Establishment of the President's Economic Recovery Advisory Board

Background

Policy Impact

The establishment of the President's Economic Recovery Advisory Board (PERAB) under Executive Order 13501 had a significant role in shaping economic policy during a critical period of financial recovery. It provided an avenue for diverse economic perspectives and facilitated the flow of independent, nonpartisan advice directly to the President. By soliciting insights from various sectors, PERAB aimed to enhance the economic competitiveness of the United States. This structure allowed the administration to leverage expertise from outside the government, ensuring that economic policies were informed by real-world business experience and academic insight.

While traditional advisory bodies within the government can sometimes be insular, PERAB's composition of distinguished citizens from outside the government brought a fresh, dynamic approach to advising the executive branch. This advisory board enabled direct input on high-level economic strategies, ensuring they were not purely theoretical but rooted in practical, diverse experiences and insights. The unique structure encouraged broader participation and helped tailor economic strategies that were more attuned to the realities faced by industries and workers across the country.

Operational adjustments under PERAB included regular consultations with various stakeholders to evaluate the financial and banking systems' stability and growth potential. Additionally, PERAB's reports directly to the President provided a comprehensive evaluation of economic conditions, promoting informed decision-making. This was particularly crucial during the global financial crisis, as it directly informed executive strategies on economic recovery, job creation, and sustainable financial growth. However, the entity remained purely advisory, lacking regulatory or enforcement power, which allowed the President and his administration to select which recommendations to implement.

Reason for Revocation

Shift in Strategy

The decision to revoke the advisory board in January 2011 reflected a shift in the administration's strategic focus as it moved from immediate crisis management to long-term economic planning. By early 2011, the U.S. economy was transitioning from the initial recovery phase to one focusing on sustained growth and addressing structural economic concerns. President Obama potentially saw the need to streamline his advisory structures and integrate the learned insights into existing governmental frameworks such as the National Economic Council, rendering PERAB's external format less essential.

Additionally, the revocation could be attributed to an ideological realignment within the administration, wherein regular governmental advisory structures were preferred over ad-hoc external bodies. This would bolster the role of internal government expertise, reinforce institutional systems, and potentially reduce redundancy or conflicting advice avenues, centralizing economic strategy within existing federal mechanisms.

Moreover, the revocation highlighted an ideological commitment to efficient governance. Streamlining organizational structures and minimizing overlapping duties could have been seen as promoting a leaner, more responsive governmental apparatus. By dissolving PERAB, the administration may have sought to send a message of confidence in the formal economic advisory bodies, reinforcing their roles after initially relying on external bodies during the crisis peak.

This move also resonated with political considerations, whereby simplifying advisory processes could enhance perceived transparency and accountability. By folding advisory roles back into established entities, the administration could aim to consolidate policy development and reduce the number of independent, potentially conflicting inputs in its economic decision-making process.

Winners

Government Institutions

The revocation of the advisory board potentially benefited established governmental institutions by reinforcing their roles and centralizing economic policy advice within these entities. The National Economic Council and other longstanding advisory bodies regained prominence and could better coordinate policies across departments, fostering greater coherence in economic planning and implementation.

Furthermore, key members of the Obama administration's internal team, including the Secretary of the Treasury and the Director of the National Economic Council, might have found their influence on economic policy strengthened. This centralization allowed for a more streamlined chain of command and facilitated the integration of economic strategies and policy proposals with departmental goals and operations.

Additionally, sectors preferring stability and predictability in federal engagement were likely content with the dissolution of the ad-hoc advisory board. Large corporations and financial institutions, in particular, could benefit from working with established, predictable governmental channels rather than adjusting to external advisory bodies whose recommendations might introduce variability in economic policy directions.

Losers

Outsider Perspectives

The dissolution of PERAB might have disadvantaged those who valued outsider perspectives within federal economic policymaking. By revoking the order, the administration lost a dedicated forum for incorporating non-governmental viewpoints, which could have led to less diverse inputs into economic strategy, ultimately impacting the representation of various industry and public interests in federal decisions.

Small business owners and individuals from less represented economic sectors might have seen PERAB as a unique opportunity for their voices to reach the highest levels of government. Its removal potentially reduced the influence of voices outside traditional power corridors, leading to narrower perspectives within economic policy advisory circles.

Furthermore, members of the board and similar external experts who contributed their time and expertise without compensation lost an official platform to influence policy at a national level directly. The opportunity to collaborate with governmental economic strategists provided a unique outlet for their insights, potentially leaving a gap in how certain unconventional yet valuable insights reached the President directly.