Thanks Ever So Much, President Poor-Mouth

Be afraid, be very afraid. That has been the message of President George W. Bush and his economic team ever since December, when they realized that for the first time in 112 years they couldn't use the normal argument of new presidents to push their program. Invoking "the will of the people" wasn't going to cut it this time.

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So they did something risky and unusual--they poor-mouthed the economy to build support for their tax cut (which, as currently designed, would have almost zero impact on the economy this year) and to sprinkle a little blame for any recession on Bill Clinton. Even if Bush turns out to be right in his predictions of gloom, that doesn't mean he was right to make them. Not "prudent," as his father might say. Not helpful.

Yes, the power of any president over the economy is often exaggerated. This latest slowdown began last fall and was probably inevitable. The tech-stock bubble inflated and burst without much influence from Washington. But if the origins of economic trouble cannot be blamed on a president, the way it spreads psychologically is very much within his job description, if for no other reason than that the American people believe it to be. Consumer confidence is central to any soft landing (or, in the case of real recession, any recovery), and that confidence can be bolstered or eroded by the man in the White House.

Until last week, confidence in the economy remained high by historical standards, and for good reason. Despite a plunging Nasdaq and signs of weakness in manufacturing, the fundamentals--low inflation, strong job growth, strong productivity--have stayed sound. But confidence in the future of the economy has been falling sharply since the beginning of the year. Why? What conditioned the public to be so bearish this year when we've weathered bigger market corrections before?

Part of the explanation is that many Americans figure we're overdue for some tougher times. Nothing lasts forever. But leadership, especially when it's new and more credible, still counts. Only days after Bush prevailed in the Supreme Court, Vice President-elect Dick Cheney said on TV that we were at "the front edge of a recession." (Even now, that is highly debatable.) Bush himself could hardly open his mouth in his first weeks in office without talking about a "sputtering" economy whose growth has "stalled."

Last week I followed the president to East Brunswick, N.J., where, starting to worry about the weight of his earlier words, he insisted he had "great faith in the future of the economy." Now Bush is entering deeper rhetorical waters, where every phrase will be parsed as if he's Alan Greenspan. He's gone from saying the economy is bad when it wasn't so bad--to saying it's good when it isn't so good.