What followed was either a great example of mutual incomprehension or political theater at its finest. Blankfein professed bewilderment. Goldman’s clients are professional investors, he said. They are well able to do the same kind of due diligence that the investment bank had done and come to the same conclusion. Left unstated but implied was that Goldman couldn’t be held responsible for the stupidity or short-sightedness of others. Goldman was absolutely within its rights to not worry about what happened next, as long as it didn’t lie outright to its clients.

Angelides shot back. “These are pensions of police officers,” he snapped. True, but irrelevant to Goldman Sachs or any other Wall Street firm. After all, those pension funds were being overseen by trustees, by experienced investment managers. They, not Goldman Sachs, had a fiduciary duty to the cops in Massachusetts or California. For its part, Goldman’s fiduciary duty was to ensure that its own shareholders received the maximum possible profit, not check to be sure its clients were behaving prudently.

Real reform on Wall Street doesn’t involve reviving the spirit of the Glass-Steagall era, as Volcker has argued. Rather, it requires reviving the culture and spirit of a time before investment banks were publicly traded, when other considerations went hand-in-hand with maximizing profit.

In all the excitement surrounding the face-off between Angelides and Blankfein, few pundits paid a lot of attention the next round of testimony, which includes some reflects by veteran banker Peter Solomon, a former vice chairman of Lehman Brothers. Back in the 1960s, Solomon told the FCIC, when investment banks were still partnerships without a permanent capital base, all of Lehman’s partners hung out together in a single large room on the third floor of its headquarters. Not because they relished each other’s company, he added, but because they were afraid of what might happen to their own stake in the investment bank if they turned their back on their fellow partners. Any single partner was able to commit all of the firm’s assets in a transaction. A mistake would wipe out their capital and their credibility. Profits were great—but not profits at any cost.

Decades of operating as just another for-profit business rather than financial institutions playing a vital role in the nation’s economy have caused Wall Street to lose this perspective. Nor, as Blankfein’s comments show, do they see the poor quality of the products they sell as any of their business.

But "caveat emptor" is no way to run a healthy financial system. True, ask any senior banker about this and you’ll get an argument in response that maximizing profits automatically implies looking out for the health of clients and the system, since they can’t make money without them. But when push comes to shove, a Wall Street CEO is legally required to put profits first, as any banker who has confronted the urgent cry to book fees from another banking deal or boost trading profits by another few million dollars before the end of a quarter can testify.

In a short paper published by the Harvard Business Review online last fall, veteran risk manager Leo Tilman pointed out the consequences of ignoring that fiduciary duty. An investment bank that had behaved the way Angelides wanted—one that pared back risk, concentrated on less volatiles businesses, and behaved, in short, as if it owned a fiduciary duty to the system and its clients—would still, today, come under tremendous pressure to change its ways. “How strong is the resolve of the firm’s executives to follow their vision before the competitive pressures (from their investors) to deliver short-term earnings force them into excessive risk taking?” Tilman wonders. How long would it take, he asks rhetorically, for directors—elected by those shareholders—to lose patience and show those reluctant risk takers the door?

Unless and until Washington’s eager reformers can find a way to address that conundrum, whatever they manage to accomplish in the way of structural reforms, including the Volcker Rule, may well prove meaningless. The solution to the fix in which we find ourselves doesn’t involve telling Wall Street what business they can or can’t pursue—rules that, given a decade or so, most will find a way to duck. Rather than trying to control Wall Street’s ability to take risk, President Barack Obama, Volcker, and Angelides need to find a way to reshape its attitude to risk taking and instill a sense that some risks—no matter how much profit they might generate—simply aren’t worth running. Confining reform to Wall Street’s structure simply increases the odds that, sooner or later, the vicious cycle of excessive risk taking and financial crisis will return to haunt us.