Yesterday the Senate passed the Restoring American Financial Stability Act of 2010 (the “Senate Bill”). In December 2009, the House passed the Financial Stability Improvement Act of 2009(the “House Bill”). The Senate Bill now must be reconciled with the previously passed House Bill.

The House and Senate Conference Committee plans to submit a final bill to President Obama before July 4, 2010. Both bills are failed attempts to promote the false idea that our elected officials are doing something constructive to reign in the unbridled greed and corruption of giant financial institutions.

Neither Bill addresses the real issues.

Neither Bill contains anything more than business-as-usual type rules.

Neither Bill brings back the best components of Glass-Steagall that were repealed by the Gramm-Leach-Bliley Act of 1999.

Neither Bill is a true change in the status quo.

First off, neither Bill prevents too-big-to-fail. Anyone with an ounce of common sense can tell you the surest way to prevent the too-big-to-fail dilemma is to not allow these firms to get too big in the first place.

If you don't allow them to get to the size where they are a systemic risk if they fail, then you never will have to face that dilemma.

The Senate briefly debated and squarely rejected an amendment that would have broken up the biggest banks by imposing a set limit on their size.

And who do you think spent a fair amount of money "lobbying" our Senators to make certain that limit would never become part of the final Bill?

If you guessed the biggest financial firms, give yourself an A+.

Score 1 for the financial industry and 0 for the taxpayers.

One of the key lessons we learned from the Great Depression of the 1930s was that to prevent the same type of economic calamity again, we needed to separate investment banking, commercial banking, and the insurance industry from each other.

If a financial firm was in one of those fields, it could not also be in either of the other two. The law required financial firms to stick to just one field. this had the effect of naturally limiting the size that a financial firm could attain.

That restriction was repealed in 1999, and suddenly financial conglomerates could grow without restraint.

Of course, a few elected officials are in favor of reinstating that provision. Those officials have been overwhelmed by the money power and neither the House or Senate Bills passed will bring back that restriction which worked so well for over a half century.

Score 2 for the financial industry and 0 for the taxpayers.

Finally, we come to the heart of the modern financial crisis: derivatives.

Worldwide, the size of the derivatives monster is in excess of One Quadrillion Dollars. That's $1,000 Trillion.

Derivatives can be a useful tool, and they are in many instances.

However, like any useful tool, they can be abused. Useful tools can be used carelessly and cause great harm. They can even be used with ill intent and turned into weapons.

That holds true for useful tools as well as derivatives.

Senator Blanche Lincoln has proposed a measure that would force the banks to do their derivative trades in entities separate from their commercial banking.

That's not nearly enough, but it is an itty bitty step in the right direction. Lincoln's measure would allow banks to continue to use derivatives, but they could no longer rely on their government-insured deposits for the capital used in speculating with them.

Guess who is in favor of this measure? Primarily the taxpayers who have been footing the costs of the derivatives disasters (think AIG and others) .

Guess who is opposed to the Lincoln measure? All of the giant financial firms who have been recklessly speculating in the derivatives arena for their own personal gain.

They want the system to remain the way that it is: if they win their derivatives bets, they pocket billions. If they lose their derivatives bets, the taxpayer pays for the loss.

In addition to all the major players, Timothy Geithner, Paul Volcker, Chris Dodd, and Fed Chaiman Ben Bernanke are all against the Lincoln measure.

The House and Senate Conference Committee has yet to finalize a Bill for the President's signature, but nobody believes the Lincoln measure will survive the Committee.

That will be Score 3 for the financial industry and 0 for the taxpayers.

Looks like the taxpayers have struck out.

Wall Street, through its army of lobbyists, has fought tooth and nail against these three ideas because all would change the structure of America's biggest banks.

They like the current system exactly the way that it currently is: they gamble and win, they take home billions; they gamble and lose, the taxpayer pays trillions.

Sadly, after both the House and Senate recently passing "financial reform," nothing's really been reformed.

So when you hear the President crowing about getting "tough" on banks, when you hear him gloating this summer as he signs the "financial reform" Bill, remember that this is primarily just the same old smoke and mirrors that the public is always spoon fed.

There was no true reform, it's all merely financial non-reform.