"Leaving Policy to the Policymakers and Business to the Businessmen"
I don’t have particularly strong feelings about who should run the National Economic Council besides a sense that the White House should make up its damn mind,* but while I think Felix Salmon makes a number of good points about the unfortunate Wall Street domination of Democratic economic policymaking circles, I think this goes badly awry:
On the other hand, if it’s really true that the only successful managers who are Democrats fall into one of Brad’s three groups [i.e., academics, movie studios, and Jewish investment banks], then the Democrats have much bigger problems than working out who the next head of the NEC should be. I don’t think it is true: I think that America is full of successful Democrats in flyover states. But also, I don’t think that it’s necessary or even particularly desirable that the next head of the NEC should be a wizened political strategist or, for that matter, a Democrat. Better that it’s someone who has seen at first hand how the economy works in America, by creating real value rather than living parasitically on those who do. And one thing that most politicians, academics, and bankers have in common is that they are fundamentally parasitical creatures.
This is a charming right-populist conceit, but I think it does a fundamental misservice to both capitalism and government. There’s a certain “parasitical” element to a lot of life in an advanced economy, including in the government and politics sectors. But effective government and decent macroeconomic conditions are extraordinarily valuable things and people who contribute to their creation are creating real value for society just like anyone else doing anything useful. And it’s a big mistake to think of the job of creating good economic conditions for a market economy as just an extension of the job of doing effect work as an executive.
Trying to think of an appropriately “flyovery” business I immediately thought of my favorite restaurant chain, Olive Garden, owned by Darden Restaurants, whose CEO seems to be a Democrat (or at least a donor to Rep Ron Klein). So should Clarence Otis, Jr become the guy who gives Barack Obama his morning economic briefings, the guy who manages the flow of economy-related memos to the President and the Chief of Staff, one of the administration’s key arm-twisters on the Hill, an explainer of economic policy ideas to members of the elite press, a hand-holder of occasionally pissed off interest groups, etc.? Well, it’s possible that he’d be good at that stuff. Or that Coscto CFO Richard Galanti or some other successful figure from corporate America would be. But it’s hard to see why their success in the business world would lead you to expect that any more than I think Bill Clinton’s successful career as a politician indicates that he’d be a good choice to run chain restaurants.
I think one way we’ve gotten to finance’s over-domination of the political process is by giving too little scrutiny to this conceit that economic policymaking is first cousins with being a rich businessman. Expanding the realm of businesses from which rich businessman policymakers are chosen has some merits, but the fundamental thing is to respect the work on its own terms.
I think it’s hard for outsiders to participate meaningfully in these staff discussions since there’s no point in foisting an advisor on the president who you like unless the president also likes him and listens to him and gives him authority in internal fights. But Summers has a smart, hardworking, well-regarded deputy named Jason Furman. If there’s someone from the outside who Obama loves and who didn’t want to work in the administration due to a shortage of high-level positions, then Summers leaving is a great opportunity to bring that Person X in from the outside. If not, then why not promote Furman and fire him later if there’s a problem? In general, the Obama White House seems to move way too slowly on personnel matters.