I’m sure it’s just a coincidence.

On August 5 James Lockhart announced he is stepping down as the man in charge of the government agency that now effectively runs the mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE). The two companies are the biggest mortgage finance companies in the U.S. Together they own or guarantee $5.4 trillion of the $12 trillion in residential mortgage debt outstanding.

On August 6 Fannie Mae announced that in the second quarter it had lost another $14.8 billion and would need to ask the U.S. Treasury for another $10.7 billion in taxpayer cash.

The $14.8 billion loss compares with a $2.3 billion loss in the same quarter a year ago and a $23.2 billion loss in the first quarter.

Am I taking a cheap shot at Lockhart? After all, he was put in charge of the Federal Housing Finance Agency only about a year ago when the agency was created. The FHFA has pretty much run Fannie Mae and Freddie Mac for the federal government since taxpayers gave the two mortgage lenders, packagers, and resellers a $400 billion line of credit.

I don’t think so. After all, Lockhart was appointed to run the Office of Federal Housing Enterprise Oversight, the predecessor to the FHFA, in 2006. He was one of the regulators in charge of watching overFannie Mae and Freddie Mac as they dug themselves deeper and deeper into a whole.

And Lockhart is sympomatic of what’s wrong with almost all the current plans to fix the financial system so a crisis like this can’t happen again: They propose giving new power to regulate the financial industry to the very regulators who didn’t do anything with the powers that they had.

Give the Federal Reserve, the Securities & Exchange Commission, Lockhart’s office, the various bodies that are supposed to regulate derivatives of one sort or another more power? So that Goldman Sachs (GS) and the next generation of new Wall Street powers can game the system by putting their employees in charge in Washington or by hiring the folks who come spinning out of the revolving door of government in Washington?

Oh, please. If that’s the best we can do, at least let’s not pretend that it’s reforming anything.

It should be very clear to you by now–it’s certainly very clear to Fannie Mae–that these two key players in the mortgage market aren’t going to dig themselves out of that hole any time soon.

Maybe never.

Here’s what Fannie Mae said when it released its earnings–and I use the term only because it’s traditional and not because it accurately describes the company’s earnings-free financial condition: “We do not expect to operate profitably in foreseeable future.”

The company finished the June quarter with a net worth of a negative $10.6 billion. That compares with a negative net worth of $18.9 billion on March 31 and a negative $15.21 billion at the end of 2008.

The fair value of Fannie Mae’s assets was a negative $102 billion at the end of June. That compares with a negative $110 billion at the end of March.

The amount of nonperforming loans that Fannie Mae guarantes for other investors climbed to $144 billion on June 30 from $121  billion at the end of March.

That’s the progress that taxpayers can see after the company has received $51 billion in capital from the Treasury in capital since November.

If there was ever an argument about why no financial company should ever be allowed to grow too big to fail, this is it.

Hey, you people in Washington. You know, the people we elect and pay. Here’s an idea for you for free.

Any financial company that grows too big to fail–you know so big that it constitutes a systemic threat to the survival of the financial system–should gradually lose its government guarantees. (Who decides what’s too big? How about a random “jury” of 12 citizens. If we’e willing to put justice in the hands of as pool of citizens, why not a decision like this? At least, because selection is random, they’ll be harder for lobbyists to systematically bribe.)

Deposit insurance from the Federal Deposit Insurance Corp. would decrease with size. Access to cheap money from the Federal Reserve would decrease with size. Access to the bundling and repackaging services of the now government owned Fannie Mae and Freddie Mac would–repeat after me–decrease with size.

If a financial sector CEO wants to pretend that he or she is Napoleon or Catherine the Great, more power to ’em. But let them play with their own money.

Oh, and by the way, James Lockhart has said only that he’s pursuing opportunities in the private sector. Be interesting to see where he winds up.