President Bush on Monday welcomed the Federal Reserve’s sweeping intervention in the nation’s financial markets as his administration faced accusations that it had supported the bailout of a prestigious investment bank while doing little to address the hardships of Americans facing foreclosures on their homes.
Meeting with his economic aides at the White House in the morning in the first of two meetings on the economy, Bush again sought to project optimism at a time of financial turbulence after the Fed’s brokering of the takeover of Bear Stearns by JPMorgan Chase.
Bush singled out Treasury Secretary Henry M. Paulson Jr. for praise, saying he had shown “the country and the world that the United States is on top of the situation,” an assertion that was broadly disputed by the president’s critics.
“I want to thank you, Mr. Secretary, for working over the weekend,” Bush said in brief remarks in the Roosevelt Room.
Bush’s remarks and his schedule underscored the growing political concern about the economy on a day that would otherwise have been devoted to traditional St. Patrick’s Day meetings and events.
The issue also spilled into the presidential campaign, drawing reactions from both Democratic contenders and the presumptive Republican candidate, underscoring how much the economy has overshadowed the war in Iraq, even as the fifth anniversary of the start of that war approaches on Wednesday.
Bush, between an Irish-American lunch on Capitol Hill and a dinner at the White House, met with a group of advisers and regulators that included Ben S. Bernanke PhD ’79, the chairman of the Federal Reserve, who has orchestrated a series of moves intended to rescue the nation’s financial markets from what officials feared could have been a chain reaction of defaults.
Bush’s handling of the economy has vaulted to the top of the political agenda, where the White House would clearly it rather not be. He stood accused on one hand of violating his own ideological opposition to government intervention and on the other of not doing enough to protect the nation’s economy from the disarray in the markets.
“Now that the president has shown his willingness to bail out Wall Street at taxpayer expense, I hope he will drop his opposition to proposals designed to help ordinary homeowners,” Sen. Harry Reid, D-Nev., and the majority leader, said in a statement.
Sen. Barack Obama, D-Ill., declared the economy “in shambles,” but he and his rival for the Democratic presidential nomination, Sen. Hillary Rodham Clinton, D-N.Y., trod carefully, expressing concern about the broader market and, in Clinton’s case, for the employees of Bear Stearns, based in her home state, New York.
“There is no doubt that we are teetering on a potential crisis on Wall Street that could have ramifications all across the country,” Obama said at a news conference after meeting with voters during a campaign stop in Monaca, Pa., a town near the Ohio border. “We have a credit market that is locked up.”