I spend a lot of time pointing out government gone wrong. Sadly it doesn’t take that much effort. But occasionally you come across someone actually doing their job and trying to protect the taxpayer. As illustrated in today’s Wall Street Journal, Edward DeMarco, the acting director of the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mae, is such a person.
Mr. DeMarco has continued to push back against repeated plans by the Obama Administration to use Fannie and Freddie as off-budget slush-funds (they seem to have forgotten such was one of the reasons we are in our current economic mess).
As I explained yesterday, by pushing back DeMarco is simply carrying out the law as it was both written and intended. It is particularly sad to see a former Obama Administration official, who now “teaches” law, complain about DeMarco missing the big picture. As if somehow the “big picture” empowers DeMarco to ignore the law. DeMarco showed his integrity by saying, “”If we’re not authorized to do it, that’s a dangerous place to be.” He’s absolutely correct. Although he should have just stopped at “not authorized to do it.”
After the lawlessness practiced by various financial regulators in 2008, it is commendable to see a true public servant reminding us that legislative decisions are the province of legislators, not regulators. If more regulators behaved this way, we would have avoided some of the mess we are now in.