Remember Eliot Spitzer?

REMEMBER ELIOT SPITZER?…. We’re all well aware of the former New York Gov. Eliot Spitzer’s (D) sex scandal. We’re also aware of the criminal investigation, his resignation, and his unmet promise as a potential political heavyweight.

But over the weekend, I read a very sharp piece he wrote for the Washington Post, and I’m reminded that the nation could use someone who knows a little something about cleaning up Wall Street and combating its excesses, and Spitzer seems to be ready and willing to make a contribution.

First, we must confront head-on the pervasive misunderstanding of what constitutes a “free market.” For long stretches of the past 30 years, too many Americans fell prey to the ideology that a free market requires nearly complete deregulation of banks and other financial institutions and a government with a hands-off approach to enforcement. “We can regulate ourselves,” the mantra went.

Those of us who raised red flags about this were scoffed at for failing to understand or even believe in “the market.” During my tenure as New York state attorney general, my colleagues and I sought to require investment banking analysts to provide their clients with unbiased recommendations, devoid of undisclosed and structural conflicts. But powerful voices with heavily vested interests accused us of meddling in the market.

When my office, along with the Department of Justice, warned that some of American International Group’s reinsurance transactions were little more than efforts to create the false impression of extra capital on the company’s balance sheet, we were jeered at for attacking one of the nation’s great insurance companies, which surely knew how to balance risk and reward.

And when the attorneys general of all 50 states sought to investigate subprime lending, believing that some lending practices might be toxic, we were blocked by a coalition of the major banks and the Bush administration, which invoked a rarely used statute to preempt the states’ ability to probe. The administration claimed that it had the situation under control and that our inquiry was unnecessary.

The piece concluded, “Although mistakes I made in my private life now prevent me from participating in these issues as I have in the past, I very much hope and expect that President Obama and his new administration will have the strength and wisdom to do again what FDR did.”

Reading this, I couldn’t help but wonder if Spitzer’s personal mistakes really should prevent him from participating in these issues as he has in the past.

Yes, he hired a call girl, but so did Sen. David Vitter (La.), and he’s still a sitting Republican senator in good standing, who apparently plans to seek re-election. Yes, he committed adultery, but so did Newt Gingrich (thinking about running for president), Rudy Giuliani (thinking about running for governor), and John McCain (the most recent Republican presidential nominee).

Do we have to exclude Spitzer from addressing the issues on which he has considerable expertise? Issues that have nothing to do with an unrelated sex scandal?

Ben Smith suggested the other day that Spitzer might be a good replacement from Hillary Clinton, should she become Secretary of State. If that’s not a realistic option, how about a role in the Obama administration? Is there a better pick in mind for the next chairman of the Securities and Exchange Commission?