In a continuing revelation of the economic team(s) to support his administration and its policy development, President-Elect Obama announced the formation of a new panel called the Economic Recovery Advisory Board (ERAB). The board’s mission will be to give President-Elect Obama and his administration expert “outsider” policy advice on lifting the nation out of the current recession and stabilize financial markets. It is designed to provide an alternative information source outside the normal government (bureaucratic) channels. The ERAB is modeled 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 the existing bureaucratic structure was inadequate to help the U.S. keep pace with Communist regimes. The financial crisis has drawn similar concern that the government isn’t properly organized to monitor and respond to modern financial markets.
Former Federal Reserve Chairman Paul Volcker will be the chairman of this new board, with economist Austan Goolsbee appointed as the staff director. Goolsbee is also a member of the White House Council of Economic Advisers. Other members of the ERAB will be drawn from a cross-section of citizens outside the government, chosen for their independence, representation and expertise. The EARB’s findings will be used as direct input into the Obama administration’s policy setting.
Personally, I think this is a brilliant move by Obama because he is leveraging much need non-government expertise. Elected officials are not really experienced economists and as the past year has shown, they are quite ill-equipped to handle the scale and speed of the financial crisis that has unfolded. It will also give President-Elect Obama a head start on his first day in office, where he will have workable ideas to base his economic recovery policies and solutions on, thanks to the input of experts across a number of business areas.
My only hope is that the ERAB does not become a political machine where the members are hired for their backing of Obama and his campaign policies, rather than for their expertise, independence and thinking. While I agree in the main with Obama’s economic recovery policies based around fiscal stimulus’, I think this crisis needs a new perspective and willingness to change course in a thoughtful way (against a set framework) as events unfold. The current crisis may rival the scale of the great depression, but the world is a different place now and solutions that worked then will not necessarily work now.
What are your thoughts? Do you think the ERAB will provide meaningful input or just become another Washington think thank, with little in way of practical ideas and solutions.
As a minor aside, it was interesting to see a headline on MSNBC today saying, “President-Elect Obama unveils further plans to combat the economic crisis, while President Bush pardons a turkey“. I know both were pre-scheduled events that just happened to be at same time, but it seems to sum up the way things are perceived. Obama is already acting in a presidential manner, while Bush has checked out. The transition has already happened.