President Bush Attempts to Reassure Americans

President Bush made a brief statement on September 18th stating that he shared the concerns of the American people regarding the financial markets and the state of the economy.

The President has cancelled today's GOP-fundraising travel plans in order to stay in Washington to meet with economic advisors and to keep an eye on the situation in the financial markets.

He briefly talked with Treasury Secretary Henry Paulson this morning and plans to meet again later today to discus issues.

He cited the federal government's actions in recent weeks to address the problems that threaten the stability of the economy and financial markets:

The government's takeover of Fannie Mae and Freddie Mac, earlier this month, of the two home-finance agencies who buy or back about half of the nation's mortgages. The President expressed that their survival was necessary to promote market stability and that they play an important role in the recovery of our housing market.

The Federal Reserve's action "to prevent the disorderly failure of the insurance company AIG". The government announce on Tuesday that it would give an $85 billion loan to help AIG, saving the massive company from bankruptcy, in exchange for a nearly 80% stake in the company. The President said that collapse of the insurance giant "could have caused a severe disruption in our financial markets and threatened other sectors of the economy".

The Securities and Exchange Commission took action on Wednesday to "strengthen investor protections and step up its enforcement actions against illegal market manipulation". The SEC has tighten the rules of short-selling, which is speculation that the price of a stock will fall.

"The Federal Reserve, in coordination with central banks around the world, took a substantial step to promote additional liquidity to the U.S. financial systems." The Fed and five other central banks announced a joint effort on Thursday to pump an additional $180 billion into the global economy. This action is hoped to reduce the hoarding of cash by banks around the world and help with the liquidity conditions in the financial markets.

"These actions are necessary, and they're important. And the markets are adjusting to them. Our financial markets continue to deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges. The American People can be sure we will continue to act to strengthen and stabilize our financial markets, and improve investor confidence. Thank You."

The President's announcement was the first public address concerning the economy since Monday, and he did not outline any further actions that the administration may be considering. After Bush's statement, Press Secretary Dana Perino stated that she was not at liberty to say what the Bush Administration's next move may be, but that the various U.S. government agencies, under the President's orders, would take the necessary actions to prevent broader damage to the economy.



Sources:
whitehouse.gov
federalreserve.gov