Rep. Barney Frank sees economy taking off, but not before midterms

The US economy is about to take off, but not in time for House Democrats, according to Barney Frank (D) of Massachusetts, chairman of the House Financial Services Committee. That committee oversees key economic players, including the Federal Reserve and the Federal Deposit Insurance Corp.

President Obama’s economic team, Representative Frank said, made its “biggest mistake” when it predicted the Recovery Act would keep the unemployment rate under 8 percent. “There was no reason to say that,” Frank said. “The answer is, we will do the best we can.”

The unemployment rate was at 9.6 percent in August.

Frank spoke at a Monitor-sponsored breakfast with reporters on Friday. Voters have experienced “tremendous pain,” the Massachusetts Democrat said, but he cited lower debt and inventory levels and higher productivity as factors underlying his forecast for the economy.

Still, he said, “the timing is bad for congressional Democrats.” Frank does not expect the rebound to be visible to voters in time for November’s congressional elections.

Frank said he thought the situation was “analogous frankly to President Reagan." He continued, " ’82 was bad for the congressional Republicans. But by ’84, the economy was in great shape, and it was very good for the president’s reelection. I think you are going to see a similar phenomenon.”

First elected to Congress in 1980, Frank was asked about his own reelection effort. "Clearly it is a tough year," he said, "but for me, it is not that much different from last time.” He is hosting President Clinton at an event Sunday in Taunton, Mass., in an effort to boost his campaign.

The Recovery Act resulted in “less unemployment than there would have been if we had not passed that bill,” Frank said. But, he noted, the economy “hasn’t done well enough, and the public doesn’t grade on a curve. The public grades on reality, particularly when expectations have been raised.”