Bush Defends Rescue Plan

President Bush yesterday mounted a vigorous defense of his efforts to cope with the global financial meltdown, saying that the move to purchase stock in major U.S. banks was a "last resort" to shore up collapsing credit markets.

Bush, whose administration has come under growing criticism for its uneven response to the crisis, also urged Americans to be patient and allow time for the government's market interventions to take hold.

"The federal government has responded to this crisis with systematic and aggressive measures to protect the financial security of the American people," Bush said in a speech at the U.S. Chamber of Commerce in Washington. He added later: "It took a while for the credit system to freeze up; it will take a while for the credit system to thaw."

The 20-minute speech marked Bush's lengthiest and most detailed public comments on the crisis since Sept. 24, when he delivered a prime-time address urging passage of a $700 billion federal bailout plan that is now being implemented. Bush and his senior aides have faced criticism from lawmakers and financial experts over their handling of the crisis, particularly the decision to buy stakes in nine major banks after the administration said it had no intention of doing so.

Treasury Secretary Henry M. Paulson Jr. and other key economic aides have taken the lead in organizing the administration's response to the crisis, with Bush keeping a relatively low profile. The White House said yesterday's speech was aimed in part at explaining the government's actions to the wider public.

Appearing forceful and at times defensive, Bush said the roots of the crisis go back "more than a decade," effectively laying part of the blame for the crisis on his Democratic predecessor, Bill Clinton. Bush also stressed that the move to invest taxpayer money in banks is temporary and will not lead to a lasting government investment in private markets.

"I know many Americans have reservations about the government's approach," Bush said. "As a strong believer in free markets, I would oppose such measures under ordinary circumstances. But these are not ordinary circumstances. We took this measure as a last resort."

Much of the address appeared aimed at fiscal conservatives, who have bristled at a series of rescues and other steps that amount to the most extensive government intervention in the markets since the Great Depression.

Bush said he was forced to make such moves because "the hole in our financial system would have grown larger" if he did not. He also noted that the U.S. government has a history of limited interventions in the financial system, most recently during the savings and loan crisis of the late 1980s.

"In every case, the government relinquished its ownership stakes after the crisis ended," Bush said. "And we will do so again. The government intervention is not a government takeover."

Bush also said the country should "never lose sight of the enormous benefits delivered by the free-enterprise system," calling it "the greatest system ever devised." World leaders such as Russian Prime Minister Vladimir Putin and Venezuelan President Hugo Chávez have characterized the crisis as reflecting the limitations of U.S.-style capitalism.

The economic crisis has broadened at a time when Bush's popularity has plunged to the lowest levels of his presidency. Bush has also come under increasingly sharp attacks from presidential candidates Sen. Barack Obama (D-Ill.) and Sen. John McCain (R-Ariz.), who declared this week that he was "not George Bush."

Bush's public statements on the economy have had little apparent impact on financial markets. His remarks yesterday came before U.S. markets opened but after an announcement that the pace of new home construction dropped in September to its lowest level since 1991.

"It's background noise, really," said Ed Yardeni, an investment strategist. "It's cheerleading, and the only thing that is going to cheer people up is if these rescue plans start to work. Cheerleading doesn't work here anymore."

Joseph Brusuelas, chief U.S. economist at Merk Investments, called Bush's speech "a robust defense of democratic capitalism" that should have been delivered a year ago. But he said that only statements from Paulson, Federal Reserve Chairman Ben S. Bernanke and other top economic officials carry weight right now.

"It is unfortunate it doesn't matter," Brusuelas said. "He gave a good speech. It is too bad the public and the market weren't paying attention."

Staff writer Renae Merle contributed to this report.