After raking off three quarters of a billion dollars, Sandy Weill now says it may be time to separate commercial banking from investment banking.

On Wednesday Weill said, “What we should probably do is go and split up investment banking from banking,” He continued, “Have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.” “There is such a feeling among people, among regulators, among the political system all over the world, against the banking system, and I don’t think that’s going to change so soon.”

This is the same Sandy Weill, who was the one time CEO of Travelers Insurance, one of the world’s largest insurance companies. He cooked up a scheme in 1998 to merge his company with Salmon Smith Barney, one of the largest investment banks and John Reed’s Citicorp, one of the world’s largest commercial banks. The result was a super-bank called Citigroup. In 1998 Federal Reserve Chairman Alan Greenspan, President Bill Clinton and Treasury Secretary Robert Rubin approved the merger, even though it violated prohibitions enacted in the Glass-Steagall act of 1933.

In 1999, under the leadership of the Clinton administration, and with the encouragement of then Treasury Secretary Robert Rubin, the repeal of key provisions in the Glass-Steagall act by the Gramm-Leach-Bilely Act of 1999 gave legitimacy to the Citigroup merger.

The Glass-Steagall Act of 1933, also known as the Banking Act of 1933 (48 Stat. 162) was passed in response to the stock market crash of 1929 and the subsequent failures within the banking system. Essentially the Act’s purpose was to prohibit commercial banks from engaging in the investment business. The Gramm-Leach-Bilely Act of 1999 removed many of the barriers that Glass-Steagall had erected. Finally Gramm-Leach-Bilely set up the ability for banks, investment houses and insurance companies to become hopelessly intertwined and to grow so large as to become “too big to fail.” It was signed into law by President Clinton.

Gramm-Leach-Bilely blurred the line between investment, insurance and lending, and weakened the enforcement provisions against sub-prime and predatory loans. After the law’s passage, sub-prime lending skyrocketed. In a paper for the St. Louis Federal Reserve System, Souphala Chomsisengphet and Anthony Pennington-Cross point out: “the market share of the top 25 firms making sub-prime loans grew from 39.3 percent in 1995 to over 90 percent in 2003. Many firms that started the sub-prime industry either have failed or were purchased by larger institutions.” Such purchases which would have been prohibited before the Gramm-Leach-Bilely Act.

When asked if he would re-instate Glass-Steagall in 2007, Barrack Obama said, “Well, no. The argument is not to go back to the regulatory framework of the 1930′s because, as I said, the financial markets have changed substantially.”

Today former senator Chris Dodd, co-sponsor of the Dodd-Frank Act which is an attempt at renewed banking regulation, and though intended to reduce the chance of another banking crisis, actually exacerbates the problem by piling so many onerous regulations on small community banks that they are giving up and merging with large commercial banks, told CNBC’s “Squawk Box” “When I first heard about it (Sandy Weill’s comments) it sort of reminded me of Paul Bunyan becoming an ecologist.” He went on to say that forcing all large banks to downsize was “too simplistic,” saying that Citi’s former chief was wrong to call for an end to financial supermarkets. “Just breaking up the banks is not the solution,” Dodd said. He insisted the tools of Dodd-Frank could, in extreme circumstances, be used to break up a systemically risky institution.

“The legislation allows for that Draconian step to be taken if necessary, not just with banks but with institutions that pose substantial risk to the country. They have the power and authority under this legislation to actually do that.”

So while Sandy Weill is calling for a return to the type of regulation and banking system he himself destroyed, we will once again have to live with the unintended consequences of laws passed by those who know little about the subject of those laws.