This past week, the United States’ largest bank JP Morgan Chase, announced that it has lost at least $2 billion (and probably much more) on a “complex hedging strategy.” The loss led the bank’s CEO Jamie Dimon to call the move of his own company a “terrible, egregious mistake.”

The JP Morgan’s loss is just another blunder on a laundry list of financial sector failures over the past few years. But it’s more than just that. JP Morgan is viewed as the Wall Street property least likely to engage in the kind of speculative gambling that got other banks in big trouble. For them to admit to such a colossal mistake leaves us asking the obvious question: what the *!&^* are we doing??

Four years after the crisis hit, after much blood and ink has been spilled coming up with new regulations, and in the aftermath of the Occupy Wall Street movement, why is this still happening and what, if anything can be done to stop it?

This question also leaves the Obama Administration open to much criticism as the campaign season heats up. On the one hand in 2009 President Obama had made statements like “There are a lot of banks that are actually pretty well-managed, JPMorgan being a good example. Jamie Dimon, the CEO there, I don’t think he should be punished for doing a pretty good job managing an enormous portfolio.” On the other hand he also said in 2009 “he did not become president to “be helping out a bunch of fat-cat bankers on Wall Street.”   Wall Street found his love-hate messaging to be confusing. Dimon himself stated on Meet the Press last week he would “call himelf a ‘barely Democrat’ at this point” and that the “anti-business behavior” [of the Administration] is “very counterproductive.” To further complicate matters, President Obama continues to raise significant amounts of money for his campaign from the very same folks on Wall Street, although not nearly as much as he did in 2008.

The President’s record on Wall Street reform is not entirely compelling.  On July 20^th, 2010, in the wake of America’s “Too Big To Fail” financial meltdown, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act.  It was heralded as the most far-reaching legislation in history to reign in the financial sector.  The law’s purpose was “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” Given what happened at JP Morgan one can’t help but notice the disconnect between the legislation’s intended impact and proven effectiveness.

This week Matt Taibbi outlines what went wrong with Dodd-Frank. In Rolling Stone he writes that Dodd-Frank is “groaning on its deathbed” as Republicans AND Democrats work in concert to roll back the toothiest portions of the bill, greased by the relentless lobbying of Wall Street interests. Just last week, Jamie Dimon himself personally lobbied to weaken the Volker Rule; a component of Dodd-Frank that could significantly reduce and in most cases ban risky trades at federally insured institutions, like JP Morgan. Dimon’s lobbying efforts have thus far been successful. JP Morgan insists their huge loss was a hedge, not a proprietary bet, therefore not banned under Volcker’s proposed restrictions.

Republican nominee Mitt Romney’s reaction to the JP Morgan loss was predictable. He said “I would not rush to pass new legislation or new regulation… “This is, in the normal course of business, a large loss but certainly not one which is crippling or threatening to the institution… “This was not a loss to the taxpayers of America; this was a loss to shareholders and owners of JPMorgan and that’s the way America works…The $2 billion JP Morgan lost, someone else gained.”  Romney has already stated his intention as President to roll back Dodd-Frank.

The reality is that Americans don’t care which part of Dodd-Frank did or did not JP Morgan violate.  American’s remember that in 2008 banks were in the brink and that the government spent billions of dollars to save them, and now, in 2012, the banks looks like there are just as unsafe and unstable. It highlights a Wall Street and Main Street divide that the Tea Party and the Occupiers can both relate to especially when people are worried about whether their deposits are safe.

The responsibility for this apparent failure in managing the aftermath of the financial crisis will inevitably fall squarely in President Obama’s lap who now has bankers upset with him for being to cavalier and people upset with him for letting the bankers off to easy. We’ll have to see how Campaigner-in-chief Obama finesses his way out of that one.  In the meantime take our poll on Wall Street and regulation here