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Blog Post | February 1, 2023

The Rubinite In The Running For National Economic Council

Executive BranchRevolving Door
The Rubinite In The Running For National Economic Council

Federal Reserve Vice Chair Lael Brainard is working mightily to make herself inevitable as the next Director of the National Economic Council. The American Prospect’s Robert Kuttner wrote last week about how moving Brainard from the Fed to the NEC would be a massive tactical blunder for President Joe Biden: it removes the most influential and most consistent dove from a Fed Board seemingly hellbent on breaking the back of workers nationwide through rate hikes, and puts her in charge of issues where her modest prior experience seems to indicate more conservative views.

But Brainard isn’t the only person in the running to replace NEC Director Brian Deese — and unfortunately, one of the other leading contenders is just concerning, if not more.

According to the Washington Post, Sylvia Burwell, an alumna of the Clinton and Obama administrations and currently the President of American University, has been floated as a possible NEC Director. AU’s spokesman denied the rumors to the school’s student newspaper. If you think that means anything, you clearly don’t know many press flaks.

To understand why Burwell running the NEC would be so concerning, it helps to know a bit of history about the NEC itself. According to Newsweek reporter Michael Hirsh, when Bill Clinton won the Presidency, he knew that he wanted his economic policy officials to show stricter message discipline than their predecessors had. He criticized the way that outgoing President George H.W. Bush’s treasury secretary, budget director, and Council of Economic Advisers chairman had all complained about each other to the Washington Post’s Bob Woodward during the ’92 campaign. 

Clinton knew that the State Department, Pentagon, and other foreign policy agencies all kept their screaming sessions to a standing meeting at the White House. This regular strategy meeting, called the National Security Council, was where diplomats and generals would sort out their differences and hash out a national strategy on major issues, so that they could look unified in front of the media. Clinton chose to copy that model for his economic officials. He set up a standing meeting for his top economics appointees to decide on their political strategy called the National Economic Council, or NEC.

Clinton also knew who he wanted to lead the NEC. He’d been elected on a promise to “reinvent government” so that it functioned more like a business, and according to Hirsh, “Clinton was enormously impressed with the way one of his advisers, Robert Rubin, had worked well as co-CEO of Goldman Sachs.” Rubin told Clinton that the difference between Goldman and other Wall Street firms was “Goldman’s partners functioned smoothly as a team.” 

This is where Burwell comes back into the story. Burwell got her start at McKinsey & Company in 1990, but she spun into the Clinton White House in 1993 alongside Rubin as the NEC’s first staff director. She helped him to set up what the NEC was all about, and later followed Rubin to become Treasury Chief of Staff when he became Treasury Secretary. 

In 1997, she was poached by Erskine Bowles, then the White House Chief of Staff and later co-chair of the commission that tried to cut Social Security by four-fifths. Bowles later recounted how Burwell impressed him: “The president would ask Bob Rubin a question, and Sylvia would slip him [a] note. In the meeting, I said, ‘Mr. President, I have finally figured something out: If I can get Sylvia Mathews [Burwell’s maiden name] to sit next to me at every meeting we have and slip me notes, everybody in town’s gonna think I’m as smart as Bob Rubin.'”

In short, Rubin is Burwell’s mentor, and the two are close ideological allies. She helped him establish the NEC in his image. It’s only natural to infer that she’d bring Rubin’s values and vision back to the NEC, if given the job.

Therein lies the problem. Running the meeting where economic policy got decided also meant that Rubin got to decide who was and wasn’t invited to the meeting. Again according to Hirsch, “Those who argued too vociferously, like [Labor Secretary] Robert Reich, were gently edged out of the conversation and, ultimately, the administration. But no one could pin any blame for that on the low-key Rubin.” If you’re as ambitious as Rubin, and you control the room where the administration decides its economic priorities, then eventually, your priorities become the administration’s priorities.

If you think that America’s economic policy today should be more like it was in the neoliberal 1990’s, and that the biggest problem with the Democratic Party is people like Robert Reich, then perhaps Burwell sounds like a good option to you. If, like us, you think that path is what lead the country to its current multitude of crises, then Burwell’s name should raise alarms.

Nothing in her record since indicates that Burwell has grown critical of corporate power. She spent the Bush years as an executive vice president at the Bill and Melinda Gates Foundation, the mega-philanthropy that has lead the world to terrible public health policies through sheer force of money. In 2012, she joined the Walmart Foundation, the philanthropy arm of the most notoriously anti-worker firm of the early 2010s. The Walmart Foundation is also famously hostile to public schoolteachers, aggressively promoting charter schools. It’d be a bit strange for a President whose wife is an NEA member to take economic advice from a Walton family ally.

Then there’s the fact that after a swing through the Obama administration, including time as the Health and Human Services Secretary, Burwell spent the Trump years on the Board of Directors of a health insurance giant: GuideWell Mutual Holding Corp., which is the parent company of Blue Cross and Blue Shield of Florida. Going from setting public health policy to profiting off of America’s health insurance system is not the career move of someone ready to take on the powerful.

None of this means that Clinton was wrong to set up an interagency panel on economic issues, or that the NEC is necessarily a corporate force on White Houses. We’ve been pleasantly surprised at how progressive the NEC has been under Brian Deese and Bharat Rhamamurti’s leadership. What this means is that who you have running these meetings matters, because they can shape what is and isn’t considered a serious enough proposal for the President’s appointees to hear out. Burwell’s record indicates cause for concern of how she’d wield that power.

PHOTO CREDIT: “07162014- Lets Read Lets Move at The Supreme Court Secretary Arne Duncan with Marshal of the U.S. Supreme Court Pamela Talkin and Secretary of Health and Human Services Sylvia Burwell” by US Department of Education is licensed under CC – BY – 2.0.

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