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No doubt his awareness of this phenomenon, and the grief it caused a certain president who served more recently than Hoover, is what spurs George W. Bush to keep trying to crack the code — trying to summon the right words to simultaneously convey empathy and optimism about what is happening with the markets, and to American investors.

The problem is not merely the Hooveresque echoes of insisting that all is well on a day when the Dow lost three percent of its value. This is also one of those times when Bush gets penalized by the informality — not to say inarticulateness — of his spontaneous speaking style. Confidence in neither the financial or the political markets can be restored with assurances that investors are now "buying value, as opposed to, you know, buying into a bubble."

The theme of the coverage this morning of President Bush's off-the-cuff remarks on the economy Monday, as best we can tell, is plain and simple incredulity that he made these remarks at all.

Having made them, the combined Wall Street/national political media/Democratic consensus is that he once again failed to achieve his mission, Bush and his White House will have to contend with the repercussions heading into today, in which he currently has just one scheduled public event at 2:30 p.m..

The Note pauses yet again, as we will for the duration of the week, to thank definitive Clinton biographer John Harris for his guest editing skills.

The New York Times ' Norris and Sanger get into it the way Bush did, through the recent criticisms of Bush Treasury Secretary. "Mr. O'Neill's critics on Wall Street and in Washington have not argued that he is responsible for the market's fall. Rather, they have questioned his effectiveness in reining in the federal deficit and articulating a clear federal policy for a dollar whose value has been declining along with the stock market, and his habit of speaking his mind in ways that can rattle confidence." LINK

"The criticism of Mr. O'Neill for such comments made Mr. Bush's off-the-cuff statements to reporters yesterday particularly surprising."

"About 18 months into his presidency, President Clinton talked at length about fluctuations in the dollar, and was warned by his chief economic adviser at the time, Robert E. Rubin, never to do it again — because he would be blamed if the predictions went awry. Thereafter, Mr. Clinton usually heeded the suggestion."

"Mr. Bush's advisers have given him the same counsel, and he has usually steered clear of all market predictions … That did not stop Mr. Bush yesterday from speaking in terms usually heard from Wall Street strategists."

And the Washington Post 's Mike Allen says, "White House officials had adopted a policy, similar to one followed by President Bill Clinton and his aides, of talking up the fundamentals of the economy — including the growth, unemployment and inflation rates — while avoiding comments about daily market turns."

"Bush's remarks departed from that strategy, at one point becoming so specific that he said, 'The price-earnings ratios are improving.' He noted that stocks, also known as equities, are not the only investments available."

Allen charts the slippery slope of presidential financial advice: "Officials in past administrations have discovered that a risk in discussing the stock market is that if the president appears too gloomy, he could help drive investors to the exits. If he sounds too upbeat, he may appear out of touch with the public's concerns. And if he seems to be encouraging citizens to venture back into stocks, and prices head farther down, he may be blamed for the losses." LINK

The stock slide is linked to Karen Hughes' departure. OK, not really. But Bush's communications problems on the stock slide are linked to Hughes' departure, suggests dot-connector Deborah Orin, who notes that the day after Hughes left, "Bush went to Wall Street for a big speech and stocks slid — followed by the past two weeks of excruciating market turmoil." LINK

"White House aides scoff at any talk of linkage, noting Hughes stays in close contact with Team Bush — the Republican National Committee hired her as a consultant to do just that — and his public support remains at near-record levels."

"But the White House strategy for the past few weeks has lacked something that Hughes excels at — finding a concrete way to connect with regular folks, speak their language and reassure them."

Orin winds up with this: "some insiders claim Commerce Secretary Don Evans, a Bush confidante and 2000 campaign chairman, will take a more visible public role — he's a more disciplined messenger than Treasury Secretary Paul O'Neill."

The New York Daily News' Dunaief and DeFrank point out, "With Vice President Cheney on the sidelines because of a Securities and Exchange Commission probe and his economic team plagued by policy and personality differences, Bush has become the government's chief economic spokesman by default."

"'The idea is just keep the president out there talking,' one Bush adviser said."

Talking, yes, but proposing nothing in addition to the economic policies his Administration already has laid out, which is making some election-wary Republicans fidget.

The AP's Fournier led overnight with: "President Bush had no advice for investors as the stock market gyrated wildly Monday — 'I'm not a stock broker or a stock picker' — but he said the economy is strong and corporate profits are improving … His remarks mixed optimism, skepticism and even bewilderment about Wall Street as stocks again fell sharply — reflecting the struggle by Bush and his economic team to respond to tumbling markets."

And The Wall Street Journal 's Cummings leads, "President Bush affirmed his support for Treasury Secretary Paul O'Neill and took some potshots at Wall Street … Clearly chafing from more than a week of criticism for his handling of the market turmoil, Mr. Bush echoed some of Mr. O'Neill's cracks about Wall Street, displaying the unusual strains between this Republican administration and the financial capital."

The blind quotes off the Hill from Republicans come as no surprise (if you have never dealt with members of Congress worried about losing their majority, you can't understand what complete and utter babies they are, and if you don't believe us, ask the White House legislative affairs shop).

The Washington Post 's Weisman gets this one: "One senior House GOP aide involved with the issue was … blunt: 'We are absolutely petrified.'" LINK

What are more surprising are the blind quotes coming out of Administration officials (and not just the easier-to-get "Bush advisers").

Paul Krugman wants the president to change his economic policies in reaction to the changing budgetary and market conditions, although he knows realistically that this probably will only happen just before "thousands of pigs will fill the skies over Washington." LINK

Instead, as the Washington Post suggests, the president intends to simply push harder for his existing economic growth agenda, including the kind of free-trade vote that skittish House Republicans, we are guessing somewhat informedly, are going to be less inclined to want to cast, rather than more, since in the short term those are tough votes in the face of public skittishness over the economy.

Direct association with the flimsy market's seemingly daily nosedives obviously are the last thing the administration wants — especially given their ongoing suggestions that another, recently departed Administration is responsible for the stock bubble in the first place.

But try to tie him to the markets, Democrats did. In Miami Beach yesterday, House Minority Leader and apparent 2004 presidential candidate Dick Gephardt pointed out to a major Latino organization that the market has dipped the last three times Bush has talked publicly about the economy, adding, "The president continues to speak — that isn't helping us. In fact, it may be hurting us, because what the people want is action, not words."

(The Republican National Committee yesterday, incidentally, issued a release challenging Gephardt's record on Hispanic issues.)

Action may come in the near future, as the corporate accountability conference committee works its way toward agreement, while the White House promotes economic measures already on the table, like fast-track. "In an unusual lobbying effort, Vice President Cheney, national security adviser Condoleezza Rice and Secretary of State Colin L. Powell plan to call lawmakers the White House considers 'persuadable,' an administration official said," per the Post 's Mike Allen. "Bush also plans to work the phones."

As for the conference committee, the question is whether Mike Oxley and Tom DeLay turn their backs on their business contributors and say, we have to pass the Sarbanes bill.

Oxley and Phil Gramm are considering trying to water down some of the main provisions. But, the Washington Post 's Weisman notes, time may be the telling factor, and it's on the side of the Senate bill. Weisman goes on to uncover the guerrilla warfare tactics of once-powerful industry lobbyists. LINK

The Los Angeles Times ' Gerstenzang and Gosselin, working the Hoover angle into their piece, add that "the administration's problem with the dropping Dow go well beyond public perception. Even longtime Wall Street optimists now say the president and his economic team — which includes O'Neill, chief economic adviser Lawrence B. Lindsey, budget director Mitchell E. Daniels Jr. and economist R. Glenn Hubbard — have failed to come to grips with the economic danger of the market slide." LINK

"The economic jitters that the White House is trying to calm carry long-term and immediate dangers for the president," they go on to say. "In the short run, they sow confusion in the congressional races that will be decided in November." "But if the plunging stock market dries up investment money and, with it, capital for growth, the immediate skittishness could turn into an extended downturn. That, in turn, would present Bush with a picture similar to the one his father faced when he ran for reelection in 1992, in which his war-fueled popularity was swamped by a soured economy."

While Republicans just a year ago were hoping we'd see a national election in 2002, as Charlie Cook points out in his CongressDaily column today, Democrats are the ones praying for it now.

That said, Cook figures only the first two of four stages leading to a national election have set in: 1) a drop in the "right direction" number in polls; 2) a drop in the presidential job rating; 3) a drop in party numbers/the generic congressional ballot test/other numbers dealing with certain issues; and 4) actual discernible impact on a large number of individual races.

Dick Morris goes several (somewhat dubious, perhaps) steps further, calling the whole bad economic scene "the final nail in the coming Democratic victory in 2002," regardless of the business dealings of the current and a recent past chair of the party. "The president can't always win a national debate," Morris notes. "But a president can always change the subject. His ability to determine the national agenda is almost absolute." So go attack Iraq, Morris advises the president. LINK

And the AP's Espo captures GOP concerns that all of this might affect Republican turnout in November. LINK

Reuters reports on President Bush's one scheduled public event for today, the launch of a PSA campaign to encourage adoption. "In a White House East Room event, actor Bruce Willis will be named as a national spokesman for children in foster care, the White House said … Bush is to announce the creation of the first federal Web site that focuses on the waiting American children." The new PSA's will feature Laura Bush and Willis.

Also up on Capitol Hill today, another controversial Bush judicial nominee will appear before Pat Leahy's Judiciary Committee.

David Von Drehle writes in the Washington Post that as the fight over judicial nominee Priscilla Owen heats up, a group of conservative lawyers and politicos will announce the formation of the Committee for Justice, which plans to counter the efforts of the liberal opposition. LINK

The group says they will buy TV ads in Southern states targeting Democrats who oppose Bush's judicial nominations but who may need to heed conservative pressure at home. Texas Senate nominee Ron Kirk will be the test case; Kirk has vocally opposed Owen's nomination to the Fifth Circuit.

The Committee for Justice's chief, former White House counsel C. Boyden Gray, admits that judicial nominations have not been a major campaign issue since the Reagan years. "'I don't know if it is going to work of not,' Gray says in the story. 'But its worth trying. We can't possibly make things any worse than they are now.'"

And the Post 's Lane gets into Owen's record. Apparently she has a long and mixed history with different members of the Bush Administration. For instance, she paid Karl Rove $250,000 to work on her campaign for the Texas Supreme Court, but had run-ins with White House Council Alberto Gonzalez once she was on the bench. LINK

Several papers also cover the administration's decision to pull funding for the United Nations family planning program, which is notable for what it says about the priority the White House places on constituency politics and appeasing conservatives. In the midst of planning a war for which the United States has little firm international support to begin with, they're apparently willing to risk ticking off the EU and other nations, as well as moderates at home.

Lastly, the administration "has abandoned hopes it can work with President Mohammad Khatami and his reformist allies in the Iranian government and is turning its attention to appealing directly to democracy supporters among the Iranian people," the Washington Post 's Kessler reports. LINK

The politics of corporate responsibility

The Wall Street Journal 's Hitt calls Bush's proposed Social Security reforms "one of the major casualties of the precipitous decline in the stock market." The New Journal/NBC poll shows a majority of Americans opposing partial privatization of the program. "White House officials say Mr. Bush remains committed to the initiative and will continue to press it. But with markets falling along with public enthusiasm for the idea, the issue is a difficult one for Republican candidates going into the 2002 congressional campaign … Meanwhile, the fundamental concerns about Social Security's financial health haven't gone away and are likely to grow if the country's economic troubles mount."

"Increasingly, top administration officials talk privately of a Social Security overhaul as a second-term priority. Others in the political establishment are growing more open about the likelihood of delay, too."

Another The Wall Street Journal story looks at how the business lobby has managed to gut proposed 401(k) reforms.

Bob Rubin, Allan Blinder, Janet Yellen, and now Clinton's deputy treasury secretary, Robert Altman, weighs in with a Wall Street Journal op-ed noting how amidst the blame game, the market is inflicting its own punishment.

Homeland security

White House budget director Mitch Daniels, in a Washington Post op-ed, pushes for passage of the president's homeland security proposal with its operational flexibility for the administration intact, seeming to imply that the spending restrictions on the White House budget and the "mountain of paperwork Congress imposes" could pose obstacles to the nation's ability to protect itself. "President Bush's bold vision must be matched by boldness in execution. The new Department of Homeland Security must be free to protect Americans with all the imagination and aggressiveness its employees will bring to work with them." LINK

USA Today 's Hall reports, "Nearly 10 months after anthrax attacks caused chaos among health officials from Florida to New York, fewer than a third of the states have adopted laws to give governors and state health officials powers to respond to a bioterrorism attack or other public-health emergencies." A proposed model law by the Centers for Disease Control and Prevention "and provided to state legislatures last year" has met with opposition from civil libertarians and other interested groups. LINK

Legislative agenda

Mr. Pear reports from the prescription drug front that "Senators said [yesterday] that they were already developing hybrid versions of the two major proposals for Medicare drug benefits, with the expectation that both would fail when the Senate votes on Tuesday." LINK

"Senators said they might be able to reach an agreement on costs. But, they said it would be more difficult to overcome their disagreement over the proper roles of government and private insurers in delivering drug benefits to the elderly because that disagreement springs from deep philosophical differences."

ABC 2004: The Invisible Primary

Al Gore today kicks off the Democratic Summer Academy at Vanderbilt University, sponsored by Gore's Leadership '02 PAC. This is a five-day campaign-training seminar for about 40 young political activists, taught by former (and current) Gore campaign aides and other party smarties like Donna Brazile, Carter Eskew, Mike Feldman and others from the Glover Park Group, Donnie Fowler, some veterans of the Florida recount, and Tipper Gore chief of staff Audrey Haynes.

Also today, at 12 noon, Gore will cast his early vote in Tennessee's August 1 primary, in Carthage.

Just days before September 11, 2001, President Bush was trying to revive his immigration reform proposals after meetings with Mexican President Vicente Fox. But then terrorism struck, and the White House moved on to more pressing issues.

Becoming the first Democrat, as Ron Brownstein says, to revive the immigration question big-time, House Minority Leader Gephardt said in his keynote address to the National Council of La Raza yesterday that he intends to introduce legislation within the next two weeks to grant legal status to millions of undocumented Latino and Asian immigrants, a plan which seems a lot like what Bush was proposing.

Brownstein wraps up the debate nicely in the LA Times: "According to House Democratic aides, the party plan will propose that illegal immigrants from all countries--not just Mexico--be allowed to pursue legalization. Illegal immigrants would have three years to apply for legal status. In addition to demonstrating five years of residency in the United States and two years of work and passing the background check, they would have to show that they have paid all state and federal taxes." LINK

"Anyone who passed those tests--as well as their spouses and children--would become a permanent legal resident. Under current law, permanent residents are eligible to apply for citizenship after five years." "As Gephardt described it, the House Democratic proposal follows the same political logic as the plan that Bush first floated last year. Both approaches envision a 'grand compromise' to break the stalemate on immigration reform."

After Bob Rubin issued his call for a summit of business leaders to work on corporate accountability, we were reminded that Gephardt called for such a summit back in January.

Vermont Gov. Howard Dean's San Francisco schedule today includes a speech to the state AFL-CIO.

Here's your programming guide for this evening. The New York Post says that tonight on "Real Sports with Bryant Gumbel" on HBO, a 19-year-old video will be shown which features Al Sharpton discussing "a major coke deal with an undercover federal agent … On the tape, Sharpton nods and says, 'I hear you' after Victor Quintana, the FBI agent who was posing as a narcotics kingpin, outlined potential profits." LINK

Sharpton said that the guy just started "discussing drug-dealing … 'I didn't know what this guy was on about. I didn't know if he was armed. I was scared, so I just nodded my head to everything he said and then he left.'"

"Sharpton was not charged as a result of the conversation, claimed the tape was released to smear his name in advance of a possible run for the presidency."

The New York Daily News has more details: "On the HBO show, Sharpton first refuses to watch the video and storms out of the interview with reporter Bernard Goldberg. But he later returns, watches and attacks the video as a setup." LINK

"HBO is airing the tape as part of a story about Michael Franzese, a former Mafia captain who once facilitated gambling by pro athletes."

A Washington Post blurb on the GOP 2004 convention has this: "Many Republicans think New York is a logical place for the 2004 convention because of Sept. 11, but the city can be a logistical nightmare." The Note note: as a few Democrats involved in the selection process also have pointed out to us. "New Orleans hosted the 1988 GOP convention to good reviews. But one GOP official said the Tampa/St. Petersburg bid committee has shown great enthusiasm in its presentations, and given the importance of Florida in the presidential race — and the fact that the president's brother is governor — it might be in the thick of the final decision-making." LINK

Politics

The Republican House campaign committee recently went on the air with their first campaign ad of the cycle in a Waco, TX-based congressional district touting their challenger to Rep. Chet Edwards (D). However, "[i]n an embarrassment to Republicans," the AP's Espo notes, the candidate "conceded Monday that he opposes the major education bill that President Bush championed" and to which the NRCC ad refers. "'I have to disagree very vehemently with … Bush's education bill,' Ramsey Farley said on a radio program this spring."

The White House apparently feels strongly enough about the suggestion that the GOP is vulnerable on environmental issues for Karl Rove to give an interview to USA Today rejecting the idea; the story offers some good examples in the Pacific Northwest. LINK

The AP's Lester reports that two civil rights groups have asked President Bush to remove Peter Kirsanow from the US Commission on Civil Rights after Kirsanow said people might demand internment camps for Arab-Americans if Arab terrorists strike the United States again. Officials with the Leadership Conference on Civil Rights and the American-Arab Anti-Discrimination Committee wrote Bush to complain. Kirsanow made the comments after hearing testimony from Arab-American leaders who said the government violated civil rights following Sept. 11. LINK

The Rev. Jesse Jackson gets not one but two stories in the Washington Times today. In an interview with the Times , Jackson "said he will seek to meet with Palestinian leader Yasser Arafat on a peace mission to the region 'soon,' although he could not give a definite month." Jackson also addressed the Rainbow/Push conference yesterday, giving a speech in which he "equated police officers accused of brutality with terrorists, referring to police as the 'militia.'" LINK LINK

A Senate subcommittee headed by Nevada's Harry Reid "voted Monday to cut more than one-third of the money President Bush requested for work at the proposed nuclear waste burial site at Yucca Mountain in Nevada," the Los Angeles Times reports. LINK

New Jersey

Democratic Senator Bob Torricelli testified yesterday behind closed doors at an Ethics Committee hearing. One of the ratpack of reporters trying to track Torricelli down tells the Note that there "was a total 'Where's Waldo' quality to it all." The Ethics Committee allowed the Torch to change the location of the testimony, presumably so he wouldn't have to walk in front of a bunch of cameras. "Word has it that the testimony actually took place somewhere in the Capitol."

And in Torricelli's absence, our source notes, Common Cause's Scott Harshbarger showed up at the stakeout and "proceeded to launch into a tirade for the cameras about backroom, secret maneuvering, the Senate club, etc."

Here's the New York Times ' Kocieniewski's account. LINK

California

Republican gubernatorial nominee Bill Simon yesterday released nearly all of the past 11 years' worth of tax returns, though the campaign limited the media's chance to view them. LINK

Another article on Simon disclosing returns, complete with an analysis emphasizing how complex his finances are. LINK

Florida

It's official: surrounded by members of the state's largest public employees union, Janet Reno filed her papers Monday and became the first candidate officially entered in the Florida governor's race. LINK

Apparently the state elections folks still can't count right. LINK

New York

The New York Post pats itself on the back for calling the Chuck Schumer endorsement yesterday of gubernatorial candidate Carl McCall over Andrew Cuomo. "Schumer's big move in a contest that's already divided the party came just hours before a 'Democratic Unity' fund-raiser was held to help whichever candidate wins the Sept. 10 primary." Senator Clinton will not be making an endorsement, the Post says. LINK

Facing a Conservative primary challenge, Lt. Gov. Mary Donohue, "in a letter to thousands of Conservative Party members, says she's 'personally leading the crusade throughout New York' to let President Bush know New Yorkers oppose the federal appeals court ruling that having 'under God' in the Pledge is unconstitutional … GOP insiders said yesterday Gov. Pataki's re-election campaign designed the 'crusade' to raise Donohue's profile with Conservative voters." LINK

Texas

"Democrat Ron Kirk's Senate campaign hit the airwaves Monday — by mistake. Instead of a commercial for a seafood restaurant chain, a San Antonio station mistakenly played a 30-second Kirk spot from his spring runoff with teacher Victor Morales." LINK

Republican Senate nominee John Cornyn "is fighting a federal court order to pay more than $660,000 to lawyers for minorities even as he and other state officials have billed taxpayers almost $4 million for redrawing the state's legislative and congressional districts last year." LINK

North Dakota

On Monday, Gov. John Hoeven (R) will become only the second US governor to visit Cuba in more than 40 years, The Wall Street Journal points out.

Iowa

Dateline, Waverly: "The election fortunes of Tom Vilsack and Doug Gross most likely will be decided in eastern Iowa neighborhoods like the rows of tidy homes that line Iowa and Sunset streets here," sayeth the Register's Roos. LINK

New Hampshire

The regional paper updates the state of the New Hampshire Senate race. LINK

South Dakota

Republican Rep. John Thune's Senate campaign is angling to blame Democratic Senator Tim Johnson if prescription drug reform doesn't get passed this year; the Johnson campaign is firing back that Thune "is the candidate with a 'cozy' relationship with big drug companies for accepting their campaign contributions." LINK

South Carolina

The debate over debates has begun; Democratic Gov, Jim Hodges and GOP challenger Mark Sanford have agreed to three — September 9 in Newberry, sponsored by the AARP, September 18 in Columbia, sponsored by the South Carolina Business and Industry Political Education Committee, and October 10 in Charleston, sponsored by the Post and Courier newspaper — but can't agree on any others, including a possible fourth debate proposed by the state League of Women Voters. LINK

North Carolina

The Raleigh News & Observer reports that Elizabeth Dole apparently is "not universally recognizable. During a recent flight from Triad International Airport, she was searched four times, at one point being asked to remove her shoes. 'I must look real suspicious,' Dole said." LINK

On another topic, the paper reports the Democratic Dole Videotaper-in-Chief Jason Sulham, who "is such a regular that Dole has worked him into her standard stump speech," "wrote a letter to the Dole campaign saying it does 'not have my permission to use my image or likeness in any campaign advertisements or material.'"

"Meanwhile, a cameraman for the Dole campaign, who identified himself as Dave, showed up last week to videotape a speech by Democratic Senate candidate Erskine Bowles in Charlotte. Bowles was speaking Wednesday to the National Association for Commissions on Women. But while the Dole campaign allows Sulham to videotape her, the Bowles campaign asked the Dole cameraman to leave."

Bush Administration strategy/personality

The Boston Globe 's Kornblut sharply tracks, and notes the critiques of the presidential mottoes over the past week, from "Strengthening Our Economy" to "Protecting the Homeland." "More are on the way, providing steady work for the former television producer now in charge of wallpapering Bush events. White House officials insist that such frequent branding works, giving distracted television viewers a quick guide to the official message of the day." LINK

"Yet the practice, which involves more frequent and smaller logos placed close to the president's head to ensure a spot on television, has begun to draw criticism — especially on days when the message looks more like wishful thinking than a description of real events."

"What was once a collective effort by campaign staff is now under the control of a single architect, former ABC producer Scott Sforza, who boils down Bush's speeches to their common denominator for almost every important event, officials said."

"Sforza then considers the placement of the Post ers, to ensure they do not escape the lenses of television cameras around the room. Like almost all political events, the design has almost nothing to do with those in attendance, and is geared, instead, for the viewing public — a traveler who happens to catch a glimpse of the event on CNN at an airport terminal, for example, or a worker watching the nightly news."

President Bush saw Austin Powers! the Washington Post 's Grove reports: "over the weekend at Camp David, Bush screened the latest Mike Myers vehicle … No word yesterday on the presidential verdict." LINK

Note to the Cheney press corps (ha): Grove adds, "we hear that all those civilian-garbed folks spotted in Georgetown recently with uniformed mounted U.S. Park Police officers are members of the Secret Service brushing up on their equestrian skills for Vice President Cheney's Wyoming vacation next month."