Pimco's El-Erian Tapped to Head President’s Global Development Council

Thursday, 27 Dec 2012 08:27 AM

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President Barack Obama has named Mohamed El-Erian, CEO and Co-Chief Investment Officer of fund giant Pimco, as chair of the president’s Global Development Council, the White House said in a statement.

The council, created in February, seeks to develop private-public partnerships to spur growth and development across the globe.

El-Erian’s job functions at Pimco won’t change.

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

The White House appointed eight other members to the council now headed by El-Erian:

• Richard Blum, chairman of Blum Capital Partners

• Sylvia Mathews Burwell, president of the Walmart Foundation

• Esther Duflo, economics professor at MIT

• Sarah Beardsley Degnan Kambou, president of the International Center for Research on Women

• James Manyika, director of the McKinsey Global Institute and a senior partner at McKinsey & Co.

• William Reilly, senior Adviser to TPG

• Steven Schwager, retired CEO of the American Jewish Joint Distribution Committee

• Smita Singh, former director of the global development program at the William and Flora Hewlett Foundation

Pimco manages the world’s largest bond fund.

El-Erian regularly provides insightful commentary in the media on today’s turbulent economic issues, often in a calming manner.

The son of an Egyptian diplomat, El-Erian said recently that a decision by House Republicans to cancel a vote on House Speaker John Boehner’s fiscal cliff deal increases the chances the U.S. economy will careen into a recession next year.

The rebellion against Boehner among his fellow Republicans stalls a deal with the White House to craft a 2013 fiscal framework and avoid what many see as a preventable recession.

Sweeping tax hikes are due to take effect at the end of this year at the same time deep cuts to government spending kick in, a combination known as a fiscal cliff that could tip the country into recession next year, according to both government and private-sector estimates.

The White House and Congressional Republicans have centered the debate on income taxes, with the Obama administration calling for tax hikes on incomes over $400,000 a year, and Boehner countering with a proposed hike on incomes of over $1 million a year, a proposal dubbed as Plan B that quickly found opposition among his own ranks.

Get a deal soon and end the political grandstanding, even with political parties, El-Erian wrote in a CNBC Guest Blog, or the chance of recession becomes increasingly likely.

“In order to avoid a recession that would aggravate the country’s unemployment problem and reignite concerns about housing and household finances, Democrats and Republicans need quickly to find a way to work together. While possible, it is hard to see how this happens endogenously. There are lots of divisions, and at many levels,” El-Erian wrote.

“[The] collapse of Speaker Boehner’s Plan B unfortunately makes it more likely that the fiscal cliff may materialize, constituting a blow to a recovering U.S. economy.”

Editor's Note: The Truth About the Economy — Government Documents Lead to Eerie Conclusion

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