- The Washington Times - Saturday, March 15, 2008

During another day of intense volatility on the stock and other markets, President Bush yesterday said the economy has hit “uncertain times” but urged a restrained and tempered government response that allows the market to self-correct.

Democrats blasted the president’s speech, saying the government must intercede immediately to stop what many are now calling a recession from getting far worse.

Speaking in Manhattan to the Economic Club of New York, the president sought to allay investors’ and consumers’ fears while also acknowledging, in some of his most blunt terms to date, that the economy is suffering and Americans are worried.

“In a free market, there’s going to be good times and bad times. That’s how markets work. There will be ups and downs,” Mr. Bush said. “And after 52 consecutive months of job growth, which is a record, our economy is obviously going through a tough time.”

The Dow Jones Industrial Average yesterday plummeted after the Federal Reserve had to step in to help rescue Bear Stearns Cos., the second-biggest underwriter of U.S. mortgage bonds, by guaranteeing a loan from investment bank JP Morgan. Other markets — including bonds, commodities and currency — also had bad days amid investors’ fears of recession and a credit meltdown.

Yet the president said that the government has acted to ease the economic downturn but should not panic and do too much.

“The temptation … is to put bad law into place,” Mr. Bush said.

Senate Majority Leader Harry Reid, Nevada Democrat, called the president’s plan “inaction,” and said “Democrats know that ‘wait-and-see’ is not a responsible strategy for an economy that is teetering on the brink of recession.”

But Mr. Bush said he was “deeply concerned about law and regulation that will make it harder for the markets to recover, and when they recover, make it harder for this economy to be robust.”

He said he opposes giving $4 billion to state and local governments to reduce the number of vacant homes, allowing bankruptcy court judges to reduce mortgage debts, and propping up home prices. He urged Democrats to give the $157 billion stimulus package time to work, and said that the housing market, in particular, “is in the process of correcting itself.”

“Markets must have time to correct,” he said.

The President’s Working Group on Financial Markets, a seldom-used body led by Treasury Secretary Henry M. Paulson Jr., this week unveiled a long-term plan to introduce tighter safeguards against irresponsible lending practices and loan securing. The plan leaves implementation to the private sector and is designed to prevent a similar economic downturn in the future.

Joint Economic Committee Chairman Sen. Charles E. Schumer, New York Democrat, said the president’s speech was “completely disappointing.”

“Things are worse now because the president’s proposal are always a day late and a dollar short. The kinds of things we were calling for nine months ago he’s beginning to call for now, but his reluctance to roll up his sleeves and deal with this crisis stands in the way of any kind of real recovery,” Mr. Schumer said.

The president told the audience of about 700, which included former Secretary of State Henry Kissinger among the more than a dozen seated on the dais, that he was concerned about the number of people facing foreclosure, and said his administration is trying to help homeowners avoid losing their homes.

“Foreclosure places a terrible burden on our families. Foreclosure disrupts communities,” Mr. Bush said.

But Mr. Bush insisted he is still optimistic about the economy’s mid- and long-term prospects, because of how markets responded to the recession he inherited as president and to the September 11 terrorist attacks.

At the end of his address, Mr. Bush struck out against what he called a lack of American self-confidence leading to protectionist sentiments and public opposition to investment in U.S. companies by foreigners.

“A confident nation accepts capital from overseas,” Mr. Bush said.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide