PRESIDENT BUSH’S CHANCES of keeping world financial markets calm while pushing through Social Security and tax reform took a dive last week. Remember: If the president is to succeed in privatizing a portion of the Social Security system, he will have to persuade financial markets that it is safe to run even larger budget deficits, at least for awhile, as between $2 trillion and $5 trillion are diverted from the government pot into private accounts over the next decade. And if he is to reform the tax system by closing loopholes so that overall rates can be reduced, he will have to persuade Congress to take the political risk of creating the inevitable losers.

That means the president needs an economic team every bit as powerful and weighty as his foreign policy team. It is not to be. Bush has chosen to reappoint John Snow to the Treasury. Snow has been a loyal foot soldier, willing to travel the world to repeat that America favors both a strong dollar and one set by market forces. Since market forces, such as they are in currency markets, are progressively weakening the dollar, it is unlikely that the secretary fails to see the contradiction in his statement. Such loyal parroting of the White House line has its obvious rewards, but it does not make for credibility of the sort that the administration will need in the coming months.