This Wall Street Journal op-ed examines what President Obama's plan to end proprietary trading at firms with a federal safety net could mean for reform of the financial system.†
President Obama and Democrats have settled on demonizing Wall Street as a campaign theme for November's elections. If history is any guide, Mr. Obama and New York Senator Chuck Schumer will now persuade Wall Street to underwrite this campaign. Ah, the politics of hope and change. How refreshing.
Phony populism aside, yesterday Mr. Obama introduced his first serious idea into the debate on reforming the financial system. In calling for an end to proprietary trading at firms with a federal safety net, the President showed that he now understands an important principle: Risk-taking in the capital markets is incompatible with a taxpayer guarantee.