Updated with comments from President Obama's speech in New York.

NEW YORK ( TheStreet) -- President Obama is totally overstating the MainStreet vs Wall Street conflict to scare Congress into passing new banking regulations.

"Some on Wall Street forgot that behind every dollar traded or leveraged, there is family looking to buy a house, pay for an education, open a business, or save for retirement," Obama said Thursday in New York.

That's got a nice populist ring to it, but it's not that simple. What about the value to MainStreet from all the money flowing into 401Ks and IRAs courtesy of a bank-led bull run in the markets?

I'm sure Obama understands the nuances, but they aren't politically expedient. It's far more effective in Washington to have clear villains.

So Obama's SEC delivered Goldman Sachs' ( GS) head on a platter with its fraud charges last week.

It doesn't matter that the SEC's case against Goldman is lame, the public has been put on notice that banks can't be trusted.

With the stage set, Obama is now in New York today, taking the fight straight to Wall Street. Just when it looked like Congress might waste a good crisis (as Rahm Emanuel, Hillary Clinton and other Obamanistas have become fond of saying), Obama is putting on a full-court press against banks.

IMF Bank Proposals Face Hurdles (Forbes)

Obama's timing is deliberate, arriving in New York just after the banks started getting good press with headlines like "Morgan Stanley's ( MS) Trading Business Delivers" and "JPMorgan's ( JPM) Success Raises Stakes".

Even the oft-maligned poster child for the financial crisis, Citigroup ( C), posted a surprise profit.

Obama took the opportunity to turn those profits into indictments, saying that "until this progress is felt not just on Wall Street but Main Street we cannot be satisfied. Until the millions of our neighbors who are looking for work can find jobs, and wages are growing at a meaningful pace, we may be able to claim a recovery - but we will not have recovered."

Sure, Obama offered a few bones to the bankers and struck the occasional conciliatory note such as his concluding remarks that "ultimately, there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation."

But Wall Street really served as the backdrop for Obama's populist appeal to rally MainStreet and remind members of Congress that an election is coming and they don't want to be on the wrong side of this debate.

Obama knows how to work a crowd -- and after today's speech in New York, he has put bank reform back on America's agenda.

--Written by Glenn Hall in New York. You can also follow my outrage on Twitter .

Some say Obama's attack on Wall Street is misdirected. Do you think we need banking reform? Share your outrage (pro or con) by posting a comment.

TheStreet's editorial policy prohibits editors and reporters from holding positions in any individual stocks.