Bush and economy: In control or in denial?

By Matt Spetalnick - Analysis

WASHINGTON (Reuters) - As a steady drumbeat of alarming economic news raises the specter of global financial meltdown in the twilight of his final term, U.S. President George W. Bush is doing his best to avoid even uttering the word "recession."

"A lot of uncertainty," he said as he soft-pedaled the economic situation last month. "A rough patch," he called it as the crisis deepened last Friday. "Challenging times," he acknowledged on Monday.

His penchant for understatement in the face of what some on Wall Street see as the worst threat to the world financial system since the Great Depression has again underscored questions about his ability to lead through a major crisis.

Some critics have accused him of being in a state of denial over the severity of the problem, which started last year with an imploding U.S. housing market and quickly spread to credit markets and the broader U.S. and global economy.

"The laissez faire attitude -- don't be involved attitude -- towards the housing crisis is what's caused this," Sen. Chuck Schumer, a New York Democrat, told CNBC, saying he hoped Bush would take it as a "wake-up" call.

Not since Hurricane Katrina devastated New Orleans and other parts of the U.S. Gulf Coast in 2005 has Bush faced so much criticism of a too-little, too-late government response in a national time of need.

The latest shock waves came on Sunday when the U.S. Federal Reserve announced a series of emergency measures in a bid to reverse a rising tide of panic in financial markets.

It backed JPMorgan Chase & Co's deal to buy stricken investment banking firm Bear Stearns at a fire-sale price while expanding lending to securities firms for the first time since the Great Depression in the 1930s.