WASHINGTON ( (TheStreet) -- So I see that Wall Street has a man at the White House -- William Daley, a former Commerce Secretary, Chicago politico and, above all, a top executive of JPMorgan Chase ( JPM).

What a fortuitous choice! What timing!

I say that because two seemingly unconnected bits of news have been floating around the ether in recent days, but to me, when you link them together, they show the kind of horror show that financial regulation--and the White House approach to Wall Street-- has become.

They also point to a solution, one that's not happening, but a solution nevertheless.

The first bit of news is barely worth mentioning. Remember financial reform? You know, the Dodd-Frank legislation, which sets up a Consumer Financial Protection Bureau under the Federal Reserve, beefs up the power and budget of the Securities and Exchange Commission, and places new restrictions on banks and derivatives? Well that's on life support, if not already dead.

You can thank Congress, specifically Congressional Republicans, for doing that, by passing a stopgap spending law that freezes the SEC budget, making it impossible to write the regulations that are needed to bring much of Dodd-Frank to life. Last month, Republicans in the Senate blocked an omnibus spending bill that would have raised the SEC's budget by $1.3 billion, or 18%, while commodities regulators would have gotten a 69% increase. Thanks to Republicans on the Hill, Congress isn't increasing their budget by a nickel. The stopgap spending bill expires in March, but it will take World War III to get another nickel for regulators. Shady companies, stock scamsters and philandering banks all need to say in unison, "Thank you, Senate Republicans!"

The other bit of news that I had in mind was a sizable FINRA arbitration award against Securities America, a unit of Ameriprise Financial ( AMP), which was slammed with $1.2 million in damages for allegedly selling a fraudulent private placement in something called Medical Capital. The lawyer pursuing the case says he has got dozens of other aggrieved investors lined up, and Securities America, of course, denies wrongdoing.

It may not seem that way, but these two bits of news are tightly linked. See, it all has to do with a fundamental question that has bugged me for a long time: What does the ordinary investor do when our regulatory-Congressional apparatus seizes up like a lawnmower with an oil leak? Regulators have hardly been distinguishing themselves in the first place, and the Congressional end of the equation is back to business as usual, with the emphasis on "business."

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