Remarks to the Economic Club of New York and a question-and-answer session in New York City

Weekly Compilation of Presidential Documents, March 17, 2008

March 14, 2008

The President. Glenn, thanks for the kind introduction. Thanks for giving me a chance to speak to the Economic Club of New York. It seems like I showed up in a interesting moment--[laughter]--during an interesting time. I appreciate the fact that you've assembled to give me a chance to just share some ideas with you. I also appreciate the fact that as leaders of the business and financial community, you've helped make this city a great place, and you've helped make our country really, in many ways, the economic envy of the world.

First of all, in a free market, there's going to be good times and bad times. That's how markets work. There will be ups and downs. And after 52 consecutive months of job growth, which is a record, our economy obviously is going through a tough time. It's going through a tough time in the housing market, and it's going through a tough time in the financial markets.

And I want to spend a little time talking about that. But I want to remind you, this is not the first time since I've been the President that we have faced economic challenges. We inherited a recession. And then there was the attacks of September the 11th, 2001, which many of you saw firsthand, and you know full well how that affected our economy. And then we had corporate scandals. And I made the difficult decisions to confront the terrorists and extremists in two major fronts, Afghanistan and Iraq. And then we had devastating natural disasters. And the interesting thing: Every time, this economy has bounced back better and stronger than before.

So I'm coming to you as an optimistic fellow. I've seen what happens when America deals with difficulty. I believe that we're a resilient economy, and I believe that the ingenuity and resolve of the American people is what helps us deal with these issues. And it's going to happen again.

Our job in Washington is to foster enterprise and ingenuity, so we can ensure our economy is flexible enough to adjust to adversity and strong enough to attract capital. And the challenge is not to do anything foolish in the meantime. In the long run, I'm confident that our economy will continue to grow because the foundation is solid.

Unemployment is low at 4.8 percent. Wages have risen; productivity has been strong. Exports are at an alltime high, and the Federal deficit as a percentage of our total economy is well below the historic average. But as Glenn mentioned, these are tough times. Growth fell to 0.6 percent in the fourth quarter of last year; it's clearly slow. The economy shed more than 80,000 jobs in 2 months. Prices are up at the gas pump and in the supermarket. Housing values are down. Hardworking Americans are concerned--they're concerned about their families, and they're concerned about making their bills.

Fortunately, we recognized the slowdown early and took action. And it was decisive action in the form of policies that will spur growth. We worked with the Congress. I know that may sound incongruous to you, but I do congratulate the Speaker and Leader Reid, as well as Boehner and Mitch McConnell and Secretary Paulson, for anticipating a problem and passing a robust package quickly.

This package is temporary, and it has two key elements. First, the growth package provides incentives for businesses to make investments in new equipment this year. As more businesses take advantage, investment will pick up, and then job creation will follow. The purpose was to stimulate investment. And the signal is clear, once I signed the bill, the signal to--folks in businesses large and small know that there's some certainty in the Tax Code for the remainder of this year.

Secondly, the package will provide tax rebates to more than 130 million households. And the purpose is to boost consumer spending. The purpose is to try to offset the loss of wealth if the value of your home has gone down. The purpose is to buoy the consumer.

The rebates haven't been put in the mail yet. In other words, this aspect of the plan hasn't taken to effect. There's a lot of Americans who've heard about the plan; a lot of them are a little skeptical about this "cheek's in the mail" stuff that the Federal Government talks about. [Laughter] But it's coming, and those checks, the Secretary assures me, will be mailed by the second week of May.

And so what are the folks, the experts--guys like Hubbard--anticipate to happen? I'm not so sure he is one now, but the people that have told me that they expect this consumer spending to have an effect in the second quarter and a greater effect in the third quarter. That's what the experts say.

The Federal Reserve has taken action to bolster the economy. I respect Ben Bernanke. I think he's doing a good job under tough circumstances. The Fed has cut interest rates several times. And this week the Fed--and by the way, we also hold dear this notion of the Fed being independent from White House policy. They act independently from the politicians. And they should. It's good for our country to have that kind of independence.