While some Wall Street elders are honest enough to acknowledge that Wall Street needs reform, one man continues to shill for Wall Street's excess. That man is none other than William Donaldson - George W. Bush's SEC Director. The New York Times:

That worries William H. Donaldson, a chairman of the Securities and Exchange Commission in the George W. Bush administration, and a co-founder of Donaldson, Lufkin & Jenrette, a prominent Wall Street firm in its day. To deal with such issues, Mr. Donaldson, now 78, would have Congress create a powerful regulatory body, independent of the Federal Reserve or any other government body, whose members would be appointed directly by the president.

The Bush Administration and William Donaldson were complicit in the dismantling of the regulatory environment that contributed to the financial crisis. The article quotes other Wall Street elders that completely dismantle Donaldson's concern trolling.

While the younger generation, very visibly led by Lloyd C. Blankfein, chief executive of Goldman Sachs, lobbies Congress against such regulation, their spiritual elders support the reform proposed by Paul A. Volcker and, surprisingly, even more restrictions. “I am a believer that the system has gone badly awry and needs massive reform,” said Mr. Bogle, the 80-year-old founder and for many years chief executive of the Vanguard Group, the huge mutual fund company.

Mr. Volcker, 82, signed up the support of nearly a dozen peers whose average age is north of 70 and whose pedigrees on Wall Street and in banking are impeccable. But while Mr. Volcker focuses on a rule that would henceforth prohibit a bank that takes deposits from also buying and selling securities for its own account — risking losses in the process — most of his prominent supporters see that as a starting point in a broader return to regulation. And most do not hesitate to speak up in interviews.

Listen to Nicholas Brady, a Treasury secretary in the late 1980s and early 1990s and before that chairman of Dillon Read & Company, now extinct, but in its day a prestigious Wall Street house. “If you are a commercial bank,” he said, “and you wish the government to guarantee your deposits and bail you out if necessary, then you can’t be involved in speculative activity.”

Does that mean Mr. Brady, now 79, would tell commercial banks they could no longer trade securities for their customers? Mr. Volcker, who gained fame in the 1980s as chairman of the Federal Reserve, would permit this and so would President Obama, who has endorsed the Volcker restriction on proprietary trading, but not the broader ban on trading for customers. Mr. Brady just might take that extra step.

“I’d certainly look into it,” he said, arguing in effect that the current generation of bankers is so profit-oriented, it might well find a way to convert trading for a customer into surreptitiously trading for the bank itself, risking depositors’ money in the process.

“You draw a line that is too tight,” Mr. Brady said. “That does not bother me a bit.”

Nor does it bother John S. Reed, a former Citigroup co-chairman, who played a role in building Citi into a powerhouse that mingled commercial banking and all sorts of trading activities. That mix helped to precipitate the current credit crisis, requiring a costly federal bailout of Citigroup, among others, in 2008.

Mr. Reed, now 71, was long gone by then, and from retirement he has second thoughts. He even thinks about resurrecting the Glass-Steagall Act of 1933, which prevented banks from engaging in any sort of trading activity involving stocks and bonds. (It was revoked in 1999, partly at the behest of Citigroup, then run by Sanford I. Weill.)

“I can be convinced that we should move back in the direction of Glass-Steagall,” Mr. Reed said, disagreeing on this point with Mr. Weill who, at 76, has not retracted his view that deregulation was the right course. Indeed, Mr. Weill has hanging on a wall of his retirement office, as a trophy, one of the pens that President Clinton used to sign the bill that revoked Glass-Steagall.

Mr. Reed, in contrast, wonders if a trading operation should even exist under the same roof as a standard commercial bank. The traders make more in salary and bonuses than the bank employees, and there are frictions. “The bank people say ‘if the capital market guys take big risks, why can’t we do so too and earn the same bucks?’ ” Mr. Reed said. “They start trying to do things that make them look good, like making risky commercial loans and driving for volume.”

The Volcker Rule would solve this in part by telling “the capital market guys,” as Mr. Reed put it, that they can trade only as agents for customers and not on behalf of the house. Restricted to serving only customers, they might or might not take fewer risks.

In any event, the restriction goes in the right direction, which is why George Soros, the billionaire trader, endorses it and falls into place as one of Mr. Volcker’s supportive elder statesmen, referring to him as “an extraordinary public servant.”

But the Volcker Rule is emphatically not enough, Mr. Soros said. A company like Goldman Sachs, barred from proprietary trading, would probably give up its status as a bank holding company and revert to its role as a big Wall Street investment house, free to trade as it wished. If it then failed, Mr. Volcker would use the federal government to usher it through an orderly liquidation. Mr. Soros, in contrast, would rescue Goldman Sachs.

“The danger is that Congress and the administration may try to hide behind the banner of Volcker’s reputation, enact this one dimension of reform and nothing more, and pretend that it is sufficient to repair the financial system,” Mr. Soros said. “That would be a dangerous mistake.”

At 79, Mr. Soros says, he has watched Goldman Sachs, and other firms like it on Wall Street, grow too big to fail, which means that no administration could allow such giants to go through Mr. Volcker’s orderly liquidation and disappear. That would be too damaging to the financial system, the economy and the political party in power.

“You have to recognize that they enjoy an implicit guarantee,” he said of the big trading houses. “To pretend they will be allowed to fail is not credible.”

The solution for Mr. Soros is to avoid failure in the first place. The big Wall Street firms “would have to be closely regulated to make sure they don’t fail,” he said. “You may decide to break them up, or restrict the number of markets in which they are allowed to operate and you would need to impose capital requirements” to curtail risk-taking.

Derivatives contracts are a major source of risk, and Mr. Soros would limit their use. These contracts — offering insurance, for example, on trading positions — are still ubiquitous. When they come due in great quantities, as they were about to do in the fall of 2008, the contagion spreads, undermining one financial institution after another.

These elders know something is gravely wrong with Wall Street. But, William Donaldson and his fellow Bush Administration cronies just don't get it. They are the staunch defenders of a failed system that rewards wealth, not work. Today's so-called conservatives are trying to dress up in populist clothing hoping to earn America's to support. But, behind the populist smokescreen are the same old "conservative" leaders that put Wall Street before Main Street during the Bush Administration.

The Securities & Exchange Commission is responsible for enforcing securities and financial regulatory law in this country. In the lead up to and during the beginning of the global financial crisis three men were asleep at the wheel: former SEC head Christopher Cox, former Fed Chair Alan Greenspan and current Fed Chair Ben Bernanke.

Accountable America Chairman Tom Matzzie said that these three men must answer for their actions:

It’s about time. Chairman Angelides is right to call Cox and Greenspan. If they decline to appear they should be subpoenaed.

Cox macheted the law enforcement functions of the SEC—one of the reasons Bernie Madoff was never caught.

Cox in particular allowed the banks to over-leverage themselves by neglecting his role as SEC chair to protect the public. An SEC bank supervision program, started in 2004 by his predecessor, was abominably managed by Cox and has been called one of the single greatest factors contributing to the financial crisis. Cox’s 17-year record and demeanor as chairman was always to protect the Wall Street banks rather than investors, the public and the economy at large.

It is easy to forget that Alan Greenspan ran the Fed for most of the period when the housing bubble was being inflated. He sat by as the bubble grew with few critical words until after he left his post.

The last two days, Accountable America has run newspaper ads calling on the Commission to investigate the regulators who failed to protect the public and the economy. Support our efforts.

The Financial Crisis Inquiry Commission is meeting to start their review of what happened during the crisis that has dragged our economy into what some are calling the Great Recession. (You can watch a LIVE Webcast of the Commission hearings on C-SPAN or online at www.fcic.gov--January 13 and 14.) Today Accountable America released a new print advertisement--appearing in Politico and Roll Call in Washington, DC--urging the Financial Crisis Inquiry Commission to hold ALL the parties involved in the crisis accountable. The ads highlight the failure of former Securities and Exchange Commission Chairman Christopher Cox to catch the fraud of convicted Ponzi-schemer Bernie Madoff, despite significant warnings to the SEC.

The Commission's hearings are an important first step--they'll feature some of the most prominent bank executives in the industry. But as the chief regulator overseeing the securities industry before and during the crisis of 2008, Cox failed to do anything that prevented the crisis. Cox appeared to be more committed to his long record helping Wall Street banks than protecting America's investors, the public or the economy at large. The SEC was too docile and ineffective. The Financial Crisis Inquiry Commission, chaired by former California State Treasurer Phil Angelides and former U.S. House Ways and Means Chairman Bill Thomas, should investigate the role that officials at the SEC, Federal Reserve and elsewhere played that allowed the foxes to get into the henhouse.

Ultimately we need real financial reforms that prevent a crisis from happening again and put a new cop on the beat protecting investors, the public and the economy. But we also need accountability.