And now there are five -- five Wall Street behemoths, bigger than they were before the Great Meltdown, paying fatter salaries and bonuses to retain their so-called"talent," and raking in huge profits. The biggest difference between now and last October is these biggies didn't know then that they were too big to fail and the government would bail them out if they got into trouble. Now they do. And like a giant, gawking adolescent who's just discovered he can crash the Lexus convertible his rich dad gave him and the next morning have a new one waiting in his driveway courtesy of a dad who can't say no, the biggies will drive even faster now, taking even bigger risks.

What to do? Two ideas are floating around Washington, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one.

The right idea is to break up the giant banks. I don't often agree with Alan Greenspan but he was right when he said last week that "[i]f they're too big to fail, they're too big." Greenspan noted that the government broke up Standard Oil in 1911, and what happened? "The individual parts became more valuable than the whole. Maybe that's what we need to do." (Historic footnote: Had Greenspan not supported in 1999 Congress's repeal of the Glass Stagall Act, which separated investment from commercial banking, we wouldn't be in the soup we're in to begin with.)

Former Fed Chair Paul Volcker, whose only problem is he's much too tall, last week told the New York Times he'd like to see the restoration of the Glass-Steagall Act provisions that would separate the financial giants' deposit-taking activities from their investment and trading businesses. If this separation went into effect, JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. And Goldman Sachs could no longer be a bank holding company.

But the Obama Administration doesn't agree with either Greenspan or Volcker. While it says it doesn't want another bank bailout, its solution to the "too big to fail" problem doesn't go nearly far enough. In fact, it doesn't really go anywhere. The Administration would wait until a giant bank was in danger of failing and then put it into a process akin to bankruptcy. The bank's assets would be sold off to pay its creditors, and its shareholders would likely walk off with nothing. The Treasury would determine when such a "resolution" process was needed, and appoint a receiver, such as the FDIC, to wind down the bank's operations.

There should be an orderly process for putting big failing banks out of business. But this isn't nearly enough. By the time a truly big bank gets into trouble -- one that poses a "systemic risk" to the entire economy -- it's too late. Other banks, competing like mad for the same talent and profits, will already have adopted many of the excessively-risky banks techniques. And the pending failure will already have rocked the entire financial sector.

Worse yet, the Administration's plan gives the big failing bank an escape hatch: The receiver might decide that the bank doesn't need to go out of business after all -- that all it needs is some government money to tide it over until the crisis passes. So the Treasury would also have the authority to provide the bank with financial assistance in the form of loans or guarantees. In other words, back to bailout. (Historical footnote: Summers and Geithner, along with Bob Rubin, while at Treasury in 1999, joined Greenspan in urging Congress to repeal Glass-Steagall. The four of them -- Greenspan, Summers, Rubin and Geithner also refused to regulate derivatives, and pushed Congress to stop the Commodity Futures Trading Corporation from doing so.)

Congress is cooking up a variation on the "resolution" idea that would give the Federal Deposit Insurance Corporation authority to trigger and handle the winding-down of big banks in trouble, without Treasury involvement, and without an escape hatch.

Needless to say, Wall Street favors the Administration's approach -- which is why the Administration chose it to begin with. If I were less charitable I'd say Geithner and Summers continue to bend over bankwards to make Wall Street happy, and in doing so continue to risk the credibility of the President, as well as the long-term financial stability of the system.

Wall Street could live with the slightly less delectable variation that Congress is coming up with. But Congress won't go as far as to unleash the antitrust laws on the big banks or resurrect the Glass-Steagall Act. After all, the Street is a major benefactor of Congress and the Street's lobbyists and lackeys are all over Capitol Hill.

The Street obviously detests the notion that its behemoths should be broken up. That's why the idea isn't even on the table. But it should be. No important public interest is served by allowing giant banks to grow too big to fail. Winding them down after they get into trouble is no answer. By then the damage will already have been done.

Whether it's using the antitrust laws or enacting a new Glass-Steagall Act, the Wall Street giants should be split up -- and soon.

In an interview in Sunday's Washington Post, Prime Minister Binyamin Netanyahu may go further than any of his predecessors in rejecting a settlement freeze -- this after President Obama went further than any of his predecessors in demanding one.

In the fifteen years since Prime Minister Yitzhak Rabin and PLO leader, Yasir Arafat signed the Oslo agreement, Israel has never, in principle, ruled out a settlement freeze. On occasion, it has, in fact, implemented a freeze while on several others, Israeli prime ministers said "yes" but with conditions.

There has been one constant. Israeli prime ministers tended to go along with the US and Palestinian view that freezing settlements was not a final status issue (i.e, one that would only be resolved in the context of comprehensive negotiations) but a precondition for negotiations like the PLO's cessation of violence, which has been in effect for years.

Israeli prime ministers understood that Palestinians viewed the expansion of settlements as something unacceptable during negotiations. As one Palestinian put it, "you can't discuss how you will divide the pizza while one guy is gobbling it up."

This all changed today with an interview in Sunday's Washington Post.

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This is worth looking at. It is Peggy Noonan in the Wall Street Journal arguing that supporters of the President can no longer argue that he inherited the mess (the wars, the economic collapse) because he's been President for 9 months.

She compares Obama's situation to that of his predecessor. "At a certain point, a president must own a presidency. For George W. Bush that point came eight months in, when 9/11 happened. From that point on, the presidency--all his decisions, all the credit and blame for them--was his. The American people didn't hold him responsible for what led up to 9/11, but they held him responsible for everything after it," she writes.

What balderdash. First, the American people should have held him responsible (at least partly) for 9/11 because he and his team ignored repeated warnings that Al Qaeda was planning precisely the kind of attack it, in fact, launched.

Second, it is hardly to anyone's credit that no one was held responsible for the fact that both Manhattan and the Pentagon (the Pentagon!) were naked and open to attack by our enemies. (Imagine if Al Gore had been President!)

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A couple of days ago, Jeffrey Goldberg explained why he was disinclined to associate with J Street, in spite of his sympathy for a two-state solution:

So I'm comfortable in many ways with J Street's basic worldview. On the other hand, I don't think the group has put forward a well-articulated vision of what a progressive Jewish democratic Israel should look like. This might be because, in addition to having progressive Zionists as members, it also has anti-Zionists (these are the types who are happy with Stephen Walt's tragic endorsement of the group) and it's obviously very hard to put forward a positive vision of a Jewish Israel when some of your important supporters -- Bernard Avishai comes to mind -- don't even believe in the idea of a Jewish state.

Now Goldberg denies that "anti-Zionists" like myself are actually keeping him away from J Street's conference. We would know this, presumably, if we had read a different one-line blog post, in which he says, with obvious sarcasm, "I'm sorry I'm going to miss this conference" (which, in context, if you follow his link, reads like "I'm sorry I'm going to miss this circus"). Then, en passant, Goldberg explains his evidence for "anti-Zionism."

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Since 2004, Rey Leal has been fighting. He's fought on the streets of Fallujah, for mental health care in south Texas, and in Washington, for a solution to years of late veterans' health care budgets.

Today, Rey, and millions of veterans, have won their fight.

When Rey returned home from Iraq after two combat tours, he sought mental health care at his nearest VA clinic, where there was just one psychologist, taking appointments only two days a week. The psychologist only works two days because that Texas clinic, like many VA clinics and hospitals, has to stretch its funding to make sure the money lasts the whole year. They don't know how much funding they'll have next year because the VA budget is routinely passed late.

In fact, 20 out of the last 23 years, the budget has not been passed on time. This year was no exception. As of today, the VA budget is 22 days late--and counting.

For veterans, these late budgets mean the VA is forced to ration care for the almost 6 million patients whose livelihoods depend on its services. This is why Rey took his fight to Washington. The good news for vets is that Congress finally listened.

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Progressives are always asking the question "Is Obama tough enough?" To listen to Rush Limbaugh, you would think that the White House political organization is so tough Limbaugh is in danger of being packed off to a Gulag in Northern Alaska with his buddy Glenn Beck

And these guys in the Obama administration... Look, folks, Alinsky Rules for Radicals: When faced with an opponent, get rid of the opponent. You don't debate the opponent. You don't consider the opponent's ideas. You say, "I won. Screw you. Get out of the way, and whatever I have to do to get you out of the way is right." It's happening right before our very eyes...But this is how these people operate! There won't be an opposition by the time they get through.

When the schoolyard bullies like Limbaugh and Beck start whining to the teacher, you know that Axelrod and Company are doing something right. The exquisite irony in hearing Limbaugh whine that Obama will not "consider the opponent's ideas", as if Limbaugh ever gave a moment's consideration of his opponents ideas. As Vandehei and Allen point out this morning, Limbaugh and the Brownshirts are an anchor around the neck of the Republican Party.

Many top Republicans are growing worried that the party's chances for reversing its electoral routs of 2006 and 2008 are being wounded by the flamboyant rhetoric and angry tone of conservative activists and media personalities, according to interviews with GOP officials and operatives.

The Washington Post poll was very clear. The Republicans are now defined as the far right party and it scares the bejesus out of most independents.

Kenneth Feinberg, President Obama's compensation czar for bailed out banks, appears to have taken some genuine steps to rein in excessive executive compensation at the basket case banks that received the most TARP money. He cut cash salaries by 90 percent in some cases and reduced overall compensation for the top executives at the seven institutions that received the most government money.

This is a good first step, but it is only a first step. The pay caps involve only a relatively small number of people in an industry where hugely bloated salaries are the norm. Even in these cases it is too early to know that the pay caps will actually prove to be binding. After all, Wall Street's main craft is evading regulations and taxes. It is entirely possible that those clever Wall Street boys will find a way to get around whatever pay restrictions Mr. Feinberg puts in place.

Whatever happens to the pay of this small group of executives the real problem goes much deeper. The Wall Street folks view the wreckage from last year as a minor distraction and are eager to get back to business as usual. This attitude was best expressed by "a person close to A.I.G.'s board," who said of plans to restrict pay at the AIG division that wrecked the company to $200,000: "that's insulting ... why wouldn't anybody quit?"

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There was a famous Harvard-Yale football game back in 1968. And it's results produced an even more famous headline on page one of the Harvard Crimson. "Harvard Beats Yale: 29-29."

The reason for the headline: Yale had a perfect season and had at least two major stars (Brian Dowling and Calvin Hill) who would go on to the NFL. The Harvard team was a bunch of scruffy (for Harvard, anyway) upstarts like Tommy Lee Jones. So when, in the last seconds of the game, Harvard tied the score, every student at both schools understood that the underdog, Harvard, had won.

That game is considered the best game in the hundred plus years of Harvard-Yale football rivalry and is known simply as "The Game."

Well, in much the same way, J Street has already won won the battle with the status quo lobby. For the underdog, tying is winning.

Like Harvard in 1968, J Street has already won.

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A couple of years ago The Nation's Eric Alterman published What Liberal Media?, shredding the familiar conservative charges. It may be too soon to ask, What liberal academy? -- although I've had fun exposing what I called "Wile E. Coyote conservatives" who were rushing off cliffs a couple of years ago blaming liberals for ousting Lawrence Summers from the presidency of Harvard (the high-capitalist Harvard Corporation did it, and not for politically correct reasons) and for enrolling a former Taliban rep as a special student at Yale (an older, more conservative Yale foreign-policy network blessed it).

Now comes a Chronicle of Higher Education debate on whether and why liberal academia still spurns conservative scholars. Never mind that the fiscal crises gripping public and private universities show them to have been far more captive to market riptides than to leftist doctrines; in the Chronicle, Columbia intellectual historian Mark Lilla writes that on many campuses a pervasive ideology still normalizes "liberal" views that are rather narrow and arbitrary. Boston College's Alan Wolfe agrees that colleges promote little true intellectual diversity, although he says conservatives are part of the problem.

Others add brief observations, mine noting that what's actually normalized by the typical campus mix of political correctness and corporatist discipline isn't very "liberal," as most Americans use the term. Baiters of tenured radicals -- the conservative humorist P.J. O'Rourke, the propagandist Roger Kimball, the provocateur David Horowitz -- can't so easily claim, as David Brooks claimed in 2002, that America "houses its radical lunatics ... in [academic] departments that operate as nunneries for the perpetually alienated." Not only do market forces rule; lavishly funded nunneries for failed, aging neo-cons are sprouting or entrenching themselves at Yale, Duke, George Mason, Claremont- McKenna-Pomona, Chicago, and elsewhere.

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MEDIA MATTERS TAKES DOWN LENNY BEN DAVID HERE. Read all about the former American, now Israeli settler, who has made destroying J Street his life's work.

Now Lenny has joined forces with the ZOA.

The Zionist Organization of America is a right-wing fringe group, which regularly engages in Arab and Muslim baiting. (Check out the poster on the ZOA home page).

In my opinion, ZOA is an anti-Arab and Muslim hate group. So, naturally, it is terrified by J Street which has as its goal promoting US diplomacy to end the Israeli-Palestinian conflict.

And, just as naturally, ZOA is promoting the screed against J Street by Israeli settler, Lenny Ben David.

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At a conference in London, a Goldman Sachs international adviser, Brian Griffiths, praised inequality. As his company was putting aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier, Griffiths told us not to worry. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” he said.

Eight months ago it looked as if Wall Street was in store for strong financial regulation -- oversight of derivative trading, pay linked to long-term performance, much higher capital requirements, an end to conflicts of interest (i.e. credit rating agencies being paid by the very companies whose securities they're rating), and even resurrection of the Glass-Steagall Act separating commercial from investment banking.

Today, Congress is struggling to produce the tiniest shards of regulation that would at least give the appearance of doing something to rein in the Street.

What happened in the intervening months? Two things. First, America's attention wandered. We're now focusing on health care, Letterman's frolics, and little boys who hide in attics rather than balloons. And, hey, the Dow is up again. The politicians who put off Wall Street regulation for ten months knew that the public would probably lose interest by now.

Second, the banks keep paying off Congress. The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley's Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.

Official Wall Street PAC donations are piddling compared to the tens of millions of dollars that Wall Street executives dole out to candidates on their own (or with a gentle nudge from their firms). Remember -- the Street is where the money is. Executives and traders on the Street have become the single biggest sources of money for Democrats as well as Republicans. And with mid-term elections looming next year, you can bet every member of Congress has a glint in his or her eye directed at the Street.

That's why the President went to Wall Street to raise money Tuesday night, gleaning about $2 million for the effort. He politely asked the crowd to cooperate with reform -- “If there are members of the financial industry in the audience today, I would ask that you join us in passing necessary reforms" -- but those were hardly fighting words. It's hard to fight people you're trying to squeeze money out of.

Which is the essential problem.

Ken Feinberg, the President's "pay czar" came down hard on executive pay yesterday, for those banks still collecting money under TARP, as well he should. But Feinberg isn't trying to pass new financial reform legislation, and TARP no longer covers several of the biggest banks with the highest pay and bonuses -- although they're still getting subsidized by the government with low-interest loans.

Wall Street and the Treasury want us to believe that the TARP money will be repaid to taxpayers, but Neil Barofsky, the special inspector general keeping watch over TARP, said yesterday that just 17 percent of the TARP money has been repaid, and “[i]t’s extremely unlikely that taxpayers will see a full return on their investment." Later he told a reporter that it's unlikely "we'll get a lot of our money back at all."

Brian Griffiths, the Goldman international adviser who told us inequality is good for us, doesn't know what he's talking about. America is lurching toward inequality once again, led by the financial industry. The Street is back to where it was in 2007, but most of the rest of us are poorer than we were then -- largely due to the meltdown that occurred because Wall Street overreached. The oddity is that we bailed out the Street, including Griffiths and his colleagues, but apparently won't even be repaid.
And now that Griffiths et al knows his firm and the other big ones on the Street are too big to fail, he and his colleagues will make even bigger gambles in the future with our money.

E-mail I just got on Ben David. It came from a big Washington lobbyist. "I hope your friend, Lenny, is retired because controversial consultants don't get hired. Len is now shown himself to be an anti-Muslim racist. That could make him an untouchable."

I wrote back: "Lenny is retired which frees him to indulge his inner racist."

START with Media Matters Action Network's explosive expose on Lenny Ben David. And here is the Jerusalem Post on Lenny Ben David and the rightwing cabal out to get J Street.

Then everyone should read Spencer Ackerman's powerful piece about his friend, Rebecca Abou-Chedid, a young law student in Washington who is Arab-American.

Why a piece about Rebecca? Because Rebecca was the target of a drive-by hit directed at J Street by an Israeli settler, Lenny Ben David. Lenny is the quarterback of the smear campaign against J Street and attacked Rebecca in passing. She's Arab-American. She worked for an Arab American civil rights group. She supports J Street. Hence, J Street is consorting with the enemy because everyone with Arab blood in their veins is THE ENEMY.

I know Rebecca well and she is about as anti-Israel as Yitzhak Rabin was. I choose the analogy carefully. Ben David (Lenny Davis) is a settler, an enemy of peace and of everything Rabin represented. Naturally he hates J Street. Read his screed. It's a combination of Joe McCarthy and J. Edgar Hoover, one lie after another. And racist on top of it. (Lenny has a pathological hatred of Arabs)

So who is Lenny?

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We have recently done some work on the TPM backend to improve the login and email delivery systems. You should always receive confirmation emails from us when you sign up for an account or change your password, and you shouldn't be logged out when browsing the site, leaving comments and posting to Reader Blogs within one session. Though we've tried to squash as many of these bugs as we can find, I'd like to know what your experience has been in the past few weeks. Please leave a comment here if you're still seeing either of these issues.

I am just about to board a plane for the US, so I am unable to answer this remarkably ill-informed (and, under the circumstances, vicious) shot from Jefferey Goldberg: the idea that he cannot go to the J Street conference because "some of [its] most important supporters -- Bernard Avishai comes to mind -- don't even believe in the idea of a Jewish state." I would simply ask readers to consider this post, or this, or this interview. Or just watch this lecture on You Tube. Goldberg has, alas, started to speak about "the idea of a Jewish state" a little like the way FOX News celebs talk about "America." Complexity is for sissies. Very sad. When he was at the New Yorker, his work on the settlers was the best there was.

In August, at the height of the Tea Party Movement, I counseled that the temporary gains of Republican's would turn out to be ephemeral. The new Washington Post/ABC News Poll proves my point.

Less than one in five voters (19 percent) expressed confidence in Republicans' ability to make the right decisions for America's future while a whopping 79 percent lacked that confidence.

Among independent voters, who went heavily for Obama in 2008 and congressional Democrats in 2006, the numbers for Republicans on the confidence questions were even more worse. Just 17 percent of independents expressed confidence in Republicans' ability to make the right decision while 83 percent said they did not have that confidence.On the generic ballot question, 51 percent of the sample said they would cast a vote for a Democratic candidate in their congressional district next fall while just 39 percent said they would opt for a GOP candidate.

The Know-Nothing Party known as Republican is not a credible alternative. Obama's comment to the Republicans, "Why don't you grab a mop? Why don't you help clean up? ... Grab a mop -- let's get to work!" is exactly on point.