Obama names labor economist to replace Goolsbee

In a Rose Garden announcement on Monday, President Obama tapped labor economist Alan Krueger to become chairman of the White House Council of Economic Advisers. He would replace recently departed CEA head Austan Goolsbee.

Obama briefly mentioned the cleanup efforts in the aftermath of Hurricane Irene before announcing Krueger's appointment, saying that getting the economy going remains a top priority for his administration and alluding to the jobs plan he will announce next week. Krueger did not speak at the news conference, and Obama did not take questions.

Krueger, a Princeton University professor, would likely support more-aggressive government intervention to combat unemployment, according to a report in The Wall Street Journal.

Krueger served as assistant Treasury secretary for economic policy during the first two years of the Obama administration. During that time, he worked on analysis for tax incentives for employers, the "cash for clunkers" initiative, and Build America taxable municipal bonds.

Treasury Secretary Timothy Geithner, through a spokeswoman, said of Krueger that "given his expertise in labor economics, he is precisely the right choice to lead the CEA at this moment in history," The Journal reported.

"His experience at the Treasury will give him a running start in his new job," Martin Feldstein, CEA chairman under President Reagan, told The Journal. "Alan is an expert in labor-market problems, taxation, and the economics of terrorism. I hope the president listens to him."

Goolsbee, who seemed downright giddy with his new job at the University of Chicago (or with not having his old job), said on MSNB's Morning Joe on Monday that there is just one thing to focus on going forward: growth.

"When we're growing, we will be adding jobs -- that equation still works," he said. "Getting growth back up is critical. That ought to be the No. 1 priority."

Goolsbee also called the political turmoil "self-inflicted wounds that America has generated in the last four or five months."

Krueger would need to be confirmed by the Senate before he could succeed Goolsbee as CEA chairman. The White House considered acting Commerce Secretary Rebecca Blank and University of California (Berkeley) public-finance specialist Alan Auerbach for the CEA chairmanship.