THE financial industry is in convulsions and US President George W. Bush has kept a low profile, delegating the heavy lifting to his key advisers. But unlike the lambasting Bush got for appearing uninvolved when Hurricane Katrina devastated the US Gulf Coast in 2005, this time observers are praising him for taking the right approach to the crisis. Still, critics argue that Bush is dealing with a storm at least partly of his own making, thanks to the administration's deregulatory policies. But with the turmoil now unfolding, observers said the president's tactic of delegating to Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke, and staying out of the limelight, was correct given the complex issues at stake and the risk of spooking the markets. “As large as they are, financial issues are still largely technical in nature and it is appropriate that they are being handled directly by Secretary Paulson and Fed Chairman Bernanke,” said Robert Litan, an economics senior fellow at the Brookings Institution. “Paulson is under enormous time pressure and it is also appropriate that he appear publicly only when it is important to do so,” he said. There is precedent for such an approach. During the financial crisis that erupted in Asia in 1997 and spread to Russia and Latin America, then President Bill Clinton delegated the task of fixing it to his Treasury Secretary Robert Rubin. When Bush entered the White House nearly eight years ago, he was seen as the CEO president -- setting the policy agenda and then delegating the details. That approach has been highlighted by his handling of the Lehman Brothers Holdings Inc's implosion, and the rescue of insurer American International Group. Paulson, lured away two years ago from the lucrative top job at Goldman Sachs to be Treasury secretary, has been dispatched to fix the mess that sprang from a home mortgage crisis, sparked a credit crunch and sent global markets tumbling. As the economy has seesawed over the last year, Bush has acknowledged that the country is going through a “rough patch” but he has insisted that the long-term US economic fundamentals are strong. “He (Bush) is not ... the dominant figure,” said Stephen Hess, a presidential scholar and professor at George Washington University. “One can say that that's the way he runs his government anyway, through this type of delegation.” Bush is the first US president with a master's degree in business, and he has experience in the business world -- having worked in the oil industry and owned a baseball team -- but not in financial institutions. “Unless you have practical work experience at a financial institution, it's hard to fully grasp what's going on right now,” said Gregory Brown, an associate professor at the University of North Carolina's Kenan-Flagler Business School. As the Lehman and AIG crises unfolded, Bush and White House officials have been particularly tight-lipped, in part to avoid jolting the markets but also letting the experts who have been in the trenches at the Treasury or Federal Reserve talk. Bush made brief remarks on Monday about the uncertainty after Lehman Brothers Holdings Inc filed for bankruptcy, telling Americans that the short-term adjustments in the markets were painful but the markets in the long term were “flexible and resilient.” Late on Wednesday, the White House announced that Bush had canceled a trip to Alabama and Florida that had been scheduled for Thursday to stay in Washington and focus on the financial crisis. “I would say this president and probably most other presidents, given their lack of expertise in financial markets in particular, should leave it to the people that are more knowledgeable about these things to make comment,” said Brown. Despite little public activity, the White House has said Bush is talking with his team regularly. He had a call with Paulson from Air Force One on his way to Texas on Tuesday to survey damage from Hurricane Ike. When Bush returned to the White House, he met with Paulson and Bernanke where he agreed with their recommendation to bail out AIG, offering up to $85 billion in loans in exchange for a 79.9 percent stake. He had planned to talk to reporters after that meeting, but his staff canceled that to avoid ruffling the markets further. “I will update you as soon as possible as to when you would hear from the president on the economy again,” White House spokeswoman Dana Perino said. Both men hoping to win the Nov. 4 presidential election and succeed Bush, Republican John McCain and Democrat Barack Obama, have outlined ideas on how to fix the mess and have surrounded themselves with key finance experts. Obama tapped former Treasury secretaries Rubin and Lawrence Summers while McCain has former Hewlett Packard chief executive Carly Fiorina and the former director of the Congressional Budget Office Douglas Holtz-Eakin. Fiorina touched off a firestorm on Tuesday when she said none of candidates running for president or vice president were qualified to run a major corporation -- but she may have done them a favor by effectively distancing them from Bush. Litan said the job of president is similar to that of a CEO but the challenges they face are very different even though they both share the same objective of growth -- economic and profits. “There are also many other objectives a president and elected officials must pursue: fairness, national security, protection of individual rights, and so on,” Litan said. “The ‘national CEO job' is thus very different from and more complex than the CEO of even the largest of companies.” – Reuters __
