"Friendly takeover"
The American Prospect
April 4, 2007
By Robert Kuttner

Robert Kuttner is a Distinguished Senior Fellow at Demos and Co-Editor at The American Prospect. Here he writes that, "the most influential figure setting the economic course of the Democratic Party is banker Robert Rubin. But his counsel isn't likely to help either the Democrats, their constituents, or the economy.

Friendly Takeover
T@P By common consent, the most influential figure setting the economic course of the Democratic Party is banker Robert Rubin. But his counsel isn't likely to help either the Democrats, their constituents, or the economy.

By Robert Kuttner
Issue Date: 04.04.07

In April 2004, AFL-CIO president John Sweeney grew concerned that John Kerry was getting too much of his economic advice from the Wall Street wing of the Democratic Party. Kerry had just completed his primary sweep. In the general election, he would need the unions. Sweeney proposed a private meeting to discuss living standards as a campaign issue, and the candidate invited the labor leader to his Beacon Hill home. Sweeney arrived at the Kerry manse, bringing his policy director, Chris Owens, and Jeff Faux of the Economic Policy Institute. There, seated in the elegant living room, were Robert Rubin and two longtime lieutenants: investment banker and former Rubin deputy Roger Altman, and fellow Clinton alum Gene Sperling -- Kerry's key economic advisers.

In a three-hour conversation, the group discussed the deficit, taxes, trade, health care, unions, and living standards. The labor people urged the candidate to go after Wal-Mart's low wages. Rubin countered that a lot of people like Wal-Mart's low prices. Kerry eventually announced that the meeting needed to wrap up, because "Bob has to get back to Washington." Rubin responded that, no, he could stay as long as Kerry wanted. Sweeney and his colleagues were ushered out the door; Rubin, Altman, and Sperling remained. "Wall Street was in the room before we arrived," says Faux, "and they were there after we left."

Now, more than two years after Kerry lost a winnable election, the Democrats have taken back both chambers of Congress, running on an economic platform far more populist than Kerry's. With the strongest field in decades, they could win the presidency in 2008. Though Hillary Clinton is running as an economic centrist, a ticket led by John Edwards, Barack Obama, or Al Gore (if he gets in) would probably run a robust campaign on pocketbook issues. But if the Democrats do take back the White House, they are likely, once again, to find Bob Rubin in their living room.