Spitting on a Gift Horse.

“They’re not accustomed to being engaged in politics this way,” says a private-equity investor. ‘Their skin isn’t toughened. They actually take [the attacks by Obama] personally. This is a profession with a lot of smart people, but who aren’t necessarily terribly introspective. They think they actually deserve to make all this money. So any attack on their livelihood is, ahem, unpleasant.’“

In the wake of the Senate’s 59-39 passage of financial reform last week (not to mention increasing evidence of rampant and pervasive fraud at Goldman, Morgan, and elsewhere), New York‘s John Heilemann surveys the bruised egos of Wall Street’s would-be robber barons. (In very related news, Paul Krugman and the WP note that Wall Street is now betting heavily on the GOP again.)

Keep in mind: Wall Street is angry with the administration despite the fact that “Geithner’s team spent much of its time during the debate over the Senate bill helping…kill off or modify amendments being offered by more-progressive Democrats.” [Change we can believe in!] Heilemann writes: “Whatever the effects of the bill, among them will be neither an end to the too-big-too-fail doctrine nor any curb on what the sharpest Wall Streeters see as the central threat to the system’s stability: excessive financial leverage. Geithner, Summers, and Obama had little interest in tackling those matters, not because they are indentured servants to Wall Street but because at heart they are all technocrats who believe the system doesn’t need to be rebooted or downsized, merely better supervised.“

Still, on the bright side and despite the ambivalence (or open opposition) from folks in high places, this bill did get significantly stronger on the Senate floor, and in some ways is now stronger than the House version passed last year. Let’s hope this welcome progressive trend continues in conference.

FinReg: Where Things Stand.

“Last week, Congress decided it would not confront Too Big To Fail, the single gravest threat to our collective financial security. But there are still several key Wall Street reforms worth fighting for–reforms that must be enacted before the next crisis hits, with or without a big bank break-up. And fortunately, key Senators have authored amendments dealing with each one.” In HuffPo, Zach Carter delineates the most worthwhile progressive amendments to financial reform still up for debate in the Senate. A good encapsulation of the state of play.

Bank to Basics.

“The big U.S. banks were the source of the global financial crisis, in part because their bigness and their practices were copied by major banks around the world. What happens in this reform effort is being watched avidly in many countries, because it will say much about how global finance is to be conducted. What is often missing in these discussions are the assumptions people make about banking and its role in a modern economy. We should begin therefore with some first principles.“

As the manifestly fradulent behavior by Goldman Sachs of late comes to full light — one among many, it seems — Numerian of The Agonist goes back to basics to make a case for strong banking reform. “The very first lesson we should learn from this crisis, which we thought this nation learned in the 1930s, is never again…The second lesson we should learn from this crisis is that we should not as a nation have to learn these lessons over and over again every 80 years. Something has to be done to make the legislative changes this time stick.”

Bailout, or we all sink.

“‘Today’s the decision day. I wish it weren’t the case,’ said Rep. Barney Frank (D-Mass.).” Despite the apparent attempt by divider-not-a-uniter John McCain to kill a compromise he hadn’t even read last week, the Dubya White House and Congress hold their respective noses and come to agreement on Paulson’s $700 billion bailout plan, with debate in the House starting today. “The proposed legislation would authorize Treasury Secretary Henry M. Paulson Jr. to initiate what is likely to become the biggest government bailout in U.S. history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates. The plan would give Paulson broad latitude to purchase any assets from any firms at any price and to assemble a team of individuals and institutions to manage them.“

As I said here, I’m not all that happy about the nation having to subsume the risk, and ride to the rescue of, the many banks and Wall Street types that profited massively from these obviously suspect mortgage deals. But, what else is there to do? As with so much else occurring over the past eight years, it befalls us now to clean up the mess left by the free market fundies of late. I just hope we learn something from the economic consequences of this latest binge of free-market fraudulence, before they grow too dire. To wit, whatever the corporate-funded right tells you about self-regulating markets, we need, and will continue to need, real refs on the field.

Update: Uh oh. The bailout compromise dies in the House, prompting the Dow Jones to swiftly tank 700 points. “The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against.“

As the TIME article linked above noted before the vote, “the candidate with the most riding on Monday’s vote is McCain, who backed the concerns of conservatives in the House over the initial agreement…[I]f a majority of the House Republicans don’t vote for the measure, McCain could lose political face. ‘If McCain cannot persuade them, it is hard to portray him as a leader,’ said Clyde Wilcox, a political science professor at Georgetown University.” So, that’s the silver lining, I guess. But the bad news now, alas, is considerably worse.

Put Rudy in.

Another crack emerges in the DeLay-Abramoff Ring: The Feds flip Tony Rudy, a former top flunky of Boss DeLay’s, which is particularly bad news for the former “Mayor of Capitol Hill,” Bob Ney. “According to papers filed today, Rudy will provide key corroborating information regarding the case prosecutors are building against [Ney], who was taken by Abramoff on a lavish trip to Scotland in 2002.” Update: The Post profiles Rudy. “‘How did Abramoff and Rudy meet, through JDate? No, they met through DeLay,’ Frank said.”

Casino Jack vs. the Gym Rats / The Boehner Blitz.

Behind closed doors, the Republicans talk amongst themselves about lobbying reform, with the status quo beating back a challenge by reformers to vote on new GOP leadership across the board (except for Hastert.) “‘All we were doing was asking us to look in the mirror,’ Rep. Daniel E. Lungren (R-Calif.), a co-sponsor of the motion, said after the vote. ‘The shadow of [Jack] Abramoff is not a mere distraction but a serious problem to address.’” Meanwhile, in the race for Majority Leader, while Blunt might be on the threshold of maintaining the DeLay ring’s hold over the House GOP, Boehner apparently proved himself no friend to reform either. Speaking on the GOP’s anti-lobbying package, he “scoffed that Congress knows how to do just two things well — nothing and overreact, according to witnesses.” And Boehner leads the candidates in former-staffers-turned-lobbyists.

But, give ’em credit — the GOP have at least succeeded in kicking lobbyists out of the House gym. “The rule change passed overwhelmingly, 379 to 50, but not before Democrats — and some Republicans — ridiculed it as meaningless. Rep. Barney Frank (D-Mass.) suggested that lawmakers compromise and change the rules so that lobbyists must yield to lawmakers who want to use the gym equipment they are on. ‘I’m a gym guy; I’ve never seen anybody lobbied there,’ said Rep. Jack Kingston (R-Ga.). ‘I’ve never seen any nefarious plots hatched on the treadmill.'” Just in case, though, Boss DeLay voted against the change.

Update: It’s Boehner on the second ballot over Blunt, 122-109. (Looks like the Shadegg-Boehner deal went through — On the first ballot, Blunt, who will remain Majority Whip, was only 7 votes shy of winning.)