Fixing Wall Street is complicated, but a piece at the core of Dodd's bill is very simple: Don't let these jerks ever again make bets with 2 percent capital and 98 percent debt. Leverage was the poison that caused the Great Recession, starting with home "owners" putting zero percent down and extending all through the system. Capital is what cushions everybody against unforeseen reverses. With no equity in the system in 2008, the whole thing collapsed.

Dodd says his bill will prevent another catastrophe by "imposing tough new capital and leverage requirements that make it undesirable to get too big."

Good idea. But it's hard to say at this point what that means. But it sounds like the Financial Stability Oversight Council would make "recommendations" to the Fed for ratcheting up capital requirements as companies get big and complex, "with significant requirements on companies that pose risks to the financial system." I'd rather see statutory or at least permanent regulatory capital requirements than some squishy advisory power, but this is hard to do in a global economy.