A Superfund Solution for an Economic Love Canal

Abstract

In this essay, Professor Konar-Steenberg argues that the current mortgage crisis bears striking similarities to the toxic waste crisis of the 1970s and 1980s, justifying an analogous legislative solution: A Superfund-style accountability regime for the subprime mortgage mess to complement the local, state, and federal economic cleanup measures already underway. The essay notes the important similarities between the two crises, both of which involved risky and inadequately regulated commercial behavior whose negative consequences gutted entire communities. The essay argues that these similarities justify imposing the severe rules of Superfund-style liability – strict, retroactive, and joint-and-several liability, coupled with broad corporate liability options – in order to reach the many kinds of actors who had a hand in making the subprime mess.

Keywords: subprime, strict liability, foreclosure, mortgage, TARP, bailout, real estate, property, discrimination