The truism that "Americans love an underdog" enjoys widespread belief and application. The Tea-Party phenomenon fuels underdog challenges to established political elites (although given their "astroturf" status, one wonders whose interests these challenges actually represent). Scott Brown commands the underdog-loving spotlight. Whenever an establishment appears to be challenged by an outsider, the image of populists vs. elitists seems to follow within instants.

Thomas Frank, however, whose What's the Matter With Kansas explains the Tea Party phenomenon at least as well as any other analysis, thinks that Scott Brown's victory should ignite a populist fire within the Obama Administration. Writing before President Obama's State of the Union Address and his subsequent appearance with the House GOP in Baltimore, Frank challenged the President to expose the GOP's faux-populism--expressing rage over the bailouts while also blocking efforts at financial reform--by challenging them over this very set of issues:

What you need to do now is pick a fight, preferably one that forces the obstructionists of the right to take the side of privilege. You need a battle that will expose their populism and their protest for the pretenses they are. Your target is obvious: the financial industry, from Wall Street to the credit card companies. Yes, taking them on will cost you campaign contributions for 2012, but take Wall Street down a few pegs and Americans might start to remember what it was their grandparents loved about Democrats all those years ago.

TIME magazine thinks that Obama is following this script. Their piece, "Can Bashing the Banks Help Obama?" oozes with outsider vs. establishment/elite face-offs. Noting that earlier Administration jibes at Wall Street bankers had produced few policy changes, TIME's Grunwald and Scherer nevertheless state that "the latest bank-bashing does indicate a new strategic approach to [Obama's] second year, inspired by the same public wrath that produced [Scott] Brown's upset."

That means more populism and confrontation, less deference to Congress. It's a shift from an inside game to an outside game, from passive leader of a divided party to active agitator for change. The idea is to take an uncompromising stand, make a clear case to the public and then force lawmakers to choose sides — as opposed to announcing general principles, letting Congress hash out its own details at its own pace and then desperately cutting deals to try to cobble together 60 Senators.

Additionally:

So now they want to draw bright lines: Are you with us or Wall Street, with ordinary families or greedy titans? They figure that if they can't get a legislative victory, they'll get a potent political issue.

But Republicans are already accusing Obama of sacrificing reform on the altar of politics, and it's true that the bright-line strategy could scuttle whatever chances there might have been to build bipartisan consensus in the Senate

We saw this in both the State of the Union Address, when Obama challenged the GOP Senate leadership to assist in governing, and again in Baltimore, where the President repeatedly drew distinctions between House Republican and Administration policy preferences. (Hmm. Recall, this is potentially a very polarizing device [see, particularly, the last paragraph].)

TIME says:

It's no coincidence that the day before Obama announced his latest push to crack down on big banks, his confidants David Axelrod and Valerie Jarrett met with Troubled Asset Relief Program (TARP) watchdog Elizabeth Warren, the intellectual mother of the consumer agency and the most prominent populist advocate for financial reform. "They made it very clear that Wall Street needs to stop acting like nothing has changed," Warren told TIME.

(For more on Warren's views, see this awesome clip from the Daily Show. And, yes, I want to make out with her, too.)

Also, the White House seems to have remembered that they have ex-Federal Reserve Board chairman Paul Volcker lurking around the Executive Branch, for, as TIME notes:

It's also no coincidence that the President made his announcement while standing next to the unlikeliest populist advocate for financial reform, 82-year-old former Federal Reserve chairman Paul Volcker, a previously marginalized Obama adviser who had chastised the Administration for making insufficient efforts to limit the size and risk profiles of big banks. The White House is tired of complaints that its economic team — especially Treasury Secretary Timothy Geithner, the former New York Fed president who helped bail out AIG and other failing firms — is too close to Wall Street. Bringing the legendary gray eminence in from the cold — Obama called his plan to ban proprietary trading by commercial banks "the Volcker rule" — not only lent capitalist gravitas to populist bank-bashing but also reinforced the message that the Administration will not be outflanked in its assaults on Big Finance.

The details of the Volcker rule will be more fully explained as early as Tuesday, although it is clear Mr. Volcker advocates a strict separation between commercial banking and other financial services activity:

The BBC has obtained a recent article by Mr. Volcker for a specialist magazine, OMFIF (Official Monetary and Financial Institutions Forum). In it, Mr. Volcker made it clear that he wants a complete separation of commercial banks from the financial markets.

"We simply cannot afford further financial market breakdowns," said Mr. Volcker's article.

"I favour a separation of commercial banking activities that are essential to the functioning of our financial system from more speculative trading-oriented capital markets activities that are not.

"To lower the risk and vulnerability of commercial banks, I favour prohibiting their ownership or sponsorship of hedge funds, private equity funds, and large-scale purely proprietary trading activities in securities, derivatives or commodity markets.

"These measures would directly eliminate potential areas of risk, reduce conflicts of interest and focus management attention on the core functions of banking."

The BBC points out that Volcker's ideas enjoy traction among banking analysts:

His ideas are strongly supported by many people who follow retail banking, who feel the reckless property related-lending that led to the crisis was a result of the swashbuckling culture of Wall Street investment bankers that now control finance.

"The investment bankers had effectively achieved something extraordinary in a period of as little as 20 years - control over many of the largest retail deposit-taking institutions in the world," says Michael Lafferty, chairman of Lafferty Group, a global banking research house.

"My personal view is that retail banking and investment banking are like oil and water - and will never really mix.

"We have at last the opportunity to return banking to real bankers, concerned about customers and with a proper appreciation of risk, and to help markets break out of their extreme tendency for booms and busts of the past three decades."

Awareness of popular anger at the global financial elite extends even to the World Economic Forum in Davos, Switzerland, where bankers focused concern on the "real economy."

Despite the bankers' recognition of the need for reform, specific criticisms of the Volcker rule have been expressed:

The IMF's Strauss-Kahn called for a speeding up of new rules on capital requirements for banks.

"The question of coordinating this financial sector reform is top priority. We're not going exactly in the right direction," Strauss-Kahn said in an oblique reference to Obama's proposals to bar commercial banks from proprietary trading and ties with hedge funds and private equity funds.

Discussions at the Davos meetings, in fact, challenged the necessity of regulating institutions deemed "too big to fail," suggesting instead the creation of a transnational resolution fund to prevent future financial crises, although it should be recognized that "finding a consensus on how to limit the potential cost to taxpayers of emergency bail-outs could lead to critical delays."

At a bigger picture level, the issue of populist appeals generated a pseudo-exchange between David Brooks of The New York Times and Matt Taibbi of Rolling Stone.

Brooks, in a piece called "The Populist Addiction" pretty much outlines the worst aspects of populism, describing more European fascism than the nineteenth century Populist movement from whence the notion—populism—takes its name. He does, however, nicely differentiate the left- and right-wing versions of the contemporary populist beast, but he sees populist appeals as attempts by political elites to gain more power:

Ever since I started covering politics, the Democratic ruling class has been driven by one fantasy: that voters will get so furious at people with M.B.A.'s that they will hand power to people with Ph.D.'s. The Republican ruling class has been driven by the fantasy that voters will get so furious at people with Ph.D.'s that they will hand power to people with M.B.A.'s.

Taibbi responds pretty forcefully, calling Brooks' piece "a passionate defense of the rich" while claiming to be the target of the shot Brooks takes at the end of his fourth paragraph when he argued that "with the populist narrative, you can just blame Goldman Sachs [for the entire financial crisis]." Taibbi did, after all, call Goldman Sachs "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

On the one hand, at least some elements of the journalistic and economic elites have perceived that citizens/consumers/voters in the West perceive those elites to be completely out of touch with the lives normal citizens/consumers/voters live. They can either accept reform or generate even more cynicism, though if the return are high enough, they might yet gamble that citizens/consumers/voters and their interests are not worthy of action to stop the boom and the bust. So that's what's on the other hand: How much reform will the banking elites who constitute Thomas Friedman's Electronic Herd be willing to consider in the public interest of the political communities where they profit?