RUBIN REPENTS? I just noticed it, so I guess I can hardly wonder why it attracted so little attention, but I'm sort of stunned that Nation national affairs correspondent and leading fair-trader William Greider's tentative rapprochement with establishment economics guru and former Clinton Treasury secretary Bob Rubin attracted so little notice. Greider and Rubin sat down last month for a long chat on the state of the economy, the problems of trade, and the dangers of inequality. Rubin, for the first time, spoke publicly about his concerns over the state of the economy, gave play to fears that neo-liberal economic policies weren't healing the distributional divide, and acknowledged that we lacked an effective strategy for dealing with the global wage convergence (where the median wages of rich and poor countries swing towards the middle).
I'm having a bit of trouble articulating why, but this is important, momentous stuff. When Rubin and others started The Hamilton Project, many of us with a lefty economics bent joked about creating The Aaron Burr Project. But The Hamilton Project, while still flawed, hasn't exhibited the blithe attitude towards today's economic losers that many of us feared. Indeed, what its proposals, and Rubin's recent speeches, indicate is that we're seeing a convergence between the lefty critique of globalization and the concerns of its highest profile proponents.
Rubin talks, at the beginning of the interview, about the argument he and Robert Reich used to have about growth versus distribution. Where Reich took the apportionment of the pie to be the problem, Rubin worried over its size. But if Rubin hasn't forsaken growth, as well he shouldn't, he's begun fretting over its distribution, as well he should. Indeed, he's even emerged with a Galbraithian outlook, bringing up JKG's "countervailing powers" thesis to argue that "If you believe in a market-based system, the system is a negotiation between two people who can really negotiate with each other. If one side has no negotiating power, that isn't really a market-based system. It's an imposition of one on the other." That's actually a fairly radical viewpoint, one that contrasts with DLC positions that Rubin was formerly associated with.
There's much more, and I hope you'll read it. But the unstated political relevance that makes all this so critical is that Rubin is the most respected economic figure in the Democratic establishment today. His words open wallets, his imprimatur confers legitimacy. Were he to cross-off the left end of the economic spectrum, as many believed he would, those presidential contenders and prominent pols who espoused a progressive economic perspective would be choked off from the start, trying to convince the populace with half a megaphone and widespread institutional opposition. If Rubin, however, is moving over, that will reorient the terms of the debate, allowing a greatly expanded swath of the spectrum to be marked "acceptable." For all of us concerned about inequality, globalization, and wage stagnation, little could be more promising.