From Sean Paul. And not from a Senator, any Senator, sigh:

I think an anecdote is appropriate here first. When the Bear Stearns hedge funds blew up last year I asked Bob Geiger, who has impeccable sources in the Senate, if this was on their radar. I pestered him for several weeks and he never got an answer from any of them that I am aware of. This just goes to show you how out of touch our Congress is with reality. Perception is everything and at that time, the wise men all agreed: it's contained.

Oh well. Go read the whole thing; but I'll pull out the bullet points:

[First,] mark-to-model should be excised from GAAP and disallowed. End of story. If you can't discover a real price, then there isn't a market for it.

Second, disclosure and absolute transparency when it comes to any kind of credit derivatives.

Third: I would make it mandatory for all bankers, hedge funds, all bank employees and executives and pretty much anyone who works in a 'securitized' or derivative market to get licenses to work in the securities market. ... If Conservatives want teachers to take tests, then finance professionals should too! ... Another key reason for this is that all of them need to relearn the idea of "fiduciary responsibility."

Fourth: executive compensation and clawback provisions. It is simply obscene that Lehman Brother's filed for bankruptcy but in those proceedings their executives were allotted $2.5 billion in bonuses.

Fifth: enforce anti-trust laws. If it is too big to fail, it is too big to exist.

Sixth: regulate hedge funds, although keeping said regulation at a minimum.

Seventh: overhaul municipal bond issuance, marketing, selling, and trading regulations. At the present time muni-bond buying and selling (at least on the retail level) is based on principles, there are no real regulations, per se.

Eighth: Insurance industry reform, not really, except for CDSs (see above). It's a good things the states have authority over this or AIG really could have been a cataclysm of an altogether horrific order. Ian Welsh might have some good ideas here.

Ninth: enact a Tobin tax on all cross-border financial trades of say, .01% of the total value added transaction and use it to fund real foreign aid projects like building water wells, and other essentials, not subsidizing the sale of weapons to Israelis and Egyptians as we currently do with our 'foreign aid' budget. Oh, did you think our foreign aid budget actually went to helping poor people? Did you then know that on a per capita basis each Israeli citizen gets about $500USD a year from you, the taxpayer? I bet you didn't.

Finally, everyone in the investment business, instead of having to take obligatory exams on new bullshit Patriot Act money laundering laws--which actually made it harder for new business to start up, not to mention the fact that anyone with half-a-brain and a sound understanding of fiduciary responsibility knows who's laundering and who's not--should take mandatory classes on financial prudence, what systemic risk is, what causes it, etc. . . .

Interesting. Something to go forward with. Too bad everybody's so focused on the horse race, because the window of opportunity to start this discussion will close faster than we can imagine -- if the powers that be have anything to do with it.