6. Rein in the credit raters. A major reason for the worldwide mortgage disaster is that Moody's, Standard & Poor's, and Fitch, the big three credit-rating agencies, rated toxic waste securities AAA when they should have been rated ZZZ. Investors slavishly subservient to the ratings stocked up on this trash, to their detriment. Take away the big three raters' special place in government policy, and let them duke it out with smaller upstart raters who are paid by securities' owners rather than by issuers.

    Much of what I'm saying is unconventional, maybe heretical. But conventional fixes haven't served us well. We can't just tinker at the margins and set up a new agency or two and expect Wall Street to give up greed. Salesmen will always be salesmen. But if we change incentives and add transparency, they'll be pitching us a less toxic product.