One of the highlights of last week?s SkyBridge Alternatives Conference was the blowout party on Wednesday night (click here for the blow by blow description).
Seeking refuge from a band that was blasting my ears out, and fleeing the nubile young bodies that kept bumping up against me and spilling my margaritas, I sought out a safe haven. There, cloistered in the quietest, darkest refuge from the event, far beyond the most distant swimming pool and palm tree, I found former congressman, Barney Frank, sitting in a lounge chair.
If this name piques your memory, it is because Barney was a co-sponsor of the 2011 Dodd-Frank bill, the most sweeping regulation of the financial industry since the Securities Act of 1933. As chairman of the House Financial Services Committee, he became a familiar figure during the endless hearings for the controversial legislation.
To say that Barney is a man with strong opinions is probably the understatement of the century. If you make a statement he believes is factually incorrect, he will shout you down until he has the last word. I watched him do exactly that when he sat on a discussion panel with republican strategist, Carl Rove. The two went at it like cats and dogs for ten minutes, the rest of the participants sitting there in awe, with their mouths hanging open.
Barney is upset that the US is still spending massively to defend Europe 20 years after the collapse of the Soviet Union, their only real enemy. They can easily afford to pick up the tab themselves. The US has vastly overextended itself with military commitments. We can no longer afford to be the world?s policeman.
Sunni and Shia Muslims have been hating each other for a thousand years. We are not going to change that in a few years of spending a few trillion dollars and thousands of lives. You can?t use the US military for social engineering. Attempting to do so just pisses everyone off and only creates more American enemies.
Banks are now bigger than they were before the financial crisis, largely because the government required them to post more capital. But ?too big to fail? has been solved. The new Resolution Authority has the power to wipe out shareholders in the wake of future poor business decisions. That did not exist in 2008. No more bonuses will be paid for large losses.
Corporate tax reform is a big priority, but is far more difficult than people realize. The people you take money away from get much angrier than the beneficiaries of change are made happy. That is a problem in the current big money election environment.
Son of a New Jersey truck stop operator, Barney went on to obtain a degree from the Harvard Law School. He entered politics in 1972 when he joined the Massachusetts House of Representatives. Frank was elected to congress in 1980, representing the western Boston suburbs. He went on to win reelection 12 consecutive times.
Frank first went to Washington about the same time as I joined the White House Press Corps as a correspondent for The Economist magazine. I didn?t know him personally, but shared with him his frustration in trying to explain economic issues to then president Ronald Reagan. When I asked the president from home state of California why his tax cuts gave himself the largest percentage reduction, he answered that ?It?s because I pay the most taxes.? Go figure.
What I found most fascinating about Barney was his recollections of the Boston political scene during the 1960?s. In the past year, I have read biographies on John Kennedy, Robert Kennedy, Ted Kennedy, and the most interesting, their father, Joe Kennedy. If you ever want to gain insight into one of history?s best natural traders, finest businessmen, and the first chairman of the SEC, read The Founding Father by Richard Whalen. Barney knew all of these men, and listening to his first hand stories about them was a real education.
All of this great information came at the price of sitting downwind from his cigar smoke for two hours. As a journalist, I long ago learned that if you want to get the real dope, you sometimes have to pay the price.
