Do We Need an NEC?

Bruce Bartlett makes what is, I think, the right point about alleged personality conflicts between Christina Romer and Larry Summers — it’s not clear that Bill Clinton’s decision to create the National Economic Council and the job Summers currently holds was a good idea. The genesis of the position was, in part, a political gambit. One of Clinton’s main themes in the 1992 campaign was the idea that George HW Bush was “out of touch” and spending too much time on foreign affairs and not enough on domestic matters. So with the Cold War over, we would create a National Economic Council comparable to the National Security Council and an NEC director comparable to the National Security Advisor.

Nothing terrible has resulted from this decision, but it’s hard to imagine a scenario in which both the NEC director and the CEA chair have a really high level of job satisfaction. Neither person has a large agency to oversee and they can’t both be the president’s “chief economic advisor.” When you consider that there’s also a Domestic Policy Council and an Office of Management and Budget in the White House, it seems like at least one chief too many. Given the current tradition of making the NEC director someone who’s more of a political operator and making the CEA chair more of an ivory tower type, the solution might be to abolish the CEA. After all, if the president wants to get a briefing on some subject from an academic macroeconomist I’m pretty sure that could be arranged at any time.