Former Fed chairman to head economic board

Paul Volcker to advise Obama on fiscal policy as the leader of the board charged with promoting economic growth.

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WASHINGTON (CNN) -- President Barack Obama tapped an old Washington veteran Friday to help craft the administration's fiscal policy, naming former Federal Reserve Chairman Paul Volcker to lead a new economic advisory board.

Volcker is "by any measure is one of the world's foremost experts on the economy ... one of the most experienced and insightful minds that we have," Obama said at the White House.

"He has advised me for many months, and he has helped steer the American economy through many twists and turns. ... I'm glad that Paul has decided to continue his public service at this critical moment."

Volcker, 81, headed the Federal Reserve from 1979 to 1987, raising interest rates and, in the eyes of many economists, contributing to an economic downturn in order to help control a then-spiraling inflation rate.

He will head the president's Economic Recovery Advisory Board, which is to meet on a regular basis and provide independent, non-partisan advice to Obama on how to best promote economic growth and stability.

The goal of the board - established by executive order Friday - is to help the administration as it tries to tackle what is, by all accounts, a steadily deteriorating economic climate.

A U.S. government report released Friday showed the economy shed more than half a million jobs for an unprecedented third month in a row.

The Labor Department reported that the unemployment rate rose to 7.6% and a net 598,000 jobs were lost in January, the highest monthly job loss since December 1974.

The president seized on the report to renew the push for his stimulus plan, which is currently being debated in the Senate.

"I am sure that at the other end of Pennsylvania Avenue, members of the Senate are reading these same numbers," Obama said. "I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay, or politics as usual while millions of Americans are being put out of work.

The new advisory board has been established for a two-year term, after which Obama will determine whether it is still needed. It is modeled on the Foreign Intelligence Advisory Board, created during the Eisenhower administration to provide the president independent advice on global affairs.

"This new institution should send a signal of how seriously I take the responsibility of building an economic recovery that is broad and enduring," Obama said.

"I created this board to enlist voices to come from beyond the Washington echo chamber, to ensure that no stone is unturned as we work to put people back to work and to get our economy moving. ... We will meet regularly so that I can hear different ideas and sharpen my own, and seek counsel that is candid and informed by the wider world."

Obama initially announced his intention to establish an economic advisory board shortly after last November's election.

Austan Goolsbee, a University of Chicago economist who has been one of Obama's top economic advisors, will serve as staff director and chief economist of the board.

The other board members are:

-- William H. Donaldson, chairman of the Securities and Exchange Commission

-- Roger W. Ferguson Jr., president & CEO of TIAA-CREF

-- Robert Wolf, chairman and CEO of UBS Group Americas

-- David F. Swensen, CIO of Yale University

-- Mark T. Gallogly, founder and managing partner of Centerbridge Partners L.P.

-- Penny Pritzker, chairman and founder of Pritzker Realty Group

-- John Doerr, partner in Kleiner, Perkins, Caufield & Byers

-- Jim Owens, chairman and CEO of Caterpillar Inc.

-- Monica C. Lozano, publisher and CEO of La Opinion

-- Charles E. Phillips Jr., president of Oracle Corporation

-- Anna Burger, secretary-treasurer of the Service Employees International Union

-- Richard L. Trumka, secretary-treasurer of the AFL-CIO

-- Laura D'Andrea Tyson, dean of the Haas School of Business at the University of California at Berkeley

-- Martin Feldstein, George F. Baker professor of economics at Harvard University

-- Jeffrey R. Immelt, chairman and CEO of GE To top of page

President Barack Obama tapped an old Washington veteran Friday to help craft the administration's fiscal policy, naming former Federal Reserve Chairman Paul Volcker to lead a new economic advisory board.
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