Bush Declares Capitalism Accomplished!

From defender of the free world to defender of the free markets, President Bush on Thursday delivered what the New York Times described as an "impassioned defense" of capitalism, declaring "the American system is still 'the engine of social mobility.' " This was not merely a presidential road trip to revive slumping markets—though it helped; The Dow, in a wild day, rose more than 6 percent to crest above 8,800, the Wall Street Journal writes. No, Bush's words were carefully chosen to send a message to any weak-kneed foreign head of state who may want to use the financial meltdown to introduce at this weekend's G20 summit a new layer of red tape to rein in rogue capitalists. Once the summit begins, however, the lame-duck president may be forced to take a back seat. “He’s going to be much more the host and much less the chairman than he realizes,” Adam S. Posen, who advises foreign governments on economic coordination, said of Bush to the NYT. “He’s going to be providing the snacks and the venue and making sure everybody’s comfortable, but he is not going to be driving the agenda; that’s the reality. The agenda-setting is with Gordon Brown and Nicolas Sarkozy and Hu Jintao.”

There certainly will be a lot to talk about at this weekend's summit as the world's top economies face increasingly worrying problems back home, the Financial Times writes. Germany announced yesterday it has officially sunk into a recession. China revealed its industrial growth hit a seven-year low, and monthly unemployment benefit claims in the United States are at their highest level since 2001.

With each passing day, automakers' fates look increasingly grim. Their hopes of qualifying for part of the Treasury's $700 billion bailout fund is coming up empty. Republicans in the lame-duck Congress represent a strong enough minority to block any taxpayer dollars going to the Big Three before President-elect Barack Obama is sworn into office in January, BusinessWeek figures. Democratic congressional leaders acknowledged this also, saying Detroit is probably not going to get the emergency aid request before 2009, the NYT writes. January may be too late. One of the Big Three is bound to flame out by then, analysts tell the NYT.

Bad news this morning for bank jobs on both sides of the pond. The WSJ reports that Citi is set to start a cull of more than 10,000 positions in its investment bank and other divisions throughout the world, and will "slash ... budgets for employee compensation by at least 25%." At the same time, the U.K.-based RBS is set to cut 3,000 jobs in its global-banking and markets work force, the BBC reports. The bank, which employees 170,000 people worldwide, is paying the price for "too much exposure to the sub-prime market in the United States and [overpaying] for the giant Dutch bank ABN Amro at the height of the boom." Things could get far worse for Citi, says the NYT, now that "loans that the financial giant made to consumers in good times are going bad in growing numbers." The bank could be forced to lay off 25 percent of its work force over the next year.

While President Bush was celebrating unfettered free-market forces on Wall Street, five of the nation's top hedge-fund managers were extolling to Congress the benefits of tighter regulation. The five, Philip A. Falcone, Kenneth C. Griffin, John A. Paulson, James Simons, and George Soros—"who were paid an average of more than $1 billion last year," notes the Washington Post—told lawmakers they would "support new rules that would require their industry, controlling nearly $2 trillion, to disclose more of its secrets," writes the NYT. Nevertheless, all of the billionaires "emphasised that they were not culpable in the financial meltdown," adds the Financial Times.

Finally, MGM Mirage CEO Terry Lanni appears to have been bluffing. The company announced Thursday that Lanni is stepping down after it emerged he does not have a master of business administration degree from the University of Southern California, as his company bio says, the Los Angeles Times writes. The 65-year-old may not be going out in style, but he's leaving behind an industry in crisis and a company in desperate shape. Shares of MGM Mirage are down 87 percent this year.