Hearts, Minds, and Wallets

You know, he should really know better than to try to calm people down:

WASHINGTON, Aug. 8 — President Bush, seeking to reassure Americans about the economy and combat Democratic criticism of his policies, said on Wednesday that recent financial market turbulence was not a cause for worry but a natural adjustment from the improvident lending of recent years.

Speaking at the Treasury Department, with Treasury Secretary Henry M. Paulson Jr. sitting across the table and reporters seated in a circle around them, Mr. Bush said that his economic advisers would be “paying close attention as the market begins to readjust its assessment of risk” in housing and other sectors.

The president said he also discussed with Mr. Paulson and other cabinet members the possibility of tax cuts and reduced regulations aimed at overcoming what some see as a weakening of the competitiveness of American capital markets compared with those overseas...

It was an unusual presentation for Mr. Bush, both politically and economically. Presidents are usually advised not to wade into discussions of markets at a time when they are so unpredictable and anxiety-inducing.

Mr. Bush’s suggestion that the recent housing declines should be seen as a normal market correction from past excesses and that the government should avoid interfering with the process carries political risks at a time when some people are losing their homes, lending institutions are shaky and Democrats are demanding action.

Indeed, immediately after the president’s comments, Democrats excoriated him for saying that the economy was in sound shape, and many called on the administration to encourage federal housing agencies to step in and make more money available, perhaps by buying up troubled mortgages to avoid foreclosures.

For his part, Mr. Bush, in a verbal tour of the current economic scene, was eager both to calm the markets and knock down the Democratic calls for the administration to intervene, predicting that the turmoil in the housing sector would end with a “soft landing” and would not damage the larger economy.

“I believe that markets ultimately look at the fundamentals of any economy,” Mr. Bush said. “And the fundamentals of our economy are strong. Inflation is down. Real wages are increasing. The job market is a strong job market. People are working. Small businesses are flourishing.”

They'll greet us as liberators, with roses, too.

And where's that codpiece uniform?