Bush aims to ease economic worries

US president Bush attempted to ease America's fears over the economy today in a set-piece speech that was short on specifics.

Eager to show that he felt people's pain, the president scrapped a political fund-raising trip to tell the country his administration was working feverishly to calm turmoil in the financial markets.

"The American people are concerned about the situation in our financial markets and our economy," Mr Bush said. "And I share their concerns."

The tumult in financial markets and the meltdown of corporate giants have shaken people's faith in the economy and their own retirement savings.

Wall Street fears there are more significant financial companies to fall, which would have a spillover effect within the United States and on world markets.

In brief formal remarks outside the Oval Office, Mr Bush sought to show that the administration is moving swiftly and aggressively by taking "extraordinary measures".

The White House said those measures, a series of loans and takeovers, will help protect the broader economy and therefore everyday life.

But the president used language that resonated more with market analysts than the public.

As he put it: "The American people can be sure we will continue to act to strengthen and stabilise our financial markets and improve investor confidence."

Mr Bush did not specify what those steps might be. White House press secretary Dana Perino said she could not comment on them, either.

"I can't tell you where this ends. I wish that I could. But we will take any necessary steps to deal with this in the days that follow," she said.

The president planned to meet Treasury Secretary Henry Paulson later and stay in regular touch with other economic advisers.

At the start of this week, the Federal Reserve rescued American International Group, an insurance giant, from bankruptcy by granting an emergency US$85bn (€124bn) loan. In the historic bailout, the government gets almost an 80% stake in the company.

Then yesterday the Securities and Exchange Commission tightened rules on short selling, the practice of betting that a stock will fall.

And today the Federal Reserve pumped $55m (€38.1m) in temporary reserves into the system after co-ordinated action with the central banks of other nations. Both moves were designed to prevent credit from drying up and sending the broader economy into virtual paralysis.

Earlier this month, the administration took over mortgage giants Fannie Mae and Freddie Mac. The two struggling companies, which were created by Congress to help people afford home loans, account for about $5 trillion dollars (€3.47 trillion) in home mortgages, about half the nation's total.

Mr Bush cited all these steps and promised that the "markets are adjusting."

The trouble facing the markets - Mr Bush called them serious challenges - have put the White House into crisis mode.

But Mr Bush has behaved very differently than in previous crises, such as around the start of the Iraq war, of after Hurricane Katrina hit in 2005 or last month's invasion by Russia of Georgia. In those cases, Mr Bush would talk nearly every day on the issue. This week, he has kept a lower profile.

His remarks today were his first since Monday. And he has spurned every attempt by reporters to ask questions about the developments, including again today. As he finished his very brief statement and turned to walk back into the Oval Office, a reporter asked if he believed the economy was still sound. The president kept walking.

Despite Mr Bush's public stance, the government has taken more and more extensive actions than in decades.

A private business group reported today that the economy's health deteriorated for the second consecutive month in August as building applications dropped and unemployment claims rose.

Oil prices were rising again as investors eyed US financial turmoil. Employers are cutting staff. New applications for unemployment benefits are up, partly due to Hurricane Gustav.