On Tuesday, the White House announced the departure of National Economic Council (NEC) Director Stephen Friedman. The week before, President Bush named Office of Policy Development (OPD) Director Margaret Spellings to be secretary of education. He should use this as an opportunity to reorganize his domestic staff structure.
I have never been a fan of the NEC as an organization. It always has seemed to be an unnecessary extra layer of bureaucracy that added little to the implementation of economic policy. Indeed, I think the NEC has tended to get in the way, making it harder for established agencies like the Treasury Department and Council of Economic Advisers to do their jobs.
The NEC was created by the Clinton administration. It grew out of a campaign promise by Clinton in 1992 to elevate the stature of economic policy to that of foreign and defense policy in the White House. Toward that end, he proposed establishing an economic organization equivalent to that of the National Security Council (NSC).
The problem is that the nature of economic policy does not lend itself to the same organizational structure required for foreign and defense policy. For starters, the NSC is needed to mediate the institutional policy disputes that inevitably exist in every administration between the State Department and Defense Department. Moreover, the nature of foreign and defense policy makes it extremely time-sensitive and generally involves secret data and materials that demand special procedures.
Only very, very seldom does anything like this arise with economic policy. Most of the time, its issues do not require immediate action and almost never involve national security. Furthermore, the kind of institutional conflict that exists between State and Defense has no counterpart among economic agencies. They may have different roles and opinions, but they are not inherently at loggerheads with each other, requiring a specialized agency to mediate the ongoing conflict.
Knowing this also explains why some of the criticism of National Security Advisor Condoleezza Rice is misplaced. The very nature of her job is to avoid taking sides between State and Defense, which means keeping her personal views to herself. If she were to take sides, as many outsiders have criticized her for not doing, she would lose her credibility as an honest broker and essentially abrogate her position. Rice would be of no value to the president or the NSC if her positions were predictable. Thus, attacking her for being a chameleon misses the basic point of her function.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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