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Obama Names Volcker to Head New Economic Advisory Board

By Michael A. Fletcher
President-elect Barack Obama today named former Federal Reserve chairman Paul Volcker to head a new advisory panel designed to help guide the administration's efforts to stabilize the nation's struggling financial system and create millions of new jobs.
Speaking at his third news conference in three days, Obama said the new President's Economic Recovery Advisory Board will be tasked with bringing fresh thinking and "vigorous oversight" to the administration's efforts to jumpstart and reshape the nation's economy.

"The reality is that sometimes policymaking in Washington can become too insular," Obama said. "The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking -- and those who serve in Washington don't always have a ground-level sense of which programs and policies are working for people, and which aren't."

Obama has said that soon after he takes office he wants to enact a massive economic recovery plan that will save or create 2.5 million jobs, through a combination of tax breaks for the middle class and a huge infusion of government spending on a wide range of infrastructure projects that he hopes will lay the foundation for future economic growth.
He said the new advisory board will help police that effort. The board will be headed by Volcker, 81, who was appointed chairman of the Federal Reserve by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan. He served as one of Obama's closest economic advisers during the presidential campaign.

During his tenure as Fed chairman, Volcker was confronted with an economic crisis marked by high inflation and stagnant growth, which he battled by raising interest rates, which eventually arrested the problem but not before the nation endured a deep recession.

Obama said he is modeling the advisory board -- which he said will eventually include a broad cross section of economic stakeholders and researchers, from union members to business owners and university researchers -- on the President's Foreign Intelligence Advisory Board, created by President Dwight D. Eisenhower.

"The board will report regularly to me, Vice President-elect Biden and our economic team as we seek to jump-start economic growth," Obama said.

The board's top staff official will be Austan Goolsbee, a University of Chicago economist who has advised Obama since his 2004 campaign for the U.S. Senate. Obama also named Goolsbee to his three-member Council of Economic Advisers, which will be headed by Christina Romer, a University of California at Berkeley economist.

Posted at 11:39 AM ET on Nov 26, 2008  | Category:  Economy
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Not enough credit is being given to the high gas prices this past year and it's serious damage on our economy and society. That one factor alone has caused serious stress in both individuals and businesses. A record number of homes and jobs have been lost as a direct result. And, while we are doing the happy dance around the lower prices at the pumps OPEC is announcing cuts to manipulate the prices upward again. We must get on with becoming energy independent.We can't take another year like this past. There is a wonderful new book out about the energy crisis and what it would take for America to become energy independent. It covers every aspect of oil, what it's uses are besides gasoline, our reserves, our depletion of it. Every type of alternative energy is covered and it's potential to replace oil. He even has proposed legislative agenda's that would be necessary to implement these changes along with time frames. This book is profoundly informative and our country needs to become more informed and move forward with becoming energy independent. Green technology would not only provide clean cheap energy it would create millions of badly needed new jobs. The Book is called The Manhattan Project of 2009 Energy Independence NOW. Our politicians all need to read this book. www.themanhattanprojectof2009.com


Posted by: BeyondGreen | November 26, 2008 6:09 PM

thomas777'

I heard that same report and had a similar response. I can understand wanting to unfreeze that student loan market and the auto loan credit but as a person who only has borrowed in order to make money, I was somewhat perplexed how unfreezing the credit card market would be helpful to anything.

Posted by: Gator-ron | November 26, 2008 3:16 PM

With the appointment of Volcker and the selection of Geithner, Obama is helping the Fed consolidate their control over the nation's treasury. These people are bank minded and what we need are economic leaders who are Constitutionally minded. The banks are not the solution, they are the problem.
http://ewebsmith.com/Finance/hiddendemon.html

Posted by: websmith1 | November 26, 2008 2:12 PM

Too many cooks in the kitchen already. First the treasury guy. Then the national economic council guy. Then the council of economic advisers gal. Now this. What's next? A bailout czar?

Posted by: ongdiaoi | November 26, 2008 12:37 PM

Please correct me if I'm wrong, but...

It appears that the definition of 'stimulus' is to do whatever is necessary to get American consumers to resume using their credit cards. I heard a report on CBS News this morning in which the recovery goal was "to get consumers borrowing again..."

Following WWII, this country was focused on productivity and saving. Credit was available, but only to those who could demonstrate that they were producing a reliable stream of taxable income, and that they were not living beyond their means. Credit is also justified in order to facilitate the creation of infrastructure which will lead to future productivity. So incurring new deficits in order to fund infrastructure and industry is reasonable. Borrowing to help people pay off their credit cards, or stay in homes they couldn't afford in the first place, is inexcusable negligence in the face of an economic disaster caused in large part by the profligacy based on credit and irresponsible lending.

As a Republican who voted for Obama, I hoped he would have the insight and the courage to take the heat necessary to detox our economy after decades of dependence upon this malignant 'buy now, make minimum payments forever...' mentality. We need to aggressively discourage the high-risk credit card industry, or dismantle it altogether, even if that means near term pain for small businesses who rely upon customers to buy products they cannot afford. We need to require mortgage holders to prove the creditworthiness of borrowers with hard documentary evidence which can be verified on-line by regulators and investors.

If we do those things, many people will incur significant pain. If we don't, our entire economy and our country as we know it could collapse before the end of Mr. Obama's first term.

Posted by: thomas777 | November 26, 2008 12:32 PM

President-elect Barack Obama keep talking! THE MARKET LOVES IT! BUSH SHOULD RESIGN TODAY~

Posted by: FutureJumps | November 26, 2008 12:06 PM

I love this guy Obama!

Posted by: GeorgHerbet | November 26, 2008 12:05 PM

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