By Simon Johnson
In 2006 Robert Rubin and his allies created the Hamilton Project, housed at the Brookings Institution, to think about what a future Democratic administration would do. (Senator Obama attended the opening.)
From a tactical standpoint, this was a brilliant move. It developed people, including Peter Orszag and Jason Furman (directors of the project), trained a team, and created an agenda.
Unfortunately, financial reform was not – and perhaps still is not – on this agenda. The financial crisis more than blindsided them; it overturned their entire way of thinking about the world. At least in part, this explains their slow, partial, and unsatisfactory response. In any case, it hasn’t worked out for them – or for us.
Wednesday morning there is a potential step in another direction. (Alternative link.) There are many questions.
Can would-be reformers agree? This is probably the easy part, at least for now.
Will there be continuity and personnel development, for example in the Institute for New Economic Thinking and the Roosevelt Institute?
Where’s the “Geithner wing” of this movement – i.e., the people with practical policy experience inside the regulatory machine, who can be brought in to senior government positions?
And who will provide the political leadership? All eyes are on the Senate – but who exactly will step up and on what basis?
18 thoughts on “After The Hamilton Project”
‘Step up’?..more like ‘step aside’. Counting, keeping, and consolidating the millions they’ve made in the last ten years sure makes it easier to discuss ‘reform’ now.
Envoking Alex Hamilton in their schemes is one more step down the triple-speak highway.
Well, I’m sure all the Hamilton Project guys, along with Obama, still want to loot Social Sec— Oh, I’m sorry, “tackle entitlement reform.” I mean, as long as they can offer a new source of commissions to the financial sector through privatization, they’ll still be in the driver’s seat, no?
I don’t know if this belongs to GS & co spin-campaign
but this piece came up this morning in Europe:
‘Washington aide ‘has changed mind’ over proprietary trading’
“Washington has backed down on proposals to block investment banks from engaging in proprietary trading activities, Britain’s top financial regulator told MPs yesterday.Lord Turner of Ecchinswell told the Treasury Select Committee that Paul Volcker, head of America’s newly formed Economic Recovery Advisory Board, had changed his mind over pursuing hardline reform..”
From the then-Senator Obama: ”None of this, I would argue, happened by itself. It happened because the leadership we had, including many in this room, was willing to take on entrenched interest and experiment with policies that weren’t necessarily partisan or ideological”. “Entrenched interest” – how funny…; “weren’t necessarily partisan or ideological” – how true, or at least, more often than not being the case even though in that same paper (from the Brookings Inst.) Obama says “For those on the left, and I include myself in that category, too many of us have been interested in defending programs the way they were written in 1938…” And I say, when you’re “only” a Senator (1:100), you can be freely on the ideological Left (or Right). Since becoming president, he has positioned himself with more Centrist, moderate policies. Although, if he wants his cake and eat it too, he ought to seriously consider nominating either Christina Romer or Lawrence Summers to fill the Fed’s open position: “Mr. Obama has named one person to the Fed board so far: Daniel K. Tarullo, a law professor who served in the Clinton administration and is an authority on financial regulation.” [(I would prefer to see Janet Yellen nominated and approved. “Yellen is considered by many on Wall Street to be an Inflation Dove…. and as such is less likely to advocate Federal Reserve interest rate hikes…”)]. Raising or not raising interest rates always disproportionately affects the 95% of the population, so it may only be an academic point in some circles.
To briefly comment on an earlier posting: “…As examples, see the work of Asim Khwaja and Atif Mian or Mara Faccio on how political connections really work in and around financial systems.” Though pointing out the influence and advantage of the political class in their studies, it would be rather interesting to see a more current test sample (control group): “The freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago.” (Ref: http://tinyurl.com/yevavlh)
“Robert Rubin and his allies created the Hamilton Project, ….”
“Unfortunately, financial reform was not – and perhaps still is not – on this agenda. The financial crisis more than blindsided them; it overturned their entire way of thinking about the world. ”
Simon, please Wiki before you type. From http://en.wikipedia.org/wiki/Robert_Rubin:
“Before his government service, he spent 26 years at Goldman Sachs serving as a member of the Board, and Co-Chairman from 1990-1992. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm. From November to December 2007, he served temporarily as Chairman of Citigroup.”
This is like criticizing Heinrich Himmler (in an alternate world where the Third Reich survived) from not including freedom, transparency and due process of law from his proposed New Nazi Renewal platform.
Instead, it just shows that Wall St owns the Democratic Party just somewhat less than it owns the GOP.
first link is a brief about the group and rubin:
second link is about the date of group’s launch in 2006, in time to parley any insight about the economy: the date http://www.brookings.edu/events/2006/0405education.aspx
Why not start with electing Warren Mosler to the senate from Connecticut?
This reminds me of selecting a team to set up, and administer the Marshall Plan, before you have defeated the Germans.
Ok, Tim, and Rubin and what have you are not enemies, not like the Germans were, anyway. But first they have to be defeated before we can talk who might replace them. And the only guy that can ‘defeat them’, is the President.
“The financial crisis more than blindsided them; it overturned their entire way of thinking about the world.”
Overturn a turtle: it is still a stupid turtle. It can’t think. Or at least not what the philosopher understands by thinking.
Maybe, inside of the inaccurate semantics of “White House”, “Goldman Sachs House” would be more charged with accurate meaning.
The Nazis were in GREAT part financed, pushed and organized by Wall Street. The Lord Of Finance, Schacht, head of the Deutsche Bank was in full connivance with US based plutocracy as soon as the early 1920s, and even earlier (he met with JP Morgan in 1905). Schacht and his friends pushed for Hitler and his friends, as hard as they could.
Long Hitler’s finance minister, Schacht was tried as a Nazi, then exonerated, and, as countless Nazis found his place again in the new order, same as the old one.
Thus a distinction without much of a difference. The same oligarchic system that gave Hitler, among many other gifts, is still firmly in place.
A gift that keeps on ordering around.
Are you channeling my internet connection?
Check out the relations between Deutsche Bank, and Cambridge University’s various econ units, CERF, etc.
The influence of various huge “stiftungs” (foundations) on the media and finance.
The history of The Atlantic and all its affiliates with John McCloy and company after WWII. It goes on and on…
When the Hamilton Project was announced in 2006, I wrote in my then-NY Observer col that it added up to nothing more than the usual crowd of bs-spouting, influence-craving types: Altman etc. It would amount to nothing and it hasn’t. So has anything changed? I see Evercore just got $30 million for advising on Burlington Northern (I think.) You think these types’ll crusade for financial reform?
I wonder who “changed his mind?” Maybe poor Paul had a little rendition experience.
Lots of talk, no action. It’s nice to say things, even to mean what you say, but until we have action we have nothing but logical blather. Yahoo, we’ve always had that from someone.
Maybe that explains why Rubin didn’t see the Great Recession coming when he was advocating for more risk, more reward. Rubin and his ilk should not be advising the government or formulating policy. And Democrats should not be listening to them. If anything, Democrats should be disclaiming, if not prosecuting, them all. Unfortunately, the Big O seems enthralled rather than enraged.
All these supposed experts and masters of the universe were bruting the hilarious fiction and naked lie, that the markets, and the fundamentals of the economy were “sound”, and the were only “cyclical correction”s, and blah blah blah. A cacophony of naked patent lies. Either this den of vipers and thieves, and that includes Giegthner, Summers, Rubin, Paulson, and the entire brood of hobgobblins that are responsible and culpable for conjuring, perpetuating, and profiteering wantonly from the most catastrophic economic crisis since the great depression, – or they are incompetent, ignorant, stupid, – idiots!!! Either there were crimes committed, or grotesque dereliction of duty, and mismanagement. There is no arguing this sad truth. Wingnuts, pundits, the complicit parrots in the socalled MSM, and our socalled policitians are either complicit in criminal activity, – or stupid.
The world doesn’t fall apart, and everythingfinancial does not grind to halt naturally or in the processes of socalled freemarkets. Grotesque mistakes, or wanton profiteering, or rank criminal conduct conjured, caused, and cloaked this nightmare. And it is a nightmare for many Americans, and that is the issue the predatorclass chooses to ignore and dismiss.
It’s a nightmare. No jobs, no bargaining power, radical increases in core cost of living outlays, a wild divide between thehaves and thehavenots, the dismemberment and reengineering of that thing we once called the Constitution, a purchase, bought and paid for government, bubble bust “doomloop” economies, TRILLIONS of taxpayer dollars funneled to the offshore accounts of the predator class – it’s a nightmare.
Don’t tell me there were and are not crimes committed.
Don’t tell me our socalled leaders of working in the peoples best interests?
Don’t tell me there is any such thing as “freemarkets”, or justice, or peace on earth and good will toward men.
No!!! We live in Darwinian times! We inhabit Darwinian times in the most extreme. “It’s kill or be killed”!!! The predatorclass will stomp us, (poor and middleclass Americans) into oblivion if we let them.
We cannot allow the rape and pillaging of America and our childrens future. Criminals are accountable. Bring me the head of Timmothy Giethner.
And then there’s the racist pogram in the middle east. Needs more bodies. Did we empty Detroit yet?
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