Financial Reform - or Revolution?

We hear from Capitol Hill this week that the House is starting the process of writing and passing legislation to reform the U.S. financial system.  It seems clear, however, that these reforms, if passed, are unlikely to address the root causes of the financial and housing crisis that led to our current economic troubles.

I saw Michael Moore's new documentary, "Capitalism:  A Love Story," this past weekend.  I liked the film overall and found much of it to be compelling.  One of the major themes of the movie is that Wall Street has essentially carried out a coup d'etat in Washington.  As a result of Wall Street's control over our nation's capital, serious reform seems unlikely, if not impossible.  This situation is discussed in a riveting and disturbing segment of Bill Moyer's Journal on PBS from October 9:

http://www.pbs.org/moyers/journal/10092009/watch.html

In the segment, one of the stars of the Moore film, US Rep. Marcy Kaptur (D-OH), and MIT economist Simon Johnson, explain how Wall Street insiders and friends dominate the executive branch (Summers, Geithner, et al) while campaign contributions secure the loyalty of members of Congress from both parties.

It makes me wonder whether financial reforms will even do the trick.  What we need is a revolution - massive changes to our financial and political system on the scale of the New Deal or greater.  We may not be able to reconstruct the Glass-Steagall Act wall between commercial and investment banking, but we need the equivalent and more.  We need to keep banks from becoming "too big to fail."  We need to change the rules for financing of congressional campaigns - probably just have public financing.  We need to regulate derivatives and any new, risky investments Wall Street's "geniuses" come up with.  And we need to close the revolving door between Wall Street and Pennsylvania Avenue.

If we don't, Johnson warns that the next crisis will likely be even bigger - just as this one was bigger than the technology bubble and the S&L crisis that preceded it.  If that happens, we might have a real revolution on our hands.