For anyone who is interested here is a link to the testimony today of Treasury Secretary Geithner, who survived calls for his head this week with a little boost from the markets. Geithner is very busy these days making sure people think he is up to big things.

Don’t be fooled.

This package is aimed at defusing far more radical calls for restructuring the financial system in order to allow business lobbyists to carve up the reforms into tiny bite size pieces that can be easily digested.

If Geithner were serious about reform – well if he were serious he would not hold his job for long – but let’s assume we had the opportunity for serious reform, what would one have to confront?

The basic problem is that over the last several decades a conscious sophisticated effort begun by the United States Supreme Court under the leadership of Justice Louis Powell has slowly but effectively unraveled the regulatory framework put in place in the 1930s in the wake of the first global collapse of modern capitalism. The New Deal revolution, sealed after the war by a global labor-management consensus or social contract, was gradually undone on multiple levels.

Calling this counter-revolution “de-regulation” hardly does it justice. It was, in fact, the creation of an entirely new political economy, global in scope and massive in its complexity. It is, overwhelmingly, outside of the control of government much less the democratic polity.

Let’s take a single example: at the core of regulatory principles of the financial markets put in place in the 30s is the simple idea that if you sell a security such as stocks or bonds you must register that sale with the SEC including detailed information that must be provided to purchasers of the security prior to their decision to close the sale. The counter-revolution started by Justice Powell, however, made it acceptable to redefine the term “security” so that a wide range of new types of financial instruments were exempted from the registration requirements.

That, in turn, led to all sorts of investors being sold securities that they often did not understand. Examples abound: the collapse of Orange County, the Enron frauds, the crash of WorldCom and now the implosion of major investment banks, commercial banks, insurance companies and even government sponsored enterprises like Fannie and Freddie.

Thus, a simple proposal: if you want to begin the process of rebuilding a constructive and reliable means to channel our savings into productive investments that are socially useful, re-impose the basic requirements of our federal securities laws and require that sellers of these securities provide purchasers with the information they need to make an informed investment decision.

But as I said the de-regulation counter-revolution built an entirely new political economy. That political economy has been deeply damaged. But it has not sunk and so its beneficiaries will defend it. Geithner, of course, is their man in the Administration and once again today the market sent up a strong signal of support as they did on Monday when they realized that he was in trouble. They fear a turn to the left that might make their life a little too complicated.

So watch Geithner with interest – his role on the world stage right now is to defuse the possibility of genuine reform while maintaining the illusion of significant change. That produces a fascinating form of political theater.