JEANNINE AVERSA
Associated Press
The government’s drastic economic rescue efforts will eventually pay off, President Bush insisted Friday, offering calming words to anxious Americans but no suggestion of a quick revival as Wall Street braced for another wild day.
- A d v e r t i s e m e n t
The economy didn’t falter overnight, “and it’s going to take a while for the credit system to thaw,” Bush said just before the markets opened, speaking across a park from the White House at the U.S. Chamber of Commerce building, a symbolic headquarters of American business.
Despite a flurry of radical actions by the Bush administration and the Federal Reserve, banks in the United States and abroad are still wary of lending money to each other and to their customers. The credit clog is depriving the wheezing U.S. economy of oxygen.
Financial and credit problems have dragged on for more than a year and took a dangerous turn for the worse last month. All the fallout threatens to plunge the U.S. economy – as well as the world economy – into a painful recession.
That has led to erratic trading on Wall Street, where the Dow Jones industrials have swung widely, slashing a trillion dollars of wealth from the markets one day, only to pile some of it back on the next. The Dow fell more than 200 points shortly after opening on Friday, then recovered slightly.
Before he spoke, there was more grim news: Home builders cut back sharply, dropping new-home construction to its slowest pace since January 1991, when the country was in a recession and going through a similar painful housing correction.
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