Spitzer’s formulation is nothing we haven’t heard before. The government intervenes because it has to. It intervenes because it remains the only actor capable of ensuring “integrity, transparency, and fair dealing” among and within companies. Businesses are not governments – and therefore, should not be expected to act like them; the only principle to which they are bound is the bottom line. Governments must act to circumscribe corporations where their actions negatively impact other competitors or the market generally. If these are the premises we hold to be true, then obviously our existing regulatory framework falls short of the mark. But not in the conventional sense. According to Spitzer, our regulatory bodies already have sufficient powers to do the work necessary to punish offenders and prevent systemic failure. The problem, as he sees it, lies not with the framework but with the regulators themselves. And the costs have been dear. While we continue to undergird an unrepentant Wall Street, we have neglected to invest in recovery projects that would employ thousands of Americans in building a 21^st-century economy. With the loss of its 60^th vote in the Senate and midterms fast approaching, one only wonders how much longer the Obama administration can afford to keep taking this middle road, pleasing no one and arguably displeasing more.

A cause célèbre among liberals, financial regulatory reform has become the most recent partisan boxing match on the Hill, following a stormy (and ongoing) healthcare battle. Evidence to the contrary notwithstanding, Republicans have wasted no time in making the case that regulation is precisely how ‘we got into this mess.’ With thousands more joining the unemployment lines daily, it’s becoming harder to sympathize with such a position. So far from offering a prescriptive solution, it offers platitudes. But slogans don’t feed families and they certainly don’t jumpstart faltering economies. That hasn’t stopped the debate from being fought at the ideological margins as a veritable referendum on capitalism. To its credit, Baker’s piece has no interest in such a discussion – indeed, he makes clear at the outset that regulation has nothing to do with a free-market story, but rather an equity story. Banks have been ready if not eager to line up for government checks when it behooves them. In fact, the insurance scheme implemented in the wake of the 1930s collapse, ostensibly a consumer protection, effectively insulates banks – particularly large ones – whose failure would cause systemic damage to the larger financial system.

Because the failure of large banks poses a non-trivial threat to the economy, government aid is a forgone conclusion. What’s worse is they know it. To offer government insurance of deposits without also regulating the behavior of its recipients would be akin to an endorsement of reckless behavior – the kind that penalizes smaller banks who get swept up in the storm, despite abiding by conventional, low-risk strategies. As Baker notes in his piece, “The banks presumably understood the risk that they were taking in making loans in the first place. They are in the business of distinguishing good credit risks from bad. A financial institution that is unable to make such distinctions is misallocating capital.” Hewing to a capitalist argument, then, shouldn’t it follow that the government ought not to intervene and merely let the market do what it will, shuttering the windows of banks who are unable to compete? I sense the boardrooms of America would chafe at my glibness, but the point remains: if you want to be consistent in your ideological arguments, one can’t ignore the double standard by which the banking industry has managed to reap the benefits of government intervention while actively resisting meaningful regulatory changes.

Although the regulatory fight is only just getting started, the administration is taking preliminary steps to address the problem with President Obama’s decision this afternoon to implement a tax on TARP funds to recoup the projected $117 billion in losses from the original $700 billion loan program. In strikingly populist language, the President made it clear that stalling tactics would not prevent his administration from doing the people’s business, calling on Wall Street to “meet [its] responsibilities.” Some 50 companies are expected to fall under the new guidelines. It also represents a major shift in existing policy, where administration officials like Secretary Geithner previously asserted that such a tax would merely be passed on to the consumer; these pressures are expected to be minimal since the tax is targeted and affected companies will presumably still have an incentive to remain competitive. Industry spokesperson Steve Bartlett called the move “strictly political” and maybe it is. But that doesn’t mean it wasn’t the right move. Nor by any means should it be the last.

Security concerns aside, the White House has been at pains to underscore its firm belief that a jury will return a verdict of ‘guilty’. Meanwhile, those detainees deemed too dangerous for release and too difficult for prosecution will continue to be tried before private military tribunals, in spite of the President’s January 22nd Executive Order 13492 which called for their immediate suspension. All this begs the question, why bother making a point about the efficacy of the criminal justice system if you’ve decided the trial’s outcome before it’s begun? After all, presumption of innocence is a foundational part of that system and hence, the opportunity to avail oneself of such system would seem rather the point. What’s more, if public trials are only workable on an ad hoc, when-we-feel-like-it basis doesn’t that undermine the message about their suitability as the proper forum for criminal proceedings?

In spite of its repeated efforts to turn the page on Bush-era policies, the Obama administration has continually found itself at the mercy of political pressure forcing it to curtail its plans somewhat. Even as it signals a new chapter in America’s ‘moral leadership’ abroad, the administration is finding it difficult to navigate the terrain, making some previously undesirable policy options, necessary evils in the pursuit of some presumably greater good. The two-tiered trial system announced by Holder is merely the last in a series of such decisions. It recalls the President’s speech at the National Archives in March on the administration’s revised detention and interrogation policy, where he elucidated several detainee categories, among them those individuals who required so-called ‘preventive detention’ since they are considered dangerous, but impossible to convict. This brings us back to the current debate over terror trials. Like the Bush administration, who believed that terrorists were not normal criminals and hence, should not be tried as such, the Obama administration has reluctantly continued a policy of military tribunals, faced with the hard reality that extending the right to public trial to every detainee would be politically precarious. This inconsistency of rhetoric and reality, between alleged justice and the awkward half-measures actually being implemented undermines the sincerity of this effort. Indeed, if their intention was to reinvigorate faith in the criminal justice system to dispose of criminals, they’ve done just the opposite.

Immigrants, of course, aren’t the only victims in this story. Law enforcement has been hard-pressed to keep up with the growing influx of ‘criminal-aliens’ since the 1980s. In its effort to reign-in the overflow, the Departments of Homeland Security and Justice have turned to private firms, at the expense of struggling rural towns. These corporations have come under fire in recent days with the unfolding story of Michael Hinton – an ex-con caught defrauding the small Montana town of Hardin in an alleged scheme to operate its local prison. Sordid as it is, his story is quite common. Ostensibly sanctioned by law enforcement officials, these private firms have sought out small, impoverished, predominantly South Western towns for which the building of prisons would guarantee jobs and steady incomes. Promising greater and greater efficiency at a minimum of the cost necessarily comes at the expense of something else – such ‘nonessential’ services as in-house medical and psychological staff. All this begs the question, at what point do civic and humanitarian concerns outweigh efficiency arguments? More important still, how does a society reconcile its public duty to uphold and enforce the law – a task most of us agree that society alone can exercise – against an increasingly privatized corrections industry?

The Obama administration continues to tread lightly – holding their predecessor’s line under the guise of preserving ‘law and order.’ Perhaps that’s a rationale which voters are willing to accept for the moment, but all that clamoring for change back during the campaign will come back to haunt the President and his congressional allies in 2012 unless they actually follow through. In preparation for the coming immigration debate, Homeland Security Secretary Napolitano spoke on Friday, November 13th at the Center for American Progress on the issue of reform, broadly defined. While it’s encouraging to see some movement on this front, any part of a workable solution will require a reassessment of the draconian public-private prison scheme. Talk only goes so far before voters begin to wonder whether they’ve backed the wrong horse. Ball’s in your court, Mr. President.