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Last week the Dallas Fed issued an explosive report (PDF) -- predicting America will face another financial crisis and be forced to bail out Wall Street again unless the biggest banks are broken up.

This isn't the Occupy movement. The Dallas Fed is one of the most conservative banks in the Federal Reserve system. And it knows first-hand about the dangers of under-regulated banks -- the Savings and Loan crisis of the 1980s and '90s affected Texas like nowhere else.

According to The Dallas Fed report, Wall Street's power makes it almost impossible to control because "they have the lawyers and the money to resist the pressures of federal regulation." This means the Dodd-Frank act, which is supposed to prevent another financial calamity, is woefully inadequate.

Wall Street seems intent on proving the Dallas Fed correct. At this very moment its legion of lobbyists is pushing legislation in Congress to weaken provisions in the Dodd-Frank law regulating the trading of derivatives.

Meanwhile, the same lobbyists are swarming over the regulatory agencies charged with implementing Dodd-Frank. They've been trying to weaken other provisions, like the so-called Volcker Rule that bars banks from gambling with commercial deposits. The Volcker Rule is now riddled with loopholes large enough for the bankers to drive their Ferraris through.

Where they haven't yet eviscerated Dodd-Frank, Wall Street's lawyers have been going to court to stop it. Recently, they delayed a rule by the Commodity Futures Trading Commission to limit speculation in commodities such as oil.

Clearly Wall Street hasn't learned its lesson. The public will not tolerate another financial meltdown and bailout, and yet Wall Street won't accept more regulation. If it's too big to fail and too powerful to regulate, the only answer is, according to the Dallas Fed "breaking up the nation's biggest banks into smaller units."

We did it to the giant oil companies a century ago because they were too powerful, economically and politically. It's time to apply the same medicine to Wall Street.

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