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O'Neill was derided as an outsider by Wall Street and Washington, but that never troubled Bush. He considered it an asset. Yet O'Neill's stint has been rocky from the start. His penchant for making off-the-cuff quips on everything from Argentina's economic collapse to the merits of a strong dollar has roiled markets around the world and cost him the limited clout he had on the Street. "It's not that he's bad, and it's not that he's dumb," says a New York banker who attended a meeting with O'Neill last week. "It's just that he has no gravitas. And once you lose it, you can't get it back." O'Neill's habit of being out of the country during times of economic turmoil has led even some Republicans to call for his ouster. "O'Neill's been traveling everywhere but Main Street and Wall Street," G.O.P. Congressman Mark Foley of Florida told Time. "The Administration needs a central figure who can deliver a clear, potent message on the economy." But O'Neill scoffs at the notion that a Treasury Secretary's job should include trying to calm the markets or reassure the public. "I'm a little dubious," O'Neill told Time, "that in the middle of a hurricane, a soothsayer can make the wind go away."
It doesn't help that Bush's economic advisers don't play well together. Disputes among Lindsey, O'Neill and Hubbard have become so acrimonious that they have begun seeping out of this famously buttoned-up White House. Lindsey can roll his eyes when asked about O'Neill's latest unscripted remark. And according to allies, he has complained that Hubbard's status quo views have persuaded the President to reject as interventionist even modest new policy steps. The President's top economists, says a senior Administration official, "disagree on the analysis before they ever get to the remedies."
Bush may cling to his belief that the market's woes won't affect the basic soundness of the economy, but he knows from his father's experience that politicians who don't appear to take voters' pocketbook fears seriously pay for their callousness at the polls. "This President is acutely aware of the impact of the economy, both on regular Americans and on Presidents," says Mark McKinnon, a campaign 2000 veteran who still advises Bush. "Americans fundamentally understand a President can't move the markets, but they want to be assured that he cares about it and is doing all he can."
So prepare to see an Administration in motion. The President will hold a lavish ceremony this week to sign the corporate-responsibility bill. O'Neill, Evans and others will attend a series of events promoting good news about the economy. To ward off charges that Bush is lounging on his ranch while the economy burns, he will make trips into the "heartland" to meet with anxious Americans. Topping it off, he will host a day-long economic forum in Waco, Texas, on Aug. 13.
The folks at the White House are hoping all that activity convinces voters that the Bush team is finally on top of things. Meanwhile, they're praying that the "real economy" stays stable and the markets settle down. More made-for-TV indictments are likely this week, which will help too. But just in case, one topic slated for discussion at the Waco forum isas White House communications director Dan Bartlett puts it"ways to avoid a double-dip recession." And as some economists point out, on a graph, a double-dip recession looks like a W.
With reporting by Michael Duffy/ Washington