That is the same Rubin with whom Democratic candidate Barack Obama met, along with other influential advisers, on Tuesday to figure out what to do about the sorry state of our economy. But what in the world did he expect to learn from Rubin? And why did he appoint Rubin's protege, Jason Furman, who ran the Rubin-funded Hamilton Project, to be the Obama campaign's economic director? Hopefully, during their encounter Tuesday, Rubin offered himself as a contrite model of everything that the candidate of change needs to change.
After all, Goldman Sachs, where Rubin spent 25 years of his business career before entering the Clinton administration, has been one of the prime corporate villains in the financial shenanigans that led to the sub-prime mortgage scandal.
As co-chairman of the firm, surely he had knowledge of the financial hanky-panky that would prove so disastrous down the road. Indeed, as treasury secretary, he favored an extension of the deregulation that enabled this explosion of banking avarice. Not surprisingly, the current treasury secretary, Henry Paulson, also previously headed Goldman.
When Rubin assumed a top position at Citibank after his stint at the Treasury, he was not above influencing his former employees in the government. In one notorious instance during the fall of 2001, when Enron was going down the tubes, Rubin telephoned a treasury under secretary and asked him to consider intervening with credit-rating agencies to hold off downgrading Enron's ratings. Some media accounts noted the possibility of a conflict of interest when the story was leaked, because Enron owed Citibank $750 million, which it could not pay if bankrupt.
Despite his skills and his vaunted position as Citibank's chairman, Rubin was not spared the disastrous consequences of Citibank's own wild financial manipulations that, if anything, even exceeded those of Enron. Tens of billions in bad mortgage and credit card debt placed the bank at the forefront of the current economic crisis, and so it is weird that Obama would now turn to Rubin for advice.
It's even weirder that the presumptive Democratic nominee would pick Rubin's man Furman as his campaign economic director at a time when cleaning up the mess left by the bankers is the highest priority. Furman hardly distinguished himself in that role in John Kerry's failed presidential campaign four years ago, with its muffled economic message that could not be blamed on the candidate's stiff style alone.
The bigger problem is that folks such as Rubin and Furman, perhaps best known as an economist for his bold but woefully misguided defense of the Wal-Mart business model, clearly do not feel the pain of the voters who are losing their homes.
But then again, why should Rubin, or Gramm on the Republican side, be expected to care when they have made so many millions off of the suffering of those voters? Not good at a time when we need a presidential candidate who sticks it to the bankers instead of sucking up to them.
© Creators Syndicate
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Albion Monitor July
31, 2008 (http://www.albionmonitor.com)
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