Yesterday I explained why the Fed's new report on family finances from 2007-2010 shouldn't prompt us to stop thinking about income distribution and start thinking about wealth distribution. Today I'm going to focus on something the Fed report has got me thinking about: the Republican-ness of the 2007-2009 recession and the weak recovery that's followed. By this I do not mean that Republican politicians are to blame for the recession. As it happens, they are--the recession began on President George W.
In his new book, The Escape Artists, my TNR colleague Noam Scheiber makes the interesting argument that one problem with President Obama's economic team was that, in struggling to pull the U.S. economy out of recession, the Rubinites (i.e., Tim Geithner and Larry Summers) were fighting the last war. What the financial crises of the late 1990s taught Geithner, Summers, and other members of Treasury Secretary Robert Rubin's economic team, Scheiber argues, was to embrace the Powell doctrine. Just as Colin Powell had argued that the U.S.
Jon Corzine's testimony before the House agriculture committee may mark the definitive end to the Democratic party's love affair with Wall Street. Once upon a time, Wall Street bankers were Republicans. Not terribly ideological, they preferred whenever possible a minimum of taxation, regulation, and government in general, but they didn't make a fetish of it. As the GOP moved right starting in the mid-1960s the east coast Republican establishment began to crumble, and by the late 1980s it was mostly gone.
The New York Times ran with two demographic surveys one day after the other. The first, which it headlined “Snapshot shows U.S. public more disillusioned than ever,” demonstrated that the American people are fundamentally miserable with their condition. They expressed egalitarian instincts at least to the extent that they want the distribution of wealth to be more even.
“Nobody should assume we’re going to have a debt-limit extension,” John Boehner warned. “If the vote were held today, it would not pass.” Sound familiar? This was Boehner in November of 1995, when he was the House Republican Conference chairman and his party was refusing to raise the debt ceiling unless President Bill Clinton agreed to a package of sweeping spending cuts. The big difference is that back then, Republicans backed down, whereas today they’re on the verge of winning major policy concessions in exchange for a deal.
[Guest post by Noam Scheiber:] If you’ve spent much time talking to Treasury officials over the past two years, you’ve probably heard them joke that Gene Sperling, a counselor to Secretary Tim Geithner, is the department’s in-house populist. What makes this funny (insofar as wonk humor can be funny) is that Sperling isn’t exactly your classic pitch-fork wielder. He was director of Bill Clinton’s National Economic Council (NEC) in the late ‘90s, a period when the White House got pretty good marks for its understanding of business and the broader economy.
[Guest post by Noam Scheiber:] Interesting bit of trivia from a blogger named "madhedgefundtrader," posted on the iconoclastic finance site Zero Hedge (via Politico's Morning Money): Before he left, I pulled out all the cash in my wallet and pointed out to Geithner that while I had bills signed by previous Treasury Secretaries Larry Summers, Paul O’Neil, and Robert Rubin, I lacked one with his illegible scrawl. Did he have any which he could exchange with me?
National Review's Kevin Williamson scoffs at Robert Rubin's deficit-cutting credentials: Who would you trust to get the budget balanced? Robert Rubin? I’ll bet on Rick Rubin first. Huh. There are a lot of valid criticisms of Rubin, ranging from his business dealings to his solicitude for the financial elite vis a vis the country as a whole. But suggesting that his preferred policy mix is incapable of producing a balanced budget seems like an odd line of attack: