Bush lowers the bar: "It's going to take a while for the credit system to thaw"

[Amerigo Vespucci]

http://www.huffingtonpost.com/2008/10/17/bush-to-give-pep-talk-to-_n_135505.html

WASHINGTON — The government's drastic economic rescue efforts will eventually pay off, President Bush insisted Friday, offering calming words to anxious Americans but no suggestion of a quick revival as Wall Street braced for another wild day.

The economy didn't falter overnight, "and it's going to take a while for the credit system to thaw," Bush said just before the markets opened, speaking across a park from the White House at the U.S. Chamber of Commerce building, a symbolic headquarters of American business.

Despite a flurry of radical actions by the Bush administration and the Federal Reserve, banks in the United States and abroad are still wary of lending money to each other and to their customers. The credit clog is depriving the wheezing U.S. economy of oxygen.

Financial and credit problems have dragged on for more than a year and took a dangerous turn for the worse last month. All the fallout threatens to plunge the U.S. economy _ as well as the world economy _ into a painful recession.

That has led to erratic trading on Wall Street, where the Dow Jones industrials have swung widely, slashing a trillion dollars of wealth from the markets one day, only to pile some of it back on the next. The Dow seesawed between positive and negative territory in afternoon trading Friday.

Before Bush spoke, there was more grim news: Home builders cut back sharply, dropping new-home construction to its lowest point since January 1991, when the country was in a recession and going through a similar painful housing slump.

Bush defended the government's recent interventions into private business, which would have been extraordinary for any U.S. administration but have been particularly so for a Republican president.

"I would oppose such measures under ordinary circumstances," Bush said. "But these are not ordinary circumstances."

Seeking to calm fearful investors, Bush said the steps are "big enough and bold enough to work."