Bill Black — Jobs, Jobs, Jobs – Not Austerity

Democrats under the spell of Rubinomics consign themselves to the political wilderness.

New Economic Perspectives
Jobs, Jobs, Jobs – Not Austerity
William K. Black | Associate Professor of Economics and Law, UMKC

Marshall Auerback — Another Rubinite to the White House?

First, we had Treasury Secretary Jack Lew (whom Rubin made a very wealthy man at Citigroup). And now we find out that President Obama has nominated Walmart’s philanthropic head Sylvia Mathews Burwell to become director of the White House budget office. She touches all of the right bases: a McKinsey alumnus, and served as Rubin’s chief of staff from 1995 to 1997, when she moved back to the White House to serve as one of Clinton’s two deputy chief of staffs, the other being future Center for American Progress founder John Podesta. Podesta and Burwell worked under chief of staff Erskine Bowles, he of Bowles-Simpson fame.

So what’s wrong with having people in the White House who are familiar with the way the capital markets work? Well, yes, they are all “markets people”, who just happened to be around during the time of one of the greatest private sector debt bubbles in history and still fail to recognize the destructive dynamics unleashed by that. It’s as if I went a surgeon who amputates the wrong limb. Should I therefore go back to him for a 2nd procedure on the grounds that he might be more familiar with my body than other doctors?

Macrobits
Another Rubinite to the White House?
Marshall Auerback

(h/t Kevin Fathi via emial)

Brad DeLong — Between Greece And Zimbabwe

Brad DeLong takes MMT seriously.

But suppose that you are in an intermediate case, where the Treasury and the central bank do not want to peg the currency (and the internal price level) but do not want to let it (them) do their own thing without limit either? Suppose the Treasury Secretary believes that a strong dollar* is in America’s interest. What you then have is a mix of the polar gold-standard and MMT cases. But what are the proportions of the mix?

Grasping Reality with Both Invisible Hands
Between Greece And Zimbabwe (very short)
Brad DeLong | Professor of Economics and chair of the Political Economy major at the University of California, Berkeley
(h/t Mark Thoma at Economist's View)

* Bob Rubin and his protegés favor a "strong dollar" in order to "keep borrowing costs low," which translates to running a balanced budget or even a surplus, as Rubin advised Democrats in the Clinton administration to do, setting the stage for the first depression of the 21st century. This goes by the name "Rubinomics." See also the Roosevelt Institute piece with links on Rubinomics. The Rubinites are now deficit doves that think moderate austerity is called for now rather than the austere austerity of the sound money crowd.

Robert Rubin, the Puppeteer, still running economic policy.

Geithner, Summers, Orzag, Daly, Jack Lew...the list goes on and on. Robert Rubin puppets, all.

No single individual has had an imprint on American economic policy over the past 20 years more than Robert Rubin. And the man put together an unblemished record of blowing up everything he touched: From Citigroup to the US economy with his late 1990s surpluses (which we're still trying to recover from) and as an encore, the entire global economy with his single minded pursuit of financial deregulation and derivatives.

Rubin is still with us, behind the scenes perhaps, but very active nonetheless by way of his puppets who continue to press for deregulation and "fiscal responsibility."

I recently saw the Puppeteer himself at the Four Seasons Hotel in New York, having lunch with none other than Pete Peterson (another financial robber barron who's been gunning for an end to Social Security for decades and is likely to get it) and--you guessed it--Timmy Geithner, who looked like he was obediently taking orders from his two masters.

But it's the President who has become Rubin's main act. The Puppeteer has taken Obama's message of change and deftly crafted it to Wall Street's interests.