Meet Your New House Financial Services Committee Chair

barneyfrankgetsthechair.jpgThe rest of America will be talking about Nancy Pelosi’s rise and Donald Rumsfeld’s fall today. But we’re kind of bored by all that already. Besides the Democratic takeover of the House of Representatives has important implications for something we actually do care about—finance.
Meet Barney Frank, the incoming chairman of the House Financial Services Committee. He’s thought to be a pretty bright guy. He’s openly gay. He’s been in Congress for as long as anyone can remember. There was some sort of sex scandal years ago but it’s not like he strangled his mistress or anything.
So what can we expect from Barney?
• He’s a friend of Fannie Mae and Freddie Mac, and an opponent of those who want to reform those institutions with portfolio limits.
• He’s a friend of internet gambling, and argued quite forcibly against recent legislation against it.
• He makes most activist hedge fund managers seem like pussycats when it comes to outsized executive pay.
• We probably won’t see much Sarbanes-Oxley reform coming out of his committee. He’s said before that he doesn’t think there needs to be any broad legislative changes, although he’s hinted he’s open to changes at the regulatory level.
• A push to regulate hedge funds is now a lot more likely.
• He’s a free trader.
• He’s a fan of plans to make America more open to immigration.
Wall Street’s not exactly panicking about Frank’s turn in the chairman’s seat. His long years of experience on the Financial Services Committee have made him pretty familiar with the ways of Wall Street, so it’s not like some barbarian crashed the gates.

  • 11 Oct 2006 at 11:34 AM
  • Citicorp

The Business Side: A Look At the Mark Foley Scandal’s Fallout

markfoley.jpgWe’ve mostly avoided writing about the latest bit of grossness flowing from our nation’s capital. But this morning we were reminded by Tim Carney’s most recent article that the scandal may have some repercussions for American business and the markets. You see, just like Bob Dole was often referred to as “the Senator from ADM,” disgraced congressman Mark Foley was “the Representative from American Sugar.”
Sugar is one of those things that probably shouldn’t be made in the United States. If not for the subsidies and protectionist restrictions, we would probably import almost all our sugar. But politics has kept sugar American, and Foley has been at the forefront of the Sugar Patriots on Capitol Hill. Not surprisingly, he has been heavily rewarded by the American sugar industry for his votes. With Foley gone, the sugar industry has lost a powerful and dedicated ally. This could mean trouble for these politically dependent companies, and it could mean cheaper sugar for everyone else.
Foley was also a Citigroup favorite. Here’s how Tim Carney explains the bank’s relationship with Foley.

Over his career, Foley received more than $30,000 from Citigroup, the eighth-largest corporation in America. Citigroup is betting big on wind power, predicting in the company’s “citizenship” report: “Renewable energy in the U.S. and abroad is expected to attract several billion dollars of financing annually over the next 15 years, with wind power driving much of this growth.”
In 2004, Citigroup invested $23 million in a factory to build wind generators in India, selling them into the U.S. In 2005, Foley introduced a bill to extend a special tax credit allowing Citigroup’s customers to reduce their tax bill by 1.5 cents for every kilowatt-hour produced.

[Note: Tim Carney, author of The Big Ripoff: How Big Business and Big Government Steal Your Money, is the brother of DealBreaker’s John Carney.]

Big business loses a buddy with Mark Foley resignation
[Washington Examiner]