Robert Rubin: A VP Choice that Signals "We Will Fix the Economy" for the Middle Class

Vice Presidents rarely impact a presidential election. In this year a wide field of highly qualified people would add strength to governing, but only one, Bill Richardson of New Mexico, would by virtue of being on the ticket dramatically expand the base by ballooning the Latino vote ("For a Change-Turnout-New Voter Election, Richardson should be the choice for VP", May 23, 2008) and add New Mexico, Colorado, Nevada and possibly even Texas and Arizona to the Democratic column, and improve comfort margins in states like New Jersey, Pennsylvania, Ohio. Even Florida might become competitive.

There is another slant to choosing a vice president, and that is to send a signal that words alone cannot achieve. In an election focused on the economy, and, more precisely, an ailing economy that needs major surgery, selecting Bob Rubin powerfully sends that message.

Rubin was first the Director of the National Economic Council and, from that position, convinced the new President, Bill Clinton, that high interest rates were like a tax on the entire economy, both at the individual and societal level, and that demonstrating credibility on deficit reduction would trigger a "virtuous cycle" of falling interest rates that would further reduce the debt (lower interest payments), provide people with more money to spend and spur investment.

The key was both controlling spending and raising revenues through higher tax rates on the wealthy. They did it.

Despite all the denials by the radical righties, it worked; more importantly, the American people know that it worked because they experienced the benefits.

As Treasury Secretary, Rubin deftly managed the Mexican financial crisis despite wails and moans from the radical righties in Congress; and, helped Bill Clinton navigate his way through the government shutdowns Newt Gingrich and his allies engineered with Rubin retaining the "full-faith-and-credit" of the United States of America that Gingrich so cavalierly threatened.

Since much of economics is psychology, at least in the short-run, I bet that if Obama selected Rubin, the dollar would rise on that news alone. Under Bush the dollar lost 50% of its value against the Euro; and, under Bush, for the first time since World War II, the US is not the world's number one economy.

And, I bet, Ben Bernanke over at the Federal Reserve would feel less of a need to raise interest rates that could hurt or delay a housing recovery, if he knew Bob Rubin was going to be Vice-President.

A rising dollar would lower, in dollar terms, the price of oil. Coupled with actual deficit reduction when they take office, the dollar should strengthen further.

Yes, I know, Rubin is a Wall Streeter. He would have to get comfortable with Obama's policies on trade. And, I do not know if he has any entanglements that would make selecting him a mixed signal for an Obama campaign based, as it must be, on change.

But, in addition to the strong signal that the economy not only must, but can and will be fixed, Rubin brings additional strengths: he is "of the Clintons", and thus goes some way to healing those wounds; he is Jewish, a strong constituency already, but, if stronger, could tip states like Florida; he is a very skilled administrator; and, publicly at least, he is rather quiet and uneffacing.

He exudes strength and confidence.

Most importantly, Rubin knows that a strong middle class is the only path to sustained prosperity.

Could we get all that by reappointing him Treasury Secretary? Perhaps, but he has "been-there/done-that", and he probably would not take that job again.

Bob Rubin as a VP choice would be an economic shot-heard-'round-the-world.

Comments

[OtayPanky]

The most important qualification for VP is: would he make an acceptable president?

How does Rubin fit that criterion?

[Joee]

NO!! Rubin does not have the qualifications to be VP, let alone qualifications to be president. Why even mention him as a viable candidate, when Rubin has no potential to bring anything significant to Obama's ticket? Someone like Ariana Huffington would be infinitely better qualified to be VP on Obama's ticket.

[AnotherMcIntosh]

"The most important qualification for VP is ..."

He would be acceptable to the MSM.