Bush's task: Turn back the bears

Wall Street's wild ride has presented President Bush with a problem that has confounded many of his modern predecessors: restoring public confidence in essentially uncontrollable financial markets.

For Bush, the good news is that chief executives who suffer through a stock slump early in their terms usually recover, politically speaking. Who remembers today that the Standard & Poor's 500 fell more than 12 percent during the Reagan administration's first year and a half?

The bad news is that the White House response to date has been stumbling, say some economic experts. Its message has been muddied, and the Bush economic team has at times seemed less impressive than its national security counterpart.

"There's a sense that the administration is playing catch-up with all this," says Martin Baily, a chairman of the White House Council of Economic Advisors under President Clinton.

Not that anyone's saying it's an easy job. Much of what influences market behavior is beyond any president's control. Rousing rhetoric from the bully pulpit only goes so far.

Bush can keep reminding investors about the generally healthy economy, but he can't offer assurances that more bad corporate news isn't about to break.

"What people really want to know is that the accounting scandals are over, and we won't know that [for some time]," says Kevin Hassett, a resident scholar at the American Enterprise Institute in Washington.

Bush's big problem so far, say analysts, has been twofold: His proposed solutions for what ails Wall Street have changed from day to day, and his aides have arguably mismanaged the way in which his message has been communicated.

Thus, in his Wall Street speech in early July, the president took a punitive approach. Longer prison terms for corporate malfeasance was one of his centerpiece proposals.

By this weekend, however, Bush's proposed crackdown on corporate bad apples received only passing reference in his radio address on what he termed "economic security."

Bush focused instead on Congress: specifically, what lawmakers need to do at this critical juncture. He called on the Senate and House to agree on corporate-reform legislation before their August recess, despite the administration's past hesitance about such a bill. He urged passage of a terror-insurance bill and promotion of economic security by fiscal constraint.

"While the economy is growing stronger, confidence in our free-enterprise system is being tested," said Bush.

And while the message shifts, the pictures look bad. Televised reports of Bush's speeches on the economy are now accompanied on many channels by news crawlers that charts the ups and downs of the Dow as the president speaks.

On one level, this is surely unfair: No chief executive can control the minute-to-minute movement of a stock market that trades billions of shares.

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