This week America witnessed Black Thursday for workers and families as the Senate defeated a bankruptcy bill that would have protected distressed homeowners and the House passed a bill that encourages and guarantees banks will continue abuses the bill pretends to remedy for a full year.

Politically and financially, Americans will look back on these years, and judge what happens when a Democratic president and Democratic Congress use the government as an instrument of reform, change and problem-solving. To state my conclusion at the outset, I do not believe Treasury Secretary Timothy Geithner has carried this mantle well and what I see in current policy is little more than a gigantic transfer of wealth from taxpayers to banks, which is being abused and misused by most banks.

It will be a disaster if this becomes the historic, political and financial legacy of Democrats using government to solve problems, and I believe it is essential for Democrats and progressives to join a great debate on the side of workers and families and against the abuses that are front-page news and continue every hour of every day.

It is outrageous that banks take trillions of dollars of taxpayer money for the purpose of lending to Americans while they raise credit card rates, turn fixed rates to variable rates that guarantee huge additional rate increases when the Fed resumes raising its rates, while they raise banks fees, cut customer lines, and increase foreclosures when trillions of dollars were spent for them to do exactly the opposite.

On Black Thursday the Democratic House (many of whose members take enormous sums of money from banks, as do Republicans) passed a bill to allegedly protect consumers that will not take effect for at least a year. This means the House supports continuing every abusive action the bill claims to oppose for one full year, at least, in a stunning triumph for the banking lobby.

It is time to break ranks with an almost universal Washington consensus about how business is done in this town, a consensus that is leading our country to financial disaster.

My “epiphany” came when I glanced at the recent campaign finance report of Sen. Chris Dodd (D-Conn.), which shows a stunning lack of support from home-state donors and a deluge of donations from companies doing business with his Senate Banking Committee.

Dodd is a good man in a corrupted system. Both parties profit from this crisis through massive campaign donations. Those who manage troubled institutions profit from it through massive bonuses and compensation.

While Wall Street pay is quickly moving back to bubble levels, the system of speculation for compensation (which creates perpetual bubbles) remains intact. Campaign money still flows like a mighty river in a legalized pay-for-play system that corrupts our financial and political systems alike.

The source of public anger is this: The core policy is fundamentally a multi-trillion-dollar transfer of money from taxpayers to banks, which borrow money from taxpayers at low interest, punish taxpayers by charging them higher interest and pay themselves a king’s ransom for doing it.

The president speaks of transparency and accountability, but: Does anybody know exactly how much money the various government agencies have spent rescuing banks that still refuse to lend? Four trillion dollars? Seven trillion? Ten trillion?

What, exactly, have taxpayers received in return? These monies were provided to increase lending, but net lending is down.

When banks receive trillions of dollars to increase lending, they insult the intelligence of taxpayers and the integrity of government by increasing credit card interest rates, increasing bank fees, lowering credit limits, increasing home foreclosures and lowering net lending. Where’s the accountability?

Meanwhile, Obama and McCain received huge amounts of money from banks, Wall Street firms, hedge funds and mortgage companies while congressional fundraisers continue ad nauseam.

While money is doled out to banks by Congress, money is doled out to Congress by banks.

It is a direct attack against economic recovery, a direct attack against economic stimulus and a direct attack against economic growth for interest rates to be hiked, credit limits to be cut, bank fees to be raised and lending to be lowered.

Have they no shame?

Taxpayers pay for the bailout, subsidize the lobbying, underwrite the campaign donations. Then they are taxed by banks through fees and rates that work as regressive taxes. They will be taxed again to pay for the deficit. They will be taxed again when the value of their money declines from the inflation these trillions of dollars will inevitably cause.

Does anybody understand exactly what the Federal Reserve money is used for, exactly who received it, exactly what taxpayers receive in return and exactly how much money has been spent?

Where’s the transparency?

Can anyone justify the number of senior Treasury jobs that remain unfilled, or the pay-for-play schemes surrounding state pension funds?

Everyone should read the lengthy story in Monday’s New York Times about the career of Mr. Geithner. Did he do his job well, or disastrously, at the New York Fed when he failed to regulate the firms while they were causing this crisis?

Mr. Geithner is without doubt a great power-networker, who spent much time at the N.Y. Fed in endless networking events with the financial powerbrokers who were creating the crisis that Geithner was failing to prevent.

Geithner was not reforming the system, protecting the customers or opposing the abuses that endanger our national solvency. He was cultivating the support of financial powerbrokers who were, and remain, his true constituency.

What does it tell credit card CEOs that the president’s chief economic adviser falls asleep at a meeting where he should have been defending taxpayers and consumers like a lion?

The Republicans have virtually nothing to offer except hoping the president fails without serious ideas of their own. The Party of No has earned its 21 percent approval rating. But, as a matter of conscience and concern for my party and my country, I must break ranks.

What is happening is wrong. A whole generation will pay the price for what we do today. The cost will be enormous and incalculable. Both parties owe the next generation far better than either party offers today.

No bank should ever be too big to fail. Instead of taxpayers subsidizing mergers, regulators and legislators should break up any bank so large that its failure endangers the nation as a whole.

It is inexcusable and shameful for even a Democratic House to pass a bill to allegedly combat abuses against citizens, and make that bill effective a full year later, which means all of those abuses will continue for least 12 more months. To call this a consumer protection bill is an abuse of language and a fraud against consumers and voters who do not want these abuses continuing for another year, and supported by Democrats as well as Republicans in Congress for another year.

Banks given trillions of dollars to lend should lend. Those of either party who tolerate these abuses are betraying the largest financial trust ever given to public officials in the history of the nation, the world or any generation.