There aren't a lot of days you're going to hear me saying that people like Carl Levin [D-MI] and Dianne Feinstein [D-CA] are on the right track. But there's at least one issue where I have to give them props for trying, and actually think their proposals make more sense than the White House or, to date, the GOP. Newsweek's "The Insurgents" talks about work that Maria Cantwell [D-WA], Byron Dorgan [D-ND] et. al. are doing to deal with financial industry regulation. They're closer to the heart of the matter than blathering about nebulous concepts like "systemic risk"...

"Dorgan warned in 1999 that "massive taxpayer bailouts" would result from the repeal of the Glass-Steagall Act, a move that allowed investment and commercial banks to merge. Both Dorgan and Cantwell are worried about loopholes that will permit firms to keep trillions of dollars of derivative trades in the shadows, escaping regulation. Levin, for his part, wants to rescind many of the Clinton-era laws that led to deregulation, including the 2000 Commodity Futures Modernization Act, which exempted credit default swaps from regulation. Unless giant financial firms like Citigroup and AIG are broken up, Sanders says, they'll have to be bailed out again someday."

And you know what? I think they're right. Actually, I support guys like Chris Whalen, whose prepared remarks to the Senate Banking Committee argued, convincingly, that Credit Default Swaps should simply be prohibited outright, as fraudulent. That their pricing is so inherently so non-transparent, and that they are inherently wealth-destroying by increasing the level of risk and loss in the system for the very thing they're supposed to insure against, that they should not exist.

They do exist, because in the short term, their opaqueness generates supra-normal profits for certain firms, even though they are likely to trigger those firms' implosion at a later date. But by then, the people currently in charge have probably made millions in bonuses, and don't suffer from the crash. Unlike the people who still work there. Or the larger economy.