They may be premature. There is still time for a turnaround even as the president nears the end of his "second 100 days." Then again, the stock market may simply be acting -- as it so often does -- ahead of the curve.
A four-comma money manager, who spoke on condition that he be identified as "someone who fervently supports the president but is frustrated as hell," puts it like this: "A few months ago, the president could have sent a bill to Congress to make his entire tax cut permanent. The Democrats would have screamed, but they would have been afraid to stand in the way, and a few of them would have been for it.
"Now, they're having a hell of a time even getting a proposal out to do a short-term fix on the alternative minimum tax," a hated provision of upper-bracketeers for now that will, however, begin to soak about one-third of all Americans come 2007.
A GOP strategist who works on one of the White House's lobbying whip teams moans: "Not only is there no coherency -- there doesn't seem to be anyone who can go to the president and say, 'this administration is losing control of events.' Who's going to do that in this cabinet? John Snow?"
A senior White House aide said that when Fed Chairman Alan Greenspan tried recently to urge the president to revise his strategy for winning Social Security personal accounts, the president was polite and engaged. But after the conversation, Bush political aides joked openly about the bespectacled one as a "lame duck old maid."
Some in the administration have speculated about naming a Greenspan replacement early -- partly to reassure markets, but partly to send the message that the White House feels that his retirement is "no big deal."
One problem is that even close Friends of W seem divided about whether the White House is losing clout on domestic legislation, let alone the causes if it is.
Some blame the effort spent on Social Security reform -- an issue which has dominated administration lobbying efforts for months, but in which public opinion, if anything, has solidified and moved marginally against the president's men. Yet others say the effort will soon gain the 2-3 Democrats needed to bring a Senate vote this fall. (The latter group may suffer from "irrational exuberance.")
Still others believe, as influential privatizer Steve Moore wrote in The Weekly Standard, that the effort is indeed in trouble -- but blame the White House message, or argue that the siege must be continued no matter what the cost to other matters on the agenda.
Still another group -- small, but well-respected -- argues that the continued Social Security crusade may have already cost the White House a serious chance at tax cutting in 2005, and may lead to an agenda meltdown, and loss of House and Senate seats, in 2006.
WALL STREET WISDOM
Investors and corporate managers are naturally less inclined to take an ideological view. Judging from movement in the stock market in recent weeks, however, they believe something is afoot.
Some blame "management" -- the current phrase on the Street for the Bush Administration's lack of strong, independent voices, particularly on its economic team.
Yet an opposite camp seems to think that what the White House has lost, perhaps naturally after the pressure and mind-concentrating fact of a close campaign came to an end in November, is coherence and unity.
"One day they're reorganizing to have Karen Hughes, Wolfensohn, and some other really excellent people take over the agenda on foreign policy," the aforementioned money-manager notes. "The next day -- I mean, the next weeks and months -- they can't even figure out what to say about Russia and Argentina," countries that have engaged in de facto takings from U.S. investors in recent months, with little protest from the Treasury.
Early this week, White House political aides organizing support for Social Security on Wall Street reportedly put out two sets of calls on the same day. The first set sought to advise backers that a White House proposal, including private accounts, would be sent to the Congress "in the coming days." A second advised that the White House "is not going to propose anything" until Democrats soften their opposition to the proposal for personal accounts.
When a confused recipient of both calls asked for clarification, he got several contradictory answers. One aide told him that the White House "is in the battle for the long term," but will be proposing a bill as part of an exit strategy -- allowing the White House to say it tried, pull the proposal, but say it remains committed to "a dialog in the coming months and years." A second aide said that a bill will be sent down because "we've got some movement" among Democrats pledged to filibuster any proposal with private accounts. A third said, "that's nonsense, we're not sending up a bill now; not even close."
The White House apparently believes it has a good shot at picking off several Democrats from a list of 6-8 Senators, most of whom have already signed a letter pledging to filibuster personal accounts for Social Security.
Goldman Sachs, though, reportedly told some of its clients that its high level contacts, including Democratic members, consider the White House list "laughable." One client said Goldman Sachs officials claim "at least two senators" on the White House short list are allowing the administration to woo them only as moles -- immediately reporting any intelligence back to Senate Minority Leader Harry Reid.
"If there is no solution, there is no problem," as Moshe Dayan once said. That mindset itself, however, appears to be precisely part of the difficulty -- a bland, perhaps overconfident vibe from the White House -- that is troubling investors.
Wall Street has plenty of uncertainties now without adding a weakened president to the mix.
Short-term uncertainty over Fed policy is one; long-term concern over Greenspan's replacement another. The prospect of a domino effect for emerging market debtors has fixed-income investors fretting, and is exacerbated by the perception that John Snow is no Bob Rubin -- but does have a Larry Summers gift for verbal infelicities. Divisions between House Speaker Dennis Hastert, Bush super-strategist Karl Rove, and Senate Majority Leader Bill Frist -- the three evidently can't even agree where certain key vote counts stand -- is yet another.
Oh, yeah: And what if the economy is slowing?
At least as seen by investors, Mr. Bush is now in some danger of lame-duckism over tax and budget policy. For that reason alone it's not yet time to buy U.S. equities: out.
(Gregory Fossedal is an adviser to investors on global development trends and ideopolitical risk, and a research fellow at the Alexis de Tocqueville Institution (adti.net). His clients may hold long and short positions in many of the investment securities and opportunities mentioned in his reports. Investors should perform their own due diligence and consult their own professional advisor before buying or selling any securities. Mr. Fossedal's opinions are entirely his own, and are not necessarily those of his clients or AdTI. Furthermore, they are subject to change without notice.)