The most interesting aspect of President Barack Obama's prescribed limits on executive pay is its potential for a ripple effect.

Confined to those who run firms that accept new bailout money, the relatively tough stance on runaway Wall Street compensation touches an inflamed public nerve and represents a shrewd use of the bully pulpit.

"The president's program is an essential first step in thinking about the role that executive compensation played in creating the economic meltdown," wrote Nell Minow in an essay this week for CNN.com. "Perverse pay incentives and excessive compensation are not a symptom or a side benefit; they are a cause."

I first heard Minow at a business editors' convention in Washington, D.C., in 1998. She is among the most vocal corporate watchdogs, but seemed to be a voice in the wilderness until this week. Now she's much in demand.

"Why are we paying people for this catastrophic behavior?" Minow asked this week on the MacNeil/Lehrer NewsHour. "The one thing that we count on Wall Street to do is to manage risk. They did that very, very badly. There have to be some consequences."

From now on, top execs at companies that get government assistance are restricted to a maximum annual pay of $500,000, except for restricted stock that cannot be liquidated until the loans have been paid back. Limits are imposed on golden parachutes, corporate jets and other perks. Clawback provisions force execs to give back money if they provide misleading information.

"You want to get rich? Fine," Minow told Jim Lehrer. "But you're going to get rich by doing a really great job. No one complains that Bill Gates made too much money - he created value."

The notion of a ripple effect is suggested to me by a masterful essay, The Big Fix, by David Leonhardt in last Sunday's New York Times. Leonhardt talked to Larry Summers, Obama's top economic adviser, who described to him the so-called "Rahm Doctrine," named after Rahm Emmanuel, Obama's chief of staff. "You never want a serious crisis to go to waste," Emmanual reportedly told an audience of business execs. "What I mean by that is that it's an opportunity to do things you could not do before."

Critics, the Securities and Exchange Commission - even Treasury Secretary Henry Paulson - have railed against executive pay over the past 10 years, but one could argue that things weren't quite bad enough to get anything substantial done about it. But now, "the fact that the economy appears to be mired in its worst recession in a generation may well allow the administration to confront problems that have festered for years," Leonhardt wrote. As MIT economist Frank Levy, told him, "In a crisis, there is an opportunity to rearrange things, because the status quo is blown up."

Will the imposition of pay limits on bailed-out execs cause other corporate boards to rein in their compensation? I'm skeptical. Executives, their boards and compensation consultants have found their ways around most pay limits thus far, and I would expect it again. But Obama's use of his bully pulpit to introduce excessive compensation into the national conversation is ingenious.

"This is America," he said Wednesday. "We don't disparage wealth . . . we believe success should be rewarded. But what gets people upset - and rightfully so - are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers."

The left-leaning Economic Policy Institute (insert a few grains of salt), estimates that CEO compensation in 2007 was 275 times the salary of the average worker. In the late 1970s, CEO pay was 35 times that average. I'm not even convinced that disparity is inherently harmful. But the big business failures of the past eight months have been so catastrophic that big paychecks and perks are squarely in the glare of public opinion.

"I used to compare these guys to Marie Antoinette," Minow wrote about Wall Street's chiefs. "Now, the more apt comparison seems to be Nero."