Bloomberg TV reports that George W. Bush is likely to nominate Kevin Warsh and former administration official Randall Kroszner to the Federal Reserve Board (FRB). For some background surf to this and this post.
The newbies have been groomed in Bush's administration already. Warsh has been one of Bush's special assistants on economic policy since 2002.
The National Economic Council (NEC)at the White House was created by former president Bill Clinton in 1993. In his 1992 campaign, Governor Clinton said that he wanted to create an "Economic Security Council" that would be similar to the National Security Council; later, however, he dropped the word security to avoid the possibility that security considerations might be seen as overriding trade and economic goals in dealing with nations such as Japan, Russia, or China.
Following his inauguration, Clinton promptly made good on his promise. On January 25, 1993, he signed Executive Order 12835, and the National Economic Council (NEC) came into being.
PHOTO: Kevin Warsh (and Jane Lauder) at last year's Bloomberg party, considered "the hottest after-party in town" by Washingtonlife.com. Photo courtesy of Washingtonlife.Warsh has been working as a lawyer at Morgan Stanley in the last 7 years.
PHOTO: Randall Kroszner. Photo courtesy of aei.org.
Kroszner is currently an economics professor at Chicago university. Find his bio here (pdf).
The two new FRB members will need to take a good look at the Congressional Budget Office's (CBO) outlook on the budgets 2006-2016 which was published yesterday (pdf).
The CBO projects a deficit of up to $360 billion this year or 2.8% of GDP, assuming a GDP growth rate of 3.6%. Good luck.