For those of you that don't go to the link, please read an excerpt from the article. Read carefully Robert Rubin's advice to Bill Clinton when he was president and how his advice changed the economy. As Rubin says, "it is the high taxpayers that create jobs."
Enter Rubin, at first a mere assistant to the president. Updating the Roosevelt view of Wall Street as a New Yorker cartoon, Rubin reminded Clinton that the rich create jobs. As Bob Woodward reported in ``The Agenda,'' Rubin at one point provided what could be termed the Great Reality Check of the 1990s, saying, ``Look, they're running the economy and they make the decisions about the economy. And so if you attack them you wind up hurting the economy and wind up hurting the president.''
Changed Direction
Aided by Republicans who gained control of the House and Senate in 1994, and egged on by Federal Reserve Chairman Alan Greenspan, Rubin proceeded to redirect the administration. He turned Clinton, who was, after all, a governor from Arkansas, into a bond-market expert who nattered on about basis points. By 1997, James Carville was uttering his famous quote about being reincarnated as the bond market, because then `you can intimidate everyone.''
Clinton gave up on health care. Rubin even pushed him into cutting the capital-gains rate to 20 percent, a level below that of the second half of the 1980s during the Reagan years.
Reality Check
The Rubin Reality Check was so powerful it affected both parties long after Clinton left the White House. Through Rubin, Democrats learned that expansive experimentation has a downside because of the fear it can generate. Through Rubin, Republicans were reminded that capital-gains-rate cuts can generate extra revenue. The economic-growth rate of the late 1990s, 4.1 percent on average, was something to brag about -- and still is. Protecting the economy from uncertainty was Rubin's hallmark. He even titled his 2004 memoir ``In an Uncertain World.''
Democrats today are back where they were when Begala, Carville and Reich were leading the transition team: bouncing with ambition to do something grand. But much more talk -- never mind laws -- about a big capital-gains increase will sock equities in the face, just like the mortgage crisis socked subprime and commercial paper in recent months.
