There’s a World of Trouble Out There

Several critics say private-sector analysts and other government departments not limited by the CIA's culture of secrecy are better suited to produce accurate predictions based on "open source" economic data. Intelligence officials counter that the CIA did produce accurate readings of the Asian financial crisis a decade ago, and they point out that Wall Street analysts don't earn high marks themselves for predicting the current financial debacle.

Philip Zelikow, a counselor to former secretary of state Condoleezza Rice who wrote one of the earliest studies of the CIA's capacity for economic analysis, defends the intelligence estimates made by individual analysts within the CIA during the Cold War, and he thinks it's good the agency is getting back into these areas. Zelikow says the government is "breaking new ground here." But he adds that the only way the new approach will work is in coordination with other domestic agencies abounding in economic expertise, like the Treasury Department and the Federal Reserve.

And because the current crisis began in America, the need for information-sharing across the government is all the greater today. As Zelikow notes, "Where it gets hard is when you have to make judgments that include analyses of what the American economy will do. The CIA doesn't like to analyze the American economy," because, he says, the agency's legal mission is to confine itself to overseas threats. "This is why the CIA alone can't do the job. But the CIA pooled together with other agencies can." We can only hope they get it right this time.

With Owen Matthews in Moscow, Melinda Liu in Beijing and John Barry in Washington

© 2009