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Today, he is emerging as one of the nation’s archreformers, pushing to impose some of the most stringent new financial regulations in history. And as the head of the Commodity Futures Trading Commission, the leading contender to oversee the complex derivatives contracts that played a central role in the financial crisis and, in turn, the Great Recession, he is in a position to influence the outcome. It may seem an unlikely conversion, but it is one that has won the approval of Brooksley E. Born, of all people, a former outspoken head of the commission. She sounded alarms more than a decade ago about the dangers hiding in the poorly understood derivatives market and was silenced by the same Washington power brokers that counted Mr. Gensler as a member. Mr. Gensler opposed Ms. Born, according to people who worked at the commission in the 1990s, and in 2000 played a significant role in shepherding through Congress deregulation measures that led to explosive growth of the over-the-counter derivatives market. That was then. These days, Ms. Born is convinced of Mr. Gensler’s reformist zeal, as he takes on Wall Street in what is becoming one of the fiercest battles over regulation in the postcrisis era. “I think he is doing very well,” she said in an interview. “He certainly seems to be committed to robust oversight of derivatives and limiting excessive speculation and leverage.” The proposals championed by Mr. Gensler, if adopted by Congress, would substantially alter what is now a largely unregulated market in over-the-counter derivatives, financial instruments used by companies and investors to protect themselves and bet on moves in variables, like interest rates or currencies, and to speculate. The proposals include forcing the big banks that sell derivatives to conduct their trades in the open on public exchanges and clear them through central clearinghouses, so that any investor can see the prices that dealers charge their customers. Today, those transactions are bilateral and private.

Yet the increasingly outsize rewards accruing to the nation’s elite clutch of superstars threaten to gum up this incentive mechanism. If only a very lucky few can aspire to a big reward, most workers are likely to conclude that it is not worth the effort to try.

It is true that the nation grew quite fast as inequality soared over the last three decades. Since 1980, the country’s gross domestic product per person has increased about 69 percent, even as the share of income accruing to the richest 1 percent of the population jumped to 36 percent from 22 percent. But the economy grew even faster — 83 percent per capita — from 1951 to 1980, when inequality declined when measured as the share of national income going to the very top of the population.

The cost for this tonic seems to be a drastic decline in Americans’ economic mobility. Since 1980, the weekly wage of the average worker on the factory floor has increased little more than 3 percent, after inflation. The United States is the rich country with the most skewed income distribution. According to the Organization for Economic Cooperation and Development, the average earnings of the richest 10 percent of Americans are 16 times those for the 10 percent at the bottom of the pile. That compares with a multiple of 8 in Britain and 5 in Sweden.

The ex-Treasury officials, who served both Republican and Democratic administrations, wrote that the reform measure, which would prohibit commercial banks from owning or investing in hedge funds, private equity funds or "proprietary trading" operations, is a reasonable trade for the benefits banks reap from "public support by means of access to the Federal Reserve and FDIC insurance." And while the rule may not alone prevent the next financial crisis, they said it's a crucial part of a more expansive regulatory reform package: "We fully understand that the restriction of proprietary activity by banks is only one element in comprehensive financial reform. It is, however, a key element in protecting our financial system and will assure that banks will give priority to their essential lending and depository responsibilities."

Reconciliation was created through the Budget Reform Act of 1974 in an effort to streamline the budget process, strengthen the ability of Congress to make tough decisions regarding deficits, and to make legislative decision-making more efficient. Congress quickly expanded on the types of measures that could be considered under reconciliation until 1985 and 1986, when the Senate passed rules proposed by Sen. Robert Byrd that limited what could or could not be included when using this process. Before moving forward, Democrats must consider two questions. The first is whether using reconciliation to pass health care is legitimate or an abuse of the process. Republicans have charged that this would be akin to forcing the program through the chamber rather than passing the bill through negotiation and compromise. On this question, the answer is easy. Reconciliation has been as much a part of the Senate in the past three decades as the filibuster. According to an article that was published in The New Republic, Congress passed 22 reconciliation bills between 1980 and 2008. Many important policy changes were enacted through this process, including the Children's Health Insurance Program, COBRA (which allows people who switch jobs to keep their health care), student aid reform, expansions in Medicaid and several major tax cuts. NPR's Julie Rovner reported that most of the health care reforms enacted in the past two decades have gone through reconciliation. President Ronald Reagan was one of the first presidents to make aggressive use of reconciliation when he pushed through his economic program in 1981. Senate Majority Leader Howard Baker said then that speed had been essential because "Every day that this is delayed makes it more difficult to pass. This is an extraordinary proposal, and these are extraordinary times." Presidents Jimmy Carter, George H.W. Bush, Bill Clinton and George W. Bush all used reconciliation as well. It is worth noting that these presidents, particularly George W. Bush, also made use of sweeping executive power to circumvent Congress altogether. The second question is more difficult and it involves perceptions. If the Democratic leadership wants to use this tactic, they have to convince enough members of their own party that this won't scare off independent voters. This argument was harder to make in 2009 than in 2010. But after a year of dealing with paralysis in the Senate and highly effective Republican obstruction, more Democrats are coming on board. The leadership must be proactive in responding to the criticism about reconciliation. They will have to explain that reconciliation is a legitimate process by pointing to the history. They will also have to connect the dots for voters frustrated with the ineffective government by explaining that the constant use of the filibuster has turned the Senate into a supermajority institution where both parties have found it extraordinarily difficult -- virtually impossible -- to pass major legislation.On this point, Republicans and Democrats actually agree. Indeed, as Democrats make this decision, Kentucky Republican Senator Jim Bunning is objecting to a unanimous consent order and single-handedly preventing the Senate from passing an important bill to assist unemployed workers.