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Bush tries to reassure nation after economic woes

  • Story Highlights
  • President Bush discusses nation's financial health Friday at White House
  • Dow Jones Industrial Average dropped 679 points on Thursday
  • CNN poll states 26 percent of Americans confident Bush can handle financial crisis
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By Elaine Quijano
CNN White House Correspondent
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WASHINGTON (CNN) -- President Bush repeatedly has tried to strike an awkward balance between reassurance and reality about the nation's financial crisis. But the repetition raises the question: to what effect?

Since September 15, the day financial giant Lehman Brothers failed, the president has commented on the nation's financial health 27 times, either through written, radio or on-camera statements.

On Friday, Bush sought to reassure the nation. "This is an anxious time. But the American people can be confident in our economic future. We know what the problems are. We have the tools to fix them. And we're working swiftly to do so."

He spoke Friday after Thursday's astonishing 679-point drop in the Dow Jones Industrial Average .WatchVideo Ali Velshi discuss the latest Wall St. drop »

Bush's statements have mostly been brief, as in Thursday's comments at the White House during a Hispanic Heritage Month celebration.

"I'm confident in our economy's long-term prospects. We'll get through this deal," he said.

Yet with world markets already rattled over the U.S.'s financial woes, Bush and his advisers have seemingly concluded the only way to express that confidence is in short, measured statements. While the president did deliver a prime-time address to the nation last month focusing on the financial crisis, he has not held a formal news conference since July 15.

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The last time the president took questions on the economy, the inquiries came not from reporters, but from small business owners in suburban Washington on Tuesday. The questions were polite but pointed.

After listening to the president deliver remarks, business leaders asked him how to cope with frozen credit markets. His answers reflected the delicate balance between reassurance and reality.

"I believe the steps we're taking will free up the credit. It took a while to get it frozen; it's going to take a while to get it unstuck," Bush said, as he defended the massive $700 billion financial rescue plan passed last week. "In the meantime, have faith that this economy is going to recover over time."

Answering another question about what might happen to one man's 401(k) and others' retirement plans, the president was positive and blunt.

"I think in the long run, they're going to be fine because the stock markets will reflect real value. In the short term, they're going to take a hit," he said.

Yet analyst Anne Mathias with the Stanford Group said for Bush, trying to reassure Americans and the markets is problematic on several levels.

"The first part is that he's really not very popular right now. ... The second part is that he is not very fluent in discussing these kinds of issues," Mathias said, adding, "it's a really dicey question because the markets are so reactive that if you say the wrong thing it's easy to make the problem much worse."

Mathias says the third difficulty for Bush is credibility. "There are many who oppose him or are upset with the White House who put the blame for us being in this position at his feet," she said. "It's difficult to be a credible part of the solution when many people think you are part of the problem."

In the latest CNN Opinion Research Corp. poll, 26 percent of Americans expressed confidence in the president's ability to handle the financial crisis, compared with 52 percent for Treasury Secretary Henry Paulson, who has been President Bush's point man on the crisis.

Deputy White House Press Secretary Tony Fratto called it a "bizarre notion" that some believe Paulson acts independently of the president, saying the secretary "works at the direction of the president."

Fratto also rejected the notion that the Bush administration is to blame for the crisis, saying for years, the administration had been calling for more oversight of mortgage giants Fannie Mae and Freddie Mac.

"We've been pushing for six years to put a strong regulator in place to get those companies to clean up their acts," Fratto said. "Some of the policies we asked for took a lot longer than necessary."

He said Bush showed tremendous leadership in pushing financial rescue legislation, formally called the "Emergency Economic Stabilization Act," through the Congress.

"We did something in a matter of days that had never been done before," Fratto said. He added that considering the complex and historic nature of the bill and election-year politics, "it's a remarkable accomplishment."

Yet Mathias says the bill's passage probably had more to do with the credit freeze affecting the broader economy.

"All of a sudden, the switchboards lit up on Capitol Hill with people saying, 'Whoa, I can't get my loan. My line of credit got canceled. My home equity line just got canceled, you've got to do something,' and I don't think that is necessarily political leadership on the part of anybody in Congress or in the White House. ... It was more like desperation caused this bill to get passed," Mathias said.

It was one week ago that Bush signed the bill into law, and the Dow has steadily dropped in the days since. A senior administration official who asked not to be named ahead of the president's Rose Garden remarks said, "Look, anyone who tries to make the case that this (market volatility) is some grade on the rescue plan needs to have patience. We haven't even bought a single asset yet," referring to the Treasury Department's new authority to buy troubled assets from banks.

Mathias likened the situation to going to the doctor's office. "You go to the doctor's office, you get a prescription, it doesn't start working right away, and that is the case with this bill. President Bush signed it, but nothing has actually happened yet," Mathias said, adding, "I think once this actually starts working, once the patient starts taking the medicine, people will start to feel better."

Until then, Bush is in a sense, stalling, swerving and solving. He's stalling by continually explaining that the government has an arsenal of tools available to deal with the financial crisis. He's swerving to avoid market-sensitive statements, such as commenting on specific policy options. He's solving, as in his calls to world leaders this week to coordinate their actions as well as an upcoming Saturday meeting at the White House with the finance ministers of the Group of Seven industrialized countries. Video Watch how U.S. allies are playing the "blame game" »

The backdrop of Friday's address was different than when the crisis first emerged into public view with the collapse of Lehman Brothers in September.

This time, amid fears of a global recession, Bush tried to present a clear-eyed, yet reassuring case for why Americans and investors around the world should stop worrying.

"We're working closely with partners around the world to ensure that our actions are coordinated and effective," Bush said.

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"Through these efforts, the world is sending an unmistakable signal: We're in this together, and we'll come through this together."

However, with less than four months left in office, the president also has to wonder whether anyone is listening.

All About George W. BushHenry M. PaulsonNational Economy

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