Tuesday, December 9, 2008

Barney Frank and Nancy Pelosi: Old Suspects With Worn Out Solutions

I was watching Barney Frank standing in back of Nancy Pelosi at a press conference. He was looking on as she was speaking. I was astonished that Frank, despite his flagrant mismanagement of Freddie Mac and Fannie Mae was clasping his hands without handcuffs. Frank is bereft of the decency that would have mandated his resignation from the Finance Committee if not from the House of Representatives.

I was watching Barney Frank standing in back of Nancy Pelosi at a press conference. He was looking on as she was speaking. I was astonished that Frank, despite his flagrant mismanagement of Freddie Mac and Fannie Mae was clasping his hands without handcuffs. Frank is bereft of the decency that would have mandated his resignation from the Finance Committee if not from the House of Representatives.

Watching the press conference reminded me of a terrible crime scene years ago in Staten Island. A child had gone missing and the entire neighbourhood in which she lived was in turmoil. Volunteers from the area, familiar with every inch of the landscape were aiding in the search. One individual was very driven. He make himself available to cops and pointed not only to hiding places but to suspects. Soon enough, the police used their psychological as well as forensic expertise to zero in on their “helper”, who turned out to indeed be the culprit.

Barney Frank had that same nervousness, that guilt driven energy propelling him towards the spot light in the financial crisis with which we are faced. He is driven towards centre stage as towards a vortex in a cesspool in which he himself has drilled a hole. He stands in front of a morass of his own making, pointing fingers and feigning righteous indignation.

There is another perpetrator profile that bears an uncanny resemblance to Barney Frank. That is the workaholic company accountant. He is the guy who is so devoted to the company that he even comes in on weekends. He hasn’t taken a vacation in fifteeen years. His wife doesn’t mind. He doesn’t have a wife to mind. What drives him to such extremes of devotion? It all unravels with a case of acute appendicitis. Frank the accountant is out for two weeks. Bob the office temp rolls up his sleeves and gets to work. Soon, Bob’s capable, can do expression morphs into perplexity and concern. He calls in the president of the company. The president of the company calls the police. Frank the workaholic accountant has been embezzling.

The election is over. The “It’s the Republican’s fault.” shtick is stale. Obama is in. If Pelosi and Frank want to really help the country, they can talk honestly to a Democratic administration that will be eager to settle matters quietly. That might work if there is a body buried somewhere, figuratively speaking. But what if Barney Frank is to financial crime what John Wayne Gacy was to homicide? Then the Democrats might not be so interested in bipartisan solutions. They might want to exclude the Republicans from any sensitive discussions.

Congress is already bailing out the banks. We haven’t added up the damages from that disaster. And now Nancy Pelosi is talking about the government keeping an eye on the auto industry? She wants Barney Frank to employ his “financial expertise” to save the auto industry?

I get a sinking feeling about a solution to the auto industry crisis coming from congressional oversight, when congressional oversight caused so many problems previously.

There are people who specialise in revamping troubled companies. These people do not want to lose money. The government can help by creating a legislative and tax climate that will encourage investment by private individuals in the auto industry. Pouring in money that is either extracted from taxpayers or printed in the dead of night is no solution. There are probably millions of people who would invest in mutual funds that are devoted to investing in the survival of the auto industry.

Congress should be working on private solutions. Although a sick financial system can not heal itself, there are ways to attract investors and to build confidence. More direct supervision by a Congress that has badly botched previous assignments is likely to reduce public confidence and increase public debt. The market is heavily influenced by mood and sentiment. Patriotism and concern for our future could fuel massive voluntary private investment in troubled industries. Regulating these private investment strategies should be done by individuals with a proven record of expertise and integrity. Congress and the Internal Revenue Service should be facilitating investment in recovery and brokering an agreement between unions, management and banks.

There are obvious solutions to the current financial crisis. All we are getting is the same obvious suspects. Americans should demand better. Sphere: Related Content

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