Newspaper article THE JOURNAL RECORD

`The Committee to Save the World'

Newspaper article THE JOURNAL RECORD

`The Committee to Save the World'

Article excerpt

The end of the impeachment trial brought relief to more than just the Clinton household. It was also a signal to Treasury Secretary Robert Rubin that he finally is free to leave.

The resulting shake-up could foreshadow the economic policy agenda of the Democratic Party for the next 20 years.

The current expansion owes much to Rubin. A former co-chairman of the investment banking powerhouse Goldman Sachs, Rubin joined the Clinton campaign in 1992 after Mario Cuomo folded his candidacy. When Clinton won the presidency against all odds, Rubin headed up the newly created National Economic Council. From its behind-the-scenes cockpit he decorously shouldered aside the Council of Economic Advisers. Former Senate Majority Leader Lloyd Bentsen was Treasury secretary in those days. He and Rubin persuaded Clinton that a "down payment on the deficit" was needed. The resulting package of tax increases and spending cuts touched off a six-year boom. The man who did the footwork on the down payment, surveying market participants, economists on its appropriate size, was a 38-year-old Lawrence Summers, a former Harvard University economist then completing a tour as chief economist for the World Bank. When he joined the Treasury in 1993 instead of heading the Council of Economic Advisers, it was widely interpreted as a snub. When Bentsen retired after two years on the job, Rubin effortlessly moved up to the Treasury. Only a few were not surprised when he chose Summers as his deputy. It was a lofty place for a young man, but then Summers was an unusual young man. The nephew of two of the century's premier economists (his economist father is Paul Samuelson's brother, his economist mother is sister to Kenneth Arrow) Summers had firmly established himself as one of the top economists of his own generation. He had served as campaign adviser to both Michael Dukakis and Clinton. A good division of labor ensued. Rubin talked markets, Summers talked economic and regulatory policies, and both men talked to Federal Reserve chairman Alan Greenspan and, often enough, to Clinton himself. …

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