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Former Fed chairman added to Obama economic team

Thu., Nov. 27, 2008

Volcker to lead advisory panel

CHICAGO – Amid fresh signs of financial troubles, President-elect Barack Obama announced Wednesday he was tapping a seasoned figure from past economic struggles to head a new advisory panel dedicated to creating jobs and stabilizing the markets.

Obama said that former Federal Reserve chairman Paul Volcker, 81, would head the committee, bringing into his circle of top economic advisers a man credited with curbing the high inflation rates of the late 1970s.

Obama announced the appointment in his third news conference in as many days – all devoted to the economy, all meant to imbue confidence in a nation clearly shaken by the economic tumult.

The spate of unwelcome news has forced Obama to move more quickly than some past presidents-elect in constructing his economic team.

On Monday, Obama announced his choice for Treasury secretary, Timothy Geithner, president of the Federal Reserve Bank of New York. And Tuesday he rolled out his new budget director, Peter Orszag, who comes from the Congressional Budget Office.

David Axelrod, a senior adviser to Obama, said in an interview: “There is no doubt we have a crisis of confidence right now. And there’s enormous interest in the financial markets and in the country generally about what his plans are and who he will rely on for advice in executing his plans. And we felt that we needed to move very quickly and send those signals.”

Apart from Volcker, the new economic advisory panel will include Austan Goolsbee, a University of Chicago economist who will serve as staff director. Goolsbee advised Obama during the campaign and was mired in an embarrassing controversy during the Democratic primary season

Canadian government representatives said Goolsbee had privately assured them that Obama’s anti-NAFTA rhetoric amounted to mere campaign posturing.

In the tightly controlled news conferences this week, reporters were barred from questioning Goolsbee, Volcker or any of the other economic officials Obama introduced.

Next week, the president-elect is to roll out his national security team. He is expected to name Clinton as his secretary of state and to retain Robert M. Gates as defense secretary.

Asked whether he could stock his administration with such Washington insiders and still carry out his promise to transform Washington, Obama stressed that the overall governing vision comes from him.

He said the “conventional wisdom floating around Washington” is that “there’s a recycling of people who were in the Clinton administration.”

Explaining his recruiting methods, Obama said he is simply drawing from a pool of talent with government experience.

He said, “I suspect that you would be troubled and the American people would be troubled 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.”


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