Paul Volcker was chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan. President-elect Obama, with Volcker, left, and Goolsbee, right, says the new advisory board will offer a fresh perspective.

Washington — Calling for fresh ideas and perspectives on how to respond to the U.S. economic situation, President-elect Barack Obama created the President's Economic Recovery Advisory Board to provide outside expertise and advice on federal economic policies. The board will be chaired by former Federal Reserve Chairman Paul Volcker, and its chief economist and staff director will be Austan Goolsbee, a professor of economics at the University of Chicago.

Speaking in Chicago on November 26 in his third press conference in as many days, Obama said he is forming the advisory board because economic policymaking in Washington has become too insular.

“The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking. You start engaging in ‘group think.’ And those who serve in Washington don't always have a ground-level sense of which programs and policies are working for people and businesses and which aren't,” he said.

Obama said Volcker, Goolsbee and other individuals yet to be named will come from business, labor, academia, and other fields and will be “candid and unsparing in their assessment” of his administration’s economic policies. They will be reporting regularly to Obama, Vice President-elect Biden and members of Obama’s economic team to “challenge some of our assumptions, to make sure that we are not just doing the same old thing all the time,” he said.

Volcker has a long history of public service in U.S. economic policy. He was Federal Reserve board chairman under Presidents Carter and Reagan during the 1970s and 1980s. In 1952, he joined the staff of the Federal Reserve Bank of New York, and he worked at the Treasury Department during the 1960s between positions with Chase Manhattan Bank.

Obama will be the sixth U.S. president Volcker has served, and the former Fed chairman was an economic adviser to the Obama campaign. He is currently a member of Obama’s transition economic advisory board. (See “President-elect Obama Planning Response to Economic Crisis.”)

“Paul has been by my side throughout this campaign, providing a deep understanding of financial markets, extensive experience managing economic crises and keen insight into the global nature of this particular crisis,” Obama said. “He pulls no punches. He seems to be fairly opinionated … [and] has a long and distinguished record of service.”

Goolsbee has been an economic adviser to Obama since the president-elect’s 2004 U.S. Senate campaign. He is currently a professor of economics at the University of Chicago and has written columns on economic issues for The New York Times.

“Austan is one of America's most promising economic minds, known for his path-breaking work on tax policy and industrial organization. He is one of the economic thinkers who's most shaped my own thinking on economic matters,” Obama said.

The president-elect also said he plans to nominate Goolsbee as one of the three members of his Council of Economic Advisers. On November 24, Obama selected Christina Romer to chair the council. (See “President-elect Obama Announces Top Economic Advisers.”)

Obama said the new Economic Recovery Advisory Board will be modeled on the President’s Foreign Intelligence Advisory Board, created by President Eisenhower in 1956. The Eisenhower board was designed to offer an independent and nonpartisan source of advice and oversight on the U.S. intelligence community and its programs.

Similar to the intelligence advisory board, members of the economic advisory board “will bring to bear their wisdom and expertise on the formulation, implementation and evaluation of my administration's economic recovery plan,” Obama said.

The president-elect also said he is combining “experience with fresh thinking” as he assembles his Cabinet and close advisers. He said Americans would be troubled if, during a critical time for the U.S. economy, he did not include officials from the Clinton administration who have federal experience. “We need people who are going to be able to hit the ground running,” he said.

Obama said his campaign vision of change “comes first and foremost … from me.”

“My job … is to provide a vision in terms of where we are going and to make sure, then, that my team is implementing it,” he said. The new economic advisory board will offer “a cross-section of opinion that in some ways reinforces conventional wisdom, [and] in some ways breaks with orthodoxy in all sorts of ways,” he said.