Volcker Out, Immelt In on Economic Board
Friday 21 January 2011
by: Sheryl Gay Stolberg and Anahad O'Connor, The New York Times News Service | Report
Schenectady, NY - President Obama will name Jeffrey R. Immelt, the chief executive officer and chairman of General Electric, on Friday to run his outside panel of economic advisers, replacing Paul A. Volcker, the former Federal Reserve chairman, who is stepping down, the White House said.
Mr. Immelt will chair a new Council on Jobs and Competitiveness that Mr. Obama intends to create by executive order. In a statement issued shortly after midnight, Mr. Obama said he wants the council to "focus its work on finding new ways to encourage the private sector to hire and invest in American competitiveness."
The council will be a reconfigured version of the board Mr. Volcker chaired, the President's Economic Recovery Advisory Board. That body, created by Mr. Obama when he took office in the thick of the worst economic crisis since the Great Depression, is set to expire on Feb. 6.
The changes signal what the White House describes as "a new phase of our recovery," a shift from crisis to job creation. They come as Mr. Obama has been working hard to repair his frayed relations with the business community. Mr. Immelt, who was a member of the original board, has been a frequent presence by the president's side in recent months, as Mr. Obama has sought to spotlight his efforts on behalf of American companies overseas.
He was with Mr. Obama when the president traveled to India in November. During a stop in Mumbai, the White House announced a string of business deals between India and American companies, including a $750 million order from India's Reliance Power Ltd. for steam turbines manufactured by General Electric.
And Mr. Immelt was with the president again this week during the visit of President Hu Jintao of China. The G.E. executive attended a high-level meeting Mr. Obama convened with business leaders and Mr. Hu. He was also a guest at Wednesday night's state dinner in honor of the Chinese leader.
"Jeff Immelt's experience at G.E. and his understanding of the vital role the private sector plays in creating jobs and making America competitive makes him up to the challenge of leading this new council," Mr. Obama said. The president will make the announcement of Mr. Immelt's appointment during a visit to Schenectady, the birthplace of General Electric and home to G.E.'s largest energy division. The steam turbines purchased by Reliance Power will be built there.
It was well known in Washington that Mr. Volcker, 83, had sometimes been frustrated in his role as an outside adviser to the president. In the statement, Mr. Obama thanked Mr. Volcker for his service and pledged to continue to call on the former Fed chairman for advice, saying, "He will always be a member of my team."
In reconstituting his economic advisory panel, Mr. Obama appears to have changed its mission from stabilizing the economy to increasing employment, something signaled by the board's new name, the President's Council on Jobs and Competitiveness.
Mr. Immelt, who became chairman and chief executive officer of General Electric in 2001, has worked closely with the Obama administration. The G.E. executive announced his new role as head of the jobs panel in a Washington Post opinion piece on Friday, and he was also scheduled to appear with the president the same day at a General Electric plant in Schenectady, N.Y.
"The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world," he said in the piece. "My hope is that the council will be a sounding board for ideas and a catalyst for action on jobs and competitiveness. It will include small and large businesses, labor, economists and government."
During Mr. Volcker's time as head of the previous panel, the former Fed chairman met periodically with Mr. Obama and had something of a lukewarm relationship with the administration, which mostly obtained its economic guidance from Timothy F. Geithner, the Treasury secretary, and Lawrence H. Summers, director of the National Economic Council. Mr. Volcker, however, became well known for crafting a measure that restricts the ability of banks whose deposits are federally insured from trading for their own benefit. Mr. Obama proposed the "Volcker rule" in January 2010 as part of a broader financial regulatory reform effort, though the measure has been fiercely opposed by some banks and Wall Street firms.
Mr. Obama's statement called Mr. Volcker "one of the wisest economic minds" in the country, and someone who has "fought for policies that help American families and strengthen our economy."
Mr. Immelt's appointment comes as Mr. Obama has increasingly turned to people with close ties to the business sector for counsel in the wake of the setbacks of the midterm elections, something highlighted by the appointment of William M. Daley, the former Commerce secretary and senior executive at JPMorgan Chase, as the president's chief of staff.
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