Minnesota 2020 Journal: Governor Obstinate


Obstinacy is not leadership.

Opinion: Governor Obstinate

During the average two of every three days that Governor Pawlenty is physically present in Minnesota, he’s demonstrates an oppositional proclivity, meaning that he’s against things. The 2008 bonding bill, education finance reform, property tax relief, expanding access to affordable healthcare, whatever the issue, Pawlenty obstinately rejects it.

With the state and national economies reeling, foreclosures skyrocketing, and lay-offs creeping up, Minnesota needs real gubernatorial leadership. Opposition is insufficient.

To be fair, I’m not one to rush into uncharted waters. If anything, I’m skeptical of broad-brush answers to any problem. I’m not especially keen on the one-year mortgage foreclosure moratorium because it’s a blunt policy instrument that will perpetuate rather than relieve harm.

Neither unthinking insistence nor obstinate rejection of a sub-prime mortgage foreclosure moratorium will realize progressive resolution. At day’s end, we want to grow and move forward, not wallow in an unproductive past.

First, we have to move past punishment. Financial failure is no more a moral shortcoming than home ownership is an outward sign of inner-grace. Punishing people for embracing the American dream will only undermine families and communities.

Second, everyone is responsible. Criminal, fraudulent conduct deserves prosecution. But, that’s only part of the solution. We need a stronger regulatory climate, not a dismissive wave of the hand from conservative public policy makers.

We’re not going to punish or apologize our way out of the sub-prime driven mortgage foreclosure crises. A little compassion, a healthy dose of clear-eyed realism and a willingness to work, really work, at resolution is required.

During the mid-1980s farm crises, the Minnesota Farm Interest Buy-Down program leveraged state dollars by bringing together agricultural borrowers and lenders. The idea was simple: something is better than nothing. Some debt service, at least in the short haul, is better than none. Banks are the business of lending money; they’ve repeatedly learned that holding unproductive assets is unwise and unprofitable.

Contemplating today’s expanding home foreclosure problem, the 80s farm crises offers several important policy leadership lessons.

Twenty-one years ago, noted Minnesota economist C. Ford Runge, evaluating the Farm Interest Buy-Down program, wrote that “This program illustrates five key lessons: the limits of state financial resources; the consequent need to shift financial risk away from state treasuries; the potential for cooperative efforts by state departments and the state university; the problems resulting from efforts to make rural financial stress a partisan political issue; and the difficulty of dismantling temporary initiatives.”

Runge notes Governor Rudy Perpich ‘s critical leadership role. “Remembering the populist initiatives of the 1930s, many [farmers] called on the Governor to impose a moratorium on farm mortgage foreclosures. Set against this demand was wide-spread concern in the financial community that a moratorium would tie up orderly foreclosures and force reductions in the general supply of farm credit. In response…, Governor Perpich appointed an “Economic Crises Commission.”

In short order, the program’s basic structure -credit mediation and an operating loan interest buy-down program, facilitated by the Minnesota Extension Service- were in place. Facing a first-rank crisis, Perpich didn’t wilt, fold or flee; rather, he led.

Minnesota’s share of the subprime mortgage financing and foreclosure crises is distinctly different from the mid-80s farm crises. Consequently, those solutions aren’t fully applicable but the idea of a collective solution to a large, shared problem remains.

Twenty years ago, Governor Perpich put his head down, running straight at the problem. Today, Governor Pawlenty’s greatest priority is protecting “no new taxes” pledge. It’s not a solution and, in fact, it exacerbates our state’s problems. We can and must do better. Nobody -not foreclosed-upon homeowners, not lenders, not neighbors, not cops, not progressive public policy advocates- wants a lot of empty houses.

Vacant, foreclosed houses are obstinacy’s ultimate triumph. I’ll take “do something” over “do nothing” any day. Where’s the leadership, Governor?