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Robert Rubin and the politics of hope

by Robert Teitelman | Published November 2, 2010 at 12:39 PM

Just in time for midterm elections, who makes an appearance but Robert Rubin in the Financial Times. Once the greatest Treasury secretary in history, once one-third of the Committee to Save the World, Rubin's reputation then fell into disrepute, associated not only with the now passé '90s-era Washington Consensus, with its program of fiscal conservatism, deregulation and market liberalization, but his long tenure at Goldman, Sachs & Co. and his richly compensated, less-than-onerous perch at Citigroup Inc. Rubin provides a target for nearly everyone, and the slings and arrows have flown. Indeed, the history of the fall of Rubin's rep is a rich and nuanced one; the current disdain that he's now held, particularly among progressives who view him as the Svengali who led poor Bill Clinton astray, may well fade a bit as we get some historical distance. But like Greenspan, he's not about to get full sainthood back. But we know all that. Rubin has been extremely quiet, either sunk in gloom or patiently waiting for the storm to pass. His column today is so close to the vest that he all but suffocates it. Several aspects are worth remarking on. He still thinks of himself as a Great Man; he writes in a sort of sonorous seriousness in which the first-person singular leaps out and sounds like the voice of god. But what that "I" agrees with is about as much of a surprise as a Sarah Palin tweet. "I agree with the administration's targeted budget additions that might be particularly powerful economic catalysts, such as small business support, or might meet other immediate imperatives, such as extending unemployment insurance and state aid for teachers." That's nice. Rubin is establishing that he's no crazed, Tea Party-like fiscal maniac, but still a centrist Democrat who believes in austerity, but not quite yet. A reasonable, if slightly obvious, stance.

But a Great Man. When Great Men write op-ed columns, they often feel the need to explain, often in great detail, what we already know, as if we're stupid. This is a sign that they haven't been getting out enough, or that they're surrounded by sycophants. Greenspan falls for that, except you can't always untangle his meaning, which gives him a mystical air. (Pondering the two prose styles makes you wonder what the dialogue was like in those famous breakfasts during the Clinton years; perhaps they brought in Larry Summers to spice things up.) Rubin feels the need to outline possibilities, good and bad, embedded in a variety of basic economic moves, such as a new stimulus, quantitative easing or "action in other areas." This sense that he is talking to himself is exacerbated by the fact that he seems not to realize that a wild, circus-like election is about to occur that will probably leave little room for any economic maneuvering involving Congress. "Even this 'First Phase' will be difficult," he admits. "But it can buttress business confidence, reduce short-term market risks and start building the fiscal base for longer-term economic success." He goes on to recommend eliminating tax cuts for the rich and retaining those for the middle class.

So far Rubin does not deviate from the basic Obama plan. And for the long term? "Meeting our challenges means moving from our current risk-laden fiscal trajectory to a sound fiscal regime and public investment and reform in critically important areas like education, healthcare costs, infrastructure, immigration and others. Effective government to undergird a market-based economic system is not a liberal idea, but a practical imperative to meet the needs of a successful economy that markets won't fulfill." What can you say? You know you're in trouble when any sentence starts with "Meeting our challenges."

Great Men also rise above history, like the claque in the clouds at Davos. Everything is technique. Rubin's sermonette here could have been given to a panicky Bill Clinton before the 1994 midterms: dispassionate to the point of mortality, so general that it's inarguable, except from the loony fringes that in respectable company needn't be mentioned. Indeed, what it lacks is, well, any feel for the political currents surging through the nation. He does not seem to recognize, or acknowledge, that the economic crisis has dealt a serious blow to economic technique. There is no longer a consensus; there is no longer agreement on how to interpret basic historical or economic facts, near and far; there is paranoia, fantasy and guns out there. The Rubin prescription for the '90s, which seemed so amazingly clear and coherent, now seems, at best, a little thin, at worst, beside the point.

But no, Rubin is aware that politically the nation is at odds. But his politics are the kind of bloodless conflict that resides in textbook and policy papers, not the surreal bestiary of views and positions arrayed across our landscape. In his last paragraph, he wearily admits that "Thus, our most fundamental challenge [challenge, again, like the Boy Scouts!] is the effectiveness of our political system." But he is hopeful. Great Men must never leave their readers in despair, or open to cynicism. "The historic resilience of our political system, our economy, our culture and our society is a hopeful auger. We have risen to difficult challenges many times in the past and we can do so again. But there is much to do."

"A hopeful auger." Swell. The Great Man has confidence in us. He should really get out more often. - Robert Teitelman

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