President Obama wants to try principal reduction as a way to help home owners and the economy. The problem for Obama is Ed DeMarco, acting director of the Federal Housing Finance Agency, which would be responsible for implementing a key part of this policy, doesn’t like principal reduction.  As acting director of FHFA, DeMarco has decided that gives him the right to set government policy based on his personal preferences.  This prompted Paul Krugman to call for DeMarco to be fired:

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.

Whether you agree with the policy or not, this is a debacle. A part of the executive branch basically refusing to carry out the policy decision set by the duly elected executive of the country is a problem for President Obama.  It goes to the heart of his administration’s unquestionably bigger failures.

Often debates about the grade President Obama deserves for his first term focus on what he could and didn’t do on the legislative front. The decision often hinges on theoretical arguments about what a divided Congress would or would not accept. Less focus, though, is put on the fact that Obama simply didn’t put enough effort into using his authority to put into critical positions people that agree with his vision and would help carry out his policies.

Almost no real effort was spent trying to replace DeMarco with an Obama pick, and now it is hurting his ability to govern. Ed DeMarco, though, is not even the most important example of this failure. There is a shocking number of judicial vacancies. In addition not only did Obama reappoint Ben Bernanke, instead of choosing someone of his own to run the Federal Reserve, but Obama effectively left two seats on the board vacant for his first two years.

Leaders can’t lead effectively if they don’t first get their people into key positions to implement their policies.