Barack Obama rounded out his core economic team this morning, naming venerable former Fed chief Paul Volcker to head a new advisory board of outside-the-Beltway notables that he said would hold his administration accountable for its economic-recovery efforts.
The president-elect said the President?? Economic Recovery Advisory Board (PERAB?) will help him and his administration keep a fresh perspective. ??ometimes policymaking in Washington can become a little too ingrown ?a little too insular,” he said. “You start to engage in group-think.”
In some ways, the move caps Volcker's return from temporary obscurity: Fed chief under Carter and Reagan, he tamed the stagflation that roiled the U.S. economy in the late 1970s, but in doing so helped trigger the early-1980s recession -- and left him less than popular in some quarters. For years, his reputation as an inflation-fighter and macroeconomic engineer was eclipsed by Alan Greenspan.
Obama also named Austan Goolsbee, a University of Chicago behavioral economist who served as a top campaign adviser, as chief economist and head of the new board's staff. He'll also serve as a member of the Council of Economic Advisers, which Obama said on Monday would be headed by Berkeley economist Christina Romer.
It isn't the first time an incoming president has created a new economic council: Bill Clinton did the same in 1993, when he took office amid a recession and soaring deficit and created the National Economic Council to help coordinate the administration's economic policy.
This time, however, Obama stressed that the new panel would be composed of "distinguished individuals" -- to be named later -- from business, labor and academia.
His third press conference on economic appointments in three days -- yesterday he named Peter Orszag as his budget chief, promising to pare wasteful government spending and tackle the deficit, once the economic crisis is over -- has served to keep the Obama administration in the spotlight even before it has real power. As we noted yesterday, it's almost as if he were president already.
But there is a downside to seeming to be in charge, as a question from reporters in Chicago underscored toward the end of the brief Q&A that followed the announcement.
Asked directly if he supported yesterday's $800 billion package from the Federal Reserve and Treasury designed to stimulate lending, Obama tried to sidestep it: "We have to do whatever's required in order to ensure our financial system gets credit" moving again, he said. After all, there's no upside for Obama in owning the policies of the waning days of the Bush Administration.
Another press question did prompt Obama to tackle head-on another criticism of his nascent administration, however: that, far from sweeping change inside the Beltway, it looks a lot like corners of the Clinton Administration. Timothy Geithner, Obama's pick to head Treasury, for example, was the agency's undersecretary under Clinton.
Given that the Clinton headed the last Democratic administration, "it would be surprising if I selected a Treasury secretary who had had no experience with the last administration," he said. Indeed, he said he would likely have been criticized if he had picked nominees who didn't have executive-branch experience.