Robert Scheer is the editor of Truthdig, where this article originally appeared. His latest book is The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America (Twelve).

Maybe I got it wrong. During the presidential campaign I wrote columns blasting Sen. John McCain for siding with the big bankers on deregulation, citing his choosing ex-Senator Phil Gramm, currently a vice chairman of the Swiss-owned banking giant UBS, as his presidential campaign chair. Barack Obama, on the other hand, repeatedly blasted Gramm and the Gramm-Leach-Bliley Act, which the Texas Republican had pushed through Congress, with President Bill Clinton’s support–legislation that repealed the Glass-Steagall Act and radically deregulated the financial industry.

But now the roles are reversed, and it is McCain who, along with Senator Maria Cantwell, D-WA, has sponsored a bill to repeal Gramm’s legislation, while Obama seeks to preserve it.

The Gramm legislation, which permitted the merger of investment and commercial banks into too-big-to-fail corporations (including Citigroup and AIG, two financial giants that had to be bailed out by taxpayers), was thought by Obama the candidate to be a key cause of the meltdown. But as president he reappointed the Clinton-era officials who had sided with Gramm in ending sensible banking regulations that had protected the public for seventy years and made the US banking system the envy of the world.

Rather than restore Glass-Steagall, the Obama-backed banking regulation bill passed last month by the Democratic majority in the House went along with the desire of Wall Street lobbyists to prevent the breakup of the big conglomerates and to block control of their massive trading in the derivatives that proved to be so toxic.

The result, with some deceptive reformist window dressing, is a pro-Wall Street business-as-usual cop-out, and the Senate version is likely to be more of the same. Fortunately, there is a better way, and thanks to the McCain-Cantwell bill and a companion one authored by Representative Maurice Hinchey, D-NY, in the House, there is still a chance at serious financial regulation through the restoration of the key provisions of Glass-Steagall.

How odd that it now remains for McCain to stand up to the oversize banks.

“… I want to ensure that we never stick the American taxpayer with another $700 billion–or even larger–tab to bail out the financial industry,” McCain proclaimed in introducing his legislation. “…This country would be better served if we limit the activities of these financial institutions.”

But just the opposite happened under the great bailout. The big investment houses of Goldman Sachs and Morgan Stanley were allowed to suddenly attain the status of commercial banks in order to qualify for federal bailouts, and the once-staid commercial Bank of America was encouraged by the Fed to buy out the investment house Merrill Lynch. As a result, banking has never before been concentrated in so few hands. As Representative Hinchey put it:

“Today, just four huge financial institutions hold half the mortgages in America, issue nearly two-thirds of credit cards, and control about 40 percent of all bank deposits in the U.S. In addition, the face value of over-the-counter derivatives at commercial banks has grown to $290 trillion, 95 percent of which are held at just five financial institutions. We cannot allow the security of the American economy to rest in the hands of so few institutions.”

Those derivatives, that hodgepodge collection of securitized debt–including mortgages of most American homes–are at the heart of the problem, and they are not regulated in any significant way by the legislation supported by the administration. It’s no wonder, since Lawrence Summers, the president’s top economic adviser, was not only a key proponent of reversing Glass-Steagall in the Clinton White House but also supported the Financial Services Modernization Act, passed a year later, that summarily exempted those suspect derivatives from any regulation.

Although Obama has blasted “fat cat bankers on Wall Street,” it is time for those who elected him to ask for more than rhetoric. And to ask that of the Democratic leaders of the House, who refused to allow a vote on Hinchey’s amendment to include the restoration of Glass-Steagall in their so-called Wall Street Reform Act. Introducing it as a separate bill, Hinchey stated:

“The repeal of the Glass-Steagall Act was done to help large banks become enormous and to line the pockets of banking executives with more money than most Americans could ever dream of earning in their lifetime…. This bill would help right the ship and return our country to the days when banks either participated in commercial lending activities or investment activities, but not both.”

There is much logic in preventing commercial banks, which carry the hard-earned savings of depositors and a federal guarantee of their worth, from engaging in the high-roller risk-taking of investment banks.

If McCain now gets it, why doesn’t Obama?