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“The system is set up to regulate, not to deregulate, and a lot of the folks who are doing it like the regulatory environment,” Mulvaney fumes.
Mick Mulvaney’s career reached its logical endpoint last week when he announced he’d started a new hedge fund focused on exploiting deep knowledge of regulatory trends in the financial services sector. “I can't think of anyone better to read the tea leaves, if you will, of what is going to come next from Congress or any one of the slew of federal regulators out there,” said Mulvaney’s new business partner Andrew Wessel, lending high praise to what amounts to official corruption.
There are few public sycophants quite as shameless as Mulvaney when it comes to doing the bidding of financial loan sharks. Thanks to his slavish devotion to the cult of personality around a president he once called “a terrible human being,” Mulvaney has gone from being the payday-loan industry’s favorite congressman to Trump’s director of the Office of Management and Budget, the Consumer Financial Protection Bureau’s internal destructor, the acting White House chief of staff, and finally, the prestigious and rarefied job of Special Envoy for Northern Ireland.
Yet Mulvaney seems to be leaving public service unsatisfied. You see, despite his best efforts, financial regulation still, well, exists. And annoyingly, it seems there are hardworking people who still want it to, you know, exist.
In an interview with S&P Global, Mulvaney shared a bit of the insider wisdom he’s gleaned about the regulatory state: “One of the things that I’ve learned is that it’s really, really hard for the government to deregulate. Not only are they not good at it, they’re not set up to do it, but there are folks who work at the agencies who just don’t like it.”
It might be a shock to hear that government is “not good” at financial deregulation, given how it’s seemingly the one thing that’s popular on both sides of the aisle. But Mulvaney’s complaint is instructive; he’s frustrated that the civil servants who actually make the executive branch run happen to care about doing their jobs properly.
It’s an important point that bears repeating: People who hate government tend not to be very good at it.
Mulvaney’s most famous fight with day-to-day regulators came at the CFPB, when the agency’s student loan ombudsman, Seth Frotman, quit with a highly public resignation letter arguing “the bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the bureau to serve the wishes of the most powerful financial companies in America.”
But the CFPB wasn’t the only agency from which Mulvaney learned about the regulatory state. He told S&P Global: “Folks don’t realize this, but the Office of Management and Budget actually houses what’s called the Office of Information and Regulatory Affairs, which is the central clearinghouse for almost 90 percent of the regulatory and deregulatory action that the government takes.”
Thank you for telling us what we already know, O explainer of things. OIRA, as it’s known, actually frustrated progressives for many years, since Barack Obama appointed Wall Street apologists to its management. There’s currently a lively debate on the left about what to do with it should the Democrats take power next year.
“The system is set up to regulate, not to deregulate, and a lot of the folks who are doing it like the regulatory environment,” Mulvaney fumes. “That’s what they do. That’s why they went to go do this. They like regulation.”
Mulvaney appears upset that OIRA isn’t fulfilling its reputation as a regulatory graveyard, but it needn’t fill that role. And there’s something truly extraordinary about not even OIRA being able to satisfy his deregulatory agenda, thanks to the under-appreciated hard work of actual civil servants in the financial oversight apparatus. They mostly want agencies like the CFPB, Securities and Exchange Commission, and Federal Deposit Insurance Corporation to make the economy work better for average people.
Democrats horrified by Trumpian governance should hear an opportunity in this. Mulvaney is giving away the goat of just how much power lies in executive branch agencies: By appointing people to head these agencies who are as pro-government as Mulvaney is against it, Biden could do tremendous social and economic good completely independent of his Congressional agenda. By Mulvaney’s estimate, “whereas it took the Trump administration 18 months to put a new dereg agenda in, it might take a Biden administration 30, 60 days to put new stuff in.”
The key is finding nominees who both believe in an agency’s cause, and can motivate and lead the civil servants who staff them. Traditionally, transition teams reward high-dollar donors or longtime political allies with these jobs. Corruption concerns aside, such leaders come in with far less experience and knowledge of the culture of the agencies they lead. There are many better paths a transition should take, most especially by looking outside the Beltway and finding enthusiastic leaders across the country in non-profits, local governments, academia, and genuinely small businesses. But there’s another reform to supplement that effort, which is extremely straightforward.
You can promote from within. Individuals like Frotman know how the federal government works, know the missions of their agencies, and personally know the civil servants alongside whom they’d serve. They are not a part of the corrupt revolving-door culture which Americans of all stripes despise. And simply trusting the people who know these agencies to lead them will make the Biden transition team’s job that much easier. Should Biden win in November, they’ll have over 4,000 positions to fill, after all.
For too long, we’ve denigrated civil servants as lazy, wasteful, and parasitic—terms and frames which are wrongheaded and highly racialized. The resulting anti-government fervor gave us the catastrophes of the Bush and Trump presidencies. It’s an important point that bears repeating: People who hate government tend not to be very good at it.
If Biden wants to prove that he won’t be like Trump or Mulvaney, if he wants to prove that his government will indeed restore dignity in America, there’s a simple and powerful step he can take: Trust in government, and commit to appointing career civil servants to top jobs running the agencies they understand. If nothing else, it will severely piss off Mick Mulvaney. And isn’t that what matters most?
