by a former Special Forces Officer
There can be economy only where there is efficiency.
In 2009, Dennis Blair, then Director of National Intelligence, rocked conventional wisdom by boldly asserting the primary near-term security concern of the United States was not Russia, China, or international terrorism but rather the global economic crisis. As the world witnessed the full effects of the Great Recession, Blair proclaimed that the continued global economic and financial crisis posed a greater threat to our national security. He also stated the longer the economic recovery, the greater the likelihood of serious damage to United States strategic interests worldwide.
Those prophetic words by Dennis Blair from over a decade ago resonate today as the world struggles to regain its balance. From the economic impact of the global pandemic to ransomware attacks on oil pipelines to the war in Ukraine, the criticality and fragility of the U.S. economy remain a significant issue. Yet as vital as the economy is to our strategic well-being and preservation of our way of life, efforts to devise and execute effective and efficient economic policies, particularly those leveraging economic power as an instrument of national might, remain problematic.
The impact of the coronavirus, global supply chain issues, and trade wars has shown how vulnerable the U.S. economy is to a variety of strategic factors. Many of which require a comprehensive, all-of-government approach to resolve. As the United States organizes and employs unprecedented economic sanctions against Russia for its aggression in Ukraine, the types of sanctions, their efficacy, and coordination of those sanctions, both nationally and internationally, have shown the challenges of wielding this sort of economic power. To use economic might as an effective weapon, it must be well-coordinated for maximum effectiveness.
Given the significance of our economy and the role our economic strength plays in both domestic and global affairs, the U.S. often struggles to field comprehensive, effective, and unified economic plans and policies. There are many factors that contribute to this problem. Bipartisan politics is one among many, however, less apparent, but arguably of critical importance, is the lack of all-inclusive economic integration into the national strategic decision-making within the U.S. government. This lack of integration is largely due to the absence of a single entity with economic policy authority within U.S. national decision-making structures.
While many G-7 countries have a Minister of Economics in their cabinets, a quick survey of the U.S. National Security Council (NSC) reveals no equivalent cabinet-level position representing economics as an element of national power. No single cabinet officer advises the President on economic matters of strategic significance. The four main elements of national power are diplomatic (State Department), informational (Office of the Director of National Intelligence), military (Defense Department), and economic. All are represented by a cabinet-level authority, apart from the economic component.
Currently, the President and the NSC receive economic policy advice from the National Economic Council (NEC), a non-statutory, non-enumerated adjunct to the NSC that lacks the mandate to direct wide-ranging economic strategy. Departments of Commerce, Treasury, Energy, Transportation, Agriculture, the Federal Reserve as well as other U.S. government organizations all play vital roles in the U.S. economy and all have inherent bureaucratic and administrative friction points among them that limit the optimization of a comprehensive economic stratagem.
The need for economic integration into national strategic decision-making is not a new phenomenon. Some form of economic policy staff has existed in the White House since the 1960s. President Lyndon B. Johnson assigned a senior-level aide to organize staff and develop domestic policy, which included economic policy. In 1970, President Richard M. Nixon issued an executive order that created the Office of Policy Development, a large White House office with jurisdiction over economic and domestic policy. It was President Bill Clinton however who recognized the need for more robust integration of economics into national strategic decision making. He created the National Economic Council (NEC) on January 25, 1993, by Executive Order 12835. The NEC’s creation fulfilled a major campaign pledge of President Clinton to put the then economic problems of the United States at the forefront of federal policymaking.
The purpose of the NEC ostensibly is to coordinate the economic policy-making process and ensure economic policy decisions and programs are consistent with the President’s stated goals. In principle, the NEC also has opportunities to demonstrate increased leadership domestically, bilaterally, and in multilateral organizations such as the World Trade Organization (WTO), Asian-Pacific Economic Cooperation (APEC), and the Association for South-East Asian Nations (ASEAN).
The creation of the NEC was certainly a step in the right direction and an improvement in the overall effort to integrate economics into national strategic decision-making. However, the NEC falls short of delivering the necessary direction required to coordinate and implement strategic economic policies. The NEC remains essentially an advisory organization and as a non-statutory member of the NSC, lacks supremacy and unity of effort over the numerous departments and agency heads within the administration whose policy jurisdictions impact the nation’s economy.
The NEC Director can only coordinate in conjunction with these officials to try and implement the President’s economic policy objectives. As the chief economic advisor to the President, the NEC Director is supported by a staff of policy specialists in various fields including agriculture, commerce, energy, financial markets, fiscal policy, healthcare, labor, and Social Security. However, the NEC Director retains no statutory authority over these areas. The NEC’s task remains to try and cooperate closely and work with the other elements of the NSC on strategic economic issues. The NEC, therefore, lacks the needed legislative clout required to orchestrate and align the confusing patchwork of government economic activities.
The sheer magnitude of the importance of economic power mandates the need to consolidate efforts under one director, a Director of National Economy. Just as the intelligence failures on September 11th led to the creation of a unified intelligence community under the Director of National Intelligence, and the creation of a Director of Homeland Security, the importance of the U.S. economy merits the creation of a unified economic community with representation on the NSC.
A new government agency is not what is being advocated. The existing structure of the NEC with some adjustments in staffing and membership is sufficient in terms of the structure required. However, leadership, in the form of a Director of National Economy, is the crucial missing element. A Director of National Economy will not supersede the authorities of other cabinet secretaries, but rather, ensure strategic economic matters are coordinated across agencies and properly represented at the appropriate level, commensurate with the importance of the issue. The Director of National Economy can play a crucial leadership role in establishing effective economic policies as well as helping articulate and build consensus with Congress for those plans. Consistent and effective economic policies will in turn restore investor confidence, eliminate uncertainty on the direction of economic strategy, and promote a milieu needed for economic recovery and growth.
The creation of a Director for National Economy will fill a much-needed void. The Director of National Economy will streamline the U.S. economic effort, coordinate policy among divergent and unsynchronized agency efforts, provide outreach on economic issues to Congress, and eliminate unnecessary and redundant regulatory overlay that constrains business. In a time of crisis, the Director of National Economy will coordinate and align U.S. economic power in accordance with the directives of the President.
As stated, no current organization within the Federal Government speaks with all-inclusive authority on strategic economic matters nor has stature within the currently established national security apparatus to effectively execute national economic strategy. An executive, cabinet-level position, appointed by the President, approved by Congress, and charged with the overarching responsibility for economic policy as a permanent member to the NSC fulfills that much-needed role.