Welcome to Episode 117!
STIMY Episode 117 features STIMY’s very first US Congressman – Barney Frank.
Barney Frank was:
🔥 Member of the US House of Representatives (1981 – 2013)
🔥 Chairman of the House Financial Services Committee (2007 – 2011); and
🔥 Lead co-sponsor of the 2010 Dodd-Frank Act – which introduced the greatest Wall Street reform in history.
Barney didn’t have the most obvious route into politics. In fact, he seemed destined to be barred from politics!
But through a series of serendipitous events, Barney eventually found himself at the heart of US politics and was, according to the New York Times,
“one of the people most responsible for overhauling financial regulation after the 2008 economic crisis“.
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Who is Barney Frank?
Barney Frank was born 3 miles from the Statute of Liberty and lived a pretty conventional middle class life.
It was defined in part by the fact that he was a Jew living in a largely Catholic community. With a father who owned a truck shop dominated by corrupt politicians, the mafia and a couple corrupt unions.
And a family that was deeply interested in politics.
- 7:39 Obsession with politics
- 14:27 Anne Frank
- 15:50 Politics in the blood?
Becoming a US Congressman
The route to Congress wasn’t obvious. In fact, the Pope even had to intervene to ensure that he was elected to the House of Representatives!
Barney shares the tricks that allowed him to be so effective in his job, why he was willing to sacrifice his political career, and how he maintained strong ties and trust with his constitutes.
- 19:58 Campaigning in a Republican state
- 23:07 Enjoying the things he’s very good at
- 24:20 1980 campaign was the toughest race
- 26:31 Intervention from the Pope?!
- 29:24 Congress is like “high school as a freshman”
- 30:53 Do the job well, but not TOO well
- 31:51 How do you become/stay popular?
- 35:34 How do you know what’s happening on the ground?
- 38:20 The Boston Globe article
- 40:43 Being willing to sacrifice his political career
- 41:52 Why did Barney keep winning by wide margins?
- 44:34 Having empathy due to being closeted for so long
- 45:33 The average American isn’t homophobic?!
Dodd-Frank Act, Trump & the 2024 US Presidential Election
Barney Frank is the Frank in the Dodd-Frank Act. So we naturally touch on financial reforms, the meltdown of Silicon Valley Bank and his role as director at Signature Bank.
Oh, and he also shares why he thinks Trump is the most self-destructive politician he’s ever seen and his thoughts on the upcoming 2024 US Presidential Elections!
- 47:44 Dodd-Frank Act
- 53:28 Could the Dodd-Frank Act have done more to prevent the SVB meltdown?
- 56:01 Challenges in raising the insurance limit on bank deposits
- 58:01 Disagreeing with Senator Elizabeth Warren that the Dodd-Frank Act is to blame
- 59:46 Crypto
- 1:00:57 Where’s the banking crisis headed?
- 1:02:36 The 2024 US Presidential Elections, Trumplestilkin as the most self-destructive politician he’s seen in awhile
- 1:05:13 How governments can encourage crypto innovation
- 1:06:19 A mistake to be the director of Signature Bank?
- 1:10:56 Was it a mistake to partially repeal the Dodd-Frank Act?
If you’re looking for more inspirational stories, check out:
- Lydia Fenet: Top Christie’s Ambassador who raised over $1 billion for non-profits alongside Elton John, Matt Damon, Uma Thurma etc.
- Eric Sim: From being the son of a prawn noodle hawker stall owner to the former Managing Director of UBS with 2.9 million LinkedIn followers
- Adrian Tan: President of Singapore’s Law Society & the King of Singapore
- John-Son Oei: Building a home in 3 days with EPIC Homes (social enterprise)
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STIMY Ep 117: US Congressman Barney Frank
Barney Frank: If you're a serious legislator, you learn as much as you can about your colleagues, particularly those who are influential in the area where you wanna work. You learn about their political situation at home.
You learn about their personalities. You learn how to ingratiate yourself with them and how you can help them and make them value your friendship. And that becomes particularly important when you move up. And by the time I became chairman of the committee that wrote the Dodd-Frank Bill, uh, I spent all my time, I had, uh, certain number of Democrats on my committee because by then things had gotten very partisan.
My main job was to make the members of the committee my friend and to make them wanna make me happy. But, and the way you do that is anytime I could do a favor for them, I did.
Ling Yah: Hey everyone!
Welcome to episode 117 of the So This Is My Why podcast.
I'm your host and producer, Ling Yah, and In case you didn't know, STIMY is now open to sponsorship. So if you're interested in sharing your story, what you are building, then do just drop a note at sothisis [email protected] and let's just have a chat.
And today we have STIMY's very first US Congressman Barney Frank.
Now Barney was a member of the House of Representatives for over 30 years, is also the chairman of the US Financial Services Committee, the Frank Behind the Dodd-Frank Act, and that's just the tip of the iceberg.
Now, how did Barney end up in politics? What does it take to thrive despite being gay? What led his decision to come off the closet with an explosive Boston Globe article? And also one of his views of the SVB meltdown given his role in the Dodd-Frank Act, his role as a director at Signature bank, his views of Trump and Trumplestilkin and the upcoming US presidential elections. Well, I guess you'll just have to listen to find out.
After all, the New York Times did describe Barney Frank as one of the person most responsible for overhauling the financial regulation after the 2008 economic crisis.
So clearly you can miss this episode.
Are you ready?
Barney Frank: I was actually physically born, literally three miles from the Statue of Liberty. Bayona, New Jersey is just literally three miles south of.
Statue of Liberty between New York and New Jersey. I lived a pretty, uh, conventional middle class life. It was defined in part by the fact that I'm Jewish. I lived in an largely Catholic community where, where those guys who were Jewish, who were minority, but it wasn't an oppressive situation.
My father owned a truck shop.
My mother kept our house. I had three siblings still do, fortunately. And, I went to public schools, public high school. You know, I lived a fairly normal teenage life.
Ling Yah: I thought it was interesting you said that your dad ran the truck shop, as you say, and it was a place that was totally corrupt. What does that mean?
Barney Frank: Well, the, uh, city of Jersey City where my father at the truck stop was dominated by an alliance of corrupt politicians, the mafia, and a couple of corrupt unions. I'm a great union supporter, but back then, People have seen the movie on the Waterfront. Don't know what I'm talking about. Both the Teamsters Union and the Longshoreman's Union in the, in the New York area, were very closely tied in with the mafia.
And while my father was not an official member as the man running a truck stop, which was of course, tied with, with the, trucking industry, uh, he had associations with, uh, with organized crime.
But even so, your parents still instilling you to believe that the government was doing good. How did they do so?
Back then in the, uh, fifties. I was born in 1940, so my teen years in the fifties, uh, one thing, there were actually two things that differentiated me from my friends, my peers.
One, I was very interested in politics. I remember watching political events on television. The, the hearings, involving Senator Joseph McCarthy in his war in the Army. I was 14. Uh, I remember being very much outraged by the murder of Emmett Till. There's recently a movie about that. Now, a young black kid, he was my age, beaten at death by bigots, uh, in Mississippi.
And the bigots turned out to include some law enforcement officers. Um, so I thought of that at an early age. Uh, but I never thought that I would myself have a career in politics because of the other thing that set me apart from my peers. Uh, I realized at 13 that I'm gay and, uh, back then, this is 1953.
Uh, being gay was, was a pretty tough thing. So I just kept it a secret. And, uh, I later wrote a book in which my memoir, in which I said, you know, when I was 13 and a couple years after that, I thought, well, it'd be nice going to politics, but I, I could never succeed politically because I'm gay. And that's very unpopular.
And to succeed in politics, you have to be well liked. things changed by the time I retired, 58 or so years after that, things had flipped. being a politician had become unpopular. Uh, and being gay was much, uh, much more accepted In my last couple of years, um, I helped pass what's known as the Dod Frank Act to regulate the financial system.
And, uh, I got married to my husband, the only member of Congress still to have a same sex marriage. And what the pollsters told me was that in, uh, 19, in 2012, my marrying my husband, Jim, Was more popular than passing the Doran Act. That was a kind of reversal, uh, uh, being gay became much more socially acceptable than being a congressman.
Ling Yah: So back then, when it wasn't socially acceptable, what did you think you were going to do with your life? Because I noted that you went to Harvard Law School. So did you think, I guess I'll be a lawyer then if I can't be a politician?
Barney Frank: That's a very good question. It, it dictated it. I had originally thought, well, I'll be a lawyer and get into politics.
Yeah. But then while I was in undergraduate at Harvard, I looked around, well, what is it like for a gay man being a politician, knowing I was gonna, and I wasn't gonna have a double life of pretending to be stray and getting married. Uh, that wasn't a possibility. Anyway, I decided at the suggestion of one of my faculty members, No, you know what?
Instead of being a lawyer, I'm gonna be a professor of, of political science. I like politics and the university is a safe haven, relatively for a gay man. So rather than go out into the world as a gay man trying to disguise that and practice law, I'll become a professor. Uh, at the time I made that decision, it was the early sixties sig well, I graduated 62.
Um, John Kennedy had begun to, uh, the practice of hiring high ranking powerful academics to serve in his administration. Uh, McGeorge Bundy, John Kenneth Cal bought the Schlager, your own Weezer, et cetera. So I decided, okay, here's what I'll become a professor. I'll be doing what I like reading and writing about politics, but as a university professor, that will also gimme a chance.
To participate in campaigns, to be an advisor to politicians. And, you know, you, you're an academic, you get a two year leave of absence. So I became a graduate student looking for a PhD in political science with the goal of becoming a professor, sort of following the model of the guy I always admired enormously, John Kenneth Cal, and go back and forth between academia and stints as an advisor.
Uh, and that it seemed to me would be the best way to deal with being gay and indulging my, uh, great obsession with being politically active.
Ling Yah: Where did this obsession come from? Why were you so determined to be in politics even though you couldn't be at the front lines at the time, you thought.
Barney Frank: I don't know.
And that's a very good question I'm asked that there's a very interesting book. It was an oral history with, uh, former Supreme Court Justice Felix Frankfurter. It's called Felix Frankford, the Reminisces. And I recommended to people, and he was asked, where his interest in justice, et cetera, came from.
He said, you know, I've never been able to put myself on the couch. My, I don't know. I mean, it's one of those things, I don't know why I'm gay. I do know why I was Jewish. My parents were Jewish. But why I had that interest in politics, I, I do not know. I mean, I can tell you, I am glad and I, I justify it because my instant politics has been as a means of making this a, a better world, a fairer world, a world in which there is less suffering.
So I, I will say I feel morally justified in the kind of politics I practiced. But why I chose that rather than others, I don't know. I guess there's one, one secondary factor I can give. Politics involves the skills that I am good at and not the things that I'm terrible at. I'm very good with words.
I speak well. I think quickly. I am terrible with things. I have been in a lifelong war with inanimate objects. I break things probably cause I'm left-handed too, by the way. I'm a member of every minority. And, um, my husband knows if I start to try and fix something, he immediately intervenes because I will make it worse.
I don't mean to, but that's the way it is. So, uh, I went into a, uh, a profession in which verbal facility is a great thing. The other thing I have, and this sounds like a joke, but it, it may be, but it's also serious. I did change from being a professor, doing politics, part-time to doing politics full-time. I got an invitation from a man who, uh, became the mayor of Boston in 1967.
He said, why don't you come work for me? This
Ling Yah: is Kevin White. This is
Barney Frank: Kevin White. Gotta finish my, uh, PhD thesis. I said, I'll go to work for you temporarily. My temporary stint with him turned into a profession change. And here's the reason. And this sounds like a joke, but I have a fairly short attention span, and that's a real handicap if you're trying to write a scholarly thesis.
Uh, on the other hand, if you are in politics as a generalist, not as the specialist in transportation or healthcare or some, some particular area, but if you are a general assistant to an elected official, an executive, if you are a legislator in the course of a day, You will have to deal with at least six or eight separate subjects.
And that gives me a comparative advantage. If we all have, uh, 20 minutes to think about something, I generally will come out very high. If we all have four days to work on it, I'll pile away a lot of that and lose any advantage I might have had. So I literally decided I was much better at being an assistant to the mayor with a broad range of responsibilities than, uh, being a serious committed scholar.
Ling Yah: So this was 1968, you were the chief of staff. What was some of the highlights on the Kevin Hey,
Barney Frank: in, it was in, uh, actually December of 67, the mayor, mayor White said, come to work for me. I said, I gotta go finish my thesis. He said he was very effective. He said, look, you're a big liberal. You've got all these liberal things you want me to do with race and poverty.
Um, If you go back to Harvard, I'm gonna have a harder time doing it. You're one of the few people I have around me who has that commitment. Oh, that got me.
Ling Yah: And wasn't it, during this time when you were working for Kevin, you also met Congressman Joe Moley. What was that like?
Barney Frank: I did meet Joe Moley after I went to work for Kevin White, and he became one of the people I most admired and enjoyed working with. But I met Kevin White in 1967 through, a radio broadcaster, a great one named Christopher Liden.
He, he and his wife, his wife worked for Kevin White. They were next to Kevin White, and I knew him. He was a reporter for the Boston Globe. I knew him at Harvard and he recommended me to White. So that, that was the connection to go to Kevin White.
Ling Yah: You said at the time that Joe was running as an independent and that was very smart and courageous.
I wonder because
Barney Frank: Yeah, by the way, you asked me what it was like working to Kevin White. It was a mainstream, it was, um, I worked, uh, I didn't know what when I started, but I, I wound up, you know, doing like 13 and 14 hour days. I was overwhelmed. It was extraordinarily rewarding cause I thought we were doing good things, but I, it was also exhausting in the course of it.
You know, some people lose weight when they're stressed. I overeat when I'm stressed, so, uh, I, uh, ballooned. I went to 270 pounds. I'm five foot, I was five foot 10 at the time. So it was very stressful and it was very rewarding in the, in the fundamental moral sense. But it was tough, personally, and of course added to that was a strain of being totally closeted about my being gay, although, I was helped by the fact that this is before the Stonewall riots.
And so that being gay, gay issues were not a factor. But as to Moley, there was a woman who was a terrible racist named Louise Day Hicks in Boston, who was, started a political career who almost got acted mayor, and Kevin White who ran against each other. In fact, that's how I came to work for White.
I didn't know him very well, but I did know he was infinitely preferable to this Pigott who was running against him. And I wanted to help him defeat her. And she lost to white, but she had enough popularity to get elected to Congress, in 1970. And the problem we had was this, in a primary in the north, you don't need a more than 50% of the vote to win.
If there were six candidates and the one who gets 37% gets more than anybody else, he or she wins. It's not what we call a runoff of the top two. And the thing was this, there was gonna be a white liberal and a black candidate, and Louis, say hicks, so she was always gonna get her 40% plus. And the other two were gonna split the, the other 60 remotely correctly.
Figured out he ran against her as a Democrat in 1970 in laws cause he split the vote with, with a couple of black candidates. So in 1972 he stayed out of the primary when she won it, as she could always do because of this split in the opposition, he ran against her in the final as an independent, very clever strategy.
And he beat her across the, an hour after he won as an independent, he announced he was a democrat and remained a Democrat of all his life.
Ling Yah: Wasn't your sister also Anne Luis also involved and she used some gorilla warfare to help Joe as well.
Barney Frank: My, uh, older sister.
Anne Lewis, little side here of interest. she was married to a man named Gerald Lewis in 1956. They divorced, about 12 years later and she since remarried, but she kept the name, uh, Louis, for an obvious reason. If she went back to her maiden name, what would it be? Her first name is Anne. Anne Frank.
Anne Frank. she would've gone back to being Anne Frank. She was Anne Frank when she was born in 1937 but by 1960 being Anne Frank would've been awkward.
She is a brilliant woman. If we did not have sexist discrimination in America, she would've had an even more impressive political career.
She had a very good one. She was, press secretary to Bill Clinton. She's very close to Hillary Clinton. She was the first, I think woman to be the executive director of the Democratic National Committee. But, but she was held back. She's two years older than I.
So she was held back in the sixties and seventies because it was a bad time for women.
She was one of the leading women to be actively engaged in politics and has had, as I said, a, very important career. It would've been better, I think, if she hadn't been discriminated against as all women were until fairly recently.
Ling Yah: It sounds like politics was in your family blood in spite of all the barriers.
Barney Frank: It was very good question. Not as a practice but in conversation.
We read the newspapers, we followed a closely, uh, both my parents were active, energetic, liberal democrats, and we talked about it at that. There was a, the New York Post, interesting. Today is a very right wing paper run by Rupert Murdoch, although it's a right wing paper that has turned on Donald Trump.
But back then, in the fifties and sixties, the New York Post, Was the one of the leading liberal left, organs in America. And we would fight off the New York Post, you know, who gets to read it first? And there was some great columnists and men named Mary Kempton, just an extraordinarily, talented guy.
And, uh, so yeah, the, the politics were very liberal.
1972, again, you were also elected to the state legislature. How did your family react to that? They must have been really proud.
Oh, they were very happy. Yeah. Uh, very, very happy. Although, interestingly, you asked before about the corruption in Boston. Yeah.
The first political job I had was to become Mayor Kevin White's assistant in 1968, because he thought I'd done a very good job helping him in the campaign. So I called my mother, my father, Sri had died at the age of 53. from the heart condition, which I have inherited from him. And, you know, we complain about medical costs in their high, but we are buying a degree of medicine that just qualitatively way ahead of what we had.
I inherited the, uh, condition of not enough good cholesterol from which my father died at 53 in a week, I'll be 83. And what's happened is that medicine has so improved both the surgical techniques and the medications that, as I said, I've already outlived my father by 30 years with the same condition.
So he had died, but my mother and my fourth, my three siblings were alive. But when I told my mother in 1968, she was still living in New Jersey in the midst of what was then a very corrupt political system. It's gotten much. And I told her very proudly that I was gonna be the chief assistant to the mayor.
And she said, reflecting the area in which she lived. Oh, that's wonderful. I'm happy for you, but if you don't mind, I'm not gonna tell people because in, uh, Bayone, in Jersey City, working for the mayor was almost like pleading guilty to corruption. So she didn't want the newspaper, the local newspaper, which my uncle was the, uh, sports editor, my uncle Rosie, who wrote Rosie's Roundup, married to her sister.
That's how different it was. But by 1972, I mean, they became proud when I did things, I remember one of the first things I did, early on of impact was to write the statement Kevin White gave on the night Martin Luther King was murdered, who asked what it was like three months into my being the mayor's chief assistant, in my first.
Non-academic job went Luther, Cambridge murdered. And he did a wonderful job of, of relating to the anguish in the, uh, black community. And I wrote the statement and I, I sent it very proudly to my mother, said I wrote this. so that became, that, that switch. And by 1972 when I, uh, ran for the legislature, yeah, my siblings were all very helpful in the campaign.
And my mother was very proud. As a matter of fact, my mother, after I got elected in 1972, she was still living in New Jersey at that point. All four of her children were in the Boston area, or two have since left. and her husband had had died. So she moved up. My mother moved up from Bayone to Massachusetts, by the way.
She, then she got involved in my campaign when I ran for congress. She made a commercial, which was so popular that she soon became the leader of an elderly organization. And for the last 15 years of her life until she died at 92, she was a, a major player in Massachusetts politics, not having previously, in politically involved.
But, uh, the family was not only proud, but throughout my career, enormously supportive.
Ling Yah: I read when you were running at the time, it was a solidly republican for generations and you were clearly very liberal. And then you were working with your family to run this campaign. What was that whole trail like experience?
Barney Frank: Well, for instance, my, my younger sister who is not herself but is active in politics, um, she's been an educator, but for 32 years she was the treasurer of my campaign, handling tens of millions of dollars and becoming an expert in election law. Uh, my brother took leave of absence twice from his job to be my campaign manager.
My, my older sister used her own significant political connections on my behalf. And then my mother, as I said, in 1982, I was running for reelection and I was running against a incumbent Republican Congressman was one of those things where we call redistricting, where two Inc incumbent members of Congress have to run against each other.
And she was a woman who was the senior woman in Congress. She was a more moderate Republican, and, we ran against each other. I won, I thought I was gonna lose, but she got hit by the Reagan recession. And in the forerunner of what's happened now, she had been a more liberal Republican, but when Reagan took over, The conservatives really took over the Republican party.
And so she was getting pressure to vote with Reagan on things that she knew were unpopular in her own district, my district. But she was afraid that the conservative Republicans would Peter in the primary. We've seen that here in America more recently, where the, the pro-Trump Republicans win the primary, but they're weaker in the final election.
And that she, she had to be a reaganite to win the primary, but that was not popular in, in 1982 in the final election. But one of the problems I had was being gay. she knew I was gay, but she didn't wanna say it. And, I had supported, by the way, in my first year in the state legislature, I filed two bills.
Which were sort of outliers at the time, but I've since been vindicated. One was to legalize marijuana. The other was to end discrimination based on sexual orientation. were both filed, 51 years ago. I was kind of, uh, advanced in that, but, um, she was sort of hinting at my being gay and noting that I didn't have any family.
I was kind of, not in touch with family values. So we made a commercial of a, an older woman, handsome Whitehead, older woman, talking about how I, uh, would protect social security against the Republicans. And at the end, she says, with a kind of shy smile, in case you're wonder. Why I am so sure that that Barney will be protecting us older people.
He's my son. It was my mother who was charming and attractive and a little bit nervous, and that transformed her into a media star , very intelligent woman. Although she played graduating high school with depression, was never be able to get a higher education. So she became, as I said, a uh, a leader. But I had, my whole family was we were kind of in terms of a campaign apparatus, I guess we were uh, minor league, Jewish Kennedys.
Ling Yah: It sounds like family was integral to you having a successful start into the political world.
Barney Frank: Yeah. And then it turned out, as I said, and this is the happiest thing about my life, is this, it turns out that I am very good at those things I most enjoy doing and the things I'm terrible at, I didn't wanna do in the first place.
Uh, cuz I don't, I don't believe that there are people who are. We are brilliant across the board, or talented across the board. And everybody's a mix of strengths and weaknesses. And happily for me, my strengths and my interests coincided. And so it turns out, yeah, I was good at politics, having a short attention span, being verbally, uh, a felicitous.
Those are, those are the assets you need in politics. I also benefited because I grew up in a working class town, working in my father's truck stop, and then went to Harvard and I had a pretty good exposure to a wide social background. And of course, when you're running for office, particularly when you're running for Congress, where you are, constituency is, uh, half a million people or more.
You've got the full range of, of humanity to deal with. And I was, uh, well positioned to deal with a whole range of people,
Ling Yah: I believe 1980. When you first ran for office to the US House of Representatives, you described it as your toughest race. Why was that?
Barney Frank: Well, in 1980 when I ran for Congress, it's interesting, by the way, the reason I ran for Congress, I, I had been in the state legislature from a very unusual district.
It was downtown Boston. It was, uh, more liberal. It was what we later came to call yuppies. It was very atypical for Boston. I wasn't from Massachusetts at the time. I ran, almost everybody elected in Massachusetts had been born there, and their parents had born there. They had deep roots. They were, uh, on the democratic side generally either Irish or Italian in, in heritage.
And, um, I never thought I would go beyond being a state legislator. Then as I, it turned out I was good at being a state legislative and I was attracting a lot of attention from other liberals, particularly by the way, because that was a time when liberalism was starting to get hurt. And you know, here's an interesting thing.
The freedom of nothing left to lose, being gay and Jewish. I didn't think I had much of a political future. I thought, well, I'm hearing the legislature, I'm probably not gonna be able to win anything else. So I was able to take positions that other people who might have been liberal were afraid to take.
And pretty soon, um, I was the leading liberal because the others were defecting. I, you know, I never thought I would, I agreed in 1972 to be a sponsor of the gay rights bill. Turned out I became the only sponsor at first because everybody else was afraid. So as a result of not thinking I had a chance to go further, I became the leader of, of this faction, which, which I guess I became a leader by default.
And then it occurred me, well, you know what, uh, yeah, I'm not gonna be a senator, win the whole state. But there were a couple of congressional districts where liberals, uh, were insufficient numbers so I could win. The problem was they were both occupied. One occupied by, uh, former Speaker of the House, tip O'Neill, a great man, a great friend.
I lived in his district. It would've been ridiculous to think about running against him. And this is, in the seventies. He ultimately quit in 1986, but I would not have stayed in the legislature that long. The other district, about a mile away from where I lived, was another very liberal district, including, uh, two communities of City of Newton, the town of Brookline, large number of, of Jewish people and liberals.
But it also had a con. He was much younger. His name was Robert Trinity. He was a Jesuit priest. And of course, there was no way, uh, I was always supportive of him. And then somebody took a step that directly resulted in my being a congressman, uh, Pope John Paul ii, because Father Dry, the Jesuit priest was fairly liberal.
Wouldn't vote to ban an abortion. He said, I'm against abortion. I'm not gonna impose that legally on others. So the Pope ordered him not to run again in 1980 and having taken, uh, oaths of poverty, chasity obedience as a Jesuit, which he believed in. He stepped aside heartbroken, but, but obedient. Uh, and I won.
Uh, he later said that he always wanted to ask the Pope how he felt about, uh, ordering a, a Catholic priest to leave and having him be replaced by a gay Jew, but they never let him near the Pope to ask him. But, uh, that's how I got elected. But I was an odd candidate. I had moved into the district. I was from New Jersey, and most important, 1980 was a very good year for the Republicans.
If you go back 1980, we have in America what we call wave elections. Those are elections that happen maybe every 10 or 12 years. And which one party just overwhelms the other, where individual merits of care did become much less important than, than feelings about Party in 1980 with Ronald Reagan. Jimmy Carter being unpopular.
That was a Republican way of election. Uh, that was the year the Republicans took over the United States Senate in the majority for the first time, I think in, in, uh, mid decades. And, uh, a lot of Democrats lost in the house. We narrowly held the house majority, but, but, but we also had, so 1980, I had all those personal problems of being an unusual candidate, lacking some of the normal strings and it being a Republican year.
So, uh, I won both the primary, the Democratic primary, uh, on my personal weaknesses and the final election on those, plus the, uh, Republican year I won. In both cases I got 52%. That's the lowest. I won by 4% in every subsequent election, including the last one, which was also very tough. I won by double digit percentages.
Ling Yah: What was it like arriving in Congress? I heard in one interview you said it's like arriving at high school as a freshman.
Barney Frank: Being in a legislator is a very unique thing as, as I said it to be one of the areas where I have some strength. Yeah. Um, here's the deal about being in, in, in, in a Parliament, Congress, whatever.
In most of our activities where we are formally working together in a legally binding way, one of one of two principles is involved. One is h. There's a boss and the boss can give you orders and the boss can hire you and fire you, et cetera. The other is money and a lot of our dealings with each other, I'll pay you to do this, you'll pay me to do that.
When you are a member of a legislative party, your relationships with the other 30, 200, 500 and the Indian uh Parliament, your relations are wholly informal. That is, there's no hierarchy in the House of Representatives in the sense that, yeah, the speaker is more important than a freshman in the other party.
But when I was a member of Congress for 32 years, no one could tell me what to do. My boss for several hundred thousand people back home, and they couldn't get together to gimme a direct order. No one could fire me, and no one could say, you must vote this for you. That way they could put pressure, but it's qualitatively different.
I had no boss, which means then. And we can't bribe each other. That wouldn't make sense. It's illegal and you're pretty soon running outta money, even if you wanted to. So what happens is your relationships, your ability to be influential depends on your ability to make friends, to make other people wanna follow you.
And it's very much like trying to be popular in high school. You wanna get a reputation for doing the job well, but not too well if you look like a little smarmy, then people don't like you. And, that as I said, it's obviously not an exact or even, even close parallel, but it's the closest I can think of that is trying to become influential in Congress.
It's more like trying to be popular in high school than any other two things.
I would love to delve deeper into that because I imagine lots of people listening who are working in large companies, they also need to figure this out. How do I. Rise through the hierarchy, have good relations with my colleagues.
Ling Yah: You clearly figured it out. How do you be popular?
Barney Frank: No, you, you, the, the point is how do you get along with your peers? Yeah. I mean, with your superiors and, and your subordinates, it's a different thing, but getting along with your peers requires more personal skills than anything else. Um, means for me, what it, what it meant was, particularly as I moved into more of a leadership position, um, I wanted to get other people to agree with me when I couldn't order them to do it.
Well, in some cases it's easy because you happen to agree, you know, you can work with the people who are other liberals or conservatives or whatever you are. So the question then is how do you get people who don't necessarily agree with you agree?
One, what I found was give them a stake in your friendship, which means, It doesn't mean you're trade.
That doesn't work. You wanna that bit work wears off. You try to be as helpful to them as possible. If you're a serious legislator, you learn as much as you can about your colleagues, particularly those who are influential in the area where you wanna work. You learn about their political situation at home.
You learn about their personalities. You learn how to ingratiate yourself with them and how you can help them and make them value your friendship. And that becomes particularly important when you move up. And by the time I became chairman of the committee that wrote the Dodd-Frank Bill, uh, I spent all my time, I had, uh, certain number of Democrats on my committee because by then things had gotten very partisan.
My main job was to make the members of the committee my friend and to make them wanna make me happy. But, and the way you do that is anytime I could do a favor for them, I did. I told the people working me. That's the way you do it.
By the way, if people wanna see this technique and read about it, there's a great biography of former president Lyndon Johnson by Robert Kero, c a r o.
And when he was minority leader with the Senate, I became the minority leader in effect of my committee. And one summer I went to Cape Verde. I represented in Congress a lot of people from the, island in republic of cup of air. And, um, they could've been the district I represented and I drank some water I shouldn't have drank.
So I spent a lot of time reading and, um, I, uh, read this biography and I read particularly the part about Al Johnson operated when he was the leader of the minority. And I, I, that's one of the two patterns that I followed in my career where I thought there were lessons. Uh, to be learned. And someone once said to me, when I disagreed with, I had the great privilege, you work very closely with one of the great leaders in American history, Nancy Psi, without question, extraordinarily one of the great leaders.
And, um, at one point though, I disagreed with her on something and it was high profile. And someone said to me, listen, you know, aren't you afraid that the the speaker actually then was, is gonna, is gonna be mad at you? And I said, well, let me tell you, I've learned this as being chairman of the committee. I am not afraid of my leader.
I am afraid of my followers. They're the one, uh, on who's allegiance I have to count. So I spent a lot of time trying to make sure that my followers felt that I had their interests at heart and that it was in their interest to keep me in that position precisely because of that.
Ling Yah: How do you ensure that you always knew what was happening on the ground?
Is there so many people with scar at your.
Barney Frank: Very good question. By ignoring almost everything else.
One of the things that I, you know, the more you'd know one thing, the less you know of everything else. It was a great, again, I like literary analogies. At one point in the Sherlock Holmes story, Dr. Watson discovers that Holmes does not know some basic scientific fact, maybe that the earth revolves around the sun or whatever.
And Watson said, Holmes, I'm astonished, uh, at your ignorance on these things. And Holmes said, well, Watson, there's only so much room in anybody's brain, including mine. And I therefore exclude any information that isn't relevant to, uh, our work. And, um, I knew a great deal about America political history and economics.
Uh, it was probably, I don't know, I watched the quiz show of Jeopardy with my husband. And if there are questions about music, I don't know any of the answers. If there are questions about history and politics, I generally do. So I focused, I don't get to read much fiction. I didn't then, I just spent all my energy and attention on politics and economics and the other thing that I have been blessed with.
I'm lucky to have a very good memory. I ha I have a good memory for, for specifics. So having read things or heard things, I can recall them.
Ling Yah: Would you say that while you were building friendships.
Barney Frank: That's particularly relevant in debate? I had a reputation and I think deserved as a good debater, and part of that is most people, when they argue, forget what they'd said previously.
People have this great tendency to seize on a point because it helps them in the moment, but it may contradict something they said. Couple months ago, even a year or two ago. So in the Congress, I'm debating with the same group of people, and I remembered better than they did what they had said before, and being able to quote them against themselves because they would change their position depending, uh, uh, somebody had a great saying, uh, well, where you stand may depend on where you sit.
that memory was very helpful as a debating technique.
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Ling Yah: Would you say, and this is before the Boston Globe article, that you were perhaps a bit too hard on people as well. Do you feel, because you weren't out yet, I read somewhere that that was, you felt that was the case? No. Que
Barney Frank: I know there are people who, appear not to.
There were gay people who were very cogniti, and often people say, oh, that's so wrapped up in their work that they don't have any time for sexuality. They have no sexual feelings. I find that to be wholly untrue. Uh, what happened is there are people who repress it, and when you repress those feelings, you get angrier.
And there's no question I was, uh, I was angry at myself, but you know, you displaced that. And, uh, well, let me put it this way. As it began to leak out that I was gonna publicly declare that I was gay, I did it in 1987. I was one of the first political figures to do that voluntarily. The second right, 1987, uh, in May of 87 Memorial Day and um, American Memorial Day.
And as it became clear to some people, some of my straight allies in Congress came to me and said, please don't make that announcement because it will diminish you. You are our ally and we don't want you to be pigeonholed as that gay guy. And I said, I understand that, but I, I can't, this is personal. I can't live this way.
It's tear me apart, uh, to be hiding who I am and not have healthy emotional as well as physical relationships. And then after I came out, most of those same people said, we're glad you did because you're, you're not angry anymore. You're more relaxed. So clearly that, that was very helpful. Being out, uh, makes you better.
And I can think, I'm not gonna give names, but I can think of a couple of prominent liberal figures whom I know, uh, who, who were excessively nasty from time to time. And I think, uh, the closeted people, I think that's a part of it.
Especially since, as I. Being effective in a legislature where is an interpersonal business.
So to the extent that you were dealing with your own anger at being closeted and denying yourself the right to live freely, that is particularly handicapped in trying to become popular with, with, with your peers.
Ling Yah: It's took you 32 years to come out. Did you feel when that article came out that you were willing to give up your political career if that was
what you took?
Barney Frank: Yeah. Yeah. I reached a point I hoped I could survive. I wasn't, uh, suicidal. I thought my get, best guess was that I would survive, with a diminished role. But, but still the role, I was too pessimistic. It turns out it could not diminish my role at all.
But I had reached a point where personally, I, I couldn't stand.
In fact, look, there was a couple years later, a, uh, scandal broke where I had had an. Stupid relationship with a sex worker. And I was able then to explain, but that predated my coming out by several years. But I said that's an example of the one in which I dealt with these friendships being a prominent gay closeted politician, I simply, I had to make a choice.
Either I was gonna have healthy, emotional and physical relationships and be public about my being gay, or I was gonna conceal being gay and have to deal with my other needs in, in a clandestine and unhealthy way. And I just didn't wanna do that anymore.
Ling Yah: I was very intrigued to learn that every election after you came out, you won by a wide margin.
Why do you think that's the case?
Barney Frank: One, I'm a very good incumbent. I'm not a great first time candidate. I get nervous in the first, in 1980 by the way, uh, I was apparently burned, nasty, and. One of my best friends and campaign manager, Jim Siegel, said at some point the job became to keep me from having too much contact with individual voters cuz I would insult them.
but, um, as an incumbent, I like the job of being a member of Congress. I was good at it. And part of what you do as a member of Congress, obviously is to make national or broad public policy, but the other is to be an advocate for your particular constituency with federal agencies. And I was very good at that.
I, I got a lot of things from my district, all which they deserve. I also, what I found in politics is when you have a group that feels it's being treated unfairly, it's easier to, uh, become their, the sort, it's easier to get them to support you than if they're pretty happy with things. And I had, uh, some groups of fishermen in the city of New Bedford, Portuguese Americans, Cape Verity Americans that I thought were being unfairly treated in various ways.
And by becoming their advocate, I met, for example, at, an international conference a few years ago, in Belarus. I met, Jose, uh, Barroso, who has been the president of European Union, a prominent Portuguese politician. And I went up and introduced myself to him. I represented a large number of Portuguese Americans in South Asian Massachusetts.
And as I introduced myself, he said, oh, I know you, you were a great friend of the Portuguese people in America. I ingratiated myself. In fact, in 19, in 2010, when I won my last rights was tougher because I was getting blamed fairly, but as a fact for things that happened in the financial crisis, the Republican who I ran against, and I, I won.
54% to 43% healthy margin, but not, not the 20 or more that I used to do. But he complained that when he went to people and said, they shouldn't vote for me because I had done this or that wrong, sometimes they would say, well, I kind of agree with you, but he was very helpful. They would cite my constituency service.
And, I think that gave me, even though I would often take unpopular ideological prediction that was marijuana, et cetera, uh, although the world caught up with me, I think the extra benefit was my constituency service and my sympathy with the groups that have been mistreated and I, uh, am with them.
Ling Yah: Would you say that because you were closeted for so long, they allow you to be far more empathetic and therefore effective as a politician?
Barney Frank: Oh yeah. No. When the Republicans finally took over in 1994 and now as representatives, having been in the minority for 40 years, and a lot of the Democrats were just stunned in the house because almost none of them had ever served in the minority, maybe none of them at all.
And I didn't, I wasn't happy, but I was functional. And someone said to me, well how, how come you seem to be less disoriented by this conversion for majority of the minority status? And my answer was that being a gay left-handed Jew, I was pretty used to being in the minority. And uh, I knew what that was like.
So yeah, I think I always have and the single biggest, cause if I had any year one wish, it would be to diminish. The effect of racism in America..
Ling Yah: So before we go onto the financial reform, would you say, because I heard you say once, that the average American then even now weren't homophobic, so they thought he was supposed to be, would you agree that still the case even by Trump?
Barney Frank: In, in 1987 when I started to come out, we did a poll and uh, what it, what I found was twice as many people fought, it would be a political liability for me to be honest about being gay as would personally be upset. That is, there was a perception, people who were not themselves gay thought everybody else was.
And what happened is this, and it's very, very straightforward. Um, as gay people began, To come out of the closet. Starting really in the seventies, more and more straight people learned who we were. People learned that they had lesbian and gay and bisexual cousins and teachers and clients and teammates and doctors and patients.
And not only that, but we were, you know, if, if you're friendly with someone, if you feel kindly towards someone and then you find out some fact about them, uh, that doesn't mean they did something terrible. Well, what, in what world? You then, oh, I used to really like you, but now that I know what you do for sex, I don't like you anymore.
And then so, and that's one of the reasons why we have made much more progress in defeating homophobia than in defeating racism. Uh, every gay and lesbian person I know has a large number of straight relatives. Most black people do not have white relatives. Uh, you know, one of the problems, racism, much African Americans have suffered much more than black people than, than gay people, I believe mean discrimination.
But, but black teenagers had one advantage of a gay teenagers, no black teenager had ever had to agonize about how to tell her parents that she's black. Uh, gay and lesbian for gang lesbian teens for years. Not so much anymore, but that was a terrible ordeal.
Ling Yah: I wanted to talk about the Dodd Frank Act. Could you sort of give us a overview of the context behind that coming into play?
Barney Frank: Yeah. give you a quick American history read lesson. In our economy, what happens is this. Economic reality changes and when it changes, the new reality has no rules to govern it because it's new. and without rules, bad things will happen as well. It's good things. And at some point, after enough bad things have happened.
The system responds by setting up rules. It's only you have new rules now that govern the changes, but then a new set of changes comes. And once again, that outstrips regulation and you have to catch up. So there've been four cycles that I, I see we're actually, I think maybe in the fifth in 1860, there were no national companies in America or in most of the world.
Uh, and so from the late last half of the 19th century, as companies began to be national in scope, railroads and oil companies and others, they had no rules and they did some things that were abusive. So from the late 1890s through the early teens, president's, uh, Roosevelt and Wilson, and even Taft, Put together rules.
We created the Federal Trade Commission, the Federal Reserve System, the Interstate Commerce Commission. In other words, a new set of rules at the national level. There were no national economical laws in 1870. There were a whole bunch by 1910 that, however, led to finance capitalism, we now have the stock market.
So from the early 20th century into the thirties, you have an increasingly important stock market by no rules, and that contributes to the depression. So Franklin Roosevelt in the New Deal imposes rules for the stock market. Now that system, that regulated system, works very well for 30 or 40 years until the seventies.
And then another set of motivations come first, technology. You could not have had the financial crisis, things like derivatives without computers, you couldn't have done that by hand. Secondly, a large amount of capital floods into America. Mostly from Asia, uh, but also from oil producing companies. So there's all this capital around and the computers to deploy it.
So this whole system of highly obst excuse financing, credit default swaps, um, um, mortgage backed securities, that becomes a factor. And again, there's no rules for it. And finally, that causes a crash. So what we did in Dodd-Frank was Justice Roosevelt did in the New Deal or theater, Roosevelt Woodrow Wilson, and did at the turn of the century, we created a set of rules for the contemporary situation.
So we, we regulated mortgage financing, we regulated derivatives, we made them go on exchanges. So you didn't have counterparties left unpaid. But we learned from previously, we also gave the regulators the power to deal with the next thing. We didn't know what it was, right? Definition, you don't know. It now turns out by the way, uh, that, that there, there is an innovation that's caused some trouble, but not nearly as much as in the past.
And it's two things. Again, it's crypto and it's the ability with information technology to move your money from one bank to another in eight seconds. Um, so those two things have been destabilizing, but I will say this cause of what we did in 2010, we are much better able to deal with those things. The regulators have the power to deal with them.
And, and here's the big difference, just writing an article about this. In 2008 when we had a crisis, many financial institutions were insolvent because the quality of their assets was no good. They had made mortgage loans that weren't gonna be repaid. They had packaged derivatives that were gonna go uncompensated.
We cleaned up that situation. In the current situation, there are liquidity problems because of the fears I believe about crypto and the ease with which you can move your money, but they're not solvency problems. Maybe as Silicon Valley Bank was insolvent, I know the bank, I was on signature. We were never insolvent and no regulator said we were.
So we did give the regulators the power and they did two things. First of all, they said they would temporarily guaranteed deposits if a bank got in trouble. And secondly, they opened up liquidity facility, which we'd authorized. Um, so that banks are solvent, but the liquid can get the money. So I think our system is working.
That is the last time around we got rid of the bad practices of. Mortgages that shouldn't have been made and overly leveraged and under finance derivatives. And we also gave the whi, which meant that when the current situation erode, the quality of the financial assets is much greater. You don't have a lot of crap on people's balance sheets.
And secondly, we gave the combined regulators the power to deal with the situation. But what we did in 2010 was, and we waited way too long as a society, we fashioned new rules for the innovations that came in the seventies and eighties and which while they were unregulated red problems,
Ling Yah: I mean, it makes perfect sense.
You have the quality of access, you're not illiquid. And then you have things like SVB I wonder, looking at what's happened now, you wonder, is there anything more that you should have done with Dodd-Frank that could have helped to prevent this?
Barney Frank: Yeah, I, this is now the controversial thing given the, uh, Ease with which people can move deposits.
The question is, should we three times? In American recent history, the federal regulators have temporarily guaranteed deposits above the 250,000. In 2008, the Fed did it. During the pandemic, I was reminded, the Fed did it again. And, uh, now you know, when you have done something three times because of a crisis, it's probably time to think about doing it permanently, not to have a crisis.
Uh, the other argument is, well, no, if you increase, if you, if you guaranteed deposits too high, people will not be careful about what bank they put their money in. But I think to tell a business person, in addition to making your product and selling your product, you have to become an expert in bank Finance is too much.
Yeah. A major corporation, fortune 500 can hire some analysts. But if you're a small businessman, no, I don't see how you can keep tabs on, on the bank. And so what I would propose is not for personal accounts. We're not talking about the pocket money of millionaire, but if you are a business with a requirement for an ongoing payroll and paying vendors, you should be allowed to get a guarantee on the amount you need for those transactions for two months transactional accounts, which is what we try to do in our bill.
I think that's the one thing you need to do. Now, I don't see any other way to deal with this. Um, as I said, given the, uh, the bank ones, it used to be a bank one, you had to go down to the bank and do it. Now, it's now a, a bank wink, and I don't see how you can stop bank winks.
That makes perfect sense because otherwise, you know, one company will have to split between many different banks that you'll keep 250.
Yeah. Makes no sense. And by the
way, million dollars personally, or they go to four banks. What if you need, uh, 10 million a month or how many banks are you gonna go to 50, 60? You're imposing. And I know there are companies that are do it for you, but that's imposing it seems to me an unnecessary transaction cost, uh, and, and financial costs.
You gotta pay somebody to do that.
Ling Yah: What do you think are the biggest challenges in raising that cap?
Barney Frank: First of all, there's ideology on the right, which says no, that's government interference and it weakens the incentive for banks to be responsible. The argument is that you want depositors to be at risk for a certain percentage of their deposits because that way they will be much more careful in monitoring the safety and soundness of the banks they choose.
I think that's unrealistic and it's an excessive burden on them. There used to be a problem on the left who people said, well, they got that much money, they're on their own. But the leader of the left in financial issues is, uh, Elizabeth Warren. And she has been very good about saying, yes, you gotta take this off.
I think Elizabeth Warren's articulation of that defeats upon the left, but the odds to go, you guys look in 2008. I tried to do that in my legislation, in all legislation and in the house version we did increase the liberal, the limit for transactional accounts. Actually before our bill was a hundred thousand, we got at start to two 50.
but among at that point we ran into objection from the left. Although I said thanks to Senator Warren's leadership, I don't think that's there anymore. But we ran into this ideolog on the right in the wall Street Journal last week. A leading conservative financial expert, Charles Kalan Ramirez said, you'll destroy the discipline of banks if you increase the deposit guarantee.
But then you also have one very influential group, bank of America, city Corp, JP Morgan Chase and Wells Fargo. The biggest banks get a competitive advantage when there is no deposit guarantee because even though they are not legally protected logically, they are the least likely to fail. They are the least likely to have a run.
So it's the combination now of conservative opposition and I opposition to deposit insurance and the big banks wanted to keep a competitive advantage.
Ling Yah: You mentioned Senator Warren. She actually has said that, you know, the Dodd-Frank Act to be blamed for what's happened because it was watered down.
I believe you disagree with that, is that right?
Barney Frank: Yeah. As I look at what happened, um, The biggest thing we did in 2010 was to prohibit the practices that led to toxic assets. Nothing done since then, including in 2018, diminished that at all. As far as signature bankers concerned, where I was on the board, we were shut down by the initiative of the New York state regulator. Not the federal regulators.
The law she's talking about in 2018 does not affect that regulator. That was an amendment to federal law. So it clearly could not have been a factor because the people shut us down, had as much power before. Its after what the 2018 law did was to reduce the reporting requirements, that were mandatory.
The bank regulators still had the power to act. And while I'm not closely familiar with Silicon Valley Bank, Everything I read says that, yeah, the regulators were aware of problems. These were, remember at first Donald Trump's regulations, but then, then, Joe Biden's. And the answer is that in silicon, I, I don't understand what a stress test would've shown about Silicon Valley Bank that they didn't already know.
And I think again, it was the combination of the ease with which you can transfer bank deposits and the fears of unregulated or unregulated crypto and I, those were in plain. Some, I don't see what, how either of those were concealed.
Ling Yah: Speaking of crypto and the ease of transfer of money, how can banks protect themselves from situations that we've seen so far?
Because you've got social media that's hyping up all the fear and that seems to just going gonna be
Barney Frank: continuing in the future. I think what Signature had done that. Our crypto involvement did not put us at risk. We did not have a lot invested in crypto ourselves. We didn't have a lot of crypto assets.
What we had, we provided a platform so that if you were a customer for the bank and somebody else was a customer of the bank and you wanted to deal with each other in crypto, look, a bank's job is to facilitate those payments. And we allowed it to happen. And I believe we were penalized, not because we had been put at risk by crypto, but simply because we would be involved.
So I am afraid that, not necessarily afraid, I've never been a fan of crypto. I think if it disappeared tomorrow, uh, or had never appeared in the first place, be defined. Uh, but I think it's gonna lead banks to be very, very wary of any, any, uh, crypto involvement. Not just putting their their own assets in into crypto, but even facilitating crypto transactions between others.
Ling Yah: Where do you think this banking crisis is heading?
Barney Frank: Well, it's not nearly as much of a crisis as it was. I think it's stabilizing already. Mm-hmm. , you know, it's two, two weeks into this in 20 0 8, 2 weeks into the crisis, things were getting worse and worse and worse.
Now things are stabilizing in the market and elsewhere. so I think what we are now gonna have is a debate about how we deal with the, volatility of deposits. What do you do about that? There's also gonna be, I think, an increase in the regulation of crypto. By the way, much of the regulation of crypto outcomes, not from the bank regulators, but from the securities regulators, the Securities and Exchange Commission, and the Commodities Futures Trading Commission.
I think they're gonna have to tighten up the, regulation of crypto. And I think until, and unless crypto becomes much better regulated and people have more confidence, I think you're gonna see them, losing access, crypto assets, losing access to the banking system and the debate going forward.
Well first, once that happens, a source of the deposit volatility will be diminished. Banks will steer clear of crypto. And secondly, there will have to be a policy debate. Uh, some senator one and others will be for increasing. By the way, again, we're talking about transaction accounts, not personal accounts.
The question is, should we increase the deposit, guarantee level for transactional accounts? And if not, what are alternative ways of dealing with the volatility of deposits? That's a policy debate going forward.
Ling Yah: What are your thoughts on the 2024 US presidential elections?
Barney Frank: I believe that, Donald Trump is likely to be the Republican nominee, and, he will lose. He's become, he reminds me now of an old fairy tale. Trumplestilkin. The little man who got angry and stamped his foot and made a big hole in the ground. He is the most self-destructive politician I have seen in a long time.
And, uh, ironically, I think the, uh, criminal charges, especially if he's indicted, I'm gonna help him win the Republican nomination. in fact, I think Governor DeSantis is probably very jealous. Because Trump is carving out this role for himself as the victim, the main target, a very articulate, conservative American named William r.
Buckle won dead. talking about people in the fifties during the Communist scare said he thought one particular public figure who was jealous of one of his colleagues who had been accused because had enhanced his popularity. He said that the one who was not accused had subpoena envy. And I think, uh, Ron DeSantis probably has subpoena envy vis a vis Trump.
So I think Joe Biden will defeat Donald Trump. Now, there's one problem we have to address, and that is the inaccurate perception that, that the Democrats have been solved on crime. We suffer because a fairly small percentage of Democrats have been, I think, quite a responsibly talking about cutting back on policing.
And a couple cases das have not done a good job of prosecuting. I think it's important for the president and other Democrats to make it clear that that is not the majority position. Personally. I think interestingly, a good person to make that decision is I think the, one of the highest ranking former prosecutors in American political history, vice President Harris, she was a da, and when she was DA of San Francisco, you didn't have these complaints that you had from one of our successors.
So I I, I'm in favor of seeing the vice president take lead and saying, listen, this is nonsense. We have been more supportive of the police. We're the ones who fund them. Uh, yes, we want them not to have bad relations, but by the way, cleaning up relations between the police and minority communities improves policing and safety because the, the less the minority community will cooperate with the police in telling them what's going on, the, the less safe we are.
But with all that together, I best guess Donald Trump is the nominee and Joe Biden Beaton.
Ling Yah: Fantastic. Barney, I have collected some questions from listeners of this podcast. They would love to ask you, so three different people. The first is Aaron. Hi Barney.
Aaron Tang: My name's Aaron, and I work at one of the cryptos here in Asia.
My question is, how can government regulators continue to encourage crypto innovation? Even how recently there seems to be open hostility toward crypto companies?
Barney Frank: I think the answer, well, I, it's a two step process. First, there needs to be not by the bank regulators as much, although probably from them, probably from the Federal Reserve, but the, uh, securities regulators and others have to regulate crypto better.
That is, they have to show that crypto is safer. the notion, for instance, the argument of this crypto is, is backed a hundred percent in dollars. Well, show me that. So it's a two-step process. Crypto has to be made safer for people and, treated as a security to great extent. And only when people in have increased confidence, crypto.
Well, it, it'd be able to get, well. I think the banks be able to reengage with it.
Ong Kian Ming: Frank, my name is Kian Ming and I was a PhD student in political science at Duke University when the doc making its way through Congress in 2000. My question view comes in two parts. The first part is, given your reputation as somebody who wanted to have strong financial, uh, regulation over the banks, uh, after the 2008 subprime crisis, uh, do you think it was a mistake for you to then go on to take up the position of a directorship in a bank in 2015 after your retirement from Congress?
Barney Frank: No. Um, let me say, I, I wanna broaden the potential liability. I went on three boards after leaving Congress that were, uh, dealing with matters that I advocated for in Congress. I went on the board of Signature Bank. I went on the board of a company that wanted to sell marijuana, and I went on the board of a company that wanted to set up an exchange traded fund supportive of, gay, lesbian, bisexual, and transgender issues.
now I was a, frankly, more of an advocate for marijuana and, L G B T rights then than for banking. Should I have not tried to push those? I mean, here was a case where I was moving on, on things that I had worked on as far as being a board member of a bank. Let me first stress the, the argument. That I, uh, I was not influenced in my position.
And here's the deal. The one thing that I did, which was to say 50 billion as a trigger for increased scrutiny. Remember the 50 billion trigger had nothing to do with the powers of the regulators, but with their discretion whether they had to do certain things, but it didn't regulate it, it did not bla the prohibitions on bad mortgages or unfunded credit default swaps.
But when I first said 50 billion was too low, it was, I had never heard of Signature Bank. Uh, I began to say that in 2012 and 13, I didn't, I didn't even know about Signature Bank until, uh, a couple years later and, and I quote Shirley Bear, who was one of the toughest bank regulators, she went on the board having been head of the F D I.
Of Santander, and someone asked her how she could justify having been a tough regulator and now being on a bank board, and she said, oh, is it your position that nobody who believes in regulation should be on a board? Uh, I disagree with that. I don't want to say that. Uh, and, and I, I defy anyone to show that in any way my position when I was on the bank was influenced by a hope on a board.
I never thought about that or that anything I did as a bank, uh, a board member was any way inconsistent with what I advocated as a, uh, a member. By the way, let me make one point, people said, well, why did you have those 2018 amendments at all? I welcomed the chance to say this. Here's what happened. In 20 13, 14, 15, some of the democratic senators who had voted for Dodd-Frank were getting political pressure.
From the smaller banks and the regional banks who said too much paperwork. They didn't like the whole bill. And some of them said to each other, you know, we could lose over this. So there was a, as long as Obama was president, or if Hillary Clinton was president, people didn't have to worry about too much of a weakening of the bill because it would be veto.
But when Donald Trump got elected in 2017, there became a fear that enough Democrats would be pressured in the Senate cause they had the votes in the house to make a substantial rollback in the powers that the regulators had. Because so many democratic senators, eight or 10, would've been enough, would've been pressured to vote for it.
So there was an effort with the Democratic senators and some sympathetic outsiders to come up with some pressure vows that would undo the pressure to make. Major cutbacks in Dodd-Frank by cutting back on some of the things that we didn't think would be harmful. And I think that that paid off. By the way, the conservative Republicans were opposed to bank regulation of the sort.
We did. Understood that. And in the house where the conservative Republicans were in charge, they didn't want to pass those 2018 amendments. They were dragging their, they were blocking them in the house until the bank said, no, you're supposed to be our friends. Please don't do that.
Ong Kian Ming: Do you think it was a mistake for you to support the partial repeal of the Dodd-Frank Act?
Barney Frank: No, because it didn't appeal any of the important pieces. It did not reinstate the ability to do anything they shouldn't do. I can guarantee you that it had nothing to do with signature, and I don't see how the fact that they didn't have to do stress tests, by the way, they could have ordered stress tests if they wanted to.
They just didn't have. Automatically the regulators. But I don't see how the absence of a stretch test in 2021, even 22, would've showed you the palm of Silicon Valley. Maybe that's, if there is some aspect of Silicon Valley's ultimate failure that would've been uncovered by a stress test or other monitoring, that was changed by 2018.
I need so many, shows me. The other thing I should say, by the way, I did not want some, my belly. I, I did support a change, but I wanted to go from 50 billion to 150. It went to two 50 because a very powerful Republican, Richard Shelby, since retire of Alabama, wanted to do this for Regents Bank in Alabama.
So, I fact, I had my way Silicon Valley would've been covered. But even with that, I don't, I, no one has showed me what it was about Silicon Valley that would've been uncovered that wasn't already known.
Dylan Ler: Hi, my name is Dylan, and my question is, do you think the fats raising the interest rates affected Signature Bank, was Signature Bank not prepared for the hiking rates, and is the Feds to be blamed?
And the next question is, if you do believe crypto, what's the reason why Signature bank was shut down? What is the plan of action that signature bank is going to take against the FDIC?
Barney Frank: Oh I, the chances, by the way, proof of, of my, evidence from my argument is that the bank that was, uh, given in effect the, uh, the remains of signature.
Got everything except crypto. The, New York Community Bank, I think it's called Flagstar now. they took over essentially everything at the Signature Bank except crypto. I mean, I, that's demonstration that, that was the, uh, only problem. the question, what action are we gonna take at the F J C? Uh, I don't plan to take any, I think there's so much discretion given the likelihood of any successful lawsuit.
I'm, I'm skeptical. so I, I am not aware of any action that we're gonna take. I regret it. obviously I think it was unfair, by the way, it was not so much the F D I C as the New York State regulator. I think if you look at it, signature does not compare. So unfavorably with First Republic, as suggested by signature being shut down and First Republic being helped to stay alive.
The difference is not between the two banks, but between the two state regulators. The California regulator did not do the first Republic, what the New York State regulator, did to us. I think that's the, uh, and by the way, I will say this without any question. If the two things that the federal regulators announced on Monday had been announced on Friday, a liquidity facility and a backup of deposits, signature would be going on fine.
Right now, there wouldn't have been any trouble. Secondly, if they had let us open on Monday and get the benefit of those two announcements, signature would still be functioning. That's another, those reasons together are why I think it was a New York very latest decision to tell people to, uh, not get involved with crypto.
That was what, what killed us.
Ling Yah: Barney, here's been such a pleasure to have you on the podcast.
Barney Frank: All good questions. Thank you.
Ling Yah: Thank you. Can I wrap up with three final ones? I ask every single guest of mine. The first is, do you feel that you have found your why?
Barney Frank: Oh, oh, yeah. Yeah. I mean, it was true for me. It was to use the talents I have in a way that made the world a, a fairer place. I have always wanted to end discrimination and, poverty and, increased freedom. Yeah, I think I've had a pretty good shot at that.
Ling Yah: What kind of legacy do you wanna leave behind?
Barney Frank: Uh, the legacy of someone who is smart enough not to answer that question.
Ling Yah: And what do you think are the most important qualities of a successful person?
Barney Frank: Oh, well, it depends because I don't think we choose our, well, it depends on what, let me put it this way.
I think you should assess your strengths and weaknesses and if you can get into a, uh, line of work, an activity which, favors your strengths and where your weaknesses are. Not a problem. I think because I, I, there's not one set of talents. There are talents for some things and not further there.
There are the talents to be a doctor, talents to be an automobile mechanic, talents to be a whole lot of things. The teacher, there are very important things that one can do to advance the common welfare. And, uh, they call on different sets of talents. And the first step is to assess your own strengths and weaknesses.
And then if you can go into the area of helping others. Which place of the strengths and minimizes the weaknesses.
Ling Yah: And that was the end of episode 117.
The show notes and transcript can be found at www.sothisismywhy.com/117.
And do stick around for next Sunday, because we'll be meeting one of Malaysia's most well-known OG entrepreneurs. He went from being one of the worst in English at Cornell to coincidentally joining the startup world, being promoted to COO, despite never managing anyone before, and turning around a Taiwanese company that was losing $1 million to making 8,000 in profits in 8 months.
It's a great story, so do stick around, check out the other past episodes in the meanwhile, and see you next Sunday.