Bush says anxiety is feeding market instability
Washington (AP) — President Bush said Friday that the government's financial rescue plan was aggressive enough and big enough to work, but would take time to fully kick in.
"We are a prosperous nation with immense resources and a wide range of tools at our disposal ... We can solve this crisis and we will," Bush said in brief remarks from the White House Rose Garden.
Bush spoke as leaders of the world's leading economies gathered in Washington amid frozen credit markets, panic selling in stock markets and a looming global recession.
The president noted that major Western economies were working together in an attempt to stabilize markets and end the spreading panic.
"Through these efforts, the world is sending an unmistakable signal. We're in this together and we'll come through this together," Bush said.
Finance ministers and central bankers from the Group of Seven -- the United States, Japan, Britain, Germany, France Italy and Canada -- were here for a weekend meeting. Bush plans to meet with the leaders on Saturday.
Bush said he understood how Americans could be concerned about their economic future, "that anxiety can feed anxiety, and that can make it hard to see all that's being done to solve the problem."
The president said the new $700 billion rescue plan that he signed into law a week ago authorizes the Treasury Department to use a "variety of measures to help banks rebuild capital" including "purchasing equity of financial institutions."
It was the first time the president has mentioned suggestions that the government buy shares of banks, although it has been mentioned by other administration officials.
Bush also noted that the Federal Reserve has injected hundreds of billions into the system and with other central banks has made interest-rate cuts that should help thaw frozen credit markets and enable loans to flow again.
Government insurance on bank and credit union deposit accounts has been raised to $250,000 and the Treasury is offering insurance for the first time for money-market funds, he added.
"The federal government has a comprehensive strategy and the tools necessary to address the challenges in our economy," Bush said.
He sought to reassure Americans that the government is doing all it can to cope with the problem. He acknowledged mounting worry among people about their retirement and investment accounts.
Bush said that the administration had launched initiatives that "have helped more than 2 million Americans stay in their homes."
He also noted "rigorous enforcement" steps taken by the Securities and Exchange Commission to make sure that some investors don't "take advantage of the crisis to illegally manipulate the stock market."
Stock market volatility continued, with the Dow Jones industrials falling nearly 700 points soon after trading began, regaining all of that deficit to show an advance and then turning lower again.
(Copyright 2008 by The Associated Press. All Rights Reserved.)