(7:49am ET) President Obama has outlined the Treasury Department’s proposal to reform the financial system and capital market regulation. Once again the two are inter-connected by Washington and there is no reason for that. The financial system of banks and non-bank financial services is entirely different in concept than the capital market. Full stop.

Anyway, Obama has delivered the White Paper crafted by Treasury Secretary Geithner and now it’s up to Congress to pass legislation. Starting today, Geithner will appear before both Senate and House panels, where the questioning and testimony could get interesting.

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Giving the Fed more power over what has been the role of government seems absolutely silly since it is a private sector banking organization, and these banks are at the very root of the problems today. But that’s what ex-head of the New York Fed, Mr. Geithner, is pushing for.

I see the issue quite simply; remove the power of the financial elite, ie, Humungous Bank & Broker, and you kill the issue of the people’s government facing banks that are too big to fail. Limit the size of HB&B by not permitting one-stop financial services organizations. Didn’t Citi, Bank of America and JP Morgan prove that model didn’t work?

Let’s return to the conflict-of-interest free days where an insurance company was an insurance company; a broker a broker; a dealer a dealer; and a banker a commercial banker. The extra competition would then pave the way for a stronger America, a stronger Europe, a stronger world of finance. Regardless of political structure of a nation; the most critical aspect to growth is competition.

But what is about to start in Congress is politics, in the worse sense of the word. Politics got America into this problem, and politics is about to keep it in deep trouble.

A case in point; politics is little more than marketing a brand, both Republican and Democratic, as its leadership works secretly to accumulate power in ways that benefit their financial patrons. Presently, the Democrats are in power and so will push for consumer-protection powers and limits on executive compensation. That’s a fit with their brand.

But behind the scenes, these people – as I say, both Republican and Democratic -- are chomping at the bit to get direct access to the taxpayer’s money because that’s what their patron’s want. If the politicians can get their hands on some of it on the way through, so much, they think, the better.

Under former Treasury Secretary Paulson, HB&B got that access to the tune of hundreds of billions of dollars in direct payments, and trillions in guarantees. Now Geithner wants the forthcoming reform legislation to ensure the status quo where the financial elite continue to operate with impunity.

That’s the problem today; everybody wants the money but too few of us want to earn it.

Ain’t right.