Frank talk with a US Congressman

2012-05-24 10:03

New York - Barney Frank has represented his constituency in Massachusetts in the US House of Representatives since before this reporter was born.

He is a staunch Democrat and his two major areas of expertise, although by no means limited to these, are finance and civil rights. Since the economic depression began in 2008 Frank co-wrote financial reform legislation (you will hear Americans refer to "Dodd-Frank") to cope with the fallout from bad banking practices.
 
Frank sat down for a one-on-one interview with News24 to discuss some of the policies currently under hot debate in the USA.
 
As far as I am concerned, the USA has no bigger problem than its continually growing debt pile, which is now sitting around the $16-trillion mark – that's $16 000 000 000 000, to be clear. I pressed the congressman for a solution to fixing a continual budget deficit, and the gaping morass of debt.
 
He didn't even pause: "Tax wealthy people more, and in particular, make serious reductions in America's overreach militarily. We ought to tell Western Europe, central Europe, the Mediterranean, 'That's yours. We don't need to worry about you. We'll worry about the Middle East'.

"We can make a very substantial reduction in our military expenditures. We have to have some constraints elsewhere, but if you raise taxes on the wealthy and get normal economic growth, we'll get our deficit under control."

Stability not all it's cracked up to be

This naturally led us to Afghanistan. This war is costing the USA, and the Obama administration is making moves to get the bulk of troops out by the end of 2014, without a precise plan to really do so.

Frank says the USA should get out of Afghanistan as soon as possible, even before bringing about stability. "How can I stabilise a culture so alien to me?" he asked, "Thirty-year-old Americans, very well armed can do some things, but they can't bring stability to Afghanistan. They can't bring to a culture, which we are very excepted from, American values, European values…"

He also doesn't think stability is all it's cracked up to be, "Well it's less stable, but it was stable in a bad way before. The Taliban, when it was run, was very stable, Afghanistan was more stable. Iraq was more stable. Stability isn't definitively a good thing. China's pretty stable and very much oppressive."
 
Frank then dropped his summation of the capabilities of the American military: "The military is very good at stopping bad things from happening. They are not very good at making good things happen."
 
One of the major criticisms of new financial regulations, enacted to prevent another global crash like in 2008, is that companies will flee regulated countries for those without.

$2bn loss

"We've worked very closely with other countries," says Frank, "Particularly with the European Union, with England, with Canada, with Japan. I think that, whereas in 2006, there was this temptation for countries to under-regulate to attract people, what the countries have learnt now is that bad financial practice anywhere can blow up anybody.

"German banks failed because of American bad loans. So there was a general agreement on the part of all the major financial entities in the world to have tough regulation. And [the banks] can't go to China, China won't let anybody in, they are very xenophobic, but as far as England and the EU and Canada and Japan: we're going to have very similar regulation. It took a lot of consulting to make sure [the banks] weren't going to play that game with us."
 
Last week JP Morgan Chase, the USA's biggest bank, announced a $2bn loss due to a rubbish hedging strategy. The company's shares fell, the banking sector's shares fell, and JP Morgan CEO, the very popular Jamie Dimon, was out apologising and making nice to everyone under the sun.

Since the Dodd-Frank set of laws are supposed to protect against this, I cornered the congressman on how this managed to happen years after financial reform was supposed to have taken place.
 
"Centrally our role and our mission was not to provide institutions from losing money. It was to prevent the loss of money by institutions from spilling over into the economy and that, I think, we've done. If the JP Morgan Chase had happened five years ago there would have been a lot more concern about the whole economy. We have a greater safety net in place."
 
Europe's financial fortunes are in the dwang, and Frank didn't mince his words: "[Europe is] the major potential danger for the president's re-election, and the major obstacle for our economy's potential recovery, and it's chancy, and we've been, the Obama administration, has been trying to help them. But it is something that makes me nervous."

Legalise it

Frank's work in civil rights has often centred around the concerns of the LGBT community, but certainly isn't exclusive to that.

He also believes in the legalisation marijuana: "It's one of my disappointments with the Obama administration – harassing people smoking marijuana. It's ridiculous. There are a number of areas where as people who are now in their 20 and early 30s in age, they are going to bring with them into the political process more and more common sense. And that's true on other social issues. Certainly LGBT rights and I think marijuana is another one of them."
 
As you have noticed so far, he doesn't mince his words all that much, and kept up the direct tone when I asked him how to fix the USA's congress, which is currently log-jammed with many issues that need attention, but a divisive bunch of people who can't pass anything.

"[We fix it] by people not electing right wing nuts... It was the election of this extreme right-wing group who brought that about."
 
One of the major worry of Americans is that China is going to knock them off the world's top spot, and the government talks a good game, but isn't really all that sure what to do about it.

Frank says this fannying around isn't achieving anything, "We make this great mistake of thinking 'Oh, we can't let China get mad at us'. Well, China needs us more than we need China. I think we can be tougher about fairness there, about their one-sidedness.

Damage under colonialism


"You know, some Americans benefit from China sending us stuff, but it has a negative effect on our income distribution. And it hurts people who would be working. So I think we should be tougher on them."
 
And last but not least, Frank introduced a bill called Hunger to Harvest which aimed to conquer hunger in southern Africa.

I asked him why he concentrated on this part of the world: "Well because economic development has been slower in Africa than other places. Asia has, South Asia has picked up. The damage done by colonials was greater, and for a variety of reasons the illogical nature of some of the issues that were created – they've had more problems."

Read more on:    us  |  economy  |  war
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