Citi's Bob Rubin Is Back In The Game
On Oct. 12, the eve of the Presidential debate focusing on the economy and other domestic issues, Robert E. Rubin, who serves as John Kerry's top economic adviser, says most folks have no clue who he is. "They don't remember me. Do you think they do?" he ponders in his self-effacing way.
Financial types certainly know who Rubin is. And given the number of TV appearances he has made lately -- four in the last two weeks -- the average guy on the street may now recognize him, too. Rubin, a Citigroup (C ) director and former Treasury Secretary under Bill Clinton, has been out promoting the paperback debut of his book, In an Uncertain World. But he's using the opportunity to talk up the Democratic Presidential nominee.
Rubin's name is continually invoked on the campaign trail. During the Oct. 8 debate, even President George W. Bush mentioned Rubin when he pooh-poohed Kerry's plan to keep jobs from going overseas: "Robert Rubin looked at his plan and said it won't work." Says Rubin: "Bush misunderstood me. Kerry has his head on very straight in terms of economic policies."
Whatever the case, having Rubin at Kerry's side is a good strategy, say experts. Says Greg Valliere, chief strategist at Charles Schwab Corp.'s (SCH ) nonpartisan Washington Research Group, "Rubin absolutely helps the Kerry ticket. He reminds people of the mid-to-late 1990s, when investors did well." Indeed, the "Bring back Bob" chants seem to be getting louder, even from some Republicans. Says Peter G. Peterson, co-founder of the Blackstone Group and a longtime Republican: "He engineered one of the most responsible fiscal periods in recent American history."
Rubin, 66, is not officially part of the Kerry campaign. But that doesn't mean he's averse to Kerry-related close-ups. At the Democratic National Convention in July he sat next to Teresa Heinz Kerry during her husband's speech. On Sept. 15, he was with Kerry at the Detroit Economic Club while the candidate slammed Bush's policies and spelled out his own. Says Gene B. Sperling, director of the National Economic Council under Clinton and part of Kerry's election team: "When Kerry has to make major speeches or policy decisions, the senator almost always asks that Bob be in the room or on the phone." Rubin says he was holed up with Kerry for two days this summer and has had countless phone chats with him since. "He just called me this weekend," says Rubin.
Kerry and Rubin work well together, but don't agree on everything. "Kerry is more committed to middle-class tax cuts than Bob," says a campaign source. "Bob would rather take the deficit reduction."
No doubt, Rubin is in his element when talking about reducing the annual budget deficit, now at around $415 billion. He argues that it will lead to high interest rates, which will curb investor enthusiasm and put the brakes on the recovery. And to put it bluntly, Rubin thinks Bush's tax cuts, especially those for the wealthiest Americans, stink.
Rubin has his critics. "You need tax cuts to stimulate investment and jobs," says Stephen Moore, head of the Washington-based antitax Club for Growth. He adds that "getting rid of deficits doesn't make interest rates go down." Others say Rubin closed the budget gap mainly because of the tech boom, when high productivity and a bull market powered the economy.
If he helps Kerry win the election, Rubin is likely to go to Washington as well. "I think he's bored with what he's doing at Citigroup," says a close business associate involved in the Kerry campaign. "My sense is that he really wants to be the next Fed chairman." Rubin denies this: "My mind isn't there right now."
What about Rubin's record at Citigroup, which has seen its share of scandals? Critics are dismayed that he emerged unscathed. A year after he joined in '99, Rubin made a call to the Treasury Dept. to intervene on behalf of Enron Corp. Soon after, Citi was hit hard by the analyst scandal and had to split its investment banking and research arms. And Japanese regulators recently ordered the bank to shut its private-banking operation because of legal violations. Says Rubin: "Citigroup has a great management team. It will work these things out."
Rubin says he has always had a hankering for public life. If Kerry is elected, folks will likely once again be reminded just who Bob Rubin is.
By Marcia Vickers in New York