Richard Condon was a writer of best-selling, high-toned thrillers such as The Manchurian Candidate. He lived the last part of his life in Dallas, and above his desk he kept a saying which, paraphrased, went like this: Think of the worst you can imagine and it’s probably even worse than that.

This has come back to me during the unfolding saga of Goldman Sachs. First it seemed pretty bad that some of the gang at Goldman had sold mortgage-related derivatives to their clients while others at Goldman, trading for the house account, were selling those same securities short, expecting, then hoping, that their price would fall. What a crummy way to treat your customers.

But it was, indeed, even worse than that. The Securities and Exchange Commission has charged that Goldman also deliberately selected mortgages that looked the most likely to fail. Allegedly they did this with the help of John Paulson, a hedge fund manager who was yearning to bet against the housing market with a stacked deck. Goldman happily obliged, for a hefty fee, according to the SEC.

Goldman insists that suggestions also were made by ACA, the lead buyer of these synthetic collateralized debt obligations, called synthetic because they contain no mortgages at all but simply are a vehicle for wagering on a bundle of home-not-so-sweet-home loans. The SEC claims that Goldman misled ACA into believing that Paulson had confidence in the soundness of these derivatives, hardly the case. As one cartoon put it, the hoped-for failure succeeded, making a jackpot for Paulson and more money for Goldman than it lost betting on the bright side of mortgages, but costing investors as much as $1 billion.

Maybe Goldman Sachs broke the law. Maybe not. But if not, then our civil and criminal codes require unflinchingly tough revision. Think back to the charges brought against Martha Stewart by the SEC and a U.S. attorney that she lied to investigators about having sold stock one day in advance of an adverse announcement and possibly saved herself $46,000 in losses. For this Stewart was sentenced to five months in prison, five months’ confinement at home and two years’ probation.

The question is: how much harm did she do to other people? None that I can see, though insider trading is never a good thing. And what about the billion dollars of harm Goldman allegedly arranged for investors, some of them banks representing pension funds, which, of course, handle the life savings of pensioners? If these accusations are found to be true, what should the penalty be for that?

President Obama was wrong. We are not all in this together. Too many on Wall Street really are off an another planet, playing by different rules, profiting from different motivations, providing shockingly little in the way of goods, services or value. The urgent work of Congress now is to protect the real economy — that’s the rest of us — from the river-boat-gambling gang which must be separated from commercial banks. Next, Congress should ban synthetic debt obligations, oddly named since there is no obligation to anybody for anything. Then all legal derivatives should be traded only on exchanges. Whatever the outcome of the case against Goldman Sachs, to allow the current system to continue is to accept that things will grow even worse than we can imagine today.