may not be allowed in a court of law, I hold Barney Frank responsible for the sins of his comrades in the Democratic party. It’s guilt by association and failing to use his position of power in the party to effectuate change. It’s my belief (based on much evidence that I will not state for brevity’s sake), that Frank, Pelosi, Reed, Lieberman, Obama et al. take turns taking the blame for failing to live up to their liberal rhetoric. They all have agreed to play the same game–to service bankers while giving lip service to the commoner.

          Plus, the evidence for Matt’s claim is necessarily harder to prove. Frank is guilty by omission so it’s harder to prove because they are going to blame the Republicans or have some other excuse. See below about reversing Glass Steagal. There is no excuse for failing to get a vote on the record. The excuses are not believable. But it’s much harder to show that a defense is not plausible than it is to show evidence the evidence of politicians promising to do things, for instance.

          Anyway, there is also affirmative evidence that these people are insincere* . . . . and I’m off now to try to find this evidence against Frank because the circumstantial evidence is already overwhelming, imho.

          *like the evidence Obama made a secret deal with Pharma and he and the progressive caucus knew that there would never be a public option in Obamacare yet held a dramatic play where they pretended to “fight” for this, which was really an excuse to sucker Democratic voters.

        2. Walter Wit Man

          And you’re right I can stand to read some things more closely.

          I should have realized Congressional Record’s evidence, cited just below, was sufficient to respond to your concerns about a lack of evidence.

          It sure makes it a lot easier to prove when we have an admission straight out of a perp’s mouth.

      1. Walter Wit Man

        Yes indeed. Wow.

        On a first look it took to long to start playing so I assumed it was the whole 14 debate, but on a second loading it went directly to Barney Frank speaking.

        Checkmate. This is the affirmative evidence we were looking for. Barny Frank supported deregulation.

        Thanks for the link.

    2. Walter Wit Man

      If Frank was truly concerned, why didn’t he:

      1. Force a vote on a bill to fix reinstate Glass Steagal and to repeal the Commodity Futures Modernization Act?

      2. Force a vote on a bill to tax hedge fund managers the same as the rest of us? [assuming his committee had the power to do this–but this rhetorical question applies to all Dems–there is no excuse for this law]

      There are many other sins of ommission that reveal that Barney Frank was not sincere in his claim to oversee and regulate the financial sector.

      1. David Fiderer

        Those of us who graduated high school know that a single Committee chair cannot force the entire House to vote on a bill.

        Those of us who read the newspaper know that Frank made a good faith effort, constrained by political realities, to roll back financial deregulation via Dodd-Frank.

        As for taxing hedge fund managers, Frank was not Chair of the Ways & Means Committee.

        The limiting factors on all of what you call “sins of omission,” were Obama’s futile effort to get some Republicans to go along with financial reform, and GOP senators’ abuse of the filibuster rule.

        Once again, you need to careful about projecting your own biases when you presume to ascertain someone else’s “sincerity.”

        1. Walter Wit Man

          Well, that’s part of your problem, thinking that your degree from High School, or your reading of the “news” paper, grants you superior insight.

          I am aware that a committee can’t force a vote of the entire house. But it is responsible for sending bills out of committee. So he has power to “force” a vote on this, especially in his committee. He could try to bottleneck his committee, and make sure that nothing comes out of the committe until the full house considers his bill to repeal Glass Seagal. More importantly, he could confer with leaders like Pelosi and use his power to make sure the whole house considered it.

          Thank you for clarifying that taxation legislation comes out of the Way and Means Committee. I was unsure of that. Are you sure there is no argument that Frank could make to introduce it–that it regulates hedge fund managers and therefore can come from his committee? It shouldn’t matter if he loses that anyway–the Democrats would be pursuing all options if they were sincere.

        2. DavidP

          Mr Fiderer your statement “Those of us who read the newspaper know that Frank made a good faith effort, constrained by political realities, to roll back financial deregulation via Dodd-Frank.” sounds like DNC standard whining that the Republicans forced us( legislators, exectutive) to except a watered down bill that has been furthered watered down since its passage with nary a peep from the Demecratic Leadership of which Mr Frank is still a member. If that is a good faith effort I’d not like to see a bad faith effort by these same people.

  14. Hugh

    With Dodd-Frank, the most significant question it posed for us was who was the bigger whore for the banksters: Dodd or Frank? It was pretty much a toss-up.

    Fiderer is recycling a lot of bilge that the blogosphere in its early years spent most of its time debunking. Most of the time it doesn’t matter how someone in Congress votes. There are in a politician’s career sometimes only a handful of votes where their vote makes a difference, and it is only at those times that we can judge them on their votes alone. Healthcare, for example, was such a vote.

    Somewhat more common are those votes which expose the truth behind a politician when they support bad legislation or block good legislation. The 2008 FISA Amendments Act is an example of this.

    Votes are, of course, not the whole story. As chairman of the House Financial Services Committee, Frank had enormous power to influence and guide the debate on financial reform. It is hard to describe what a torture it was to listen to the House hearings on the financial reform which were unrelentingly lame, stupid, and repetitive.

    Yet to hear Fiderer tell it, chairs like Frank were almost powerless. This is, of course, the same discredited argument made about Obama, that somehow his hands are tied even as he occupies the Presidency with the most expansive powers in the history of the Republic. Sorry, it doesn’t wash.

    And even if Frank were just a simple Congressman, he still could have brought up Glass-Steagall at every hearing. He could have led marches against the banks. He could have engaged with progressives. But he never did any of these things. So what Fiderer is wanting us to do is to accept, not what happened, but Frank’s version of what happened. And this too is a repeat of what we saw so much of in the 2000s: Fiderer is telling us not to believe our lying eyes.

  15. Hugh

    Re “emotionally satisfying and not politically useful,” this looks like a riff on Nancy’s Pelosi’s famous line dismissing progressive opposition to the wars: “They are advocates. We are leaders.” The same arrogance shines through both.

  16. steelhead23

    Matt, with all due respect, this post is useless. Yes, Mr. Frank is enjoying political post-mortems he hasn’t earned. So what? Let us speak kindly of the dead – and get our knives out for the living pols who have sold us out (Obama) – and laurels for those who have stood tall (see Kevin Egan’s list).

    Also, would you mind explaining why, given his astounding failures, nobody primaried Obama? Is it because it would be difficult to fund an effective effort? Or is it because Obama would likely win and would politically persecute anyone who dared challenge him? Or other?

  17. Mole

    I seriously think we are about to hit a wall.

    I mean, dou you really think obosso and frank are not leftist enough?

    God save us…

    1. different clue

      Yes, I seriously think Obosso and Frank are not leftist enough. In fact, I seriously think they aren’t leftist at all. So there.

  18. SteveA

    As Gore Vidal said way back in the 70s:

    “There is only one party in the United States, the Property Party…and it has two right wings: Republican and Democrat. Republicans are a bit stupider, more rigid, more doctrinaire in their laissez-faire capitalism than the Democrats, who are cuter, prettier, a bit more corrupt—until recently… and more willing than the Republicans to make small adjustments when the poor, the black, the anti-imperialists get out of hand. But, essentially, there is no difference between the two parties.”

    1. different clue

      Kurt Vonnegut wrote another version of that same point somewhere in an essay titled In A Manner Which Must Shame God Himself in a book of essays called Palm Sunday. Somewhere in that article he wrote about being in a room with various modestly rich media/academic/political figures like John Kenneth Galbraith and Barbara Walters and so forth. Some of them were Democrats and some of them were Republicans “and whether they were Democratic or Republican was considered a hilarious accident which nobody was required to explain.”

  19. Jay Vos

    Thanks for this article.

    Honestly, the only reason Frank is considered a liberal is because he’s a gay Democrat. Since I am queer, I was always told by my friends that he was iconic for LBGTs. But I always thought of Barney Frank as a self-centered Log Cabin Republican.

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