Two Economic Ideas for Biden

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Not all big decisions are on policy. How you structure your presidency is just as important, since it dictates your policy path.

First, get rid of the National Economic Council. It was created by Bill Clinton as a power perch for Robert Rubin. The post was later held under Obama by Larry Summers. The idea was always malarkey that the head of the NEC would merely be an honest broker sifting alternatives for the president. The director of the NEC is where the power resides.

The NEC has crowded out the very useful role of the older Council of Economic Advisers (CEA) as a direct source of expert advice to the president. NEC chairs have treated the CEA as merely technicians.

The NEC has also created power struggles with other Cabinet officials, and given Wall Street yet another seat at the table. Not helpful.

Second, pay very close attention to whom you name to the key economic Cabinet power posts. Those would be the secretaries of Treasury, Commerce, Labor, U.S. trade representative, and budget director. Typically, Democratic presidents find a Wall Streeter to lead Treasury, a business mogul to head Commerce, and a deficit hawk at OMB.

Obama named Tim Geithner to the former and billionaire Penny Pritzker to the latter. The trade job has also typically gone to someone who is in the tank for Wall Street and the hyper-globalization lobby—Mike Froman under Obama. Labor is treated as a second-tier job. So the battle for progressive economic policies is over before it starts.

If Biden wants to be as good as his recent, very progressive words, he needs to change these patterns of political capture. Elevate labor secretary. Name a Treasury secretary committed to reining in Wall Street, not enabling it. Find a commerce secretary who believes in industrial policy; and a trade rep who really believes in the great statement Biden put out on rebuilding domestic manufacturing.

At the end of the day, when an administration takes shape, campaign policy papers don’t matter. Personnel does.

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