But will they? Mortgage lenders and those who finance them have proven ingenious at offloading risk onto borrowers, through prepayment penalties, fees and so forth, which remain legal within certain bounds and proved toxic to subprime borrowers. Geithner/Summers commit to a financial product safety commission, per Elizabeth Warren’s exhortations, but in a sense they are allowing the toaster factory to keep churning out incendiary devices. I’ll be very surprised if their reform plans actually do anything to rein the practice of offloading risk onto borrowers – and as long as borrowers continue to shoulder the high price, having skin in the game won’t stop securitizers from underwriting destructo-loans.

The upshot, they say: give a heave-ho to those ratings agencies already — the ones that gave top grades to securities that in no way deserved them — and make the Securities and Exchange Commission once again a watchdog agency working on behalf of investors.

Yes, and yes; yes to Lewis and Einhorn’s other recos, too. But. What they’ve offered here is a promising recipe for avoiding investor apocalypse in the future. Okay, and a strong, reasoned argument for helping overstretched homeowners, too. And yet none of this gets to the heart of why the real estate bubble was so disgustingly destructive to the nation, or what über-regulators are going to need to focus on as agents of the public interest — which, I’m sorry, is not always the same thing as investors’ interests.

What Lewis and Einhorn are essentially talking about building a better, sharper, stronger debt-trading machine. The most poisonous flowers of the old growth, collateralized debt obligations and credit default swaps, come in for properly savage thrashings here. So why no questioning of mortgage-backed securities themselves? Is it really enough to improve their reliability of their ratings and oversight? For investors, absolutely. Enough about them for a moment. For many homeowners, the strange invention that Lewis himself so delightfully chronicled in Liar’s Poker — the transmogrification of the places where we live into tradeable bets and blips — wreaked miseries long before investors in those securities had to suffer. (Full Treasury/HUD report here.) Indeed, if regulators had succeeded in keeping the zaniest excesses of derivatives trading in check, the kinds of depradations Larry Summers and Andrew Cuomo railed against in 2000 would undoubtedly still be going on. Engineering a more robust business in indebting consumers is not the way out of this nightmare.