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Alan Krueger, Labor Economist, Nominated To Become Obama Economic Adviser, Signaling Shift

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Even as Washington was preoccupied with the debt ceiling standoff this summer, Americans repeatedly told pollsters that the job market, not the federal deficit, was their main concern. Now, with President Obama reportedly reaching out to a prominent labor economist for a key administration position, it seems as though the White House is coming around to that point of view.

Obama has nominated Alan Krueger, a labor economist at Princeton, to chair the White House Council of Economic Advisers, filling the position most recently held by the economist Austan Goolsbee.

(This post has been updated to include comments by the president and additional material.)

Speaking from the White House Rose Garden Monday, Obama called Krueger "one of the nation's leading economists" and praised his "invaluable" work in the aftermath of the financial crisis, when Krueger served as both the Treasury's chief economist and its assistant secretary for economic policy.

Krueger's nomination to the CEA comes at the end of a summer of sluggish growth, high prices for consumers, swollen unemployment rates and weakened sentiments among Americans who see no immediate prospect of an economic turnaround. A series of underwhelming economic-performance reports have led a growing number of economists to conclude that the country still faces many months of anemic growth and high joblessness.

Shortly after the resolution of the debt-ceiling showdown in August, Obama pledged a renewed White House effort to improve the economy. The president is said to be putting together a major address on jobs to be delivered some time after Labor Day, for which he has already consulted with Warren Buffett, CEO of Berkshire Hathaway, and Alan Mulally, CEO of Ford.

Krueger is currently a professor of economics and public affairs at Princeton. His Treasury position, which he held in 2009 and 2010, required him to go through a Senate confirmation process, meaning that his confirmation this time around may be able to occur relatively quickly.

While at the Treasury, Krueger worked under Obama during a number of previous job-creation initiatives, including a hiring tax credit for small businesses in early 2010. He also helped to create a program known as Build America Bonds, which ran from 2009 to 2010 and made it easier for states and cities to borrow and invest money. The program, which Krueger has written about for The Huffington Post, was regarded as one of the more successful stimulus efforts of the Obama administration.

Krueger's academic work has focused on wages and the labor market, as well as the macroeconomic effects of education policy. He has written or overseen studies about a variety of other subjects as well, including the environment, the emotional peaks and valleys of a typical workday, and the economic factors that weigh on concert revenues for popular musicians, in a paper that quotes Jack Black's character from School of Rock.

In one influential 1995 study, Krueger and the labor economist David Card refuted a commonly held belief that increases in the minimum wage lead to fewer jobs for low-paid workers. Their research showed instead that in multiple real-life scenarios, raising the minimum wage resulted in no significant job loss.

In another widely cited work, the 2007 book What Makes a Terrorist, Krueger argued that poverty and lack of education play a relatively small role in the emergence of terrorism in a given society. Rather, he said, it's the absence or suppression of civil liberties that seems to reliably produce the most terrorists.

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