A report entitled, “Sold Out: How Wall Street and Washington Betrayed America,” was released Wednesday claiming that “$5 billion in political contributions [from 1998-2008] bought Wall Street freedom from regulation and restraint.”

It is hard to argue with that conclusion when you look at the litany of regulatory exemptions, accommodations and rule changes along side the size of political contributions and lobbying budgets.

The report issued by the Essential Information and the Consumer Education Foundation is 231 pages but you can get the gist of it in the executive summary that lists the 12 key policy decisions that led to our current crisis.

Chief among these were the repeal of the Glass-Steagall Act, which allowed for the merger of commercial banking and investment banking; ruled permitted off balance sheet accounting, which allowed banks to hide their liabilities and true worth; exempting some financial derivatives from regulation and the Securities and Exchange Commission adopting a voluntary regulation scheme, which allowed banks to ramp up their leverage exponentially.

The report points out that there was no lack of warnings with each of these changes but the power of lobby efforts overcame all of those warnings.

You don’t have to be a conspiracy theorist to realize the power of some of these groups who pushed these changes, you just have to remember how this crisis has played out. Remember how leaders at the Fed and Treasury continuously downplayed the crisis, calling a bottom or stating “the worst is behind us” after each additional shoe had dropped.

Remember how this has constantly been called a liquidity crisis instead of a solvency crisis as if nothing has actually been lost.

The dollars spent on making sure these changes were made are staggering. Unfortunately money spent on lobbying (in all industries) and image making is part of a core business strategy. I have often thought, what if all these monies spent on these efforts were instead spent on making a better product; be it the auto industry, banking, pharmaceuticals or whatever? I think there would be fewer industries in trouble and even if they were, there would be a fairer playing field so that competitors would ready to replace failed firms. There would be no “too big to fail” firms.

For capitalism to work, there has to be a cost for failure.