The first two suggestions make sense - our tax policy has been skewed for years in favor of the wealthy. The mortgage interest deduction has been a misguided regulatory policy pushed by a utopian attitude towards home ownership.

More regulation for hedge funds and investment banks, however, is likely to aggravate the problem. Hedge funds and private equity investors emerged in part because of the onerous leverage and short-sale restrictions that regulations put on mutual funds and individuals. Further regulations would merely create other - more international and less closely tracked vehicles creating the same risks.

The problem here is not necessarily that the hedge funds and banks had the exposures they did (they're adults and not naive about these risks) but that investors in the investment banks and hedge funds weren't aware of them, and that everyone (including the hedge funds and investment banks) relied on the rating agencies to bless the CDO and CMO tranches.

As a first step, before we handcuff investors and their proxies further, is to make sure market players are obligated to disclose the risks they're bearing in plain english. Current accounting rules for illiquid securities are so convoluted and archaic that a normal CPA couldn't follow them. Force everyone to disclose their financial position in plain english, so that the average person can understand them.

If investors want to take the 32:1 leverage that carlyle capital bore, then let me. Just make sure they know what they're buying.