Our Annual Conversation with a PR Guru, Part IV

GUEST: Howard Rubenstein
AIR DATE: 6/16/10

I’m Richard Heffner, your host on The Open Mind.

And several years ago, when he first sat at this table for what has now become our annual conversation about what really has happened over the year just past and what may well happen in the year just ahead in Our Town, Our Nation … in that Open Mind conversation I identified my guest, then as now, as the Public Relations Guru of modern America.

Nor was — or is — that just plain “spin control” on my part. Indeed, the New Yorker Magazine a couple of years ago may have had it just right in titling its Ken Auletta Profile of my guest, “The Fixer…Why New Yorkers Call Howard Rubenstein When They’ve Got A Problem”.

And Auletta surely had it right, just right, when he wrote … quote … “For years, many of the city’s wealthiest and most visible personalities have been represented by a somewhat achromatic gentleman who is paid to keep them in the public eye in times of triumph, out of the press in their hours of shame, and, in general, to provide advice, comfort, and refuge as the moment demands.”

Well, Auletta continued: “Wearing dull suits and dull rimless glasses, this gentleman (and that is his demeanor: mild and well-mannered in an old-fashioned way) has none of the swagger or élan of the public relations men of an earlier era, like Ben Sonnenberg or Edward L. Bernays…

“And yet he is ubiquitous, trusted, a kind of gentle fixer for those who run New York: its governments and newspapers, its cultural institutions, boardrooms and sports teams….”

Of course, I then had to look up precisely what “A somewhat achromatic gentleman” means, and when I asked Howard Rubenstein how he likes being described as “colorless”, he translated the word as meaning not shooting from the hip or the lip, quote …”or getting angry at every slight or in a crisis losing my temper or my dignity”.

And he doesn’t, which is one of the reasons, I very much suspect, why my guest ended up recently as New York Magazine’s choice as one of the Big Apple’s most powerful men and which leads me to ask my guest what he suspects Our Town has to look forward to as the new century moves into its second decade.

In 2009 his Yankees did win the World Series, after all.

His friend Mike Blooomberg was elected to a third term as Mayor … though just barely, despite spending incredible amounts of his own money in the campaign, which made some people a lot richer, but many others quite disgruntled.

By year’s end, too — even in the midst of tragically high unemployment rates and downsizing here and around the nation — some of New York’s biggest financial institutions started paying their very top people, once again, shockingly huge bonuses. And I wonder what my guest says about those public relations for the year ahead? Howard, you’re on.

RUBENSTEIN: Well, let’s look backwards first.

HEFFNER: Okay.

RUBENSTEIN: It was a very tough year. Where knocking on my door were people that you describe … “Help” … a lot of crisis work. And when I deal with a person in crisis, sometimes it’s hard to get the truth from them. And I’ll say “Why don’t you have your lawyer hire me”, so there’s … I create a privileged communication.

Then I’ll say, “What’s your good name worth?” And they’ll say, “It’s worth everything.” And I say then tell me the truth.

The truth sometimes is very painful. But once you have the truth, you can base your actions on that truth. Sometimes you say nothing. Sometimes you explain what you’ve done wrong. Sometimes you apologize.

This past year was very painful for many people including the 10% unemployed. Terrible pain for them.

The very, very wealthy … they … they said they were in pain, but you wonder.

Pain, when you’re a billionaire is different from pain when you can’t meet your mortgage.

HEFFNER: Now I’m going to quote that all over the place, Howard.

RUBENSTEIN: (Laughter)

HEFFNER: You’re, you’re quite right about.

RUBENSTEIN: Well, I, I see it. We have so many clients … not one of them was exuberant and on the positive side of the street this past year.

Now let’s look forward. I believe next year will still be a very difficult year. Some of the pundits are saying, “Oh, we’re going to be on the upswing right away.”. I don’t believe that. I believe for the first three quarters of next year we’ll be coping with continuing unemployment. Perhaps it will stay where it is, but 10% is a very, very tough number.

I think in the real estate industry, we’re fortunate in, in New York we haven’t overbuilt. But there’s no demand. People are trying to sock away the money they have. Banks are still not lending.

They’ve got to open that window. And unless they open the window, I think you’ll find the President of the United States knocking on the door and helping open the window for them.

So they’ve taken baby-steps on their public relations … I’m talking about the Wall Street group and the banking people. They’ve taken sort of baby steps.

Recently they’ve improved that … quite a bit … but it’s not nearly enough.

What do I look forward to next year? In the last quarter I think you’ll start to see a comeback. I think you’ll start … New York is so resilient … we’re wonderful, we have great spirit.

Look at the assets we have. Just look at the cultural asset … the educational asset, the businesses that we nourish here. Just our attitude about ourselves. So I’m very positive in a negative environment.

HEFFNER: Very positive in a negative environment. It must be that smile, that enthusiasm, that “up-ness” on your part that does something for them.

RUBENSTEIN: Well, if I go in in a gloomy way and I wring my hands and I say “This is terrible, we’ve got to go into a fox hole and disappear”, I don’t’ think I’d be doing my job.

I try to encourage my clients to think positively even in a very negative environment. And I’ll say, “Well, let’s assume your business is not doing very well, What do you do to improve it? What steps do you do to tell a better story? Who do you involve in a civic and charitable endeavor that will keep you upfront?”

And then they, they perk up and they say “Well, I’m interested in autism … I’m interested in cancer research.” I said then spend time there, even though your business is lagging. Just give the time. You don’t have to give the money, give the time, give your energy. And suddenly you find you’ve reached their inner soul and they start to think positively about something else, other than their flagging business.

HEFFNER: Now, you know, cynically I could say I didn’t know they had inner souls.

RUBENSTEIN: Ahhh …

HEFFNER: You’re going to tell me that’s too populist …

RUBENSTEIN: … everyone ….

HEFFNER: … a notion.

RUBENSTEIN: … everyone … no, no … I don’t believe that for a minute. Everyone has an inner soul. Sometimes they mask it. They, they put it into deep freeze. And it’s hard to get to it.

But so many of the people that flaunt their wealth now, didn’t start that way. I’m meeting people all the time that say, “Oh, you came from Brooklyn.” Yeah.

And, and I would say that my father had the only job on the street … (smile in voice) … everyone else was on welfare … unemployed.

And then I say “You know, I came from Brownsville,” someone … someone yesterday told me … “And we were poor.” And then I said “So why do you put on an act? Why not recognize your roots, live with your roots and mine and help others come out of that environment.” And you do reach their inner soul that way. And they say, “Yeah, this country gave me some break.” And I say, “So help someone else.”

HEFFNER: The masters of the universe and they’re largely the people you deal with …

RUBENSTEIN: Yes.

HEFFNER: … they’re your clients …

RUBENSTEIN: Yes.

HEFFNER: … are you saying to me that they see and feel and hear this now, perhaps more than before?

RUBENSTEIN: Well, some of them are operating with great fear.

HEFFNER: Fear?

RUBENSTEIN: Fear. Fear that they’ll lose what they’ve achieved, if they’re heavily invested in something that’s in collapse. If their business lacks demand. If the newspapers or television magazines are on their case.

They operate in fear that somebody will be “on” to them and expose them and their inner soul which they’ve hidden for so many years. It’s, it’s a different environment. This is far different than it was two years ago.

HEFFNER: Different environment … because of that fear?

RUBENSTEIN: Because of fear. And they look around. And now it’s a global economy that’s suffering dramatically. And they don’t see a way out because they have no control. So they were helped by the Federal government, some of them … they got a huge influx of money. Then they kept it. Then they put out huge bonuses and suddenly they were being criticized for it. They didn’t realize that they can’t put on a display of wealth and sneer at others “Look how rich I am. I’m so bright”, when the government did the rescue for them.

So that was a gigantic public relations error that many of them are realizing now. So even though many of them, most of them … are paying that money back … the taxpayer money back … our money back, they realize they have to do something further. And they must, they should.

HEFFNER: How do you … how do you place the matter of bonuses into this …

RUBENSTEIN: Oh, the bonuses …

HEFFNER: … positive picture you have.

RUBENSTEIN: Well, some of them have said they’re going to forego bonuses this year … the huge bonuses. Others have said “We’re going to take the bonuses in the form of stock, but not … but not take the stock for five years. Not cash in.”

The criticism came about in a simple way. Some of them would close a deal and the next day they’d pull a huge commission out and then the deal would go south … the business would fail, there was no income coming out of the deal they created. It left a terrible impression … on them … and the people they were dealing with … and the people they hurt. They’ve got to pay attention to that now.

HEFFNER: But even if you talk about bonuses that don’t come due for five years, ten years …

RUBENSTEIN: Right.

HEFFNER: … whatever it, it may be … we’re talking about salaries that you and I … as … well, talk about myself …

RUBENSTEIN: No, you can talk about me the same way …

HEFFNER: … I as an old …

RUBENSTEIN: … (laugh) … I’m in a service …

HEFFNER: … face it, you’re a kid …

RUBENSTEIN: … business.

HEFFNER: … you’re a kid, Howard. I mean I think back to a time when the kinds of income that we talk about now are just impossible to believe.

Yes, there were, there were the Carnegies, and there were the Mellons … but they weren’t the kinds of masters of the universe …

RUBENSTEIN: They were few and far between. And some of them realized that they were handing out dimes to show that they were really decent people.

I think the people that have pulled in bonuses and salaries far in excess of anyone’s remote imagination ought to look at it again, keep the money in their business. Use the money to help other people. They’ll still be extraordinarily wealthy.

I’m not even setting a level of, of bonus or salary. They know what it is. When somebody walks out with $150 million in one year … something’s wrong. Something is wrong.

HEFFNER: Or something’s very, very right.

RUBENSTEIN: Something was right that they probably earned that, but they have to give back. I really feel strongly that they have to give back.

HEFFNER: Do you think we’re going to reach a point, in the near future, where we, as a people, are going to say “Never mind what you give back … we’re going to take … in terms of excess profits … whatever that means … away”.

RUBENSTEIN: Oh … we had a time in our history, during war time and all where excess profits were taxed. To the limit.

HEFFNER: Right.

RUBENSTEIN: If they’re not careful, you’re apt to find our President and our Congress and Senate, House of Representatives doing something like that. And even if it doesn’t pass, the threat of doing that should be enough to force these people back and say, “I want to be more reasonable.”

HEFFNER: But that hasn’t happened yet?

RUBENSTEIN: Not yet. I don’t think it’s close yet. But if our recession continues through this year and we don’t see some daylight, that could easily happen.

HEFFNER: When I talk to my students about excess profit taxes, they don’t know, of course, what I’m talking about …

RUBENSTEIN: Right.

HEFFNER: And when I talk about the percentages that there were, they can’t believe it. They cannot believe it. I think most people … I think if we walked out on the street today, after we finish this program and ask about maximum taxation, people wouldn’t believe what we used to pay.

RUBENSTEIN: We paid almost all of our income in taxes … at the end … 98% when you figure city and state and Federal taxation. And all of the other peripheral taxes. Huge, huge burden … and yet, there were complaints … but there was no revolution.

Here, if our country realizes the crisis we’re in with trillions of dollars in debt hanging over each one of us … and you think through … “What are my kids and grandchildren going to have to do to pay that?” You can’t live on that forever. I think the realization will come and some of our public officials will start to educate the public. It’s important to educate the public as to the crisis.

HEFFNER: You know, it’s interesting, Howard, a couple of times you’ve talked about the Senate, the House, the President …

RUBENSTEIN: Right.

HEFFNER: Indignation and then action. We’re talking now, together at the end of a year, at the end of a decade … the first decade of the new century … it seems to me that not terribly much has been accomplished in the House … well, in the House … that’s different … but they know there’s the Senate to stop them.

And are you so convinced that that President has been that effective in getting what you would consider the right kind of action from the masters of the universe?

RUBENSTEIN: He’s got a very tough road. One Senator … as you’ve seen in the newspaper … just one … any one … can block almost any action. Which puts us in a difficult position.

I would prefer that either party had a, a really solid majority in the Senate. Then there would be real negotiation. Now, it’s a, it’s a one person demand, rather than a real negotiation that goes on in our Senate.

So … in the House it’s, it’s somewhat different. I think Americans have to wise up to the need to look with respect, responsibility and concern of where we stand.

And I, I would … I would think the President can convince us of that. But his ability to do it is severely limited.

HEFFNER: Limited by the …

RUBENSTEIN: Private …

HEFFNER: … you mentioned the Senate before.

RUBENSTEIN: Well, limited by, by the politics of government. Really limited.

Because … he’ll call for something that makes ultimate sense in health care … whatever … ultimate sense … and then one Senator will stand up and say, “Oh, no, I’m not going to have that portion in there or I’m going to kill the Bill.”

The President has no real leverage over that. What can he do? What he can threaten to do is “I’m going to go into your district and campaign against you.” And he’ll probably do some of that.

HEFFNER: It didn’t do Franklin Delano Roosevelt all that much good many times when he …

RUBENSTEIN: That’s right.

HEFFNER: …. Said that.

RUBENSTEIN: That’s right.

HEFFNER: What do you think it will do for President Obama?

RUBENSTEIN: I doubt if it will do a lot, but he’s got to use some kind of leverage. The, the public communications today differs dramatically from what it was in his day or even ten years ago.

HEFFNER: What do you mean?

RUBENSTEIN: All the bloggers. All the Internet and anyone who wants to get a message across … can … and you get thousands and thousands of hits on that message, then the main … I’ll call it the “mainstream media” … television and newspapers and magazines. They monitor those blogs and they report on what the blogs say. And suddenly, worldwide, you have communications that never existed before.

And if there is a revolution in communications where, where loads of them say, “We’re in such difficulty, we have to take these kinds of steps”. And there’s a unity and a chorus of complaint with solutions attached to it … you might see some action.

HEFFNER: Well, but it is said that the Obama people … in the campaign of 2008 worked those blogs …

RUBENSTEIN: They did.

HEFFNER: … worked those …

RUBENSTEIN: They did.

HEFFNER: … new means of communications …

RUBENSTEIN: They did.

HEFFNER: What’s happened since then?

RUBENSTEIN: Well now they’re up against the House and the Senate. And, and his communications are falling flat. People will say, “Well, that’s campaign rhetoric”.

They’re, they’re using his great speech-making ability against him.

HEFFNER: Explain that.

RUBENSTEIN: They’re saying “He gives great speeches, but when it comes to the substance of performance, he doesn’t have it.”

I disagree with that. I think he’s taken on some wonderfully important things. But he’s having one difficult time getting approval for his, for his programming.

It, it’s … ahem … it’s a country … and probably the world … that now is being run, to a large extent by communications.

It wasn’t that way before. What in, in my early day … what happened in Brooklyn stayed in Brooklyn. That’s a paraphrase.

(Laughter) Today what happens in Brooklyn suddenly explodes all over the world. The, the Las Vegas theme no longer exists. What happens … anywhere in this world … happens everywhere.

And that’s a challenge to all of us. And let’s assume somebody is unemployed. Can’t meet the mortgage payments. The banks are ready to evict them … you see that in thousands and thousands of cases. And that message really gets across.

There could be an intellectual and emotional upheaval in our country that will force the politicians to take reasonable steps to preserve those people.

HEFFNER: Okay, Howard …you say that. That’s important. Why hasn’t that seemed to be the case? Why hasn’t the conviction that you feel … why hasn’t there been a greater cry from the people?

RUBENSTEIN: Because it hasn’t been deep enough in terms of time. You let this crisis … the way it is … last another year, a year and a half … that outcry will be felt and people will act on it. Because you read almost every day, “Oh we’re coming of it. Oh, I have a lot of confidence that this month, next month … just look at the figures of unemployment … it went down point two percent. O point two percent …

HEFFNER: 0 two percent

RUBENSTEIN: … Well, my god, there is still so many people that just pulled of the market looking for jobs. They’re not even counted in that unemployment group. So … I think the depth of our recession has to last somewhat longer … and I hope it doesn’t … before you’ll find an upheaval over here … where not only the major newspapers, but the bloggers all over this country and all over the world will say, “Look, throw the politicians out who don’t do anything.”

The recent polls that I’ve seen show an interesting thing. Prior polls … up until quite recently showed in New York a dislike for the Senate and Assembly. Mostly the Senate as being dysfunctional.

But they said, ‘How’s your Senator?” And they came off okay.

HEFFNER: How come?

RUBENSTEIN: The recent poll …

HEFFNER: Yes?

RUBENSTEIN: …. Shows a reversal of that. It was in, it was in the newspapers just recently … where now they’re questioning their own Senator.

When that happens … watch out. That Senator will say “I don’t have an easy go of it.” An incumbent … now is the target of derision. An incumbent. And you’ll find a lot of incumbents up against it.

HEFFNER: You’re talking now about the New York State Legislature.

RUBENSTEIN: New Jersey.

HEFFNER: Do you think that will happen around the country.

RUBENSTEIN: Well, sure, in New Jersey they, they tossed out an incumbent … you’re seeing it all over the country. Where the incumbent now has to defend himself against “Throw, throw them out. Throw them out of office. Look how bad things are? What did they do to help you?”

They’re talking right to the public and they’re talking through the means of communications that Obama used. They’ve … they’re on to it. When Obama ran, McCain didn’t have that ability.

HEFFNER: But that would seem to indicate your own sense that in the year ahead, in 2010, at the end of which we have Congressional elections …

RUBENSTEIN: Yes.

HEFFNER: … that we’re going to see that the rascals who were driven out are going to be the Democrats.

RUBENSTEIN: Well, I can’t even call the rascals. But, yes, the people that are incumbents … Democrats … even some Republicans that are in office. They’ll say, “What did you do for us? You’ve been silent. You don’t raise your voice in protest.”

HEFFNER: Then isn’t the present Republican approach to national politics a wise one? They’re holding things back, they’re the ones who were objecting, largely …

RUBENSTEIN: Yes.

HEFFNER: And if nothing happens, the rascals will throw out …

RUBENSTEIN: They have an opportunity that they couldn’t have made up, you know. They have that opportunity.

HEFFNER: Obstructionism works.

RUBENSTEIN: Absolutely.

HEFFNER: So …

RUBENSTEIN: And they’re blaming the people in office.

HEFFNER: MmmHmm.

RUBENSTEIN: “You’re not doing anything.” So the Democrats have been saying “So make a suggestion”. And, and it reaches a dead end. The Republicans haven’t come through with a heavy hand of suggestions. They haven’t. They’re sitting back and saying, “That’s your responsibility. Do something”. And it’s almost … pretty silent, other than an internal fight within the democratic party.

HEFFNER: So that here at the, at the turn of the decade …

RUBENSTEIN: Yes?

HEFFNER: You don’t sound terribly optimistic.

RUBENSTEIN: I am … long term. I’m not optimistic about the next nine months, maybe the next year.

But I’m optimistic about Americans having optimism, having real hope, having drive, having assets here that no one in the world has. Intellectual assets. The ability to tell our American story is something that we have to do.

If I were the President, or advising the President, I would urge him to educate Americans wherever they travel to talk abut the pluses and positives of visiting this country. Of extolling the opportunity here. This is a land of opportunity and we’ve got to sell it.

As a PR person I would sell the opportunity that exists and that will stimulate our economy.

HEFFNER: Do you think he’s heading in that direction? That he does enough in this area?

RUBENSTEIN: Oh, he can do a lot more. I’m telling … I’m suggesting that he go community to community and enlist them as spokespeople … millions of spokespeople, whenever they visit anybody. Another state. Another country. Talk “up” America. In the positive way of our freedom of opportunity, our freedom to speak out and an ability to build something for our kids.

HEFFNER: It’s kind of tough, if you’re unemployed to take that message, isn’t it?

RUBENSTEIN: No, it is. But how are you going to come out of this? We’ve got to attract new businesses here and an unemployed person has to do something to at least show that “I’m not dropping out of life.”

HEFFNER: Well, Howard, I know that you’re telling this now …

RUBENSTEIN: Yes.

HEFFNER: … to us, the people.

RUBENSTEIN: Yes. Yes.

HEFFNER: But I gather you’re telling it also in another way to those masters of the universe whose ear, ears you have.

RUBENSTEIN: I’m telling my clients “Don’t be boastful, talk up the positives of the American society. Don’t be flaunting your wealth.”

I give them a lot of “don’ts”. And then on a positive side, I said, “Why not be thankful for what our country offers you and others and help the others achieve what you’ve achieved”.

HEFFNER: Howard Rubenstein, that’s the best way possible to end a beginning of the year program.

RUBENSTEIN: Thank you.

HEFFNER: Thanks for joining me again on The Open Mind. And I hope that we both have positive messages when we meet again like this next year.

RUBENSTEIN: (Smile in voice) I’ll see you next year. (Laughter)

HEFFNER: Thanks, Howard.

RUBENSTEIN: Thank you.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.