Soured Deal Another Blow for Chinese Solar Company section B - page 2
Young people fall out of love with high street banks
31 Jul 2012
| Comment Eurozone collapse would trigger bank bail-outs, £1 trillion of QE
31 Jul 2012
| 176 Comments Greece 'on the brink' as cash reserves dry up
31 Jul 2012
| 7 Comments Eurozone unemployment hits record high
31 Jul 2012
| 78 Commentshttp://krugman.blogs.nytimes.com/2012/07/31/fire-ed-demarco/
Fire Ed DeMarco
Do it now.
Who? you ask. DeMarco heads the Federal Housing Finance Agency, which oversees Fannie and Freddie. And he has just rejected a request from the Treasury Department that he offer debt relief to troubled homeowners — a request backed by an offer by Treasury to pay up to 63 cents to the FHFA for every dollar of debt forgiven.
DeMarco’s basis for the rejection was that this forgiveness would represent a net loss to taxpayers, even if his agency came out ahead.
That’s a very arguable point even on its own terms, because the paper he cited (pdf) in support of his stance took no account of the positive effects on the economy of debt relief — even though those effects are the main reason for offering such relief. Since a reduction in debt burdens would strengthen the economy, this would mean greater revenue — and this might well offset any losses from the debt forgiveness itself.
Furthermore, even if there’s a small net cost to taxpayers, debt relief is still worth doing if it yields large economic benefits.
In any case, however, deciding whether debt relief is a good policy for the nation as a whole is not DeMarco’s job. His job — as long as he keeps it, which I hope is a very short period of time — is to run his agency. If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA’s budget position, the agency’s director has no business deciding on his own that he prefers not to act.
I don’t know what DeMarco’s specific legal mandate is. But there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.
This guy needs to go."
Who? you ask. DeMarco heads the Federal Housing Finance Agency, which oversees Fannie and Freddie. And he has just rejected a request from the Treasury Department that he offer debt relief to troubled homeowners — a request backed by an offer by Treasury to pay up to 63 cents to the FHFA for every dollar of debt forgiven.
DeMarco’s basis for the rejection was that this forgiveness would represent a net loss to taxpayers, even if his agency came out ahead.
That’s a very arguable point even on its own terms, because the paper he cited (pdf) in support of his stance took no account of the positive effects on the economy of debt relief — even though those effects are the main reason for offering such relief. Since a reduction in debt burdens would strengthen the economy, this would mean greater revenue — and this might well offset any losses from the debt forgiveness itself.
Furthermore, even if there’s a small net cost to taxpayers, debt relief is still worth doing if it yields large economic benefits.
In any case, however, deciding whether debt relief is a good policy for the nation as a whole is not DeMarco’s job. His job — as long as he keeps it, which I hope is a very short period of time — is to run his agency. If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA’s budget position, the agency’s director has no business deciding on his own that he prefers not to act.
I don’t know what DeMarco’s specific legal mandate is. But there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.
This guy needs to go."
- 31 Jul 2012: Euro break-up would result in a 5.2% drop in UK output next year, warns Fathom Consulting
- 31 Jul 2012: Monti and Hollande seek swift action to bring down interest rates as unemployment soars and investors seek safe havens
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31 Jul 2012: With Iberian house prices in freefall, bank says it will sell off thousands of properties at any price necessary
- 31 Jul 2012: UK may lose triple-A rating if GDP growth continues to disappoint, Moody's ratings agency warns
- 30 Jul 2012: Mark Weisbrot: The ECB has the power to end the eurozone crisis. But it refuses to do so – in order to push a regressive political agenda
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