Image: Austan Goolsbee, Paul Volcker and President-elect Barack Obama
Pablo Martinez Monsivais  /  AP
President-elect Barack Obama, with former Federal Reserve Chairman Paul Volcker, center, chairman-designate of the Economic Recovery Advisory Board, and chief economist-designate Austan Goolsbee, left,  at a news conference in Chicago, Nov. 26, 2008.
updated 11/26/2008 11:44:27 AM ET 2008-11-26T16:44:27

President-elect Barack Obama named a board of economic experts from outside the government to advise him, in his latest bid to reassure nervous consumers and financial markets that he will bring swift economic relief as president.

Obama made the announcement Wednesday in Chicago at a morning news conference in which he tried to reassure Americans that "help is on the way" for the economy.

"I was elected with the charge of getting this economy back in shape," Obama said Wednesday. "We are going to implement starting Day One when I come into office."

He also pushed back against criticism that he was recycling former Clinton administration officials as he builds his new economic team. He said his Cabinet would "combine experience with fresh thinking."

The panel — called the President's Economic Recovery Advisory Board — is intended to help Obama bring stability to the financial markets and create jobs.

Former Federal Reserve chairman Paul Volcker, 81, will head the President's Economic Recovery Advisory Board, while the board's top staff official will be Austan Goolsbee, a University of Chicago economist.

"He pulls no punches," Obama said of Volcker. "He seems to be fairly opinionated."

Former President Jimmy Carter named Volcker Fed chairman in 1979, a time of high inflation and high unemployment. Volcker helped tame inflation by raising interest rates, despite intense opposition by some in Congress. Volcker's moves helped plunge the economy into recession in the short term, but he was later credited with reviving the economy by getting inflation under control. Volcker served as Fed chairman until 1987.

It was Obama's third news conference in as many days as Americans moved into the long Thanksgiving holiday weekend.

On Tuesday, Obama introduced Congressional Budget Office Director Peter Orszag as his candidate to run the White House Office of Management and Budget. The president-elect also pledged a "page-by-page, line-by-line" budget review to root out unneeded spending.

On Monday, Obama tapped New York Federal Reserve President Tim Geithner as his treasury secretary and named several other top economic advisers.

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His economic team largely complete, Obama was expected next week to introduce national security officials, including Hillary Rodham Clinton as his secretary of state. Aides said the New York senator had not yet formally accepted the offer, but transition officials have indicated that the nomination is on track.

Obama also was expected to announce he had asked Defense Secretary Robert Gates to remain at the Pentagon for a year. James Jones, a former Marine Corps commandant and NATO commander, was Obama's pick to be national security adviser.

Obama defended his selection of former Clinton officials to help run his administration.

"The American people would be troubled if I selected a treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever," Obama said.

"What we are going to do is combine experience with fresh thinking," he said. "But understand where the vision for change comes from. First and foremost, it comes from me. That's my job, is to provide a vision in terms of where we are going and to make sure then that my team is implementing."

At his news conference Tuesday, Obama set no goals for reducing the federal deficit — now in record territory and headed ever higher. On Monday, he announced plans for a massive economic stimulus plan that Democrats have said could cost as much as $700 billion.

On Wednesday, British Prime Minister Gordon Brown said his country will host an April 2 meeting of the Group of 20 industrialized and emerging economies to discuss the financial crisis. Brown told lawmakers in London that Obama has said he will attend the talks.

With his Electoral College landslide victory, Obama said he has a "mandate to move the country in a new direction, and not continue the same old practices that have gotten us into the fix we're in."

At the same time, the Democratic president-elect pledged to consult with Republicans and approach his administration with humility "and a recognition that wisdom is not the monopoly of any one party."

Obama's promise to be careful with federal spending was placed in a larger context.

"As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation," he said.

The picture took on troubling new dimensions a few hours before he spoke when the Commerce Department reported economic activity declined at a rate of 0.5 percent in the three months ending in September.

Further underscoring weakness, Americans' disposable income fell at an annual rate of 9.2 percent in the same period, the largest drop in records that date to 1947.

And The Washington Post reported Wednesday that the number of Americans using government-subsidized food stamps to buy groceries was expected to pass 30 million this month, a new record.

The federal budget deficit was a record $455 billion for the fiscal year that ended Sept. 30 and is certain to be higher in the current fiscal year — possibly reaching $1 trillion — as the costs of a financial bailout and an economic stimulus package are piled on top of smaller-than-expected tax receipts.

In an interview for ABC television to air Wednesday, Obama suggested that bank executives forgo their bonuses this year to show they are taking responsibility amid difficult economic times.

According to excerpts of the interview released by ABC, Obama said bank executives should make sacrifices because so many other people are struggling as the U.S. economy slips further. Some financial firms, including Goldman Sachs, the Swiss bank UBS and the British bank Barclays, have said they are not handing out annual bonuses to top executives, and Obama encouraged more to follow.

"I think that if you are already worth tens of millions of dollars, and you are having to lay off workers," Obama said, "the least you can do is say, 'I'm willing to make some sacrifice as well, because I recognize that there are people who are a lot less well off, who are going through some pretty tough times.'"

Obama also said the heads of the three auto companies who came to Washington asking for a bailout are a "little tone deaf" to what's going on in the country. It was the second time this week he has had harsh words for Ford Motor Co., Chrysler LLC and General Motors Corp. The struggling companies are pressing Congress for $25 billion in government loans.

During a news conference Monday, Obama said the Big Three may deserve some assistance, but taxpayers cannot be expected to blindly support an auto industry "that has been resistant to change."

Many economists think that aid to state and local governments should be tops on the agenda for any new stimulus spending, as they have less borrowing authority than the federal government and must slash budgets as the slowdown causes tax revenues to fall.

Obama and Vice President-elect Joe Biden plan to meet with nearly all the U.S. governors in Philadelphia next Tuesday to discuss how the economic crisis is crimping states and their budgets.

Alaska Gov. Sarah Palin, the former Republican vice presidential candidate, planned to attend the gathering, her office said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Obama: 'Old ways of thinking just won't do'

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