As U.S. president-elect Barack Obama named his key financial advisers on Monday, he called on the newly-elected Congress to pass an economic stimulus package immediately after starting their new session early in January.
"We are facing an economic crisis of historic proportions," Obama told reporters.
He also said the economy "is likely to get worse before it gets better," as he asked Congress not to hesitate in putting together a rescue package that would be a follow-up to the US$700-billion-plus financial sector bailout already announced by the Bush administration.
Obama's remarks, combined with outgoing President George Bush's promise to help save Citigroup, seemed to breathe life into the beleaguered New York stock market.
The Dow Jones industrials soared 397 points. Along with gains made last Friday, it made an 891-point increase over two trading days. According to The Associated Press, that's the biggest percentage gain since October 1987.
Obama hasn't said how much he wants from Congress, but some Democratic lawmakers have put the figure in the same range as the Bush bailout package.
Even as he asked Congress for money to stem potential job losses, Obama warned Americans to tighten their belts. He was particularly critical of the Big Three U.S. automakers. He said he wants to see a more detailed plan from their leaders before he backs a US$25 billion emergency loan package they have requested.
With a deepening global economic crisis, Obama has moved relatively quickly to put together his cabinet before taking office in less than 57 days.
On Monday, Obama named:
- New York Federal Reserve President Timothy Geithner as Treasury Secretary
- Lawrence Summers, a former Clinton advisor, as head of the White House National Economic Council
- Christina Romer, an economics professor at UC Berkely, head of the White House Council of Economic Advisors
- Melody Barnes, a former policy executive at the Centre for American Progress, as director of the Domestic Policy Council
Bringing together the 'best minds'
Obama said the team is comprised of the best people equipped to fix the current economic crisis faced by the U.S. and much of the world.
He urged Americans not to "underestimate our capacity to overcome" the major economic challenges the U.S. faces, but warned there will be no quick fix.
"We know this won't be easy and it won't happen overnight," Obama said of finding a way out of the economic uncertainty.
"We'll need to bring together the best minds in America to guide us and that's what I have sought to do in assembling my economic team."
During the somber news conference, Obama said the appointees he named on Monday share his belief that "we cannot have a thriving Wall Street without a thriving main street, that in this country we rise or fall as one nation, as one people."
Geithner has served in senior roles in the Treasury Department, the International Monetary Fund and the New York Fed and has an "unparalleled understanding of our current economic crisis in all of its depth, complexity and urgency," Obama said.
Summers, Obama said, brings a unique combination of "skill, intellect and experience to the role he will play in our administration."
Summers served as under-secretary, deputy secretary, and the secretary of the treasury. He was a "central architect in the policies that led to the longest economic expansion in American history," Obama said.
Obama described Romer as a macroeconomist with a specialty in the effects of fiscal policy on monetary shocks.
The president-elect also said Romer's extensive study of the Great Depression will come in handy.
Romer is also co-director of the monetary economics program at the National Bureau of Economic Research. In her role at the NBER she is also in charge of determining when the nation is in a period of recession or economic recovery.
