tv Robert Rubin Speaks at the Washington Ideas Forum CSPAN October 10, 2016 8:01pm-8:21pm EDT
we'll show you several seg frmts this year's washington ideas forum. that's followed by a look at the presidential transition process with two former white house officials and later a senate hearing on how the health care law is effecting state insurance markets. >> secretary robert rubin talks about the future of political discourse in washington and how a newly elected president might work with the next congress. this is 20 minutes. >> good morning, everybody. so bob, as i'm sure, nearly all of you know, spent many years at goldman sachs, ultimately as co-chairman. the first ever director of the
council under bill clinton. treasury secretary of course and vice chairman of citigroup and now co-council chairman. we are here to talk about the economy and politics and it's funny. when i've been having these conversations the last few years i feel like they are always so dark when we talk about the economy, right? and now i feel like there are a little bits of signs of lightness. i guess i want to ask you whether we should begin to become, start to get a little more optimistic. the census report on income last year showing healthy gains up and down the spectrum. we don't know about this, but wages still seem to be outpacing inflation. it is hard to see economic points. people were depressed in the early '90s then we went into this great boom. is there any reason to think and hope we're at the beginning of a period where we're finally going to see more consistent
improvements in living standards for most americans? >> well, i think it sort of depends on what time period we're talking about a little bit. my view would be as follows, i think that the 2015 numbers encouraging are a one-year numbers. there was a federal reserve board study, i think, in may that said something like 31% of the american people self identify as struggling. it said that something like 45% of americans couldn't raise $400 within a short period of time if they had an emergency. i think that answer in terms of how people are doing is still a very large number of americans struggling. and i think we face a very serious policy issues in our country. but in a broader sense of what i think, david, looking at beyond the immediate future but looking at to longer term we have enormous strength and comparative advantages. and i think we have the advantage to do we well over a long period of time. and i look at growth, widespread
participation, economic security and i think they mutually reinforce it. in fact, i don't think you will get growth unless you have broad-based participation and widely increasing incomes unless you have growth. but that gets you then to what i think is the essential and determinative factor with respect to our future. we face enormous policy challenges. the public investment. structural reform and criminal justice reform which i think is an economic issue which is an individual issue for those involved. we need to overcome poverty. infrastructure. we need immigration reform. we need all kinds of measures to deal with the pressures created by technological development and globalization. and i think this is all doable substantively david. but it does come down to the question of whether or not our political system will function effectively. i believe, and this is my last argument on that, i believe that our economic future in terms of
growth and how the broad sway of american people do, that is to say whether we have widespread income increases and economic security is going to be absolutely dependent on whether or not our political system reestablishes functionality to meet our policy challenges and that, my judgment, comes down to the question it congress like history of the recent past, reestablishes functionality. >> so the classic thing for a journalist or someone from a think tank or in washington it say is, the two parties just need to agree more. and i guess i would be interested in your thoughts about the fact that you're obviously a democrat, right? but not known as left wing democrat. when i look at things -- >> probably right. >> when i look at -- >> depends on whose perspective you have. >> some people say all democrats are left wing. >> a lot of people i know would say that. but go ahead. >> when i look at the two parties today, by no means, speaking personally, do i think the democrats are right on every
issue. there are some issues in which i find the conservative arguments stronger. but in terms of party functionality, to me the democrats are a functioning party and the republicans are not. they don't want to govern. they don't want to pass things. they've just nominated really the most irresponsible candidate for president in our lifetime. and so i -- >> [ applause ] >> what i struggle with is, this question that is talked about that there is not symmetry between the two parties. they are both right about some things and wrong about some things. but to me we don't have a functioning right center in this country. do you disagree with that? >> well, i guess i think of it a little bit differently, david. i that i in both -- i'm very much a democrat. i think in both parties the more extreme elements to the party are where the energy is right now. i do think we don't have a
symmetry. i think the freedom caucus in the house has fundamentally been opposed to governing. that's a major problem for our country. so assume for the moment current polls hold, and hillary gets elected president, i think the critical question for our country will be, is the congress going to engage with hillary and the democrats to govern and that is to say to engage in principle compromise, focus on facts and analysis, and politics is important, to make difficult decisions so that in respect to our critical challenge we can legislator is it going to be like the last six years in which is fundamentally almost complete dysfunction in our system. and if we have that complete dysfunction, i think we will pay an ever increasing cost for it and over the long run if that continues, i think we will languish. if to the contrary we meet our challenges and as i said, we can do very well. i'm not licensed to practice
politics but my instinct is -- well, i'm not. i had a debate once with jim baker, and he ended by saying, you're not licensed to to practice politics. i said, you're right, but i happen to be right on this issue. the symmetry could change. depend on what happens. >> you know hillary clinton. >> yes. >> how optimistic are you that you talk about the six years of virtual paralysis. how optimistic are you that a significant portion of that stems from failures by the obama administration and that she can do a better job than they did or how much alternately, maybe a third option, do you think there wasn't much more of the obama administration could do to forage compromise and therefore we should be pessimistic that she will be able to. >> they decide the obama issue
although to be critical, that center mcconnell at the very beginning said that what we're going to do is do whatever we can to oppose this president. it is not a very good way to begin. >> no. >> a new administration if your objective is to govern. but i think she's going to be terrific at reaching out. i used to know her pretty well. in the two years i was in the white house, my office was three offices away from hers. i spent a lot of time with her. i think she's terrific. i think she's smart. a progressive but you know, i would call her a pragmatist with progressive values. i think she will be very good at reaching out. i don't think that's the question. i think the question is, assuming the house remains republican, which certainly proposes high probability, will the house engage with her to govern. i think that's the critical and dispositive issue with respect to longer term issue of our country and i thisty will make a difference in the short term because basically we have right now wab slow recovery. yes, 2015 was good in --
favorable. substantial improvement be as you correctly say. wages increasing at all levels. but if you look at 2016 and data and also you look at some of the fed reserve study that i mentioned and so forth, i think fundamentally we are still in a period of very sluggish wage growth. most americans not participating in the growth that is taking place and i think we really -- i think there is a lot we can do about that but while can you do some things by executive action fundamentally we need legislation. >> when i was in philadelphia to cover the democratic convention this year ways struck by how many signs there were that said no tpp. there were hundreds and hundreds of signs about the pacific trade deal. i think there's a fair debate to have about whether trade has been more harmful to people than the washington consensus has acknowledged. but i see absolutely no evidence that trade is as important and trade deals are as important to the struggles of the american
worker than it has taken on, the significance it's taken on. however it has taken on the significance. do you see any way that hillary can sign some version of the tpp or is it effectively dead? >> well, i'm going to leave that question to hillary and the people around her. but i think there's a larger question, david. david outer, very highly distinguished columnist at mit, wrote an article there is no question we are in a period of predominant conditions. in addition to contributing to growth is also having or creating serious pressures on wages and serious pressures on jobs. i think in response to that we need to meet our policy challenges and some of those conventional challenges we always talk about. we need public investment. question of how of pay for it is a debate that needs to be had.
we need structure reform in all kinds of areas. we need for example fair laws with respect to collective bargaining so workers can make their choice on a level playing field. criminal justice reform. we need to overcome poverty. i think we need to have some sort of a framework that applies, that benefits versus cost to our regulatory structure. and so much else. and if we do all of that, and then we need -- then we absolutely need to address our intermediate trajectory which is unsound and i think in multiple ways very risky for our economy and for our working people. but if we do all that david then i think within that context we will be addressing the wage pressures and this locational wage pressures if you will and job pressures that trade and farm more importantly technology have created and i think changed the attitude toward trade and that spreads to technology and
technological development and far greater pressures. >> what about wall street where you spent so much of your career. >> oh, one more thing on trade. look, when president clinton was there, he was in favor of trade limitation. he is a enormous political skills was never able to explain to the american people the benefits of trade. but i think the key now is to address the dislocations that technology predominantly but also trade are creating. if we do that then i think we can create a cycle in which there is broad support for policies that are very good on balance for our economy but do have, as i say, pressures that need addressed. >> can you see they were be hillary's 10 minutes during debate was the stuff about trade, politically. so wall street. >> yes. >> i'm sure you disagree with some of the debate about wall street from the left and right. but there is a broad sense in the country that wall street has done things that make life
harder for a lot of americans. i'd be interested in your thoughts about what do you think should change about the way our government policy treats wall street? >> well, i think that's complicated question. in 2008 we have the worsed financial crisis since the 1930s. and there were a lot of people, including myself, who thought that we had developed excess before that, david. but virtually nobody, and you look at fed transcripts, virtually nobody saw the full panel of full powers that would work and interacted with feedback loops to create what turned out to be, as i say, worst crisis since 2008. there was a lesson in that. the lesson is that the down side is far worse than virtually anybody saw. including myself. and therefore, we needed to have reform and out of that came dodd-frank. i think there are parts of dodd-frank like the protection agency, material derivatives. i think we should have done more
on derivatives, that i said in my book in 2003 and which is still available in paper back. and there is no limit on how many you can buy. and with respect to crisis, it could turn out to be counter productive but very important we address issues and very important we have a stimulus bill to try to get us back on track. i think in terms of wall street today, i get the impression that you are sort of right. there's a negative attitude to wall street. >> yes. >> i noticed that. >> including, i might ad, in the new york times with all due respect. there is in some fair measure a market based financial system. that, i think, is something that we need to recognize in our legislation and regulation. but we also have to deal with the kind of problems that 2008
manifested. so i think we need a balance and i think the pendulum shifted and it is a very complicated question with how do you have an effective market based sift aenl have the issues that rose in 2008 will. snrs. >> one of our hosts here, he gave me an idea before we came on stage and i want it ask you to imagine you are graduating from college now. and when you graduated from college, in 1960s, you went off to law school -- >> no, i didn't. >> you did not? >> i went to law school for three days then dropped out. then went to london -- >> then went to law school. >> but i had a wonderful year in london. no responsibilities. a dollar was a terrific thing to have and i add great time. >> excellent. >> so i want you to imagine you are graduating from college today.
let's say you go off to london and have you that great year. let's imagine you came back with a lot of options and and with all of the benefits and challenges, what do you see is the most the most thing you are attracted to as a young person? >> from very early on in my life, i wanted to be in the political arena some some fashion or another. i knew i wouldn't run for office. i hoped that some day i could be part of the political process. partly because ways fascinated with how our system worked and even when i was younger, more so later but there's a lot i believe in. if i could get into government i could be involved in trying to pursue and advance in the issues i believe in. whether i start that way is a different question.
if i were graduating today, and in a financial sense is to get involved in the technology world in one way or another. i do think there are aspect of the financial world that are still interesting and promising and i think i would at least think about it. but it is very different from when i graduated. >> how has it changed? >> the big firms have become very big. the regulatory is very difficult. as you pointed out, a very negative public attitude toward wall street. i think the financial industry as a whole. as a whole, but i think there are some exceptions to this, as a whole could have a difficult time for a long time. and mostly big public companies today. goldman sachs was a small partnership and that's just a very, very different environment.
whatever i did, whatever i did i would try to do again what i was fortunate enough to be able to do in that day and age that was easier to do then than now. in addition to focussing on my job and doing the best i could and able to accomplish, i would try to get myself involved in civic and political activity outside of my job. i think makes life more interesting. all kind of people wount have otherwise known. in my case it gave me the opportunity both in civic activity and ultimately in political activity to pursue objectives and values and ideas i had about what our world should be like that i wanted to be involved in pursuing. >> for all of our problems, you when you look at polling, the group most optimistic about our country are the same young people who struggled the most economically over the last generation. 20-somethings and 30-somethings have paid the highest price and
are still far more optimistic than people in their 50s and 60s. >> maybe they just don't understand it as well. >> thank you. >> thank you. >> the washington ideas forum, also heard from pakistan's former president, who talked about relations with the u.s. and the military raid that killed osama bin laden in 2011. he's followed by a discussion on europe's financial future. this is 45 minutes. good morninging. >> general musharraf, good morning. >> thank you. >> at the beginning of general's autobiography "in the line of fire" he wrote this. the story of my life coincides almost from the beginning with the story of my country so the chapters that follow are a biography not only of a man but