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Bush Meets With Cabinet on Financial Crisis


U.S. President George Bush says he is convinced the American economy will come back, saying his administration has taken extraordinary measures to deal with an extraordinary situation. We have more from VOA White House correspondent Paula Wolfson.

The president called his cabinet to the White House for a detailed discussion of the financial crisis.

As the meeting began, he sought again to ease public concerns and calm a volatile market.

He said the actions taken by the government are designed to thaw the credit freeze, and strengthen financial institutions.

"These are extraordinary measures, no question about it," said President Bush. "But they are well thought out, they are necessary and I am confident in the long run this economy will come back."

On Tuesday, the president announced plans for the government to buy up $250 billion in stock in private banks. With members of his cabinet seated around him, Mr. Bush stressed these steps do not amount to federal intervention in the banking sector.

"The liquidity measures being taken are structured such that the government will be a passive investor," he said. "In other words, there will not be government officials sitting on the boards of private companies."

The president spoke shortly before the U.S. stock market opened for the day. Stocks fell sharply in early trading, following downward movement in Asia and Europe.

Analysts believe the markets are reflecting concerns that global efforts to rescue the world economy may not be enough to prevent a recession.

Already there are signs in the United States that the credit crunch is having an impact beyond the banking sector. New figures show retail sales declined 1.2 percent in September. That is the biggest monthly drop in three years.

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