Tags: Zients | White | cyber | White House

National Economic Council's Zients Talks About Sony and Economy

By    |   Friday, 19 Dec 2014 07:56 AM

Jeffrey Zients, director of the White House National Economic Council, sat down with Politico Chief Economic Correspondent Ben White, author of the "Morning Money" newsletter, Dec. 18 to talk about the administration's economic agenda for its seventh year in office.

Zients worked for Bain and Co. before establishing powerful enterprises with associates, and he became known in government as "Mr. Fix-It" for leading the effort to repair the healthcare.gov website.

White began by talking about a breaking story that Sony had decided to cancel the showing of "The Interview," which was supposed to open on Christmas, after already being struck by state-sponsored cyber terrorism through a hacking of its files.

White asked a couple of questions: How will the government respond, how can the government respond to that in a way that shows that it won't be tolerated going forward and how big of an economic impact, long-term, are we looking at on corporate America by state-sponsored cyber terrorism?

Zients responded that the president had spoken to this the previous night and that it is clearly a serious situation. Zients recalled his time in the private sector, where part of the role of a CEO is to think through what the risks are to their business.

Depending on the industry or business, this involves making sure that you have safeguarded your network. He added that the president has led on this effort, that there is a single point of contact at the Department of Homeland Security for cyber incidents, working carefully with the private sector on critical infrastructure, areas like nuclear power plants, and has increased information sharing between the federal government and the private sector. He noted that the president had proposed legislation, but Congress has not acted on it, that would encourage information sharing and provide liability and consumer protection. So this an important area of focus where we have to be very vigilant.

White returned to the question of how to quantify the damage, and he observed that the Hollywood community is taken aback by Sony's decision to back down. (This writer would note that the parent country is based in Japan, which adds another complication to the circumstance.) Zients called the economic impact "the wrong focus," and he emphasized that right now the question is what we can do to get ahead of this. He stressed the need to protect our networks and for every company to invest in cyber protection, and now it requires legislation.

White moved to the announcement of normalization of relations with Cuba, and he asked what the administration could do without Congress removing the embargo. Zients responded that short of lifting the embargo there are opportunities in areas like agriculture and residential construction and opening up the Internet. White asked Zients to respond to a Washington Post editorial questioning taking the action when the Castro regime is evidently close to "on its last legs," with the collapse in oil prices removing support from Venezuela. Zients responded by repeating his earlier message.

White moved on to the collapse of the Russian ruble and asked whether there's a potential for contagion. Zients called the direct impact "pretty de minimis," but coordinated sanctions have been targeted at certain sectors of the Russian economy, defense and energy, while minimizing the impact on the U.S. and allied economies. Zients explained that the target is the Russian leadership and its policies.

The administration's approval of a budget deal that included a partial rollback of Dodd-Frank derivatives regulation has elicited "outrage" on the Democratic left, according to White, and he asked Zients why the White House went along. Zients called the deal a "compromise" that was necessary to provide certainty in government to support continued recovery. White followed up by suggesting that the Republicans also wanted to avoid a shutdown and might have gone along with removing the push-out provision, but Zients repeated that overall the deal is beneficial.

In the rest of the discussion, Zients laid out an administration agenda of trade agreements, business tax reform and infrastructure funding. One can see in his presentation the outline of a transition process to the administration that will take office in 2017.

(Archived video can be found here.)

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Robert-Feinberg
Jeffrey Zients, director of the White House National Economic Council, sat down with Politico Chief Economic Correspondent Ben White, author of the "Morning Money" newsletter, Dec. 18 to talk about the administration's economic agenda for its seventh year in office.
Zients, White, cyber, White House
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2014-56-19
Friday, 19 Dec 2014 07:56 AM
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