Heads, Wall Street executives win; tails, the taxpayers lose. That’s the message of past months, which clearly show that investment banking and other big swaths of the U.S.’s “financialized economy” are, for all intents and purposes, insured by the U.S. government. I’m not against that insurance — the financial sector really is too big to fail without taking the rest of us down with it — but I don’t think it should be free. In particular, we should put some constraint on the casino economy in the following two areas:

Curb very-short-term speculation. The housing bubble (and, before that, the food bubble that plunged 100 million people into poverty, and the oil speculation fueling last year’s sky-high gas prices) shows that, when markets are focused on super-fast speculative trading and executives are rewarded just for this quarter’s stock performance, then long-term foresight — the kind of real investment that benefits everyone — goes out the window.

All those risky mortgages would never have been sold if they were going to be owned long-term by the bank that gave them, as in the past. These days, however, brokers sell mortgages to Wall Street, which slices and blends them into (not so secure) “securities” for gullible global investors. Their absentee cash fueled hugely irresponsible lending, causing housing prices to skyrocket — until the inevitable crash. And mortgages-via-Wall-Street are now creating a new kind of pain: a bank may find it in its best interest to renegotiate with a recession-stricken borrower rather than foreclose — but the company that administers a mortgage-backed security is afraid that, if it shows any leniency, it will get sued by some of its many investors.

(To try to deny the Wall Street problem, conservative pundits are brazenly trying to blame the poor for the mortgage meltdown by targeting the Community Reinvestment Act, which fights redlining by asking banks to make “safe and sound” efforts to actually lend some money in the communities where they are located. But this argument is a load of hooey, as Alan Greenspan told Congress when asked about the CRA: “… the real toxic mortgages occur with the huge increase in securitization and largely the demand from abroad.”)

What can we do to put the casino economy back in touch with reality? We still want markets in which people can buy and sell things — just not quite so extraordinarily fast. One simple step would be to put an extremely low tax of .25% or less on each stock, security, or commodities future purchase. This would have basically zero effect on long-haul investors, while discouraging day traders and hot-money speculators.

Look hard at new forms of “investments.” When any new kind of investment is invented — and Wall Street has come up with some doozies in recent years — the burden should be on the inventor to demonstrate why it shouldn’t be regulated.

Exhibit A is, of course, those mortgage-backed securities, which — with the help of credit ratings agencies riddled with conflicts of interest — were sold as much safer than they actually were. Many of the people on the ground who sold the mortgages knew better — one long-term broker felt “sick to [his] stomach” at the loans they were making and selling to Wall Street — but the market from the “giant pool of [global investment capital] money” was too good to pass up.

Exhibit B: One of the roots of the present financial crisis, “credit default swaps,” are basically a form of insurance for corporations — but they were not called insurance, because their makers wanted to evade the sensible regulations that are put on insurance (i.e., that the insurer have reasonable financial reserves).

Call them “exotic,” “sophisticated,” or whatever the adjective du jour is – just call them to account. There are several proposed bills before Congress that would put some brakes on irresponsible speculation.

In the case of food commodity futures, which have such a dire effect on the world’s poor, the good folks at the Maryknoll Office of Global Concerns have a sign-on letter to Congress, which you can read and get your organization to endorse here.

Elizabeth Palmberg is an assistant editor of Sojourners.