TH today: "If Klain does leave, I would view that as a setback for the chances of a change in the Biden administration’s policy towards Fannie and Freddie in the near term, and perhaps for the full second half of the President’s first (and possibly only) four-year term.
A Chief of Staff does not make policy, but he (or she) does help the President and his senior leadership achieve a consensus on what the most important policies to pursue are, and then how to implement them effectively. What’s wrong with Fannie and Freddie now is that they are on Treasury and FHFA “institutional auto-pilot,” heading in a non-sensical direction that is doing great harm to a key constituency of the Democratic party, low- and moderate-income homebuyers. As I’ve been saying for some time, to fix that will require some senior member of the Biden economic team to step up and make thoughtful secondary mortgage market reform a high personal priority. I wasn’t thinking that Ron Klain would be that person, but he certainly could have been a big help in making a change in policy toward Fannie and Freddie successful. As a former senior advisor to Fannie’s Office of the Chairman (of which I was a member for the last five years I was there), Klain knew the company and its business in a way that very few in government do. And of course he had great credibility and clout among Biden’s senior economic policy team, and with the President himself. We’ll have to see who Biden picks as his next COS (of the names I’ve heard bruited about, the only one I know to have some familiarity with Fannie and Freddie is Steve Ricchetti), but in my view not having Klain in that role will make getting the companies out of conservatorship in the next two years a tougher lift than it already was shaping up to be."
