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Bush: US Has Taken 'Extraordinary' Measures to Stabilize Markets


U.S. President George Bush says Washington will continue to act to stabilize financial markets shaken by fears of a global financial meltdown. VOA White House Correspondent Scott Stearns reports, the world's major central banks are joining forces in hopes of restoring investor confidence.

President Bush canceled travel to political fundraisers to stay at the White House and consult with economic advisors.

"The American people are concerned about the situation in our financial markets and our economy, and I share their concerns," the president said.

The U.S. government has taken charge of the nation's largest home finance agencies. It also moved to rescue the insurance firm American International Group, the failure of which Mr. Bush says could have caused a severe disruption in financial markets and threatened other sectors of the economy.

The speed of government action during the past week has largely left lawmakers behind. Treasury Secretary Henry Paulson informed Congress of the $85 billion loan for AIG only after the deal was done.

Using taxpayer money to save faltering firms is the most direct, but not the only way the executive branch intervenes in economic crises. President Bush earlier this year got Congress to agree on an economic stimulus plan of tax rebates for consumers and tax incentives for businesses to spend money on new equipment.

Presidents affect markets through regulatory policy and in the way they spend public funds as the amount of assistance budgeted for corporate research and development, for example, either encourages or discourages businesses from making similar investments.

Presidents also affect economies with public policy. President Bush says Congress can help the economy by passing free-trade agreements with Colombia, Panama, and South Korea to help American businesses sell more goods overseas. He also wants to expand offshore oil drilling which he says will ultimately reduce energy costs.

Presidents do not directly affect monetary policy because the U.S. Federal Reserve is an independent entity. The Fed has joined other nations' central banks to pump hundreds of billions of dollars into global financial markets in hopes of restoring investor confidence and encouraging banks to lend each other money.

President Bush says it is a substantial step to provide additional liquidity to the U.S. financial system.

"These actions are necessary and they are important and the markets are adjusting to them,"he said. "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."

The U.S. economy has been hurt by falling home values and high energy and food costs. A public opinion poll by CBS News and the New York Times this week said the economy and jobs are the biggest issues on the minds of nearly half the American voters before November elections.

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