Fundraising Letters to Look Forward To

STOP THE PRESSES!

From the New York Times yesterday: ‘Two monkeys with tiny sensors in their brains have learned to control a mechanical arm with just their thoughts . . . ‘

This is very good news for those of us who want to live forever, or at least for a very long time.

As I wrote half a year ago:

My conception has long been that technology is on such an astonishing exponential trajectory – we’ve begun mapping the human genome, for crying out loud! Oh, look, we’ve finished! – that one day soon we’d be able to download our consciousnesses into a brain bank, basically, where we’d be able to do almost all the things we do now . . . email our friends, watch Seinfeld reruns, order movies on demand, play web boggle, go for virtual treks to Machu Pichu . . . a world in which the big addiction would be not cocaine or meth but the orgasm button.

(In a brain bank, you wouldn’t literally press buttons. But how far are we now from being able to send electrical impulses from our brains? Not very far.)

Class warfare would be primarily between the virtual humans, like me, with 500 years of compound interest enhancing my vast fortune, and the physical humans, like some 25-year-old with an actual screw driver. I’d have $50 trillion (a good chunk of it in Borealis stock); but he would have the ability to disconnect me.

☞ Well, it seems we are not so far at all from ‘being able to send electrical impulses from our brains,’ thereby to control our TiVos. (And if Ray Kurzweil is right, as I wrote in that same column, we might not even need to surrender our bodies.) I know this is a tiny bit creepy. But consider the alternative.

A NON-FUNDRAISING LETTER

You know how Warren Buffett’s annual shareholder letters have come to be eagerly awaited? And widely read by an audience of (bitter, envious) people (like me) who don’t even own his stock?

Well, I feel much the same way about Congressman Barney Frank’s fundraising letters. Why haven’t they been collected in a book?

Foolishly, I haven’t saved them over the years. But I thought I would share his latest.

Dear Friends:

Political life has an enormous number of benefits. One of the things I most dislike is to hear my colleagues complain about the terrible burdens under which we labor, and give the impression that they are doing the world an enormous favor by holding onto their jobs. In fact, in the majority of instances the facts are exactly the opposite: we want very much to keep our jobs and are prepared to impose on relatives, friends, random passers-by and others in an effort to do so.

But there is one downside. Precisely because we are in a position where we are allowed – even expected – to solicit people for favors, money, kind words, etc., we can come to think of this as the normal form of human interaction. In particular, there is a very real possibility that we can transform ourselves into one of the most unpleasant of characters: an acquaintance from whom you hear only when he or she needs something.

So I am writing this to you simply to stay in touch, and it includes no request whatsoever for money, praise, moral support or anything else. It is simply a letter to people who have been extremely good friends and who have made the career that I continue to enjoy possible.

This has been a very exciting time for me, more exciting than anticipated. From the standpoint of the country, it would obviously have been good if it had been less exciting. I took over the Chairmanship of the Committee on Financial Services precisely at the time when the subject matters in the jurisdiction of that committee became among the most important facing the country. We deal not only with housing in both the public and private sectors, but insurance, banking, and the securities industry in all of its recent, exotic transmogrifications.

Consequently, I have been working much harder at this job than I can remember working since my first years as Executive Assistant to [Boston Mayor] Kevin White, and I am forty years older today than I was then, which is not an enormous advantage overall. (More wisdom and a lot less energy does not make the ideal trade-off.) The result is that I have seen my horizons shrink in some ways. I now know a very great deal about those things that are in the jurisdiction of my committee, and less about almost everything else than I have ever known in my life. But the responsibility of trying to cope in both the short and long term with this financial crisis takes precedence.

There is a silver lining to the dark cloud that the current economic situation presents. I have for years been frustrated by those who greatly over-argue the case for our free market system. I am a capitalist, and I believe it is clear that the free market system, properly run, is the best way to generate wealth that human beings have ever come upon. But that system has both strengths and weaknesses, and I have long felt that the need for a well financed and well run public sector working along with the private sector has been substantially undervalued in our politics. For nearly thirty years, we have been governed excessively by the line from Reagan’s first inaugural, that “Government is not the answer to our problems; government is the problem.”

People argued that economic growth is not only a good thing, but a complete one, and that if we were to exceed on an annual basis three percent growth, all would be well and all of our citizens would prosper. Many of us argued that we were growing in a way that exacerbated inequality unnecessarily, and that this would have not only negative social consequences, but ultimately a deleterious economic impact, but we were the minority.

Dominant opinion also held that regulation was a bad thing. The mantra here was that of the distinguished economic philosopher and former Majority Leader, Dick Armey, who insisted that “markets are smart and government is dumb.” From one perspective, recent events may have borne that out. Some observers may believe that the people who were doing business with Bear Stearns were smart enough to get the dumb Federal Reserve to take care of them when the investment decisions they had made went sour. But I don’t think that the ability of the market to stick the government with the cost of its mistakes was what Armey had in mind. The lesson we should be drawing from this is that, even though there are times when the government will in fact have to step in to prevent greater economic troubles — as I think the Fed ultimately did appropriately in this case — the most important thing for us to do is to put in place rules that make it less likely that this will occur.

So just as with the notion that we need not worry about fairness in the distribution of income as long as we have growth, the argument that the greatest threat to the market system is excessive regulation has been substantially discredited by results. History is to some extent repeating itself in the grand scale. The formation of large industrial enterprises in the late nineteenth century led to the reforms known as the anti-trust laws, the establishment of the Federal Trade Commission, and similar actions under Theodore Roosevelt and Woodrow Wilson. The subsequent flourishing of the stock market and its steep decline beginning in 1929 led to the reforms instituted under Franklin Roosevelt. In these cases, the economic activity was largely beneficial, but it had negative side effects (which of course were especially severe during the Great Depression) that had to be curtailed by sensible regulation. This is where we are today with securitization and the other exotic market instruments.

So while it would obviously have been much better for the country if none of this negative activity had happened, we can at least take some comfort in the fact that there is a broad recognition in the country today politically that it is time for the kind of significant economic reforms that we have seen in prior eras.

This makes the 2008 election extraordinarily significant. Of course the number one issue remains the need to withdraw from this badly conceived and execrably conducted war in Iraq, with all the damage it does in so many ways. And the fate of the United States Supreme Court is clearly at stake given the age of the justices, particularly those who continue to uphold basic constitutional liberty. Add to this the fact that we face one of the most important decision points in our economic history, and you have an election of overwhelming importance. The bad news is of course that we are in this economic bind. But the partially mitigating good news is that more and more people now realize what must be done to prevent its recurrence.

I am very grateful to you and others who have helped me get to the position where I am Chairman of the Financial Services Committee so that I am able to participate in our efforts to deal with this crisis in both the short and long terms.

BARNEY FRANK

☞ See what I mean?

Have a great weekend.