Washington - Today, the Obama administration will present a plan for reregulating the financial industry - one of the most highly anticipated policy reforms on the president's long list. But critics charge that the key to the future of the financial system is accountability for crimes.

    The collapse of the financial industry and the subsequent government bailouts have enraged Americans, who see their government using tax dollars to save a system which failed to protect the interests of the little people. Now that the world financial system has taken as small step back from the brink of disaster, Americans want to see how much control and protection their unprecedented lending has bought them.

    The president's top economic advisers, Treasury secretary Timothy Geithner and Director of the National Economic Council Lawrence Summers, outlined the planned reforms in an op-ed piece published in The Washington Post on Monday.

    In summary, the administration's plan is to: 1) prevent banks from overlending, 2) put the Federal Reserve in charge of overseeing financial institutions whose collapse could threaten the entire system (think A.I.G.), 3) increase reporting and transparency to give investors more information about complicated financial products like the infamous mortgaged-backed security in an attempt to create less reliance on the controversial credit ratings agencies, 4) regulate derivatives (a proposal Summers fought and helped defeat as treasury secretary under President Clinton), 5) "offer a stronger framework for consumer and investor protection across the board," 6) give the government the power to wind down nonbank financial institutions in crisis (as they can now with failed banks under the rules of the Federal Deposit Insurance Corporation), and 7) "lead the effort to improve regulation and supervision around the world."

    Critics point out that two vital issues are not being talked about: excessive compensation for Wall Street executives and prosecution for those who committed crimes.

    "Compensation is not mentioned. But excessive compensation is at the heart of the problem. It creates a massive mis-alignment between the interest of the CEO's, who are short-term self-servers, and the long-term interests of the bank as a going concern [a healthy company]," University of Texas economist James K. Galbraith told Truthout.

    "[Excessive compensation] divorces the top management from public purpose, which banks as chartered institutions should serve. The compensation issue is not a matter of punishment or populism - it is the heart of the problem of a predatory corporate culture."

    An in-depth interview with Professor Galbraith on the subject of regulation can be read here.

    Recently, the Obama administration backed off a proposed $500,000 pay cap for executives at bailed-out financial firms, opting instead to appoint Washington lawyer Kenneth Feinberg to oversee the salaries and bonuses of executives at seven rescued financial institutions. System-wide caps have not been proposed.

    In their outline, Geithner and Summers avoided casting blame on anyone in particular for the collapse.

    That's a problem, according to criminologist, University of Missouri law professor and veteran of the Savings and Loan crisis, Professor William K. Black.

    "The administration has made some general comments about the importance of prosecutions, but has not taken the concrete steps essential to addressing the 'epidemic' of mortgage fraud that the FBI publicly identified in its Congressional testimony in September 2004. [The administration's] strongest comments have stressed its opposition to reviewing and exposing the crimes and blunders that caused the global financial crises," Black said in an email to Truthout, adding, "We need an honest diagnosis about what caused the epidemic and how our systems designed to prevent fraud failed coupled with a top priority effort to investigate and prosecute the senior officers, for example, the officers at the top of the largest non-prime loan specialists, that led the most destructive losses."

    Black discussed the fraud underlying the financial crisis in an interview with Bill Moyers.

    Both Galbraith and Black stressed that putting the Federal Reserve in charge of regulating financial institutions, the failures of which could destabilize the whole financial system, would be a mistake.

    "[The Federal Reserve] has a huge conflict of interest, since it will always justify a bailout by the necessity of saving the system," Galbraith said, adding, "Putting it in charge is like putting a travel agency in charge of investigating airline crashes."

    The administration's goals were reiterated and expanded upon in a background briefing from a senior Obama administration official on Tuesday evening.

    The senior Obama administration official, speaking on background, went into detail about the creation of a new consumer protection agency, which will have "broad authority to write rules ... supervise and examine any institutions, banks and non-banks. It will be the primary enforcer of consumer protection law across the financial sector so we can level up the playing field ...We need to start fresh, we need a clean break from the past on consumer protection."

    UC Berkeley linguistics Professor George Lakoff said that the Obama administration has a lot of work to do if they want to push back against the right-wing Republican charges of "socialism."

    "These are economic problems that they know very well. The question is how are they communicating them to the public. We have not seen clear communications on this. Communication is absolutely crucial. There is a difference between 'taking over,' and 'regulating.' That difference has not been made clear by the administration. They have not named and discussed the difference. As a result Republican scare-tactics have been working their way across the country, which is why the administration has been on the defensive," Lakoff told Truthout in an interview, adding, "It is very important that they talk about the difference between responsible capitalism and irresponsible capitalism. Their job is to maintain responsible capitalism and they need to say that."

    Geithner, Summers and Wall Street

    Geithner and Summers have been criticized for their ties to Wall Street and their role in the failure of the system they are now working to save.

    Prior to joining the Obama administration, Geithner was the president of the Federal Reserve Bank of New York, where he was a powerful regulator tasked with overseeing the activities of Wall Street banks from 2003 to 2009, arguably the most profitable and reckless period on Wall Street since the years leading up to the Great Depression.

    Summers, a Harvard economist, served throughout the Clinton administration, eventually becoming treasury secretary during Clinton's final year and a half. An anti-regulator, Summers hailed the repeal of key banking restrictions passed in 1933. Critics point to this specific deregulation as a key component of today's subprime mortgage crisis. Summers joined with then-Chairman of the Federal Reserve Alan Greenspan to quash calls for regulating the now-infamous credit default swaps - the suicide vests that financial institutions like American International Group (A.I.G.) threatened to detonate if not bailed out.

    Summers's ties to Wall Street go much further. His financial disclosure forms, released in April, show that he collected around $5.2 million from a hedge fund during the year before he joined the Obama administration. Also during 2008, while serving as one of Obama's informal economic advisers, but before officially joining the team, Summers collected speaking fees from troubled financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch. For these and other speeches, Summers earned over $2.7 million.