Setting a tone for an economic summit on his turf, US President George W. Bush plans to tell world leaders that reforming financial markets alone won’t help if they abandon the free market and turn cold over trade.
The president was to sell that message yesterday from the heart of Wall Street. At the venerable Federal Hall, home of the first Congress and within shouting distance of the New York Stock Exchange, Bush was to frame expectations for the high-level gathering he is hosting in Washington this weekend.
Bush is also in New York to address a UN conference on religious tolerance and to meet with King Abdullah of Saudi Arabia.
But the broader focus is on the deteriorating economy, which has millions of people grappling to keep their jobs, their homes and their hopes. The most severe economic downturn in decades threatens to end Bush’s tenure on the most sour of notes before president-elect Barack Obama takes over.
To rally a more coordinated world response, Bush is convening representatives of some of the world’s biggest industrial democracies, emerging countries and international bodies in Washington.
He will host the leaders at a White House dinner today and review causes and solutions for the financial mess tomorrow.
The president’s aides pledge the summit will produce thorough discussions and concrete results but warn there will be no sudden fixes. The summit is just the first in a series intended to deal with the enormity of the economic meltdown, and the next meeting won’t be until after Bush leaves office on Jan. 20.
The top agenda item is the tricky matter of how to overhaul regulatory oversight of financial markets around the world.
Yet, Bush will also emphasize that reforms, while essential, won’t work unless they are accompanied by open trade and competition.
“Protectionist rhetoric about walling off markets or companies does not help stabilize markets,” Dan Price, Bush’s deputy national security adviser for international economic affairs, said in a preview session with reporters on Wednesday. “It in fact leads to greater uncertainty.”
Heading into the meeting, Europeans are seen as looking more urgently for broad changes and tighter universal banking regulations than the US.
Price rejected suggestions of discord and said it was “grossly inaccurate” to suggest the US was not taking a firm lead in reform.
“We are no less committed to fixing the problems, and addressing regulatory and other deficiencies, than any other leader,” he said.
In the short term, the world leaders are expected to focus on ways to stimulate economic consumption, free up credit and ensure that international financial institutions have the money to respond.
Goals include making financial markets more open and less risky for millions of investors.
Some critics have blamed lax oversight and failures by regulators in the US and elsewhere to detect problems for the current meltdown. It began with the collapse of the US housing market, froze up credit lines and the broader financial sector and rippled overseas.
In the US alone, the nation’s jobless ranks zoomed past 10 million last month, the most in a quarter-century, as 240,000 more people lost jobs. In the latest dire sign, US automakers say they are struggling to survive.
Obama is steering clear of the summit but will have a couple of representatives available to meet with leaders on his behalf.
Besides the US, the countries represented will be Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey. Those countries and the EU make up the G20.
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