The Economicization of US Foreign Policy: Getting Into National Economic Council Stuff


HCR 3.jpgStarting today on the US Senate Foreign Relations Committee, a new staffer joined the team.
She is my former New America Foundation colleague Heidi Crebo-Rediker, a brilliant financial markets expert, who in recent years worked in Moscow and London and who has been concerned about the global rise of “state capitalism” in other parts of the world — and America’s seeming lack of concern about government-directed strategic financial moves that other states are making.
Crebo-Rediker will head the portfolio for economics, markets and finance on the Senate Foreign Relations Committee for Senator John Kerry — who told me he is greatly impressed by Crebo-Rediker’s work and approach to international finance.
America’s global economic position is very much on Senator Kerry’s mind — evidenced in part by the Washington Post‘s snippet that the Senate Foreign Relations Committee Chairman was in deep conversation about the economy with Ben Affleck at an Inaugural party.
This trend of Foreign Relations/National Security parts of the government “going economic” has been happening for a long time on an incremental basis.
During the Clinton administration for instance, Joshua Gotbaum served both as Assistant Secretary of Defense for Economic Security and as Assistant Secretary of the Treasury for Economic Policy. At that time, DoD was stretching into economic policy questions with the post that Gotbaum first held.
However, there seems to be more of a punctuation point around recent institutional moves like at the Senate Foreign Relations Committee — that America’s national security and foreign policy can no longer be neatly siloed away from its economic circumstances.
The Department of State is going through similar adjustments of its policy turf.
At the Senate confirmation hearing of Deputy Secretary of State for Policy James Steinberg, Senator Jeanne Shaheen asked Steinberg what role the State Department would play as compared to the Departments of Commerce and the Department of Treasury in dealing with America’s international economic policy position.
Steinberg responded:

It is critical that the State Department play a central role in this. (emphasis added)

James Steinberg went on to say that while there are obviously a lot of resources spread across the government that deal with economic policy, it was important to develop a more “integrated approach.” He said that we needed an integrated approach that included relationships with key countries and allies and dealt with the realities of integrated markets as well as the impact of this policy on other countries and on Americans.
Steinberg said that otherwise — without an integrated approach with the State Department playing a central role — the government would otherwise end up with a stovepiped approach, with different agencies pursuing different work.
Steinberg punctuated this graphically by suggesting:

The State Department will play an active role not only in the traditional NSC World — but also the NEC World.

For the uninitiated, the NSC is the National Security Council in the White House — and NEC is the National Economic Council.
Steinberg’s logic makes sense — and so does John Kerry’s decision to bring someone in with real world expertise in financial markets.
It is long overdue for the lines that demarcated geostrategic issues from geo-economic ones to be blurred and fudged up.
But still. . .expect some turf wars from Treasury, Commerce, and some in the National Economic Council who don’t yet fully sign on to Jim Steinberg’s sensible vision.
And it will be interesting to see if the Senate Finance Committee tries to either acquire Heidi Crebo-Rediker from John Kerry’s stable, or just ignores the expansion of economic staff capacity on the Foreign Relations Committee, or works collaboratively with it.
— Steve Clemons


9 comments on “The Economicization of US Foreign Policy: Getting Into National Economic Council Stuff

  1. Robert M says:

    OK I totally blew it on where she is employed. I do know that the Clinton’s want the same thing at state, i.e. a role in determining economic policy. If they weren’t there I could accept the situation.
    As to her role on foreign relations; I think you’re right in that there needs to be some co-ordination but here it seems to me that the need is for a new subcommittee that crosses committee lines. In an English parliamentary type government it is more available because the partisan lines are drawn at the shadow level.
    As to the cabinet levels there is again the need for the same type of cross co-ordination. Hopefully the cabinet can work that out. I have doubts though because all the current moves have been to appoint czars at the White House guaranteeing continued confusion.


  2. WigWag says:

    “America’s global economic position is very much on Senator Kerry’s mind — evidenced in part by the Washington Post’s snippet that the Senate Foreign Relations Committee Chairman was in deep conversation about the economy with Ben Affleck at an Inaugural party.”
    Who would have guessed that Ben Affleck was so interested in economic policy? After their “deep”conversation, I’m surprised Kerry didn’t recommend Affleck to President Obama for Secretary of the Treasury or at least Chairman of the SEC. With Affleck ensconced in a Cabinet position, Kerry could turn to the important job of finding a position for Affleck’s friend, Matt Damon. Given Damon’s success playing Jason Bourne, Director of the CIA would be perfect for him.
    The only problem is that Obama already offered that job to Leon Panetta. To get Damon appointed, some strategy needs to be developed to dump Panetta. Surely Panetta must have a nanny tax problem somewhere in his past or perhaps the Panetta Institute at California State University provided a free car and driver that Panetta never paid taxes on.
    If no tax problem can be discovered, Steve Clemons could always ask Maureen Dowd to intervene. She could do a column or two slandering Panetta and if necessary she could recycle her favorite line about Al Gore; you know, the one where she says “he’s so feminized, he’s practically lactating.” No one would support a “lactating” head of the CIA.
    One thing you can be sure of, is that macho man Jason Bourne, aka Matt Damon, isn’t lactating.
    Can you imagine the star power in Washington, D.C. if all this worked out?
    We would have the new American Idol, Barack Obama as President and Ben Affleck and Matt Damon in the cabinet.
    Can you imgaine what the parties would be like at Maureen’s house?


  3. E.Manning says:

    All I can say is thank God we are finally consulting with Ben Afflec! This truly signals that we are finally taking things seriously.


  4. Mr.Murder says:

    Thanks greatly for this post, Steve.
    On a prior thread, going into the weekend, I asked that you get a story detailing how we plan to implement spending for policy with job creation here.
    Mostly I wanted assurances that money for USAID and other projects would become integrated ventures. Appropriations that would tie directly into American job creation while still helping develop the background economic and leadership structure abroad to accelerate American interests, private and public.
    Although this has long been a design of progressive and pragmatic aims, this is one time we’ve actually embraced the concept in a unified example to the fullest extent imaginable.
    In the future I could see this take even bolder steps. The steengthening of financial institutions in Gaza, Israel,Cyprus, Palestine, Lebanon, Egypt, and Jordan. When money from each of these models gains vested interest with the other it will help cultivate the kind of structure needed to advance peace. See also Turkish EU membership and southeast Europe. Cuban-American normalization. SEATO activity to mirror NATO deployments in Afghanistan.
    All of these complex arrangments can nourish the roots of commerce, provided venture capital doesn’t go use explotiative means, in adapting managed framework as a basis of value exchange.


  5. Zathras says:

    The Senate Foreign Relations Committee was, as a practical matter, the Bush administration’s doormat. This was a matter of institutional decay, of the Senate as well as of the Committee, as well as personal deficiencies on the part of committee members.
    I’d like it if this changed with the new Congress and administration, and I suppose it’s nice that a new staffer on Foreign Relations is someone Steve Clemons knows and likes. The Committee isn’t going to be much more a force in foreign or economic affairs, though, if its chairman can’t do better than deep conversations with Ben Affleck.


  6. TonyForesta says:

    If she is one of the “ideologues that come out of the Rubin camp, – read this and weep. The financial crisis a Pandora’s box of potential crisis, and the worst is yet to come.
    I would prefer new blood, new ideas, and new approaches to solving and correcting this horrorshow. All the oldworldways FAILED miserabley. The old models do not work. Many of the oldworldways in intrinsically corrupt and criminal, not to mention morally reprehensible and immoral.
    American must accept the terrible truth that our economy and our treasury is insolvent, – that our economy and treasury must be methodically and intelligently demolished, and a new more balanced, fair, equal, lawful, forcefully regulated, and ethical and moral economic model and treasury policies MUST be methodically and intelligently constructed to replace the oldworld criminal and FAILED system. The models of the past are dead and rotting in the field. It is time for new ideas, new policies, and new approaches.
    Simply moving pieces around the leadership chess board and bruting the exact same failed and criminal policies is a recipe for certain disaster.
    Heidi is I’m sure and nice human being, but her proclivities are bent of feeding, immunizing, and bailing out the the predator class at the taxpayer expense.
    Thanks, but no thanks!
    The people need the change Obama promised, and apparently is now betraying and abandoning. Wall Street and government insiders are the primary and single cause of the many problems and crisis facing Americans – not the solutions.
    We need real change, real accountability, and real focus on the peoples best interests, and not the status quo, a woefull lack of accountability and accounting, and overt favoratism of the predator class above and beyond the best interests of the American people.


  7. ... says:

    i think this is a helpful move as opposed to only listening to rubin types… hopefully obama will pay attention to nec’s views on economic issues as much as he does to the other dept’s where the focus is only on finances…


  8. Steve Clemons says:

    Robert M — I think you are confusing things. Heidi is not joining State, she is joining the Senate Foreign Relations Committee — which I totally support. I also would like to see the State Department become more tuned in to the realities of economic competition and markets… Arguably, the State Department played a leading role over the years in stifling American competitiveness and harming America’s global economic condition in favor of various broad national security goals — because we were “stovepiped” then. Steinberg is right that we need genuine coordination and integration — but I think he’s still going to have a tough time getting others to play.
    But in general, I disagree with your take — In my view we need more people who understand the realities of finance like Heidi — and few who are ideologues that come out of the Rubin camp.
    Steve Clemons


  9. Robert M says:

    This appointment is ridiculous. She is not needed nor is anyone from Commerce. With the situation we currently face having one more competing bureaucracy is a distraction. The financial crisis is a Treasury issue. Further, putting it in the State Dept is just one more opportunity for the Clintons to buy influence for themselves. They need to be stopped now.


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