Connecticut Senator Chris Dodd, desperate to repair his reputation after his AIG bonus embarrassment and other missteps, now wants one big regulator, eh? The blogger Washington weighs in with a thoughtful piece, arguing that Dodd's bill is likely to contain too many loopholes and "really just maintains the status quo."

Community bankers (i.e., most of America's little banks) think of such a superregulator as a "big, hairy, cyclopean beast," as my colleague James Lieber pointed out in "No Justice." True, but ultimately such a regulator will be wimpy. And why strip any authority at all from the FDIC, where Sheila Bair has shown that banks can at least occasionally be brought back into line?

I'm partial to Washington's arguments because he thinks Glass-Steagall should be reinstated, "that banks should choose either to act as traditional, safe depository institutions or as speculative funds, but not both."

Washington points to a piece that cuts through all the bullshit (including Dodd's) by investment-banking type Marshall Auerback called "Attention Lloyd Blankfein: The Public Purpose of Banking." Wherein Auerback concludes by saying that "what Senator Dodd and Congressman [Barney] Frank are arguing about is akin to how to rearrange the deck chairs on the Titanic."