The news this past week, including this morning’s news about
Citigroup, has made it even more clear that we are facing an economic
crisis of historic proportions. Our financial markets are under
stress. New home purchases in October were the lowest in half a
century. Recently, more than half a million jobless claims were
filed, the highest in eighteen years – and if we do not act swiftly and
boldly, most experts now believe that we could lose millions of jobs
While we can’t underestimate the challenges we face, we also
can’t underestimate our capacity to overcome them – to summon that
spirit of determination and optimism that has always defined us, and
move forward in a new direction to create new jobs, reform our
financial system, and fuel long-term economic growth.
We know this won’t be easy, and it won’t happen overnight.
We’ll need to bring together the best minds in America to guide us –
and that is what I’ve sought to do in assembling my economic
team. I’ve sought leaders who could offer both sound judgment and
fresh thinking, both a depth of experience and a wealth of bold new
ideas – and most of all, who share my fundamental belief that we cannot
have a thriving Wall Street while Main Street suffers; that in this
country, we rise and fall as one nation, as one people.
Today, Vice President-Elect Biden and I are pleased to announce
the nomination of four individuals who meet these criteria to lead our
economic team: Timothy Geithner as Secretary of the Treasury; Lawrence
Summers as the Director of our National Economic Council; Christina
Romer as Chair of the Council of Economic Advisors; and Melody Barnes
as Director of the Domestic Policy Council.
Having served in senior roles at Treasury, the IMF and the New
York Fed, Tim Geithner offers not just extensive experience shaping
economic policy and managing financial markets – but an unparalleled
understanding of our current economic crisis, in all of its depth,
complexity and urgency. Tim will waste no time getting up to
speed. He will start his first day on the job with a unique
insight into the failures of today’s markets – and a clear vision of
the steps we must take to revive them.
The reality is that the economic crisis we face is no longer just
an American crisis, it is a global crisis – and we will need to reach
out to countries around the world to craft a global response.
Tim’s extensive international experience makes him uniquely suited for
this work. Growing up partly in Africa and having lived and
worked throughout Asia; having served as Under Secretary of the
Treasury for International Affairs – one of many roles in the
international arena; and having studied both Chinese and Japanese, Tim
understands the language of today’s international markets in more ways
Tim has served with distinction under both Democrats and
Republicans and has a long history of working comfortably, and as an
honest broker, on both sides of the aisle. With stellar
performances and outstanding results at every stage of his career, Tim
has earned the confidence and respect of business, financial and
community leaders; members of Congress; and political leaders around
the world – and I know he will do so once again as America’s next
Treasury Secretary, the chief economic spokesman for my Administration.
Like Tim, Larry Summers also brings a singular combination of
skill, intellect and experience to the role he will play in our
As undersecretary, deputy secretary, and then secretary of the
Treasury, Larry helped guide us through several major international
financial crises – and was a central architect of the policies that led
to the longest economic expansion in American history, with record
surpluses, rising family incomes and more than 20 million new
jobs. He also championed a range of measures – from tax credits
to enhanced lending programs to consumer financial protections – that
greatly benefitted middle income families.
As a thought leader, Larry has urged us to confront the problems
of income inequality and the middle class squeeze, consistently arguing
that the key to a strong economy is a strong and growing middle
class. This idea is the core of my own economic philosophy and
will be the foundation for all of my economic policies.
And as one of the great economic minds of our time, Larry has
earned a global reputation for being able to cut to the heart of the
most complex and novel policy challenges. With respect to both
our current financial crisis, and other pressing economic issues of our
time, his thinking, writing and speaking have set the terms of the
debate. I am glad he will be by my side, playing the critical
role of coordinating my Administration’s economic policy in the White
House – and I will rely heavily on his advice as we navigate the
uncharted waters of this economic crisis.
As one of the foremost experts on economic crises – and how to
solve them – my next nominee, Christina Romer, will bring a critically
needed perspective to her work as Chair of my Council of Economic
Christina is both a leading macroeconomist and a leading economic
historian, perhaps best known for her work on America’s recovery from
the Great Depression and the robust economic expansion that
followed. Since 2003, she has been co-director of the National
Bureau of Economic Research Monetary Economics program. She is
also a member of the Bureau’s Business Cycle Dating Committee – the
body charged with officially determining when a recession has started
and ended – experience which will serve her well as she advises me on
our current economic challenges.
Christina has also done groundbreaking research on many of the
topics our Administration will confront – from tax policy to fighting
recessions. And her clear-eyed, independent analyses have
received praise from both conservative and liberal thinkers
alike. I look forward to her wise counsel in the White House.
Finally, we know that rebuilding our economy will require action
on a wide array of policy matters – from education and health care to
energy and Social Security. Without sound policies in these
areas, we can neither enjoy sustained economic growth nor realize our
full potential as a people.
So I am pleased that Melody Barnes, one of the most respected
policy experts in America, will be serving as Director of my Domestic
Policy Council – and that she will be working hand-in-hand with my
economic policy team to chart a course to economic recovery. An
integral part of that course will be health care reform – and she will
work closely with my Secretary of Health and Human Services on that
As Executive Vice President for Policy at the Center for American
Progress, Melody directed a network of policy experts dedicated to
finding solutions for struggling middle class families. She also
served as Chief Counsel to the great Senator Ted Kennedy on the Senate
Judiciary Committee, working on issues ranging from crime to
immigration to bankruptcy, and fighting tirelessly to protect civil
rights, women’s rights and religious freedom.
Melody’s brilliant legal mind – and her long experience working
to secure the liberties on which this nation was founded and secure
opportunity for those left behind –
make her a perfect fit for DPC Director.
I am grateful that Tim, Larry, Christina and Melody have accepted
my nomination, and I look forward to working closely with them in the
months ahead. And that work starts today, because the truth is,
we don’t have a minute to waste.
Right now, our economy is trapped in a vicious cycle: the turmoil
on Wall Street means a new round of belt-tightening for families and
businesses on Main Street – and as folks produce less and consume less,
that just deepens the problems in our financial markets. These
extraordinary stresses on our financial system require extraordinary
policy responses. And my Administration will honor the public
commitments made by the current Administration to address this
Further, beyond any immediate actions we may take, we need a
recovery plan for both Wall Street and Main Street – a plan that
stabilizes our financial system and gets credit flowing again, while at
the same time addressing our growing foreclosure crisis, helping our
struggling auto industry, and creating and saving 2.5 million jobs –
jobs rebuilding our crumbling roads and bridges, modernizing our
schools, and creating the clean energy infrastructure of the
twenty-first century. Because at this moment, we must both
restore confidence in our markets – and restore the confidence of
middle class families, who find themselves working harder, earning
less, and falling further and further behind.
I have asked my economic team to develop recommendations for this
plan, and to consult with Congress, the current Administration and the
Federal Reserve on immediate economic developments over the next two
months. I have requested that they brief me on these matters on a
daily basis, and in the coming weeks, I will provide the American
people and the incoming Congress with an overview of their initial
recommendations. It is my hope that the new Congress will begin
work on an aggressive economic recovery plan when they convene in early
January so that our Administration can hit the ground running.
With our economy in distress, we cannot hesitate or delay.
Our families cannot afford to keep on waiting and hoping for a
solution. They cannot afford to watch another month of unpaid
bills pile up, another semester of tuition slip out of reach, another
month where instead of saving for retirement, they’re dipping into
their savings just to get by.
Again, this won’t be easy. There are no shortcuts or quick
fixes to this crisis, which has been many years in the making – and the
economy is likely to get worse before it gets better. Full
recovery won’t happen immediately. And to make the investments we
need, we’ll have to scour our federal budget, line-by-line, and make
meaningful cuts and sacrifices as well – something I’ll be discussing
Despite all of this, I am hopeful about the future. 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.
And most of all, I believe deeply in the resilient spirit of this
nation. I know we can work our way out of this crisis because
we’ve done it before. And I know we will succeed once again if we
put aside partisanship and politics and work together, and that is
exactly what I intend to do as President.
Thank you, and I’m now happy to take questions.
Economic Team Announcement
Monday, November 24, 2008