Timothy Geithner new U.S. Secretary of the Treasury

The newly elected U.S. President Barack Obama warned on Monday that the United States is facing an economic crisis of historic proportions and introduced his economic team that is expected to put the U.S. economy back on the path of recovery and growth.

"Most experts now believe that next year we could lose millions of jobs," Obama said at a press conference in Chicago, just under two months before taking office. Obama stated that he sought leaders for his economic team who share his fundamental belief that "Wall Street cannot flourish without Main Street flourishing as well," meaning the broader economy and not just the financial sector. At the press conference in Chicago, Obama introduced the President of the Federal Reserve Bank of New York, Timothy Geithner, as the future Secretary of the Treasury, and former Secretary of the Treasury Larry Summers as the head of the National Economic Council. As the head of the New York regional branch of the FED, the U.S. central bank, Geithner (47) helped implement government measures to combat the crisis on Wall Street, overseeing the takeover of banks Bear Stearns and JPMorgan Chase, the bailout of insurance giant AIG, and the protected bankruptcy of Lehman Brothers.

Geithner has been at the helm of the Federal Reserve Bank of New York for five years, since November 2003. Summers served as Secretary of the Treasury in the Bill Clinton administration. He was the chief economist at the World Bank from 1991 to 1993. Before his government career, Summers taught economics at Harvard University. Obama also introduced Christina Romer, an economics professor at the University of California-Berkeley, who was selected as the head of the President’s Council of Economic Advisers, a group of economists who advise the President on economic policy. Obama also introduced Melody Barnes as the director of the Domestic Policy Council. Obama spoke just hours after the Bush administration announced a major bailout package for Citigroup, with $306 billion in government guarantees for the bank’s troubled assets and $20 billion in preferred stock buybacks. President George W. Bush earlier stated that he had spoken with Obama before the announcement of measures for Citigroup.

On Monday, Obama reiterated that his economic recovery plan envisions the creation of 2.5 million jobs by 2011, primarily through the rebuilding of road infrastructure and alternative energy sources. Obama stated that the new economic team has been tasked with developing recommendations for that plan and consulting with Congress, the current administration, and the Federal Reserve regarding immediate economic developments in the next two months. During the presidential campaign, Obama proposed $175 billion in economic stimulus over the next two years, but some of his economic advisers recently stated that this package needs to be much larger. Obama on Monday declined to speculate on the necessary size of the stimulus package, emphasizing that it will be "expensive" but must ensure that it is "large enough to stimulate the economy and get it back in shape."

Some Democratic representatives in Congress indicated that the two-year stimulus package could reach $700 billion. When asked by reporters about government assistance to the American auto industry, Obama was moderately critical, expressing surprise that its leaders came to seek government aid of $25 billion without a more concrete plan to overcome the crisis. During Obama’s speech, which was quite general and lacking new information since his economic appointments and plans had already been announced, the Dow Jones index fell by about 100 points, from a rise of 350 points that it had achieved after the announcement of aid for Citigroup. Over the weekend, it was reported that Obama had chosen New Mexico Governor Bill Richardson as Secretary of Commerce, who reportedly accepted the position, with the announcement of his appointment expected after November 27. (Hina)