President Obama’s inaugural address, markedly different from his campaign speeches in its bleaker tone, can be understood as an outline of his economic philosophy and strategy. Beyond the $825 billion bailout bill, Mr. Obama set the tone for a very different relationship between government and the economy.

His address sounded some clear values and principles: The economy will be more closely monitored. The nation’s prosperity will be measured by how broadly it reaches its people. Hard work and fiscal discipline and restraint will be the currency used, in the realms of both government and individuals.

And he repudiated Ronald Reagan’s pronouncement in his first inaugural address in 1981 that “government is not the solution to our problem; it is the problem.” Mr. Obama asserted that government is going to work for people, and where it fails to do so, it will be trimmed.

Rather than the socialistic view Mr. Obama’s critics attributed to him during the campaign, his vision for government’s role in the economy is that of a traffic cop rather than Robin Hood. The badly weakened economy is a “consequence of greed and irresponsibility” by some, he said. Greed can be controlled only by governmental oversight. The market’s power to generate wealth “is unmatched,” he said, but the market can spin out of control, and “a nation cannot prosper long when it favors only the prosperous.”

The success of the economy “has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart … because it is the surest route to our common good,” he asserted.

But blame also lies with “our collective failure to make hard choices,” the president said. So the federal government must regulate itself by refusing to grant tax breaks it can’t afford to offer, and perhaps by stepping away from its self-appointed role as the world’s referee.

Government must be judged by “whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified,” he said.

But the president also challenged individuals to carry their share of the burden. Greatness “must be earned. Our journey has never been one of shortcuts … [or] for those who prefer leisure over work, or seek only the pleasures of riches,” he said. The prosperity we enjoy has come because “men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life,” he said.

On a more practical level, the president signaled where investment would be aimed “to lay a new foundation for growth.” The targets include “roads and bridges, the electric grids and digital lines … We will harness the sun and the winds and the soil to fuel our cars and run our factories.”

The inaugural address was, as expected, eloquent. But it also serves as a road map for sharply different economic policy, something like a schooner captain’s order to “Come about.” When the boom swings and the ship’s bow turns, few should be surprised.