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WHAT MAKES A RUBINITE?
As Citigroup collapses atop Robert Rubin's reputation, one of the side-effects has been to embolden critics of Rubin's successors and allies, many of whom are now well-embedded in Obama administration. Larry Summers, Timothy Geithner, Peter Orszag, Jason Furman, and others are pretty tightly associated with Rubin. For most of them, he was their patron, the figure whose favor transformed them from talented civil servants into the sort of people who get cabinet-level positions. For critics of so-called Rubinomics, like my beloved boss BK, watching Rubin's proteges step into every major economic staffing position in the new administration has been concerning. Watching them do so as Goldman-Sachs, which Rubin once led, and Citigroup, which Rubin recently advised, get buffeted by the subprime collapse is almost perverse.
But it's worth separating the two critiques of Robert Rubin. There's the traditional ideological critique, which is that Rubin prioritized deficit reduction over social investment, constraining Clinton's liberal instincts and robbing the working class of the full benefits of his presidency. Then there's the class solidarity critique, which was best made by Kuttner in his article Friendly Takeover. This argues that Rubin, the former chairman of Goldman-Sachs, was a Wall Street guy with a Wall Street perspective and Wall Street sympathies who governed in a way very friendly to Wall Street. This meant deregulation, it meant blocking new regulation that would have contained derivatives, it meant bailing out bad Wall Street bets, and so forth.
But Rubin's successors aren't Wall Street guys. They're bureaucrats and academics. All of them served under Rubin in government, not at Goldman-Sachs. Summers, Geithner, Orszag, and Furman have little in the way of a Wall Street background. Geithner, in fact, has been Wall Street's main regulator for the last couple of years. So insofar as one of Rubin's problems was that he was viscerally sympathetic to his former colleagues and overly influenced by their perspective, that's not actually a trait that's likely to afflict his successors. The ideological stuff is a different issue, though for the time being, there seems to be incredible unity on the left that deficits should be ignored, investment is essential, and health reform is necessary.
COMMENTS (5)
The problem, I think, isn't Rubin per se. It's the simple question of where the progressives are. Most administrations contain a mix of centrists and left- or right-wing thinkers, but it seems like Obama's "team of rivals" is that of rivalrous centrists and conservatives!
There is no "post-partisan" consensus. That much is clear from the "center-right" nonsense coming from the wingnut punditariat. So if partisanship and ideology are still going to exist after January, why on earth should it only be Republican partisanship and conservative ideology?
Posted by: Demosthenes | November 24, 2008 12:00 PM
Geithner, in fact, has been Wall Street's main regulator for the last couple of years.
Heck of a job, Timmy!
Posted by: eRobin | November 24, 2008 12:26 PM
I don't live in D.C., so I don't know the answer to this question, but is there a deep bench of experienced self-identified progressives that were available to Obama? Or are we just seeing the inevitable consequence of selecting those with experience for high-level cabinet posts?
Posted by: arbitrista | November 24, 2008 1:06 PM
someday, someone will have to explain to me how problems that occurred at goldman long after rubin left and problems that are occuring at citi where rubin isn't an operational executive (he's a rainmaker and adviser, which means he is part of the executive but not any kind of decision-maker hiimself) are somehow proof of his shortcomings.
the thing to crit rubin for is resisting regulation of derivatives.
that said, i think ezra is onto something here: if you didn't believe that clinton's economic policies in the '90s were the right ones for the country, then yes, you don't like rubin's judgement (i did, and so i do).
if you think his flaw was resistance to regulating derivatives, then the wall street critique comes into play, but i doubt that there is a single member of the new team who opposes some form of derivative regulation, so what's the issue?
a lot of the chatter about rubin reminds me of a lot of the chatter about harry reid: it's based on an overemphasis on the individual....
Posted by: howard | November 24, 2008 3:36 PM
How comforting to know that Geithner has been "Wall Street's main regulator for the last couple of years." And what a bang up job he has done.
Posted by: Lewis | November 25, 2008 11:39 AM