(For one example of a not-so-private—but still anonymous—remark in this vein from a lobbyist who thinks Dodd’s populism was all for show, see this item by Politico’s Victoria McGrane.)

Before joining the Journal, Paletta worked for three years for American Banker. Maybe there’s something salutary about working in the trade press, because Stacy Kaper did a solid job with this same story for that publication. Here’s her lede:

WASHINGTON — Senate Banking Committee Chairman Chris Dodd’s decision not to seek reelection strengthens his ability to enact regulatory reform, but the final bill is also expected to be more moderate, observers said Wednesday.

Removing the campaign pressure of fighting to keep his seat will let Dodd fully focus on reform — and his legacy. But it also probably strengthens the hand of Republicans and moderate Democrats who want to tone down the bill.

This captures the shifting power dynamic in a nutshell. (So does the headline, which forecasts that reform is now “more likely” but “less potent.”) Farther down, Kaper offers good details about the likely fate of various measures. And, like Paletta, she gets a good quote from Mark Calabria, who notes here that moderate Democrats are also unlikely to support Dodd’s initial proposal.

Covering financial reform is a classic opportunity for the press to, as CJR’s Brent Cunningham has urged, “take a stand” on behalf of the public, whose interests—across ideological lines—are shortchanged in a political environment shaped by the power of money. But even if reporters are reluctant to do so, the public still deserves straightforward, accurate explanations of the various political interests competing over important issues. In the case of financial reform, it’s not enough to simply celebrate the idea that legislation is more likely—what’s important is what will be in the legislation, and who will benefit most from its passage. A story that doesn’t hit those points clearly is letting its readers down.

Update: Jim Kuhnhenn, author of the AP story discussed here, sends along via email a link to another version of his article. Here’s how it opens:

WASHINGTON — Sen. Christopher Dodd’s decision to retire at the end of the year increases the chances of a Senate overhaul of Wall Street regulations that is bipartisan and friendlier to the financial sector than what President Barack Obama may want.

Political strategists from both parties and financial sector lobbyists say Dodd, the chairman of the Senate Banking Committee, is now free from re-election considerations and fundraising demands to cut a deal with Republicans without fear of alienating liberal voters.

…The decision also dilutes the influence of financial sector executives and hedge fund managers who have regularly filled Dodd’s campaign treasury with donations. That could make it easier for Dodd to insist on requirements that banks put more of their money at risk when they make loans and that regulators have more control over previously hidden financial transactions.

To my eye, that’s better. It offers a somewhat different read on Dodd’s motivation than some of the other stories, but it’s one that, given his record, makes sense. It makes more sense of the liberal base/moneyed donor dynamic. And most importantly, it makes clearer to readers how the balance of power in this debate is shifting, and whose interests are being favored.

According to Kuhnhenn, this version of the story moved on Wednesday for Web and print, so it’s what newspaper readers would have seen Thursday. The version cited in this column moved overnight Wednesday-to-Thursday for the Web; it is currently the one featured at the AP site.

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Greg Marx is an associate editor at CJR. Follow him on Twitter @gregamarx.