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Former Deputy Treasury Secretary talks Rubenstein Fellows appointment, government experience

Sarah Bloom Raskin, who served as deputy secretary of the Department of the Treasury in the Obama administration for three years, became a Rubenstein Fellow in August. At Duke, Raskin will spend the next three years working with students and faculty to study financial markets and regulations. She will also guest lecture courses and advise students on careers in the public sector. The Chronicle spoke with Raskin about some of her goals for her tenure at the University. This interview has been edited for length and clarity. 

The Chronicle: What has the transition to being at Duke been like? 

Sarah Bloom Raskin: I’m just getting my bearings. It is a completely rich place in terms of being filled with people who have such amazing ideas. Duke has a special history in terms of doing interdisciplinary stuff which has been particularly impressive to me. 

TC: Why did you decide to accept this position? 

SBR: I hadn’t even known [the Rubenstein Fellows Program] existed when I came down and gave a talk at the Law School in May. As I was talking about regulation to the people in the Rethinking Regulation program [at the Kenan Institute for Ethics] and Global Financial Markets [Center at Duke Law School], I realized there is a way to rethink regulation that will get a lot of people talking. And so, I went back home to Washington after giving my remarks on the topic and got a call from the provost’s office inviting me to do more in developing these ideas. 

TC: In the past, you have focused on how cyber data can improve the functioning of the economy. What has that work involved? 

SBR: We live in a world of big data, and there’s a lot of data being collected on us at all times. For the most part, we go along with this collection, thinking that it’s okay as long as we have some semblance of privacy. But I think there’s another way to be looking at data, and that is from what can be shared back to us. So I’m thinking of figuring out how we can build up a notion of information rights. And we share this information all the time through our phones, through our apps. That data is being saved and being used in some way. And maybe we don’t care how it’s used as long as it is anonymous and nobody knows it belongs to us. But maybe there are ways in which that data can be beneficial to us. Let’s say I want to switch from one [job] to another. I would like to know how much money I can make if I moved into another role. Firms have data on this; I’d like to know it. So I can see that sharing and disclosing certain information can help the functioning of the economy because it can make transitions more smooth due to this abundance of information. More information allows greater disclosure regarding how information is getting used, and that information helps people make decisions about their own futures. 

TC: What has some of your work with U.S. financial policy involved? 

SBR: One of the most important ideas for regulation in the financial sector is this idea of resilience—the ability to bounce back. I’m looking at resilience from the perspective of the household, the individual, the firm and the macroeconomy—different ways in which resilience becomes an important motivator to understanding financial regulation. 

One thing that we saw with the financial crisis is it lasted longer than anybody expected it would because people and firms really didn’t have the ability to bounce back. It took a long time for them to get back on their feet. But this is the idea of resilience, which is how do you bounce back, and what are the factors that affect how quickly you do so. 

TC: How do you plan to explore resilience and cyber data at Duke? 

SBR: I hope to be around people who have not only done important research projects themselves but who are also going to help me articulate and illuminate these ideas better.

There’s another reason that I’m very interested in coming to Duke, and that is of course this remarkable student body and the ability to let students know about the importance of taking their understandings of finance and economics and applying it in a public setting to do something for the common good. 

TC: How will you work with the Rethinking Program at the Kenan Institute for Ethics and the Global Financial Markets Center at the Law School?

SBR: They all have people who think about these questions. These people will likely be part of the group of people who start to illuminate these concepts as a result of the strong intersections between functioning markets, resilient regulation and, of course, ethics. I think that in bringing these people together, we might come up with some new insights. 

TC: How will you use your experience in federal government to accomplish your goals? 

SBR: The way I’m going to do that is by thinking through a lot of the experiences and decision points I went through [as deputy secretary of the Treasury and as a governor on the U.S. Federal Reserve Board] and see what lessons emerge from them. I think there are decisions that have been made at a very high level, and the question is whether or not those decisions could apply in a different context. 

So just to be more concrete, we learned a lot about housing [during the financial crisis]. We learned a lot about people having problems selling their homes. There were loan officers who were involved in the financial crisis. Now, we’re dealing with a lot of student loan problems, and the question is do the student loan officers have any similarities with the mortgage officers that we saw with the financial crisis. Is there anything that we learned in dealing with the financial crisis that is applicable today? 


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