President Bush & Analysts React to the Bear Stearns Bailout
Friday, March 14, 2008SUSIE GHARIB: The Bear Stearns bailout was also on the mind of President Bush today. Just hours after the news broke, the president was in New York addressing the Economic Club of New York and he said that he believes the Federal Reserve is doing a quote, good job under the circumstances. The president addressed 800 leaders from Wall Street and corporate America on a wide range of business issues.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It seems like I showed up in an interesting moment.
GHARIB: After that light-hearted start, President Bush turned serious, trying to calm nervous investors.
BUSH: This morning the Federal Reserve with support of the Treasury Department took additional actions to mitigate disruptions to our financial markets. Today's events are fast-moving, but the chairman of the Federal Reserve and the secretary of the Treasury are on top of them and will take the appropriate steps to promote stability in our markets.
GHARIB: The president said that the economy is going through quote, tough times, acknowledging that growth has slowed, gasoline and food prices are up and more than 80,000 jobs have been lost in the past two months. But he said quote, a root cause of the slowdown has been the downturn in the housing market and he warned Congress that massive government intervention is not the solution. BUSH: We got to be careful and mindful that any time the government intervenes in the market, it must do so with clear purpose and great care. Government actions are -- have far-reaching and unintended consequences.
GHARIB: Another big topic on the president's agenda: trade. He said it is quote dangerous for the U.S. to turn protectionist because it would it hurt the nation's economy. During the question and answer session of the event, the president said he believes in a strong dollar. But he did not repeat what he told me earlier this week that he supports a quote stronger dollar. Bear Stearns' chief economist David Malpass was disappointed by the president's dollar comments. In an op ed piece in the "Wall Street Journal" this week, he urged President Bush to take action to boost the greenback.
DAVID MALPASS, CHIEF ECONOMIST, BEAR STEARNS: The president was clearly talking about the need to bring investment into the U.S. but he was not using the dollar as a tool.
GHARIB: But others were more encouraged by what the president said today.
GLENN HUBBARD, DEAN, GRADUATE SCHOOL OF BUSINESS, COLUMBIA UNIV.: I think the headline message was he understands the economic weaknesses in the economy, is committed to further action if necessary.
ABBY JOSEPH COHEN, CHIEF INVESTMENT STRATEGIST, GOLDMAN SACHS: He did a good job of talking about fiscal policy, monetary policy
BARBARA HACKMAN FRANKLIN, FORMER U.S. SECRETARY OF COMMERCE: He made a strong statement about trade which I think resonated here and why we cannot be isolationist and protectionist.
GHARIB: President Bush described himself as a quote optimistic fellow and said he believes the economy is resilient and quote flexible enough to adjust to adversity.
