6th November 2012
Edward DeMarco is like a gold nugget in a compost heap.
The man with power over more than half of U.S. mortgages lives in a 1961 split-level brick house with a basketball hoop in the driveway and a green Subaru in the carport. The homes on Edward DeMarco’s block in a suburb of Washington, D.C., are so close together that neighbors see into each other’s windows. This surprised several dozen demonstrators, one in a vampire costume, who visited in September to demand he quit his job as acting director of the Federal Housing Finance Agency. “My home is better looking than this,” said Catrese Tucker, a Massachusetts toll collector whose house is in foreclosure.
That’s because he lives within his income and you don’t, leech. As a general rule, in these degenerate modern times, anytime you’ve got protestors in silly costumes parked outside your door, you’re doing the right thing.
Congressional Republicans and Democrats and President Barack Obama want to wind down and replace Fannie and Freddie, yet they haven’t agreed on how. That makes DeMarco the only official in Washington actively working to shrink the two companies. “The FHFA under the leadership of Acting Director DeMarco is slowly but surely enacting housing finance reform without the guidance or consent of Congress,” says Isaac Boltansky, a policy analyst at Compass Point Research & Trading. “That’s due in part to the complete inability for Congress to find any consensus.”
My, what a surprise! Aren’t you surprised? I’m sure surprised. The most astonishing part is that they somehow found the only guy in Washington who is willing to do his job.
DeMarco has been focused on Fannie and Freddie for decades. With a Ph.D. in economics from the University of Maryland, he began scrutinizing the companies in 1986 as a research fellow at the General Accounting Office. In a 1990 report he concluded that the companies needed much closer federal supervision “to keep emerging problems from imposing losses on taxpayers.” In 2006 he became deputy director at the Office of Federal Housing Enterprise Oversight, the predecessor to FHFA. He began running FHFA in an acting capacity after director James Lockhart left in 2009.
In other words, he’s far more qualified to do this job than the drones who are complaining about him. I suspect that this fact underlies much of their dissatisfaction.
DeMarco is best known for one controversial position: He has resisted forgiving debt on loans backed by Fannie and Freddie, which he says would encourage struggling homeowners to stop paying their mortgages in hopes of getting a break. In February, Treasury Secretary Timothy Geithner tried to persuade him to change his mind by offering to reimburse Fannie and Freddie for as much as two-thirds of the cost of debt forgiveness. At the end of July, DeMarco released an analysis concluding that taxpayers were likely to lose money. The government-sponsored enterprises would continue to be barred from reducing loan principal, he decided.
I’m shocked, shocked I tell you, to find a ‘public servant’ that actually puts the public interest first, rather than treating a government entity as a gigantic magic cash machine.
In the aftermath of that decision, calls for Obama to replace DeMarco came from a diverse group that included members of Congress, New York Times columnist Paul Krugman, the United Steelworkers, and even the Sierra Club.
All the Usual Suspects. He must be doing a great job to have all of Sauron’s servants after him.
“I well understand that housing finance in general and those two companies in particular attract a great deal of political interest, and understandably so,” DeMarco says. “The approach we take here is we try very hard to be apolitical about it.”
In other words, he refuses to do the Potomac Two-Step, and the Chattering Class, who are used to getting their way in all things, are incensed.
Democrats say DeMarco doesn’t care enough about families in danger of losing their homes. In one meeting last year on Capitol Hill, he earned the displeasure of Senator Barbara Boxer (D-Calif.), who has been pushing FHFA to expand aid to homeowners. “He didn’t have any motivation that I could see to help people,” Boxer told National Public Radio. She called it “the worst meeting I’ve had in my life.”
I like him already. It’s not his job to ‘care about’ anything other than what’s best for the taxpayer and the housing market. Continuing the same policies that got us into this mess in the first place (‘No job? No credit? No problem!’) doesn’t help anybody, it just slaps more lipstick on the pig.
“My approach from the beginning has been, as long as I’ve been asked to have this responsibility, to carry it out in the best way I can,” he says. “I always envisioned myself as a career official, and I still am a career official.”
Well. If we can find 9 more such righteous men in Washington, perhaps it will escape destruction.
I’m not holding my breath.