President's Council of Economic Advisers

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President’s Council of Economic Advisers
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Founded 1946
Headquarters Washington D.C.
Products Analyzes and interprets economic developments
Web site www.whitehouse.gov/cea

The President's Council of Economic Advisers (CEA) was created as part of the Employment Act of 1946. It is a part of the executive office of the President of the United States and is comprised of three members appointed by the president who analyze and interpret economic developments, appraise programs and activities of the government and formulate and recommend national economic policy to promote employment, production and purchasing power under free competitive enterprise. The president designates one of the members of the CEA as chairman.

Federal Reserve Chairman Ben Bernanke served as the CEA's chairman from June 21, 2005 until Jan. 31, 2006.

Contents

History

The Council of Economic Advisers (CEA) was not the Employment Act of 1946's major focus. As the Second World War ended, many feared that the United States would return to being a depressed economy. Many felt that the United States had the ability, through discretionary fiscal policy, to prevent such an economic collapse but needed legislation to force the federal government to promote continued economic prosperity. Thus, Keynesian economists in government convinced their congressional allies to introduce the Full Employment Act of 1945. Because critics thought the proposed legislation would result in higher inflation, the final legislation (Employment Act of 1946) included vague goals of "maximum production and employment consistent with price stability."

During the first months of the Eisenhower administration, there was debate about whether the three-member form of the CEA should be continued. Critics noted that it did not always speak with a unified voice.[1]

Alan Greenspan, former chairman of the Federal Reserve, noted in a 2005 speech before the Truman Medal Award and Economics Conference in Kansas City though that the small agency of the CEA has "asserted its influence even while filling most of its positions with economists who were on temporary leave from other professional activities." He added that a hallmark of the CEA is the pride that its staff members take in providing objective analysis. "That devotion first and foremost to objectivity has led to the interesting phenomenon that, while the overall economic views of administrations have swung widely, the policy advice given by their successive CEAs has undergone far smaller swings," he said.[2]

Activities

The duties and functions of the CEA include:

  • Assisting and advising the president in the preparation of the economic report;
  • Gathering timely and authoritative information concerning economic developments and economic trends;
  • Appraising the various programs and activities of the federal government;
  • Developing and recommending to the president national economic policies to foster and promote free competitive enterprise, to avoid economic fluctuations or to diminish the effects thereof and to maintain employment, production and purchasing power;
  • Making and furnishing such studies and recommendations with respect to matters of federal economic policy and legislation as the president may request.[3]

The CEA has maintained a decentralized record keeping system. From 1946 to 1976, such files were considered to be the personal property of their creator. Many council and staff members who served during that period donated their files to the appropriate presidential library. In September 1976 during the Gerald Ford administration, the incumbent CEA council and staff members collectively offered their files to the National Archives for accessioning as federal records. The National Archives, in accepting the offer, established a record group and allocated the records to the Ford Library.[4]


Key People

References

  1. Council of Economic Advisers. EH.net.
  2. From The Economic Journal, 102 (September 1992), The Council of Economic Advisers and Economic Advising in the United States, by Martin Feldstein, Chairman of the Council of Economic Advisers During the Reagan Administration/Excerpt of Text on CEA Site. CEA.
  3. About the Council of Economic Advisers. CEA.
  4. Records of the Council of Economic Advisers. The National Archives.
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