Friday, December 05, 2008

Back to the 70s: Cynicism

While among the top echelon at Citigroup (as someone called “Citigroup Inc. director and senior counselor”) Robert Rubin [one of the President-elect's principal advisors on economics] took in an aggregate $115 million in pay and bonuses — even though his bank’s stock crashed and lost 75 percent of its value, and now the conglomerate totters close to bankruptcy...Parallel Lives, Victor Davis Hanson, National Review Online, 12/5/2008

A disciple of Robert Rubin, Timothy Geithner, according to the Office of the President-elect, will be the next Secretary of the Treasury. Larry Summers, another of Robert Rubin's buddies, is about to the White House's senior economics advisor. And still another Rubin protege, Peter Orszag, is about to become White House budget director. Who is Robert Rubin?

Before he became Citibank's Senior Counselor and a Director, he was Bill Clinton's Secretary of the Treasury,from which position he oversaw the deregulation of the banking industry, deregulation which the Office of the President-elect hopes to overturn as a means of recovering from the current banking disaster. He's also the guy who, as Senior Counselor it is claimed, convinced Citibank to buy a ton of collateralized derivatives from Citibank's board members, including himself (no one else would buy them). He's also the guy who is widely quoted as disclaiming all responsibility for the misbehavior of the world's largest bank (Citibank), misbehavior he was involved in himself as Senior Counselor and Director, and which, it is possible to allege, has cost investors several hundred billion dollars in stock value in the last year. At the same time, Rubin collected over a hundred million dollars in personal compensation from the same company.

Perhaps this is overstatement, but this biography of the mentor for the new President-elect's economics team reads a lot like being rewarded for robbery, not only by Citibank (which benefited enormously, for a short time, under former Secretary Rubin's deregulation scheme), but by the incoming administration in appointing one of his colleagues to be Secretary of the Treasury and two others to oversee White House thinking and action on the budget. One can almost imagine the job interviews in a Brooklyn social club.

But, hey, that's just cynical, eh?


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