Barney Frank's "grand bargain"

Incoming House Financial Services Committee chairman Barney Frank told the National Press Club Wednesday he would like to see a "grand bargain" between U.S. businesses and U.S. workers. The way he sees it, businesses should agree to higher wages, lower executive pay, single-payer national health insurance, taxes to pay for affordable housing, tougher labor and environmental standards in other countries, and laws that make union organizing easier.

In exchange, Congress would agree to pro-business policies on trade, foreign investment and immigration.

Apparently the "grand bargain" would replace the current bargain, a free market where people exchange their labor for a salary based on the scarcity and revenue-generating power of their skills, accompanied by pro-business policies in exchange for massive campaign contributions.

Congressman Frank's unspoken premise is that it's the proper role of government to enact a lot of restrictions on voluntary activity for no reason except to enable politicians to lift the restrictions in exchange for government-approved behavior in some unrelated area.

Then, not long afterwards, lawmakers can issue gentle reminders that it is only through their benevolence that those restrictions stay lifted, and unless they see some campaign contributions and a few free rides on the corporate jet, well, who knows what might happen.

What might happen is that lawmakers will go on television and thunder about doing away with special interest breaks and loopholes that are "costing" the Treasury billions of dollars.

What a racket.

For some reason, politicians think that when you give the government less of the money that belongs to you, what's actually happening is that the government is giving you the money that belongs to the Treasury.

People who do math this way should really not be voting on the federal budget.

Here's a bulletin for the new Democratic majorities: There is nothing in the U.S. Constitution that gives the federal government the power to make life fair.

The Constitution gives the federal government very limited, enumerated powers. One of them is the power to make treaties. Another is the power to regulate interstate commerce. But those things cannot easily be stretched to accommodate a directive ordering private companies to pay their executives less and their rank-and-file employees more.

If Congressman Frank thinks he can fool or frighten corporate America's CEOs into overlooking that, he's about to find out why they get the big bucks.


Copyright 2007

Editor's note: You might be interested in the earlier post, "Hillary Clinton and the 'basic bargain.'"

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