Last week, President Barrack Obama appeared on The Tonight Show to make us laugh over issues like the financial crisis, the burgeoning deficit, the energy crisis, the dubious future of American prosperity and, of course, to give us the latest gossip on the impending presidential dog.

(Laughter and applause … )

Obama wasn’t an ordinary late night TV guest. First, he is the sitting President of the United States — the first to ever appear on late-night TV. Second, he wasn’t there to promote a new movie, TV show or book. Rather, as soon became apparent, he was there to promote the economic agenda of his administration.

The economic crisis is a media field day, providing content to everybody from student journalists like me, to college dropouts like Rush Limbaugh, to comedians like Jay Leno. More than likely, Obama was afraid that amidst the rabble, people didn’t know who to listen to, or he was afraid they were listening too much to the likes of Rush Limbaugh.

What better way to reach out to the average American than to appear on a late-night comedy show? Especially one that comes on right after the 11 o’clock news full of bad news about the economy and replete with headlines on those embarrassing AIG bonuses!

Jay Leno is no David Frost, but Obama actually maneuvered through some heavy stuff, from issues like the causes of the financial crisis, tax reform, regulatory reform and government intervention.

Speaking on the causes of the crisis, Obama kept it light on financial jargon. AIG “used to be just a regular, old insurance company … they insured a whole bunch of stuff,” Obama says, until “some smart person” decided “this sub-prime thing, it’s a great deal, you can make a lot of profit.”

In fact, Obama talked a lot about “the larger problem” of greed and the Wall Street culture of excess. On the AIG bonuses, Obama said something I found very interesting: AIG’s “legal judgment was not necessarily wrong. But there’s a moral and ethical aspect to this.”

For many years economists/philosophers have tried to figure out if the free market corrodes morale character. Answers are ambiguous and range from “It depends,” “Yes, but … ,” “No!” “Yes, too often” and my personal favorite, “We’d rather not know.” The recent economic crisis — and the AIG bonuses — seem to provide some indication that the free-market encourages greed.

From the AIG bonuses, Obama segued into talk about regulating greed: “Before somebody makes a bad bet,” it will be up to government regulation to say, “Hold on, you can’t do that.”

When it comes to the actually punishing greed, Leno was more somber: on Congress’ decision to virtually tax away the AIG bonus money, Leno states, “Here’s something that kind of scared me … it was frightening to me as an American that Congress, [or] whoever, could decide, I don’t like this group, let’s pass a law and tax them 90 percent.”

This question speaks to one of the fundamental deconstructions brought up during the presidential campaign: whether Obama’s “socialist” policies will lead this country down the Hayekian Road to Serfdom, a world where collectivism inevitably leads to tyrannical control by the government.

Despite promising that he had “a good answer,” Obama, like a good politician, successfully dodged the question by discussing raising taxes on the wealthiest Americans, again arguing for tax reform based on morality and ethics.

Personally, I believe Obama is right on the money in his policy choices. A fairer tax policy, the bailout of the banks, the stimulus to help Main Street — these are all policies that any government which cared about its people would pursue. Morally, ethically AND ECONOMICALLY, these are all good policies.

Given that the main thrust of criticism by the likes of Rush Limbaugh is that Obamanomics are not sound, I was surprised that Obama played the morality and ethics card and didn’t say more on the economics.

What I expected, and what I think he should have said, is that without the bailout, the collapse of the banking sector would have cost the taxpayer more. I expected him to say that the government wasn’t being tyrannical in the least by trying to take away the AIG bonuses — if the free market had their way, there would have been no bailout and AIG would have been in bankruptcy courts today. This means that legally AIG would no longer honor contracts that stipulate bonuses.

Further, if we do not regulate executive compensation, this presents a problem of “moral hazard.” Without such regulation, companies will continue to make bad bets since the consequences of their actions are distorted.

I expected Obama to say that a fairer tax system will encourage people to work harder and make all of society better off. In addition, high levels of inequality in any society are bad, correlated with crime and other social ills.

Finally, I expected him to reassure the American people that, although sometimes the government must intervene and regulate in cases of market failure, he believes in markets, because in every country in the world, capitalism has increased prosperity more than any other form of government, no matter how “moral and ethical” its intentions.

I know Obama believes all this; but somewhere between the jokes, he just didn’t quite get this across. Mainstream media missed the point anyway — the next day, the top news focused on a joke made in bad taste about the Special Olympics.

At any rate, Obama’s counteroffensive worked, I think, because I found myself talking about it the next day with my grandmother, who doesn’t like politics but loves TV. “I like that Obama,” she said, “He sure is a good talker.”

Maybe I am wrong and Leno was not the forum for a treatise on modern economics. Maybe the average American was just happy to see their president reaching out to them. After another hard day at the office, another day worrying about the bills, another day of hearing Rush Limbaugh preach Armageddon over the radio, Obama was there to put you to sleep, tell a joke and assure you everything is going to be okay.

And, best of all, you didn’t have to miss Leno!