Obama's Economic Recovery Advisory Board: Brilliant or More Bureaucracy?

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 stabilizing 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 ERAB'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 needed 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 tank, with little in way of practical ideas and solutions.

As a minor aside, it was interesting to see a headline on MSNBC earlier this week 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 the 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.

Comments

[Crookedwood:]

Andy Singh may worry about the ERAB becoming political but it is a false item. I believe the expertise of this team will bring immediate impact and benefit for the country for the very reason that it is not political. In time all creations become institutionalized and the way to make certain this does not is to hold it to the bright light of public analysis and evaluation. Crookedwood

2008 Nov 28 09:04 AM

[derryl:]

Prior to the mid 1990s the World Bank was routinely criticized for funding only the largest scale initiatives and ignoring smaller but more efficient projects. Later analysis showed that this bias was inescapable as the WB had limited manpower to read proposals, decide on projects and administer the loans. "Bureaucratic efficiency" ensured that a single $5 billion project like the Marcos' dam in the Phillippines was more attractive to World Bankers than 100 $50 million projects because they just didn't have the staff to allocate the money through that many accounts.

This same problem is an obvious risk when you're talking about spending 100s of billions of dollars as fast as possible. Maybe decentralizing control by getting states more involved would help lighten the administrative load.

But the more people you get involved in the process the slower it becomes. I guess it's a balancing act between quicker central decision making and effective oversight to get value for the spending.

2008 Nov 28 12:13 PM

[Nurse76:]

1)WHITE HOUSE PRESS ASKED ABOUT OBAMA'S BIRTH CERTIFICATE 11-24-08
www.whitehouse.gov/new...
2)THE US SUPREME COURT CASES QUESTIONING BARACK OBAMA'S CITIZENSHIP:
origin.www.supremecour...
origin.www.supremecour...
3)Alan Keyes, BLACK AIP presidential candidate lawsuit in California
www.aipnews.com/talk/f...
4)Atlah Black Minister demands the birth certificate:
www.youtube.com/watch?...
5)OBAMA HIMSELF IN INTERVIEWS
www.eyeblast.tv/Public...
6)STOP OBAMA CONSTITUTIONAL CRISIS:
www.rallycongress.com/.../
7)AMERICA WANTS TO KNOW:
americamustknow.com/de...

2008 Nov 29 12:33 PM

[LR European:]

I would agree, tentatively, a brilliant move. There is a paradox, however, between the 'agent for change' that the US and the world were entranced by and the familiar names being lined up to develop policy. The hope must be that Obama will use top level information and advice to shape his own, new, policy; taking this path to 'change' rather than the alternative impulsive gut-led initiative that was on offer in the election campaign. This way, in theory, Obama could have the authority to put his own stamp on Washington, to overrule the bureaucrats and achieve change.

If that is the plan, I celebrate it. However, he will need to be brave and strong to see it through, to avoid the ambushes and trip wires that will be set in his way.... He will need a lot of support from the nation.

It will be fascinating to watch. Probably more comfortable to watch from Europe.

2008 Nov 29 05:49 PM