The Volcker Board

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"The Volcker Board"

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Throughout the campaign, Austan Goolsbee seemed destined for the CEA Chair job. But Obama wound up going in a different direction, and now we know where he’ll land:

Paul Volcker, the former Federal Reserve chairman who throttled the economy to crush inflation in the 1980s, will lead a new White House panel aimed at reviving growth, according transition team spokeswoman Stephanie Cutter.

President-elect Barack Obama will name the 81-year-old Volcker as chairman of the new President’s Economic Recovery Advisory Board today, she said. Austan Goolsbee, a University of Chicago economist, will be the top staff official on the board and a member of Obama’s Council of Economic Advisers.

In government, it’s not unusual to have an agency or department or commission structured such that the top guy is primarily there to serve as a public face you can trust while, while someone else does most of the heavy lifting. That would seem to be the case here given Volcker’s age and Goolsbee’s longstanding relationship with Obama. The choice of Volcker is interesting symbolism — his major policy achievement was deliberately provoking the country’s only major post-Depression economic downturn as an inflation-fighting tactic. The policy worked, albeit at a steep price, but presumably that’s not what we’re looking to do now.

But having someone with Volcker’s record — there’s really nobody on the planet with more solid inflation-fighting credentials — on hand to bless recovery efforts may help provide reassurance as Obama pursues a stimulus course that’s sure to lead to large deficits.

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