U.S. President Obama and British Prime Minister Gordon Brown said Tuesday that the global economy would recover from the recent sharp downturn but that it would require a common effort to combat protectionist impulses, coordinate economic stimulus efforts and update antiquated regulatory structures. Meeting in the Oval Office on Tuesday, the two leaders added that the "special relationship" between the United States and Great Britain would not only survive the economic turmoil but would be strengthened in the long term. Obama also dismissed worries spurred by the "day to day gyrations of the stock market," arguing that they were the byproduct of a perfect storm of losses generated by "lax regulation," "massive overleverage" and "huge systemic risks taken by [regulated and] unregulated institutions." Those losses, Obama said, were now working their way through the system. "There's going to be a natural reaction," the president noted. "What you're now seeing is [that] profit and earning ratios are getting to the point ... where buying stocks is a good deal if you have a long-term perspective." Obama added that although businesses were starting to see new hiring potential as the $787 billion stimulus package takes hold, the recovery would not happen overnight. "We dug a very deep hole for ourselves," he said. The recovery will be "full of fits and starts," though both the American and the world economy will eventually be "better off for it." The president and the prime minister agreed that the Group of 20 countries needed to more effectively coordinate their economic stimulus plans. The subject is certain to dominate a planned meeting of the G-20 nations in London in April, Associated Press reported. --MORE
