Bush: No Tax Cut for Corporations

"Asked about collapsing housing markets, and the risk of them declining further, Mr. Bush said: 'In a way it's a necessary reaction to a flood of liquidity that came into the market in the past couple years.' That was financial jargon referring to the past several years of easy money, some of it from overseas, at low interest rates.

"Mr. Bush said that as a result of the deep pools of money available, 'housing got really hot' and that a decline was inevitable. He added that 'if the market functions normally' it will lead to a soft landing. 'That's kind of what it looks like so far,' he contended."

Deborah Solomon writes in the Wall Street Journal (subscription required): "President Bush shrugged off concerns about stock-market turmoil, saying Wall Street is adjusting to a flood of liquidity and is beginning to 'readjust its assessment of risk.'

"Mr. Bush, seeking to reassure jittery investors who have watched the market gyrate wildly, said the volatility is natural but the economy is strong and there is enough liquidity to absorb the ups and downs.

"'If markets are given a chance, they will adjust in a way that is a necessary reaction to a flood of liquidity that came into the market over the last couple of years,' the president said during a briefing with reporters at the Treasury Department. . . .

"Mr. Bush dismissed recent polls showing that U.S. citizens are feeling sour about the economy. A recent Wall Street Journal/NBC News poll showed that more than two-thirds of U.S. citizens believe the U.S. economy is either in recession now or will be in the next year.

"He said he understands 'there's disquiet out there' but attributed much of the economic anxiety to concerns about the war in Iraq. 'I happen to believe the war has clouded a lot of peoples' sense of optimism.'"

Political Points

Krishna Guha and Andrew Ward write in the Financial Times that Bush "sought to draw broad political dividing lines on tax, public spending and free trade, accusing Democrats of plotting the biggest tax increase in US history, endangering the solid economic growth achieved over the past four years. . . .

"The remarks appeared aimed at reclaiming the initiative in the debate over economic policy at a time when Democrats are seeking to exploit widespread pessimism among middle-class Americans about the direction of the US economy.

"'I will use the veto to keep your taxes low and keep federal spending under control,' he said in a public statement."

Bush and Cavuto

Bush also swatted softballs from Fox News host Neil Cavuto yesterday. Here's the video. Cavuto starts off: "I notice in the heat, you just don't sweat."

Iran Watch

Here's a sobering story.