In “Damascus Gate,” the canvas is the clash of millenarian faiths, of Islam and Judaism, in the Holy Land. American proselytizers, Mossad secret agents and intifada warriors conspire and collaborate against a backdrop of passions dating back thousands of years. To the lead character, Lucas, a journalist, “sometimes the entire field of folk seemed alien and hostile, driven by rages he could not comprehend, drunk on hopes he could not imagine. So he could make his way only through questioning, forever inquiring of wild-eyed obsessives the nature of their dreams, their assessment of themselves and their enemies …”

It is not difficult to see today’s current events — today’s “wild-eyed obsessives” driven by rage — as natural elaborations of the frictions and fault lines working themselves out in “Damascus Gate.” As Osama bin Laden hints that he has nuclear weapons, and warlords blitzkrieg down upon the Taliban stronghold of Kandahar, “Damascus Gate’s” fantastic plot, which features both a terrorist scheme to blow up Jerusalem’s holiest temples and a complicated drugs-for-guns smuggling operation, seems less and less implausible with each passing day. It comes as no surprise that Stone has been paying close attention to the news from Afghanistan.

Are there any resonances between what is currently going on in Afghanistan and what you have been interested in as a writer?

Oh, certainly. Certainly in terms of what “Damascus Gate” is about, which is apocalyptic religion. For a long time it seemed to me that some form of militant Islam was going to challenge the West and particularly the United States. It seemed to me that Arab nationalism — secular nationalism — was failing as a vehicle for the Arabs. More and more they’ve turned to Islam.

And Islam is so severely challenged by Western culture and the current situation. According to the Quran, Muslims are not supposed to tolerate the political rule of infidels — subjugation to armed infidels — which tends to be how they view the troops in Saudi Arabia or anywhere, and Israel as well. In fact, they tend to see Israel as the last of the colonial enterprises in Islam. This is the way the people in Hamas talk: They talk of a pure continuous crescent of Islam where Christians and Jews can live; they can be there, but they are not supposed to be in charge of anything. And I think there is some talk about restoring the caliphate, so that there would be a unified Islam ruled by sharia [Islamic law], at least a unified Sunni Islam. I think that something like that ideology is what a guy like bin Laden would have, that the caliphate could somehow be restored and all these kings and dynasties that are post-colonialist and tools of America could be overthrown and America at least forced out of the Middle East as a prelude to the universal spread of Islam.

At Salon, right after the terrorist attacks, we received a number of letters from people who couldn’t understand why someone would hate us so much.

I find that surprising, but I think that’s because of the time I have spent over there. There is this tremendous anger that has been mounting ever since the fall of the Turks, when the West began to carve up the Middle East and establish these dynasties and create these borders, these colonial borders. There has been anger against the power of the infidel and also a tremendous resentment of the technology — all this technology which Islam did not produce.

Islam is supposed to rule, Islam is supposed to be the enlightened part of the world that got the message directly from God. It is very unseemly that all these proud people exist who reject Islam and nevertheless prosper so much and even give orders to Muslim kings and generals — it’s just not right.

The Quran is full of references to the people of Id: They are proud, they are rich, but they are infidels and the Quran keeps saying they will fall, their cities will fall. I think that to get an insight into the thinking of the most extreme radical Muslims, a reading of the Old Testament is instructive.

To get a sense of how much harsh unforgivingness there is?

Yes. The harsh unforgivingness to the enemy who has no respect for God, for the Lord of Hosts — who is obviously real to people who climb into airplanes and crash them into buildings. That supernatural world is amazingly real to them; you wonder if it is as real to clerics in the West as it is to them.

And they resent the power and aggressiveness of the West; it used to be Britain, now it’s us. They tend to see Israel as nothing more than a creation of ours. They read “The Protocols of the Elders of Zion,” they believe a lot of things. There are a lot of people walking around East Jerusalem who believe that Adam built the Dome of the Rock.

In “Damascus Gate” there’s a very strong sense of intractability in the conflict between the West and Islam.

Yes, exactly. There was a picture in the Times several days before the bombing started; it was downtown Kabul, it was a pile of rocks and a kid on a donkey, and you thought, well, what could they possibly bomb? They’re bombing the pile of rocks and the kid on the donkey, or at least they’re dropping bombs pretty close to that kid, and they are screwing up and dropping bombs on some civilians, and that is certainly going to turn people in the Islamic world against the United States.

There is a tremendous amount of myth, totally mythical attitudes toward the United States, that is fueled by karate movies — you know all the Hollywood reject movies that show in downtown Cairo — that just portray the United States as the most utterly depraved place imaginable. I mean they really believe it’s a very, very bad place full of very bad people. They genuinely — the average Muslim does believe that. They don’t like to be inhospitable or unfriendly but it does emerge, when you talk to people in that part of the world. That opinion of America is somewhat deluded, but it’s very, very low. And the longer the war lasts, the more they’ll get uneasy about the killing of fellow Muslims and the more people in Europe will begin to move on the old Vietnam lines.

It seemed to me the last time I was in Europe that a whole generation of Europeans had been brought up with the idea that America is pretty depraved and it is a place to be opposed. In Europe, even in central Europe and in places where Americans used to be pretty popular like the Czech Republic, there is really not much sympathy for the United States. I think it is easy to blame the United States for all the ills of modernism. I don’t think it is accurate to do that, but it is nice to have another country that you can blame for all the contemporary ills and all the vulgarity of contemporary life. You can always say, it’s not us, it’s them, they’re doing it, our culture was great until they came along and that [attitude] is not only in the Third World or Islam, it’s in Europe too.

The most recent swings in the military situation in Afghanistan have turned the tables on people who were criticizing our bombing strategy. A week ago, you noted the longer the war lasts “every day it lasts, it gets tougher.” That doesn’t seem to be true anymore.

At this point, we do seem to have achieved — with air power — to have driven them out of the cities. I’m glad it went well. I was worried. But I don’t want to be complacent. I think there is a lot of possibility for the infighting of the sort that happened before 1992, among ethnic groups and tribes. I also think that trying to find bin Laden is going to be difficult. I don’t know why that ever was the declared aim at the beginning — to really make him such a celebrity.

In “Outerbridge Reach,” your main character, Owen Browne, longs for “the good fight or the right war — something that eased the burden of self and made breath possible.” Isn’t this war different from Vietnam in that many Americans are thinking of it as a good war, a right war?

I think that’s right. If you look at the crowds who are listening to Bush, they are really trying to be inspired, they are waiting for him to say something wonderful, and of course all he is doing is reading this stuff off the teleprompter and they just sit there and wait to be inspired or try to convince themselves. I think you are right, people are looking for a good war, but they are not being given anything except a lot of inept propaganda. And if the propaganda that they are using abroad is as inept as the propaganda they are using here, they are in bad shape. And I am sure it is. But the fact is, I can’t say that if I were in the position of the people who run the country that I would do anything quite different.

Is there any way out of this mess?

I honestly don’t know. In a way the worst setup we could have is all these elderly oil men — Cheney and so forth, the people who run the country — in a way they are the last people we should have as our leadership right now. They are like the Bourbons — they remember nothing and forget nothing. I don’t know what we can do; truly, there are ways in which this government, or the country, has become so utterly devoid of community … A lot of people abroad think that we leave people to starve in the street. We are not as bad as who we are often thought of as being, but I think it’s still pretty bad. I think the federal government could do a lot that it is not doing.

In a lot of ways I think I’ve become more left-wing than I used to be, because I was always a kind of cold warrior. I mean, I always criticized the Cold War and its paradoxes but when the chips were down I knew which side fundamentally I was always on. I didn’t have illusions about Marxist ideology. But now, I don’t know, I certainly don’t believe in Marxist ideology, but I find the American system a scandal in its indifference to poor people and working people, and I think also our perception of the world remains very, very unsophisticated. You hear Adm. Stufflebeem or these other men, they do not seem to have the necessary flexibility of spirit, the necessary irony, the necessary perception and thoughtfulness to do what they are doing, to deal with the machinations of the people that they have made their enemy. We were always going to end up being their enemy; I don’t think we are to blame for that. But they seem naive.

Even in the context of what appears to be victory, at least for now?

I think they have a problem in what they call in business their corporate culture. I think that is a problem and remains a problem: their ability to identify and discuss their aims, to transfer into language and hence into politics their role as military men. We know from Clausewitz that war is politics — and this inability to verbalize and to articulate is a political liability; it is part of a problem of military corporate culture, and I think that remains. I still think there is a lack of a certain worldliness on the part of the American military and I think that is true of the masters of this administration. I question their flexibility and adeptness. But I will be happy to see them resolve this.

The long-term situation, particularly in Palestine, seems to be pretty hopeless.

It really does. I used to be more hopeful than I am. The thing is everybody’s plans have gone to hell, I mean everybody’s initial plans have gone to hell. The Arabs in the former Palestine, the Palestinians, imagined that since they outnumbered the Jews so considerably, that eventually when Arab nationalism struck, they would, if not drive the settlers out, come to dominate them. And then on the other side, the Zionist side, there was an expectation that something like what happened after the war between Greece and Turkey would happen, that there would be a population transfer — this was hoped for back in the ’30s — that maybe the British could pull it off, that [the Arabs] might in fact be transferred to another territory. That was always part of the program; that was always hoped. Both sides were hoping for the impossible. Both sides were hoping that they were going to win thoroughly, that they were going to win everything and no provision was ever made for what we think of as the 21st century solution, which is a multicultural, multiethnic state.

In “A Flag for Sunrise,” the protagonist, Holliwell, is seeking in Central America “people who believed in things, and acted in the world according to what they believed.” In all your books, it seems characters are on that kind of quest. But in thinking about Afghanistan, one could say that the Taliban fit that description of people who believe, and bin Laden might fit that description. But do we?

No, we certainly don’t. I don’t think we can quite imagine that degree of belief. I keep getting back to that line of Yeats, in “The Second Coming”: “The best lack all conviction and the worst are filled with passionate intensity.” But can you really call these people the worst? I don’t know — they certainly don’t see themselves as the worst; they see themselves as sublime martyrs who have lived heroic lives.

I find [all this] absolutely fascinating but I also find it very, very frightening. I think there is a lot to be scared of in the contemporary world. History has come for us, it’s here; what we feared is beginning to happen to us. And I have to say that I’m very much afraid that the next one of the bombs that goes off is not going to be a conventional bomb; I think that they are going to put it together in some safe house in Jersey.

People back in the ’80s in Cairo were saying that one day there will be an Islamic bomb, and one day Islam will be able to go nuclear. And I think that day is very close. And I can’t see why — having done what they did, having killed all those people — they would stop at nuclear weapons. So maybe, if by reacting the way we reacted we deterred them, we deterred somebody like bin Laden from using a nuclear bomb against us in the thought that he might not want to see a city in Islam nuked in retaliation, maybe then what we did wasn’t so off base.

If the consensus reporting from Capitol Hill is correct, sometime in the next two days, Republicans and Democrats will agree on a deal that keeps the payroll tax cut in place, extends unemployment benefits (albeit with a gradual reduction in the length of benefits put into place) and, once again, protects doctors from a cut in their Medicare reimbursement rate. The unemployment benefits and the so-called doc fix will purportedly be paid for by a combination of wireless spectrum sales, tweaks to how much the federal government contributes to federal worker pensions, and cash carved out of the health reform deal.

The politics of this are a lot easier to figure out than the economics. Simply put: It’s a win for Obama. The White House avoids putting the brakes on economic growth by preventing an imminent tax hike and keeping the safety net more or less intact for unemployed workers. In the run-up to an election that may be largely decided by the performance of the economy over the summer, that’s huge. If Republicans, as some have suggested, wanted to tank the economy to ensure new occupants in the White House, this is not the way to go about it.

And as a bonus, at least for the moment, the White House has also managed to avoid another game of budget showdown chicken. That said, the House has yet to vote, and over the past two years we’ve  witnessed several occasions in which recalcitrant conservative representatives have torpedoed deals that were supposedly set in place. On the other hand, it’s possible that the negative political consequences of the 10 percent approval rating currently “enjoyed” by House Republicans is beginning to sink in.

Economically, the deal doesn’t do anything to additionally stimulate the economy, it merely keeps in place measures that have already been enacted. The maximum length of eligibility for unemployment benefits will gradually contract, a process that will cause hardship for workers who drop through the safety net. But macroeconomically speaking, the effect isn’t going to be that huge. Nor will the offsets that pay for the unemployment extensions and the doc fix add up to much in the way of contractionary austerity, though it certainly won’t be pleasant for federal workers who may end having to contribute more to their own pensions.

All in all, it’s kind of a wash. The White House avoids sabotaging the economy, the Republicans avoid making themselves any more unpopular than they already are. It’s a sign of just how dysfunctional Washington has been over the last couple of years that the absence of drama seems like a masterful political stroke by Obama. Maybe, as James Fallows suggests, he really is learning how to be president.

Not only does the foreclosure deal add up to peanuts compared to the $350 billion tobacco settlement, but it also pales before the size of the problem that it is theoretically supposed to address. The amount of negative equity held by Americans in their homes is currently calculated at around $700 billion. As a result of the foreclosure settlement around 750,000 Americans who lost their homes to foreclosure will receive checks of around $2,000 and another million homeowners will see the size of their outstanding loans reduced by an estimated average of around $20,000. Sure, any additional stimulus will be sorely appreciated in today’s demand-constrained U.S. economy, but a $2,000 check isn’t going to make up for a foreclosed home, and it is silly to think the banks will feel more than a slight pinch. The banks have already reserved enough capital to cover the checks that they are going to have to cut (around $5 billion). Compared to the damage caused to American families by both the financial crisis and the rush to foreclosure, the banks are getting off easy.

Obama may be technically correct to say that the settlement “will deliver some measure of justice for some families who have been victims of abusive practices,” but it’s wrong to treat the news as any kind of real payback for bank misdeeds. It’s just nibbling around the margins.

So is it a sellout — “another raw demonstration of who wields power in America,” as Naked Capitalism’s Yves Smith, — undoubtedly the harshest critic of the Obama administration on housing policy and bank reform — argues? That’s a little harder to say, and a lot depends on the future course of events.

Some defenders of the settlement are arguing that the size of the deal is smaller than it might otherwise be because the government has retained the right to sue the banks for a wide variety of mortgage-related bad behavior stretching beyond the fraudulent processing of foreclosure paperwork at the heart of this deal. In particular, the states attorneys general of New York and California can continue their own separate investigations. As Felix Salmon writes, “other big-money lawsuits over securitization can and almost certainly will still be brought — which means that the big banks all still have significant litigation risk hanging over their heads.” As if to punctuate this point, on Wednesday night, the Wall Street Journal reported that federal regulators plan to sue some of the largest banks on charges of fraud related to the dodgy securitization of mortgages in 2007 and 2008.

The proof of this theory will only come when we see how hard the Obama administration and states like California go after the banks in the future. Given the track record of this administration, that may be doubtful. (Although, it may be worth noting that at least one conservative critic of the settlement, Douglas Holtz-Eakin, bases his critique precisely on the fact that banks still can’t put the whole crisis behind them. The administration can’t leave well enough alone, complains Holtz-Eakin, or “resist the political temptation to rouse its base with finger-pointing and lawsuits.”)

A more interesting question to consider, however, is how the housing relief contained in this settlement fits into other administration housing policy efforts currently in the works.

First off, government negotiators are still working on roping another nine mortgage providers into the deal, which could raise the overall settlement total from $26 billion to around $40 billion. In March, the rejiggered HARP refinance program will kick in, presumably allowing hundreds of thousands of homeowners to refinance at currently rock bottom mortgage rates. There is also strong pressure coming from the Federal Reserve and the White House to convert currently unoccupied foreclosed homes owned by the Fannie Mae and Freddie Mac into rental properties, a step that would remove excess inventory from the housing market.

Each individual nibble here is unlikely to make a profound difference, but taken together, all these initiatives add up to the most concerted effort the Obama administration has taken to date to bring relief to the housing sector. It’s also worth noting that it’s all happening without any help whatsoever from Congress. The approach does not address the desire for punishment that so many would like to see meted out upon the banks, but it will likely help spur additional economic growth. At a point when the economy already seems to have solid momentum toward recovery, every extra bit of help is gravy.

President George W. Bush cut taxes for almost everyone who paid income taxes. Romney would make the Bush tax cuts permanent. But that’s only a first step.

He would also raise taxes on poor families with children at home and those going to college.

Romney does this by reducing benefits from the child tax credit and the earned income tax credit and by ending the American Opportunity tax credit for college education.

To be fair to Romney, when the candidate made his comment on not caring about the poor, he did it in the context of noting that there is a “safety net” for the poor, and if it was broken, he would “fix it.” But it’s a little difficult to square the idea of fixing a broken safety net with the plan to eliminate tax breaks that benefit poor families with children who aspire to a college education. (Not to mention the little problem of figuring out how to pay for that safety net, while at the same time committing to making permanent budget-busting tax cuts.)

Romney’s tax plan appears tailor-made for an Obama attack team to rip to shreds. Of course, judging by the results from the primary and caucus contests so far, poor people don’t seem very inclined to vote for Romney, so maybe he figures he’s got nothing to lose.

Now, don’t get me wrong. I’ve got nothing against Jeremy Lin. He was a high school phenom in Palo Alto, Calif., and I know some Asian American kids out here in Berkeley who worship the ground he walks on. Lin didn’t make the NBA because he’s freakishly tall, like the 7-foot-4 Yao Ming (Lin is “only” 6″3′). He’s there because he can play ball, because he has a wicked fast first step when he drives to the basket, and he knows how to deliver the rock to the big guys (a skill a surprising number of “legitimate” NBA guards show little interest in mastering). He’s a triumph of will over genetic endowment, a fact that makes him inspiring to an entire generation of Californian kids restless with their model minority shackles.

But you can like Lin, and you can root for him, and yet still find his instantaneous, Tim Tebow-like ascent (in more ways than one!) to pop-cultural phenom — LINSANITY! — to be more than a little disorienting. Jeremy Lin is the latest example of how our socially-mediated, always-on world can churn any data point, any outrage, any act of heroism or moment of despair into a full-scale world-wide frenzy in less time than it took me to write this sentence.

We’ve seen this before. The same forces — social media, digital publishing tools, smartphone ubiquity — that are giving us Linsanity just blitzkrieged the Susan G. Komen Race for the Cure Foundation. They torpedoed Hollywood’s attempt to force SOPA and PIPA through Congress and blew up Bank of America’s plan to charge a $5 fee for debit card use. They fueled the Occupy Wall Street movement, magnified every Tebow prostration before God into a worldwide religious orgy and are ever-more ready to pounce on any misstep by a Mitt Romney or a Newt Gingrich and explode it into an instant political crisis.

And the crazy thing is, we’re figuring this out as it goes along — and giving the phenomenon more power. As we understand this new world, and submerge ourselves in it, we are beginning to take our cues from it.

Just want every one to know that I wrote about #linsanity this morning long before it became “hip” this afternoon: bit.ly/Apjdq4

— Jon (@viewmyseats) February 8, 2012

The mainstream media now seems to be adapting its coverage of events on the basis of whether something blows up in social media as much as it does from the perceived newsworthiness of the event itself. It’s startling, but also natural: When you see a fire start to blaze, you run to cover to it. And so Linsanity breeds more Linsanity.

You want highlights? Here’s a distilled package of nine minutes of Lin’s exploits from his 28-point explosion on Monday night. You want a tribute video with an original rap soundtrack on top of some T.I. beats?  Someone is recommending it to you on Facebook or Twitter right now. You want analysis, pro or con? Plug “Jeremy Lin” into Google News and say goodbye to the rest of your day.

You want vaguely disconcerting racially tinged jokes playing on Asian, black, and white stereotypes? Twitter’s going crazy:

Jeremy Lin is a huge pickup for the Knicks. Not only is he scoring a ton of points but he is also tutoring his teammates children in math.

— The Bill Walton Trip (@NotBillWalton) February 7, 2012

“We know that Lin has been playing along, but honestly, fellow Knicks, stop bowing to him after a great play.” nymag.com/daily/sports/2…

— Angry Asian Man (@angryasianman) February 8, 2012

Lots of sterile white folks offer to adopt Jeremy Lin, concerned with the all black family he is currently with.

— The Fake ESPN (@TheFakeESPN) February 7, 2012

On Monday, the social media world was also getting worked up about Michigan Republican Senate hopeful Pete Hoekstra’s racist Super Bowl ad, featuring a Chinese woman (labeled “yellowgirl” in the HTML code for the Web version) gloating over all the jobs her country was taking from the U.S. Once thrown into the 24/7 crazy cultural mashup perpetual motion machine, it didn’t take long before anger about that ad ran head on into Jeremy Lin pride. I have seen tweets urging Jeremy Lin to run for the Republican nomination for the Michigan senate seat, tweets warning that the only American jobs in danger from Asians are those belonging to New York Knick starting point guards, and even a tweet riffing off Kobe Bryant’s self-identification as “black mamba” — Jeremy Lin is suddenly  the “yellow mamba.”

It’s a tricky, tricky world. We get pissed off when we learn that an HTML jockey has labeled a Chinese woman “yellowgirl” but we grin when see Lin dubbed “yellow mamba.” Or maybe not; maybe we get mad at both. The tweet-stream moves too fast too tell for sure. It’s just one non-stop improv jazz riff frenzy.

The craziest thing is, from his record so far we know absolutely nothing about Lin’s staying power as a potential long-term starting NBA point guard. Lin won a state championship as a senior high school and broke all kinds of Ivy League records at Harvard, but he wasn’t drafted by a single NBA team, sat on the bench last year as a rookie for the Golden State Warriors, was cut by both Golden State and Houston before this season, and was playing in the NBA’s developmental league just two months ago. He’s had two great games against two bad teams, and once the league figures him out, he could easily become old news as quickly as he became the news. Or he might tear his ACL next week, be out for the season, and never manage a full comeback. His incredible domination of the basketball world right now tells us nothing about his future.

But one thing we do know for sure: There will be something to replace him, sooner rather than later. We’re strapped to a new kind of rollercoaster — the only thing we can be certain of is that our passions will be constantly roiled by whatever new outrage or delight seethes our way via our new information channels. You know that the Susan G. Komen foundation is reeling from their contact with this world. And you’ve got to guess Jeremy Lin is having a strange week.

Who’s next?

For New York’s bankers and traders, the new math suddenly reordered their assumptions about their place in a post-crash city. “After tax, that’s like, what, $75,000?” an investment banker at a rival firm said as he contemplated Morgan Stanley’s decision. He ran the numbers, modeling the implications. “I’m not married and I take the subway and I watch what I spend very carefully. But my girlfriend likes to eat good food. It all adds up really quick. A taxi here, another taxi there. I just bought an apartment, so now I have a big old mortgage bill.”

And there’s more where that came from! Banking analyst Dick Bove complains that the government has “basically castrated these companies.” Sorry, Dick, but it couldn’t have happened to a more deserving bunch of testosterone-crazed bulls in the entire global economy pasture. Hard times for investment bankers? It’s hard to imagine anything in the world that the average American could care less about, at this particular juncture in time.

2) As proof, amazing as it may seem, that the Dodd-Frank bank reform law is achieving exactly what the U.S. economy needs most: a reversal of the long-term trend in which the financial sector steadily gobbled up more and more of the U.S. economy.

Sherman makes a persuasive case that, even before the full implementation of Dodd-Frank, in anticipation of the new rules the big banks have been forced to make major changes to their businesses that have had a serious negative impact on their bottom line.

What is even more startling about this reversal is that few thought the much-vilified Dodd-Frank act would have much effect at all … And yet, from the moment Dodd-Frank passed, the banks’ financial results have tended to slide downward, in significant part because of measures taken in anticipation of its future effect. Since July 2010, Bank of America nosed down 42 percent, Morgan Stanley fell 25 percent, Goldman fell 21 percent, and Citigroup fell 16 — in a period when the Dow rose 25 percent. Partly, this is a function of the economic headwinds. But the bill’s major provisions — forcing banks to reduce leverage, imposing a ban on proprietary trading, making derivatives markets more transparent, and ending abusive debit-card practices — have taken a pickax to the Wall Street business model

If true, this is great news. In 1986, Wall Street accounted for 19 percent of all U.S. corporate profits. Just before the financial crash that figure had grown to 41 percent. That’s not a healthy economy. That’s an economy of speculators trading with each other and blowing up financial bubbles. Obama has gotten no end of grief from the left for not breaking up the big banks immediately after becoming president, even though one could make a good argument that to do so in the middle of the crisis would have damaged the U.S. economy even further. If, in fact, the long-run resolution of this drama is a Wall Street that is withering on the vine, while the “real” “Main Street” economy gradually strengthens, then we are looking at something remarkable: a profound transformation of the U.S. economy, the likes of which we haven’t seen since the Reagan administration.

3) As unwarranted hype.

Of course, Dodd-Frank has not been fully implemented, and financial sector lobbyists are busily exerting tremendous pressure to make sure every new rule gets written so as to have the weakest effect possible. At the same time, Wall Street will pour hundreds of millions of dollars into the campaign of Mitt Romney, who has promised to make rolling back Dodd-Frank one of the primary goals of his presidency. Profits may be bad this year, and bankers might be whining about their bonuses, but Wall Street will regroup, Dodd-Frank will be neutered, and it will be business as usual in just a few years.

Readings 2 and 3 are not necessarily in contradiction with each other. It’s possible for Dodd-Frank to already be having a salutary effect and for that effect to be short-lived. In some ways, Dodd-Frank’s legacy may be what November’s election ends up deciding — although whichever party wins the White House in 2012, the power of the financial sector over the political process is unlikely to diminish significantly.

But regardless of which reading you choose, the piece itself is amazing if only for the plethora of quotes from bankers lamenting how the times have changed. There’s a self-awareness of the fact that the country headed down the wrong road, that maybe, just maybe, there was something wrong with all the easy money. Wall Street sounds chastened. Whether or not the Occupy movement, or Dodd-Frank, or the bad economy is most responsible for this reality is impossible to say, but for now, let’s call it progress.