It was a sign of the high regard financial markets hold for Treasury Secretary Robert Rubin that when the White House announced his resignation Wednesday, the Dow temporarily plunged 200 points.
Along with Federal Reserve chairman Alan Greenspan, Secretary Rubin is widely regarded as co-architect of the nation's current prosperity.
Rubin himself would demur. At a recent Monitor breakfast, he outlined some of the factors he sees behind America's current bounty: A private sector that relearned how to be competitive over the past 15 years. A president who practiced fiscal restraint (including the 1993 deficit-reduction package), who knew what he wanted to do economically and stuck to it. The administration's economic internationalism, including support for NAFTA and the Mexico bailout.
As important, Rubin holds, is what the administration didn't do: It hasn't criticized the Fed, thus adding to the credibility of the US financial system and markets. It didn't implement an industrial policy in which the government allocates economic resources. And it didn't support attempts to pass a balanced-budget amendment.
Rubin is certainly right on many counts. Republicans might cite President Bush's 1990 deficit-reduction package as the beginning of federal fiscal responsibility, or the Reagan tax cuts as freeing up capital for investment and innovation. They might also give more credit to Americans' own ingenuity and hard work than to federal policies. And they might observe that the election of a GOP Congress in 1994 added backbone to Clinton's penchant for fiscal responsibility.
But the Clinton administration's decision to follow a centrist economic path, rather than the interventionist approach favored by the Democratic Party's liberal and labor wings, at the very least falls into the category of "do no harm." It's doubtful the economy would be where it is today had there been more government meddling.
Rubin must be given credit for pushing the centrist approach, both as chairman of the National Economic Council and later at Treasury. Perhaps more than any other Cabinet secretary, he had Clinton's ear.
The president will nominate Deputy Secretary Lawrence Summers to replace Rubin when he leaves in July.
Early indications are the sometimes abrasive but highly respected Mr. Summers will have little difficulty with Senate confirmation. His choice signals a steady course for administration economic policy.