Lunch with the FT: Barney Frank

Lunch with the FT: Barney Frank
By Jeremy Grant
Copyright by the Financial Times 2007
Published: August 31 2007 13:19 | Last updated: August 31 2007 13:19


When I contact Barney Frank’s staff to arrange to meet the US congressman, I expect the suggested venue to be a familiar lunch spot for the politically powerful in Washington DC. Instead, I receive an e-mail with driving directions to a location 50 miles south of Boston.

So here I am in Sagres, a restaurant in Fall River. The waiters keep up a lively Portuguese patter with diners as they move from table to table. There is no sign of Frank. But there are plenty that I am not in Washington. His staff had said he’d like to have lunch in his constituency, near Boston. I hadn’t figured on a Portuguese place miles away. This could be lunchtime in Lisbon, I’m thinking. Or Frank’s idea of a practical joke. Before I have time to decide, the congressman for the 4th District of Massachusetts arrives, sits down and introduces me to the waiter who’s been explaining the menu to me in English. “This is a journalist from the Financial Times – they’re doing restaurant reviews now,” he jokes.

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Frank doesn’t do small talk. He can often be brusque. But he is witty, so much so that he was recently voted funniest member of Congress by the Washingtonian magazine. Yet what really makes the 67-year-old a standout in American politics is that he is a left-leaning liberal who also espouses the free market. A Harvard-trained lawyer, he is equally at home fighting for workers’ rights to organise unions and to promote affordable housing as he is debating regulation of hedge funds or deconstructing the reasons behind the current credit-market turmoil.

As we study the menu, he homes in on the issue that consumes him most: inequality. After adjusting for inflation, the median American household is earning less than it was in 2000. In some polls, three quarters of Americans say they are either worse off – or no better off – than they were six years ago. Productivity is up, but wages have stagnated. “You’ve got this problem where the increased wealth of the last few years, particularly since Bush came in, it’s just been wholly inequitably distributed. And the average citizen says: ‘I’m getting screwed.’ Enough of it now,” he says.

The so-called “middle-class squeeze” is propelling economic issues to the forefront of the 2008 presidential election. As Democrats grapple with how to forge a united front on it, Frank has acquired, through his chairmanship of the House financial services committee, a powerful pulpit from which to shape the debate.

I ask Frank to tell me about Fall River. It becomes clear why he has picked this spot for lunch. Once a booming 19th-century textile town that was home to more immigrants than any other city in the US, it is part of his constituency. Quaker Fabric, a local textile maker, has just announced 800 layoffs. He is here to see what he can do.

We order. Frank picks a hearty Portuguese soup of peas, carrots, cabbage, white beans and noodles, followed by the Shrimp Mozambique – his usual. He knows this cuisine, having been to the Azores a dozen times. Fall River is home to 300,000 Portuguese, most former Azoreans. I go for a similar shrimp starter, then feijoada, a stew consisting of three different Portuguese sausages, cabbage, beef and red beans. He declines wine – “I can’t, I’m going to be working all day” – but after I order a half bottle of red, he agrees to a glass.

Before we get into inequality, I’m curious about one thing. Frank was the first US congressman voluntarily to declare his homosexuality. It has not always been an easy ride since then. In 1990, the House censured him after a scandal in which it emerged that a male escort he’d struck up a relationship with had been operating a prostitution ring from the basement of Frank’s house. He admitted having a relationship with the man, but denied knowledge of his basement activities.

I ask if there have been any problems being the only openly gay man in the House. “No, but I thought there would be.I guess that’s why I’d been on the [Democratic party] leadership track but [former House Speaker] Tip O’Neill did say to me when I told him: ‘Oh, I’m so sad, I thought you were going to be the first Jewish Speaker.’ Interesting that he’d say ‘Jewish’. Tip came from that era.”

It wouldn’t have occurred to him to think of you as the first gay Speaker then, I venture. “Right. I wouldn’t have been, by the way, the first gay Speaker. There were at least two others in the 20th century.” I ask who. He tells me – off the record.

Frank has used his wit and force of intellect to get by. In May, he demonstrated his ability to take on social conservatives as the chamber voted on legislation to allow federal authorities to prosecute hate crimes targeting people because of their sexual orientation. Urging legislators to support the bill in the face of critics who said it would threaten the right to express moral opposition to homosexuality, Frank’s response was classic: “If this bill passes people will still be able to call me a fag. Although if they’re in the banking business, I wouldn’t recommend it.”

He says he has found that by being openly gay in politics the public does appreciate and understand authenticity. “What happens with many American politicians is that they are advised by consultants that they have to change and they have to conform to this stereotype, this persona. Because otherwise you can’t win. And what happens is you become less appealing than you otherwise would be. Al Gore the post-presidential candidate is more like the real Al Gore than Al Gore the candidate.”

As for Barack Obama, the Democratic presidential candidate who portrays himself as a Washington outsider, Frank says he is trying to “become the new version of authenticity”. “But it seems a very laboured authenticity. And you don’t get authenticity by saying: ‘I am authentic.’ It’s one of those things that, once you say it, it’s gone.”

Our food arrives. The feijoada is served, steaming hot, in a steel pot. Frank immediately gets to work on his shrimp. I switch the conversation back to inequality. A statistic I’d seen that week struck me as interesting: just over half the earned income in the US goes to 20 per cent of the population. “And it’s worse than any time since 1929,” Frank picks up. Not only has productivity growth failed to translate into wage growth, government has failed to “retard the increase in inequality” by investing in training colleges. Americans’ ability to access healthcare is still linked to employment.

Frank’s central premise is that “displaced economic anger” in the middle class is why the Bush administration recently failed to pass landmark immigration reform. It has also led to angst over the effects of globalisation. “What I want to say to the business community is this: I agree with you that some of these things are good. They are being held up by an anger that cannot be fixed by things that are intrinsic to these issues themselves; you have got to fix the economic context in which they happen. You have to allow unions to be recognised – that’s been my take with private equity; they need to recognise the service employees and hotel workers. You’ve got to allow unions and you’ve got to stop demonising government so that government can resume the provision of services.”

For a long time the Republicans were able to stave off a debate about inequality by deriding it as class warfare, Frank says, so engaged with his subject that he is speaking as rapidly as he is chewing. That’s no longer the case because of rising anger over outsized pay packages for chief executives. “People have connected the dots,” Frank says. “Compensation of the top three officials in the 1,500 biggest corporations has about doubled as a percentage of profits – from 4.3 [per cent] to 9.2 [per cent]. You’re talking about macroeconomically significant numbers. When they gave [former Home Depot CEO Robert] Nardelli $210m [in severance pay], at the same time they announced they were going to buff up the stores by putting $350m into them. We’re talking about comparable numbers here. It’s now finally come together in a very angry public that says it’s unequal, it’s unfair, you’re getting way too much.”

His solution? A new compact between Democrats and business and conservatives that he sums up thus: “Help us with equity and we can help you with growth.”

Coffee arrives. I suggest that could be hard to stitch together, as much as the business community likes what they see in Barney Frank. He recognises this, and adds that you “can’t do anything without the presidency”. “Here’s what I’m hoping: if you get a Democratic presidency and a Democratic Congress – not a sure thing – then we’d come up with this package. I am hoping that we can prepare the way so that when we offer it they will be accepting of it.”

I suggest that if this strategy works, the Democrats would recapture the political and economic middle ground for a very long time. “And the middle’s huge now,” Frank agrees.

I ask for the bill, reminding him that by tradition the FT pays. “No, no, can’t. Ethics rules. Can’t do it,” he jumps in, waving his hand over the bill and pointing out that especially if the FT’s parent company, Pearson, has a lobbyist in Washington, he cannot be bought lunch. We split it.

Frank starts to rise from the table. His driver has been sitting at the back of the restaurant behind me and has signalled to Frank that it is time for a phone interview with The Boston Globe. They want to ask him about the job losses at Quaker Fabric.

The next day I go online to see how the paper covered the factory closure. Quaker is described as having “at first prospered under free trade agreements”, but the company buckled under a flood of cheap imports from China. Frank is quoted saying the closure is another example of the unfairness of current economic and trade policies. “These working-class people are bearing the brunt of a policy of globalisation that benefits the few and damages the many.”

If Barney Frank’s message isn’t clear by now, I reflect as I leave the restaurant for the drive back to Boston, it should be.

Jeremy Grant is the FT’s US financial correspondent.