With American joblessness at a historic high, foreclosures up 25 percent, and an E.U.-wide recession, Pres. George Bush addressed fellow world leaders at the Manhattan Institute.
“While reforms in the financial sector are essential, the long-term solution to today’s problems is sustained economic growth,” he told an audience in New York. “And the surest path to that growth is free markets and free people.”
“History has shown that the greater threat to economic prosperity is not too little government involvement in the market," he added, "but too much.”
The address came on the same day the Labor Department reported that jobless claims last week increased by 32,000 to the a seasonally adjusted 516,000. The last time there were that many unemployed was in the wake of 9/11, when 517,000 jobless claims were reported seven years ago, and it's only the second time since 1992 that claims have topped 500,000.
Thursday's report likely "reflects a genuine acceleration in the pace of layoffs," Ian Shepherdson, chief U.S. economist for consulting firm High Frequency Economics, wrote in a note to clients.
Earlier in the day, the Paris-based Organization for Economic Cooperation and Development announced that the world's developed economies have slid into recession and that 2009 promises to be even worse.
The OECD, which monitors 30 democracies with market economies, aid the U.S. economy would contract by 0.9 percent, Japan's by 0.1 percent and the Euro area by 0.5 percent.
Sadly, the $700 billion bailout approved by Congress last month has performed no magic. After forcing some of the nation's largest banks to take taxpayer dollars in an effort to loosen up the credit markets, the Treasury Department is facing the sad reality that the plan isn't working.
The plan now is to seed a new loan facility with $50 billion to help companies that issue credit cards, student loans and automobile financing, reported the New York Times.
As the government does everything it can to keep lending institutions afloat, another 84,000 homes were repossessed in October, a jump of 25 percent over October 2007.