Donald Luskin

by I Am John Galt

  And redistribute he would. By the time Frank was through, his lifetime quest for ever-increasing political power to promote social equality and universal home ownership would bring a nation to its knees, triggering a banking collapse unparalleled since the Great Depression and plunging millions of productive Americans into unemployment, foreclosure, and financial ruin.

  A Czar Is Born

  How does one get to have enough control over the economy in order to destroy it? Was Barney Frank smarter, harder working, more honest? No—in the moral universe of Ayn Rand, smart, hardworking, and honest people don’t want to control the economy in the first place. They just want to control themselves.

  Frank, like Wesley Mouch, the government central planner who destroys the economy in Atlas Shrugged, isn’t stupid. But of all the not-stupid people in the world, the ones who become economic czars share other key traits. They are people who know they couldn’t make it in the private sector, so they turn to politics. They are corrupt, in the sense that they are willing to bend and break even the tainted rules by which the game of politics is played. They are ruthless, willing to let the world go to ruin as long as they can be in control of it. And they are shameless and unapologetic, blaming everybody but themselves when it does.

  Barney Frank was named chairman of the House Financial Services Committee in 2006 not through any special expertise or background in the banking sector, but due to the cockroach-like survivability of an entrenched lifelong government bureaucrat. With the exception of some half-stints in academia, Frank has spent his entire career on the government payroll. He has never created a job. He has never had to earn a living on the strength of his contribution to the economy. He has never been responsible for capital investment decisions where he bore personal financial risk. He’s never worked on a trading desk or in a bank, brokerage, or corporate finance division. He’s never even rung the register at a fast-food restaurant.

  Several other congressmen were ahead of Frank in the political pecking order for the high-profile leadership position. But when then-Representative Chuck Schumer, the Democrat of New York, moved from the House to the Senate, Bruce Vento died of cancer, and John LaFalce didn’t seek reelection, Frank suddenly found himself enthroned on the committee that oversees insurance, banking, the securities industry, and affordable housing. He said that the role made him “feel like a kid in a candy store,” and remarked that “I have more power than knowledge.”2 If only that remark had represented self-awareness rather than a lame attempt at self-deprecating humor, perhaps Frank wouldn’t have presided over the worst financial collapse in modern history.

  Like Rand’s Wesley Mouch, Frank crafted a lifelong career out of patronage and pull, using political power to distort the economy through endless rules and regulations while ignoring their real impact on the nation. Oblivious to the end, he would not only shift blame and shirk responsibility for the destruction he wrought, but would rationalize it as not doing enough—and then clamor for even more power.

  Those who have encountered Frank throughout his life invariably come away with certain indelible impressions. The first is that he’s smart and verbally acute—if not always intelligible in his fast-talking, marble-mouthed New Jersey accent. His comments are witty, acerbic, and sharp-tongued. He has been known to flay a hearing witness or election challenger with slashing verbal parries, dissect an argument with disarming tongue-in-cheek wordplay, and deflect criticism with blunt-edged insults. “On what planet do you spend most of your time?” Frank tersely cudgeled a constituent at a town hall meeting for the Obama-sponsored health care bill. “Trying to have a conversation with you would be like trying to argue with a dining room table. I have no interest in doing it.”3

  Colleagues from both sides of the aisle give great deference to his debating skills. He can speak extemporaneously on wide-ranging subjects of law and complex bills without reference to notes. His remarks are peppered with clever quips, and his creative positioning of issues makes his arguments both devastating and funny. His aphorisms have made him a bit of a media go-to for irreverent commentary on the public record, like a modern-day legislative Yogi Berra. Even as a junior state rep from Massachusetts, the New York Times favored his quotes over more prominent but linguistically guarded figures. “This bill is the legislative equivalent of crack,” Frank said in a 1986 debate on a bill funding increased border protection from drug traffickers. “It yields a short-term high but does long-term damage to the system and it’s expensive to boot.”4

  While winning verbal jousts and painting colorful metaphors may provide entertaining sound bites that make for great play on the evening news, for Frank it’s a diversionary tactic to shunt discussions on substantive issues to a controlled version of reality intended to spare him the need to consider uncomfortable truths. When challenger Richard Jones opposed federal rent subsidies for housing and price controls on energy during a local candidate forum, Frank countered by labeling his position as “cruel” to the elderly.5 When a Harvard law student asked a straightforward question of how much responsibility, if any, Frank took for the economic crisis as chair of the House Financial Services Committee, Barney struck back defensively. “This is the right-wing attack on liberals’ attempt to stop regulation,” he spewed as part of an aggressive if not entirely sensible tirade that would have knocked the most seasoned political brawler off balance.6 He never answered the question, and successfully evaded any hint of culpability by effectively trampling a forum of free speech with verbal jackboots.

  Frank used his considerable brainpower and verbal acuity not to create and build, but rather to shift and maneuver. Instead of learning the business of construction and the economics of free-market incentives to create housing, he pushed government subsidies and rent control. Rather than learn about efficient production operations in the face of a globalizing economy to support local manufacturers, he introduced legislation calling for a boycott of products made by a nonunion textile plant that employed over 27,000 American workers across nearly 60 facilities.

  Frank is known to read voraciously, often reserving his luggage space on trips for stacks of unread newspapers and legislative documents—even reading while standing at the House urinal. His appetite for words is superseded only by his physical hunger. He has often been seen ravenously gobbling down food at campaign events, and has been heard privately scoring the quality of his hosts by the quantity of their buffets.7

  At five foot 10 and weighing up to 270 pounds, Frank is frequently seen with food stains on his ill-fitting suits. Thaleia Schlesinger said Barney’s shoes looked like “a dog ate them.” She later agreed to serve as press secretary for his first congressional campaign only after he agreed to buy three new suits.8 A 1974 campaign poster promoting his reelection to the Massachusetts Statehouse depicts a rumpled Frank, unshaven and sporting Elvis Costello–style glasses with Coke-bottle lenses under the caption, “Neatness isn’t everything.”

  Born Barnett Frank in Bayonne, New Jersey, in 1940, Frank was reared on a fetid stew of socialistic New Deal politics and outright criminal corruption. His parents, Sam and Elsie, were committed liberals and devoted Roosevelt Democrats. A 1958 photograph shows Barney and his mother posing delightedly next to a seated Eleanor Roosevelt during an Israel Bond drive event in their hometown.

  The adulation clearly rubbed off on the young Frank—and then some. In high school, Barney attended a conference at Columbia University for aspiring journalists. Instead of bringing copies of his school newspaper to distribute to his fellow attendees, Barney handed out issues of the Communist paper, the Daily Worker.9

  His myopia seems to have taken hold at an early age as well. One day Barney came home from school with a note that said he needed glasses. When his mother asked, “Why didn’t you ever tell me that you couldn’t see well?” he replied, “I thought everybody saw things that way.” Although Barney got glasses, they seem not to have much clarified his view of the world.10

  In one early incident while
working as an unelected point man for Boston Mayor Kevin White, Barney assigned Colin Diver, who would later become president of Reed College in Portland, Oregon, to work on preparing a rent control proposal. “I had the benefit of some pretty good training in economics and I had the benefit of conversations with some economist friends of mine,” Diver said. He told Barney that rent control was bad economics and that it was not going to work, and he predicted that it would have a long-term disastrous impact on the housing market.”11 Barney dismissed Diver’s concerns and pushed the initiative forward anyway. The need for popular giveaways to a clamoring constituency, along with Barney’s own growing sense of infallibility, outweighed objective economic reality.

  When Barney was growing up, his father, Sam, owned a truck stop near the Holland Tunnel entrance in Jersey City called Tooley’s. It was a unique full-service facility for its day, with diesel fuel, a weigh station, restaurant, and bunkhouse where weary drivers could spend some horizontal time enjoying a little JC hospitality. Sam also had ties to organized crime. The land behind the stop was a well-known dumping ground for dead bodies and was often searched by New York cops investigating murders and mob hits.12

  Sam’s older brother, Harry, owned a local car dealership. In 1946, he was granted a city contract to supply municipal vehicles in return for kickbacks to members of Frank “Boss” Hague’s Jersey City political machine with purported ties to the Mafia, as well as the teamsters and longshoremen’s unions. Sam acted as an intermediary of some sort in the deal and spent a year in jail after refusing to testify before a grand jury as a material witness.13 At the age of only 6, Barney would visit his dad behind bars and later expressed great admiration for his father’s strict adherence to the Cosa Nostra’s code of omertà, or refusal to cooperate with authorities against a known criminal conspiracy.14

  When Sam died at the age of 53, Barney took a year off from college to help resolve the family’s affairs. He reports that members of the Mafia were very supportive during the ordeal. Frank “Funzi” Tieri, who later rose to head the Genovese crime family, attended brother David Frank’s bar mitzvah when Barney was 23. It’s among these formative influences of socialist-leaning politics and mob-centered criminal activities that Barney had a chance to learn early firsthand lessons on the power of an influential position, and extracting unearned value from it.15

  In 1966 during an aborted attempt to earn a doctoral degree, Frank received his draft notice. He responded with documentation showing he was a graduate student and received a deferment. The draft board, which was run by local New Jersey politicos, then mysteriously lost or misfiled Frank’s record. He was never again called up despite having suspending his studies shortly thereafter.16

  Abandoning his doctoral studies, Frank cut his political teeth on Boston Mayor Kevin White’s staff as his nonelected, de facto deputy. According to White, Barney, like White himself, is a power collector—someone who gloms onto everything he can get his hands on, someone who reaches out for more power to do more things—in contrast to a power user, someone who wants only the power necessary to do his job.17 Boston Globe reporter Chris Lydon recalled, “Barney was born to be a first-class public man.”18 As we will see, that description is a contradiction in terms.

  Frank seemed to thrive on hardball city politics and quickly became known as Mayor White’s political troubleshooter. When demonstrators gathered on the Boston Common to protest the city’s midnight curfew, Frank showed up at 3:00 A.M. to coordinate the police bust. Barney frequently testified on behalf of the mayor at city council meetings, often fielding hostile questions from the elected representatives. When White ran for governor, Frank ran the city of Boston, making day-to-day decisions.

  In 1971 Congressman Michael Harrington offered Barney a job as administrative assistant in his Capitol Hill office. Figuring it was a golden opportunity to learn the inner workings of an even larger power forum, he accepted. “The only legislation that I ever worked on in terms of trying to get something passed was to make sure we got ‘three deckers’ for the city of Lynn,” Barney recalled. “It was a program for one- and two-family houses, a federal loan program. I remember going to a member from Massachusetts on the Banking and Currency Committee, Peggy Heckler, to do it.”19 It was a succulent taste of using political pull to bestow unearned tax dollars on the undeserving in the name of social progress in housing—a taste that would later never seem to be sated.

  When State Representative Moe Frye retired from Massachusetts Ward 5, Frank decided to run for the open seat. At the time he looked at it as a stepping-stone to greater political influence in the vein of Michael Dukakis and an opportunity to advance his social causes while honing his political maneuvering skills. Since 1972 was the first year 18-year-olds were eligible to vote, Barney tapped into the mass of young antiwar Boston University students in his ward, winning the general election with a solid 60 percent of the vote.

  Loud and controversial, Frank lost no time backing extreme issues in the Statehouse, generating plenty of public notoriety and name recognition in the process. He sponsored bills to legalize marijuana use, to repeal state obscenity laws, to promote gay rights, and to establish adult entertainment zones with legalized prostitution. All were soundly defeated despite some colorful debate.

  “Mr. Speaker,” Barney pronounced on record during a legislative session in characteristic form, “it is true that I have introduced bills relating to pornography, gambling, prostitution, adultery, marijuana, and homosexuality. But I am going to make a commitment to my colleague from New Bedford. I will keep on trying until I find something he likes to do.”20

  Later, reflecting on his terms in the state legislature, he remarked, “There is no question that the Massachusetts House in those days was a complete dictatorship,” adding, “I say benevolent dictatorship, which is the best form of government.”21 It is an odd attitude for someone from the state that threw tea in the waters to protest King George, and one he would carry forward to the U.S. House of Representatives: that the politically powerful have a better, more expansive view of their subjects from the seat of their throne and that they should make the rules for the rest of us, because we don’t know what’s in our own collective best interest.

  Frank’s next step up the political ladder was nearly a matter of divine intervention. In 1980 Pope John Paul II got word that one of his Jesuit priests was active and vocal in support of liberalized abortion laws. The kicker was that the priest, Father Robert Drinan, happened to be a five-term Democratic congressman from Massachusetts. The Pope immediately invoked a heretofore unenforced papal law prohibiting priests from holding secular public office, effectively preventing Drinan from seeking reelection and opening up the seat to all comers.

  Bored with the state legislature and facing what a biographer called “a mid-life crisis,”22 Frank threw his hat into the ring and ran in a crowded field as Drinan’s handpicked successor. He won the primary, but it proved to be a tough year for Democrats in the general election. Down-home Jimmy Carter was helpless before powerfully charismatic Ronald Reagan and a tide of conservative voters in the wake of high inflation, gasoline shortages, and rampant unemployment. As doomsday pundits decried the end of American prosperity, Reagan’s campaign posters exclaimed, “Let’s make America great again.”

  Barney explained to voters that the conservative Reagan position was that government takes care of the basics, such a cleaning the streets and providing police, but that beyond that it is up to private charity to help people in need. The Reagan administration’s policy, he said, reflected the credo of David Stockman, director of the Office of Management and Budget: “Nobody is entitled to anything.”23

  Frank was right about Reagan’s outlook on the role of government—which matched Ayn Rand’s. Rand expressed it through Howard Roark, the hero of The Fountainhead, who said, “This our country. The noblest country in the history of men. The country of greatest achievement, greatest prosperity, greatest freedom. This country was not based on s
elfless service, sacrifice, or renunciation, or any precept of altruism. It was based on a man’s right to the pursuit of happiness. . . . Look at the results.”

  Frank’s outlook? Ask Atlas Shrugged’s Wesley Mouch: “. . . protect the property of the rich and give a greater share to the poor . . . cut down the burden of your taxes and provide you with more government benefits . . . lower prices and raise wages . . . give more freedom to the individual and strengthen the bonds of collective obligations . . . combine the efficiency of free enterprise with the generosity of a planned economy.”

  But Barney Frank was always more interested in such promises than in founding principles. In a 1991 comment about the document he swore to support and defend against all enemies foreign and domestic, he quipped, “There’s too much Constitution worship in this country. It is a good document, but separation of powers is a bad idea. Divided government doesn’t work.”24

  Frank’s demonization of Reagan’s individualist ideals must have resonated just enough in a district with constituents seeking free handouts to sneak past the national conservative bulwark. With an overwhelming advantage, including high-profile endorsements and an historically solid Democratic constituency, Frank eked out a narrow victory against his Republican opponent, winning just five of the 23 cities in the district.

  By the time Frank came to Washington, he was leading a conflicted personal life, unable to come to terms with a personal reality that nearly derailed his political career—his homosexuality. Convinced it would quash his national political ambitions, Frank suppressed the truth. He came out of the closet to just a few friends and family members. Staggering under the burden of concealing a double life, he was caustic and belligerent to his colleagues and staff. He comforted himself with an almost manic approach to his work, trying to soothe his private inner turmoil with a public ointment of grandiose rhetoric about helping the less fortunate, including statements about how the “hungry three-year-olds in America bother me a great deal.”25