The stock market's relentless slide is exposing a growing phenomenon in American culture: The politics of the portfolio.
For the first time since the 1990s, when America's small investors came of age with the rise of 401(k) plans and all-day cable coverage of Wall Street, share prices are taking a prolonged and pronounced beating.
In this scenario, with more Americans feeling financially pummeled, the stock market has become an economic and cultural force that politicians can't ignore.
Of course, presidents have always kept a close eye on Wall Street but mostly as a backdrop for larger economic policies.
But today, the stock market has become a pocketbook priority for so many constituents from retirees to house-painters and hotel managers that share prices have taken on a political life of their own.
So far, the public does not seem to be blaming President Bush for the market's losses, just as during the 1990s, they never directly credited Bill Clinton for its gains.
Yet analysts agree that negative perceptions of the economy are never good for the party in power and perceptions of the economy today are clearly linked to the performance of the market. Moreover, the pessimism surrounding the market could ultimately affect the overall economy, by driving down consumer and investor confidence.
"Everybody has a stake now in what goes on on Wall Street," says Carroll Doherty, editor of the Pew Research Report in Washington. "It's a logical consequence of the rise of 401(k)s."
During the past two decades, the percentage of Americans invested in the stock market went from one in five to roughly half of all households.
A new poll finds that fully 40 percent of Americans say they have at least $10,000 invested in the stock market, whether through individual stocks or mutual funds. Of those, 46 percent began investing within the past decade, according to the July 8-11 poll by Investors Business Daily/TIPP, in which The Christian Science Monitor participated.
Since those who own shares are also those most likely to vote, this represents a profound shift in the makeup of the electorate. It means that every major market drop could have significant political repercussions.
"Nearly one-half of those with investments say that the market decline of the past two years has had a significant impact on their retirement plan," says Raghavan Mayur, who ran the poll for TIPP, a unit of TechnoMetrica Market Intelligence. "Many are outraged."
This pessimism is all the more striking, say analysts, given that the economy had appeared to shift from recession into positive growth early in the year, and other economic indicators have been positive of late. Recent readings of inflation, interest rates, and manufacturing have been fairly upbeat, yet polls show that people are increasingly negative about the economy. "What's going on here, to a degree, is that the corporate problems and the market are just wiping out the economic good news," says Mr. Doherty.
For the president, this presents a significant challenge, since the stock market is in some ways harder to influence than the economy as a whole as Mr. Bush found out last week, when the market took a dive after his speech on corporate reform.
"The speech was about trying to restore public confidence in the markets, and it had just the opposite effect," says Thomas Mann, an analyst at the Brookings Institution here.
At a briefing last week, Bush spokesman Ari Fleischer danced around the market news, noting that the market rose briefly after the president's speech before falling later in the day. Then he quipped: "That's for those of you who, as Washington reporters, have some type of savvy about what makes markets go up and down." Bush will give another speech today at the University of Alabama, in which he is expected to stress some of the more positive recent economic indicators.
Still, Democrats say if the stock market doesn't turn around, it could pose a serious problem for the president's party in the coming congressional elections.
"The pattern is that whenever the economy declines, the party in power is blamed whether it shows up in the stock market or whether it shows up in unemployment," says Rep. Martin Frost of Texas, chairman of the House Democratic Caucus.
Both parties, meanwhile, have been trying to stake out the high ground in confronting corporate accounting scandals.
But to the degree that the Washington debate devolves into a blame game, analysts say this strategy could backfire on both parties.
It could spur further loss of confidence, and again crimp the prices on Wall Street that, increasingly, matter on Main Street.
"People have always voted pocketbook issues," says Greg Casey, president of the Business Industry Political Action Committee. Today, however, "what they perceive as their pocketbook [is] a little different."