Why is the President Engaging in Happy Talk?

This poll taken from the Volkh Conspiracy gives a good idea about the President's commitment to talking up stocks. There is plenty of evidence that we've either reached or are about to reach what market watchers call "capitulation" - which means we are close to the bottom of the market. But the market still seems bound and determined to shudder under even slightly bad news.

It is unclear whether talk from the Oval Office can move markets. Clearly, beginning in my memory with the JFK episode with the steel companies, Presidents can have an effect on the negative side. But as Rober Schiller pointed out in his book on Subprime issues (I will review it soon - short review is that it is well done) part of a president's economic task is to help build confidence.

While there are many things I am not comfortable with about the President's budget proposals, I think his effort to boost our spirits is appropriate. I hope it works.