Mar. 20--U nlike Europeans who express political anger in tumultuous street marches, barricades and blockades, modern Americans largely have been patient sideline observers in times of political and economic turmoil. The boiling public wrath over the $165 million in AIG bonuses, a comparatively small but hugely potent symbol of the staggering financial crisis created by Wall Street's disastrously rotten dealing in unregulated credit derivatives, marks a notable shift in tone. Americans haven't taken to the streets yet, but it's clear many would if they thought it would do any good.

In reality, clawing back those bonuses, though a worthy action, may be a distraction from the main mission. The bonuses amount to less than a tenth of 1 percent of the $170 billion that AIG alone has sucked in and parceled out to its equally complicit trading partners. Hundreds of bailout billions in addition have gone to banks and investment houses.

The real fix for the wrongs that have occurred in the financial markets lies in the hard work of fundamental, comprehensive reform of the regulatory apparatus that should have been authorized -- but wasn't -- to oversee what AIG, its partner clients and other banks were doing with credit derivatives.

It is not just lax oversight that allowed the financial markets to crash. It is chiefly the huge and blatant gap in the regulatory structure itself -- and the determined mindset in Washington the past nine years against establishing effective regulation -- that allowed the meltdown to happen.

Expert critics know that. Many repeatedly sounded alarms as unregulated trading in credit derivatives and credit default swaps, or CDS -- mushroomed to gargantuan proportions after the Republican-controlled Congress deliberately excluded the novel CDS product from regulation under the Commodity Futures Modernization Act of 2000.

Neither the Commodity Futures Trading Commission, which regulates U.S. futures trading, nor the Securities and Exchange Commission, which regulates the stock markets, were given oversight of trading in CDS. To suggest how determined the mindset against regulation was, Congress even approved the exclusion of CDS trading from states' gambling laws in 2000. In retrospect, that is as ominous a symbol as could have been given that financial traders could create products and act with impunity outside normal rules.

AIG was already a colossus global insurer when it created CDS and began issuing them for big fees to cover the investment bets of hedge funds and investment banks.