For those who need a 10,000 foot overview of the debate over the cramdown legislation, I highly suggest this recent Businessweek cover story. Not only does it explain the issue and how banks are effectively exacerbating the foreclosure crisis, it shows the ugly side of how Congress still works. By that I mean it shows that in debates over issues of money and corporate power, banks are treated as the most important players of all - more important than the public at large. For a taste, here's what I mean:
Senator Dick Durbin (D-Ill.), who since 2007 had led unsuccessful efforts in Congress to give bankruptcy judges authority to modify home loans, dispatched his senior economic policy adviser, Brad J. McConnell, to talk with lobbyists for JPMorgan Chase and Bank of America. "Each agreed to take [the idea] back to their folks to see what they could do," says a person familiar with the talks...By the time McConnell talked to the JPMorgan and BofA representatives the next day, however, "they had gone on full defense mode and started to complain about how lousy a deal Citi had struck," says the person familiar with the exchanges. Bank opposition...
In the following weeks, banking lobbyists launched a renewed attack on the cramdown legislation, enlisting as an ally Republican Representative Lamar Smith of Texas, among others. Apart from Citi, "the industry remains united in that bankruptcy cramdown would destabilize the market" by creating widespread uncertainty about the value of numerous troubled mortgages, says Steve O'Connor, senior vice-president for government relations at the Mortgage Bankers Assn. His group is distributing talking points to key congressional aides laying out reasons why "Congress should defeat bankruptcy reform legislation."...
Industry lobbyists are organizing home state bankers to pressure moderate Democrats they hope will be receptive to limiting the kinds of loans eligible for cramdown. One target: Senator Evan Bayh of Indiana.
There's a lot in this passage - but I think the most important part is how lawmakers are still integrally involving corporate lobbyists in their legislative efforts to deal with the economic crisis. I don't mean to pick on Durbin - on this issue (and on many) he's been great. I mean to highlight the enduring corruption of the process itself.
It's stunning, really - these lobbyists represent the same corporations that ran the economy into the ground, and yet Congress still feels the need to ask their permission to go ahead with legislation to stop their most egregious practices.
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[Source: RETROGRESSING - Posted by FreeAutoBlogger]
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