The ferocity of this week's Senate Republican attack on Democratic financial reform legislation was the surest sign yet that the GOP believes it is winning the argument over the economy.

Last year, amid the aftershocks of the most catastrophic financial meltdown since the Depression, opposing tougher financial regulation might have seemed a suicide mission to all but the most safely entrenched conservatives. And enough Senate Republicans might still recoil at being portrayed as defenders of Wall Street to eventually allow Democrats to pass a strong bill. But the fact that so many Republican senators feel comfortable starting with "Hell, no!" resistance to the Democratic plan demonstrates the GOP's confidence that it has convinced voters that Big Government poses a greater threat to prosperity than Big Business, especially when they can portray the former as the servant of the latter.

More than a few Democrats worry that such Republican confidence is eminently justified. When Democracy, a center-left journal, recently asked leading liberal thinkers to assess President Obama's performance, a recurrent theme was fear that he had lost control of the economic debate. Robert Reich, President Clinton's Labor secretary, lamented that Obama's failure to provide "a larger narrative" to explain the causes of the crash and his response to it had left the public "susceptible to [conservative] arguments that its problems were founded in 'Big Government.' "

The Republicans' "narrative" about Obama's economic agenda -- articulated again in Senate Republican Leader Mitch McConnell's attack on financial reform -- has been straightforward and unrelenting. In their telling, Obama is transforming the United States into a sclerotic European social-welfare state; forcing the strained middle class to fund both a "crony capitalism" of bailouts for the powerful (the charge McConnell leveled against the financial bill) and handouts for the poor (through health care reform); and impeding recovery by smothering the economy beneath stultifying federal spending, taxes, and regulation.

The fear among the Democracy contributors is that against this disciplined assault the White House is suffering from what could be called a "narrative gap." By which they mean that the White House has inadvertently allowed Republicans to shift public discontent from business to government by not working more doggedly to link President George W. Bush's anti-regulation, tax-cutting policies not only to the 2008 meltdown but also to the economy's meager performance over his entire tenure. (During Bush's two terms, the economy created only one-fourth as many jobs as it did under Clinton; poverty rose sharply; and the median family income declined, after rising 14 percent under Clinton.)

When Obama first arrived, he often arraigned his predecessor's record. The first chapter of Obama's initial budget document was "Inheriting a Legacy of Misplaced Priorities." Obama still delivers some similar jabs. But more often, he diffuses blame for the downturn across "a perfect storm of irresponsibility... that stretched from Wall Street to Washington to Main Street." Obama, at other points, has emphasized his continuity with Bush's approach, particularly on financial bailouts. (Liberal critics such as Reich believe that link extends beyond rhetoric to policy.) The result is that Obama has mostly shelved what political scientist Stephen Skowronek of Yale University calls "the authority to repudiate." That's the effort, employed by consequential presidents, such as Franklin Roosevelt and Ronald Reagan, to build support by portraying their agenda as the remedy for their predecessors' failures.

Absent such a framework, public opinion about the economy is clearly shifting toward the GOP as the downturn persists. Obama's economic approval rating has sagged to around 40 percent, and his lead over congressional Republicans on managing the economy has virtually evaporated.

These trends are compounding Democratic anxiety about the November election and fueling the Republican confidence apparent in the financial debate. But this fight could have more rounds left. Although times remain tough, positive economic signs are sprouting more frequently: job growth in March, rising retail sales, and a stock market that has soared 70 percent since its 2009 low.

Democratic strategists hope that by autumn, Obama could be positioned to argue that his approach has seeded recovery and that a Republican Congress would restore the agenda that seeded the storm. With enough good news, that could be a powerful claim. But if too few Americans feel progress by Election Day, the White House may regret not trying more systematically to persuade the country that the policies Republicans now tout as the engine of recovery are the same ones that helped drive the economy into the ditch.

This article appeared in the Saturday, April 17, 2010 edition of National Journal.

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