Robert Rubin

Robert Rubin
Robert Rubin
Born	August 29, 1938 (age 88); New York City, U.S.
Occupation(s)	Banking leader, attorney, government official
Years active	1964–present
Known for	70th U.S. Secretary of the Treasury, co-chairman of Goldman Sachs

Robert Edward Rubin (born August 29, 1938) is an American former banking leader, attorney, and government official. He held the position of the 70th U.S. Secretary of the Treasury during the Clinton administration. Before entering public service, Rubin dedicated 26 years to Goldman Sachs, eventually becoming a board member and serving as co-chairman from 1990 until 1992.

Rubin is recognized for his role in fostering economic expansion throughout the Clinton years, notably through initiatives such as the 1993 Deficit Reduction Act and the Balanced Budget Act of 1997. Nonetheless, some detractors contend that his policies favoring financial institutions played a part in precipitating the 2008 financial crisis.

As of 2024, Rubin continues to engage in business and policy endeavors, acting as a co-founder of The Hamilton Project, holding the title of co-chair emeritus at the Council on Foreign Relations, and working as a senior counselor with Centerview Partners.

Early life

Born in New York City on August 29, 1938, Rubin is the son of Jewish parents Sylvia (née Seiderman) and Alexander Rubin. He relocated to Miami Beach, Florida, during his childhood and completed his secondary education at Miami Beach Senior High School. In 1960, he graduated summa cum laude with a Bachelor of Arts in economics from Harvard College. After a brief period at Harvard Law School, he traveled internationally before pursuing further studies at the London School of Economics and obtaining an LL.B. from Yale Law School in 1964.

Early career

Rubin started his professional journey as a lawyer at Cleary, Gottlieb, Steen & Hamilton in New York City between 1964 and 1966. He then joined Goldman Sachs in 1966 as an associate within the risk arbitrage division. Over time, he climbed the ranks to become co-chief operating officer and was appointed co-senior partner and co-chairman in 1990.

In addition to his corporate roles, Rubin acted as New York finance chairman for Walter Mondale's 1984 presidential campaign and chaired the host committee for the 1992 Democratic National Convention held in New York.

He also served on several boards and advisory groups including those of the New York Stock Exchange, the U.S. Securities and Exchange Commission Market Oversight and Financial Services Advisory Committee, as well as panels advising New York Governor Mario Cuomo and Mayor David Dinkins.

Clinton administration

Between January 25, 1993, and January 10, 1995, Rubin was Assistant to the President for Economic Policy, overseeing the National Economic Council created by Bill Clinton. The NEC’s role was to harmonize efforts across Cabinet departments and agencies on matters such as budgetary policy, taxation, trade, and poverty reduction to ensure unified policy development and execution. According to Robert S. Strauss, Rubin’s leadership was instrumental in making the NEC effective.

1993 Deficit Reduction Act

Rubin played a central role as "one of the chief architects" behind Clinton's 1993 Deficit Reduction Act, which focused heavily on reducing the federal deficit. Proponents credit this legislation with helping generate budget surpluses in the late 1990s alongside robust economic performance, while opponents emphasize its tax hikes. Rubin supported increasing taxes on higher income groups to achieve fiscal objectives. The Baltimore Sun observed that this agreement reassured bond investors about the administration’s dedication to deficit reduction, which contributed to lower interest rates and stimulated economic growth.

Secretary of the Treasury

In December 1994, President Clinton put forward Rubin as the nominee for Treasury secretary. Following Senate approval by a unanimous 99-0 vote, Rubin officially assumed office as the 70th United States Secretary of the Treasury on January 10, 1995. His term coincided with a period of robust U.S. economic expansion characterized by near full employment, rising stock markets, and stable inflation levels. Throughout his service until his resignation in 1999, unemployment in the U.S. fell from 6.9% to 4.3%, the federal budget transformed from a $255 billion deficit to a $70 billion surplus, and inflation rates decreased. Deputy Lawrence Summers succeeded him in July 1999.

CNN Money recognized Rubin as "one of the architects of the Clinton administration's economic policy," sharing credit with Federal Reserve Chairman Alan Greenspan for what became the second-longest economic boom in American history. Senator Chuck Hagel (R-NE) commended Rubin as "an ideal public servant who prioritized policy over politics." Upon Rubin’s departure, President Clinton hailed him as the "greatest secretary of the Treasury since Alexander Hamilton."

1990s international crises

When Rubin took office in January 1995, he immediately confronted the Mexican peso crisis, which threatened Mexico with potential default on its external debts. Acting on advice from Rubin and Greenspan, President Bill Clinton authorized $20 billion in U.S. loan guarantees through the Exchange Stabilization Fund. This intervention helped Mexico stabilize its economy, and the U.S. Treasury ultimately realized a $580 million profit from the loan arrangement.

Between 1997 and 1998, Rubin worked alongside Greenspan and Deputy Treasury Secretary Summers in coordination with the International Monetary Fund to manage financial turmoil affecting Russia, various Asian countries, and Latin America. This trio was famously labeled "The Committee to Save the World" by Time Magazine on its February 15, 1999 cover.

Balanced budget agreement

Early in Clinton’s presidency, Rubin championed efforts to achieve a balanced federal budget and maintain a strong dollar to facilitate interest rate reductions by the Federal Reserve. He underscored the widespread societal advantages of fiscal balance despite debates over uneven distribution of benefits. Rubin acted as the principal negotiator for the administration in discussions with a Republican-controlled Congress regarding the balanced-budget agreement. The Balanced Budget Act of 1997 is frequently regarded as the defining achievement of Rubin’s tenure as Treasury secretary.

Regulation of derivatives

In 1998, Rubin collaborated with Federal Reserve Chairman Alan Greenspan to oppose a proposal by Brooksley Born, then chair of the Commodity Futures Trading Commission (CFTC), which sought regulatory authority over over-the-counter credit derivatives. Following their recommendation, Congress removed CFTC jurisdiction over these derivatives in 1999. Subsequently, over-the-counter credit derivatives were exempted from CFTC oversight under the Commodity Futures Modernization Act of 2000. These financial instruments later played a significant role in triggering the 2008 financial crisis.

Arthur Levitt Jr., former chairman of the SEC, observed that Rubin and Greenspan were firmly against Born's regulatory initiatives due to concerns about market disruption. In his memoirs, Rubin acknowledged that derivatives carried substantial risks that users often failed to grasp fully. By 2008, he expressed that improved regulation of derivatives could have strengthened financial stability but noted that political constraints made such reforms unattainable. His apprehensions regarding systemic risks posed by derivatives dated back to his tenure at Goldman Sachs.

In 2010, former President Clinton admitted that Rubin’s counsel against regulating derivatives was mistaken and contributed to the financial meltdown in 2008. However, Clinton aide Doug Band clarified that Clinton had conflated Born’s specific proposals with Greenspan’s broader resistance to regulation while still appreciating Rubin’s economic guidance during his administration.

Urban policy

During the Clinton administration, Rubin actively promoted investment initiatives targeting economically challenged rural and urban communities. His efforts included enhancing the Community Reinvestment Act through his role at the NEC and pushing for increased support and funding for community development financial institutions (CDFIs). He also endorsed the expansion of empowerment and enterprise zones, which provided tax benefits to businesses investing in these underserved areas.

Decline of the Glass-Steagall Act

While serving as Treasury Secretary, Rubin regarded the Glass-Steagall Act as obsolete. Influenced by lobbying efforts led by Sanford I. Weill, both Congress and the Clinton administration moved to repeal the legislation, paving the way for the 1998 merger between Travelers Group and Citicorp. Rubin stepped down in July 1999 and joined Citigroup’s leadership team by October. The formal repeal of Glass-Steagall occurred under Rubin’s successor, Lawrence Summers, with President Clinton signing it into law in November 1999.

Local Initiatives Support Corporation

Following his departure from public office, Rubin took on the role of chairman at the Local Initiatives Support Corporation (LISC), dedicating himself to promoting economic revitalization in neglected American neighborhoods. The Chicago Tribune noted his enduring focus on encouraging business investments as a key approach to alleviating poverty.

Citigroup

Rubin became chairman of Citigroup’s executive committee in 1999. During the 2001 Enron scandal, he sought government assistance to avert a credit rating downgrade for Enron, a significant client of Citigroup; a Senate inquiry ultimately cleared him of any misconduct. Rubin explained that he acted in dual capacities—as a Citigroup executive and a former Treasury official concerned about broader economic repercussions.

In late 2007, he briefly served as Citigroup’s board chairman. His responsibilities primarily involved client engagement, government relations, business growth initiatives, and advising senior management without direct operational duties—a role The Wall Street Journal described as somewhat ambiguous.

After the 2008 financial crisis, Rubin faced criticism for fostering a culture of excessive risk-taking at Citigroup and endorsing policies that contributed to the turmoil. The federal government injected $45 billion into Citigroup through TARP; by 2010, most of these funds were repaid with taxpayers realizing a $12 billion net gain. In 2008, shareholders filed lawsuits against Citigroup executives including Rubin for allegedly misleading investors; the bank settled in 2012 for $590 million without admitting fault. Rubin resigned in 2009 after receiving $126 million over a decade—a compensation amount that drew criticism from various commentators.

In 2010, the Financial Crisis Inquiry Commission recommended investigating Rubin for possible legal infractions linked to Citigroup’s crisis involvement; however, no action was taken by the Department of Justice.

Other work

Rubin served on Harvard University’s governing board from 2002 until 2014 and continues to participate actively on its finance committee. He co-established the Hamilton Project think tank focused on economic policy in 2006 and holds the title of co-chairman emeritus at the Council on Foreign Relations. Additionally, he is a trustee of Mount Sinai Health System, co-chairs the advisory board of the Peter G. Peterson Foundation, and acts as senior counselor at Centerview Partners investment bank.

He was also involved with the Africa Progress Panel promoting sustainable development goals and contributed to the Global Citizenship Commission tasked with evaluating human rights frameworks.

Publications

Rubin's autobiography, In an Uncertain World: Tough Choices from Wall Street to Washington, achieved New York Times bestseller status and was recognized by Business Week as one of the premier business books in 2003.

His follow-up work, The Yellow Pad: Making Better Decisions in an Uncertain World (2023), delves into "probabilistic thinking"—the evaluation of risks involved in decision-making—and earned a spot on Bloomberg News’ list of Best Books of 2023.

Economic Approach

Rubin champions a combination of fiscal responsibility alongside strategic public investment. During his tenure as Treasury Secretary, he played a pivotal role in transitioning the federal budget from deficit to surplus and advocated for a robust dollar policy that has remained central to U.S. economic strategy. Often described as a centrist, pro-business Democrat, his economic policies are credited with fueling growth throughout the 1990s. However, critics from the Republican side argue his tax cuts were too modest, while some Democrats blame his approach for factors leading to the 2008 financial crisis.

He endorses progressive tax structures and the expansion of earned income tax credits aimed at benefiting low- and middle-income households. Conversely, he has opposed tax reductions favoring high-income earners enacted during the administrations of George W. Bush and Donald Trump. Under President Joe Biden’s leadership, Rubin joined former Treasury officials in supporting the Inflation Reduction Act and advocated for making refundable child tax credits permanent.

In April 2016, Rubin was among eight former Treasury secretaries who publicly encouraged the United Kingdom to remain within the European Union ahead of its referendum.

Environmental and Climate Policies

Rubin has concentrated on the economic implications of climate change, participating on the U.S. Climate Risk Committee, which assesses financial risks linked to environmental changes. In 2015, he identified climate change as "the existential threat of our age," recommending adjustments to GDP calculations to factor in climate-related externalities, mandatory corporate disclosure of carbon costs for investors, and integrating climate-driven fiscal impacts into government forecasts—all intended to promote more anticipatory policy measures.

In collaboration with Henry Paulson and George Shultz through the Risky Business Project in 2016, Rubin urged the Securities and Exchange Commission (SEC) to improve financial reporting requirements regarding climate-related risks.

Personal Background

Robert Rubin and his spouse Judith have two grown sons, James and Philip Rubin. The family has been long-standing members of Temple Beth Sholom located in Miami Beach.

External links