‘Woman CEO’ to Replace Summers?
Yesterday, Larry Summers — former Harvard president and lauded economist — announced he will leave his position as the head of the National Economic Council at the end of the year. Cue the rabid speculation over who might replace him. Names include Laura Tyson, who served as head of the NEC in the Clinton administration; Diana Farrell and Jason Furman, the current deputy directors of the NEC; and Jared Bernstein, Vice President Joe Biden’s chief economist.
But reports this morning suggest that Obama might look to name someone from the corporate world, more bluntly, a “Woman CEO,” thus killing two birds — keeping gender balance and placating the business community — with a single stone. Who might that “Woman CEO” (shudder) be? Speculation is centering on Anne Mulcahy, the former head of Xerox.
Would it even be feasible to name such a non-economist to a head economic position? Apparently, yes — the job is more management than heavy academic lifting, which is left to the Council of Economic Advisers, now headed by Austan Goolsbee. Keith Hennessey, a director of the NEC for George W. Bush, explains the gig clearly:
The NEC Director (Summers) runs the economic policy process. It’s a process management role. When an economic policy issue needs a Presidential decision, the Director of the NEC manages the process within the White House and the Executive Branch that ultimately results in a Presidential decision. Policy council staff run many meetings and conference calls.
The NEC Director generally has an advisor role and an honest broker role. The advisor role is the high visibility one that everyone thinks is fun: you get to tell the President what you think he should do on every economic policy decision he needs to make.
The honest broker role consumes much of the NEC Director’s time. Each week the NEC Director and his or her staff of about twenty run dozens of meetings and conference calls of senior Administration officials to discuss and debate policy questions, gather recommendations, and ultimately advise the President. In my view, the best NEC Directors were the ones who would not impose their own policy views on this decision-making process, but instead would let the 5-20 other senior advisors to the President slug it out. The NEC Director would make sure the debates were informed by accurate information, solid policy and legal analysis, and rigorous logic and strategy. If a Cabinet Secretary or a senior White House staffer thinks that the NEC Director is going to prevent the President from hearing his or her advice, or that the NEC Director has his thumb on the decision-making scale, then that Cabinet official or White House staffer will often seek a back channel to bypass the decision-making process and provide unfiltered *ex parte *input to the President. The President has to deal with so many issues and so many decisions that if this NEC-led process breaks down, the wheels eventually come off.
In addition to whatever personal skills and abilities he or she brings to the job, most of the NEC Director’s power comes from his or her proximity to the President (physically, bureaucratically, and sometimes personally), from the breadth of his turf, which covers all economic policy, and most importantly from the reality that he or she runs the meetings and controls the paper. If the NEC Chair is effective and perceived as fair by other members of the President’s economic team, he also gains power from other senior advisors who want to help the NEC policy process succeed, even when they sometimes disagree with the President’s decisions.