It isn't for nothing that Robert Rubin is sometimes referred to as Teflon Bob. During the late '80s, when he was a senior executive at Goldman Sachs, he emerged unscathed from the insider-trading scandals that embroiled his firm and others. In 1995, he moved from the White House before it became enmeshed in the Monica Lewinsky affair, to the Treasury Department, where, according to his boss, Bill Clinton, he turned out to be "the greatest secretary of the Treasury since Alexander Hamilton." Since returning to his home on Park Avenue in 1999, Rubin has relished the role of elder statesman, publishing a memoir, co-chairing the Council on Foreign Relations, and joining the Harvard Corporation.

Lately, however, Rubin has run into an unprecedented barrage of criticism, and some of it is sticking. In his former role as deputy chairman of Citigroup, which he joined in 1999, he was attacked for failing to address the giant bank's recurring financial problems. Now that he has taken over the chairman's role from Chuck Prince, he can no longer hide behind the claim that he has no day-to-day responsibilities at the bank. He has been paid more than $100 million since joining Citigroup, and his reputation is clearly on the line.

Even as Citigroup's problems worsen, Rubin is facing another challenge—to his status as an economic oracle. During the Clinton administration, he championed spending restraint, tax increases for the wealthy, and deficit reduction, a policy stance that came to be known as Rubinomics. In February 2001, shortly after George W. Bush took office, Rubin wrote an op-ed piece in which he warned that the new president's proposed tax cuts would damage the country and perhaps roll back the business confidence that was built up during the Clinton years.

At the time, Rubin appeared to be right. In 2002, following four years of surpluses, the federal government recorded a deficit of $158 billion; in 2003, the deficit rose to $378 billion; in 2004, it topped $400 billion. With the Congressional Budget Office forecasting more deficits as far as the eye could see, even many Republicans privately wished for a Rubin-like figure to appear at President Bush's side.

Fast-forward three years, and the 69-year-old financier doesn't look quite so prescient. In October, the Bush administration announced that in the 2007 fiscal year, which ended in September, the deficit fell to $163 billion and the economy recorded a third year of solid growth, with no sign of the slump in business confidence that Rubin predicted. Relative to the size of the economy, the deficit has dropped by two-thirds since 2004, and it is now just 1.2 percent of G.D.P.

Perhaps even more surprising, the nonpartisan Congressional Budget Office is predicting a budget surplus of $62 billion by 2012, prompting the Wall Street Journal to declare in a recent editorial that economic growth, not tax increases, is the key to deficit reduction. In the past four years, federal tax receipts have risen by close to $800 billion, or more than a third, to $2.6 trillion. Tax receipts have now climbed back to 18.8 percent of G.D.P.—slightly higher than the average of the past 40 years. So what of Rubinomics?

If the economy has thrived despite Bush having done the opposite of what Rubin prescribed, does that mean that Rubin was wrong or that Bush was simply lucky?