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Sunday, October 3, 2010

Rubinomics Defined and Linked


From Bryce Covert
New Deal 2.0
September 14, 2010

What is Rubinomics?

The term is a portmanteau of Rubin and economics, named for Robert Rubin, former Secretary of the Treasury under President Clinton. Rubinomics holds that economic growth can best be achieved by cutting the deficit and balancing the budget. Interest rates lower as inflation fears are quelled, which is then supposed to free up resources for private sector investment. These policies came to mark President Clinton’s administration.

What’s the significance?

This theory stood in opposition to Reaganomics, which holds that the way to spur economic growth is to lower taxes. However, it also goes against more progressive economic theories that advocate government spending on infrastructure, research and development, education, etc. A focus on reducing deficits often crowds out the importance of social investment.

Who’s talking about it?

Marshall Auerback warns against Hillary Clinton taking failed Rubinomics policies from her husband’s administration on as her own…RJ Eskow sees Rubin’s policies lurking in former OMB Director Peter Orzag’s op-ed on tax policy…John Heilemann at New York Magazine reported that Obamanomics were meant as an end to both Reaganomics and Rubinomics…Ezra Klein thinks Rubin’s proteges don’t get enough credit for their flexibility…Michael J. Mandel at Businessweek says Rubinomics and Reaganomics have come to a draw.

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