Rating: 
Summary: Superior Washington Memoirs
Review: This book is a thoughtful retelling of Robert Rubin's life on Wall Street and in government. The centerpiece is the account of Rubin's career in the Clinton Administration when, as director of the National Economic Council and then Secretary of the Treasury, he grappled with huge federal deficits and financial crises in Mexico and Asia. Early chapters describe his youth, Ivy League education, and career at Goldman Sachs; other chapters offer musings on subjects such as corporate governance, the financial excesses of the 1990s, global poverty, and the difficulty of educating the public on economics. Throughout Rubin reflects on his analysis-driven, "probabilistic" approach to decision-making, which carefully weighs the upside as well as the downside of decisions taken under conditions of uncertainty. The tone of the book is low-key and balanced, and the economic discussions are clear and non-technical. Rubin's writing may not sparkle but he does have a gift for anecdotes and for wry, self-deprecating humor. He deflates faddish "new economy" gurus on Wall Street and tax-cutting theologians in the GOP without resorting to ad hominem remarks. In a strange way, his book is almost inspirational: it reminds readers that not too long ago the United States had a government that weighed evidence and considered options before taking fateful decisions. I gave "In An Uncertain World" four stars (instead of five) because, in the last analysis, Rubin really is discreet to a fault: readers (and historians) would have benefited from a much fuller discussion of his relationship with Bill Clinton and from more details on policy differences and debates within the Clinton Administration. Maybe Rubin held his tongue because he hopes to re-enter public life in a future Democratic Administration. Or maybe he's just a classy guy.
Rating: 
Summary: Excellent book on current economics and politics
Review: This book is like taking a graduate course work in economics taught not by your traditional economist, but by a practitioner who makes sense of everything based on his first hand experience at the top level in both Government and the private sector. As an eminently smart and powerful fellow, Rubin has probably more detractors than supporters even within academia. Indeed, Nobel prized winning economists such as Stiglitz don't take it nicely to being outsmarted by common mortals (not so common if you look at the whole persona). The truth of the matter is that "In an Uncertain World..." is a far better book than Stiglitz rampaging book on the same subject "The Roaring Nineties." I'll let you read my review on this book for further details. If you ran a database query of the smartest people on Wall Street and Washington, at the top cross section stands one remarkable individual, Robert Rubin. The book reflects the quality of the man's intellect and judgment. Additionally, Rubin had great courage. Contrary to O' Neil and Snow the two Secretaries of the Treasury during Bush first term, who have been just salesmen for Bush tax cuts; Rubin shaped the fiscal policies during the Clinton administration. Rubin was not shy to oppose Clinton's views on unrestrained government spending. Rubin convinced Clinton of the benefits to generate a Budget Surplus to pay down Government debt before it would spiral out of control with the upcoming retirement of the Baby Boomers early in the next century. Rubin also knew that the real boss was not Clinton but the Bond market. He knew that profligate government spending, continuing rise in Budget Deficits, and a rise in Government bond issuance would be punished by the Bond market with sharp increase in long term interest rates. This in turn, would curtail capital investment, productivity, economic growth, and employment. He also knew that the reverse was true too. An improvement in the U.S. fiscal position would be rewarded by the Bond market with lower long term interest rates, resulting in faster sustainable economic growth and higher employment. In essence, Rubin is a Keynesian with a twist. He recognizes that Budget deficits can have a healthy expansionary impact during a recession. However, his concern is related to structural deficits (as opposed to cyclical deficits). In other words, when a country's fiscal position is chronically in the red, even in good times, you run into a vicious cycle. Government borrowings (increasing demand for money) will boost the price of money (interest rate) over time. As a result, interest rates rise, private investments decline, productivity drops, and GDP growth slows down. Because of the lower growth, Deficits rise further, so does government borrowings, and the beat goes on. When Rubin looks at the U.S. fiscal position over the medium term, it gets really worrisome. Indeed, Rubin addresses the issue of the Baby Boomers upcoming retirement in the second decade of this century and thereafter. Here, Rubin correctly looks at the U.S. fiscal position as a pension fund. In other words, both will have to meet large claims associated with retirees. Thus, they should build right now enormous reserves (accumulated surpluses) to withstand these huge upcoming costs. Rubin put the country's money exactly where his mouth is. Indeed, when he joined the Clinton administration, he inherited a huge structural deficit from 12 years of the Reagan era. Within eight years, he turned the U.S. fiscal position with "surpluses as far as the eye can see" to get ready for the Baby Boomer retirement. As we know, the Bush administration after three tax cuts, two of them unnecessary and irresponsible, did an abrupt return to the Reagan era, the sequel. Sequels are always worst than the original. This is no exception. And, that is because now we are virtually out of time before being flooded with the tsunami of Baby Boomers retirement costs. At the end of the Reagan era, we had over twenty years to shore up our fiscal position, now we have less than ten years. The swing in the fiscal position between the end of the Clinton/Rubin era and the first term of Bush is a staggering $10 trillion. When Clinton left the office, the Surpluses over the next ten years were estimated at over $5 trillion. Now, under Bush watch, the fiscal position has swung to Deficits over the next ten years of $5 trillion. Rubin thinks this swing has dire consequences, including downward pressure on the value of the dollar which will eventually erode the confidence of foreign investors. In turn, this will make it increasingly difficult for the U.S. to finance its current account deficit. He notes that the Budget Deficit and the Current Account Deficit are close twins. The Budget Deficit decreases domestic savings, and increases the gap between domestic savings and investments. This gap is financed by foreign direct investment which is equal to the Current Account Deficit. The book covers a lot more ground on his several decades of experience in investment banking and risk arbitrage at Goldman Sachs. It covers also very intriguing aspects about Washington. If you are interested in politics and economics, you will love this book.
Rating: 
Summary: Policy in a Bubble
Review: This book is remarkable more for what it doesn't say then what it does say. Robert Rubin was at the center of U.S. economic policy in the nineties. He seems anxious to take credit (however modestly) for the economic successes of the decade - an unemployment rate that hit a thirty year low, and a resurgence of productivity and broad-based wage growth. Readers may be inclined to give Rubin his share of the credit for these successes (whether entirely deserved or not), if he was prepared to own up to the failures. But there is remarkably little owning up in this book - in fact, there is no evidence that Rubin even realizes that anything has gone wrong. Starting with the world tour, Rubin goes on at some length about he helped to engineer the bailout of Mexico in 1994, struggling with opposition both within the administration and Congress. We then leave Mexico as a success story - with a comment later in passing that Mexico has sound economic policies, albeit weak growth. Economists tend to judge the quality of an economic policy by its outcome. Mexico's per capita GDP growth in the post-NAFTA decade has averaged less than 1.0 percent annually, a pathetic growth rate for a developing country. This compares to over 4.0 percent a year per capita GDP growth back in the days of import substitution policies, 1960-80. Russia is another instance of Rubin's heroics, as he attempted to keep the country from defaulting on its debt and devaluing its currency back in 1998. This time, Rubin and his team prove inadequate for the task. In August of 1998, Russia defaulted on its debt and devalued its currency leading to a financial crisis. Rubin's story ends here, however the rest of the picture puts Rubin's efforts in a very different light. While the financial crisis did strike a strong blow to Russia's economy, the devaluation was exactly what was needed to set Russia's economy back on its feet. In less than six months, Russia's economy was growing again. In fact, it has been experiencing solid economic growth for the last four and a half years, the first significant growth stretch since the collapse of the Soviet Union. By trying to force Russia to maintain an over-valued currency, Rubin was strangling Russia's economy. Rubin's failure was Russia's salvation. Similar stories could be told with regard to Rubin's role in other developing countries, such as Brazil and Argentina. But it is not just developing countries where Rubin seems to have missed much of the story. Rubin was the major proponent of the "strong dollar." He seems altogether oblivious to the fact that a strong dollar is a recipe for a large trade deficit. If the dollar rises in value by 25 percent against U.S. trading partners (as it did), it has the same effect on trade as if the United States placed a 25 percent tariff on all its exports, and provided a 25 percent subsidy for all imports. As a result of the strong dollar, the United States is now running a current account deficit of $550 billion annually. This current account deficit translates into foreign indebtedness. Remarkably, Rubin doesn't seem to understand how the foreign debt affects U.S. living standards. This is remarkable, because he seems obsessed with the effect that interest payments on the government debt has on living standards. The analogous effect of capital income payments from the United States to foreign wealth holders somehow never enters his framework. Of course the biggest missing item from Rubin's discussion is a serious treatment of the stock market bubble. He claims to believe that the government should not attempt to influence financial markets (although he does explicitly acknowledge one effort to prop up the market). But, given the enormous consequences of the collapse of the stock market bubble, this sort of hands off attitude is inexcusable. It was easy to show in the late nineties (as some of us did) that stock valuations were way out of line with any plausible projection for future profit growth. If Rubin had taken advantage of his standing as a widely respected treasury secretary to make this point, with the supporting charts, the market never would have reached the dangerous heights it eventually attained. All the new economy bulls would have been forced to explain why Rubin's analysis was wrong - a task that was impossible. The country is paying an enormous price as a result of the failure of Rubin (and Greenspan and Summers) to bring simple commonsense to the public's understanding of the stock market. The soaring bull lead pension funds and individual investors to lose trillions in the inevitable collapse that followed. As a result, many of the countries largest pension funds are now insolvent and millions of older workers have been forced to delay retirement. The stock crash is also the direct cause of the recession and slow growth of the last three years. In addition, it led to enormous errors in fiscal planning as governments counted on hundreds of billions in capital gains tax revenue that they are never going to see. California's fiscal crisis, in particular, can be blamed in large part on the failure to recognize the stock bubble. Given the enormous costs of the stock bubble's bursting, Rubin's line, "markets go up and markets go down," doesn't cut it. As treasury secretary he had a responsibility to promote financial stability, and he blew it big time. This brings up a final point - Rubin seems completely oblivious to this line of criticism. It is possible that he is simply being disingenuous, and choosing not to address a difficult set of issues. But, it is also possible that he has never been forced to give these criticisms any serious thought. He may live in such a bubble that he never is forced to even consider these uncomfortable questions - he hears nothing but praise for the triumphs of Rubinomics. If so, this book is far more revealing than is intended.
Rating:
Summary: Glimpse into the mind of a successful fiscal policy-maker
Review: This book is superb, it gives you a peak into the mind of Robert Rubin who served as Treasury secretary under the Clinton administration. The most valuable aspect of the book is that it is a record of successful decision making at work. It demonstrates that successful policy is carried out by looking at both positive and negative outcomes of any decision at hand, and then, using judgment to execute and follow through.
The Clinton administration faced several opportunities where the World economy was at risk, particularly in Asia and Mexico. These crisis were handled effectively by US involvement (with a potential cost of future moral hazard to some extent, although it was worth it). This book has an incredible amount of wisdom in it, I'd recommend it to anyone interested in both finance and politics.
Books such as this can be used to help us learn from events of the past and help both those in government and private sector avoid pitfalls present both now and in the future.
Rating:
Summary: Well laid out and pertinent for genarations to come
Review: This book is written by one of the few people who got to Washington with big expectations and a perfect reputation and actually exceeded all the expectations and had his reputation grow further.
This book should be mandatory reading for anyone interested in what happened in the 90's and wants to get involved in either Wall St. or politics.
It's a very easy read and is written masterfully. It will give you a much better understanding of the major players and their personalities, and the thought processes that can and should be used in macro/micro economics.
Rating:
Summary: Very Good Book
Review: This is an excellent book about politics from the eyes of a very smart and successful business man. His insight on politics, economics and the stock market are valuable. Thanks to Mr. Rubin for taking the time to put his thoughts into a book for the public.
Rating:
Summary: Superior Washington Memoirs
Review: Watch out for the Big Lie in this book -- namely, that the Bush administration tax cuts of 2001 and 2003 are responsible for the current budget deficit. The tax cut in 2001 was enacted under a perceived government surplus, while the tax cut in 2003 was driven by the faltering economy. Democrats faced with a budget surplus or a recession would have chosen to increase spending rather than cut taxes. Either way, with the internet bubble bursting and the 2001 WTC attack, the surplus would have disappeared and the deficit would have ballooned. Rubin's assertion that the tax cuts are responsible for the budget deficit is a Big Lie. I am upset about this for two reasons. 1) Philosophically I believe in a flat tax rate -- I believe everyone (and every corporation) should pay an equal percentage share in taxes over a certain minimum income level. 2) I'm worried this misrepresentation will result in poor decisions on a macro level -- like a call for higher taxes irregardless of the economic impact. If we tighten fiscal and monetary policy prematurely during 2004-2005 (as Greenspan and Bush are now signaling), we risk a deflationary spiral. That danger is emphatically not over, despite rising oil prices, a resurgent stock market and a continuing real estate boom. Maybe I'm wrong, and we can all address the current budget deficit without regard for the possibility of over-tightening. However, I'd like to feel that irrational economic decisions driven by a Big Lie are not part of our problem. I'm saying we all want to get the United States' fiscal house in order. In the process, lets not confuse party politics (progressive taxes vs. a flat tax) with sound economics. 90% of this autobiography is a well-written, measured story of an awesomely talented individual chalking up major accomplishments as a highly professional manager in a series of extraordinarily difficult and high-impact positions. Rubin is most likely a truly superb manager. I've never worked with or (more likely) for the guy. Having read the book, however, I would be very upset seeing Robert Rubin follow Alan Greenspan as Governor of the Federal Reserve. He has clearly misrepresented the economic facts in this book to suit his political positions. He'd be great as a Secretary of State for a Democratic administration, or a Secretary of Treasury redux. I give the book three stars, because Rubin is a legitimate American super star. Pity he's a Democrat.
Rating: 
Summary: Watch out for the Big Lie
Review: Watch out for the Big Lie in this book -- namely, that the Bush administration tax cuts of 2001 and 2003 are responsible for the current budget deficit. The tax cut in 2001 was enacted under a perceived government surplus, while the tax cut in 2003 was driven by the faltering economy. Democrats faced with a budget surplus or a recession would have chosen to increase spending rather than cut taxes. Either way, with the internet bubble bursting and the 2001 WTC attack, the surplus would have disappeared and the deficit would have ballooned. Rubin's assertion that the tax cuts are responsible for the budget deficit is a Big Lie. I am upset about this for two reasons. 1) Philosophically I believe in a flat tax rate -- I believe everyone (and every corporation) should pay an equal percentage share in taxes over a certain minimum income level. 2) I'm worried this misrepresentation will result in poor decisions on a macro level -- like a call for higher taxes irregardless of the economic impact. If we tighten fiscal and monetary policy prematurely during 2004-2005 (as Greenspan and Bush are now signaling), we risk a deflationary spiral. That danger is emphatically not over, despite rising oil prices, a resurgent stock market and a continuing real estate boom. Maybe I'm wrong, and we can all address the current budget deficit without regard for the possibility of over-tightening. However, I'd like to feel that irrational economic decisions driven by a Big Lie are not part of our problem. I'm saying we all want to get the United States' fiscal house in order. In the process, lets not confuse party politics (progressive taxes vs. a flat tax) with sound economics. 90% of this autobiography is a well-written, measured story of an awesomely talented individual chalking up major accomplishments as a highly professional manager in a series of extraordinarily difficult and high-impact positions. Rubin is most likely a truly superb manager. I've never worked with or (more likely) for the guy. Having read the book, however, I would be very upset seeing Robert Rubin follow Alan Greenspan as Governor of the Federal Reserve. He has clearly misrepresented the economic facts in this book to suit his political positions. He'd be great as a Secretary of State for a Democratic administration, or a Secretary of Treasury redux. I give the book three stars, because Rubin is a legitimate American super star. Pity he's a Democrat.
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