I apologize for not having a better title, I just couldn’t come up with anything. Keith Hennessey is not a name I was familiar with until yesterday. But, from 2007 to 2009 he was the Director of the National Economic Council (NEC) under the Bush Administration. Don’t know what the direct of the NEC is? No worries, we’ll get to that. Hennessey now runs a blog about policy in the United States, and he wrote a post about the various roles of the different economic advisers in the White House.
I’ve often wondered why there were so many different people in government with their hands in economic affairs. The Federal Reserve exists to operated independently, but we have the Treasury to serve the roles for the president right? Wrong. The Treasury is too busy dealing with issues such as tax, raising money for Congress, and lately being the face of government against Wall Street. It’s Treasury Secretary Time Geithner’s job to run a financial powerhouse, not advice the president on economics and policy.
No that job falls into a dozen other categories and acronyms. The two most important are the NEC and the CEA. You know what NEC stands for but what about CEA? That’s the Council of Economic Advisers. Why is there a National Economic Council and a Council of Economic Advisers? They sound the same. Their roles are in fact quite different. The CEA kind of serves as consultant or adviser to the president. They will educate the president on the economics of a decision or policy discussion. The head is usually an academic economist, for example Bernanke held this role before taking over The Fed. The NEC is more focused on the policy aspect of economics. Keith Hennessey uses an example of suggesting a $1 increase in the gas tax to explain the different roles. The head of the NEC is more of a manager and would coordinate and lead discussions with all the interested members of the staff and cabinet, as well as the president. The head of the NEC is less likely to offer an opinion, and more likely to let everyone else do that. The head of the NEC needs to be an expert on government, whereas the head of the CEA needs to be an expert on economics.
Which is why I suggest the NEC goes for a little re-branding. Instead of National Economic Council, how about: Economic Policy Council, or just Economic Meeting Coordinator. I’m sure the confusion is rare inside the White House but outside, whew!
I’m mostly regurgitating what Hennessey talks about in his post, but his is LONG. It’s really long for a blog post. I highly suggest that you read it though, because there are more distinctions to be made, as well is talking about the other seats at the economic table: such as the Treasury, Office of Management and Budget, and the Commerce Department. It’s an excellent look inside the economic discussions that go on at the White House.
Hennessey reminds me and you that every presidency works in different ways. Bush had a simpler system, Obama more complicated. This makes sense based on their backgrounds. Bush is a business man and probably believes that decisions cannot always be made with every bit of information available. Don’t waste 500 hours researching a policy decision, there are other things to do. Business works this way. Obama is a lawyer, lawyers often want every bit of information they can get. So there are more meetings, and more information gathering and research. Which way works can only come down to how the president works. This is a political strategy, but just an operation of how someone works best.
Once again, I highly recommend that you read Hennessey’s post, but if you get bored easily I’ve given you more than you probably needed already.
Photo: The White House
 By The Weakonomist |
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