WASHINGTON - President Bush and financial leaders from nations rich and poor pledged Saturday to intensify their efforts to unblock a frozen financial system before it does more damage to an increasingly shaky global economy.
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While there were no concrete offers of new moves, Bush vowed anew that his administration was doing everything possible to halt the biggest market disruptions since the Great Depression. The finance ministers spoke in unusually somber terms about the need for action.
Bush started the day shortly after daybreak with a Rose Garden appearance with finance ministers from the world's richest countries and later made an unexpected evening visit to the headquarters of the 185-nation International Monetary Fund a few blocks from the White House.
With Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, he participated for about 25 minutes in a discussion with the Group of 20, which includes rich countries and major developing nations such as China, Brazil and India.
Brazilian Finance Minister Guido Mantega said that the president told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis. According to White House spokesman Tony Fratto, Bush acknowledged the problems began in the U.S., with a meltdown of the market for subprime mortgages in the summer of 2007. The president felt it was important to take the rare step of coming to such a meeting because the problems were spreading globally.
"It doesn't matter if you're a rich country or a poor country, a developed country or a developing country — we're all in this together," Bush said, according to Fratto. "We take this seriously, and we want to work with you."
In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together "to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world's financial markets."
The financial turmoil also dominated discussions at weekend's annual meetings of the IMF and World Bank. The IMF strongly endorsed a five-point plan put together a day earlier by the so-called Group of Seven wealthy powers, in which the United States, Japan, Germany, France, Britain, Italy and Canada jointly pledged to use all means possible to prevent major financial institutions from failing and to keep pumping money into the banking system to unfreeze lending and get credit — the lifeblood of the economy — flowing again.
"The depth and systemic nature of the crisis call for exceptional vigilance, coordination and readiness to take bold action," the IMF said in its joint statement. That statement, in an unusual move, repeated verbatim all of the commitments made in the G-7 statement that had been released on Friday.
"There is a resolve that this crisis will be resolved, that no tools will be spared to address this issue," Egypt's finance minister, Youssef Boutros Ghali, chairman of the IMF's policy panel, told a news conference late Saturday.
In his Rose Garden appearance, Bush made a plea for nations work together to address the crisis, avoiding the go-it-alone protectionist trade strategies that worsened conditions during the Great Depression.
"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together," Bush said, flanked by representatives from G-7 nations, the IMF, World Bank and European Union. "There have been moments of crisis in the past when powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different."
Fratto said Bush's commitment to collaborative action was repeated and agreed to by every official and minister who took part in the White House meeting.
Bush did not mention any specific action that prompted his call. But Ireland recently moved to guarantee all bank deposits, triggering similar actions in Germany and other countries concerned that nervous depositors would move their bank accounts to Ireland.
In his White House remarks, the president barely noted a significant new step from his administration — partial nationalization of some banks. After days of speculation this move was coming, Treasury Secretary Henry Paulson announced late Friday night that the government would buy part ownership in an array of American banks.
President Hoover tried something like that in 1932 during the Great Depression. No detail was provided about how the Bush administration's approach would work, only that it was similar to Britain's move to pour cash into its troubled banks in exchange for a stake in them. The U.S. government would use an unspecified portion of the $700 billion approved by Congress a week ago to purchase stocks in a wide variety of banks and other financial institutions.
The rescue program originally was sold to Congress and the public as a plan to buy mortgage-related loans from financial institutions. The goal was to remove troubled assets from those institutions' books and inspire them to restart more normal lending operations.
Congress passed the massive and hard-fought legislation, and Bush signed it. The government raised the amount of bank deposits it insured. Billions of dollars of reserves have gone into banking systems in the U.S. and other countries. Yet credit has remained virtually frozen.
This paralysis in the credit markets has translated into intense turmoil in the stock markets. The Dow Jones industrial average just completed its worst week in history, plummeting more than 18 percent. Over the past year, people in the U.S. have watched $8.4 trillion drain from investment accounts and retirement savings.
So the administration decided to use the bailout bill to pump equity directly into the banks — an idea never mentioned during the congressional debate. The administration says it is authorized by an obscure provision of the 400-page legislation.
Officials are not saying how long it will take to get this program under way — just as is the case with the even more complicated effort to buy mortgage-backed securities.
Bush seemed to acknowledge that the lag is feeding anxiety on Wall Street. "These extraordinary efforts are being implemented as quickly and as effectively as possible," he said. "The benefits will not be realized overnight."
The president said the G-7 nations have together pledged to "do what it takes to resolve this crisis."
Officials in Europe prepared for a meeting Sunday of the leaders of the 15 nations using the euro currency. German Chancellor Angela Merkel and French President Nicolas Sarkozy said Saturday they opposed to the creation of a common financial rescue fund for Europe.
For Bush, it was the 22nd day in the past 27 he had spoken about the financial crisis, since evidence first arose that the year-old subprime mortgage mess was evolving into a broader and more calamitous meltdown.
Bush also addressed the crisis in his weekly radio address, as did Democratic vice presidential candidate Joe Biden in delivering his party's response. Democratic presidential candidate Barack Obama, in a series of Philadelphia rallies, also focused on words of calm.
"I know these are difficult times. I know folks are worried," he said. "But I also know that now is not the time for fear or panic. Now is the time for resolve and steady leadership. Because I know we can steer ourselves out of this crisis." source
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Saturday, October 11, 2008
Sunday, October 5, 2008
Barack Obama
Barack Obama's campaign has quickly rejected Alaska Gov. Sarah Palin's claim that he associated "with terrorists who targeted our own country."
Alaska Gov. Sarah Palin lashed out at Sen. Barack Obama's ties to controversial figure William Ayers.
Palin attacked Sen. Obama on Saturday for his brief political relationship with Bill Ayers, a founding member of the radical Weather Underground which was involved in several bombings in the early 1970s, including the Pentagon and the Capitol. Obama was eight years old at the time of bombings.
Obama and Ayers, now a university professor, have met several times since 1995, when both worked with a non-profit group trying to raise funds for a school improvement project and a charitable foundation. CNN's review of project records found nothing to suggest anything inappropriate in the volunteer projects in which the two men were involved.
Obama campaign spokesman Ben LaBolt said the two had not spoken by phone or exchanged e-mail messages since Obama came to the U.S. Senate in 2005 and last met more than a year ago when they encountered each other on the street in a Chicago neighborhood where both live.
Palin's attack delivered on the McCain campaign's announcement that it would step up attacks on the Democratic presidential candidate with just a month left before the November general election.
"We see America as the greatest force for good in this world," Palin said at a fund-raising event in Colorado, adding, "Our opponent though, is someone who sees America, it seems, as being so imperfect that he's palling around with terrorists who would target their own country."
She cited an article in Saturday's New York Times about Obama's relationship with Ayers, now 63. But that article concluded that "the two men do not appear to have been close. Nor has Mr. Obama ever expressed sympathy for the radical views and actions of Mr. Ayers, whom he has called 'somebody who engaged in detestable acts 40 years ago, when I was 8.' "
Several other publications, including the Washington Post, Time magazine, the Chicago Sun-Times, The New Yorker and The New Republic, have debunked the idea that Obama and Ayers had a close relationship.
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Riot and bomb conspiracy charges against Ayers were dropped in 1974, and he is now a professor of education at the University of Illinois in Chicago.
Obama campaign spokesman Hari Sevugan called Palin's comments "offensive" and "not surprising" given the McCain campaign's statement that "they would be launching Swift Boat-like attacks in hopes of deflecting attention from the nation's economic ills."
With Obama rising in polls while the country struggles in the grip of a financial crisis, Sen. John McCain's presidential campaign decided to shift attention away from the troubled economy and on to issues of his opponent's character, judgment and personal associations, the Washington Post reported.
"We're going to get a little tougher," a senior Republican operative said, requesting anonymity because he wasn't authorized to discuss strategy. "We've got to question this guy's associations. Very soon. There's no question that we have to change the subject here."
McCain campaign spokesman Brian Rogers told CNN, "We are coming up on 30 days until the election, and there are a lot of unanswered questions about Sen. Obama's judgment."
The Obama camp said the tactic wouldn't work.
"What's clear is that John McCain and Sarah Palin would rather spend their time tearing down Barack Obama than laying out a plan to build up our economy," Sevugan said.see source
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