What Obama Should Have Said

<I>TheStreet's</I> Lauren LaCapra offers a reimagined version of the speech President Obama gave on financial reform this week in New York. A series on <I>TheStreet</I> will examine the notion of 'Wall Street vs. Main Street.'
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Editor's note: President Obama delivered a much anticipated speech on financial reform in New York this week. TheStreet's Lauren LaCapra offers an alternative version below, one that may have gone further toward helping Wall Street and Main Street understand each other. TheStreet will examine that relationship in an ongoing series.

NEW YORK (

TheStreet

) -- America, listen up, because I'm only going to say this once: Reform is on the way.

I understand that you're angry. That anger stems from confusion, and a sense of injustice about how things have turned out. From your point of view, banks are doing a-OK while you're still stuck in the mud. My job is to change that last part, and I will -- if you let me. What I ask in return is for you to offer a little patience for substantial change to take place.

President Barack Obama speaks about financial reform at Cooper Union in New York, April 22, 2010.

The financial regulatory system is broken. I would like Congress to pass a reform bill that ensures the following things:

  • That banks are more closely and carefully monitored
  • That they are prevented from making reckless bets with your money
  • That their failures will be paid for by the industry -- not you
  • That the demise of one bad bank, no matter its size, will not cripple the entire industry
  • That shareholders can make sure executives don't get paid a lot of money for poor decision-making

Right now it seems like a bill is going to get passed, largely without Republican support or the support of the industry. But I'm not quite as worried about their support as I am about yours.

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My team is working hard to repair the busted housing market, to stimulate job creation and to crack the whip when scandals erupt. (For reference, see: Pay czar, financial-crisis inquiry commission,

Citigroup's

(C) - Get Report

Phibro sale,

Bank of America's

(BAC) - Get Report

board, all those mailings you've received about new rules for your credit card rates and overdraft fees, and offers to refinance your mortgage into a more affordable one. And while I won't take credit for the charges against

Goldman Sachs

(GS) - Get Report

last week, feel free to check those out too.)

In other words: The people have spoken, and I hear you loud and clear. Many of the measures taken so far have been a reaction to your anger, but with this financial-reform bill, we're trying to get ahead of the next problems before they erupt.

Let me give an example.

You may not understand exactly what a credit-default swap is; why these strange-sounding devices helped to nearly bankrupt our country; or why people got paid millions of dollars to create and sell them, and now millions more to unwind them after they all blew up. You probably don't understand it because it's absurd.

It's not your job to understand it, either. You shouldn't have to earn a Ph.D in the complexities of the financial markets to feel safe storing your money in a bank, buying a house, or simply putting food on the table. That's why I'd like to implement a framework where people who best understand the markets are charged with protecting you against their inherent dangers.

We've seen what can happen when we allow Wall Street to carry on, unchecked. Banks hire creative math whizzes to create these devices, and figure out ways to profit from them, without caring about the impact on the broader system or the consequences down the line. Bankers' ambition is to earn money for shareholders and for themselves, and there's nothing wrong with that. But someone else has to be safeguarding the broader market and the public as well.

My reform agenda would ensure that someone is keeping watch over the system and monitoring the use of new and existing financial products. It would also force banks to trade these quizzical securities on an open platform, disclose more information about them and set more money aside to cover losses so that you don't have to cover them with your tax dollars.

That's just one example of how new regulation will change the way business is done. As you may remember I promised change up and down the campaign trail. Now, I'm bringing it to your door.

But change is incremental. It's difficult to realize the impact of recovery as it starts to occur. We've just stepped away from one of the darkest periods in financial history, and people are still suffering. The tide seems to be turning slowly, but over the next several months, more and more of you will be swept up in it. There will be more jobs, more wealth, more opportunities, and a chance for everyone to work together to move the financial industry forward on more solid ground.

Many of you are skeptical about what I'm saying, and that's understandable. But I'm working to deliver positive change over here on Wall Street, in your neighborhood on Main Street, and down in the congressional chambers of Capitol Hill. My party is working with me to deliver meaningful reform for you, whether or not we're joined by bank executives and our colleagues on the other side of the aisle.

If we don't deliver on our promises, you have every right to hold me and my party accountable. I've got two years and eight months, and some of my colleagues are up for re-election in November. I ask that you consider the scale of the problems we've been tackling, the resistance we've faced and how much we've accomplished in a relatively short period of time.

-- Written by Lauren Tara LaCapra in New York

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