President Bush is holding a news conference this morning (9:20 a.m.). The news analysts say he’s going to try to allay fears about the economy.
This brings up the usual question: Is the economy really that bad, or is it just the case of the media being nattering nabobs of negativity?
Here are today’s economic headlines:
Still, there must be some people out there doing well in today’s economy. If that’s you, contact me.
9:01 a.m. – Update. Markets melting down. The Dow is below 11,000 now, and down 200 points on the day.
9:23 a.m. We’re underway. Bush urges Congress to pass oversight legislation for Fannie Mae and Freddie Mac. Gives a shot to Congress to remove ban on sections of coastal oil drilling. “The only thing standing between the American consumer and these vast resources is the U.S. Congress.” Says Congress acting means “they’ve finally heard the frustrations of the American people.” (Note: It was just 4 1/2 months ago that the president was surprised to learn gasoline might hit $4)
9:27 a.m. “Growth is slower than we would like, but it is growth nonetheless.” Says the 5.5% unemployment rate is still low “by historical standards”
Q & A
Q: Are American banks in trouble?
A: Lots of people don’t understand how important Freddie Mac and Fannie Mae are. We’re looking for stability in the mortgage markets. Reminds us that deposits are insured up to $100,000. “If you’re a depositer, you’re protected.” Says, “I think the system basically is sound.”
Q: Do you still think U.S. is not headed for a recession?
A: We grew in the first quarter.
>> Free factoid: The current Minnesota unemployment rate is 5.4%. The all-time high was 9% in November 1982. The lowest was 2.5 percent in April 1999.
Q: Are there other entities crucial to the economy that require government action?
A: If your question is ‘should the government bail out private industry,” no, it shouldn’t. Troubled by possibility of increased taxes.
Q: if Fannie Mae and Freddie Mac are shareholder owned, should they be privatized altogether?
A: We believe there should be a regulator. These institutions need to concentrate on their core mission.
Q: You said at one point you hadn’t heard of $4 a gallon gasoline…
Where are they now? (Bob: Whaaaat?) “Well, I have now.” Gas prices reflect demand. We’re going to change the psychology. The supplies of oil will increase. I’m reading about how car companies are beginning to change.
>> Free factoid: The average price for gasoline is now $4.119. This is courtesy of the Bureau of Labor.
Q: Any comment on Scott McLellan’s book.
Q: What advice would you give to Barack Obama as he heads to Iraq?
A: Listen to the generals. The Iraqis have invited us to be there. They share the goals with us to remove our troops as conditions permit.
Q: When oil prices have gone up a lot, they go down a lot afterward. Do you think oil prices are going to come down a lot?
A: No. Unless there’s a focused effort to bring more supplies to market, there’s going to be upward pressure on price. Says there’s a transition period from the hydrocarbon era and it hasn’t ended yet. “We knew the markets were going to be tight.” Gives props to ethanol technology.
Q: What do you plan to do with Guantanamo?
A: We’re still analyzing the effects of the Supreme Court decision.
Q: Reaction to Russians blocking sanctions on Zimbabwe?
A: It’s unacceptable. We need to analyze whether we can impose bilateral sanctions.
Q: Do you believe troop levels in Iraq are hindering ability to put more troops in Afghanistan?
A: The war on terror is being fought on two fronts that are noticeable to the American people, and other fronts that aren’t. Does this require full use of U.S. assets? Yes. These are two important fronts. We have to succeed in both. One front is going better than the other. Troops are coming home from Iraq based on success. Afghanistan is a tough fight. There wasn’t a lot of central government outreach to the people. Taliban will kill at the drop of the hat in order to influence behavior; it’s a little like what was going on in Iraq a couple of years ago.
Q: Should Americans expect a troop surge in Afghanistan?
A: We are. I hope whoever follows me understands we’re at war and now is not the time to give up. Just because we haven’t been attacked at home doesn’t mean some people don’t want to.
Q: A second economic stimulus package?
A: Let’s see how this one works and deal with the housing and energy legislation.
Q: Why have you not called on Americans to drive less and turn down the thermostat?
A: They’re smart enough to figure whether they want to drive less or not. The price of gasoline has caused people to drive left. The consumer is plenty bright. The marketplace works. People can balance their own checkbooks. I think people ought to conserve, absolutely.
Q: Are you confident American oil producers are tapping all sources. Will you sign agreement Iraq’s al Malaki on America’s future in Iraq?
A: Iraq: We’re in the process of working on a strategic framework agreement that will talk about cooperation on a variety of fronts. Part of that is a security agreement. If they want an aspirational goal on how quickly the transition takes place on how quickly “overwatch” takes place. It needs to be done prior to 2009.
Re: Oil. With the price at $140 a barrel? Absolutely.
Q: When will this country see a turnaround on employment?
A: I’m not an economist but I do believe we’re growing. I remember people here yelling “recession” as if you’re an economist. I’m an optimist. Good policy will strengthen our economy. I hope it changes tomorrow.
Q: Thoughts on Sudan?
A: The U.N. needs to work with current government to get troops in to save those lives.
Q: Is the Afghanistan president correct that Pakistan is responsible for increased terrorism?
A: We’ll investigate his charge. No question some extremists are coming out parts of Pakistan. That should be troubling to Pakistan. Al Qaeda is there. We have hurt al Qaeda hard and hurt them around the world. We’ll continue to keep the pressure on them with our Pakistani friends.
“I’ve enjoyed it. Thank you very much for your time.”