Mr. Robert Rubin, the U.S. secretary of the Treasury, will step down from his post this summer. The move was expected. Mr. Rubin had talked to confidants about his desire to return to Wall Street. Still, the announcement surprised markets. The dollar, bond prices and the Dow Jones Industrial Average all fell at the news; each later recovered. Mr. Rubin is a savvy trader and a smooth policymaker, but he is not solely responsible for the current U.S. economic boom. His are big shoes to fill, but the expansion can survive his retirement.
Mr. Rubin was one of the most popular and effective heads of the Treasury ever. He had the ear of President Bill Clinton, enjoyed the confidence of Wall Street and worked well with Federal Reserve Board Chairman Alan Greenspan, as well as his foreign counterparts. Those working relationships, as well as his sympathy for Wall Street’s views, helped soothe markets in rough times.
In fact, Mr. Rubin’s decision to leave is the best indicator that he considers the global financial crisis to be over. A Clinton loyalist, he would not leave his boss in the lurch. He also considers the grooming of his successor, his former deputy Mr. Lawrence Summers, now complete. Since the crisis began, Mr. Summers has been the point man for the United States, a task for which he is well-suited academically and which would give him the credentials to take Mr. Rubin’s place. There are no doubts about Mr. Summers’ intellectual abilities. A recent magazine featured him, along with Mr. Rubin and Mr. Greenspan, as the troika that staved off a global depression. Unfortunately, the secretary-designate is not known for his people skills, although they are said to be much improved. And much of the work of the Treasury secretary is confidence building, making the system function smoothly and responding quickly to crises. In terms of these kinds of endeavors, Mr. Summers is an unknown.
By all accounts, he is a quick study, however. He understands the issues and has been part of the team that helped steer the U.S. economy through the second-largest expansion in the country’s postwar history. He is a fitting successor to Mr. Rubin, who, even from Wall Street, will no doubt weigh in when he feels he has to. That alone is reassuring.
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