25 Mar 2009

Economic recovery will happen, says Obama

7:05 pm on 25 March 2009

President Barack Obama says his administration is confronting the economic crisis on all fronts and seeing signs of progress as he sought to reassure recession-weary Americans about his recovery strategy.

"We will recover from this recession. But it will take time, it will take patience," he said on Tuesday in the opening statement of his second prime-time White House news conference since he he took office on 20 January.

Knocked off stride by public anger over hefty corporate bonuses and facing scepticism about his massive budget plan, Mr Obama moved to regain his political footing and refocus attention on his broader economic agenda.

He said his priorities are to create new jobs, revitalise the housing market and to get the banks to lend again.

The president made his case to the American people and pressed for coordinated action among the world's major economies. On Monday, he unveiled a trillion-dollar plan to soak up toxic bank assets at the root of the global financial meltdown.

Mr Obama took the podium after US stocks slid while investors paused to reassess the government's latest effort to clean up bank balance sheets. Initial euphoria over the plan had driven stocks sharply higher on Monday.

His news conference also gave him a chance to lay some groundwork a week before he makes his debut on the world stage with his first major presidential trip overseas.

Brushing aside suggestions the G20 summit of major economies in London on 2 April would find him at odds with Europeans, Mr Obama said he expected leaders to share common goals of boosting growth and updating outdated financial regulations while avoiding trade protectionism.

Mr Obama, who has vowed to repair America's image overseas after eight years under Republican predecessor George W Bush, said there was signs his policy changes were "restoring confidence" internationally in the US global leadership."

The Obama administration has recently cited glimmers of improvement in the devastated housing market, but most key economic indicators remain under extreme stress.

Furor over AIG bonuses

Mr Obama's high approval ratings have been tested amid a public backlash over payment of $US165 million in executive bonuses by American International Group after the insurance giant received $US180 billion in taxpayer bailout funds.

Mr Obama was forced to repeatedly condemn the AIG bonuses while trying to temper public outrage and fend off calls for Treasury Secretary Timothy Geithner's resignation for his handling of the affair.

The AIG furor distracted from Mr Obama's effort to convince Americans that his $US787 billion economic stimulus programme will jolt the economy out of recession and his record $US3.55 trillion budget for fiscal 2010 will be money well spent.