That summer, as Nada Surf toured the United States with Superdrag, their song "Popular" became a summer anthem, and the band toured overseas. In 1998, the band released "The Proximity Effect", their follow-up album, in Europe. Produced by Fred Maher, the album gained little commercial success in the US. Their record label, thinking the album lacked a hit like "Popular", had the band record several covers, including "Black & White" (The dBs) and "Why Are You So Mean To Me?" (Vitreous Humor), to use as singles. Tired of the requirements of the A&R director, the band judged the album was perfect as-is (even though Elektra suggested the inclusion of an acoustic version of "Popular"), and broke their contract. As a consequence, Elektra did not release the album in the US and dropped the band while they were on a promotional tour in Europe. Despite these events, this album was critically acclaimed in France, where the band made a 30-show tour the following year. In 2000, the band released "The Proximity Effect" in the United States on their own label, MarDev (named after Caws' maternal grandmother, Margaret Devereux Lippitt, daughter of the painter Margaret Walthour Lippitt), after being dropped by Elektra. Following the album's release, the band performed at their record release party at Luna Lounge in New York City and toured intensively for several months to rebuild their North American fan base. From 1999 to 2002, the band took regular day jobs: Caws worked at a Brooklyn record store called Earwax, Lorca worked on some computer projects and Elliot did drum and guitar session work for other artists. Caws later referred to these times as a period of luxury, and the record store job as his "favorite job ever." In 2002, the band released "Let Go", a critically acclaimed album which included the successful single "Inside of Love", and toured for this album for several months, including many European festivals in the summer of 2003. Mostly recorded the year before, the album was produced by their friends Louie Lino and Chris Fudurich, who had engineered "The Proximity Effect"; the band paid them with $1 and $5 bills, the money earned from tour merchandise sales. In 2005, the band released "The Weight Is a Gift" on Barsuk Records, an album produced by Chris Walla (among others), and finished touring for this album in October of the following year.