President Bush struck a reassuring tone Wednesday about recent turbulence on Wall Street, saying he believes the markets will work their way through the turmoil safely and achieve a "soft landing."
Bush, in his most extensive remarks on a gyrating stock market that has sent investors on a rollercoaster ride, expressed confidence that investors would eventually calm down. The president said he expects investors to reassess their risk and begin to focus more on the economy's fundamentals, which he said are solid and sound.
"I'm not an economist, but my hope is that the market, if it functions normally, will be able to yield a soft landing," Bush told a small group of reporters at the Treasury Department on Wednesday. "That's kind of what it looks like so far."
Investors are concerned about a worsening housing slump and possibly a widening credit crunch - an uneasiness of recent weeks that they fear could permeate the financial system and the national economy.
Overcoming the housing slump
"The underpinnings of our economy are strong," Bush said, adding that such conditions should help the markets get through the current problems.
"So the conditions for a - you know - for the marketplace working through these issues are good, and that's how I look at it," Bush said.
Bush noted that the economy is growing modestly and generating jobs, despite the ill effects of the sour housing market.
After nearly stalling in the first three months of this year, the economy rebounded in the April-to-June quarter, growing at a solid 3.4 percent pace, the best in more than a year. The nation's unemployment rate edged up to 4.6 percent in July yet remains low by historical standards. Inflation - aside from a recent burst in energy and food prices - has shown signs of improving.
However, stocks have been swinging wildly.
The president indicated he wasn't overly worried. He said the markets have gone through periods of ups and downs before. "It's the nature of the markets," he said.
On Wall Street, stocks - encountering another somewhat volatile session - ended the day up 154 points.
The Iraq factor
"I'm a glass half-full person," the president said of his optimism. "I believe that if markets are given a chance they will adjust" in a way that won't endanger the economy, he said.
Although Bush insisted his economic policies have helped the economy grow and his tax cut let workers keep more of their own money, the president has been coping with weak public-approval ratings for his economic stewardship. Only 37 percent approve of his performance, close to a record low, a recent AP-Ipsos poll indicated.
"I do understand there is disquiet out there," Bush said.
On the one hand he blamed the war. "I happen to believe the war has clouded a lot of peoples' sense of optimism," Bush said. On the other hand, he noted that consumer confidence, as measured by the Conference Board, soared to a six-year high. He said there have been conflicting measures about Americans' moods and their feelings about the economy.
Looking ahead to the Democratic-controlled Congress' return in September, Bush made his case anew for keeping taxes low and restraining spending. He also urged policymakers to avoid protectionist trade measures.
Lawmakers and some Americans are losing patience with China, which they blame for the loss of millions of factory jobs, unfair trade competition and a flood of harmful food, toys and other products flowing into the United States. The U.S. trade deficit with China last year swelled to $233 billion, the highest with any single country.
The president acknowledged China "is on a lot of Americans' minds" these days. He said the administration is working to protect Americans from unsafe goods and deal with trade problems. Bush said one of his big concerns is the rampant piracy of U.S. movies, computer software and other intellectual property rights. The administration is also working to curb that and wants to make sure "people don't steal our ideas," he said.