Bush: Markets adjusting to economic action
WASHINGTON (CNN) -- President Bush on Thursday said he shared Americans' concerns about the economy and his administration is ready to act to prevent severe market disruptions.
The U.S. economy still faces "serious challenges," Bush said. "My administration is focused on meeting these challenges."
The president said the government had taken "extraordinary measures" to help stabilize the markets, including the takeover of insurance giant American International Group Inc. on Tuesday.
Bush said the AIG takeover was necessary to prevent "a severe disruption in our financial markets and threatened other sectors of the economy."
He also said the federal takeover of two mortgage giants Fannie Mae and Freddie Mac were necessary to "help promote market stability and to ensure they can continue to play a role in helping our housing market recover."
The Federal Reserve on Wednesday night also took steps, in coordination with central banks around the world, to provide additional liquidity to U.S. markets, Bush said.
"These actions are necessary and important, and the markets are adjusting to them," Bush said.
Despite the government's takeover of AIG, the Dow Jones industrial average fell 449 points Wednesday in its second worst session of the year. The market has bounced back somewhat Thursday morning, with the Dow up more than 100 points.
Bush made his comments after meeting with economic advisers, including Treasury Secretary Henry Paulson. Bush said he would confer again with Paulson later Thursday.
The president canceled a fundraising trip to Alabama and Florida to meet with his advisers, the White House said.
The White House has defended the Federal Reserve's decision to bail out AIG. The Fed announced Tuesday it would provide an $85 billion emergency loan in exchange for a nearly 80 percent stake in the company, the most far-reaching intervention into the private sector ever for the Federal Reserve.
"While no one would have liked to have ended up in this situation, you have a government that is willing to lead," White House press secretary Dana Perino said.
Bush has not fielded questions about the economic upheaval this week and even canceled a statement Tuesday. Reporters have tried each day. When one tried to press Bush in the Oval Office on Wednesday, he said he could not hear the question, then made light of the moment by saying, "I'm old."
Congressional Democrats, along with key Republicans, voiced their displeasure with the recent bailout. Some Republicans said they were not aware of the White House's plans to rescue AIG.
"Once again the Fed has put the taxpayers on the hook for billions of dollars to bail out an institution that put greed ahead of responsibility and used their good name to take risky bets that did not pay off," said Sen. Jim Bunning, R-Kentucky, a member of the Senate Banking Committee.
Rep. Roy Blunt, R-Missouri, said House Republicans are struggling to "understand a coherent strategy" about which firms get rescued and which ones don't.
House Speaker Nancy Pelosi, D-California, placed the blame for the nation's economic woes squarely on the Bush administration, arguing it failed to regulate the financial industry aggressively.
"The most recent bailout initiated by the Bush administration -- that of AIG -- is just another example that George Bush is a failed manager," she said Wednesday. "Because of the inattention, or a decision on their part to have crony capitalism in our country, Americans across the country are feeling the pain of this."
Perino countered, saying lawmakers could have done more to head off the crisis.
"I think that Congress needs to take -- before they start throwing arrows -- take a little bit of time for some self-reflection," she said. "But also, why don't we just set that aside for a minute and focus on the fact that we have a crisis that we're trying to manage."
Vice President Dick Cheney will fill in for Bush at Thursday's fundraiser scheduled in Huntsville, Alabama. Another Alabama event, a tour of the Huntsville Waste-to-Energy Facility, has been canceled.
Find this article at: http://www.cnn.com/2008/US/09/18/bush.economy/index.html?iref=mpstoryview
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