Barack Obama's speech on the financial crisis was a remarkable breakthrough.

First, he connected all the dots -- between the complete dismantling of financial regulation, the declining economic opportunity and security for ordinary people, the current financial meltdown, and the political influence of Wall Street as the driver of these changes. Astounding! I wish I had written the speech. It is this kind of leadership and truth-telling that is the predicate for the shift in public opinion required to produce legislative change. A radical, appropriately nuanced, and deeply public-minded description of what has occurred, the speech was Roosevelt quality: the president as teacher-in-chief. Those who felt that Obama was capable of real growth that will transcend the campaign's early and somewhat feeble domestic policy proposals should feel vindicated.

The speech also showed real understanding and subtlety in grasping how financial "innovation" had outrun regulation, as well as a historical sense of the abuses of the 1920s repeating themselves. Obama is one of the few mainstream leaders -- Barney Frank is another -- calling for capital requirements to be extended to every category of financial institution that creates credit. This is exactly what's needed to prevent the next meltdown, but if it were put to a vote now, it would be rejected by legislators from both parties because they are still in thrall to market fundamentalism and Wall Street. That's where presidential leadership comes in.

So the speech was courageous, in that it goes well beyond the current Democratic party consensus, and one can only wonder about the reaction of some of Obama's own financial backers. He also took on a couple of other sacred cows, such as electricity and telecom deregulation, proven failures to everyone but industry defenders and their allies in the economics profession.

We should not focus too much attention on the oblique dig at the Clinton presidency, which indeed fomented the pattern of excessive deregulation. Let's remember, Bill was president, she wasn't. This is a totally fair drawing of a distinction on the issues, and not a cheap shot or ad hominem attack.

The Clinton camp's rejoinder -- that Hillary is proposing to do more for the victims of the housing bust -- is totally unpersuasive. All along, she has treated the housing mess as its own self-contained scandal, rather than connecting it to the larger set of financial bubbles of which it is a part. The Frank-Dodd bill, which Obama is co-sponsoring, is a realistic remedy for purely the housing part of the crisis. If you read Clinton's March 24 speech on the housing crisis and how to fix it -- supposedly more robust than Obama's remedy -- she offers the same Frank-Dodd bill. She does not locate the mortgage crisis in the deeper financial one. And her idea of turning, for wise men, to Robert Rubin and Alan Greenspan -- more than anyone the people who gave us this crisis -- is appalling.

The one slightly disappointing part of the Obama speech was his call for $30 billion more in "stimulus." It's not nearly enough. He -- and we -- should stop even using the word "stimulus." To dig out of this mess, at a time when we already have large deficits, the federal government will need to fund a multi-year, public investment-led recovery program well into the hundreds of billions. It will need to be funded by restoring taxes on rich people. But this is a topic for another day.

A real puzzle here is the repeated assertion by columnist Paul Krugman, in the face of mounting evidence to the contrary, that Clinton's views on economic policy are more progressive than Obama's. Indeed, Obama's stunning speech read as if it were informed by recent Krugman columns on the meltdown. Hillary has not said anything close to what Obama (or Krugman) has suggested.

Unlike some of my friends, I have not fallen in love with Obama. I have been at this too long, and you risk getting your heart broken. I actually shared Krugman's critique of Obama's health insurance individual mandate and his proposal to tax the upper middle class to pay for a much exaggerated Social Security shortfall that is more like a rounding error. I simply conclude, based on what I've seen, that Obama is capable of real learning and real transformation, both of himself and of public opinion. Nothing I've seen suggests that's true of Hillary Clinton.

But Krugman, ordinarily an ornament of fair-minded progressive economics commentary, writes almost as if he has become part of the Clinton campaign. His latest characterization of Obama's proposals in commenting on the New York speech -- "cautious and relatively orthodox" -- was preposterous. Even if Krugman's sympathies are with Clinton, he owes it to his readers and to his own credibility to play it straight and credit Obama with a breakthrough when credit is due. This was surely one of those times.