Many of Obama’s top economic advisers are proteges of Robert Rubin, whose reputation has been tainted by his role in Citigroup’s current woes.

By JACKIE CALMES

WASHINGTON - It is testament to former Treasury Secretary Robert E. Rubin’s star power among many Democrats that as President-elect Barack Obama fills out his economic team, a virtual Rubin constellation is taking shape.
The president-elect’s choices for his top economic advisers - Timothy F. Geithner as Treasury secretary, Lawrence H. Summers as senior White House economics adviser and Peter R. Orszag as budget director - are past proteges of Mr. Rubin, who held two of those jobs under President Bill Clinton. Other Obama aides, too, have ties to Mr. Rubin: Michael Froman, Mr. Rubin’s chief of staff in the Treasury Department who followed him to Citigroup, and James P. Rubin, Mr. Rubin’s son.
All three advisers have been followers of the economic formula that came to be called Rubinomics: balanced budgets, free trade and financial deregulation, a combination that was credited with fueling the prosperity of the 1990s.
But times have changed since then. On Wall Street, Mr. Rubin is facing questions about his role as director of Citigroup given the bank’s current woes. And in Washington, he and his acolytes are calling for a new formulation to address the global economic crisis that Mr. Obama will inherit - and rejecting or setting aside, for now, some of their old orthodoxies.
Instead of deregulation, Mr. Obama has sworn to usher in a period of re-regulation, to avoid the freewheeling risks that Citigroup and the rest of the financial industry undertook after Mr. Rubin, with Mr. Summers, helped tear down the regulatory walls between banks, brokerages and insurance companies, and freed them to trade in unregulated and little-understood derivatives worth trillions of dollars. Mr. Geithner spent his first years as president of the Federal Reserve Bank of New York seeking ways to at least monitor those markets better.
Instead of balancing budgets, the Obama team will be going deeper into debt for at least two years by spending hundreds of billions of dollars more to stimulate the economy, without concern for deficits, for aid to the jobless, states and cities; tax cuts for workers; and jobcreating construction of roads, schools and other public works. Nor, given the downturn, is Mr. Obama expected to try to quickly bring in more revenue by repealing the Bush tax cuts for those making more than $250,000.
Mr. Summers, who may well end up being Mr. Obama’s closest economic adviser, has been especially public in calling for a big stimulus package. Many saw his touch in Mr. Obama’s recent call for a stimulus plan to create or save 2.5 million jobs.
“Everyone recognizes that we’re looking at deficits of considerable magnitude, said Jared Bernstein, an economist at the liberal Economic Policy Institute. “Whether it’s Bob Rubin, Larry Summers or the most conservative economist, that is a widely shared recognition.
Yet Rubin critics remain, mostly in Mr. Obama’s own Democratic Party among liberals and union members who favor even more domestic spending and more protectionist trade policies.
“What worries me is there is not one person in the senior group who is the outsider to this club,’’ said Robert Kuttner, a colleague of Mr. Bernstein’s at the Economic Policy Institute who has written a book, “Obama’s Challenge,’’ about approaches to the economic crisis. “Where is the diversity of opinion in this economic team? Mr. Kuttner asked.
Yet even Mr. Kuttner has warmed to some he calls Rubinistas. He praises Mr. Geithner for not hailing from a Wall Street investment bank and for being “among the toughest on the need to reregulate the financial industry from his post at the New York Federal Reserve.
By all accounts, the trait that ties the 70-year-old Mr. Rubin and the younger men is their braininess.
All but Mr. Summers are seen as cautious about policy. And all but Mr. Summers share their mentor’s low-key affability and conversational ease; many wonder just how Mr. Summers, whose brusque ways left a trail of enemies when he was president of Harvard University, will perform as director of the National Economic Council in the White House when the job demands someone who can coordinate with others, listen to them and fairly represent their views to the president.
“There’s no way he will be confined to the N.E.C.’s turf; he will be sticking his nose into everything, said Bruce Bartlett, a Treasury veteran of the Reagan administration and a Summers admirer. “Personally, I think that’s more good than bad.