Oh boy. Now we are going to have lots of Wall Street reform. We’ve had a few made-for-tv congressional hearings. The politicians did their posturing. They roughed up the tycoons before the cameras.

We need reforms after the big crisis. Just like we needed reforms after the 1929 market crash. We got those reforms in the 1930’s.

Since then the markets have changed a lot, of course. They created things like mutual funds and hedge funds and derivatives. And other fancy stuff with fancy names. They got hooked up electronically. So that players can shoot billions across the globe in a blink. They can buy and sell and buy again 100 million shares before you can blow your nose.

Lots of that new stuff got caught up in the big credit crunch. For instance, we had little or no regulation of the 8000 hedge funds. And they dealt in a few trillion bucks.

First, we need to vilify Wall Street. The politicians have been busy painting Wall Street moguls and firms as greedy, corrupt, etc. One headline this week captured the mood: “OBAMA TO TARGET ‘RISKY DECISIONS’ BY WALL STREET THAT LED TO CREDIT CRISIS.”

I put all this into a category I call “Yeah, But Mom”. You get caught swiping your sister’s candy. “Yeah, but Mom, HE wrecked her bike!”