Wall Street crisis deals new blow to Bush legacy

WASHINGTON Fri Sep 19, 2008 8:44am EDT

The ghost of Herbert Hoover in an illustration by Paul Szep. REUTERS/Paul Szep

The ghost of Herbert Hoover in an illustration by Paul Szep.

Credit: Reuters/Paul Szep

WASHINGTON (Reuters) - Mindful of his low approval ratings, President George W. Bush has sometimes likened himself to Harry Truman, an unpopular president when he left office and now admired for his handling of the Cold War.

But in the grips of what some experts are calling a once-in-a-century financial meltdown, Bush could soon find himself struggling to avoid comparisons to a very different president -- Herbert Hoover, who presided at the start of the Great Depression.

With Wall Street's upheaval spreading fear among investors worldwide, analysts agree there is plenty of blame to go around -- not only for the current administration, the Federal Reserve and Congress but for their predecessors as well -- for letting the situation deteriorate to this point.

Yet, since a president must ultimately bear the weight of history's judgment, Bush is seeing another piece of his legacy slip away.

"The question is, on whose watch did this whole mess happen?" said Terry Madonna, a political historian at Franklin and Marshall College in Pennsylvania. "Where was the financial regulation? Where was the oversight? Where were you?"

This crisis is the last thing Bush needed in the twilight of his presidency when his Republican party is battling to keep the White House in the November 4 election.

The U.S. economy has been on the ropes for months, bordering on recession, and despite security gains in Iraq, the war remains deeply unpopular with the American public.

Bush's approval ratings of around 30 percent in opinion polls are among the worst of any modern U.S. president near the end of his term.

Surging energy prices, growing joblessness and big federal deficits have also helped tarnish the public perception of his tenure.

TREADING CAUTIOUSLY

Despite deep investor anxiety, no one is calling this the beginning of a depression like the one ushered in by the stock market crash of 1929.

But Bush is treading cautiously in the face of growing financial turmoil while his loyalists seek to deflect criticism that his own deregulatory zeal has contributed heavily to it.

The White House insists that Bush is deeply engaged, though he has delegated direct management of the crisis to his top economic advisers.

He scrapped a political fundraising trip on Thursday and instead hunkered down in the White House where he made a brief appearance -- two minutes and four seconds -- to assure Americans he was prepared to go beyond the "extraordinary measures" already taken to calm the situation.

It was, however, the first time Bush had commented in public on the matter since Monday.

He had even gone as far as canceling a previously scheduled statement on Tuesday, perhaps out of concern that he would have only spooked the markets further.

All week, Bush has ignored reporters' shouted questions about related developments, including the government-engineered rescue of insurance giant American International Group, the latest in a series of unprecedented moves that failed to stabilize see-sawing markets.

He has not held a full-scale news conference since July 15 -- an omission White House spokeswoman Dana Perino said was out of concern that reporters would try to draw him into the presidential campaign battle between Democrat Barack Obama and Republican John McCain.

'KATRINA-ESQUE'

"Bush's response to the financial crisis has been Katrina-esque," said Douglas Brinkley, a political scientist at Rice University in Houston, referring to the widespread perception the president was out of touch with the situation when Hurricane Katrina devastated New Orleans in 2005.

"It's a very fast world and we look for a president to step out in public and get ahead of events. Instead we get delays and wishful thinking," said Brinkley, author of "The Great Deluge," a book critical of the administration's handling of Katrina.

Bush spent Monday heavily involved with a state visit by Ghana's president and much of Tuesday touring parts of Texas hit by Hurricane Ike.

But some have praised Bush for keeping a relatively low profile and leaving the heavy lifting to experts like Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.

For its part, the White House has insisted that Bush is in regular contact with his team and is on top of all key financial developments.

"He does always keep an eye on the markets and he wants to keep updated on that throughout the day, every day," Perino told reporters.

(Editing by Eric Walsh)

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