Wednesday, November 26, 2008

Bush and Obama Tackle Economy Together

The coordination between Mr. Obama and Mr. Bush was taking place among aides, as well as in direct talks about the rescue plan for Citigroup and unresolved details of the overall Treasury bailout plan. The president said his successor would be informed of every “big decision” that was made, adding, “It’s important for the American people to know that there is close cooperation.”

To calm anxious markets, the Federal Reserve and the Treasury plan to announce a major lending program on Tuesday to jump-start frozen loan markets, administration officials said. The Treasury had signaled earlier this month that it was considering such an action for consumer loans, but the action to be announced will broaden the program to include business debt.

In effect, the program would create a government bank to finance hundreds of billions of dollars in commercial debt, like car loans, student loans and business leases. The Treasury is expected to contribute $10 billion to $20 billion in seed capital, which would come from the $700 billion originally provided to shore up the financial system. The Federal Reserve would lend the new entity as much as 20 times that amount.

For his part, Mr. Obama sought to assure Americans and foreign investors that he was seeking to fill any leadership vacuum, and said his economic advisers would begin working “today.” The advisers include Timothy F. Geithner, his choice for Treasury secretary.

The Standard & Poor’s 500 stock index rose 6.4 percent, and the Dow Jones industrials jumped 4.9 percent, reprising the Friday upswing.

As if to underscore the transfer of power now under way, Mr. Obama introduced his new economic team at a news conference here shortly after Mr. Bush made brief remarks outside the Treasury Department.

Read it all here.

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