- We want equity NOW in the form of preferred stock with voting rights.
- We want judges to be able to modify mortgages in bankruptcy.
Read the full explanation below.
Let them know you oppose the bailout plan on the table.
- We want equity NOW in the form of preferred stock with voting rights.
The current plan says we get equity warrants. That means that we (the United States govt) can, at some time in the future take possession of the companies. However, we don't get a say in what happens to the company until we take possession. Also, only the Treasury Secretary can exercise the warrants and actually take possession. That is bogus. I guarantee if a future Treasury Secretary tries to exercise the warrants, the banks' lobbyists will scream bloody murder and exercise of the warrants will never happen.
If on the other hand we get preferred stock with voting rights then the American people get to vote on the corporations' directors. The directors (representatives of the owners) actually hire the management (the CEO) and get direct oversight. We want control today. Why? We want control because the current directors are obviously incompetent. They hired incompetent management, which is how we got into this giant financial mess in the first place. If all these directors and their hand picked execs were so smart, they wouldn't need the bailout.
- We want judges to be able to modify mortgages in bankruptcy.
The current plan says that one Federal agency (Federal Housing Finance Agency) can modify mortgages. How can one agency look after millions of home mortgages? It can't. Allowing judges to modify mortgage terms in bankruptcy allows more local and customized solutions to problems, as well as taking the load off one central point of failure.
That means that when a person goes bankrupt, the judge in the case has discretion modify the mortgage terms. This is important because it can help individuals keep their homes in some circumstances. Why don't we want to foreclose on everyone? Because, as John Robb (no "bleeding heart liberal" by any means) says, areas with lots of empty houses breed crime and instability. Thus it's in all of our interests for judges to be able to mitigate the damage of bad mortgage terms (reduce payments) and keep people in their houses. That is, unless people just want to see slums and chaos.
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