Obama set up a blind trust but later decided that even such an arrangement could not protect him from the appearance of a conflict.

It’s generally acknowledged that the first American elected official to use a blind trust was President Lyndon Johnson, who set one up when he assumed the presidency so that he and his wife, Lady Bird, could hold onto their Texas television station—KTBC, in Austin—and yet not be subject to the inevitable conflicts of interest that would result from holding an asset so heavily regulated by the federal government.

Johnson turned to Sheldon Cohen, a young tax partner at Arnold & Porter, the Washington law firm of his close friend and counselor Abe Fortas, and two Texas lawyers (old friends of the Johnsons’) took control of the trust Cohen created. Lady Bird gave the trustees complete discretion over control of her shares in the station, including the right to sell them, and the Johnsons kept direct control only of their family ranch, some other real estate, and an undisclosed amount of tax-free municipal bonds. (Cohen had first created blind trusts for some Kennedy-administration subcabinet officers, including a State Department official who had Latin American business interests, and in 1964, Johnson appointed Cohen himself as commissioner of the Internal Revenue Service.)

Most of Johnson’s successors followed his lead, but only in 1978, with the passage of the Ethics in Government Act, did blind trusts become a formal option for executive-branch officers seeking to avoid conflicts of interest. The act stipulates that trustees must be independent of the official, that the trust must be free of restrictions on sale or transfer of assets, and that the official is to receive no information except for quarterly updates on cash value and income or loss, needed to file income-tax returns. It is presumably this sort of trust that Romney has pledged to create if he wins.

As a freshman senator, Barack Obama—whose wealth comes almost entirely from his book royalties—set up a blind trust but later that same year sold all of his stocks and closed the trust because he decided that even such an arrangement could not protect him from the appearance of a conflict. Most of his wealth is now invested in U.S. Treasury bonds and diversified funds—about the most transparent option available. What’s good for the country is good for Obama, and vice versa, to coin a phrase.

There is no doubt that the standards governing the private wealth of public officials have changed radically over time. Walter Isaacson, the co-author of The Wise Men, a definitive account of the Americans who forged the post–World War II national-security establishment, told me not long ago that in all the years that Averell Harriman served in top government jobs, he never resigned from the board of the Union Pacific Railroad or severed his ties to the Wall Street firm of Brown Brothers Harriman. That would be impossible today.

But “blind trust” has another enduring meaning in American politics, a sarcastic one coined by Garry Trudeau in 1984, when, in his comic strip Doonesbury, he accused then vice president George H. W. Bush of depositing his manhood in one. The slam stung—and stuck—which is something Mitt Romney would do well to remember as he charts his investment in the presidency.