I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: "Why is it," he asked, "that we're going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?"

That's an astonishing remark -- and not just because the National Football League does, in fact, have pay caps. Tech firms don't crash the whole world's operating system when they go bankrupt; quarterbacks who make too many risky passes don't have to be rescued with hundred-billion-dollar bailouts. Banking is a special case -- and the president is surely smart enough to know that.

All I can think is that this was another example of something we've seen before: Mr. Obama's visceral reluctance to engage in anything that resembles populist rhetoric. And that's something he needs to get over.

It's not just that taking a populist stance on bankers' pay is good politics -- although it is: the administration has suffered more than it seems to realize from the perception that it's giving taxpayers' hard-earned money away to Wall Street, and it should welcome the chance to portray the G.O.P. as the party of obscene bonuses.

Equally important, in this case populism is good economics. Indeed, you can make the case that reforming bankers' compensation is the single best thing we can do to prevent another financial crisis a few years down the road.

It's time for the president to realize that sometimes populism, especially populism that makes bankers angry, is exactly what the economy needs.