THOMAS OLIPHANT

The strong economy built by Rubin will give Gore a running start

By Thomas Oliphant, Globe Staff, May 16, 1999

WASHINGTON -- On his way out of town, Robert Rubin is performing one final public service. That would be a blunt reminder of the fundamental place of the economy in our political life.

The irony is that the outgoing Treasury secretary and leader of President Clinton's economic policy team wouldn't know how to approach an issue as a partisan. But his huge accomplishments are the main reason the president was reelected and maintained a powerful position through last year's impeachment madness.

And now, with as carefully planned and nurtured a succession as has ever been seen around here, that lesson is being transmitted forward.

I couldn't help but notice that some of Vice President Gore's closest associates began sending signals almost immediately that designated replacement Larry Summers would most definitely be a strong candidate for Treasury secretary should there be a Gore administration.

The relevant fact is not Summers's frequent, if private, role of late as the person advising Gore on economic matters. Rather, it was a rare example of what Gore's campaign insists is its top priority -- maintaining and broadening the decade's astonishing prosperity.

President Clinton's handling of Rubin's departure and Summer's ascension, and even Summer's replacement as number two by the competent and experienced Stuart Eizenstat, reeked of continuity politics.

The moves had been in the works for more than two years. And it was no mere Clinton operation; the only person as firmly convinced as the president and Rubin that the 45-year-old Summers is ready for the responsibility is Federal Reserve chairman Alan Greenspan himself.

The timing was also instructive. When Rubin told Clinton more than two weeks ago that the moment had come, the remaining flash point on the fragile international finance scene (Brazil) had calmed. At last, from Rubin's perspective, there was nothing left that could be called pressing, much less crisis, material.

The idea of complete continuity in policy is everything to Clinton and Gore. The hand Gore is fated to play with is a strong one, certainly better than what George Bush was playing with at this point in 1987 and a far cry from the mess Richard Nixon wrestled with in 1959. At the margins it is probably made a bit stronger by the fact that there's no denying Gore's role at the apex of decision making in the Clinton government.

Obviously, history doesn't enshrine the economy as the sole force in presidential politics. And you can just as obviously find numerous wishful but serious thinkers close to Bill Bradley and the Republican candidates who have theories why economics won't matter next year.

However, it is a fact that since World War I, the question of whether the in party holds the White House has been answered in the affirmative whenever people's incomes after inflation are rising at least moderately and they have confidence in the future. Other variables come and go, but those have been constant.

The point is especially important as the 2000 election looms because what the government did that mattered greatly in the 1990s will also matter greatly in the next decade. When Clinton took his oath in 1993, he had already veered sharply from what most people heard during his campaign -- talk of using federal spending and a tax cut for the middle class to jump-start a stagnant economy.

When he took office, the tax cut was missing and the so-called stimulus was a puny $16 billion, and Bob Dole beat him fair and square on that with a filibuster.

In their place was an assault on the budget deficit, then out of control and set to hit close to $300 billion that year. The program was pushed not only by Rubin on his way to setting up the new National Economic Council but by incoming Treasury Secretary Lloyd Bentsen and by Greenspan.

The argument was that a gradual return to fiscal sanity would not be conservative but stimulative. By not borrowing hundreds of billions of dollars from private savings, those immense sums would be available for productive investment in the private sector.

And there would be a double stimulus because a return to sanity would cut more than enough off long-term interest rates to give an extra boost to corporate and home-buying borrowers.

It worked, and its dividend can be seen in 1996s Electoral College numbers. But the basic idea is also central to the future -- zealously guarding budget surpluses, paying down the huge national debt, and leading the world toward greater growth, depoliticized currencies, and sensible financial practices.

Continuity may sound boring. But when it means sound economic policies that have contributed to prosperity not seen since the '60s, it is the opposite.

It wouldn't hurt Al Gore to repeat some version of that mantra every day for the rest of his quest.