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By ROBERT M. KIMMITT
THE National Security Act of 1947, which created the National Security Council, the Defense Department, the Joint Chiefs of Staff and the Central Intelligence Agency, turns 65 on Thursday. But it’s not ready for retirement; it needs, instead, to be rejuvenated by making the Treasury secretary a statutory member of the National Security Council, rather than an invited attendee.
The act and the organizations it created performed well during the cold war, the post-cold-war decade and the period after 9/11. But they need to be updated to recognize the close connection between security and economic issues as we look forward from the global financial crisis of the last few years. The concept of national security has broadened considerably since the N.S.C.’s early decades, elevating economic and financial issues to crucial elements to our nation’s security, alongside the traditional diplomatic and military issues. Diplomatic and military issues are still important, of course. Iran, Syria and North Korea make that clear. But the growth areas in national security policy are economic and financial.
During the cold war, the German chancellor, Helmut Kohl, knew with precision the throw-weights of American nuclear weapons based in Germany; today, Chancellor Angela Merkel has to know with equal precision the spreads on Spanish and Italian sovereign debt.
It may seem odd that the Treasury secretary would have been left off the list of statutory members of the National Security Council by the generation of American leaders who helped lay the groundwork for Western Europe’s postwar revival with the Bretton Woods conference and the Marshall Plan. But at the time, military, diplomatic and economic policies were seen as largely separate tracks. And as the cold war deepened, the military challenge from the Soviet Union assumed overwhelming importance.
This is where the National Security Act has not kept pace. The statutory members of the National Security Council are still the president, vice president, secretary of state and secretary of defense, with the chairman of the Joint Chiefs of Staff and the director of national intelligence as statutory advisers. This is a good, but incomplete, team. Even though the Obama White House says that Treasury Secretary Timothy F. Geithner is a regular attendee, along with the statutory members, it is now time to add the secretary of the Treasury to the list of statutory members. That would ensure that the economic and financial dimensions of national security challenges are given equal weight in council deliberations, now and into the future.
In recent administrations, the Treasury secretary has, in fact, frequently been invited to join N.S.C. meetings, and the Treasury has recently played an important role, especially regarding financial sanctions against Iran, Syria and North Korea. But today’s broader economic and financial issues are too important for Treasury to attend N.S.C. meetings only when invited. That arrangement leaves too much to chance.
An example: in the waning days of the George W. Bush administration in the fall of 2008, an N.S.C. meeting was convened to discuss the deteriorating security situation in Pakistan. After sobering briefings by the secretaries of state and defense, I (as Treasury invitee) reported an even more serious financial development: Pakistan’s foreign currency reserves had just fallen below the amount required to pay for two months’ worth of critical imports, pushing the country toward a severe balance of payments crisis. The outlook was for food and fuel shortages, followed by street demonstrations and riots — a scenario ripe for exploitation by extremist groups.
The conversation at the meeting quickly shifted to how to deal with this acute problem. The result was short-term financial support from the World Bank and Asian Development Bank and a donors’ conference that followed, early in the Obama administration. Had someone from Treasury not been asked to attend that N.S.C. meeting, the situation in Pakistan might have accelerated into a crisis that would have been much more difficult to resolve.
There are other reasons to add the secretary of the Treasury to the N.S.C. The Group of 20, for which the Treasury secretary is the primary cabinet-level contact, is now the most influential organization in setting global financial and economic policies; the finance ministers of the other Group of 20 countries, who are the Treasury secretary’s counterparts, are the cabinet-level officials who deal most directly with American requests for financial cooperation on common security interests; and the finance ministers, who are frequently the most important cabinet members in parliamentary democracies, often ascend to lead their countries. Examples are Prime Minister Manmohan Singh in India, Prime Minister Yoshihiko Noda in Japan, former President Nicolas Sarkozy of France and former Prime Minister Gordon Brown of Britain.
There are, of course, other officials integral to international economic and financial success, like the secretary of commerce and the United States trade representative. They should still be invited to N.S.C. meetings. But the Treasury secretary, who has primary authority on economic and financial issues in the cabinet, should be at every meeting to advise on how economic and security issues intersect, and to ensure that the United States is using its economic and financial strength in the most effective way.
Robert M. Kimmitt, a former deputy Treasury secretary, under secretary of state and ambassador to Germany, served on the National Security Council staff from 1976 to 1985, under Presidents Gerald R. Ford, Jimmy Carter and Ronald Reagan.
http://www.nytimes.com/2012/07/24/op...ncil.html?_r=1
Jesse's comments:
Looks like the US is getting ready to flex its financial muscle. I don't think the Anglo-American banking cartel will relinquish the dollar reserve currency supremacy easily. This is currency war.
I somehow missed this editorial when it first came out. But over the weekend and today I heard echoes of the same sentiment from various places in what looks like a loosely organized public relations campaign.
The National Security Council, formed in 1947 and comprised of the President, Vice-President, Secretary of State, Secretary of Defense, Director of the CIA, and the Joint Chiefs of Staff.
The National Security Council has an unmistakable military flavor.
The move to add the Treasury Secretary as a permanent member is just another sign of the currency wars heating up. At least from the US perspective, there is an unmistakable convergence between military and economic action.
As I have noted before, the language used often suggests that the US considers its TBTF's to be a modern form of financial battleship, able to move key markets at will to support official policy. And the credit rating agencies are like agile destroyers.
the latter are more like submarines . . . .
the desired effect from an S&P ratings drop
Aye, Captain, we're a goner!
Heard most recently in Greek, Spanish, Italian . . .
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