As manufacturing reports show a drop in orders for durable goods, President-elect Barack Obama and his new Economic Recovery Advisory Board will have an uphill battle ahead of them.
Orders for durable goods dropped by 6.2% last month, more than double the 3% decline economists expected, the Department of Commerce reported today. Although the Labor Department reported that unemployment insurance claims have dropped unexpectedly to 3.96 million, down from the previous week’s 4.02 million (the highest level in 25 years), the slowdown in manufacturing has hit jobs hard.
Obama has been diligent in his promise to act swiftly and boldly on the nation’s economic problems. His assembling of a team of non-government affiliated advisors with a fresh perspective is how he plans to seek advice that is “candid and unsparing” in their assessment of his economic recovery plan.
“The reality is that sometimes policymaking in Washington can become too insular,” said Obama in today’s news conference. “Those who serve in Washington don’t always have a ground-level sense of which programs and policies are working for people, and which aren’t.”
The Economic Recovery Advisory Board will be modeled on the Foreign Intelligence Advisory Board created by President Dwight D. Eisenhower to provide an independent voice on intelligence issues. The Board will be composed of distinguished individuals from diverse backgrounds outside of government –- from business, labor, academia, and other areas.
The first to step aboard Obama’s new team is former Federal Reserve Chairman Paul Volcker who will hopefully be able to provide insight on Obama’s plan to generate some 2.5 million jobs over the next two years. Volcker served as Fed chairman from 1979-1987 during Presidents Jimmy Carter and Ronald Reagan’s administrations, when inflation skyrocketed and unemployment rates were the highest they had been since the Great Depression. Last week, recessionary unemployment rates reached the levels from when Volcker was in office. He was a part of the team that helped the country recover from the steep recession of 1983 and may have some answers for Obama’s new economic team.
“At this defining moment for our nation, the old ways of thinking and acting just won’t do. We are called to seek fresh thinking and bold new ideas from the leading minds across America,” Obama said . “And as we chart a course to economic recovery, we must ensure that our government — your government — is held accountable for delivering results.”
Along with Volcker, Obama also named University of Chicago economist and Obama policy adviser Austan Goolsbee to serve on the board today. Austan Goolsbee will serve as the panel’s staff director.
Volcker, Goolsbee and other board appointees will assist the new top notch team of economic advisors including, Timothy F. Geithner as Treasury Secretary and Lawrence Summers as director of