I have to admit I don’t know any sheep farmers, but even I know that it’s not customary for these folks to ask the wolf for suggestions about protecting the sheep.  Questions about fences and guard dogs are not something about which the farmer would consult with the predator.   This is not horse (or sheep) sense.  It’s just plain and simple common sense.

That is why I have to laugh whenever I read in the mainstream press about how Wall Street, meaning the big banks, is “resisting” new rules and tighter regulations in the aftermath of the catastrophic meltdown that the Street brought about.

My response to this “resistance” is quite simple: Who’s asking them what they think?  And why?

It doesn’t take an Einstein to figure out who the predators were in the events of the last few years.   And it certainly doesn’t take a genius to know who the prey was!

Yet, here we are a year after Lehman Brothers collapsed and we are no closer to tougher regulation for these predators than we were before. 

Can I understand that Wall Street would “resist” being overseen more stringently?  Of course. 

But in point of fact, the Street through its reckless machinations and “innovations” nearly brought this country’s and the global financial system to the very edge of the cliff.  The only reason all of us weren’t dragged along with Lehman was that the government pulled out all the stops to prevent it. 

Since it was the government that saved the butts of almost every major Wall Street firm and big bank, the government should be calling the shots when it comes to creating a system where these firms don’t carry us to the brink again. 

It’s a year later and here we are (in typical American fashion) marking the first anniversary of Lehman’s demise. And we’re doing it almost as a historical exercise. I fear we have already forgotten just how terrifying last September was and the stomach-churning that marked day after day of failures and bailouts.

There is yet another pocket of resistance to stricter regulation, greater consumer protection and restructuring the financial regulatory system, and that comes from the very regulators who failed us so terribly in the lead-up to September 2008.   None of these banking regulators wants to give up turf—not to another regulator or to a new agency with the express mandate of protecting consumers.   

My reaction both to Wall Street and Bernanke and Co. is ‘tough,’ a word the street knows and respects.

So I hope that President Obama is tough and means to follow through on his stern message to Wall Street on Sept. 14.  Speaking to those who “are misreading this moment” and “are choosing to ignore” the lessons of Lehman, the president said, “We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.”

After what’s happened I don’t believe that firms should even have the option of “choosing to ignore” the past. Recklessness and malfeasance have to have their consequences.

Settling for anything less, and especially to placate Wall Street, is the equivalent of putting the farmer inside the fence, while the sheep are left on the outside with the wolves.

The attention span of the American public-never great to begin with unless a story has to do with the death or scandal of a celebrity like Michael Jackson, in which case the appetite is insatiable-is giving public figures a freer and freer ride as time goes by.

One area in which this is becoming increasingly obvious is politicians’ blatant attempt to rewrite history even as they are making it.  A choice example is Sarah Palin stating that she was not a quitter even as she was resigning as Alaska’s governor with about a year-and-a-half to go in her first term.  Yes, of course, she was going to fight the good fight elsewhere, and so therefore she could not be accused of quitting.

Now, even if everything is relative, there is still the duck test that must be passed.  And here, I’m afraid, the now ex-governor couldn’t upend the fact that her resignation looked like a duck, walked like a duck and quacked like a duck.  She quit.

Which brings me to a figure closer to the concerns of insurance people, and that is Fed Chairman Ben Bernanke, who is rewriting history with assiduity.  Many people now believe that the Fed not only did very little, if anything at all, to protect consumers in the lead up to the Great Recession, but that the Fed was the prime enabler of many of the situations that nearly sank us.  In some ways, many now believe, the Fed was the three see-no-evil, hear-no-evil, speak-no-evil monkeys all wrapped up in one.

Out of control risky investments by banks, investment banks and other firms too big to fail?  Where was the Fed?

Out of control mortgage business rife with abuse and outright fraud?  Where was the Fed?

Credit card abuses by banks that have fleeced and victimized countless consumers?  Where was the Fed?

 Of course, many of these situations started before Bernanke took office in 2006.  His predecessor, Alan Greenspan of the now shrunken reputation as the financial wizard of all time, laid the groundwork for the catastrophe to come.  But Bernanke did his share of turning a blind eye too.

So now, when the Fed is being faced with legislative moves to trim its sails somewhat and the administration is pushing to create a federal consumer protection agency, the Fed is taking the line that it is the agency in the best position to protect consumers in the areas of mortgages, credit cards, etc.

Never mind that the Fed was seen to be too cozy with the banks for which it was the regulator and that this coziness was a prime contributor to the unprecedented risks that some of the largest banking institutions in the country undertook. 

The way the Fed’s reasoning goes now, as articulated by Bernanke in the dog and pony show he is conducting across the country and on the airwaves, is that because the Fed knows banks and is responsible for protecting banks, it is in the best position of any agency to protect the consumers who depend on banks.  There’s no conflict.

I think it takes a lot of nerve for the top Fed official to say that there is no conflict here when we are continuing to slog through the detritus that this very conflict wrought.

Bernanke’s actions may indeed have  pulled us back from the brink last fall, but I think it is fair to say that we would not have gotten to that brink if the Fed had been more insistent on being the regulator it was supposed to be than the cheerleader that so many perceived it to be.

Saying you’re best qualified to protect consumers when the evidence shows you didn’t is like saying you’re not quitting when that’s what you did. 

What do you say, ducky?  

Quack, quack.  I thought so.

If this was a sports event or some really stadium-packing group like the Rolling Stones or U2, it would have been sold out in minutes and the scalpers out in force.  But as the event I am referring to is the battle over health care reform that will be fought out in the halls of Congress and over many months, tickets are still to be had. 

In any case, this promises to be one hell of a battle, even if it does go on for months.  Upwards of $2 trillion annually is at stake here in terms of the tab for health care in this country.  Entrenched forces are not going to walk away from that lightly and those attacking the status quo are going to have to be mighty determined if they are to make over the current system the way they want.

One thing about President Obama in his drive to reshape the health care system in the U.S. is that he has stayed on message and managed to get a lot of Democrats in Congress behind him.  Given the man’s track record of pulling off surprises, I would not be at all complacent if I were one of the industries to be affected.

Those industries, meanwhile, realized that simply saying no is not going to cut it with the President, the Congress and the public.  So they have made gestures-execs from six health care-related trade groups presented the President with a pledge in May to work to shave some $2 trillion or more over 10 years from the cost of health care.

By some accounts, however, these organizations immediately started to backpedal, saying that what they said was misrepresented or exaggerated.

What’s proving to be the galvanizing point of focus here is the so-called ‘public option,’ wherein the government could be a provider of insurance to those who aren’t covered by group or individual plans. 

The cries have already gone up about how the public option with the government’s muscle behind it would eventually crowd out private insurers from the market.  This, critics say, would spell the end of health care as we know it in this country.

I think it’s important for insurers and others involved in this battle to realize that for a lot of people a change that spells the end of health care as we know it in this country is not exactly the worst possible outcome.  Some of these people, in fact, might welcome such a development.

One such very vocal critic of insurers and their allies is Paul Krugman, Nobel Prize winning economist and New York Times columnist.  His June 5 column in the Times was headlined ‘Keeping Them Honest.”  And sorry to say, the ‘them’ he was referring to are health insurers.

Krugman argues, in fact, that only the public option will keep insurers honest.  His column ends, “Right now the health insurers are promising to deliver major cost savings.  But history shows that such promises can’t be trusted.  As President Obama said in his letter [to Senators Max Baucus and Edward Kennedy], we need a serious, real public option to keep the insurance companies honest.” 

This battle is just beginning to heat up.  Not only are Senate Democrats promising some kind of public option in any health care reform scheme, but more and more talk is filling the air about taxing health insurance benefits. 

Republicans, for the most part allies of the health insurance business as it is, are saying they’re being locked out of the legislative process and thus any bill won’t be bipartisan. 

The way this is shaping up, the summer of ‘09 could be one of the hottest on record.  Just what we journalists love.