Note: This is the full transcript of the Barney Frank interview that ran in the April 23, 2012 issue of New York Magazine.
February 3, 2012. Rayburn House Office Building in Barney Frank’s Congressional Office.
JZ: Could you just think back a little bit to 1981, when you got here, and what you thought you were going to accomplish? [Phone rings, Frank answers it.]
BF: [Speaking into phone.] Yeah, hey Frank. That’s all right, what time is that? Whatever, okay, I’ll do it. That’s better for me. All right, I’ll take it. All right. I’ll just go and do it. Okay. [Hangs up phone.]
I was unsure that I was a long-timer here. I came here knowing that Massachusetts was going to lose a seat, and that I was very likely to be the targeted one. In fact, I was. They did a district that everybody assumed I would lose, including me.
I had a kind of general liberal agenda. I was specifically focused on helping cities and housing in particular. That was partly because I had that interest when I was in the legislature, but even more because, when I got here, Tip O’Neill put me on the committee that dealt with urban affairs and housing, then called the Banking Committee. He’d arranged to have a Massachusetts member on every important committee, and that committee had no Massachusetts member. There was a Massachusetts member on Appropriations, on Ways and Means, on Energy and Commerce. The one substantive committee for us that had a vacancy was that one. So there was that.
I also had in mind to try to do something about gay rights, as we then called it, because I’d been a leader on that in the legislature. I was still closeted, but from the day I decided to run for office, knowing that I was gay, I decided that I would of course still be closeted but that I would work very hard for gay rights. It would be totally dishonorable, being gay, not to do that. So I had that as kind of a secondary agenda.
JZ: What about Congress itself back then? You came in at a slightly strange time, at the beginning of the Reagan years.
BF: But I came in somewhat sheltered, because my district adjoined Tip O’Neill’s district. I had in fact been his constituent—I moved to run for Congress. In 1976, the year he was about to become Speaker, he had a tough primary fight over busing, and as a state representative in his district, I’d been a major organizer of his and supporter. His son and I had been elected to the state legislature the same year, we were very friendly, so I came in under the patronage of the Speaker. I got to sit at the big kids’ table.
I also had been in the state legislature for eight years. And legislating is very much a common thing—it’s not so different from one body to another. I mean, I can read Trollope about the nineteenth-century British Parliament and see similarities.
JZ: What are the similarities?
BF: In every other thing you do where there’s a formal relationship, one of two principles applies. Either there’s a hierarchy—there’s somebody who can hire and fire you and give you orders—or there’s no formal ongoing relationship, but you use money—I will sell you this car if you give me money, I will perform this operation if you give me money. Legislators have a formal set of responsibilities to work together, but there’s no hierarchy. There is nobody in the House that can give anybody else an order. The Speaker’s more influential than a freshman member of the minority party, but nobody can order you to do anything. Every two years the people in Massachusetts can fire me. But nobody I work with can fire me.
JZ: But the Speaker can make it easier for the people of Massachusetts to fire you.
BF: He can make it easier, but there’s a qualitative difference. In most things, your boss cannot tell you, “I’m going to make it harder for you if you don’t do this.” Your boss says, “Do it or you’re fired.” There’s a qualitative difference there.
And, by the way, increasingly there’s much more autonomy from leadership. With the Internet and everything else, more of it’s on your own than not. So that puts a great priority on personal relationships—that’s how to be influential without being overly pushy.
JZ: You’re saying you’re not very pushy?
BZ: I’m a good legislator. I’m a bad some other things.
JZ: Your relationships—
BF: On the other hand, I spent 1981 thinking for much of the time that this was only going to be a two-year deal.
JZ: Did that make you more pushy at the time?
BF: No. That’s what I would think about when I went to bed, but once the game started, you played the game. I’d been enough of a professional by then. I’d been three years with the mayor, eight years in the legislature. The bell rings, and you start swinging. You don’t stop and think about it. It wasn’t until after I was reelected in 1982 that I thought of myself as a long-term member of Congress.
JZ: So it was at the start of your second term that you started to think of yourself as a long-term member?
BF: After I won reelection in ’82, I was in a part of my district that was somewhat Republican. A guy I was friendly with, a Republican who’d been in the state legislature with me, said, “Well, this job is yours as long as you want it.” I said, “Yeah, that’s right.”
JZ: People complain about the increased polarization and partisanship, and they attribute it, in part, to safe districts.
BF: No—is there more polarization, in your judgment, in the House than there is in the Senate?
JZ: Is there more polarization where?
BF: In the House than in the Senate.
JZ: No.
BF: Okay, think about, what did you just ask me? Literally, that just destroys the hypothesis. That just makes nonsense out of it.
There are other factors. The main reason for the increase in partisanship is Newt Gingrich and the success of his decision to demonize the opposition as a way to win. That was reinforced by the right-wing takeover of the Republican Party, And finally, modern communications. Twenty years ago, people had a common set of facts that they read. They read opinion journalists, but they got their information generally from newspapers and from broadcasts. Now the activists, left and right, live in parallel universes which are both separate and echo chambers for each. If you’re on the left, you listen to MSNBC, you go to the blogs, Huffington Post, etc., and others, and you basically hear only what you agree with. If you’re on the right, you watch Fox News and the talk shows and you hear only what you agree with. That’s greatly intensified it. You know, it’s the primaries: People who want to be moderate lose. And when we try to compromise, what you find is not people simply objecting to the specific terms of the compromise but the activists object even to your trying to compromise, because they say, “Look, everybody I know agrees with us, so why are you giving in?”
JZ: So when you got here in ’81 and Gingrich got here in ’79—
BF: Correct, he wasn’t a very important factor then.
JZ: At what point did—
BF: He’s never been much of a legislator. This notion that he’s so bright, he talks about having ideas—I never considered him to be one of the brighter ones. He was a great political strategist and tactician. In the early eighties he emerged with a group of other right-wingers demonizing Democrats, and that’s basically when you began to know him, as a McCarthyite.
JZ: But you were saying earlier that in the legislature no one’s your boss, it’s all about relationships. What accounted for Republicans following Gingrich?
BF: He convinced more and more of them that that was what it was going to take to take power. Because they had been in the minority for so long, they had no stake in the system. They were ready to try and shake it up.
JZ: But was there anything about him in particular? I’m curious about the role a personality plays in all of this.
BF: Well, he’s very driven, he’s not very ideological, he’s not very public-policy oriented, frankly—you’ve seen the switches back and forth. And he tapped into the frustration of Republicans that they weren’t in power.
Reagan came to power in ’80, and the Republicans really thought, This is it, we’re going to win. But Reagan’s presidency was not followed by any congressional gains; in fact, the Republicans peaked congressionally in ’80. By the mid-eighties, it became clear that the Republicans were going to be a permanent minority. Gingrich was Moses, he could lead them out of that.
JZ: Did you see the change in your Republican colleagues? Was there less of a willingness to work with you?
BF: Into the nineties, you saw them move further and further to the right. By the Clinton years, we generally took the view that we might get some Republican votes but we wouldn’t have them if they were determinative in the outcome.
JZ: Did that change your approach? You obviously had a majority.
BF: Sure it does. You go where the votes are. You were less likely to try to put together bipartisan coalitions and more likely to try to solidify your own people. By the time I became the chairman of the committee in 2007, it was totally that way, and I spent all my time, from 2007 through 2010, my four years as chairman, working with my Democratic colleagues and spent very little time trying to win over Republicans. I had one or two I could work with on a couple issues, but where earlier I would have been working on a bipartisan coalition, I knew there was no chance of it, so I didn’t. I just focused entirely on my Democratic colleagues.
JZ: Everyone always talks about how dysfunctional things are up here today, as though there was once a kind of golden age. When you think back to the early eighties and when you got here, and a guy like Tip O’Neill, how would he work in this environment?
BF: It wasn’t personality. These are broader political forces. He would have to do what the rest of us have had to do: be more partisan.
JZ: It seems like you’re leaving in part because of this dysfunctional atmosphere.
BF: Less so. First of all, I’ll be 73 years old at the end of the month. And I’ve seen too many people stay here beyond when they should. I don’t have the energy I used to have, and I’ve been doing this since October of 1967. I don’t like it anymore, I’m tired, and my nerves are frayed.
I also want to write. Pat Moynihan could write books with one hand and legislate with the other. I can’t; I have a short attention span. The slightest distraction would take me away from writing.
JZ: Can you—
BF: Secondly, just let me say, once the Republicans took over I changed my mind. I said I don’t want to walk away with those guys in power. And I would have run again, except then the redistricting came, and what the redistricting did was it would have meant that I would have had to spend much of this current year campaigning among 325,000 new people. I had this problem. I survived last time, a terrible time for Democrats, and I won 54 to 43—you know, not as much as I’d like, but it wasn’t close. Part of it is constituent service, I think that’s an important thing to do, but very few of the things you do for your constituents are resolved within two or three months. I had this real problem. I go to 325,000 new people and say, by the way, I’m very good at helping you with your problems, but I need to tell you, if you come to me with a problem in February of 2014, you’re probably going to be out of luck because I won’t be able to resolve it. So it was redistricting that pushed me over.
But I think I will have, ironically, more credibility in my public-policy advocacy when I’m not running for office.
JZ: When you got here in ’81, I take it being a member of Congress was considered a plus at that point in terms of your image? In 1979, Congress had the lowest approval rating—
BF: Well, ironically, it still is. People are still deferential. And since I announced my retirement in November, it turns out that even impending absence makes the heart grow fonder. People have been extraordinarily nice and gracious. It’s still kind of considered a big deal by people to be a congressman.
But I’m tired. People have a right to complain to me about this problem and that problem, and I just have been doing it for too long and I dislike the negativism of the media. I think the media has gotten cynical and negative to a point where it’s unproductive.
JZ: Is that a recent development?
BF: It’s been a progressive development, or a regressive development. It’s been moving more and more.
JZ: You’re attributing the partisanship to Gingrich, but is there any—
BF: Gingrich started it, but like I said, the media—
JZ: So what explains the media going down this path? If Gingrich is the singular cause—
BF: The partisanship, don’t confuse the two, is because the left and the right separate themselves. Most people who are activists and are concerned about issues get their information from sources which reinforce their opinions and give them the facts that they want to hear.
JZ: Do you view the media now as an obstacle to getting things done?
BF: Yes, and I include even Jon Stewart and Colbert in this. The negativism, it hurts liberals, it hurts Democrats. The more government is discredited, the harder it is to get things done. And the media, by constantly harping on the negative and ignoring anything positive, plays a very conservative role, substantively.
JZ: But isn’t part of that just because the media is expected to be adversarial?
BF: Who expects it to be adversarial? Where did you read that? Did you read that in the First Amendment? Where did you read that the media is expected to be adversarial? It should be skeptical, why adversarial? Adversarial means you’re the enemy. Seriously, where does that come from?
JZ: Okay, maybe skeptical is the better word.
BF: But that’s a very different word. You reflect the attitude: adversarial. And there is nothing in any theory that I have ever seen that says when you report events that you’re supposed to [think]: I’m the adversary, so that means I want to defeat them, I want to undermine them, I want to discredit them. Why is that the media’s role? But you’ve accurately stated it and I think it’s a great mistake.
JZ: Do you think I just showed my hand there?
BF: No, I don’t think you showed your hand personally. I think you reflected the Weltzschmerz.
JZ: But you know the old aphorism: Afflict the comfortable, comfort the afflicted. I think that’s more what I was trying to get at.
BF: When have you comforted the afflicted? I don’t see that in the media. I don’t see reporting that comforts low-income people or the environment. I think it’s negative about everybody.
Secondly, I say people should be objective. I’ll give you the best quote. Bob Kaiser, one of the best journalists of my generation, once said, “I wish young journalists today would be as skeptical of bad news as they are of good news.” If they hear something good, they want to rebut it. If they hear something bad, they want to print it or broadcast it.
JZ: But that’s sensationalism: The bad news is the stuff that gets the headlines.
BF: That’s because you choose to give it the headlines.
JZ: When you got here, were the people covering the Hill back then—
BF: They were much more neutral, they in some ways recognized the value of politics. It wasn’t always negative.
JZ: Does that impact the way members operate?
BF: Sure. People are response mechanisms. People understand you’ll get more news for being negative than positive. It affects the way people act in hearings.
JZ: You go to these hearings and there’s always grandstanding.
BF: That’s because you guys give play for it.
JZ: Did the grandstanding not used to be as bad?
BF: Not nearly as bad. One thing is people in the media would ignore it. What happens is the people who do the grandstanding are very often the least influential people here. I think the public now has much less chance of judging who’s an effective member of Congress and who isn’t because that grandstanding crap dominates the media.
JZ: People talk about it stemming from C-Span and Gingrich speaking to the empty chamber.
BF: That helped it some. But C-Span’s ratings aren’t that high. What’s magnified it much more than C-Span is the Internet. The fact that everything now, every moment, is on the air.
JZ: Do you feel like you have to be more on guard now?
BF: Sure.
JZ: But it doesn’t seem like you have a problem necessarily not speaking your mind.
BF: No, but there are different ways to say things.
JZ: You’re always referred to as an institutionalist, and it seems like it’s hard to be an institutionalist when the institution is as partisan and as polarized as it is now.
BF: Yes. But in 2003, I became the senior Democrat on this committee, and I happened to be on a trip to Cape Verde, a place where a lot of people in my district are from. And I brought with me Caro’s third volume on Lyndon Johnson. I’ve read two books in my life that I read as manuals. One was Caro on Lyndon Johnson as minority leader.
JZ: How was that a manual?
BF: Senator Johnson was the minority leader first, and he had 46 or 47 Democrats. I had when I became the minority leader of the committee 30-some-odd. It was the importance of focusing on those members, providing individual attention. It was essentially establishing a relationship in which you gave them more than you got, that you used whatever authority you had to accommodate them whenever they wanted you to, so that you built up with them a strong vested interest in a good relationship with you.
The alternative, people might say, is trade one for one. No, do not do quid pro quos with them. Do not have them treat you just as somebody they trade with. You’re going to need them every so often on things. 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.
JZ: And what about Republicans?
BF: Mike Oxley was chairman of that committee in 2003 until 2007. I was able to work with him. When I was the ranking member and he was the chairman, and even the chairman before that—so I was able to work with the Republicans from ’95, when they first took power, through 2007, when I became the chairman. I was able to work with Jim Leach and Mike Oxley on a lot of things, so I’d say that’s when things really changed.
When we took power, they moved very far to the right, and from the time I became chairman in 2007, it became virtually impossible to work with them. Spencer Bachus, who was the senior Republican, tried to work with me, and he almost lost his position because of it. When 2007 came, they really imposed this rigid discipline, so from 2007 on, as chairman, I was an institutionalist, but I spent almost all of my time making sure I had a majority. As I said, in 2007 and 2008, and 2009 and 2010—well, in 2009, we were doing the financial-reform bill, there were 71 members of the committee, 42 Democrats and 29 Republicans, and as I said, the last thing I thought of every night when I went to sleep was 36. Thirty-six is one more than half of 71, and I just had to keep 36 Democrats, always Democrats, never once did I have a Republican in my four years as chairman who was critical to a majority.
JZ: When you were working with Oxley and you were working with Leach, especially with Leach, since that was during a lot of the impeachment madness, was it that you had a personal relationship with these Republicans that allowed you—
BF: No. It was because they believed in governance. In Leach’s case, by the way, he started out having hearings in Whitewater, and we frustrated his hearings and they blew up in his face. George Stephanopoulos, in his autobiography, mentions the note I sent him, when they lined up all the Clinton-administration people to be grilled, and I sent him a note. It said, “Don’t worry George, we’re kicking the shit out of them.”
JZ: But you were saying they shared your view of governance—
BF: They shared my view that governance was an important factor.
JZ: An important factor, but they had a different ideology, right.
BF: And the current group does not.
JZ: So do you look across the aisle and still see people who share that—
BF: A few. But they are mostly so intimidated by the fear of losing a primary that they can’t do much. There are a couple of Republicans on the committee that I can work with, because there’s sort of independent and tough-minded. But mostly even those that would like to work with me—people ask me, “Why don’t you guys get together?” And I say, “Exactly how much would you expect me to cooperate with Michele Bachmann?” And they say, “Are you saying they’re all Michele Bachmann?” And my answer is no, they’re not all Michele Bachmann. Half of them are Michele Bachmann. The other half are afraid of losing a primary to Michele Bachmann. So, no, there are maybe three Republicans I can work with, on a couple of issues, out of the thirtysomething on the committee.
JZ: And the ones who are afraid of being primaried, who have this view of government being important but they don’t express it because they’re afraid of being primaried, why do they stick around?
BF: Ask them, I don’t know.
JZ: But—
BF: I don’t know, I’m not going to guess.
JZ: But—
BF: I’m not going to psychoanalyze these people. I won’t do it.
JZ: You would leave, I assume—
BF: Look, this job certainly didn’t make any sense in terms of maximizing my income or minimizing my stress or maximizing the comfort of my life. I think it’s a wonderful job to have because I’m able to work to make fundamental changes in society and improve the quality of people’s lives and eliminate and diminish unfairness at various times. If I wasn’t able to do what I thought was important public policy, it would be a stupid job to have.
JZ: Without going down a laundry list of your favorite legislative accomplishments, but thinking a little more broadly—
BF: I can’t do that, it sounds egotistical.
JZ: What do you think you got done? You came in with certain goals, and now you’re leaving.
BF: LGBT rights are very important. I will take very substantial credit for the repeal of “don’t ask, don’t tell.” I’ve done a lot in housing, in rental housing, in preserving rental housing, in keeping rental housing going. I’ve been frustrated for years, but I now take some credit in the last few years putting military-spending reductions on the table. I think I played an important role in blocking the impeachment of Bill Clinton.
JZ: In impeachment, what was your attitude during that fight? Was it a matter of a principle or was it a matter of, “We have to stop them from impeaching this Democratic president”?
BF: It was that it was an assault on democracy, and I care a lot about democracy. But also it was substantive. I thought that Clinton was very important on issues. Although Al Gore would have been the same, actually, if Gore had taken over upon the impeachment, he might have been elected to win. No, it was mostly, it was the anti-democratic nature, plus I admired Clinton and it was a terrible unfairness to him.
JZ: Does it ever surprise you that there hasn’t been any kind of impeachment effort against Obama, given how—
BF: No. First of all, that one blew up. Secondly, Obama hasn’t given them the ammunition Clinton did with Lewinsky.
JZ: You mentioned LGBT rights. I think I read somewhere a few years ago that when you were done here, you planned to write a book on the gay-rights movement.
BF: Yeah, my career, and the gay-rights book will be my second book, if I can stay sentient long enough. My career and the gay-rights movement are serendipitously co-terminus, to use too many big words. I worked for the mayor of Boston 1968, ’69, ’70. My bailiwick was, among other things, liberal issue groups. I was the chief of staff.
JZ: Yeah, I’ve read Common Ground.
BF: Yeah, all right. There was no gay-rights activity in Boston at the time, none, politically, and I guarantee you that because, as a closeted gay man, I was hoping to meet other gay people, and it would have been a twofer for me. It didn’t happen. I went off to Washington in 1971 to work for [inaudible] and I came back in 1972 and there was a gay-rights movement. Very few political movements in America have as clear-cut a starting line as the gay-rights movement with Stonewall. There were some very brave people before, but Stonewall really did crystallize it.
JZ: When did you first hear about Stonewall? Where were you and how did it—
BF: I have no idea, somewhere. Oh, I know where I was, I was in City Hall.
JZ: But did you recognize it as that moment?
BF: Not as much, probably because those years I was working for Kevin White were the most absorbing of my total personality. I had no life, I gained an enormous amount of weight, it was terribly stressful. It was important work, but it was very hard work. So I wasn’t focused on very much outside of my work at City Hall.
I come back in ’72 and began campaigning for LGBT rights, and I’ve been one of the national leaders of the movement since 1972. I was the first person to file a bill in Massachusetts. 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.
JZ: So if you look at something like Pride Weekend—
BF: 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.
JZ: In 1972, when you started working on gay rights as a political issue and you were closeted at the time, it seems—
BF: I was very scared. But I realized that I could not honorably walk away from this. Here’s what happened: I did not set out to be the crusader. But in 1972, the nascent gay-rights movements in Massachusetts, they had two groups: There was the Homophile Union of Boston was one and the Daughters of Bilitis, that was the lesbian group, one gay men and one lesbian, and they jointly sent out a questionnaire to everybody running for the state legislature that year, would you sponsor a gay-rights bill? And I was the only one that said yes, so I became the gay-rights leader.
George Meany was the head of the AFL before the merger [with the CIO]and was critical of A. Philip Randolph, the head of the Brotherhood of Sleeping Car Porters. Once Randolph bellowed at him, “Who the hell appointed you the head of all the colored workers in America?” Murray Kempton, a great journalist, said, “He should have said ‘process of elimination.’ ” Because he was the only one. That’s how I became the gay-rights leader. I was the only one who signed the thing.
But I remember standing up there to testify. What am I going to do if they ask me if I’m gay? I don’t want to lie. I don’t want to tell the truth.
JZ: Did anyone ever ask you?
BF: I was 32 years old, I was unmarried, and I figured, well, people are going to think, Maybe he’s gay. I just said, fuck it, I would not come out. I could not have a political career and be out. I didn’t have a district like Harvey Milk’s, I didn’t have a large gay constituency.
JZ: When did you start coming out, not publicly, but to people—
BF: ’78.
JZ: Kevin White and people like that?
BF: Not Kevin. The first people I came out to were my siblings, my three siblings, and my closest friends.
I was elected in 1972. Then it struck me, I’m not going to go anywhere else. I’m gay, I’m Jewish, I’m not a conventional candidate. I had an unusual district, Back Bay and Beacon Hill; in fact, I was one of the few people in America to win on McGovern’s coattails.
JZ: McGovern actually carried you?
BF: I represented a district that had a lot of BU students and MIT fraternities, a lot of people voted who hadn’t voted before—it had been a Republican seat before, although it was a moderate-to-liberal Republican seat.
Shortly after the election, I ran into McGovern and I said, “Senator, I just got elected to the legislature, I wanted to thank you, I won on your coattails.” A day later I get a call from Bob Shrum, who had been a friend. He said, “Did you run into McGovern the other night?” I said, “Yeah, why?” He said, “I figured it was you. He came back and he said, ‘Guess what? I met somebody who said I helped him.’ ”
I had a bad year in ’78. I opposed Mike Dukakis for renomination for governor, I picked a woman who was running to his left, treated it as a protest, then he lost to a right-wing guy, Ed King. I supported Ed Brooke, the Republican senator, against Paul Tsongas because I thought race—I still think race has been the most important problem for us to deal with. But I didn’t think I was going anywhere politically.
So in 1978, I said here’s the deal. I’ll serve two more terms in the legislature. I’ll run for reelection in ’80, then I’ll retire. I figured I’m not going to be an academic, I got to find something to make a living at after I’m not a legislator anymore because I’m not going to be able to stay here too long. You get burned out in the legislature, and I had no further ambitions that I’d go anywhere. I wasn’t going to run for Congress against Tip O’Neill. And if Tip retired, I’d be running against Joe Kennedy and his son.
So I went to law school, took the bar, and said, okay, I’m going to run for one more term in the legislature, then I’ll retire, I’ll be a lawyer, I’ll be a gay-rights activist having been in the legislature for ten years. I’ll be fairly prominent. So I started coming out in ’79. First of all I started telling gay friends, some of whom were not surprised. And then I told one gay friend. He said, yeah, I know. I said, how do you know? He said when we walk I watch your eyes. You stare at the same people I stare at. But I began to tell my siblings and my closest friends, and I was in the process of doing that, still on the retail level, in 1980. Then I got this lightning bolt, the pope had told Father Robert Drinan he couldn’t run again. I called my brother-in-law, and said, “Hey, Jim, you know Father Drinan’s not running?” He said, “I heard that.” I said, “Well, that sound you just heard is of a closet door slamming.” Meaning I was now going back into the closet to run for Congress.
So I got to Washington. I figured, okay, here’s the deal: I’ll be out privately but I’ll be ambiguous publicly, I won’t be out publicly. I’ll be out to the gay community. And that was unsustainable.
JZ: How did you think you were going to be able to do that?
BF: I didn’t think. This is how I got in trouble with that hustler. You know, we all have emotional and physical needs that have to get expressed, and being closeted publicly, either people were too out for me or I was too out for them. I was not able to find a successful private life, an emotional life, a romantic life, so I took to hustling. I didn’t realize at the time how crazy that was. And it’s not an accident that whole deal ended when I came out. Remember, I came out voluntarily.
JZ: Yeah, I know, in the Globe.
BF: The crap with the hustler came more than two years later.
JZ: When you did come out, was it more of a personal than a political decision?
BF: Yeah, I knew it had political implications. But I’ll tell you what finally touched it. Gerry Studds had been outed and for the first time acknowledged being outted, which most of them hadn’t done. So that meant I couldn’t come out for a while—two in the whole country and we have districts next to each other? He got reelected in ’84, after his problem, and then, I figured ’86, it’s too soon.
Then a member of Congress died of AIDS, named Stewart McKinney, and a major debate ensued about whether he was or wasn’t gay, and it was very distasteful. Stewart was a wonderful man, he did a lot for the homeless, one of the last of the really liberal Republicans, and I said, geez, this is awful, if I get hit by a truck tomorrow, I don’t want there to be this big debate, was he gay? Was he not gay? So I decided that I was going to come out.
JZ: What was the most difficult conversation you had with a colleague about that? Or were they all pretty receptive?
BF: They were all very receptive. I didn’t tell that many people.
JZ: You told O’Neill, right?
BF: Yeah. Robert Bauman had written a book in which he outed me. He incorrectly referred to somebody as my boyfriend — he wasn’t, he was a close personal friend — but he referred to me as gay. The press didn’t pick it up, but I thought, I’d better tell Tip. So I went to Tip. We were sitting on the floor, it was a bad day, we were losing the vote on the Contras, and I sat next to him. I said, Tip, I’ve got to tell you something. Bob Bauman is coming out with a book that says I’m gay.
“Awww, Bahney, don’t listen to that shit. You know they say these things about people.” I said, well, Tip, the point is it’s true. He said, “Oh Bahney, I’m so sad.” That’s when he told me he thought I was going to be the first Jewish Speaker. He acted as if it was the end. A few minutes later, I ran into Pat Schroeder, Congresswoman Schroeder, and she said, “Oh, Barney, am I glad to see you.” I said why? And she said, “Because I just saw Tip, I thought you might be dead. He said, ‘Oh, Pat, have you heahd the news about Bahney? I’m so sad.’ ”
But he was then wonderfully supportive. The final part of the story was when he told Chris Matthews, “We better get ready to talk to the press. They tell me Bahney Frank is going to come out of the room.” Matthews said, “What?” Finally he figured out he meant come out of the closet.
JZ: How was it taken?
BF: There was one guy in my district when I came out, who was furious, he said I’d lied to him. I probably had, I said I was not gay. But people were wonderfully supportive, including some Republicans. Al Simpson called—we’d worked together on immigration. He said, “Hey, pal, I just have this terrible feeling I might have said an anti-gay joke sometime in your presence, I’m so sorry.”
I was at a grocery store, Roland’s market on Capitol Hill, Warren Rudman was in there, the former senator. I was in the back, and he actually yelled the length of the store, “I’m proud of you.” I guess the people who were negative just didn’t say anything.
JZ: But later, you did have these instances, people like Dick Armey and Henry Hyde, saying stuff.
BF: Yup.
JZ: How much of that has there been?
BF: Very little that I can see. It’s not been a hindrance in any way.
JZ: Do you have any regrets about not serving the Senate?
BF: Oh, it was the luckiest thing that ever happened to me, because I wouldn’t have been able to do the financial-reform bill.
JZ: When O’Neill said I thought you were going to be the first Jewish Speaker. Was he right in the end?
BF: I’d have a shot, I would have had a shot at leadership. Look, there are some things I’m very bad at. I’m a terrible academic, there are a lot of things I don’t do well, but this thing is one where my peculiar combination of strengths is very helpful and my weaknesses are not relevant.
JZ: In what way are your weaknesses not relevant in legislating?
BF: Um, I have a short attention span.
JZ: But it seems like someone with a short attention span would not be authoring Dodd-Frank.
BF: But Dodd-Frank, there’s a lot of pieces of it. Yes, I had to do some studying, but I rarely had more than an hour to spend on any one thing, or two. And I can get focused on really important things, but I can’t sit and ponder for a week about one topic.
JZ: Are there legislators who do that? It seems like the job wouldn’t lend itself to that.
BF: No, you cannot do that.
JZ: Do you actually have any hope you’re going to get things done in the next eleven months. It seems like the conventional wisdom is that—
BF: People are forgetting two things. The right wing has had this advantage that they don’t want to get anything done, so inertia has been on their side. But inertia has changed sides. I keep thinking of the song from Guys & Dolls, “Luck Be a Lady Tonight,” you know, you’ve got to go home with the fella that brung you. Inertia has changed partners. If nothing happens this year, all the Bush tax cuts expire, and there’s a substantial further cut in military spending. The right wing cannot allow either one of those to happen, so they have to deal with us. And I think there will be further cuts in the military and some increase in taxes on wealthier people.
JZ: When you look back on what you haven’t accomplished, and I’m not being negative, because I asked you what you have, but is military spending one of the things?
BF: Well, I was frustrated by that, but it’s now finally coming to fruition. I’ll tell you one thing we haven’t been able to accomplish. I got established the affordable-housing trust fund, I always felt that we should not be pushing poor people into owning homes, we should get good rental housing for them, and I believe we may be able to get a replacement for Fannie and Freddie that may include some funding for the affordable-housing trust fund. That’s the one positive thing. I wish I had been able to do more.
JZ: To what extent do you think government should incentivize behavior?
BF: It depends on the behavior. One, it should ban behavior that’s destructive toward other people. Beyond that, if there are things that people can do that have great benefit beyond themselves and have some cost, I think you should incentivize them to do that. Not compel them, but help them economically to do it. But if it’s behavior that’s seen as self-destructive individually, then I think the government should stay the hell out of it. I don’t think we should ban smoking, drinking, marijuana, gambling, any of those things.
JZ: But in terms of home ownership, that was an instance where you had the government incentivizing—
BF: I think that was a mistake. I think decent living conditions is important. But not ownership as opposed to rental.
JZ: Are you seeing a change, given what’s happened in the last few years, you were fighting a lonely fight on the rental housing?
BF: It’s become much more common now.
JZ: What was it about home ownership, because it seems that people on both sides of the aisle—
BF: One, it was seen as a way to get wealth. Of course, it turned out the other way. I think it’s just very American, you know, it’s not big in France, it’s this old frontier kind of individualist, everybody needs a home.
JZ: But that’s a pretty powerful strain in American life.
BF: And it led to problems. It’s now, however, done so much harm that it’s receding.
JZ: Is it receding? You see the Republicans have almost doubled down on it.
BF: On home ownership? No, no.
JZ: No, not on home ownership, but the free market—
BF: Yeah, but it’s blowing up in their face. I think that’s hurting them politically, particularly, by the way, this insistence on more and more military, I think one of the best things Obama’s got going for him is when Romney starts to talk about staying in Afghanistan and going back to Iraq.
JZ: You mentioned earlier about the importance of race, but you supported Hillary, right?
BF: Yes.
JZ: Was that a difficult decision—
BF: No.
JZ: You didn’t see Obama’s candidacy as important in terms of the racial history—
BF: Well, first of all, the Clintons were wonderful on the race issue, and I guess I would say women are not as important as race. I’m very proud of my record for being very supportive on race, I’m going to get the Hubert Humphrey Award this year from the Civil Rights Leadership Conference, it will mean as much to me as anything that’s ever happened.
But I worried about Obama and have been somewhat vindicated by his presidency. I think he underestimated the virulence of the right wing and overestimated his ability to govern in a post-partisan manner. I said that gave me post-partisan depression. But I was never virulently against him and I was an easy convert to him. I was never a bitter ender.
JZ: So partisanship is the problem but post-partisanship is not the solution?
BF: Partisanship is not the problem, excessive partisanship is. You can’t have a democracy without partisanship.
JZ: How do you cut off the excessive partisanship and just get it back to partisanship?
BF: I can’t do that. Only other Republicans can. Well, the electorate can. You defeat the people who gave you, who caused the excessive partisanship. Namely the tea party and the right wing.
JZ: Is that something you foresee happening?
BF: I don’t know. I don’t make predictions.
JZ: You do, though. I read a prediction you made not long after Obama was elected about how 2010 was going to be a good year for the Democrats.
BF: I underestimated the depths of the recession, and Obama made the same mistake Clinton made. When you try to extend health care to people who don’t have it, people who have it and are on the whole satisfied with it get nervous.
JZ: Do you think Obama overinterpreted his mandate with health care?
BF: The problem with health care is this: Health care is enormously important to people. When you tell them that you’re going to extend health care to people who don’t now have it, they don’t see how you can do that without hurting them. So I think he underestimated, as did Clinton, the sensitivity of people to what they see as an effort to make them share the health care with poor people.
I think we paid a terrible price for health care. I would not have pushed it as hard. As a matter of fact, after Scott Brown won I suggested going back. I would have started with financial reform but certainly not health care.
JZ: And do you think that if you’d done it with that sequencing, you could have still gotten health care before 2012?
BF: I’m not sure, but I think you could have gotten some pieces of it. And yeah, if we’d held the House, we could have gotten it.
JZ: So you think health care, in part, was the reason you lost the House.
BF: The depths of the recession, and that the president didn’t want to blame Republicans because he wanted to work together, and health care, those were the factors.
JZ: When you look at the other side now and the rampant partisanship, and you look at someone like Boehner, who seems to be having a hard time controlling his caucus, and then you look at someone like O’Neill, and you were saying earlier that they can’t fire you, but studying the two of them, how one can manage—
BF: Well, first of all, O’Neill wasn’t able to discipline the southerners. He had a dissenting wing that recognized they were the minority, that was the difference. In Boehner’s case, his right wing thinks they’re the majority, so they resent him being leader. The southerners didn’t resent Tip, they just wanted to have an influence on him.
JZ: So it’s just a question of delusions?
BF: Not delusions. It’s not clear who’s the majority in that party.
JZ: You talked earlier about Gobie, during that was there any point where you thought you were going to have to resign?
BF: Never resign. Not run again. The reason is I knew that what Gobie had said was mostly untrue, and I wanted the House Ethics Committee to investigate it and show that it was untrue, which it did. Remember, I was reprimanded for fixing parking tickets and writing a letter about him that got to a probation officer, where I lied about how I met him. Nothing about running a prostitution ring, nothing about sex in the locker room, all the bad stuff he said—the Ethics Committee found it wasn’t true. I wasn’t going to resign, because if I resigned the Ethics Committee lost jurisdiction. There was never any criminal charges, so I would have lost the forum in which to disprove most of what he said. But I was ready not to run again, if I thought it would cost the Democrats the seat.
JZ: When you look at subsequent scandals—
BF: I won’t compare myself to anybody else.
JZ: Not comparing yourself to anyone else, but with Anthony Weiner, for instance, part of his problem was he didn’t come clean at the beginning, do you ever sort of say, get it out on the table.
BF: So the question, let me see if I get this, okay, not comparing yourself to somebody else, would you compare yourself to Anthony Weiner? What do you think the answer is to that? No. Don’t try to play games. I told you I’m not going to compare myself to anybody else. You can’t rephrase it and make me do it.
+++
Interview with Barney Frank, Rayburn House Office Building, February 15, 2012
JZ: Last time I was here, you were talking about Caro’s third volume on LBJ, and how you read it as a “how to” manual. You mentioned that there was one other book you read as a how to manual. And I didn’t ask you what that was.
BF: It was a biography of Adam Clayton Powell by Charles Hamilton. [phone rings and he takes the call.] Adam Clayton Powell was the third black member of the U.S. House, but he was the first self-respecting black member.
Powell got here in 45 and he was told that he couldn’t use the swimming pool, the members swimming pool, that was only for white people, he couldn’t eat in the House dining room, and he couldn’t get his hair cut. So he said, the hell I can’t, and he did it. And Powell, my analogy was, I was the first member of Congress voluntarily to come out, the second to come out, Gerry Studds was outed but courageously said that he was. So Gerry and I were sort of tied for being the first out members. And that was a line to walk about how do you affirm your identity as a gay man without making too much of it. I had a partner at the time and my view was, and I continue to believe this now — I’m about to get married to Jim — I don’t do anything just to make a point, but I don’t not do something so somebody else can make a point. It’s how to be self-respecting without being belligerent.
JZ: So are you going to get married while you’re still in office?
BF: Yes, in July.
JZ: You’re not doing it to make a symbolic gesture, but is there any—
BF: There’s an unintended benefit. I want to get married. I do think, to be honest, if I was running for reelection I might have tried to put the marriage off until after the election, because it just becomes a complication. But I did want to get married while I was still in office. I think it’s important that my colleagues interact with a married gay man.
JZ: Does your fiancé think he’ll be treated as just a regular spouse?
BF: By the Democrats, yes. Under the Defense of Marriage Act, he does not get any of the benefits. But he’s already a member of the Democratic spouses club and a lot of the spouses are very nice to him. One of the longtime leaders of the Democratic spouses group, Debbie Dingell, the wife of John Dingell, just sent me a note saying we want to have a big engagement party for you two. They made a big deal about our engagement at the last Democratic issues conference.
JZ: Has the speed with which gay marriage seems to be being accepted—
BF: It’s pleasantly surprised me. I filed the first gay-rights bill in the history of Massachusetts in 1972. At any time in the past 40 years if you had asked me to project the progress two or three years out, I would have been too pessimistic. It’s moving very rapidly. And I think within ten years, we’re going to have pretty close to full legal equality for gay and lesbian people in much of America. There still won’t be marriage rights, I believe, in many states, but there will be marriage rights in states that are at least half of the population, and there’ll be no federal restriction on recognizing that. It’s moved very quickly.
JZ: What are government’s prospects in the next decade? You’ve made your prediction about gay rights ten years from now, but what do you see as the role of government ten years from now?
BF: I think it depends. If we can substantially reduce America’s worldwide military expenditures, I think the prospects are good. That will free up resources to allow us to start bringing down the level of debt or reducing the rate at which debt is accumulating, and free up funds.
I think people, particularly young people, want things done about climate change, I think they want things done about excessive inequality. I think there’s a very positive role for government, and I think the public wants it. I think we’ve seen that test with the tea party. The people who want to dismantle government came to power in the House. Now it’s blowing up in their face.
JZ: Do you think it’s just a question of reducing the military budget? It seems like Americans have an irrational relationship with government.
BF: Yeah, they want more from the government but they don’t want to pay for it. Now the tea party people thought the way to resolve that was to reduce what the government does. That turns out not to be popular. Many of us on the Democratic side think that the way to do it is to increase the revenues, mostly from wealthy people. Let me put it this way, I think the prospects of increased taxation on the wealthiest people and a reduction in the military are very likely. And you say it’s more than the military, but the military is critical to your formulation, people want us to spend this much [holds one hand at eye-level] and tax that much [holds the other hand at chest-level], how do you eliminate the gap?
JZ: By reducing the military.
BF: Unnecessary military expenditures are always part of the gap.
JZ: In terms of that gap, though—
BF: And by the way, just one other thing: the polls. Do you want to cut Medicare? Eighty percent no. Do you want to cut Social Security? Seventy-six percent no. Do you want to cut military commitments overseas? Sixty-five percent yes.
JZ: But at the same time, there’s that famous sign, “Keep your government hands off my Medicare.” There’s this contradiction in what people want from government.
BF: Yes there is. But that’s because people don’t like government. You didn’t ask me what the attitudes would be toward government but what government would do. I think there will be an expansion of government’s activity. People may not call it government.
JZ: Okay, I understand that about government, but what about people’s attitudes about government?
BF: Well, I think it will get better. I think people are frustrated now because they think they’re paying but they’re not getting the services. I think if we can improve what government does, then people will feel better.
JZ: Do you view this hatred of government as cyclical? Have you seen it go in cycles?
BF: No, it’s worse than it’s been in a long time. But I think it’s the fact that the economy was bad and people saw the unfairness of it. And in particular in March of ’09, when it came out that AIG had paid out bonuses with federal subsidies. And the TARP, which was this highly successful but wildly unpopular policy. The other thing is the media. The media’s gotten increasingly negative on both sides, including by the way people who are theoretically on the left who are just interested in denigrating government.
JZ: What about the media component, though? How does the general polarization get fixed?
BF: If the Republicans win everything in November, then we’re in for a very bleak period because they’ll take it as ratification of this anti-government attitude. I think it’s going the other way. I have a bumper sticker for us: we’re not perfect, but they’re nuts. And I think the public buys that.
JZ: But we’ve seen these wild swings, in ’06 and in ’08, and then in ’10, and now maybe in ’12. Is there anything that gives you any confidence that, were it to swing back the Democrats in ’12, that it wouldn’t swing back to the Republicans in ’14? It seems like we’re in this crazy cycle where—
BF: Yes, that we are able to produce results. I think if we get power and show good things happening. What happened was we got back in power and then we inherited the wind. But I think if the Democrats come back in ’12, I think, for instance, as the health-care bill goes forward, it will be less and less plausible that it was doing any damage to anybody, and more and more people will be seeing the benefits of it. Similarly with financial reform.
JZ: Are there structural reforms that you think need to take place?
BF: To get rid of the filibuster in the Senate.
JZ: Is that the only one?
BF: That’s the only one.
JZ: The last time, you talked about Trollope and you saw parallels between nineteenth-century Britain and contemporary America—
BF: In legislating.
JZ: Yeah, in legislating, but moving from legislating to the system itself, are there things about the American system that you think make it superior to these other systems? Or inferior?
BF: I never thought about it. But if you are running for prime minister of England and your party gets a majority on Tuesday, you’re kissing hands on Wednesday. We shortened the transition from March to January but we still have a more than two-month transition. The mortgage crisis was worsened this past time because critical decisions were made during the transition between Bush and Obama. We voted the TARP out. The TARP was basically being administered by Hank Paulson as the last man home in a lame duck, and I was disappointed. I tried to get them to use the TARP to put some leverage on the banks to do more about mortgages, and Paulson at first resisted that, he just wanted to get the money out. And after he got the first chunk of money out, he would have had to ask for a second chunk, he said, all right, I’ll tell you what, I’ll ask for that second chunk and I’ll use some of that as leverage on mortgages, but I’m not going to do that unless Obama asks for it. This is now December, so we tried to get the Obama people to ask him and they wouldn’t do it. During the critical period when the TARP was being administered, there was a vacuum of political leadership. And Obama at one point, when we were pressing him, said, “Well, we only have one president at a time.” I said I was afraid that overstated the number of presidents. We had no president. I would, I’d give them a week.
JZ: That long a transition?
BF: I’d give them a week, yeah.
JZ: When you were talking about the Republicans and not being able to work with them. But it’s the voters who reward that behavior.
BF: I’m glad you said that, you’re very smart. 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. Let me read this to you. [Picks up copy of Hayek’s The Road to Serfdom.] “In no system that could be rationally defended would the state just do nothing. An effective competitive system needs an intelligently designed and continuously adjusted legal framework as much as any other. Even the most essential prerequisite of its proper functioning, the prevention of fraud and deception, including exploitation of ignorance, provides a great and by no means yet fully accomplished task of legislative activity. There are undoubtedly fields where no legal arrangements can create the main condition on which the usefulness of the system of competition and private property depends where, um, it’s impracticable to make the enjoyment of certain services dependent on the payment of a price, competition will not produce the services; and the price system is, um, ineffective, um, we have to resort to the substitution of direct regulation by authority where the conditions for the proper working of competition cannot be created.” [Closes book.]
JZ: Do you read Hayek a lot?
BF: For these purposes. And so we’ve had people who understand you have the private sector, you need the public sector. The tension between left and right has been where you draw that line, but it’s been a contest between people who see maybe a 20 percent overlap. For the first time in American history we have people in power now who reject that. If they knew it was Hayek, they might think, well, maybe, but they reject the public sector. That’s why we can’t work together.
JZ: But that’s what I mean about the irrationality of voters. Just how—
BF: Okay, here’s the deal. The voters voted in general, not specifically. The voters were mad at the Democrats so they voted for the tea party. They didn’t vote to cut Medicare. They voted to denounce the Democrats. I think the tea party made the mistake that I think our side sometimes makes of overinterpreting their mandate. They didn’t like them. That doesn’t mean they love us.
JZ: Do you get frustrated with voters acting with such pique: They throw out the Democrats just because they’re mad?
BF: I have said publicly on several occasions, politicians make mistakes, journalists make mistakes, and the public is no bargain either. Yeah, I get frustrated.
But some people in the media act like Washington is some autonomous entity that’s operating with no connection to the public. I had a woman stop me the other day, she said, “I’m very angry about Congress. What are you guys doing?” I said, “Who’s your Congressman?” “Oh, I don’t know.” “Well, see, I vote for me, I’m happy with me. What are you blaming me for the people you vote for?”
+++
Interview with Barney Frank, by telephone, March 14, 2012
JZ: What did you think about Olympia Snowe’s decision not to run for reelection:
BF: It was confirmation of the death grip the right wing has on the Republican Party. Olympia was obviously just facing this terrible dilemma where she, to stave off a primary challenge and be able to function within her party, she had to move further and further to the right. She was featured actually, just before that, in a New York Times story, as a senator who’s moved considerably to the right. But it was never far enough. She was the only Republican to vote against that restriction on contraception being available through health insurance.
JZ: Did you feel that she was a useful centrist to have in Washington?
BF: Decreasingly, because the Republican Party has become so hard. She was a key vote for us on financial reform but the price of her support, Susan Collins’s and Scott Brown’s, was that we had to take $20 billion off the backs of the financial institutions, where we wanted to put it, and put it on the tax payers. The question, as between her and a right-wing Republican, she was a better. But given the pressures on Republicans these days, I don’t envy her personally but I am pleased that she retired, because I think her successor will be Angus King, who will vote with the Democrats much more. I don’t think it is possible in the current climate for a moderate Republican to be very productive on the causes I care about.
JZ: You mentioned financial reform. Dodd-Frank gets kicked around a lot by both liberals and conservatives. Are you happy with the way it turned out?
BF: Oh absolutely. Most of the critics, well the conservatives are just right-wingers who don’t want any regulation. And if you listen to some of the liberals they understand what a good job we did. I mean have you heard people complaining about the consumer bureau?
JZ: Well, conservatives.
BF: Well, yeah. But with liberals, much of it is kind of uninformed and I believe among the people who know what we’ve done there’s great support.
JZ: No legislation can be perfect and you mentioned the price of getting Snowe’s and Collins’s and Brown’s support for it.
BF: Yeah, $20 billion.
JZ: Right. Is there an ideal version of the legislation that exists in your head?
BF: I would have toughened up the derivatives stuff a little bit. We did major, major advances. For instance, on derivatives there’s anti-speculation stuff that’s now being fought. The one thing I would have done if I could just waive a magic wand, I would have done, and it has to do with derivatives, I would have merged the Securities and Exchange Commission and the Commodities Futures Trading Commission, but there’s just never any chance of doing that because they represent the farmers versus the financial markets. Other than that, I would have given the CFTC a little more authority on derivatives but generally it’s where I wanted it to be.
JZ: At what point in time do you think we’re going to be able to give it a full assessment?
BF: I’d say over the next five years, because it has to be implemented. And it will depend. If the Republicans win the presidency and or both Houses of Congress, then it will never get a fair chance, but it’s already had I think very positive impacts.
JZ: On Freddie and Fannie, people say you were wrong about those. Do you accept that criticism?
BF: No! For this reason. Yes I was wrong in 2003, but I wasn’t in charge. That is the most intellectually dishonest argument from Republicans. Remember, I was in the minority from 1995 to 2006. They were in charge. The argument appears that I stopped Tom DeLay from doing something. And by the way I changed my position in 2004. I was too optimistic in 2003, but also, and I’m frankly surprised people don’t do any research on this, if you read Hank Paulson’s book, I became chairman of the committee in 2007. The first thing we did was to pass tough legislation restricting Fannie and Freddie. It’s as a result of the legislation that was passed after I became chairman that they were put in a conservatorship and haven’t lost any money since 2008. See, I was wrong about it with a lot of other people but it had no impact. I was not the one who held up the regulation. In fact, in 2004, several of us on the Democratic side tried to ban the bad subprime loans, and the Republicans blocked us. This is all on their watch.
JZ: Looking back, whether it was consequential or not, did you learn anything from being wrong about that? Were there certain calculations you made that you learned from?
BF: Yeah, along with everybody else! Well, first of all, I was right on trying to ban subprime mortgages. No, it’s not that I learned from it in the specific. In the general sense, what I didn’t foresee was the collapse of the housing market. I was always skeptical of home ownership. But, again, frankly, I think you still don’t get it, I’ll be honest with you. You said, in regards to whether it was consequential: the Republicans controlled the Congress in 2005 and George Bush was president for four years. They did nothing. And, by the way, after complaining, they say, oh, the financial-reform bill didn’t do anything about it. Well, first of all, probably that’s because in 2008, under the Democrats, working with Paulson, and I urge you to read Paulson’s book on the subject, we fixed Fannie and Freddie in the sense of stopping the bleeding. That was done under the Democrats. They have not lost any money since 2008. Then the Republicans complained that we didn’t adopt their proposal for abolishing them in the financial reform bill. Now the Republicans have been in power in the House since January of 2011. They have not even moved to that to a full committee discussion. The Republicans talk about Fannie and Freddie when they’re out of power. When they’re in power, they have done nothing. Now in 2005 I tried to work with Mike Oxley to get some reform. It became an internal Republican fight. Oxley said the problem was that George Bush gave him the one finger salute and that’s what killed it. And that was in the Financial Times. So my record is, yes, I did not foresee the overall collapse of the housing market. I did try to stop bad subprime loans. But if you notice the quotes were all in 2003, when we were still in the minority. By 2004 and ’05 I realized that we needed to do some things; I still didn’t see the total collapse. And in 2007 as I said, and Paulson, in his book, says, in 2006, when it looked I was going to be the chairman, he started talking with me and I kept my word, those are his words, and as soon as I became the chairman, we fixed the problem in the sense of stopping the losses.
+++
Interview with Barney Frank, by telephone, March 15, 2012
BF: Thanks for getting back to me. I don’t know why my mind kind of went blank. The biggest thing I should have said was, there’s actually one part of the bill we actually had to change in the conference committee, and that was how you paid for it. The Congressional Budget Office told us that we were going to need $20 billion to pay for the things that were in the bill, so Chris Dodd and I agreed with the Democrats, frankly, to assess the large financial institutions for that $20 billion: financial institutions with more than $50 billion in assets except for hedge funds with more than $10 billion. And we brought it up and they needed two Republicans to vote for the bill in the Senate to get to 60 votes, and three Republicans, Scott Brown, Susan Collins, and Olympia Snowe, told us that they wouldn’t vote for the bill unless we took the $20 billion assessment on the financial institutions out and instead put it onto the taxpayer. That was just crazy, but that’s what we did.
There was one other thing I forgot. We wanted to assess the large financial institutions in advance, to have a fund in case there was any need to pay the debts of some of these banks, because the bill does say the taxpayers won’t do it. And I lost that one, too. But the biggest one was, because we needed those Republicans, we took $20 billion all from the banks and now onto the taxpayers.
JZ: You had mentioned that actually when we were talking about Snowe.
BF: Oh, okay. But when you asked me, what would I change in the bill, that was the biggest. The other one was, on Fannie and Freddie, and again, here’s the deal, the lesson we learned, not just from Fannie and Freddie, it was that, there is a phrase that economists use of tail risk, t-a-i-l. What it means is something terrible that could happen that’s very unlikely. And my mistake was not to see that this could happen with Fannie and Freddie but it happened with other things. And so one of the things we do in the bill, in general, is to provide against tail risk, that is to require people to build up some safeguards against a disaster that you don’t think is going to happen but if it happens it would be so terrible that you better be ready to deal with it to reduce it. And, again, with Fannie and Freddie, the whole thrust of the bill was to reduce leverage, to reduce the extent to which people could get in debt and not have money back. And that’s true for all financial institutions. So that’s the lesson we learned, not just from Fannie and Freddie but in general, that just because you think something is highly unlikely doesn’t mean you shouldn’t deal with it if it happens. All right?