President Barack Obama, who once called bank executives "fat cats" and their pay "obscene," says Wall Street needs to change executive pay incentives that reward risky bets that can yield fortunes but can also devastate financial institutions. 
 
 This image released by Rolling Stone shows the cover of the magazine's Nov. 8, 2012 issue featuring President Barack Obama that hits newsstands on Friday, Oct. 26, 2012. In an interview with Rolling Stone,... (Associated Press) 
 
 In an interview with Rolling Stone magazine, Obama says that despite congressional passage of a financial regulation overhaul in 2010, there still are not enough adequate means of holding risk takers in the industry accountable if their investment schemes fail. 
 
 "You still have a situation where people making bets can get a huge upside, and their downsides are limited," Obama says in the edition that hits newsstands on Friday. "So it tilts the whole system in favor of very risky behavior." 
 
 The wide ranging interview with presidential historian Douglas Brinkley covered topics ranging from Republican presidential challenger Mitt Romney's secretly recorded remarks to donors about Obama supporters to Supreme Court Chief Justice John Roberts' tie-breaking decision declaring Obama's health care plan constitutional. 
 
 Obama's appearance on the magazine's cover comes less than two weeks before the Nov. 6 election and underscores the president's outreach to young voters in key battleground states. Obama also has agreed to a cable television interview with MTV that is to air Friday. 
 
 When Congress wrote new financial regulations two years ago, it included "say on pay" provisions giving shareholders the right to vote on executive pay packages. But Obama said there was still a need to limit compensation, though he said it could be accomplished with a mix of legislation and corporate governance. 
 
 "I think a legitimate concern, even after Dodd-Frank, is, `Have we completely changed those incentives?'" Obama said, referring to the legislation by the names of its two chief Democratic sponsors, then-Sen. Christopher Dodd of Connecticut and Rep. Barney Frank of Massachusetts. 
 
 "These days, you've got guys who are making five years of risky bets, but it's making them $100 million every year," Obama told Brinkley. "By the time the chicken comes home to roost, they're still way ahead of the game." 
 
 In the interview, Obama also said he was not surprised by Roberts' decision upholding the constitutionality of the health care law. Roberts upheld the individual insurance requirement at the heart of the law as a tax, but rejected Obama administration arguments that the mandate was justified by the Constitution's clause giving Congress power over interstate commerce. That clause has been used to justify congressional authority for most federal programs since President Franklin D. Roosevelt's New Deal in the 1930s. 
 
 Obama, a former constitutional law professor, shared the view of some legal scholars who say Roberts rejected the Commerce Clause argument to give himself flexibility to restrict congressional power in the future. 
 
 "It was interesting to see them, or Justice Roberts in particular, take the approach that this was constitutional under the taxing power," Obama said. "The truth is that if you look at the precedents dating back to the 1930s, this was clearly constitutional under the Commerce Clause. I think Justice Roberts made a decision that allowed him to preserve the law but allowed him to keep in reserve the desire, maybe, to scale back Congress' power under the Commerce Clause in future cases." 
 
 Obama said he was surprised, however, when Romney, in remarks meant to be private, told donors in May that the 47 percent of the public who backed Obama believed they were victims and were entitled to government assistance. Obama has used that remark to portray Romney as out of touch. 
 
 "That sense that folks who have contributed to this country but are at the lower ends of the income scale are somehow looking for government to do something for them, or feel some sense of entitlement, is just fundamentally wrong," he said. 
 
 With Halloween approaching, Brinkley, in a lighter moment, asked what he would like Romney to wear as a costume. 
 
 "I don't know about this Halloween," Obama replied. "Next Halloween I hope he'll be an ex-presidential candidate." ||||| In the classic 1968 film "Once Upon a Time in the West," a villainous Henry Fonda shoots one of his lackeys, in part for the sin of wearing both a belt and suspenders. How do you trust a man, muses Fonda, who "can't even trust his own pants?" 
 
 Mitt Romney is slipping in the polls because, when it comes to his own policies, he is once again wearing a belt, suspenders, and even some elasticized waistbands. The bold Romney who picked Paul Ryan as a catalyst to run on ideas has been ousted by the return of the careful Romney who wants this race to be about Barack Obama. And America is unwilling to trust a man who seems unwilling to trust his own agenda. 
 
 Related Video Americans for Prosperity president Tim Phillips on where Mitt Romney and his Super PAC are targeting their ads. Photo: Associated Press 
 
 The re-emergence of the well-belted Romney began at the GOP convention, where he delivered a speech that had been pared away to nothing but a fleeting reference to his policies. It was on vivid display, too, in Mr. Romney's Sunday appearance on NBC's "Meet the Press," in which he managed to use 30 minutes of prime time to talk mainly of flotsam, as well as (news flash!) how bad Mr. Obama had made the economy. 
 
 As for how he would create "more jobs" and "higher income," Mr. Romney wasn't saying. His references to his "tax policy" served mainly to explain what it doesn't do. He vowed to replace ObamaCare with his "own plan"—which is? He explained he had "big policy differences" with the president on Afghanistan. Those differences are "important." So important that he moved to the next question. 
 
 Credit for this fog goes to that inner circle of Romney advisers who never liked the Ryan pick and have reasserted their will over a candidate who is naturally cautious. In the la-la land where adviser Stuart Stevens presides, Mr. Romney wins by never saying a single thing, ever, that might rock a single boat, ever. Just keep the focus on Mr. Obama. After all, no president has ever won with an economy like this. 
 
 Enlarge Image Close Getty Images Mitt Romney on NBC's 'Meet the Press,' aired Sept. 9. 
 
 One problem: Mr. Obama is winning. The August unemployment numbers are horrid; the president increases his national lead. Labor-force participation hits a 31-year low; Mr. Obama moves up in swing states. Prices spike; the president takes Michigan out of contention. No doubt Part 39 of the Romney attack on Mr. Obama's welfare policies will propel the Republican to a blazing lead. Though, failing that, Mr. Romney might consider that the pure referendum strategy is a bust. 
 
 Voters know that things are rotten; the GOP needn't spend $100 million telling them so. What they don't know is how we got here. (Was it Bush's fault? So says Mr. Obama, while Mr. Romney says nothing.) And they don't know how Mr. Romney proposes to fix it. 
 
 Well, that's not entirely true. They are getting an idea of Romney policies—courtesy of the president. Mr. Obama may himself have no ideas, but he is an expert on the Republican's plans. Mr. Romney will raise middle-class taxes. Mr. Romney will take away health care. Mr. Romney will strip seniors of programs. In the absence of Mr. Romney explaining his reforms—and how they work—why not believe the president? 
 
 The tragedy is that Mr. Romney isn't a blank; he has a hearty reform agenda. Yet his decision to go "safe"—to be Crouching Romney, Hidden Mitt—keeps him from harnessing the American hunger for political change. 
 
 One painful example: Mr. Romney's NBC interview was remarkable for his deliberate avoidance of the (apparently scary?) term "tax reform." Yet if there is one thing that Americans agree epitomizes failed government, it is the tax code. 
 
 Rather than defensively protesting that his "tax policy" won't hurt the middle class, would it be so dangerous for Mr. Romney to explain that he's proposing a grand tax overhaul? Instead of talking blandly of "loopholes," to spell out the special-interest tax breaks (mortgage-interest deductions for yachts, Hollywood tax boondoggles, renewable-energy credits) that he'd cut to make the code fairer to average Americans? To explain, finally, that it is by getting rid of these handouts that he can lower rates for everybody, which frees up dollars for investment and the jobs he promises? Say it, Mr. Romney: Tax reform, tax reform, tax reform. Say it because it is true and good. 
 
 Americans respond well to A-B-C explanations of valuable reform. (Here is what is wrong. Here is my policy to fix it. Here is how it works, with three examples. Here is the good that comes of it.) Were Mr. Romney to apply this formula to health care, entitlements, food stamps and college loans, he'd be winning. 
 
 The press embarrassed itself this week by flaying Mr. Romney's criticism of the State Department while giving a pass to the policies of a president who, after announcing the death of four diplomats, flew to a campaign event in Las Vegas. The press doesn't care. Its goal was to let Mr. Romney know what's in store for him should he consider mounting more than a mediocre campaign. If he gets spooked by that, he's done. 
 
 America isn't going to trust a candidate who doesn't trust his own pants. Unhitch, Mr. Romney, and earn the votes. 
 
 Write to kim@wsj.com
– The latest issue of Rolling Stone hits the newsstands today, bearing the smiling face of Barack Obama. The interview within is exhaustive, though it mainly treads familiar ground—as the writer, historian Douglas Brinkley notes, "excessive caution is a survival trait" in today's gaffe-driven campaign culture. Some highlights came out yesterday, and the full interview is now available. Here's a taste of what the president said: In one answer that's already got people talking, Obama was asked about Paul Ryan's "obsession" with Ayn Rand. Obama said he had read Rand's work. "Ayn Rand is one of those things that a lot of us, when we were 17 or 18 and feeling misunderstood, we'd pick up. Then, as we got older, we realize that a world in which we're only thinking about ourselves … that's a pretty narrow vision." Asked if a Romney win would doom Roe v. Wade, Obama replied, "I don't think there's any doubt." On whether financial reform went far enough: "I've looked at some of Rolling Stone's articles that say, 'This didn't go far enough, we didn't institute Glass-Steagall' and so forth, and I pushed my economic team very hard on some of those questions." But Glass-Steagall wouldn't have prevented the meltdown. "The problem in today's financial sector can't be solved simply by reimposing models that were created­ in the 1930s." On Romney's debate policy flips: "What I think happened is that we won the battle of ideas during the course of the last year," forcing Romney to "fuzz up those positions." What did he think when he saw Romney's 47% video? "It's an indication of a story that Republicans have been telling themselves for a while, at least a sizable portion." Obama often talks about giving people a "fair shake." Brinkley asked if that might become his "new deal"-esque legacy. "I'd be comfortable with that, and hearing it from a historian, it sounds pretty good to me." For the full interview, click here.