The Eternal Return of Robert Rubin

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"The Eternal Return of Robert Rubin"

I’m all for bashing Robert Rubin’s tenure at Citigroup or even for bashing some of the financial regulation decisions he made as US Treasury Secretary, but I’m growing frustrated with the widespread use of the term “Rubinite” as essentially a disparaging synonym for “worked on economic policy in the Clinton administration.”

The thing about the Clinton administration is that Jimmy Carter’s administration ended in 1980. So if you’re going to create an economic policy team for Barack Obama your main choices are (1) “folks who worked on economic policy in the Clinton administration,” (2) “folks who worked on economic policy in the Bush administration,” and (3) “folks with little economic policy experience.” Now forced to choose between (1) and (2), I think (1) is clearly the better choice. Option (3) isn’t the worst thing in the world, lots of intelligent knowledgeable right-thinking people don’t happen to have experience in government. But it seems to me that it’s extremely prudent for a president to desire that the majority of his economic policy team be composed of people with previous executive branch economic policy experience. That means basically a lot of “Rubinites” plus various exceptions around the margin. Maybe Obama could recruit Stanley Fischer away from the Bank of Israel to run the National Economic Council. But even so, you’d need a lot of “Rubinites” to staff an administration.

Now if what you’re really saying is that you think it’s a mistake to believe in the value of previous government experience, that’s an interesting argument to have. I think it’s wrong but either way it’s not really an argument about Bob Rubin.

Alternatively, it could be that what you’re really saying is simply that you don’t like this revolving door between government and Wall Street. I don’t like it either and as Jonathan Bernstein points out there’s a simple solution and it involves shifting to a more professional system of government with fewer political appointees. Retired military officers often go work for defense contractors and there’s some corrupting influence there, but you don’t have a scenario where a Major General retired after the 2000 election, goes to work for Raytheon for eight years, and then comes back as a four-star after Barack Obama’s inauguration. Most countries rely on career professionals much more than we do, programs that are managed by civil servants perform better than those run by political appointees, and when it comes to the branch of the public sector that the US takes most seriously—the military—we rely heavily on career professionals. Bernstein has an irrational attachment to America’s heavy reliance on political appointees, but as he says “all those appointees need somewhere to go when they’re in the out-party.” That means a revolving door. I don’t like it any more than you—indeed, I like it less and write tedious posts about the need to adopt a system that relies more heavily on civil servants—but it again has little to do with Bob Rubin.

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