Remarks by the President on the Economy

Business Wire, Feb 1, 2008

KANSAS CITY, Mo. -- Hallmark Cards, Inc.

10:47 A.M. CST

THE PRESIDENT: Thank you, all. Thank you for letting me come by to say hello. A couple of observations -- one, you work for a fabulous company of caring people. I appreciate, Don, your hospitality. I am still trying to recover from the kindergarten experience. (Laughter.) I mean, you talk about sapping a person's energy. (Laughter.) But it was a fabulous experience.

I got to see Hallmark cards being made, and the fella kindly made me one that said, "For your daughters." It was sweet, but it just didn't have any warning in there about how to conduct myself for the upcoming wedding. (Laughter.)

I'm here in Kansas City for a couple reasons. One, I do want to spend a little time on the economy. I had breakfast this morning with entrepreneurs, small business owners; I want to find out what's on their mind. I'll tell you that there's a sense of optimism I was pleased to hear. People are confident about the future -- at least, these business owners were -- and they should be. Interest rates are low, inflation is low, productivity is high. But there are certainly some troubling signs. There are serious signs that the economy is weakening and that we got to do something about it.

Today we got such a sign when after 52 consecutive months of job creation, we lost 17,000 jobs. The unemployment rate went down, but nevertheless, a serious matter is that for the first time in 52 months that we didn't create jobs.

And so the question is what do we do about it? Does government have a responsibility and, if so, what is it? I do think government has a responsibility. I think government can take decisive action to help us deal with this period of uncertainty. One such action is to help people stay in their homes. We got some of our citizens purchased mortgages that they can't afford now. Hopefully the reason -- hopefully they didn't get deceived, and if they did, the government has a responsibility to take care of that. In other words, we don't want people buying a mortgage and the person who sold them the mortgage didn't fully disclose the reset inherent in a subprime note.

But we can help people stay in their homes by connecting the borrower with the mortgage industry. Now, what makes it difficult in this day and age is that when I bought a home, I sat down with the saving and loan officer -- and had I gotten in a financial bind, I would have gone back to that same officer and said, you own my note, help me refinance so I can stay in my home. Today, that financial institution probably doesn't own the note anymore. Somebody else owns the note, and therefore we're trying to make sure we connect the borrower with somebody in the mortgage industry that will help them refinance.

And that's why we started what's called the HOPE NOW Alliance. Security Paulson and Secretary Jackson are bringing people together from the private sector, and they couple that with an information campaign, so that people who have a subprime loan know how to refinance and can find somebody to help them refinance. It's been a complicated matter, but nevertheless we're very much engaged in helping people sort through what is definitely a difficult period in their life.

The government can help. The Federal Housing Administration has got the capacity to help refinance homes, and they need to expand the authority of the FHA to do it. And Congress needs to get that bill passed. I mean, this will be a positive step toward helping people stay in homes. And that's what we want to do. See, you notice, I'm not saying we're going to bail out the lenders -- we're going to help the individual person be able to keep their home. It's in the interest of the country we do that.

Secondly, there are bonding authorities, tax-exempt bonding authorities that are now used to help people buy new homes. States and local governments ought to be able to use that money to help people stay in the home they have. And that will be helpful as well. So here are some constructive measures that we can take. There's a cyclicality when it comes to housing interests -- housing industry. But in the meantime, or during this down cycle we want to help individual Americans.

Secondly, a concern is whether or not our consumers will lose confidence in our economy. You don't want that to happen at Hallmark -- you want the consumers to still buy your product on a regular basis. And one way to address that issue is to have a temporary, robust tax rebate. And that's what we're working on in Congress. You hear this discussion of a stimulus package -- well, a key component of that package is to give you some of your money back so you can spend it.

And the House of Representatives passed a good package. The administration worked with the House -- it may surprise you that Republicans and Democrats can actually get something done in a constructive fashion, but it happened in this case, for the good of the country. And now the Senate is debating the bill, and it's very important for the Senate to finish their work quickly because the sooner we can get money into our consumers' hands, the more likely it is, is that this economy will get back -- recover from this period of uncertainty.