President Bush told CNBC Monday that recent drop in oil prices was the result of speculators reversing course after contributing to the run-up in prices. And he warned OPEC producers that curbing production in an effort to keep oil prices high could backfire.
"I would hope that the OPEC nations understand that high prices of oil could wreck economies," he said. "And if they wreck economies, it means the purchasers will be fewer."
Bush said that, despite the recent drop in oil prices, America needs to continue to invest in new technologies and develop alternatives to fossil fuels.
"What we've got to do in this country," he said, "is welcome low oil prices but continue to spend money to make sure we become less dependent on oil."
Bush's interview with CNBC capped a day of briefings with reporters touting his administration's accomplishments in keep the U.S. economy strong. Faced with difficult midterm elections and a deteriorating situation in Iraq, Bush is stressing the positive.
“The strength of this economy depends upon the strength of the small business sector,” Bush said at a round-table early in the day, where he talked about his administration’s role in reducing taxes and limiting regulation and lawsuits that he says impede the entrepreneurial spirit in America.
“The role of the government, it seems to me, is to make sure that dreamers are rewarded for their hard work and their ingenuity and success. And the best way to do that is to reduce taxes on people,” Bush said.
White House advisers, who think the president should get more credit for recent positive economic news, insist that Bush is not trying to change the subject away from the unpopular war. The president will continue to talk about Iraq and the war on terrorism as the Nov. 7 election nears, they said.
Eighty-eight percent of likely voters say the economy is an important issue — on a par with the percentage of people who view the situation in Iraq and terrorism as crucial matters, according to an Associated Press-Ipsos poll earlier this month. The poll found that 37 percent of likely voters say they approve of Bush’s handling of Iraq overall. More voters — 42 percent — approve of his handling of the economy.
Overall, the economy grew at a 2.6 percent pace from April through June, compared with a 5.6 percent pace over the first three months of the year, which was the strongest spurt in 2 1/2 years. Still, voters remain uneasy even though gasoline prices have started dropping, the stock market is hitting record highs, and interest rates on credit cards and adjustable mortgages are leveling off.
Rising hopes for strong third-quarter earnings lifted the Dow Jones industrial average past 12,000 for the first time on Wednesday. The Conference Board’s index of U.S. leading economic indicators rose last month, and the government reported last week that consumer prices fell in September by the largest amount in 10 months.
Democrats contend the middle class isn’t enjoying the benefits of recent U.S. economic gains. They say sluggish median earnings show paychecks have failed to keep pace with inflation, and they note rising health care and energy costs.
White House political director Sara Taylor said that the economy is a key issue in about two dozen House races, including campaigns in Pennsylvania, Minnesota, Ohio and Washington state. Democrats need a 15-seat pickup to regain the House and a gain of six seats to reclaim the Senate.
“It’s going to have an important impact on certain races around the country,” Taylor said. “I think it’s an important issue that’s not getting a ton of attention.”
Bush participated in a round-table with three small- to medium-sized businesses that have taken advantage of community banking services to expand in the Washington area. The event was held at Urban Trust Bank. The bank, set up to provide mortgages, student loans and investment opportunities mainly to minorities, was founded by Robert Louis Johnson, who started BET — formerly Black Entertainment Television.
On Tuesday, the president will speak about the economy again at a campaign appearance in Sarasota, Fla., for businessman Vern Buchanan, who is in a tight House race against Democrat Christine Jennings, a former bank executive. The prospect of losing Florida’s conservative 13th District to Democrats brought high-profile Republicans — Gov. Jeb Bush, Sen. Mel Martinez and Massachusetts Gov. Mitt Romney — to the area last week.