It's been only three years since Enron, WorldCom, and other corporate scandals burst through Wall Street like a volcano -- spewing revelations of self-dealing, corporate looting, and fudging of numbers. Congress passed the Sarbanes-Oxley law, New York's crusading attorney general Eliot Spitzer went into high gear, and the Securities and Exchange Commission, under its newly installed chairman, William Donaldson, began to crack down hard.

But apparently Donaldson cracked down too hard for Wall Street and big business, which complained bitterly to their patrons in the White House. So now Donaldson is out. Christopher Cox, the president's nominee to replace him, has a long record in Congress of letting businesses, accounting firms, and Wall Street do pretty much as they please.

A decade ago Cox helped push through Congress a law making it harder for investors to sue their companies, a measure that contributed to the anything-goes climate thereafter. And Cox opposes expensing of stock options. Executive stock options, you may recall, gave some executives a strong incentive to pump up their share prices with false accounting, and then dump them.

It's possible that lessons have been learned and Wall Street no longer needs a strong cop on the beat. But take a look at what's been going on recently. The American International Group seemed to have been on its way to getting a clean bill of health from PricewaterhouseCoopers this year, before investigators forced the company's board to restate billions of profits and change chief executives. Last week, Citigroup agreed to pay $208 million to settle allegations it swindled mutual fund investors by lying about certain discounts. And the Bank of America is at the center of an investigation into illegal tax shelters.

Granted, these are just a handful of recent allegations. But consider all the potential conflicts of interest in an increasingly turbo-charged capital market -- where securities firms are taking in more money as investors than as middlemen; where they can make more on complex derivatives and hedge funds than on stock trades; and when companies are scrambling to meet earnings targets -- and then consider that all this is happening at the same time millions of Americans are dependent on 401-Ks invested in humongous mutual funds and giant pension plans. You see the potential for another explosion, don't you?

When that happens, Congress will be forced to enact a law that will make Sarbanes-Oxley look like a game of hopscotch. Cox will be thrown out and I will be installed at the SEC. And Eliot Spitzer will become president of the United States. In the meantime, hundreds of thousands of small investors and employees will have lost their shirts.

If Wall Street and America's biggest corporations really knew what was good for them, they'd have pleaded with William Donaldson to stay on.

Robert B. Reich is co-founder of The American Prospect. A version of this column appeared on Marketplace.