Once you are deemed a serious person, there is literally no mistake too big to keep people in DC from listening to you:
Robert Rubin is poisoning Washington again.
The former Treasury Secretary who presided over the nearly-fatal deregulation of the financial industry — then made $126 million nearly killing Citigroup — had been keeping an appropriately low profile in the nation’s capital ever since everything he wrought went pear-shaped.
But now he’s back, and once again trying to influence public policy.
On Friday he made his third major (and apology-free) Washington appearance in two weeks, delivering opening remarks at a conference that his pet think tank, the Hamilton Project, co-sponsored with the liberal Center for American Progress.
But the last thing Washington needs right now is another infusion of Rubinomics — by which I mean the combination of deregulatory zeal, deficit obsession, free tradeism and general coziness with fat-cat Wall Street bankers that Rubin epitomizes.
Can’t we just give this guy an op-ed column at the Washington Post with the rest of the DC fuck-ups and be done with him?
I wish someone would deem me a serious person. I would even take the column on Fred’s Crayola Page that goes with it.
+too many for a serious person
Geez, John, you read my mind.
In some good news for today, some deserving kids have got the money they need to make getting an education a little bit easier: http://www.dailykos.com/story/2010/4/30/862339/-UPDATED-w-Teachers-Thanks!-These-kids-dont-even-have-PENCILS.
The Main Gauche of Mild Reason
You know, I have the same visceral reaction–but can we get past this grade school “they were wrong once, therefore wrong forever” train of thought? The thing that mostly bugs me is the “Rubin protege” thing, where a “Rubin protege” is anyone in the government who has ever worked with him; since we know you cannot work with/be friends with a person without sharing every single one of their views on economic policy. But the association of him as the boogeyman behind free-trade policies, which are correctly supported by the majority of economists, is also pretty annoying.
@The Main Gauche of Mild Reason: I think it’s more like the episode of Seinfeld where Jerry can live without getting a refund, but just wants the dry cleaner to admit that he shrunk his sweater. It’s not that folks like Rubin and Greenspan should be forever banned, it would just be nice to get a straightforward acknowledgment of their policy mistakes as a prerequisite to suggesting more policies.
@The Main Gauche of Mild Reason: I didn’t think that many people were arguing that Rubin was a bogeyman of “free trade” policies. (There is no such thing as “free trade”, just different trade deals which favor different parties over others, that’s a propaganda phrase.)
NAFTA, for example, was negotiated between the then-permanent PRI dictatorship President Carlos Salinas and the George H. W. Bush administration, and backed by the biggest corporate lobby effort ever to have been assembled up until then (USA*NAFTA), and then picked up by Clinton and passed by a Republican majority in the House and Senate against a Democratic majority in the House and Senate.
But I don’t really remember Rubin suggested at being at the core of this.
@QDC: Why can’t we rely more on the people who get the basics right than those who get it wrong, but who profit handsomely from their ‘wrongness’? I really don’t understand this. How was Rubin’s input more valuable than, say, mine would have been?
I can’t take anyone who invokes the idea of “Rubinism,” as if there’s some sort of unified economic theory developed by Robert Rubin and adhered to by others, seriously. Froomkin is in the Greenwald box with me.
I don’t really get this. Rubin was wrong on derivatives, but he was wildly correct on fiscal policy in 1993, and the result was a massive economic boom. And that’s pretty much how it goes; smart people get some things right, they get other things wrong. You hope the former weighs more heavily in the long run than the latter.
Also, I really don’t get the need to cast so much blame on Rubin. Yes, he fucked up with derivative regulation, all things considered, but even then, the damage wouldn’t have been that severe if other actors in the interim had acted more wisely. Say, if Alan Greenspan didn’t ignore the very existence of the housing bubble. So sure, Rubin was wrong, but Rubin being wrong didn’t create the financial crisis by a long shot.
Also, apparently we’ve killed the hippies. Too.
@Brien Jackson: I don’t disagree. That’s why I don’t have a problem with him participating in the debate. I just think that when a policy maker gets it wrong with disastrous consequences, it’s not too much to ask for an acknowledgment of that fact. Particularly when we’re addressing, in financial regulation, the exact issue he was wrong about.
Edit: Having derivatives unregulated and, particularly, not traded on an exchange was absolutely a critical ingredient in the financial crisis, so I don’t cut him much slack on that count.
Just Some Fuckhead
How the hell did Rubin fail? He made a gazillion dollars. Do you all have some other crazy metric for success?
the combination of deregulatory zeal, deficit obsession, free tradeism and general coziness with fat-cat Wall Street bankers
And why is the deficit so freaking high? Because we spent a shit-ton of money cleaning up Rubin’s mess.
He’s like a bratty teenager who wrecks the family car then bitches that there’s no wheels for him to borrow to go to Disneyland.
Huh? I was kind of young at the time, but I seem to remember things being relatively okay for the 5 or so years after Rubin left the Sec. Treasury gig.
I hope Jane is aware that they have five rotating pictures on the Sierra Club website that play as a slideshow. Because otherwise she’s going to look like one hell of a moron when people go there and discover that three of the five slides are about the oil spill.
Oh, wait, they must have done it because she posted. Yeah, that’s it. She is the queen of all she surveys!
I read the comments at FDL. Remind me not to do that again. It was like 100 mclarens all at once.
My favorite part was when people on the Sierra Club mailing list said that they had received action e-mails well before Jane posted and were roundly ignored. I think there was finally one person who said that Jane was only talking about the landing page of the website so it didn’t matter that there were other slides about the oil spill. Which, uh, wasn’t exactly what people were claiming.
J. Michael Neal
One thing about the discussion of evaluating the performance of Rubin and others in the 1990s is that I think that there are a lot of people who have no memory of the problems that deregulation was meant to counteract. They were very real. Consigning them to the memory hole of history does a disservice to everyone involved.
For decades, banking was a sleepy little business. People tend to remember it as a golden age, but it really wasn’t. Along with being boring and not having the power to wreck the world, banking was also a cartel, with all of the negatives that come with it. It was a really sweet deal for those involved, so long as they were concerned with being comfortable and not getting stupidly wealthy. Banks were not allowed to compete on the basis of interest rates; the government told them what they were allowed to offer to their depositors, and that was it. They were prohibited from doing all sorts of things. In return, it was a really hard business to break into.
Liberals were as up in arms about this as anyone else, and with good reason. Customers got screwed. So did small businesses. This was as true in investment banking as it was in commercial banking.
What really upset the applecart, though, was that a whole host of other institutions started cropping up that could do the same thing that banks could do, but without the restrictions. I’ve heard lots of people talk about how they love credit unions. Well, a large part of the reason that you love them is that they are exempt from a number of the regulations that encumber banks. People used to have to pay enormous brokerage fees; Charles Schwab put an end to that. There are plenty of other examples. in other words, the things that made it possible to make money running a bank despite all the restrictions were disappearing.
A very significant motivation for deregulating things, though certainly not the only one, was trying to rebuild the banking industry from the ground up so that it made sense in the changed world. This combined with other changes, such as the decision by the investment banks to become corporations rather than partnerships; this was a much bigger deal than the repeal of Glass-Steagal and wasn’t the result of deregulation, at least not directly.
I’m in favor of re-regulating things to make banking a boring industry again. However, I don’t delude myself into thinking that it won’t have costs. The only way to make it work is to turn banking back into a cozy cartel. That’s going to have all of the negative consequences you would think. People are going to get screwed. People are going to be able to make arguments that banking would be fairer and more efficient if we loosened things up, and those arguments will be persuasive, because they’ll be right. Banks will be every bit as much fun to deal with as a large utility company.
Hopefully everyone is ready for that, and will swallow their objections to watching a cartel make easy, risk-free profits.
I don’t see a real conflict between properly updating regulations to deal with real world changes and allowing primarily financial lobbyists and ideologues to rewrite regulations in such a way as to remove the essential protections at the root of their existence.
Let’s give credit where credit is due: telecom and energy deregulation resulted in better products, like all these handheld devices we love and finally realizing our renewable energy potential, and Fiscal Rubinomics was the appropriate policy at the time. Hell, it would have been for a lot of the Bush years too.
Not that I’m arguing that financial deregulation was anything but a curse on our country.
@MMonides: I think there’s a difference between updating regulation and de-regulation with the intent of removing crucial safeguards.
when did inflating a stock bubble get confused with good policy?