So now President Obama is threatening to veto financial reform legislation Democratic leaders in Congress are working to pass if it is not tough enough on derivatives. There is really no disagreement between Obama and Congressional Democrats on the issue, just a bizarre attempt to make non-news.

Obama is in high dudgeon because his advisors claim derivatives caused the 2008 financial crisis. The problem is this claim is false, and the proposals Obama offers would make future crises in the derivatives market more rather than less likely.

There is actually a substantial degree of consensus about how to improve the derivatives market, and market participants themselves, with no help from Washington, have made huge strides in making those improvements in the 18 months since the 2008 financial crisis.

Since they can’t claim credit for what the markets have already done, Obama and his allies in Congress are proposing to expand bureaucracy and give government the power to tell derivatives traders and users how to manage their businesses.

Obama wants to play this as Wall Street versus Main Street. But whatever problems may exist on Wall Street, giving bureaucrats in Washington more power to meddle won’t fix them. We could just let bankers roast, except that derivatives are useful in holding down prices of everyday items like food, clothing, and fuel and in managing financial transactions such as credit cards, consumer loans and home mortgages. Obama is attacking Wall Street, but it is consumers who will be stuck with the bill.