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Defeating Homeowners: A pyrrhic victory for the bankers

May 4, 2009

This classy headline comes from Ann Pettifor at the Huffington Post.  In case your vocab skills are a little lax (I know mine were), Wikipedia informs us that “a Pyrrhic victory is a victory with devastating cost to the victor.”

This is just one example of the criticism the Senate has received for voting down an amendment which would have prevented 1.7 million foreclosures.   Everyone agrees that in this battle, the banks “won” and homeowners “lost.”

There’s a lot of speculation as to why the banks won.  Shouldn’t they be treated like lepers in the halls of Congress for bringing our economy into this recession?  Instead, they continue to score legislative victories.

Senator Durbin (pictured above) famously claimed that the “banks own the Senate.”  This could explain why they were able to kill the amendment and prevent saving 1.7 million homes.

Senators who voted against the amendment explained their votes otherwise, of course.  This article on the Huffington Post — aptly titled “In Their Own Words:  Why Dem Senators Screwed Homeowners” — lists some of the reasons the Senators gave.

A New York Times editorial points out another important factor (besides the banks’ clout) behind the defeat of the amendment:  the Administration’s silence.  When the measure failed, they point out, the White House didn’t even issue a statement of regret.  It will be interesting to see how well the Obama foreclosure prevention plans work in the absence of the bankruptcy fix.

See Progress Illinois, CQ Politics, Politico, and the LA Times for more on the Senate’s consumer unfriendly decision.

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