April 16, 2007
Journamalism [sic] Watch: Robert Kuttner Unfairly Trashes Robert Rubin
A friend once told me oh, four years ago, that we would be able to tell when the Democrats are on the upswing: it will be when Robert Kuttner decides that trashing other Democrats--not arguing about the future of a party, not arguing about a good society, not debating honorable adversaries, not thinking about policies, not discussing issues, but simply trashing other Democrats--is his Job #1.
Well, it must be that time.
Robert Kuttner trashes Robert Rubin.
It is the shoddiest thing I have seen The American Prospect publish--it is even shoddier than Robert Samuelson's 2004 right-wing trashing of Robert Rubin in the New Republic and that is saying something.
Consider:
"American Prospect Online - Friendly Takeover: The '90s saw declining inflation, looser money, and rising productivity growth, for reasons unrelated to Clinton's slaying of the deficit. The economy's previous investment in computers was belatedly raising productivity growth rates. With higher productivity growth, the Fed didn't have to "take away the punch bowl," as former Chairman William McChesney Martin famously put it, for fear of letting growth trigger price pressures. Greenspan let the recovery rip because he saw few signs of inflation, not because of reduced deficits..."
Curious how Bob Kuttner knows more than I do, or indeed than Alan Greenspan does, about why Alan Greenspan believed (correctly) in the 1990s that he could keep interest rates low without generating higher inflation. Greenspan says that he kept interest rates low because (a) the deficit was smaller, (b) because higher investment made possible by lower deficits was increasing the rate of growth of potential GDP, and (c) because the computer revolution provided a further big boost to the growth of potential GDP. I think Greenspan's right about the (multiple) reasons he bet that he could keep interest rates low without triggering higher inflation. Kuttner thinks different.
It gets worse. Kuttner writes:
"A man of nimble intellect, self-effacing charm, and professed concern for America's downtrodden, Rubin functions as what once would have been called a power broker. But that label doesn't attach to Rubin, because he is so seemingly public-minded, so socially liberal, and so genuinely nice..."
"'Seemingly' public minded"? "'Professed' concern for America's downtrodden"? Bob Kuttner doesn't dare say that Bob Rubin's real aim is to shape America's public policy to make himself richer--it's false, and it would lose Kuttner too much credibility. But Kuttner does want his readers to think that Rubin is a devious, self-interested plutocrats--hence the insinuations.
It gets even worse. Kuttner writes:
"Rubin's dubious counsel included making the North American Free Trade Agreement (NAFTA) a priority over health reform (Hillary Clinton's objections notwithstanding), and pushing the budget all the way to surplus, protected from a Republican treasury raid only by a fictitious Social Security "lockbox." He did support expansion of the earned income tax credit and minor social-spending increases, but fiscal discipline was paramount. These views are not just those of a centrist policy kibitzer; they are exactly what you would expect of a leading banker..."
Bob (Kuttner, that is): "Leading bankers" are not typically for higher taxes, more progressive taxes, social-spending increases of any kind, and especially not of expanding social-welfare spending on the poor--which is what the EITC is. You expect a leading banker to be in favor of fiscal discipline, yes; but also for lower taxes, flatter and less progressive taxes, reduced social spending in general, and reduced welfare spending in particular.
And it gets even worse. Kuttner simply lies about the Brookings Institution's Hamilton Project:
"The Hamilton Project, founded by Rubin and based at the Brookings Institution, promotes free capital movements, fiscal balance, and small gestures toward greater equality..."
And it gets even worse still:
"Rubin tends to get a free pass on actions that, in lesser men, would be seen as plain conflicts of interest.... Goldman Sachs, which Rubin left to join Clinton, was a prime underwriter of Mexican bonds.... After NAFTA created a gold rush of foreign money into Mexico, enriching Goldman Sachs and its clients and triggering an unsustainable speculative boom followed by a crash, Rubin promoted the bailout of Mexico that made foreign bondholders whole..."
Notice that Kuttner does not quite say that Rubin sponsored making holders of Mexican bonds whole at the expense of American taxpayers--even though that's what "bailout" means, somebody other than the original debtor paying off a debt. Kuttner implies that Rubin sponsored making holders of Mexican bonds whole at the expense of American taxpayers, but he doesn't quite say so.
And the reason that he doesn't quite say so? Because it isn't true, and because Kuttner knows that it isn't true--U.S. taxpayers benefitted handsomely (indeed, some quite senior IMF officials in the late 1990s thought much too handsomely, they told me: they believed Rubin had used America's bargaining power inappropriately in setting the terms of the completely-repaid loans (not the "bailout") it made to Mexico in 1995) both as creditors and as workers whose jobs were not lost from the macroeconomic distress that would have followed a complete crash of the Mexican economy.
But Kuttner wants readers of the American Prospect to think that Bob Rubin enriched Goldman Sachs at the expense of the American taxpayer.
I could go on: I've only covered about a quarter of Kuttner's article. But what's the point? It's not as though Kuttner is making an argument that Rubin was wrong in thinking that Eisenhower-Republican-light policies were America's best option in the 1990s. You can make that argument (and I believe some of it, and I make some of it at times), but that's not what Kuttner is doing.
Kuttner, you see, is not in the information business. He is in the character assassination business.
<http://www.j-bradford-delong.net/movable_type/>
Carl
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