It's always the same thing. A cascade of bad news includes one item which seems to allow for howls of outrage or other displays of heightened morality which a) blots out all the other bad news, b) diverts attention to how all the bad news, even the item subject to the obsession, came about and c) allows the worst among us to cause more trouble while nobody is paying attention to what they are doing. Here's a few shorthand expressions describing relatively recent versions of this:

a) sharks threatening swimmers enjoying the summer of 2001 while the "President," on vacation at his "ranch" in Texas ignores threats of an attack on our country,

b) attacked by young Muslim men, mostly from Saudi Arabia and trained by a terrorist organization permitted to operate in Afghanistan, the United States responds by attacking Afghanistan but, led by a "President" who does not know or care that another country, where Muslims also live, had anything to do with the attacks on our country, convinces Congress and most people that those attacks also require that we commence a war in Iraq, and

c) the tragedy of a young woman who was clinically brain dead rousing a Republican Congress and the "President," on vacation at his "ranch" in Texas into enacting patently ridiculous legislation giving federal courts authority to intervene in a state case, which the federal courts nonetheless decline to do.

Which brings us to the AIG bonuses.

They should not have been paid and, of course, would not have been paid had AIG gone bankrupt, as Lehman did. It was a gross mistake to let Lehman fold, we subsequently learned, so, whether we like it or not, AIG had to be protected from a similar fate, not because it is right, not because they are good, but because the consequences for the rest of us would be very bad. There might have been better ways to prevent AIG from failing that what was done, but since we love engaging in the same stupid, ancient argument over "socialism" the only quick and decisive way of taking care of the AIG problem was to lend it money and all but control it by purchasing its common stock.

Thereafter the pigs at the trough did what they usually do. Eat from the trough.

This is not news. This is what Wall Street does. They are not responsible for the operation of the United States economy. They are responsible for making money for themselves and their clients and shareholders.

I cannot imagine ever linking to the sadly damaged David Brooks, and even in a column that is unusually cogent and right on, he has full paragraphs of nonsense, but he makes the point very well when he says:

The Washington political class has spent the past week going into made-for-TV hysterics over $165 million in A.I.G. bonuses. We're in the middle of a multitrillion-dollar crisis, and our political masters -- always willing to throw themselves into any issue that is understandable on cable television -- have decided to risk destroying the entire bank-rescue plan because of bonuses that account for 0.001 percent of the annual G.D.P.

As several people have pointed out in the last few days, our greatest President explained this phenomenon in various ways during his first four years trying to clean up the mess that Wall Street made in the mid and late 1920s, leading up to the Great Depression, but he never said it better than a few weeks before he was re-elected in 1936 when he told a rally at Madison Square Garden:

For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

We had to struggle with the old enemies of peace‹business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred.

And why did they hate him? They hated him in part because of the regulation he imposed on them to prevent the collapse of the economy from which the country was trying to recover, from happening again.

One such piece of legislation, proposed by Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) followed hearings before what was then called the Senate Banking and Currency Committee where the committee's counsel, Ferdinand Pecora, exposed banking practices which shocked Congress in to action. Without getting too complicated on a Saturday morning, AIG, an insurance company, could not have morphed into what they became if Glass-Steagall had not been repealed in 1999.

So that is the question we should be dealing with and it is that repeal about which we should be expressing outrage. The enemy is not Sen Dodd, who stood almost alone in fighting some of the worst abuses of the Bush era, nor is it Secretary Geithner or what passes for his "staff" from allowing pigs to feed at troughs. You can make it harder for them to do so, but where there is a trough, there are hungry pigs and they will find a way to eat. In other words, the money paid out to these guys was going to get to them whether "bonuses" were banned or not.

The more important question is how did they get away with selling bogus products, with grossly inadequate financial support which, when the inevitable happened, caused the virtual collapse of their firm and threatened many others?

As the most invaluable program on television, Frontline, tried to explain in 2003 (the AIG of the day was called "WorldCom"), bankers tried to get Glass-Steagall repealed since the day it was enacted. The Federal Reserve had helped to whittle down its protections but the full repeal that these schemers so wanted did not come until 1999.

Do not listen to people who tell you that repeal was the product of a 90-8 vote in the Senate. It was not. That was just a vote on a conference report which conformed language in two versions of what was called Gramm-Leach (yes, Phil Gramm, who likely would have been Secretary of the Treasury if Sen McCain had been elected president).

When the real vote was taken in the United States Senate earlier in the spring, every Democrat except Senator Hollings voted against it, but since Republicans don't care about the 60 vote rule that Sen Reid has decided to recognize, it passed the Republican controlled Senate, 54-44.

And what was our President, the Eisenhower Republican who claimed to be a Democrat, doing about this?

I posted this earlier in the week, an excerpt from a Stephen Labaton article in the New York Times of May 7, 1999 (subscrip required):

President Clinton has threatened to veto the Senate legislation, and his aides have expressed a decided preference for most of the provisions in a competing version that has been moving quickly through the House.

Senators will await the action in the House, where banking legislation with broad bipartisan support has been approved by the banking committee, and could be considered by the full chamber soon. Last year, the House adopted comprehensive banking legislation by the narrowest of margins, only to see it die in the Senate when it was blocked by Mr. Gramm.

Administration officials say the President would veto the Senate version because it would dilute requirements that banks make loans to minorities, farmers and others who have had little access to credit. The legislation also contains provisions that have been criticized by Treasury Secretary Robert E. Rubin because they reduce his department's oversight of banks.

But privately, some Democrats and Administration officials say that Mr. Clinton might agree to legislation if the objectionable provisions in the Senate measure were watered down or eliminated when the House and Senate negotiate a final bill in conference. The only Democrat voting for the bill tonight was Senator Ernest F. Hollings of South Carolina.

The legislation approved has been hailed by big banks, insurers and Wall Street investment houses as a monumental step forward because it deregulates the financial services industry for the first time in more than 60 years. Consumer groups and civil rights organizations have called it a giant step backward, rolling back protective measures adopted in the 1970's.

The Senate measure was sharply criticized tonight by the nation's top securities regulator, Arthur Levitt, the chairman of the Securities and Exchange Commission, who said it would undermine significant protection now afforded to investors. Mr. Levitt said the legislation posed ''a real danger to investors'' because it violated ''the principle of functional -- I call it 'consistent' -- regulation.''

''This is a giant turf battle that in my opinion jeopardizes investor protection,'' he added.

But some Wall Street executives strongly praised the legislation and said it demonstrated how the leadership abilities of Senator Gramm had been underestimated.

That's what we need to be talking about! Not the bonuses, which is just the result of all of this, but how warnings from "the nation's top securities regulator" came to be disregarded in a wave of excitement over a "new economy" which did not need the protections put in place by a frightened Congress in 1933. There were, as we were told for years, particularly after the Great Reagan was elected, too may regulations and, like sheep, we agreed, in stead of trying to figure out why those rules existed and what would happen if they were repealed.

So, while this collapse was well underway, the eventual nominee of the Republican Party was quoted to say:

Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory accounting and tax impediments to raising capital.

Senator John McCain, March 25, 2008

Yeh, right.

A Congress filled with people who express outrage that a "stimulus" proposal would involve "government spending" can hardly be expected to seriously tackle anything but their excited ability to tax these bonuses is nothing more than a diversion. Ferdinand Pecora, Senator Glass, Congressman Steagall and President Roosevelt are gone now, but they must have successors around today to teach us lessons we have forgotten or simply not heard in the cacophony of noise that substitutes for debate.

We have made many mistakes over the past eight and thirty years, and President Obama is right to say that we will not recover overnight from these messes caused by our own votes and stupidity. The least we can hope for, though, as we try to recover, is not to make new mistakes and cause more damage by being distracted by outrage over little things instead of dealing with the larger causes of our current situation.