President George W Bush has invited Democratic presidential nominee Barack Obama and Republican candidate John McCain to the White House to meet congressional leaders for talks on Wall Street’s financial crisis.
Then, in a televised address aimed at persuading the American public to accept a $700bn (474 billion euro) bail-out, he warned of financial meltdown.
“The government’s top economic experts warn that without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold,” he said.
“More banks could fail including some in your community, the stock-market would drop even more which would reduce the value of your retirement account. The value of your home could plummet, foreclosures would rise dramatically, and if you own a business or a farm you would find it harder and more expensive to get credit. More businesses would close their doors and millions of Americans could lose their jobs.”
President Bush made it clear the bail-out plan was essential to stave-off an impending financial disaster even though it went against all his natural instincts.
“With the situation becoming more precarious by the day, I faced a choice, to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all.
“I’m a strong believer of free enterprise so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances I would have followed this course, but these are not normal circumstances. The market is not functioning properly.”
The unprecedented bail-out has been met with scepticism and anger by legislators who say the proposal should not just be rubber-stamped. But they have also avoided opposing the deal for fear of making market-matters worse.