"Unequal" has become a license for a mishmash of insider trading, naked share shorting, off-the-charts derivatives and hedge funds that only privileged cognoscenti understand -- sleights of hand at the expense of the average small investor, such as predatory lenders telling millions of average homeowners not to worry as they could use their houses as ATM machines. They would keep growing in value at least 10 percent a year.

Ask Google what naked share shorting is, and you get 18.7 million answers in a fraction of a second. Yet average investor John or Jane Doe, whose fate is in the hands of mutual funds and/or financial advisers, doesn't have a clue. In naked shorts, shorters sell shares they haven't borrowed and/or don't intend to borrow. The Securities and Exchange Commission recently concluded naked shorting, more often than not, drives down stock prices. But it is also a scheme to bring down targeted companies.

America's classical-liberal moral-cultural system, which encourages pluralism, writes Ed Younkins, a professor of accountancy and prolific writer on the "Conceptual Foundations of Free Enterprise," is barely recognizable. Wherever one looks, the unfolding economic and financial situation is driving small businesses and the middle class back whence they came. And John Doe, without access to financial terminals and who doesn't read the Financial Times, blames the mavens of Wall Street.

Former Sen. Phil Gramm's dismissal of the current economic crisis as a "mental recession" prompted late-night comedians to ask what hallucinatory drug had been slipped into his Mickey Finn. It only widened the perception gap between those struggling to keep up payments on a house that is worth a lot less than the mortgage and those who lost a chunk of their savings but are still well off. President Bush's $78 billion in stimulus checks didn't produce the anticipated uptick.

Many of the new class of megarich, worth several hundred million dollars, have also lost half their holdings. A number of the world's 1,150 billionaires have fallen below their idea of the poverty line, minus three zeros. But in alarmingly high numbers, John Does are losing homes and family businesses.

With $5.2 trillion in liabilities, or almost half of all outstanding mortgages, the failures of two humongous housing lenders, Fannie Mae and Freddie Mac, are too horrendous to contemplate. Even though on the edge of implosion, like Bear Stearns, they are too big to fail. To nationalize would be un-American. It would boost the national debt of $9 trillion to $14 trillion.

Washington's "wisepersons" came up with the idea of getting Congress-chartered Fannie and Freddie, whose stocks were already down 50 percent in one week (80 percent over the past year), to take on still more liabilities. This would place them in "conservatorship," government gobbledygook for ward of the state with a fresh line of credit.

T. Boone Pickens, in a multimillion-dollar, nationwide TV ad campaign designed to prioritize alternative sources of domestic energy, reminds viewers about what he calls the biggest transfer of wealth in history -- from the United States to oil-rich countries -- which he says is $700 billion a year. The number of U.S. banks in trouble has gone from 100 to 300 in a few weeks (out of 8,500). IndyMac Bank, one of the nation's largest savings and loans, was closed down by regulators. Millions have canceled vacation plans. Las Vegas hotels are giving away rooms at $100 a night to stem tourist drought. Millions more are postponing retirement plans. And in the rest of the world, panhandlers prefer euros.

Financial services are almost a quarter of the U.S. economy. In many of the industry's recent scandals, work ethic has become an oxymoron. Captains of the new industry's financial houses can wreck their businesses and get pushed out by their boards of directors, but not before collecting tens of millions -- in one case $165 million -- because that's what their contracts stipulated. Win or lose, they get to keep golf or yacht club dues and, in many cases, the continued use of a company jet. The contrast with laid-off workers, whose unemployment benefits have run their course, has crept into campaign rhetoric.

Tens of thousands of Enron employees lost both jobs and life savings in the 2001 corporate heist by greedy executives, followed by multibillion-dollar scandals at Tyco International, Adelphia, Peregrine Systems and WorldCom that cost investors billions when their share prices collapsed and shook public confidence in securities markets.

This new wave of bandit capitalism gave birth to the Sarbanes-Oxley Act -- SOX for short -- which is the most far-reaching reform of American business practices since the Great Depression. The Senate passed SOX 99-0 and the House 423-3 -- and it is widely unpopular in executive suites and boards because of a slew of new corporate responsibilities. The subprime mortgage meltdown is bound to generate more SOX appeal.

Even if John McCain becomes the 44th president, the present outlook is for Democrats to retain and widen their majorities in both houses. SOX-type measures are then bound to proliferate through the financial sector. Extravagant executive compensation bundles are in the crosshairs.

As for the millions who have accumulated a mountain of debt that keeps getting bigger because of high interest rates and fees, the SOX brigades will soon be targeting the ludicrously lucrative lending practices of America's merchants of lucre. These have stranded John and Jane Doe on the edge of the precipice.

Lenders today are less worried about repayment as consumer debt is now packaged into securities and sold to investors. They make their money from what they charge borrowers: almost 20 percent. Late payments are pushing $40 a month. A loan thus becomes a perpetual earning asset. That's not how the game should be played. But then the United States is still too big to fail. And deeper into debt we shall go.

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