Obama Announces Economic Advisory Board

Former fed chairman Paul Volcker to head outside panel of economic experts.

Nov. 26, 2008 — -- In his third news conference in as many days, President-elect Barack Obama continued to signal he is prepared to seize control of the nation's troubled economy, announcing the creation of a new economic advisory panel.

"People should understand that help is on the way," Obama said at a Chicago news conference Wednesday morning.

"And as they think about this Thanksgiving shopping weekend and they think about the Christmas season that's coming up, I hope that everybody understands that we are going to be able to get through these difficult times," Obama said, "but we're just going to have to make some good choices."

Today Obama announced the creation of the President's Economic Recovery Advisory Board, a panel of outside advisers headed by 81-year-old Paul Volcker, former Federal Reserve Chairman under Presidents Jimmy Carter and Ronald Reagan. Austan Goolsbee, a University of Chicago economist and Obama economic policy adviser, joins the panel as staff director.

Volcker is given much credit for ending stagflation in the 1980s.

The names of other members of the board will be announced at a later date. Their task will be to provide Obama with expert advice outside the normal channels of the Washington, D.C., bureaucracy and Wall Street boardrooms.

"At this defining moment for our nation, the old ways of thinking and acting just won't do," Obama said.

"They call for us to seek fresh thinking and bold new ideas from the leading minds across America. And they demand that as we chart a course to economic recovery, we ensure that our government -- your government -- is held accountable for delivering results," Obama said.

Obama: Break Through the Isolation

During an exclusive interview with ABC's Barbara Walters to air tonight at 10 p.m.ET, Obama talked about the need to connect with people outside of his tight circle of advisers.

"You know, one of the things that I'm going to have to work through is how to break through the isolation and the bubble that exists around the president," Obama told Walters, according to excerpts that aired on "Good Morning America."

"I'm negotiating to figure out how can I get information from outside of the 10 or 12 people who surround my office in the White House,'' Obama told Walters. "Because one of the worst things I think that could happen to a president is losing touch with what people are going through day to day.''

Dean Baker, co-director of the Washington, D.C.-based Center for Economics and Policy Research, said the advisory panel could be useful -- depending on the weight given to it by the president-elect.

"We'll have to see how much he uses them," Baker told ABCNews.com.

"It would be good to get some different blood in. His advisers, they're obviously very experienced, very good people, very smart people, but they're all inside the Beltway or inside Wall Street," Baker said. "You need some outside blood there."

Too Many Economic Opinions?

The danger, Baker said, is having a proliferation of viewpoints that the president must sift through to ultimately make a decision about what to do.

"In principle, it would be good that he gets some outsiders, people who aren't the usual suspects," Baker said. "But whether they are really playing the big role in determining policy, we'll have to see."

Already Obama has moved faster to seize control of policy issues than any other previous president during a transition.

"It's unprecedented," said Georgetown University presidential scholar Stephen Wayne.

"But he has no choice," Wayne said. "If he doesn't address the issue, it's going to be worse when he takes over."

Obama Rolls Out Economic Team

On Monday, Obama announced former Federal Reserve Bank of New York President Timothy Geithner as his pick for Treasury secretary. He also announced that Larry Summers would direct the National Economic Council and that Melody Barnes would head the White House Domestic Policy Council. He's put Christina Romer in charge of the White House Council of Economic Advisers.

On Tuesday, Obama announced former Congressional Budget Office Director Peter Orszag as his choice to run the Office of Management and Budget.

Obama has proposed a major economic stimulus package to create or save 2.5 million jobs over the next two years.

While his assertive approach is unprecedented for a president-elect, Wayne said Obama has little choice given the economic woes facing the nation.

"He has committed to new energy and change," Wayne said, "so that means he can't sit by while Rome is burning."

Obama Wants $500-Billion Stimulus Package

Obama wants a large stimulus package costing around $500-billion, reports ABC News' George Stephanopoulos.

The money would be spent on infrastructure, including roads and bridges, so-called "green jobs" to develop alternative energies, unemployment extensions, and other aid to state and local governments.

Next week Obama plans to meet with the nation's governors, most of whom are struggling with huge budget shortfalls.

Obama is also expected to announce other members of his Cabinet next week, including Sen. Hillary Clinton, D-N.Y., as secretary of state, Gen. James Jones as national security adviser, New Mexico Gov. Bill Richardson as commerce secretary, and that Defense Secretary Bob Gates will stay on in this role.

"He knows he has to move as soon as he takes office, so he's getting out in front of these decisions now," Baker said "It's extraordinary, but then again, it's extraordinary times.