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Bush Tries to Reassure Market Investors - 2002-07-22

President Bush is trying to reassure nervous investors as U.S. stocks continue their downward slide. Mr. Bush says the fundamentals of the American economy are strong and steps are being taken to address the problem of corporate accountability.

The White House has taken a two-prong approach to the current turmoil in the stock markets: stress the strength of the economy, and continue the push for corporate reforms.

A series of corporate accounting scandals has shaken confidence in the business sector. The result has been the unusual combination of a growing economy and declining stock prices.

The president says jittery investors should look to the overall economic trends, saying the value of stocks ultimately will rise.

"I know the economics, the platform for growth, is in good shape," he said. "Inflation is low, monetary policy is sound, fiscal policy is sound, productivity is up, orders for durable goods are up. We have got the platform for growth and when the values get there, you will see the market go back up."

President Bush spoke to reporters during a visit to a national research laboratory near Chicago that is developing new technology for use in the war on terrorism. The Speaker of the U.S. House of Representatives, Dennis Hastert, is the local congressman. Mr. Bush said earlier in the day they talked about another key element in efforts to restore vitality to the markets: legislation to crack down on corporate misdeeds.

"The key is for Congress to get a bill," he said. "I talked to the speaker about it today. He is optimistic that we will get a good bill."

The president was also asked if the country will feel the effect of the decision by the giant telecommunications company WorldCom to file for bankruptcy.

"The market probably has already adjusted for that," he said. "What I am worried about on the WorldCom bankruptcy is the employees that work for WorldCom. I worry that people will lose work."

About 17,000 WorldCom employees have already lost their jobs. Company officials insist no more layoffs are imminent, but the bankruptcy filing could jeopardize severance pay for 5,000 workers laid off last month.

All this bad news about corporate America has led to some calls for the resignation of Treasury Secretary Paul O'Neill. The president said he has confidence in Mr. O'Neill, adding those who hold him responsible for declines in the stock market, should give him credit when the market goes back up.