President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker as the head of a new economic recovery board Wednesday. Volcker, who served as Fed Chairman from 1979 to 1987, is the latest addition to Obama's economic team as the president-elect prepares to face an economy in recession.
He also announced that Austan Goolsbee, one of Obama's economic advisors, would serve as Staff Director and Chief Economist of the Economic Recovery Advisory Board.
"It has become increasingly clear in recent months that we are facing an economic crisis of historic proportions," Obama said in prepared remarks. In his third press conference in as many days, Obama reiterated his call for "fresh thinking and bold new ideas from the leading minds across America."
Attacking the current economic crisis will be the responsibility of the President's Economic Recovery Advisory Board, Obama said, noting that the board is modeled on former President Dwight Eisenhower's Foreign Intelligence Advisory Board.
The board will bring in individuals from outside government, from the business, labor and academic communities to prepare solutions to the economic situation. The fresh-faced board will report to Obama, he said, with "concrete plans to put economy back on track" that he can "implement starting day one."
"The reality is that sometimes policymaking in Washington can become too insular," the president-elect noted. The board will provide a new perspective from outside the insular community, Obama suggested.
Heading the board will be Volcker, who is best known for his economic policies in the 1980s that beat back out of control inflation.
Under Volcker, inflation peaked at 13.5 percent in 1981. In response, Volcker hiked up the federal funds rate, sending the economy into a recession with unemployment rates at their highest since the Great Depression. However, by the end of his efforts, inflation was successfully lowered to 3.2 percent by 1983.
Assisting Volcker will be Goolsbee, one of Obama's economic advisors, who will serve as Staff Director and Chief Economist of the Economic Recovery Advisory Board. He will be responsible for communicating between the Board and Obama's administration. Goolsbee will also serve as one of three members of Obama's Council of Economic Advisers.
Obama will flesh out the Economic Recovery Advisory Board in the next few weeks, he said.
In the more candid portion of the press conference, Obama told reporters that it is "important for American people to have confidence that we've gone through recessions before."
"Our future is bright if we make good decisions," he said. "We don't want to get caught up in a spiral where people pull back from the economy, businesses then pull back, jobs are reduced and we get into a downward spiral."
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