Do Clinton-Era Economic Officials Represent Real Change?
Economist Dean Baker isn’t happy about seeing people like Larry Summers and Robert Rubin surrounding President-elect Barack Obama as he consults experts on the economy. The two were both Treasury secretaries under former President Bill Clinton, and both are part of Obama’s economic advisory committee.
While the Clinton years are remembered as a time of prosperity, it’s also true that policies supported by Summers and Rubin contributed in major ways to the economy’s current problems, said Baker, co-director of the Center for Economic and Policy Research.
Along with former Federal Reserve Board chairman Alan Greenspan, Rubin and Summers compose the high priesthood of the bubble economy…
While the Bush administration must take responsibility for the current crisis (they have been in power the last eight years), the stage was set during the Clinton years. The Clinton team set the economy on the path of one-sided financial deregulation and bubble driven growth that brought us where we are today. (The deregulation was one-sided, because they did not take away the “too big to fail” security blanket of the Wall Street big boys.)
For this reason, it was very discouraging to see top Clinton administration officials standing centre stage at Obama’s meeting on the economy. This is not change, and certainly not policies that we can believe in.
Rubin and Summers also were not among the small group of economists who warned during the housing boom that things were out of whack. Baker raises two questions worth thinking about: Why are we rewarding them now? And where are the fresh faces for a new administration?