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Obama Announces Paul Volcker for New Economic Board

November 26, 2008

By Michael Bowman

Washington(RushPRnews)11/26/08-President-elect Barack Obama has named a well respected former head of the U.S. Federal Reserve to lead a specialized economic advisory board in the new administration. VOA's Michael Bowman reports, the appointment of Paul Volcker was announced in Chicago amid fresh indications of a slumping national economy.

President-elect Barack Obama stands with former Federal Reserve Chairman Paul Volcker, chairman-designate of the Economic Recovery Advisory Board, 26 Nov 2008
In his third news conference in as many days, the president-elect unveiled a new layer of his rapidly-expanding economic team: a board tasked with ensuring that decisions made in Washington have a tangible, positive impact on businesses and ordinary Americans across the country.

"As we chart a course to economic recovery, we must ensure that our government is held accountable for delivering results," Mr. Obama said. "Today, I am pleased to announce the formation of a new institution to help our economic team accomplish these goals. The board will be composed of distinguished individuals from diverse backgrounds outside of government."

Called the Economic Recovery Advisory Board, the panel is modeled after a board set up by President Eisenhower in the 1950s to provide independent, non-partisan advice on national security matters.

Mr. Obama says the new economic panel will be headed by a giant in the U.S. financial world: Paul Volcker, who served as chairman of the Federal Reserve from 1979 to 1987. Volcker, a long-time advisor to the president-elect, is credited with taming high inflation rates that plagued the United States in the 1970s, and, in the process, setting the stage for brisk economic growth in the mid-1980s.

Mr. Obama says he wants to guard against the often-insular nature of Washington decision-making.

"Sometimes policy-making in Washington can become a little bit too ingrown," he said. "The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking. This board will provide that fresh perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy."

The president-elect acknowledged the severity of the current financial crisis, but noted that the United States has withstood difficult economic times before.

While Mr. Obama spoke, the drumbeat of sobering economic news continued. New government figures show more than half a million Americans filed for unemployment benefits last week. In addition, consumer spending, U.S. home sales, and the sale of big-ticket manufactured goods all fell last month.

Diane Swonk, chief economist at U.S.-based Mesirow Financial, says America's economic outlook is increasingly grim.

"These are the darkest days of what is now a full-blown recession," Swonk said. "Consumers stopped spending, and orders for durable good producers pulled back. People are hoarding cash, and what we saw was a real pullback [of spending] across the board."

World financial markets were mixed Wednesday. U.S. shares began the day with losses, but crossed into positive territory shortly after Mr. Obama's announcement.

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