Did Bob Rubin make the boom, or did the boom make Bob Rubin? Rubin himself relentlessly defers the credit to his boss, President Clinton, to Fed chairman Alan Greenspan, to his staff and colleagues at the Treasury Department, to luck, and to a natural, cyclical economic high tide that he merely tried to keep as high as he could for as long as he could -- with considerable success. Wherever credit is due, the Clinton administration has presided over the greatest economic expansion in U.S. history; a 200 percent rise in the stock market; record lows in both unemployment and inflation; and a balanced budget. And don't forget about keeping the worst global economic crisis since the '30s in check and away from U.S. shores. Asked a while back to explain the miracle, the meticulous Rubin put it this way: "It's some things we've done, some things other people have done, what the private sector has done. It's good fortune. It's all this coming together... Economic historians 25 or 30 years from now will identify factors you can't see from where we're sitting." Those same historians will also be arguing whether Rubin merely rode the wave or whether his hand was on the rudder. But one thing is certain: They won't be giving the credit to Lloyd Bentsen.
Yes, Michael Dukakis's old running mate had Rubin's job from 1992 to 1995 while Rubin headed President Clinton's newly created National Economic Council in the White House. The expansion, and the unstoppa-bull that went with it, started on Bentsen's watch. But in 1993, it was Goldman Sachs veteran Rubin (with an assist from Greenspan) who persuaded President Clinton that his dreams of a prosperous American middle class had to be kick-started by balancing the federal government's then blood-red budget books. A credible deficit reduction plan would please the bond market, the former arbitrageur argued, and that would translate into lower long-term interest rates. That in turn would stimulate the economy, which would in turn boost tax revenues, which would in turn make deficit reduction a reality. It's known as a "virtuous cycle." Six years later (with an assist from the Gingrich Republicans) the surplus is over $100 billion.
Legacy enough, probably, for a man who lunches on plain salad and spring water. Whose devotion to risk management is reflected in his wardrobe -- charcoal suits and white shirts, always. Who has been living in the same suite at the Jefferson Hotel in Washington for the past six years, and almost always dines downstairs (and whose wife wouldn't move down to boring old Washington with him). But -- and here's where the line between what Rubin actually did and what merely happened while he was minding the store gets even blurrier -- Rubin's footprints go deeper. By a strange confluence of historical eras, cultural shifts, personality and yes, good fortune, Robert Rubin, the 71st man to hold the traditionally unglamorous post of secretary of the United States Treasury, is going out a superstar.
With the helium-filled stock market shoving politics aside this decade as Americans' ticket to life, liberty and early retirement, it was Rubin and Greenspan who emerged as the wonks voters couldn't live without. Americans looked to Wall Street, Wall Street looked to Rubin. Clinton, who has proved repeatedly that he knows the electorate better than any of us, knew Rubin's value when he begged his weary cabineteer to ride out impeachment -- a sour stock market was always more dangerous than Ken Starr. And with the Cold War over and the biggest threat to American freedom no longer Russian nukes but Russian rubles, it was Rubin who stepped into the Asian flames with the U.S.-led IMF at his side. Foreign policy (at least until recently) slipped from State's purview into Treasury's, and while Madeleine Albright stumbled around the Middle East and Iraq, Rubin grabbed the headlines in Asia, where the real action was.