President Obama keeps telling the country who he is, and the country, to its continuing discredit, refuses to listen. The latest entry in the personnel-is-policy file comes in the form of Mel Watt, an irresponsible racist from the Democratic Socialists of America caucus, whom the president wishes to put in charge of the Federal Housing Finance Agency. On the record of his public pronouncements alone, Mr. Watt is unfit to hold any federal office; given that the FHFA has oversight of Fannie Mae and Freddie Mac, the corrupt government corporations at the center of the 2008 financial crisis, this nomination is particularly worrisome.
One must admit to a certain grudging respect for Barack Obama’s handling of questions stemming from his association with impenitent racists such as the Reverend Jeremiah Wright and old-school socialists such as Van Jones. In 2008, Obama was taking a beating in the primaries over his association with the Reverend Wright, the divine who lamented that “them Jews ain’t gonna let him talk to me” after the nation evinced some discomfort with his racist “Black Liberation Theology,” his blaming 9/11 on American “chickens coming home to roost,” his Pearl Harbor conspiracy theories, and his “God damn America!” chants, and who today spends his time worrying about the effects of “white racist DNA.” Ankled by his association with this paranoid racist ranter, Obama responded by lecturing the country at large on racism, a move roughly equivalent to Mark Sanford’s giving a sermon on the seemliest means for exiting a marriage. But the country, or at least enough of the country, was willing to be snookered by Barack Obama.
President Obama continued to offer more of the same, and now serves up a heaping helping of race-obsessed political opportunism in the form of Mr. Watt’s nomination. Mr. Watt, a member of the House representing North Carolina, in 2005 angrily declared that a majority of white voters would never vote for a black candidate, so sick is our country with the plague of racism. Barack Obama was shortly thereafter elected. We suppose he almost had a point — in 2008, Barack Obama in fact did not receive a majority of white votes, which no Democrat has since the party’s shift to the hard left in the 1960s. But Barack Obama was more popular with white voters than any Democrat since Lyndon Johnson, a fact that does not square with Mr. Watt’s libel on the American people.
Among the American people he has libeled on racial grounds is one Ralph Nader, perhaps not the first person who leaps to mind in the great pantheon of American race prejudice. We have our criticisms of Mr. Nader, but Mr. Watt’s contemptuous denunciation of him as “another f***ing arrogant white man” crosses the boundary from indecorous to indefensible.
But that is no surprise: When it comes to matters of racism, Mr. Watt has declared that he has no need for “empirical evidence.” He says that, instead, his experience of having walked the earth for more than 60 years with brown skin is all he needs to inform him. That he made those remarks specifically in response to questions about the role of federal policies in the subprime-mortgage bubble is worrisome.
Mr. Watt’s nomination is not about race, however. The racism is just the toxic cherry on top of the poisonous sundae, a confection of Wall Street money and Washington influence that should give pause to anybody who cares about avoiding the mistakes of our recent economic past.
The acting director of FHFA, Edward DeMarco, has refused to approve across-the-board writedowns of underwater mortgages — a policy strongly favored by Obama’s allies at the many organizations that until recently operated under the ACORN umbrella. In other words, DeMarco has been slower than many housing activists and mortgage lenders would like in returning to the 2008 status quo ante and releasing a flood of government money into low-income lending. Thus the “Dump DeMarco” campaign organized by left-wing housing activists. That they settled upon Mr. Watt as the solution to their problem is not surprising.
The mortgage-writedown campaign is simply the opening volley in the war to open the money faucets and get funds once again flowing at full force to housing organizations and, not coincidentally, to the banks that stand to profit from a return to the millennial housing-bubble economy. The banks are not in principle opposed to principal reductions — so long as the losses accrue only to Fannie and Freddie, and through them to the U.S. Treasury.
Which leaves us with Mr. Watt, a political creature who would seem odd if he were not so familiar: the race-baiting left-winger funded by Wall Street. Mr. Watt’s top financial benefactor is Bank of America, a firm recently sued by FHFA. (If it has occurred to anybody at the White House that this presents a conflict of interest, they have said nothing about it.) In 2009, about half of Mr. Watt’s campaign funds came from banking and real estate. The usual suspects are well represented: Goldman Sachs, the Credit Union National Association, Wells Fargo, the National Association of Realtors — all make appearances on his top-donors list.
Fannie Mae and Freddie Mac are still very much with us, in spite of the $200 billion or so in federal money consumed by their troubles. Between the two of them, they still hold or guarantee some $5 trillion in debt, much of it questionable. Additional troubles at either agency could put the economy right back into 2009 territory. Winding them down is not the job for a man who dismisses “empirical evidence,” nor for a man whose political fortunes have been for years tied up in those who stand to benefit from a return to the irresponsible mortgage-lending practices of the past. And the United States could use one less cynical practitioner of racial politics in public life. Mr. Watt’s nomination deserves to be rejected.