Frank: What we need is a lot more government intervention
posted at 10:02 am on July 17, 2010 by Ed Morrissey
Via The Right Scoop, Barney Frank offers Charlie Rose both a blizzard of buffalo dung and the hair of the dog in attempting to defend the Democrats’ economic policies. Frank tells Rose that the recovery was going great until the European crisis this spring — but notably avoids mentioning the nature of that crisis, which was skyrocketing debt. He also claims that private-sector employment has been growing, but that banks aren’t lending, which is choking off the recovery. Frank blames this on over-eager regulators, which he sees as a big problem that can only be solved by a massive purchase of bank stocks by the Treasury:
Let’s take a look at Frank’s claim that private-sector employment has been growing. Instead of me creating my own chart, we’ll just let the BLS do it for us this time for 2007-present, showing the gross number of private-sector jobs each month:
There has been a minimal bounce in private-sector employment since its nadir of 2009Q4, amounting to a total increase of 593,000 in seven months. That’s not enough to keep up with population growth even without the context of the steep decline of over 8 million jobs since the peak of summer 2007. The private sector has lost 3.2 million private-secctor jobs since Barack Obama’s inauguration.
That’s hardly the worst part of the above clip. Frank wants the government to start buying big enough stakes in smaller banks to force them to carry out more social engineering in the lending markets. Somehow, I doubt that the American people believe that the problem with regulators is that they’re too tough on banks — not after watching the collapse of the lending markets due to profligate and irrational risk-taking. Furthermore, Frank’s suggestion amounts to corporatism at best, which is when governments dictate corporate decisions rather than private shareholders. And again, the American public has seen what happens when Frank’s policies of social engineering outweigh rational lending practices, backed with guarantees from the federal government.
Finally, Frank follows Harry “This war is lost!” Reid in accusing Republicans of rooting for failure by opposing the very policies that nearly crashed the global economic system two years ago. Frank is, of course, incorrect. Republicans are rooting for an end to failure, which we believe will be coming in the November midterms when Frank loses his chairmanship and Nancy Pelosi goes back to being a backbencher. The majority of Americans are also rooting for the end of Frank’s failed interventionist policies, too.
Update: The nation has lost 3.2 million private-sector jobs since January 2009. My original paragraph didn’t make that quite specific enough.