Robert Rubin’s Vision Never Crossed the U.S. Border
Robert E. Rubin, who resigned Wednesday as Treasury secretary, is a great credit to the nation and to the president he served but came across as a great enigma to the rest of the world.
In Asia, especially, his elliptical views on the dangers as well as advantages of globalization were frustrating to the region of the world most terribly hit by the currency and capital crises. No one on the other side of the Pacific could ever figure out why Rubin seemed so eerily uncomfortable with the very notion of international capital reform, especially when the need for it seemed so obvious and the consensus behind it grew week by week.
There are, of course, several obvious explanations. The least plausible one (and the one perhaps most common abroad) is that Rubin’s vista is no more than that of a man made a millionaire many times over by Wall Street. Any international reform would almost certainly curb Wall Street’s room to maneuver. Why bite the hand that has fed you by coming out on the side of international reform that would crimp the pure capitalist style?
But the Rubin-as-craven-Wall-Street-front theory fails to take into account the undeniable truth that he looks at the world through a far broader prism than Wall Street, as does his deputy Lawrence H. Summers, a former Harvard professor, and as does Alan Greenspan, the chairman of the Federal Reserve Board. These three have worked well together as a team that has presented to the world the image of the U.S. economy under extremely competent management.
The more likely explanation for Rubin’s reluctance to embrace a serious re-do of the so-called international financial architecture is that in his heart, he either doubts that serious reform will work, or fears that tinkering will make a fragile and peril-ridden world economic situation worse.
Fortunately for him, he is leaving Washington at a time when the U.S. economy has probably never been better and the Asian financial crisis looks not to be getting any worse. Timing--and luck--is everything in politics. But it is not everything as regards the wisest possible public policy. If the Asian crisis was exacerbated (indeed, if not triggered) by the rapid outflow of international capital from the region, then good international governance would require changes in the way the world handles those flows. To do anything less would be to abnegate responsibility.
Rubin has done a far better job as shepherd of the U.S. economy than as a wise seer of the world’s. The latter responsibility might not be strictly spelled out in the job description of U.S. secretary of the Treasury. But in a world where there is only one global superpower, that burden does come with the territory.
