Frank questions whether market-driven wealth creation is producing more inequality "than is either socially healthy or economically necessary." He favors much more government intervention in the economy to diminish inequality. Sometimes he means equal dependence on government. For example, he wantseveryone enrolled in Medicare -- with larger co-payments for higher-income people -- in order to take health care "out of the wage system."
Frank mildly says that Congress should "pay a little more attention" to the seven governors of the Federal Reserve System, all of whom are confirmed by Congress. The Fed, says Frank less mildly, should not be considered "above democracy": "We can debate whether Terri Schiavo's life should be recognized as over" and other fundamental questions of existence, "but God forbid anybody in elected office should talk about whether or not we need a 25-basis point increase" in interest rates. "Somehow that's sacrosanct. No, it isn't. It's public policy."
The late Sen. William Proxmire, a populist Democrat who represented Wisconsin for 32 years, said that all members of Congress should have written on their bathroom mirrors, so it is the first thing they read each day, this: "The Fed is a creature of Congress." Frank says Congress should not intervene in monetary policy ... "unless." By monitoring whether the Fed's governors act as they said they would when they were being confirmed, Congress would be "setting the predicate for intervention if they act otherwise."
He wants the Fed to emphasize full employment as well as protect the currency as a store of value -- restraining inflation. But the Fed's stunning conquest of inflation since the early 1980s is almost a sufficient explanation of subsequent prosperity.
Three years ago, when unemployment was 5.8 percent, Frank outlined his doctrine of "capitalism plus" -- plus a lot of government -- in a House speech, warning that America was at "a major inflection point" where the economy's ability to create wealth is exceeding its ability to create jobs. Today unemployment is 4.5 percent. How low can it go? He answers briskly: It fell to 3.8 percent during the Clinton administration. Could that become normal? And Frank says that when The New York Times wrote that the economy had exceeded its "normal rate of growth" for eleven years, he wrote to the Times wondering whether facts are redefining normality.
Frank may be the most liberal member of Congress. His thinking is what today's liberalism looks like when organized by a first-class mind. He thinks he discerns cultural contradictions of conservatism: Some conservative policies -- free trade, and tax and other policies that (he thinks) widen income inequalities -- undermine support for other conservative policies. When capitalism's "creative destruction," intensified by globalization, churns the labor market and deepens the insecurities of millions of families, conservatives should not be surprised by the collapse of public support for free trade and an immigration policy adequate to the economy's needs.
Frank's solution, "fair trade," is to use the threat of denying access to the American market to force less-developed countries to adopt "minimal standards of civility," meaning more expansive -- more American -- labor rights and environmental protections. This is an economic version of George W. Bush's foreign policy. Bush's Wilsonian goal is "ending tyranny in our world." Frank's trade policy is "Wilsonianism without weapons." Or perhaps it is Johnsonian (Lyndon Johnson): Trade policy should impose semi-Great Society rules on less-developed trading partners, thereby helping the poor in those countries -- and reducing those countries' competitive advantages.
Frank's committee has, he says, "a larger jurisdiction to talk than to legislate." Pay attention to the talk: In it liberalism's interest in diminishing inequality (using government power to regulate the economy's distribution effects) duels with conservatism's emphasis on freedom (incentives by which market forces rationally allocate wealth and opportunity).
Frank says he is fortunate to be "in a profession where a weakness of mine -- a short attention span -- is a strength." In a government with its fingers in far too many pies, legislators must flit from one subject to another. What distinguishes Frank, however, is the coherence -- which is not a synonym for persuasiveness -- of his argument for more government-engineered equality.