COVER

MINDING THE STORE

CLINTON INSTALLS A QUIET WATCHDOG

CHRIS WOOD February 1 1993
COVER

MINDING THE STORE

CLINTON INSTALLS A QUIET WATCHDOG

CHRIS WOOD February 1 1993

MINDING THE STORE

COVER

CLINTON INSTALLS A QUIET WATCHDOG

CHRIS WOOD

With just over a week to go before Bill Clinton’s inauguration, a group of his senior advisers gathered in the dining room of the Arkansas governor’s mansion in Little Rock. Among those present were several cabinet nominees. Their task: to weed through a thicket of competing economic proposals in search of policy choices with enough promise to present to the new president. Leading the discussion was a rumpled, quiet man, who directed the debate with understated authority. Neither a cabinet member nor a major figure from Clinton’s political team, Robert Rubin, as head of the newly created National Economic Council, may prove to be a powerful figure in the new administration. Outside the upper echelons of New York City society, the 54-year-old investment banker is unknown to most Americans. One New Yorker who worked with Rubin, Michael Schlein, a chief of staff in the office of the city’s Mayor David Dinkins, said: “Remember the sign, ‘It’s the economy, stupid?” He was referring to a widely quoted notice that hung on the wall of Clinton’s campaign headquarters to remind the election team of their main issue. “Bob is the inheritor of that sign.” The council that Rubin will head is a creation of the Clinton administration, and its role and influence largely remain to be defined. Announcing the new agency, Clinton officials compared it to the National Security Council, which advises the president on domestic, foreign and military policies relating to national security. Working sessions of Rubin’s council, in fact, are likely to mirror closely the meeting in Little Rock. The council’s members include Treasury Secretary Lloyd Bentsen, Leon Panetta, chief of the office of management and budget, and Commerce Secretary Ronald Brown. As day-to-day chairman, Rubin’s role will be to serve partly as a mediator among the other members’ competing political agendas. But his position and access to Clinton (Rubin’s office will be near the President’s in the White House) will give him the power to act as gatekeeper to the Oval Office on economic issues.

Incisive: The economic chieftain is a selfmade man whose incisive intellect has carried him from modest beginnings in Brooklyn to the summit of Manhattan’s financial district. After graduating with honors from Harvard University, Rubin earned a law degree from Yale in 1964; he received his diploma in the same class

Rubin is personally wealthy. His holdings in Goldman, Sachs alone are estimated to be worth somewhere between $50 million and $100 million. He owns a weekend retreat in New York state’s fashionable Westchester County as well as a luxurious Park Avenue apartment in downtown Manhattan. And he is formidably well connected: Rubin’s wife, Judith, is Dinkins’s chief of protocol, and the couple is active in the city’s arts community. As well, Goldman’s international involvement has provided Rubin with a network of high-level foreign contacts.

Beyond his own influential circles, Rubin makes a point of reserving his privacy. He does not grant on-the-record in-

Dterviews with the media. Declared Schlein: “There are people who are there when the cameras go on, and people who are there when the decisions are made. Bob is definitely the latter.” Discreet: Nevertheless, Rubin’s discreet influence is very much apparent in New York Democratic politics. He has been a major financial supporter of the party, contributing $325,000 during the past two years to various Democratic organizations. Along with Mayor Dinkins, Rubin was instrumental in persuading the party to hold last year’s presidential nominating convention in New York—and then helped to raise more than $7.5 million to mount the successful event. He was among Bill Clinton’s earliest financial supporters, and during the campaign helped prepare the candidate for the crucial presidential debates.

Clinton is now counting on Rubin to help him keep the promises and restore confi^ dence and vigor to the U.S. economy. Some skeptical an-

whether Rubin’s Wall Street

as two future contenders for the Democratic presidential nomination, Edmund Gerry) Brown and Gary Hart.

Rubin soon turned to the world of finance. After briefly practising law, he joined Goldman, Sachs & Co., a major Wall Street investment house. There, he rose in the course of a 26-year career to become co-chairman, leading the firm to a $ 1.4-billion profit in 1991, the biggest on Wall Street. Although not formally trained as an economist, Rubin has firsthand experience of how the central economic institutions function. At Goldman, Sachs he was at different times in charge of various company activities, including stock and bond trading, the buying and selling of foreign currencies and high-risk investments in Russia and Latin America.

background is adequate training for the mass of economic policy details that he will be expected to master. Others predict that the substantial political egos jostling around Rubin’s council chamber will inevitably lead to conflict. But Rubin’s colleagues say that his style equips him well to deal with the problems that he is about to confront. Despite his innate shyness, colleagues who have watched him in action say that he is at ease with powerful personalities. Said Schlein: “He doesn’t speak just to be heard. But what he does speak up about, you’d best listen to.” As he sets out to rebuild America’s economy, President Bill Clinton will be listening.