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Chief Scammer is back: Volcker to Head New Panel To Jump-Start US Economy


FEDERAL RESERVE, PAUL VOLCKER, BARACK OBAMA, ECONOMY, POLITICS
Reuters
| 26 Nov 2008 | 11:29 AM ET

US President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker as chair of a new panel that will advise him on stabilizing financial markets and averting a painful recession.

"At this defining moment for our nation, the old ways of thinking and acting just won't do. They call for us to seek fresh thinking and bold new ideas from the leading minds across America," Obama said in unveiling the new President's Economic Recovery Advisory Board.
# Stocks Rise on Volcker Appointment

"Today I'm pleased to announce the formation of a new institution to help our economic team accomplish these goals," he said.

The new board is modeled on an advisory panel that gives the president nonpartisan advice on national security matters, Obama said.

Volcker, 81, has been an important economic adviser to Obama on economic issues. As Federal Reserve chairman in the early 1980s, he was credited with taming inflation through policies that also contributed to a recession at the time.

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The move is another step toward tackling the problems ailing the U.S. economy and is part of an aggressive effort by Obama to demonstrate that his administration will face the global financial crisis head-on when he takes office on Jan. 20.

In news conferences Monday and Tuesday, Obama outlined plans for a massive stimulus package and unveiled other members of his economic team, including New York Federal Reserve president Tim Geithner to be his Treasury secretary.

In addition to naming his top economic advisers, Obama has come closer to forming his national security team, with reports saying that Republican Robert Gates will stay on as defense secretary and retired Marine Gen. James Jones will take over as national security adviser.

Those appointments, along with New York Sen. Hillary Clinton as secretary of state, are likely to be made early next week, after the Nov. 27 U.S. Thanksgiving holiday.

Focus on the Economy

For now Obama has put his focus squarely on the economy, pledging a costly stimulus package that he urged the next Congress to pass quickly.

On Tuesday, he vowed to cut billions of dollars in wasteful government spending.

But questions remain about both goals. Obama declined to put a figure on the stimulus package—other Democrats have said it could cost hundreds of billions of dollars—and he did not identify specific government programs to be cut to help pay for it.

Analysts said Obama's daily economic pronouncements showed the next president stepping into a leadership void left by Bush.

"Confidence in Bush as an effective president has eroded so substantially that he is no longer taken seriously," said Paul Beck, a professor of political science at Ohio State University.

"There is, of course, much more confidence in Obama or he would not have been elected as president. And, he is the president-in-waiting, so the only alternative the country has to Bush as a leader, especially in a period when the markets have failed and government must play an enlarged role in them."

Obama has not shied away from telling struggling industries like banks and automakers to take responsibility for their ailing position in the economy.

In an interview with the ABC television network, Obama said bank executives should forego their bonuses this year.
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URL: http://www.cnbc.com/id/27925662/