Summers and Rubin on the Economy
In the Washington Post, Harold Meyerson writes about economic insecurity among the American middle class, referencing Larry Summers' recent column in the Financial Times and Bob Rubin's new economic policy group, the Hamilton Project.
Meyerson quotes Summers to the effect that "the vast global middle is not sharing the benefits of the current period of economic growth -- and that its share of the pie may even be shrinking."
Of Rubin, he says....
Concerned that the American dream is fading for the middle class, and fearful that said middle class may turn against the global free-trade order he helped erect, Rubin has created the Hamilton Project, which, in the spirit of its namesake, our first Treasury secretary, proposes a series of enlightened Tory solutions to address these conundrums. The project has called for greater public investment in education, health care, research and development, and infrastructure; balancing the budget; and wage insurance for workers compelled to take lower-paying jobs in our Wal-Mart-ized economy.
All well enough. But, Meyerson says, neither Rubin nor Summers can really deny the fact that for the middle class around the world, wages are "converging," leveling out in a way that helps workers in developing countries but isn't so great for Americans.
A big problem, indeed. But there's a corollary problem: the divergence of wealth in the United States. (Summers, to be fair, touched briefly upon this in his column.)
Every poll suggests that part of the anxiety of the American middle class stems from its conviction that the rich in America are getting richer...and richer...and richer—to levels unprecedented in the history of the world.
And, factually, that's correct. (It's happening in England too.)
Unfortunately, both Rubin and Summers are fundamentally compromised on this issue, as they work for a mammoth multinational banking group and a mammoth international hedge fund. It's unlikely that they're going to come up with any proposals addressing the social impact of the super-rich that would harm their employers. (Which, of course, is one reason their employers hired them—to neutralize them.)
Rubin and Summers are two extremely smart men, among the Democrats' most serious thinkers on economic issues. It's a shame that, on one issue of increasing importance to the country, they are so compromised. And, again, it makes you think of the post-presidential choices that separate Derek Bok and Larry Summers; one worked for Common Cause, one works for a hedge fund. Personal choices, certainly. But nonetheless, choices that send very different messages to Harvard students.
