SYNOPSIS: Bush's blatant hope that a dead Economy will give him political life isn't really nice.

One hears that George W. Bush likes to give people nicknames. So I hereby propose that he himself be known as Chicken Little. After all, he has been running around saying "The sky is falling! Hurry up and pass my tax cut!" And that of course means that we should dub Dick Cheney, who has been the administration's point man for economic pessimism, Chicken Big Time.

With one exception, the economic data don't support such gloomy views. The unemployment rate has ticked up slightly, but it is still lower than anyone would have thought possible only a few years ago — and in much of the country labor markets remain tight. Business payrolls actually expanded faster from November through January than they did in the previous three months.

Meanwhile, though the growth in consumer spending and business investment has slowed, there has been no collapse. Housing starts are actually up. Manufacturing output did fall sharply in the last few months of 2000, but this was mainly the result of inventory effects: companies produced too much in the face of slowing demand, found that they had accumulated excess inventories, and temporarily slashed production in order to clear their warehouses. Production of most manufactures stabilized last month, and unless demand takes another fall should soon recover.

The one really negative piece of economic news is that consumer confidence has plunged, to an extent that is hard to understand given the still relatively good news about jobs. Why should consumers suddenly have become so pessimistic?

One answer is that people are worried because of the fall in tech stocks — even though broader stock indices like the S.&P. 500 have not fallen by anything like as much.

Another answer is that the headlines have been much worse than the reality. In today's greed-is-good business world, companies announcing layoffs don't try to soften the blow; they exaggerate the damage to impress financial markets with their tough-mindedness. As this newspaper pointed out on Monday, behind those huge announced job cuts you often find quite modest actual job losses.

There is also, arguably, the CNBC effect. The media, and especially news channels that have to keep people watching all day, thrive on hype. Whatever is happening, good or bad, gets blown out of proportion. Remember the panic a few years ago about downsizing? I didn't think so. When the economy was on its way up, the media hyped its successes; now they hype the alleged recession.

Last but perhaps not least among causes of the consumer funk is the administration's own determined pessimism. Mr. Bush has a bully pulpit, and he is using it to preach economic alarm. This adds powerfully to the chorus of doomsaying. And when it comes to short-term economics, believing can sometimes make it so.

There's no mystery about why the administration is so eager to pronounce the economy flat on its back — Mr. Bush wants to use fear of recession to bully Congress into rushing through his tax cut, without worrying about little details like whether it would actually help, or whether we can actually afford it. But it's still a remarkable departure from the usual principles of economic policy. Has there ever before been a case of a U.S. administration deliberately undermining confidence for the sake of political advantage?

The closest parallel I can think of is the policy, early in the last administration, of talking down the dollar in order to put pressure on Japan. That policy was widely condemned — though few would go as far as Lawrence Lindsey, Mr. Bush's chief economic adviser, who has suggested that the weak-dollar rhetoric of 1993- 1994 was a major cause of the Asian crisis that began in 1997. Still, I agree that a policy of talking down the dollar to put pressure on a foreign government was irresponsible. How much worse, then, is a policy of talking down the U.S. economy to put pressure on our own legislature?

And turnabout is surely fair play. Having blamed efforts by his predecessors to "manipulate the dollar for domestic political purposes" for a global financial crisis, Mr. Lindsey surely cannot complain if the efforts of his own colleagues to worsen economic perceptions come in for criticism — especially if this administration succeeds in getting the recession it apparently wants.

Originally published in The New York Times, 2.21.01