RINCETON, N.J. — King Canute could not command the tides, and apparently neither George W. Bush nor Alan Greenspan can command the stock market. In recent days, both the M.B.A. president and the oracular Federal Reserve chairman have tried to calm the markets with reassuring words about the economy. But the stock market has kept on falling: on Friday it had one of its worst days ever, losing 390 points. Since President Bush addressed Wall Street July 9, the Dow Jones industrial average has declined more than 10 percent, to its lowest level in almost four years.

Those who get their economic news from television may come away with the impression that the economy and the stock market are two sides of the same coin. If the market is heading south, then the economy must be, too. But it's not true.

The United States economy is most emphatically not falling right now. The stock market may be the TV star. But it is the economy that generates the jobs and puts the food on our tables. And fortunately, the economy is doing much better than the market. If you want to bolster your confidence, turn off your TV and drive to the mall.

Normally, the economy and the market move consistently, though certainly not in lock step. The reasons are clear. A strong economy generates high and rising corporate profits, which is the traditional basis for high stock values. A rising stock market also gives the economy a boost by creating wealth for consumers and by making it easier for firms to raise capital, both of which were major factors in the boom of the 1990's. When things turn downward, all these mechanisms get reversed: a sagging economy drags profits and stock prices down, and a sagging stock market slows the economy.

Finally, because investors are supposed to look forward, the stock market should be a leading indicator of where the economy is going. And it is — to a limited extent.

But while it is normal for the economy and the markets to move together, the two sometimes go their separate ways. For example, the Dow fell almost as much, in percentage terms, on a single day in October 1987 than it has in the entire recent bear market. But the economy kept growing strongly. It was such behavior that led to the economist Paul Samuelson's famous quip that the stock market has forecast nine of the last five recessions.

So it would be a mistake to interpret the stock market's current woes as a forecast of a double-dip recession — a mistake that Alan Greenspan is certainly not making.

Consumers are spending, the housing market remains buoyant, and even business investment is coming back. The economic indicators are simply not signaling a sick economy. The gross domestic product grew at a 6.1 percent annual rate in the first quarter of this year, and something like 2.5 percent is expected for the second quarter. (The Commerce Department will announce the final figures at the end of the month.) That would clock the average growth for the first half at 4.3 percent — not bad. The Federal Reserve expects growth of about 3 percent in the second half of this year, and the consensus among private forecasters is a bit higher.

It is true that economic forecasting is an imprecise science, to say the least. But it is far more accurate than market forecasting, which is basically impossible. And economic forecasts like this, coming from a wide variety of sources inside and outside government, should give us some comfort that the economy is heading uphill.

So why, then, is the stock market in shambles? While the market never tells you why it does what it does, it's unlikely that worries about the economy are weighing it down. Instead, the best guess is that the stream of scandalous corporate revelations is taking a heavy toll on stock prices, and investors fear there is more to come. Confidence in the earnings reports of American companies, not to mention the ratings of the analysts who follow them, has been damaged if not destroyed.

The key question is whether this illness will be confined to the stock market or spread to the larger economy. If the stock market destroys enough wealth, or if the depressive psychology infects the credit markets, the financial turmoil could become severe enough to damage the economy. The tail could drag down the dog. That is why we must stop the market's downward spiral.

But how? Words, if chosen artfully, may help a bit. But talk is cheap — which may be why the markets shrugged off even the reassuring words of Mr. Greenspan, their most trusted guru. This just may be one of those moments when both the markets and the body politic are calling for action, some of which must be government action.

Can it be true that financial markets want the government to regulate them more? Paradoxically, the answer is yes. The markets have long had an ambivalent attitude toward government intervention. When things go well, they want to be left alone. But when things start to fall apart, they want Washington's help.

The reaction to President Bush's recent speeches was instructive. If Wall Street were truly opposed to government help, one might have thought that market participants would have breathed a sigh of relief: the president spoke loudly but carried a small stick. Instead, stock prices tanked.

There is a message here. Congress hears it, and even Mr. Greenspan — who is not normally a proponent of government regulation — hears it. But does President Bush hear it? The message is this: While changes in private-sector behavior will eventually fix many of today's accounting and corporate governance problems, the markets are clamoring for decisive government actions now.

Speeches have not worked. It is time to see if actions will speak louder than words.

Alan S. Blinder, former vice chair man of the Federal Reserve, is a professor of economics at Princeton.