NEW YORK (AFP) — President George W. Bush acknowledged Friday that the US economy was going through a tough period but avoided talk of recession, as he sought to reassure voters that better times lay ahead.
Speaking in New York, Bush insisted that despite a weak dollar and soaring oil prices, the US economy remained fundamentally sound and said the biggest challenge was for the US Congress not to overcompensate.
"In a free market there's going to be good times and bad times. That's how markets work. There'll be ups and downs," Bush told business leaders at the Economic Club of New York.
"Our economy is obviously going through a tough time. It's going through a tough time on the housing market and it's going through a tough time on the financial markets," he added.
"I want to remind you this is not the first time since I've been president that we've faced economic challenges," he added, citing the strains posed by the September 11 attacks of 2001 and wars in Iraq and Afghanistan.
"Every time this economy has bounced back better and stronger than before," he said. "In the long run I'm confident that our economy will continue to grow because the foundation is solid."
Bush has studiously avoided saying that the United States is entering a recession, despite many analysts considering that shrinking economic activity for the current quarter has put the economy into negative territory.
Washington's job, Bush insisted, was to foster enterprise and ingenuity to ensure the US economy was flexible enough to adjust to adversity and strong enough to attract capital investment.
"The challenge is not to do anything foolish," he added, appealing for the Democrat-controlled US Congress not to take measures that would over-correct the economy or lead to protectionism.
"The temptation in Washington is to say that anything short of a massive government intervention in the housing market amounts to inaction. I strongly disagree with that sentiment," he said.
"I'm deeply concerned about law and regulation that will make it harder for the markets to recover, and when they recover make it harder for this economy to be robust," he added. "We've got to be careful."
He also urged Congress not to overturn tax relief measures he introduced.
High energy costs, falling housing prices and consumer spending have proved a painful combination for US consumers, and the impact of a 168-billion-dollar stimulus package Bush signed into law last month remains to be seen.
Tax rebate checks are due to start arriving in US consumers' mailboxes in around two months, in a move intended by the White House to boost spending.
But he conceded that there was little to be done to counter record oil and gasoline prices. "It's a difficult period for our folks at the pump and there's no quick fix," he said.
Bush also used his speech to reiterate support for a strong dollar policy and praise the work of Federal Reserve chairman Ben Bernanke.
Bush later reiterated in a television interview with CNBC that he had not changed his support for a strong dollar, despite comments this week interpreted as a possible shift.
"That's the problem with this rhetoric ... on dollar policy. If I even put a comma as opposed to a period people are suggesting change," Bush said. "Our policy has not changed. We're for a strong dollar," he added.
Democratic Senator Charles Schumer immediately jumped on Bush's comments.
"As long as the president stays in his ideological straight-jacket and says that we're not going to deal with the problems caused by this economy, we're not going to get much better," Schumer told reporters in Washington.
Bush's remarks came eight months before November's national elections, with control of the White House and US Congress at stake and Bush's Democratic critics eyeing the economy and the vastly unpopular Iraq war as winning issues.
Copyright © 2009 AFP. All rights reserved. More »
