First he was touted as the Obama administration auto czar. Then his name vanished from the press accounts of the administration’s auto restructuring efforts. But yesterday, Steven Rattner, the investment banker who manages the Quadrangle Group, returned front and center to the auto wars with the news that he will head the group advising Treasury Secretary Tim Geithner and uber-economist Larry Summers on what to do with the beleaguered auto industry.
Rattner's pedigree is more Wall Street than Main Street, in sharp contrast to that of Ron Bloom, another Treasury auto adviser, who walked away from his own Wall Street investment bank (Keilin and Bloom) in the early ‘90s to become chief economic strategist for the United Steelworkers and the architect of much of the steel industry’s subsequent restructuring. Rattner, by contrast, was a champion of the Hamilton Project, the initiative started by Robert Rubin to bring the economic Clintonism that Rubin had shaped into the 21st century.
In July of 2006, Rattner took to the op-ed page of the Wall Street Journal to provide nothing less than the compleat world view of the modern Hamiltonian. He noted, as Rubin had, that income inequality was soaring, and that the economy’s very real productivity gains were not being shared among any but the wealthiest tenth of Americans. How to address this problem? Better hiring and evaluation of teachers was high on his list, as was wage insurance for displaced workers and a raise in the minimum wage.
But a larger portion of Rattner's article was devoted not to such palliatives, but to what Democrats shouldn't do in their quest for a fairer economy. They should not turn their back on trade agreements, he wrote, which “brought American consumers better, cheaper goods and allowed the economy to grow quickly without inflation.” (Presumably, this was before we discovered the cheaper and better lead in imported toys.)
“More extreme factions,” Rattner continued, “argue that the centrism of the Clinton administration doesn't adequately address 21st-century fears and offer in its place statist visions of organizing economic policy around belittling American capitalism and fiscal responsibility, while trumpeting unionization and protectionism.”
"That's terrible policy,” Rattner continued.
Where to begin? We could note that if anybody belittled fiscal responsibility, it was American capitalists, Robert Rubin of Citigroup high among them, whose banks ran up the towering levels of debt that American taxpayers are now compelled to assume. We could zero in on the claim that unionization is terrible policy, which, its empirical weaknesses aside, should make Rattner suspect to the UAW before he even sits down at the table.
Fortunately, Rattner will be joined at that table by Bloom. So now Treasury's auto restructuring committee has Bloom, who uniquely represents the perspectives of both capital and labor, and Rattner, who all too typically represents the perspectives of capital and capital. Ah, inclusivity.
--Harold Meyerson
