How to craft a (toothless, reformless, too-big-to-fail-ignoring) bipartisan bill

NEW YORK (Fortune) -- Washington insiders are all pumped up by Sen. Chris Dodd's pending financial reform bill. They say that it seems to have a real chance to garner bipartisan support. Yippee! That sounds great on the surface, but ask yourself WHY it seems more popular than, say, Obama's health-care bill? Reason is that Dodd's dang thing's got no teeth! Sure the bill has a measure to create a consumer protection agency within the Fed, (even that's controversial) and it would ban bank execs from being on the New York Fed's board. Then there's the real torches and pitchforks stuff, but even here, the bill is fangless. The proposed bill would allow shareholders to have "advisory votes" (say what?) on executive pay.

But the real demons -- leverage, derivatives, and TBTFS (too big to fail syndrome) -- really aren't addressed here. Limiting leverage, or borrowing by big firms, seems like a no-brainer. But it's not here. As for derivatives, yes there is some reform and some more transparency, but many companies would be exempt from the new regs, and in toto, this is really just a swipe at reining in these financial weapons of mass destruction and hardly a real attempt. And as for too big to fail, there is language about banks not being able to own hedge funds or private equity firms, or from making proprietary trades, but again this is off-point and/or half-hearted. Seems to me Wall Street has done a dandy job of lobbying against any meat-on-the-bones reform.

The real takeaway is that this is a feel-good bill, and far from the real deal. Ask yourself this: Would this bill do any good in terms of preventing the next great Wall Street meltdown? My answer: not really.

End note: Hey did you see that GMAC's ResCap, a mortgage unit of the big auto-lender has reportedly hired Goldman Sachs (GS, Fortune 500) to advise it on a possible sale? Interesting. Wonder who the buyer might be. Some have speculated Warren Buffett. But I'm wondering about Wells Fargo (WFC, Fortune 500) being the buyer. The bank could use the deal to beef up its mortgage business. A Wells spokesperson declined to comment.