Today's Must Read: The rot behind our financial collapse & some hope

Even as the country was falling into recession, Wall Street apologists/free market fundamentalists kept repeating the mantra -- as if it would save them -- that the "fundamentals of the economy are sound."

We now know that the fundamentals aren't and haven't been for a very long time. Michael Lewis and David Einhorn do a great job of exposing the rot at the core of what I lovingly like to think of as the Triangle of Financial Death -- Wall Street, the SEC and the thieves like Bernard Madoff who got rich off of everyone's pain. Lewis is a contributing editor at Vanity Fair. Einhorn is the president of Greenlight Capital, a hedge fund. I missed their piece when it ran a few days ago in the New York Times, but AlterNet has graciously resurrected it for us. One of the most eye-opening bits is this perspective on the SEC:

Indeed, one of the great social benefits of the Madoff scandal may be to finally reveal the S.E.C. for what it has become. Created to protect investors from financial predators, the commission has somehow evolved into a mechanism for protecting financial predators with political clout from investors.

Read the entire piece, though. And then we all need to ponder, and someone needs to pound it into Washington's collective heads, that the economy won't recover until new regulations, new regulators, new policies and a new mindset are installed.

Our financial system has been revealed to be a rigged game. Even now, investors can't be certain that the numbers they're reading aren't cooked and that the rating agencies are actually doing their jobs. (The agencies were failures, and the rating system failed because dishonesty was rewarded with cushy Wall Street jobs, as this piece clearly shows)

Except for the thieves who line their pockets, why would anyone else play a rigged game? I can't believe I even need to ask this next question, but why can't the U.S. financial system be as fairly run as an NFL football game?

And here's the, um, kicker: If the system isn't un-rigged and if good referees aren't put into place, then no one will invest in our economy, and the fallen house of cards will remain scattered on the floor.

Einhorn and Lewis provide some interesting ideas for how to remove the rot and save our economy. These range from providing direct help to folks with failing mortgages to new regulations.

Anyone got a black and white stripped shirt handy?