Message Received?

After watching the news coverage following Scott Brown's win in Massachusetts two nights ago, you would have thought Obama would be forced to resign in shame by week's end.

And while most sane people could see that the loss was a result of demoralized base/crappy candidate/10% unemployment combo, it was hardly the overwhelming rejection of big government/black people/health care that everyone made it seem.

I was joking with a coworker yesterday that a "wake up call" wouldn't be a bad idea if I wasn't so sure that the Democrats would get the wrong message of why people were angry.

Well, if this is true, I couldn't be happier to be wrong:

WASHINGTON—President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country's biggest banks, marking the administration's latest assault on Wall Street in what could mark a return, at least in spirit, to some of the curbs on finance put in place during the Great Depression, according to congressional sources and administration officials.

The past decade saw widespread consolidation among large financial institutions to create huge banking titans. If Congress approves the proposal, the White House plan could permanently impose government constraints on the size and nature of banking.

Mr. Obama's proposal is expected to include new scale restrictions on the size of the country's largest financial institutions. The goal would be to deter banks from becoming so large they put the broader economy at risk and to also prevent banks from becoming so large they distort normal competitive forces. It couldn't be learned what precise limits the White House will endorse, or whether Mr. Obama will spell out the exact limits on Thursday.

Mr. Obama is also expected to endorse, for the first time publicly, measures pushed by former Federal Reserve Chairman Paul Volcker, which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital. Administration officials say they want to place "firewalls" between different divisions of financial companies to ensure banks don't indirectly subsidize "speculative" trading through other subsidiaries that hold federally insured deposits.

. . .

The rules could also keep banks out of the business of running hedge funds, investing in real estate or private equity, all businesses that have become important, profitable parts of these banks. The collapse of two highly leveraged hedge funds began the process that led to the collapse of Bear Stearns.

Holy crap. That is BY FAR the best banking policy endorsed by the administration since it took office. Still waiting for more details, but if these pictures of Paul Volcker and Larry Summers are any indication, then we may be on the right track.