It didn’t get much attention at the time, but the day after the election, Rep. [tag]Barney Frank[/tag] (D-Mass.), soon to be the chairman of the House Financial Services Committee, gave an interesting speech in Boston to a number of business leaders. “I’m a capitalist, and that means I’m for inequality,” Frank said. “But you reach a point where you get more inequality than is healthy, and I believe we’re at that point.”
Frank has a policy agenda that focuses on higher wages and better benefits for workers. Corporate America has a policy agenda that focuses on fewer (and weaker) business regulations and more trade agreements. Apparently, it may be time for a “grand bargain.”
Representative Barney Frank has proposed in a series of meetings with business groups a “grand bargain” with corporate America: Democrats would agree to reduce regulations and support free-trade deals in exchange for businesses agreeing to greater wage increases and job benefits for workers.
Frank…has struck a conciliatory posture with financial-industry leaders in recent years. But since the morning after Election Day, he has moved quickly to lay out an ambitious plan to try to end the political stalemate between Republicans and Democrats on broad economic issues.
“What I want to do is break that deadlock,” Frank said in an interview. “A lot of policies that the business community wants us to adopt for growth are now blocked. On the other hand, the business community is successfully blocking the minimum wage [increase] and created a very anti union attitude in the Congress.”
I haven’t seen all of the details of the bargain, but it sounds like Frank is on the right track. Under the plan, Corporate America will have to embrace a minimum-wage increase and offer greater protection for workers adversely affected by trade treaties. Frank and congressional Dems will, in turn, looser regulations, more free-trade deals, and new immigration rules favored by businesses.
“What we want to do is to look at public policies that’ll get some bigger share of the increased wealth into wages, and in return you’ll see Democrats as internationalists,” Frank said, adding, “I really urge the business community to join us.”
As it turns out, the business community is open to the conversation — particularly when it comes to health care.
Many businesses are trying to shed high health care premiums. Frank hopes that workers and businesses can agree on a government-administered plan paid for by workers that would reduce burdens on businesses, which would pass on savings to employees through higher wages.
“I think employer-paid health care is a mistake,” he said. “I think it depresses wages.”
Stephen J. Collins , president of the Automotive Trade Policy Council, which represents Detroit’s Big Three automakers, said business leaders would welcome such a discussion with Frank. “Our companies are very open about the fact that they are facing massive competitive challenges of a global nature that need big answers,” Collins said. “There has to be a partnership between government and industry to solve some of these problems, and health [care] is one of them.”
Obviously, details matter here. How much of a minimum-wage increase will businesses accept? What kind of free-trade deals are Dems going to support? How would new health-care subsidies work?
Still, I’m vaguely encouraged by all of this and offer Frank credit for thinking “outside the box.” We’ll see how the bargain unfolds in the coming months, but it appears that there are signs of progress.