Obama seeks ‘fresh perspective’ to revive US economy

By Arun Kumar, IANS,

Washington : US president-elect Barack Obama Wednesday announced the creation of a new economic recovery board to provide a “fresh perspective” to advise him on how to stabilise financial markets and lift the country out of a recession.

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“The reality is that sometimes policymaking in Washington can become a little bit too ingrown,” he said announcing the appointment of former Federal Reserve chairman Paul Volcker to head the new group of economic experts at his third news conference in Chicago in as many days.

“The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking … This board will provide that perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy,” he said.

Volcker served as the chairman of America’s central bank from 1979 through 1987, serving under two presidents, Democrat Jimmy Carter and Republican Ronald Reagan. Following his tenure there, he worked in the private sector as an investment banker until 1996.

Volcker also headed the investigation into the UN oil-for-food programme for Iraq that led to then Indian external affairs minister Natwar Singh downfall.

Since the financial crisis erupted in September, Obama has leaned heavily on the 81-year-old Volcker, who is largely credited with halting inflation in the early 1980s, for advice.

University of Chicago economist and Obama policy adviser Austan Goolsbee would serve as the panel’s staff director and chief economist, along with his duties as a member of the White House Council of Economic Advisers, Obama said.

The new board of economic experts is modelled on the Foreign Intelligence Advisory Board established by then president Dwight Eisenhower in 1956, at the height of the Cold War, when officials worried that that the existing bureaucratic structure was inadequate to help the US keep pace with the Soviet threat.

The group, expected to exist for two years, will give Obama an official forum for getting advice outside of normal bureaucratic channels. Members of the panel will be drawn from a cross-section of citizens outside the government, chosen for their independence and non-partisanship.

The board’s tasks will be broad: to help design and implement short-term programmes to jumpstart the economy, raise wages and living standards and confront the housing crisis.

It will also address the delicate task of bolstering Washington’s oversight of the financial markets in the wake of a Wall Street collapse that has taken down many of its most venerable institutions.

Obama advisers have pledged a streamlined but tougher regulatory regime that would force more transparency onto hedge funds and private-equity firms, while regulating the trading of exotic instruments such as credit default swaps that helped precipitate the current crisis.

The move is another step toward tackling the ailing US economy as part of an aggressive effort by Obama, who succeeds President George W. Bush Jan 20, to demonstrate that his administration will face the global financial crisis head on.