Way under the radar screen of Big Media, which is too busy wallowing around in every flaw of the early glitches of healthcare.gov to notice anything else going on no matter how important, is a hugely consequential Senate confirmation fight happening this week. This fight may well have a bigger impact on our economy than any other confirmation this fight. The Federal Housing Finance Agency (FHFA) has not had an official chief for years now, but after too long a delay President Obama nominated a solid, well-respected North Carolina congressman named Mel Watt to the post. Given that the Senate hasn’t voted down a sitting member of Congress since before the Civil War, and given Watt’s stature and experience on the Banking Committee with no hint of scandal, this should have been easy. Instead Senate Republicans have dragged the fight on for months, and when it comes to a vote (likely tomorrow), it is by no means certain Watt will get the 60 votes needed to overcome a threatened filibuster.
How come? Given how dramatic a break from history and tradition rejecting Watt would be, I’ve heard more than one person speculate that racism may be a part of the mix here (Watt is African-American). And given the new trend toward Jim Crow-style voting restrictions sweeping a lot of Republican states, and some of the signs and rhetoric seen at Republican/tea party rallies, you never know. But I believe that there is something else happening here: Wall Street greed. You see, Ed DeMarco, the acting director of FHFA, has been a huge friend to Wall Street bankers who have been resisting writing mortgage debt. By DeMarco consistently refusing to embrace such a strategy for FHFA, he has given big cover for the big Wall Street banks that are resisting doing very much of it themselves.
Not only that, but DeMarco has been happy to cut sweetheart deals with the big Wall Street like JP Morgan Chase- check out this stunning piece from the NYT on the most recent way DeMarco has undercut the DOJ in the settlement talks they have been going through.
This is terrible stuff. The last thing this country needs is more sweetheart deals for Jamie Dimon and the other big Wall Street bankers. And nothing has done more to keep our nation’s economy on the slow road to recovery than the massive underwater mortgage debt faced by homeowners because of the housing collapse of 2008-9. While the numbers have gotten a little better lately, for much of the past 5 years we have seen close to 30% of homeowners with underwater mortgages, and folks with underwater mortgages are not just in serious danger of losing their homes, but they are much less likely to buy consumer goods, start new businesses, save for retirement of their kids’ college- in other words, all of the things that are good for the overall economy. By DeMarco siding with bankers rather than homeowners on writing down mortgage principal, he has been a major player in slowing this economy way down.
With a friend like this at FHFA, Wall Street doesn’t want a new director of FHFA. They like things the way they are, and don’t want a new sheriff in town. That is why Republicans are so willing to buck history and tradition, are so willing to stop the first African-American appointee to run FHFA to be confirmed. Republicans are happy to do another big favor to the Wall Street lobby.
Progressives have been battling Ed DeMarco on his unwillingness to write down home debt for years. It is time for him to go. We should do everything in our power to push the confirmation of Mel Watt. Contact your Senator by calling the Congressional switchboard at (202) 224-3121, and tell him or her to stop fronting for the big banks and vote yes on the nomination of Mel Watt.
And watch this powerful new video that the organization I chair, American Family Voices, put together on this nomination fight, and then forward it along. The next 24 hours will be key, please jump into this incredibly important fight.