Krugman: DeMarco is example of an “unyielding, irresponsible political opposition”
Paul Krugman often thinks through things on his blog so often his columns offer a more thoughtful version of his blog posts, but his latest column puts one recent example, the refusal of Ed DeMarco, head of the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac, into a multi-year effort by the Republicans to use economic policy inaction as a political tool to win an election. Krugman earlier blogged that Ed DeMarco should be fired. In his column Krugman describes:
The idea of using Fannie and Freddie has bipartisan support. Indeed, Columbia’s Glenn Hubbard, a top Romney adviser, has called on Fannie and Freddie to let homeowners with little or no equity refinance their mortgages, which could sharply cut their interest payments and provide a major boost to the economy. The Obama administration supports this idea and has also proposed a special program of relief for deeply troubled borrowers.
But Edward DeMarco, the acting director of the agency that oversees Fannie and Freddie, refuses to move on refinancing. And, this week, he rejected the administration’s relief plan.
Who is Ed DeMarco? He’s a civil servant who became acting director of the housing finance agency after the Bush-appointed director resigned in 2009. He is still there, in the fourth year of the Obama administration, because Senate Republicans have blocked attempts to install a permanent director. And he evidently just hates the idea of providing debt relief.
The main point, however, is that Mr. DeMarco seems to misunderstand his job. He’s supposed to run his agency and secure its finances – not make national economic policy. If the Treasury secretary, acting for the president, seeks to subsidize debt relief in a way that actually strengthens the finance agency, the agency’s chief has no business blocking that policy. Doing so should be a firing offense.
The bigger point Krugman makes in his column is that this is not an isolated incident of a civil servant letting ideology trump his job description. Republican politicians laid out very clearly that after winning the House in 2010 their strategy with Mitch McConnell, the minority leader in the Senate declaring their policy objectives was to make Obama a one-term president.
This is striking and I think it is not the type of behavior that any political party should engage in: deliberate sabotage of policies that might help the economy to win an election 2 years in the future. I don’t know if that has ever happened with the possible shutdown of the federal government in the mid-1990s (which was, of course, in a completely different context where the economy was growing).
There are certainly cases when a party out of power would sit behind closed doors and hope for economic weakness during a Presidential campaign because it would increase their chances of winning, but there is a huge leap between wishing for weakness in an active election and taking deliberate action to prevent policies to benefit the economy so they could point to economic weakness as evidence their opponent’s policies were not working.
If the times between elections become policy-lite periods where the government is managed solely to win the next election by contributing to economic weakness, then the democratic process is undermined and the government becomes unable to function anytime, not just right around elections. It is no surprise that Republicans are responsible for this because they have extended their idea that the nine most terrifying words are “I’m from the government, and I’m here to help” to a policy of proving their contention that the government cannot do anything right by failing abjectly with nearly everything they touch.
I was talking with a friend about this the other day and I reached a terrifying conclusion (for me, at least): I wish we could have the Republican Party of the era of Nixon and Reagan (I am not going to dream for the party of Eisenhower) back. At least then, the political differences didn’t prevent things from getting done, compromises were made because in the end the political differences were overwhelmed by the desire to help the country over the idea that compromise is a dirty word and redefined so that “compromise with me on this” means “do all of what I want and nothing that you want”.
There are Republicans who believe this and a few have been vocal, but there need to be more (I am speaking of Norm Ornstein at AEI and David Frum, a former Bush speechwriter, but I am sure there are others that don’t pop to mind). Dealing with people who you disagree with is a necessity in policymaking, but when one party is willing to “kill the hostage” (e.g. Debt Ceiling extension debate), policymaking becomes dysfunctional, which is awful, and puts the long-term future of our democracy in danger unnecessarily.