It's The Bank Lobbyists : Planet Money A pair of economists say the financial industry is getting in the way.
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It's The Bank Lobbyists

Folks, we're mostly taking President's Day off, but we did get a couple of notes from economists that I thought you'd like to see.

The first, from Simon Johnson, details the collapse of a consensus on what to do about faltering U.S. banks. Johnson's open to ideas, but he's not moving on this:

"The banking lobby has become too powerful, in large part because big banks have balance sheets that are too big relative to the size of the economy. If a bank has total assets of over 10% of GDP, it is obviously too big to fail. Of course, the smart people who run these banks know this and act — politically and economically — accordingly."

Which brings me to the second note, from Amir Sufi, also a Planet Money guest. Sufi recommends this Business Week article arguing that banks are undermining efforts to keep homeowners in their homes. You'll notice yet another Planet Money guest is featured, bank lobbyist Scott Talbott.

Sufi writes:

"My take on all of this is that the banking industry has basically shot themselves in the foot over this issue. Even though they should WANT to facilitate renegotiations of mortgages to prevent foreclosures, their lack of foresight has led them to try and stall any meaningful government help in getting around the legal difficulties in writing down principal.

"The Housing and Economic Recovery Act passed in July 2008 did not make write-downs by banks mandatory. Instead, the banking industry lobbied hard to make sure that the participation of banks was voluntary. As this article points out, the act was a miserable failure which is part of the reason the housing market continues its death spiral."