Must Read: Wall Streeters Call for Reform & Say Federal Efforts to Combat Financial Crisis Inch Wide, Mile Deep

America and the world have found out the hard way how Wall Street’s fast and loose ways hurt regular folks more than the fatcats with Gulf Stream jets and golden parachutes.  It’s heartening to see at least two creatures of The Street find religion and evangelize the good news of reform.

Sandy B. Lewis and William D. Cohan do just that in an op-ed piece headlined, The Economy is Still at the Brink, in Saturday’s New York Times.  It’s a shame that the editors at the Times decided to run their important message in Saturday’s edition rather than Monday morning when it might have attracted more attention from the likes of CNBC or the day’s cable news cycle.  Cast against the constant stream of “Everything’s Fine,” from the Obama Administration to the likes of Jim Cramer, Lewis and Cohan’s message is succinct and important to the long run of the U.S. economy.

In short, the pair are telling us that the structural issues with American high finance are still there, Bush and Obama Administration efforts to staunch the bleeding are merely fingers in Wall Street’s dike, the current system is too heavily weighted in favor of ‘insiders’ and a program of real reform is needed to restore full confidence and ensure a system that works for all levels of the economy.

Here are some take aways from their piece:

• If nearly everyone agreed six months ago that our banking system was a sham, why is every government program or action directed at preserving the old order?  Lewis and Cohan say to start with compensating executives well for moving the ball, but create a system where their net worth is tied to their failures as well.
• The writers wonder why so many federal resources are going to propping up those at the top of the financial pyramid – the big banks and insurers – when recovery will come only when the bottom of the pyramid gets more confident.
• Rather than talk of the “imminent return” of the “good times” President Barack Obama should be messaging America with “living within our means.”
• For the “long term health of the market” shareholders and other investors in the big banks need to feel the “market’s wrath.”  No more rescues for the banks that created the mess.
• More market discipline and fewer government bailouts – where will the federal government draw the line?
• Fewer academics should be advising the president and he should make room for more folks saavy in trading and markets – not to have the fox guard the henhouse, but to design incentives that will work to revive the capital markets.
• More transparency in the entire system – from providing the same real-time market information to citizens that’s available to Goldman Sachs or Morgan Stanley – to replacing the marketing exercise known as financialstability.gov with real information.
• Go after the bigwigs who brought this pox upon us – either through truth commissions or the same way the FBI prosecutes the mafia.

There’s a lot more detail in what Cohan and Lewis wrote – go check it out.