The most disturbing business news of recent weeks has been the resurgent confidence of the banking lobby, which is scrapping to stop vital reforms from changing the way it does business.

There’s also growing worry that Obama is letting this financial crisis go to waste, to use his chief of staff’s phrase, with half-measures and a let’s-all-get-along tendency. It’s unclear whether the administration doesn’t have the spine to stand up to Wall Street or its champions in Congress—or the administration’s own regulators, for that matter.

BusinessWeek gets this, and takes an appropriately skeptical look at the Obama administration’s weakness in taking on the banking lobby. It’s a testament to how captured the government is by corporate interests that these guys are even in the room. They’ve crippled the world economy, cost taxpayers trillions of dollars—and got obscenely rich doing it—and we’re still taking their advice into account? Huh?

There’s a clear consensus that the catastrophe is a direct result of a jerry-rigged regulatory system that’s been actively sabotaged over the last few decades. Nobody thinks it works. So why tinker around the edges? BusinessWeek tells you, in an excellent lede:

Old habits die hard—especially bad ones, and especially when they’re backed by well-heeled lobbyists and a powerful congressional committee chairman.

And this is a good explanation of what Obama is doing:

Despite the promise of tough reforms from the President and his top economic officials, the Administration—in its decision to put off tough political battles over regulatory turf and reining in executive pay—appeared to be backing away from the stiffest moves that were on the table.

With the worst of the crisis appearing to recede, the political will to take on those tough constituencies appeared to be fading as well. With it may go a once-in-a-generation opportunity to aggressively tackle some badly needed changes in the U.S. financial system.

The press has been up to the task on this story of late, with The Wall Street Journal leading the way reporting on the lobbying machinations jamming up Congress. I don’t know why the press has perked up here, but I’m hoping it’s a sense of moral outrage at what’s going on.

It’s a stark contrast with the mostly weak coverage of regulation in the years before the bubble burst.

Here BusinessWeek adds some important political background on why Obama is backing down from aggressive reform:

Not surprisingly, such plans sparked strong behind-the-scenes opposition from many in the financial-services industry who want to hold off radical change. Despite the industry’s weakened position, it remains an enormous fund-raising source and still holds enormous sway with many on Capitol Hill. Plus, consolidating the regulatory structure would also mean reallocating the authority of the various congressional oversight committees. It may make little sense in the modern financial world for the Commodities Futures Trade Commission to continue to regulate financial derivatives, along with the agricultural derivatives—pork bellies, corn futures and the like—that it was originally mandated to oversee. But giving up sway over those financial products would also mean a big cutback in the power, influence, and fund-raising prospects of the agricultural committees that oversee them in the House and Senate.

Why are congressmen on committees allowed to take campaign contributions from industries they regulate?

BW’s Jane Sasseen puts the latest back-down into the larger context of the administration speaking big and carrying a soft stick:

Still, some critics sense that the Administration is about to fumble an opportunity—and follow a pattern increasingly seen throughout this Administration’s policy agenda: strong language followed by actions that appear far weaker than the rhetoric.

And the magazine twists the knife with its kicker:

While many in China’s leadership see a need for fundamental reforms, there are also plenty of others who believe that as the worst of the crisis passes, nothing that extensive is needed.

“Like any leadership, there are people in government there who hope that things will just go back to the way they were,” says one senior U.S. Administration official. That could be said of many in the U.S. government as well.

Nice.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.