Damn, they figured it out

God, I love conservatives!

The director of issues analysis of a conservative fundamentalist Christian organization on Wednesday accused the Democratic Party of trying to make African Americans into “slaves” and “drug-addled addicts” with welfare benefits.

“The Democrats as a party, I believe, they want slaves, they want Americans to be as slavishly dependent upon the central government as slaves were upon their masters in pre-Civil War days, that’s what they want,” Bryan Fischer explained on his American Family Associations radio show. “We were talking this morning about how in the world is it that African Americans still support the Democratic Party? How can you explain that, when the Democratic Party is the party of slavery, the KKK, Jim Crow laws, lynch mobs, the party that filibustered the Civil Rights Act, how can you explain this?”

Fischer concluded that the only possible explanation for Democrats being supported by blacks was that the party “promises them more goodies” to get them “addicted.”

Truth or dare

Sen. Harry Reid seems to have put Mitt Romney into a bit of a box: His campaign will have to confirm or rebut the charges, because it’ll be pretty damned hard to ignore. It’s quite a surprise coming from Reid, who’s not known for this kind of openly aggressive behavior:

WASHINGTON — Senate Majority Leader Harry Reid (D-Nev.) has what he says is an informed explanation for why Mitt Romney refuses to release additional tax returns. According a Bain investor, Reid charged, Romney didn’t pay any taxes for 10 years.

In a wide-ranging interview with The Huffington Post from his office on Capitol Hill, Reid saved some of his toughest words for the presumptive Republican presidential nominee. Romney couldn’t make it through a Senate confirmation process as a mere Cabinet nominee, the majority leader insisted, owing to the opaqueness of his personal finances.

“His poor father must be so embarrassed about his son,” Reid said, in reference to George Romney’s standard-setting decision to turn over 12 years of tax returns when he ran for president in the late 1960s.

Saying he had “no problem with somebody being really, really wealthy,” Reid sat up in his chair a bit before stirring the pot further. A month or so ago, he said, a person who had invested with Bain Capital called his office.

“Harry, he didn’t pay any taxes for 10 years,” Reid recounted the person as saying.

“He didn’t pay taxes for 10 years! Now, do I know that that’s true? Well, I’m not certain,” said Reid. “But obviously he can’t release those tax returns. How would it look?

“You guys have said his wealth is $250 million,” Reid went on. “Not a chance in the world. It’s a lot more than that. I mean, you do pretty well if you don’t pay taxes for 10 years when you’re making millions and millions of dollars.”

The highest ranked Democrat in Congress, Reid is known more as a back room brawler than a public flamethrower. So his willingness to throw this private conversation into the media frenzy over Romney’s taxes underscores the low opinion he has of the Republican candidate.

Speaking of moral hazard

This really is a kick in the gut to struggling homeowners. To turn this into a straight transaction analysis when underwater mortgages are such a huge drag on the economy is just plain crazy:

The federal regulator for government-backed mortgage giants Fannie Mae and Freddie Mac said Tuesday that he would not allow the firms to reduce loan balances of troubled borrowers, saying there would be no clear-cut financial benefit and that such a move could cause some homeowners to intentionally default in hopes of getting taxpayer aid.

“We concluded that the potential benefit was too small and uncertain, relative to the known and unknown costs and risks,” said Edward J. DeMarco, acting director of the Federal Housing Finance Agency.

The decision came after months of internal analysis at FHFA and sustained pressure from the Obama administration, Democratic lawmakers on Capitol Hill and housing advocates, who argued that so-called “principal reduction” was an essential tool needed in helping to soften the fallout of the housing crisis.

Reaction to DeMarco’s decision came swiftly Tuesday afternoon.

Treasury Secretary Timothy F. Geithner struck an unusually personal tone in chastising DeMarco for his decision, even while acknowledging DeMarco’s role as an independent regulator of Fannie and Freddie.

“Five years into the housing crisis, millions of homeowners are still struggling to stay in their homes and the legacy of the crisis continues to weigh on the market,” Geithner wrote in a letter to DeMarco on Tuesday. “You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis.”

Paul Krugman responded by calling for DeMarco to be fired:

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.

Krugman’s right. It’s not DeMarco’s job to impose his philosophical orientation on his agency.

Hat tip to V.E. Hicks, attorney!

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