Most of the "sensible" fiscal solutions that Rubin represents and will recommend include the unspoken assumption that the lot of the "average consumer" (we're no longer 'citizens,' of course) is due to decline in any case and so policy-makers should proceed without too much care or concern for the 'popular' consequences...
The incoming Congresscritters will, naturally, be too much impressed by Rubin's presence, credentials, and history to ask them of him, but it would be interesting and entertaining to hear the answers, especially to the last one, which highlights the conflicts of interest which the novice law-makers will certainly not have the impertinence to ask:
1. Your central message is "fiscal responsibility"--balancing the federal budget--but is it really a good idea to cut spending or, for that matter, raise taxes now when the national economy is heading into recession? Won't that make things worse, withdrawing economic stimulus at the very moment when more may be needed?
2. On globalization, you told The Nation magazine last summer you don't think the reform ideas of your Hamilton Project will halt the global convergence of wages that is pulling down wages and incomes in America. If that's the reality, shouldn't we be exploring stronger measures to reform the trading system and defuse this explosive
3. You blame our swollen trade deficits almost entirely on the nation's low savings rate. Given that American families are up to their eyeballs in debt, how can you expect them to increase their savings? If that's the case, shouldn't you just tell people the straight truth? Their standard of living is going to fall. There's no way to avoid it, based on your precriptions.
4. You suggest that balancing the federal budget will also reduce our trade deficits, but studies by the Federal Reserve and the IMF both conclude the impact of fiscal balance is trivial. As the Clinton administration balanced the federal budget in the late 1990s, the US trade deficit was simultaneously exploding. Our current accounts deficit grew from 1.6 percent to 4.2 percent of GDP--despite Clinton's balanced budget. Japan ran huge budget deficits throughout the 1990s, yet its huge trade surpluses continued regardless. Given those facts, how can you argue the opposite?
5. Why does the business-financial establishment insist on securing elaborate rules in trade agreements to protect the rights of capital and investors, but claims any rules
to insure the rights of labor and workers would be "protectionist" and mess up the system? Don't we need rules for both labor and capital to create a stable, balanced trading system?
6. Citigroup, Goldman Sachs and other leading financial houses are taking major ownership positions in Chinese banks and financial firms. How does this color your advice to Congress on American economic policy toward China?
Naganahapun, of course...but it would be nice to think there'd be one or so of the incoming legislators curious enough, and furious enough, to ask the right questions...