Volcker to head economic rescue team

President-elect Barack Obama announced creation of an Economic Advisory Board in Chicago. From left, Federal Reserve Chairman Paul Volcker, who has been named the head of the newly created group; Obama; and Austan Goolsbee, a senior economic adviser to the Obama campaign who will be the Board's staff director and chief economist.

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KAI RYSSDAL: The president-elect had another press conference today. At which he rolled out another group of economic advisors. The tall guy on the left side of the podium is the one we're interested in. Paul Volcker ran the Federal Reserve back in the Carter-Reagan days. That means he's been around for a while. A long while.

We asked our Washington Bureau Chief John Dimsdale to find out whether the 81-year-old Volcker can provide the fresh perspective the president-elect says he's looking for.


JOHN DIMSDALE: Obama said he'll appoint innovative thinkers to the new Economic Recovery Advisory Board.

PRESIDENT-ELECT OBAMA: This is going to be designed to make sure that everybody -- businesses across the board, whether it's high-tech or manufacturing, old or new economy, labor, innovative thinkers who may not always subscribe to the conventional wisdom -- that they are there to challenge some of our assumptions to make sure that we are not just doing the same old thing all the time.

The new panel's chairman, Paul Volcker, squeezed inflation out of the economy in the 1980s with tough monetary policies.

Budget analyst Stanley Collender says the appointment of Volcker, former Treasury Secretary Lawrence Summers, and New York Fed Chief Timothy Geithner to Obama's economic team means the president-elect plans to attack the economic mess from all sides.

STANLEY COLLENDER: You've got fiscal policy people, monetary policy people, Fed people. It shows they're gonna try to be proactive. That is, rather than waiting for events to happen and responding to them as the Bush administration seems to have done in the last few months.

How will all these independent thinkers get together on policy? Andy Laperriere follows Washington for the Wall Street research firm ISI.

ANDY Laperriere: The key, I think, is not how strong-willed those personalities are. It's more, once the president makes a decision, are people going to go out and carry out that decision. And I don't think that's a big worry.

The President-elect is expected to announce Labor and Commerce secretaries in the next few weeks.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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