I was privileged over the weekend to witness a high-quality, high-road debate over the sweeping federal financial reform initiative in Congress, featuring none other than its most powerful and informed congressional advocate and some of the smartest business leaders, bankers and economists in Minnesota.
And it’s kind of a shame that most news consumers in Minnesota apparently won’t ever know about it.
Congressman Barney Frank, the brainy Massachusetts Democrat who is leading the reform advocated by President Obama, was featured at an event at the Minneapolis Radisson sponsored by the Caux Roundtable, an international group based in Minnesota that focuses on business ethics. Growth & Justice was a co-sponsor of the event.
Frank predicted that a financial reform package in some form would pass by late June. He was impressive in laying out the case for the most thorough reform since the Depression, acknowedging that the U.S. is a “private-sector society” that depends on capitalism for wealth creation, but affirming also that the government has a proper role in “setting the rules.” Frank outlined the chronology that led to the 08-09 collapse, allowing that there was some government and consumer culpability, but he pinned primary responsibility on the “securitization” of the financial industry, and the unhealthy fact that people making loans were not the same people who would end up trying to collect on those loans.
Frank said it was Bush administration conservatives, not liberals, who pushed hardest for maximum home ownership and rebuffed efforts to put the brakes on the mortgage craze or to pursue alternative policies that helped low-income families.
Almost as impressive were three leading Minnesotans who grilled and challenged Frank strongly on the particulars of the bill. They were Karen Grandstrand, chair of the Bank & Finance Group at Fredrickson & Byron and formerly with the Federal Reserve Bank of Minneapolis; Roger Conant, Chief Investment Officer for Magni Asset Management and a prominent Minnesota conservative; and David Reiling, CEO of Sunrise Community Banks.
Conant, in particular, challenged the reform bill for reaching too far in some areas, not doing enough in others, and creating an illusion that regulation can ever effectively harness a dynamic market economy.
Frank listened to the panel, and delivered a spirited counter-rebuttal, arguing at one point that bankers and their free-market champions say they want flexibility, but then press up against the limit of the law in seeking profits, then claim they did nothing “illegal” when their behavior creates economic damage or collapse.
Frank also urged the group of about 200 bankers, lawyers and accountants to understand the roots of populist rage, to work for reforms that regain public trust and result in more equality, and perhaps even to pay their employees more.
“The average American is right to think that this is not fair at all,” Frank said, and things could get a lot worse “if we don’t do a better job of easing unfairness and inequaltiy.”
It was the kind of civil, spirited, respectful and deeply informed debate that we see far too little of these days. And I’m still looking for even a hint that it happened from the Twin Cities mainstream media. A couple of respected on-line journalists were there, veteran business columnist Dave Beal from MinnPost, and Bill Clements, from Politics in Minnesota/Finance & Commerce.
Here was perhaps the leading national player on the top-of-the-agenda issue in Congress, at two events in the Twin Cities (he also spoke at the DFL Humphrey Day Dinner) and there was nothing in the Star Tribune or the Pioneer Press or Minnesota Public Radio or any of the television stations.
Instead, we had the umpteenth story on yet another Tea Party (one-sixth the expected turnout according to Strib reporter Bob von Sternberg) state capitol rally, blaming the government for private-sector failure and holding up those “Atlas Shrugged” signs.
More on Ayn Rand’s pernicious influence later.