In many ways the regulatory reform being proposed by the Obama Administration will reshape the American financial industry as we know it. It is historic and worthy of all the effort and time thousands of people will put into making them the law of the land.
But it's also important to understand what these new rules can and cannot do.
What these regulations may do is prevent a crisis just like the one we are living through right now.
Make no mistake -- this has been a hugely expensive crisis for family balance sheets digging out of debt and the U.S. Treasury shoveling money into the economy.
The International Monetary Fund warns that U.S. Government debt may rise to 75 percent of gross domestic product by 2011, nearly twice what it was in 2008. By September 1 out of 10 Americans will be out of work.
Preventing a systemic failure due to over leverage based on real estate and credit is absolutely needed. The idea of a consumer protection for financial products is also long overdue.
Anybody who has spent time reading the small print in credit card offers or an exotic mortgage agreement can see the minefields sown around consumers.
Likewise creating firewalls between the different sectors of our financial system to contain the spread of a toxic asset contagion is something everyone agrees is necessary. The global economy nearly choked to death on the alphabet soup of financial tools like CDO's, CDS's and SIV's.
Now the bad news:
The primary goal of these proposed regulatory changes is to prevent the next financial crisis. History tells us that may be unrealistic.
Preventing the next financial crisis is a noble and important function of the government just as preventing war or supporting the rule of law. Unfortunately it's doomed to fail because human beings are involved.
The reality is there will be a future financial crisis. The when and how is anybody's guess. History has proven time and again that identifying financial risks before they develop into full blown bubbles is a tricky if not impossible business.
If it were possible -- a financial crisis would not occur somewhere in the world at least once every 25 years. Whether it's tulip bulb speculation in 17th century Holland or real estate speculation in 20th century United States, people find ways of creating speculative environments that grow into bona fide economic bubbles.
When those bubbles pop you get a crisis. Also remember that these rules will only apply in the United States. The risk to the U.S. economy from outside forces is a clear and present danger as emerging markets find their way and grow in influence in the global financial system.
The process to codify the Obama Administration proposals will take months and involve Congress, Wall Street, banks, lobbyists and consumer advocates. The plans will be shaped and reshaped in ways that will make them nearly unrecognizable to their authors. It'll be a grueling process that will happen behind the scenes.
When Mr. Obama finally signs them into law sometime next fall our economy will get some protection from the market forces that pushed it to the brink in the Great Recession of 2008-2009.
What the economy will never have is immunity from the very thing that started this mess in the first place -- greed.
Read more on the regulations.
Text of Mr. Obama's remarks.
Guy Campanile is a CBS Evening News Business Producer.