Text: President Bush Speech on the Economy, October 10

10:25 A.M. EDT (Source: White House Press Office)

THE PRESIDENT: Good morning. Over the past few days, we have witnessed a startling drop in the stock market — much of it driven by uncertainty and fear. This has been a deeply unsettling period for the American people. Many of our citizens have serious concerns about their retirement accounts, their investments, and their economic well-being.

Here’s what the American people need to know: that the United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets. We are a prosperous nation with immense resources and a wide range of tools at our disposal. We’re using these tools aggressively. Read more

Congress Should Consider Saying ‘No’ to Paulson’s Plan

For those of us who don’t spend our professional lives steeped in the news and nomenclature of Wall Street and 21st Century financial markets, there is a huge learning curve to get around in even beginning to understand the depths of this current economic crisis.

From the president to the Cabinet secretaries, to the Congressional representatives, to those who would be president, we are hearing the steady refrain that we must do something now, this week.  Practically breathless from their dire warnings they are also sending a mixed message about the proposed action – a $700 billion U.S. government purchase of what seems to be nearly worthless paper. 

The mixed message is this: On one hand we have a financial system on life support because there was no oversight or accountability.  On the other hand we are supposed to surrender nearly a trillion dollars to U.S. Treasury Secretary Henry Paulson with no oversight or accountability.  Something doesn’t compute.

There’s more.  The public is supposed trust that Paulson will do the right thing, make all the right moves, by his little old self.  This country doesn’t have $700 billion for Paulson’s plan, so what we will do is sell U.S. Treasury bonds to China, Malaysia, the United Arab Emirates, Russia, and all the other friendly foreign powers who are owning us a little more every day.  Under Paulson’s plan, he will not only be able to buy the worthless paper of American companies, but also the worthless paper of foreign companies.  The public might want to ask how much the European Central Bank is chipping in to save the U.S. financial sector?

And, of course, it’s all got to be done right this minute.  Here’s an exchange from the The News Hour tonight.  Margaret Warner was interviewing Chairman Chris Dodd, D-CT, of the Senate Banking Committee and Sen. Jon Kyl, R-AZ, of the Senate Finance Committee:

MARGARET WARNER: Quick final word, Senator Dodd, Senator Kyl, does this have to be done this week?  

SEN. CHRIS DODD: Well, it should be done soon. And, again, I think speed is important. But I want to emphasize to you getting it right — we’re going to live with this for decades to come now, so we better do it right, as well.

MARGARET WARNER: Do you think it has to be done this week, Senator Kyl?

SEN. JON KYL: I do. I agree with Chris; it’s got to be done right. But this is one of those things where there is an emergency. And the kind of time that we would ordinarily put into one of these things is not available to us now.

So I think, by the end of the week or early part of next week, we’d better have it done or the market is going to react in a pretty negative way.

Dodd describes the action Congress is poised to take on behalf of Wall Street as something that will have affects for “decades to come.”  Kyl says, “… there is an emergency.”  Is there no middle ground here?  In an emergency, can’t you make a temporary repair to the ship and get it into the shipyard where careful, longer-lasting repairs can be made — where it will acutally be fixed.  Is spending $700 billion from one Friday to the next our only option?

What I wonder tonight is could this be one more set of politicians cramming something (ie. Iraq War) down our throats with fear tactics?  Much has been said about dire consequences without much light shed on just what those negative outcomes would be.  Some have said that because this is essentially a crisis of capital, or liquidity, a meltdown would mean even less capital in the economy.  So, what.  We don’t produce real goods anymore, our growth has been in the financial sector, and we now know that that growth was bogus.  Let the markets take out the trash and let’s start a new game with better rules.

Full Text: President Bush Statement on Economy September 18, 2008

THE PRESIDENT: The American people are concerned about the situation in our financial markets and our economy, and I share their concerns.

I’ve canceled my travel today to stay in Washington, where I will continue to closely monitor the situation in our financial markets and consult with my economic advisors. I spoke to Secretary Paulson this morning, and I will meet with him later on today.

In recent weeks, the federal government has taken extraordinary measures to address the challenges confronting our financial markets. We’ve taken control of Fannie Mae and Freddie Mac — the home finance agencies — to help promote market stability and to ensure they can continue to play a role in helping our housing market recover. This week, the Federal Reserve acted to prevent the disorderly failure of the insurance company AIG — a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy. Yesterday, the Security and Exchange Commission took action to strengthen investor protections and step up its enforcement actions against illegal market manipulation. Last night, the Federal Reserve, in coordination with central banks around the world, took a substantial step to provide additional liquidity to the U.S. financial system.

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.

END 10:17 A.M. EDT

(Source: White House Press Office)