Democrats can declaim about President Bush's son Neil as a symbol of what went wrong with the S&Ls. Republicans can spew their venom on former House speaker Jim Wright and the four Democratic senators out of the "Keating Five" being investigated by the Ethics Committee.

Neil Bush, Wright and Sens. Alan Cranston, Donald W. Riegle Jr., Dennis DeConcini, John Glenn and John McCain (the Republican among the Keating Five) can be left to the proper authorities. In the case of the senators, this will include voters in their states.

Congress is also about to legislate tough penalties against S&L executives who plundered their institutions.

But rounding up the criminals, while good for the soul, won't get to the root of the problem.

The problem is the federal deposit insurance system itself.

The public is under the impression that there has been a $100,000 insurance limit. Not true. Wealthy persons are not limited to the $100,000 ceiling, because -- whatever Congress may have intended -- the limit is $100,000 per deposit, not per person.

Even as the bailout cost escalates toward an incredible half-trillion dollars, there have been no basic changes made in Federal Deposit Insurance Corp. rules to limit taxpayers' exposure.

This week, I received a brochure from a thrift institution explaining how a family of four can legally get insurance of up to $1.4 million in a single S&L, in part by designating some accounts to be in trust for other family members.

But wait, there's more:

The government has pursued a big to fail" policy for banks, in the mistaken belief that it thereby protects the financial system as a whole. "Too big to fail," in actual practice, has meant that in all but the very smallest of bankrupt banks and thrifts, the government protects every deposit, no matter how large. By folding weak institutions into stronger ones, the FDIC becomes a de facto insurance system covering every deposit against every risk.

According to the American Bankers Association, the FDIC has protected 99.5 percent of the value of all uninsured deposits in closed banks since 1985.

There's still more:

The records of some failed S&Ls, such as the Lincoln Savings and Loan Association (of Keating Five notoriety), demonstrate that they solicited packages of $100,000 units, combining savings of small depositors, put together by brokerage houses looking for the highest interest payments. The broker-hucksters and their clients knew that the highest rates were being paid by the weakest institutions, some about to go belly up.

Melanie S. Tammen of the Competitive Enterprise Institute (CEI) observes: "For S&L operators, their ability to jack up deposit rates to wild levels and instantly receive fresh funds {from brokers} was like sitting at a blackjack table, going deeper into debt, but all the while being able to yell, 'Hit me again!' "

And finally, a big new shocker:

Since 1987, banks have been allowed by the FDIC to offer full insurance to pension plans holding as much as $100 million. The gimmick is a "bank investment contract" (BIC) under which the $100,000 insurance limit is "passed through" to each pension-plan participant when the total fund is deposited in a bank.

A low-rated Seattle mutual savings bank, an aggressive BIC promoter, told a trade journal that "FDIC insurance ... eliminates the need to review {a bank's} credit rating... ." The bank's advertising carried the assurance: "Our BIC Offers the Backing of a Higher Authority."

According to the CEI, which has done much to surface this new threat, BICs have added about $30 billion in liabilities to an already overloaded system. This extravagant extension of FDIC insurance must be phased down and out.

In general, the federal deposit insurance system has been allowed to degenerate, through interpretation by the regulators, into an absurd guarantee without limit. That is a basic cause of the S&L disaster, and the Bush administration and Congress until now have not faced up to it. Treasury Secretary Nicholas F. Brady is studying the problem, but told Congress that making banks more profitable and competitive -- presumably by letting them enter the securities, insurance and other businesses -- may be as important as changing deposit insurance rules. I doubt it.

FDIC Chairman L. William Seidman suggested that banks could be limited to using their insured deposits to "reasonable, conservative and safe investments." Fred Smith and Thomas Miller of the CEI recommend a more thorough overhaul, limiting insurance to $100,000 per depositor, with private coinsurance available above that level for fat-cat depositors ready to pay substantial premiums.

And above all else, as the American Bankers Association says, the government should abandon the doctrine of "too big to fail." It has outlived its usefulness (if it ever had any) and endangers rather than protects the financial system.

The Bush administration should be working hard at providing a cap on the growing liabilities taxpayers face in the S&L-and-bank crisis, now about $3 trillion, and in an additional near-$3 trillion in exposure through government-chartered enterprises such as Fannie Mae and other credit programs.

There is still something to protect by locking the barn door.