Obama Taps Volcker to Head Advisory Board

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 jobs.

Speaking at his third news conference in three days, Obama said the new Economic Recovery Advisory Board will be responsible for 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 infrastructure projects that he hopes will lay the foundation for future economic growth.

He said the new advisory board will help police that effort. It 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 chair, Volcker was confronted with an economic crisis marked by high inflation and stagnant growth, which he battled by raising interest rates. That eventually arrested the problem, but not before the nation endured a deep recession.

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

"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, Berkeley economist.

The advisory board selections are the latest in a series of economic appointments made by Obama this week. Many of the key members of his team have experience working in the Clinton administration, which had led to grumbling in some quarters that Obama is recycling Clinton's team, undercutting his promise of change. But Obama deflected that criticism, saying he is trying to combine experience with new ideas and leadership.

"The last Democratic administration we had was the Clinton administration," Obama said. "And so it would be surprising if I selected a Treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever. What we are going to do is combine experience with fresh thinking. But understand where the...vision for change comes from first and foremost. It comes from me."