Return to Rubinomics?
By Sebastian Mallaby Monday, November 13, 2006
During their long years in the wilderness, Democrats lashed out against trade and globalization, even though denying the economic case for trade is like pretending that tax cuts pay for themselves. Now that they have won Congress, the Democrats must prove that they are more than the mirror image of their opponents. This means reviving the pro-market centrism of the Clinton era -- a spirit that lives on in the form of the Hamilton Project.
The Hamilton Project is the brainchild of Robert Rubin, Treasury secretary under Bill Clinton. Rubin's great virtue was to be as free of ideology as is possible in politics and to recruit a team of clever pragmatists to work for him. Not every Cabinet secretary would choose an intellectual bulldozer as deputy -- particularly one with a talent for political incorrectness. But Larry Summers could get to the right answer faster than most people could get out of bed, and that's what Rubin cared about.
Two years ago, Rubin teamed up with Peter Orszag, a laser-brained economist at the Brookings Institution. He no longer controlled the Treasury, but he persuaded a number of fellow Democratic grandees to finance a center for Rubinomics in exile; and Orszag served as policy director, commissioning a series of creative pragmatists to grapple with the nation's economic challenges. Anyone who laments the watery generalizations of the House Democrats' election platform should check out http://www.hamiltonproject.org/ . It is proof that Democrats do have sophisticated ideas. They just need congressional leaders to adopt them.
During the recent congressional campaign, Democratic candidates mostly had the right diagnosis and the wrong prescriptions. They saw that middle-class and poor Americans have not experienced wage gains during the past five years of growth, and they saw that families are one health crisis away from financial hardship. But the Democrats' remedies -- bashing Wal-Mart, railing against globalization -- offered little more than symbolism for the poor and middle class while promising damage to the economy. ...
<http://www.washingtonpost.com/wp-dyn/content/article/2006/11/12/AR2006111200942.html>
Carl
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