Obama says US economy sound, reassures investors

By DARLENE SUPERVILLE, Associated Press Writer
March 15, 2009

WASHINGTON – President Barack Obama on Saturday downplayed divisions between the U.S. and Europe over how to tackle the world's financial crisis and said China should have "absolute confidence" that its sizable investments in the United States are safe.

In a conversation focused heavily on the economy, Obama met in the Oval Office with Brazilian President Luiz Inacio Lula da Silva. It was the latest in a series of talks the president has had with his counterparts around the world before a pair of international meetings where the economic crisis will dominate.

Both leaders will attend the Group of 20 countries summit in London on April 2, and the Summit of the Americas in Trinidad in mid-April.

Obama said the notion that the U.S. and Europe are already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, is a "phony debate."

"I can't be clearer in saying that there are no sides," Obama told reporters after the meeting. He said a full range of approaches, including stimulus spending such as his own recently enacted $787 billion package, and financial regulation, are needed to help revive the global economy.
Financial regulation "is front and center" among the issues he wants to deal with, he said.
"In my mind, at least, there is no conflict or contradiction between the positions of the G-20 countries and how we're going to be moving forward," Obama said, adding that differences in details were being worked out. "I expect to have a productive meeting."

Treasury Secretary Timothy Geithner, who had pushed for Europe to match Washington's $787 billion package of spending and tax cuts, said Saturday that there was "broad consensus globally on the need to act aggressively to restore growth to the global economy. Geithner spoke in London at a prepratory meeting of finance officials from the rich and developing G-20 countries.
At home, Obama also sought to assure China that its investments in the U.S. are safe.

Chinese Premier Wen Jiabao had said Friday he was concerned about the safety of the estimated $1 trillion his country has invested in U.S. government debt. China is Washington's biggest foreign creditor, and Obama's administration is counting on the Chinese to help pay for the $787 billion economic stimulus package by buying U.S. bonds.

"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."

Wen — and other investors — needn't worry, Obama said.

"There's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the United States," Obama said. "I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary.

"I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States," he added.

Vice President Joe Biden on Saturday said he believed there were signs that the public's confidence is growing in the administration's ability to tackle the financial crisis. He credited the "Obama factor."

"There is no doubt in our minds and there is no doubt in the president's mind that in fact we will overcome this. We will climb out of this hole," Biden told The Associated Press in a phone interview. "It just takes some real perseverence and you've got to have a guy as gutsy as the president who's willing to make some really tough decisions."

Biden, who was in Little Rock on Saturday night to help Sen. Blanche Lincoln kick off her re-election bid, said he believed the economy was showing some signs of hope.

"Consumer confidence is slightly up. The market is slightly up," Biden said. "It'll go down again, but the people are beginning to figure out that the president's got a plan and he believes we can work our way through this."

During his appearance at the White House, Silva said the crisis gives world leaders an "extraordinary opportunity" to demonstrate to their people that they are capable of handling major issues. He said it was critically important to create jobs, create incomes and boost consumption.

"We are in a large ship and water is leaking," Silva said, speaking through a translator. "Now is the time to fix the leaking and make the economy go back to the tracks."

Obama discussed the global economic crisis on Friday during telephone calls to his counterparts in Argentina, Indonesia, the Philippines and Saudi Arabia. He also has discussed the issue during recent Oval Office meetings with Japanese Prime Minister Taro Aso, British Prime Minister Gordon Brown and Chinese Foreign Minister Yang Jiechi.
___
Associated Press writer Andrew DeMillo in Little Rock, Ark., contributed to this report.
___
On the Net:
White House: http://us.rd.yahoo.com/dailynews/ap/ap_on_go_pr_wh/storytext/obama_economy/31305585/SIG=10r285jni;_ylt=Al86FsEx1p5WbCt7VMGr_f8Gw_IE;_ylu=X3oDMTE4dnE4NWdpBHBvcwMxBHNlYwN5bl9zdG9yeV9ib2R5BHNsawNodHRwd3d3d2hpdGU-/*http://www.whitehouse.gov