WASHINGTON — No one cog in the federal government’s machine of financial regulation let down the country by failing to prevent the latest shakeout on Wall Street. The entire system did. ‘They just haven’t done a particularly good job,’ said James Barth, a senior finance fellow at the Milken Institute, a nonpartisan research group based in Los Angeles. Kathleen Day, a spokeswoman for the Center for Responsible Lending, a consumer-oriented research group, explained the regulatory lapses more starkly: ‘The job of regulators is that when the party’s in full swing, make sure the partygoers drink responsibly,’ she said. ‘Instead, they let everyone drink as much as they wanted and then handed them the car keys.’ Analysts and politicians are raising serious questions about the nation’s financial regulatory system, which dates to the New Deal era. On Monday, one Wall Street bank, Lehman Brothers, filed for bankruptcy protection and another, Merrill Lynch, sought comfort by selling itself to Bank of America for $50 billion. Earlier this year, the government helped enable the sale of faltering investment bank Bear Stearns to J.P. Morgan Chase, and more recently took over mortgage giants Fannie Mae and Freddie Mac. Such […]