The economy has recently become a scapegoat for most issues that arise in modern America. But Barney Frank, a retired U.S. congressman from Massachusetts and former chairman of the House Finance Committee, is one of the people that worked to prevent economic crisis in years past.
Peter Brews, dean of the Darla Moore School of Business and host to Frank, expressed his past economic concerns to Frank without haste or hesitation.
He told the former congressman about a trip he took to the nation’s capitol with university students from Hong Kong in 2008, shortly after the government bailouts of the same year. The group met with former U.S. Sen. Chris Dodd, D-Conn., who chaired the committee that orchestrated those bailouts and worked with Frank, then his House counterpart, on the legislation.
“He later came to speak to the group that evening and two 35-year-old bankers from Hong Kong looked over at the secretary and said ‘Thank you so much for stepping up and saving the global economy from what would have been an eminent meltdown,’” Brews said. “However, in my opinion, as a South African sitting with a group of Hong Kong students talking to a very notable figure about a very historical event, I felt that what happened to our country from 2007 to 2009 was an embarrassment.”
Although Brews’ tone was rather coarse within his opening remarks to Frank, he did express thanks for Frank’s efforts in averting total economic meltdown.
“We need to ensure this doesn’t happen again. We won’t be able to afford another bailout, the powder is all gone,” Brews said.
Frank said the act in question, the Dodd-Frank Wall Street Reform and Consumer Protection Act, will be remembered as one of the most unpopular yet successful pieces of legislation in U.S. history.
“The belief behind this was because it was greatly successful, but for the life of counter-factual analysts it was difficult as to why it was so successful,” Frank said. “In reality, nobody has ever figured out the means that gave it such success nor were they able to determine what would have happened in the bill’s absence. Unfortunately, politicians don’t get credit for crisis aversion. Believe me, I tried.”
Frank went on to name large banks and corporations as the cause of the United States’ financial crisis. Before the recession of 2008, banks and creditors gave loans and lines of credit to many people who couldn’t pay them back and didn’t need the amounts of money they were given, he said.
“Banks and creditors need to take responsibility for the economic crisis that we are in. However, people need to take some responsibility too for not being financially smart,” Frank said. “Many banks knew what was coming down the pipeline too, but knew that they would receive bailouts due to the fact that they were ‘too big to fail.’”
Reform has been made on account of Frank and many other politicians. One of the precautions taken to prevent future economic unrest has been to break up larger corporations in order to ensure that in the result of failure, the consequences would be less catastrophic. Frank sponsored more 150 bills and cosponsored over 400 bills during his time in federal office.