As a clear signal that President-elect Obama is focused on the financial crisis, he introduced his choices for an economic leadership team on Monday. They include economic veterans Timothy Geithner as Treasury secretary and Lawrence Summers to lead the National Economic Council.
As a clear signal that President-elect Barack Obama is focused on fixing the broken U.S. economy, he introduced his choices for an economic leadership team on Monday. Recent disastrous economic news has made it clear, Obama said, "that we are facing an economic crisis of historic proportions."
He said, "If we do not act swiftly and boldly ... we could lose millions of jobs next year."
Obama stood up at high noon EST and told reporters in Chicago that his choice for secretary of the Treasury is Timothy Geithner. Obama has also selected former Treasury Secretary Lawrence Summers to lead the National Economic Council, Christina Romer as head of the White House Council of Economic Advisers and Melody Barnes as director of the White House Domestic Policy Council.
"I've sought leaders who could offer both sound judgment and fresh thinking," he said.
He said that his administration would make good on financial commitments that the Bush administration has made to ease unsettled markets. And Obama said his team will immediately begin working with Congress on a new stimulus package. Some Democratic legislators have said the two-year cost of Obama's plan — which includes creating and saving 2.5 million jobs — could be around $700 billion.
Obama declined to put a dollar figure on the stimulus plan but said, "Our economy is trapped in a vicious cycle. The economy is likely to get worse before it gets better."
Time and again Obama hit on the relationship between Wall Street and Main Street. He reiterated that any successful economic salvation plan must rebuild confidence not only in the world's financial markets but in the minds of middle-class Americans.
At one point Obama said that any recovery plan faces multiple challenges. He said it must, among other things, stabilize the financial system, get credit flowing again, address the continuing mortgage crisis, deal with the skittering automobile industry and create new jobs.
"I am hopeful about the future," he said. "I have full confidence in the wisdom and ingenuity of my economic team, and in the hard work, courage and sacrifice of the American people."
He added, "Families cannot afford to keep on waiting and hoping for a solution" to the economic instability.
Obama emphasized that he wants to see Congress begin to work on an economic stimulus package in early January. However, he told reporters that he did not want to get into specific numbers and details of his stimulus plan.
Obama took a few questions. Asked about the foundering automobile industry, Obama said it is historically "the backbone of America's manufacturing base."
He said, "We can't allow the auto industries simply to vanish." But he added, "We can't just write a blank check to the auto industry."
It is an industry, he says, "that has been resistant to change." And Obama said he was "surprised" that its top executives "did not have a better-thought-out proposal" when they appeared before Congress last week.
He said that the carmakers need to assure taxpayers that they have a plan for "a long-term sustainable auto industry" and that they are not just "kicking the can down the road."
Asked about the present state of the economy, he said that some proposed solutions the Bush administration has tried haven't worked. Others have perhaps helped stabilize rocky markets, he said.
But Obama said that his administration wants to clearly articulate "what our end goals are."
The American people deserve "clarity and transparency to our plan," Obama said. He added that adjustments will be necessary.
"What we have seen," he said, "is confusion on the part of the market sometimes in terms of what the overall direction might be."
Obama said he hopes to "summon that spirit of determination and optimism" within Americans and "bring together the best minds in America to guide us."
Then he introduced his economic team.
Since 2003, Geithner has been the president of the Federal Reserve Bank of New York. He knows Treasury from the inside out. He joined the department in 1988, when he was 27 years old, and has served in an array of positions for five different Treasury secretaries.
Summers was Treasury secretary under President Bill Clinton. From 2001 to 2006, Summers was president of Harvard University, where he now teaches in the Kennedy School of Government.
Romer, a professor at the University of California, is a leading expert in macroenomics and an economic historian with a deep understanding of the Great Depression. Obama referred to her "groundbreaking" research on tax policies and fighting recessions.
Melody Barnes, he said, has a "brilliant legal mind." She will be working "hand in hand" with his economic policy team, Obama said.
"That work starts today," he said, "because the truth is we do not have a minute to waste."
Material from the Associated Press was used in this report.