Fred gave Timmy and Larry some space on his Op-Ed page, and they finish up this way:

By restoring the public's trust in our financial system, the administration's reforms will allow the financial system to play its most important function: transforming the earnings and savings of workers into the loans that help families buy homes and cars, help parents send kids to college, and help entrepreneurs build their businesses. Now is the time to act.

Well, if that's all the banks are good for, then why do we need the huge CEO salaries, and all the "innovation," and the one-day-a-week jobs, and all the weasels pulling down commissions? If banking's going to become boring again, why do we need banksters?

What Timmy and Larry want to do, in fact, is make cognitive regulatory capture easier, by giving Big Money a single Big Agency to direct its fire at. Flawed as the current system is, at least it doesn't have a single point of FAIL!

Of course, the real answer is to break up the big banks, so that none of them are too big to fail, and they play a less powerful role in the political system. But that -- like so much else in the administration -- is off the table. Thank the Finance Wing of the FKDP for that...

UPDATE See also The Big Picture, Where's Volcker?

Plenty of people who supported Obama in the 2008 election did so because of Volcker’s endorsement/involvement. His absence, and lack of a visible role, has been hugely disappointing.

The Deal reported:

“The most obvious speculation is that forces within the Treasury, or the White House effectively deep-sixed anything as fundamental as separating high-risk institutions to more traditional utility banks. In fact, that may well be part and parcel of the air of compromise and expedience that hangs over the entire reform process. With a few exceptions like the disappearing Office of Thrift Supervision, most of the lineup of regulators will remain the same. The Securities and Exchange Commission and the Commodity Futures Trading Commission will survive, a consumer products commission will be set up, and a council of regulators will sit over everything, like some regulatory board of directors. It’s still a little unclear how much power the Federal Reserve will accumulate, though it seems probable that it will get some role as a systemic overseer.

This entire setup appears fragmented and inefficient, the worst of both worlds. It’s also bound to be expensive. Why anyone thought that a council of regulators was a good idea beyond political expedience is beyond me. Nothing that’s been leaked so far, however, involves any kind of fundamental alteration in the financial system itself.”

This does not bode well . .

See, there are other people than C-list bloggers nobody reads saying this stuff...