Obamanomics and Rubinonmics: Potentially A Disastrous Mix
I've written many times about Robert Rubin, Clinton's Secretary of Treasury, and it has not been flattering.
Such as this: "Last year, I wrote the following, "It seemed like a popping champagne corks early New Year's Eve for the stock market when it was announced that the Abu Dhabi Investment Authority bought a 4.9% stake for $7.5 billion in Citigroup, the largest financial institution in the US. Citigroup had been reeling because of its integral part in the subprime mortgage crisis.
"Its former CEO, Charles Prince III had jumped ship with the usual golden resignation package and this incompetent was replaced by his former adviser and biggest supporter, Robert Rubin. Illogical, but you read that right. This buy in by Abu Dhabi Investment Authority occurred on Rubin's watch.
"Jonathan Tasini seems to agree with me regarding Mr. Rubin while writing about the painful results of the mortgage lending debacle. He says, 'And what of the people like Robert Rubin, who stand at the helm of the very institutions that created the mess? They are doing just fine, thank you':'
"Since arriving at Citigroup, Mr. Rubin has been awarded compensation worth at least $126.1 million, according to Equilar, a research firm. That would place him firmly in the top 25 percent of earners if compared to the chief executives of Fortune 500 companies.
"And, indeed, Rubin is still being pointed to by both Democratic presidential candidates as a wise person who should be called on to fix the mess. Am I missing something here? Do you think any regular worker who messed up royally would last a New York minute and his or her job--not to mention being rewarded like a king? The answer is obvious."
I also wrote this: "Labor obviously does not agree with Robert Rubin's, former Treasury secretary under Clinton, so called Rubinomics. As reported by Bloomberg news via Truthout last year, 'AFL-CIO leaders, contending Democrats won the midterm elections because of voter concern about job security and stagnant wages, say it's time to set aside the free-trade policies touted by Rubin.
" 'We need to review the Rubin agenda that's led to millions of lost jobs and declining standard of living for the middle class,' said United Steelworkers President Leo Girard. 'It's an agenda that has been very good for Citigroup and the financial community because they've been able to finance the relocation of jobs and refinance the trade deficits.'
"Organized labor has long been at odds with "Rubinomics," the phrase coined to describe President Bill Clinton's economic policy, masterminded by Rubin, to promote free trade and reduce the budget deficit...."
"But Democratic leaders on Capitol Hill and other Dems inside the beltway, like Hillary Clinton, think Robert Rubin, Bill Clinton's former Treasury Secretary, is a genius. A genius for Wall Street but not necessarily for typical Americans."
"Meanwhile, it seems that senior Democrats in Congress never learn from history or recent events and continue to be enamored with Rubin and Wall Street, and may do Wall Street and corporate lobbyists' bidding to the detriment of regular working Americans."
I also wrote this: "Because of their greedy role in the subprime mortgage debacle and subsequent credit crunch, the biggies now need capital of their own.
"As Robert Kuttner points out, '...taking on the most powerful Democratic Party interest group of them all -- Wall Street -- is viewed as a sign of recklessness, unsoundness, demagoguery, and political suicide. A mark of Wall Street's ubiquitous power in defining the limits of the politically thinkable is that its power is hardly noticed. The personification of this power is Robert Rubin."'
"Even Paul Krugman, who has great respect for Rubin, says Rubinomics is not the way to go and quotes another economist, Brad DeLong who said, 'Rubin and us spearcarriers moved heaven and earth to restore fiscal balance to the American government in order to raise the rate of economic growth. But what we turned out to have done, in the end, was to enable George W. Bush’s right-wing class war: his push for greater after-tax income inequality.' ”
Now, from yesterday's NYTimes: "Senator Obama, Democrat of Illinois, hired Jason Furman, a Harvard-trained economist closely associated with Mr. Rubin, a Wall Street insider who served as President Clinton’s Treasury secretary. Labor union leaders criticized the move, and said that “Rubinomics” focused too much on corporate America and not enough on workers.
“ 'For years we’ve expressed strong concerns about corporate influence on the Democratic Party,' John J. Sweeney, president of the AFL-CIO, said Wednesday in a statement implicitly critical of the symbolism of the appointment, no matter Mr. Furman’s economic skills.
"Of particular concern to labor is the Hamilton approach to trade. While labor wants restrictions that would preserve jobs, the Rubin camp wants free trade that might cost jobs but would be offset by a broader safety net channeling more income support and job training to the job losers. Mr. Obama talks of “fair” trade agreements that include labor and environmental standards, a position that falls short of what Mr. Sweeney has in mind.
"In his statement criticizing Mr. Furman’s appointment, Mr. Sweeney said, 'The fact that our country’s economic policies have become so dominated by the Wall Street agenda — and that it is causing working families real pain — is a top issue we will be raising with Senator Obama.' ”
Here are some advice and warnings from Dean Baker writing at TPM Cafe: "..we should keep our ammunition dry. Senator Obama's election can make an enormous difference in the political environment and the direction the country takes. But progressives must keep the pressure on. Senator Obama is an enormously talented political figure, but he alone is not going to bring about change. It takes a movement."
From Naomi Klein at The Nation: "The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of [Milton] Friedman's nemesis John Kenneth Galbraith. Our "current economic crisis," Obama recently said, did not come from nowhere. It is 'the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.'
"True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do."
And from Robert Borosage at Campaign for America's Future: "The controversy really isn’t about Jason Furman. It’s about Barack Obama. Does he understand the scope of the change that will be needed? Or is he more concerned about reassuring Wall Street that the price won’t be too high? We’ll learn more about that over the next weeks, when he plans to lay out his long term strategy for the economy. One thing is clear. Obama is smart enough and Furman principled enough that he’ll hear the arguments from all sides. The real question isn’t what advice he gets; it’s what advice he decides to adopt."
Such as this: "Last year, I wrote the following, "It seemed like a popping champagne corks early New Year's Eve for the stock market when it was announced that the Abu Dhabi Investment Authority bought a 4.9% stake for $7.5 billion in Citigroup, the largest financial institution in the US. Citigroup had been reeling because of its integral part in the subprime mortgage crisis.
"Its former CEO, Charles Prince III had jumped ship with the usual golden resignation package and this incompetent was replaced by his former adviser and biggest supporter, Robert Rubin. Illogical, but you read that right. This buy in by Abu Dhabi Investment Authority occurred on Rubin's watch.
"Jonathan Tasini seems to agree with me regarding Mr. Rubin while writing about the painful results of the mortgage lending debacle. He says, 'And what of the people like Robert Rubin, who stand at the helm of the very institutions that created the mess? They are doing just fine, thank you':'
"Since arriving at Citigroup, Mr. Rubin has been awarded compensation worth at least $126.1 million, according to Equilar, a research firm. That would place him firmly in the top 25 percent of earners if compared to the chief executives of Fortune 500 companies.
"And, indeed, Rubin is still being pointed to by both Democratic presidential candidates as a wise person who should be called on to fix the mess. Am I missing something here? Do you think any regular worker who messed up royally would last a New York minute and his or her job--not to mention being rewarded like a king? The answer is obvious."
I also wrote this: "Labor obviously does not agree with Robert Rubin's, former Treasury secretary under Clinton, so called Rubinomics. As reported by Bloomberg news via Truthout last year, 'AFL-CIO leaders, contending Democrats won the midterm elections because of voter concern about job security and stagnant wages, say it's time to set aside the free-trade policies touted by Rubin.
" 'We need to review the Rubin agenda that's led to millions of lost jobs and declining standard of living for the middle class,' said United Steelworkers President Leo Girard. 'It's an agenda that has been very good for Citigroup and the financial community because they've been able to finance the relocation of jobs and refinance the trade deficits.'
"Organized labor has long been at odds with "Rubinomics," the phrase coined to describe President Bill Clinton's economic policy, masterminded by Rubin, to promote free trade and reduce the budget deficit...."
"But Democratic leaders on Capitol Hill and other Dems inside the beltway, like Hillary Clinton, think Robert Rubin, Bill Clinton's former Treasury Secretary, is a genius. A genius for Wall Street but not necessarily for typical Americans."
I also wrote this: "Because of their greedy role in the subprime mortgage debacle and subsequent credit crunch, the biggies now need capital of their own.
"As Robert Kuttner points out, '...taking on the most powerful Democratic Party interest group of them all -- Wall Street -- is viewed as a sign of recklessness, unsoundness, demagoguery, and political suicide. A mark of Wall Street's ubiquitous power in defining the limits of the politically thinkable is that its power is hardly noticed. The personification of this power is Robert Rubin."'
"Even Paul Krugman, who has great respect for Rubin, says Rubinomics is not the way to go and quotes another economist, Brad DeLong who said, 'Rubin and us spearcarriers moved heaven and earth to restore fiscal balance to the American government in order to raise the rate of economic growth. But what we turned out to have done, in the end, was to enable George W. Bush’s right-wing class war: his push for greater after-tax income inequality.' ”
Now, from yesterday's NYTimes: "Senator Obama, Democrat of Illinois, hired Jason Furman, a Harvard-trained economist closely associated with Mr. Rubin, a Wall Street insider who served as President Clinton’s Treasury secretary. Labor union leaders criticized the move, and said that “Rubinomics” focused too much on corporate America and not enough on workers.
“ 'For years we’ve expressed strong concerns about corporate influence on the Democratic Party,' John J. Sweeney, president of the AFL-CIO, said Wednesday in a statement implicitly critical of the symbolism of the appointment, no matter Mr. Furman’s economic skills.
"Of particular concern to labor is the Hamilton approach to trade. While labor wants restrictions that would preserve jobs, the Rubin camp wants free trade that might cost jobs but would be offset by a broader safety net channeling more income support and job training to the job losers. Mr. Obama talks of “fair” trade agreements that include labor and environmental standards, a position that falls short of what Mr. Sweeney has in mind.
"In his statement criticizing Mr. Furman’s appointment, Mr. Sweeney said, 'The fact that our country’s economic policies have become so dominated by the Wall Street agenda — and that it is causing working families real pain — is a top issue we will be raising with Senator Obama.' ”
Here are some advice and warnings from Dean Baker writing at TPM Cafe: "..we should keep our ammunition dry. Senator Obama's election can make an enormous difference in the political environment and the direction the country takes. But progressives must keep the pressure on. Senator Obama is an enormously talented political figure, but he alone is not going to bring about change. It takes a movement."
From Naomi Klein at The Nation: "The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of [Milton] Friedman's nemesis John Kenneth Galbraith. Our "current economic crisis," Obama recently said, did not come from nowhere. It is 'the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.'
"True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do."
And from Robert Borosage at Campaign for America's Future: "The controversy really isn’t about Jason Furman. It’s about Barack Obama. Does he understand the scope of the change that will be needed? Or is he more concerned about reassuring Wall Street that the price won’t be too high? We’ll learn more about that over the next weeks, when he plans to lay out his long term strategy for the economy. One thing is clear. Obama is smart enough and Furman principled enough that he’ll hear the arguments from all sides. The real question isn’t what advice he gets; it’s what advice he decides to adopt."
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