THE JEWISH ROBERT RUBIN BANKRUPTED AMERICA: OBAMA IS HIS SLAVE

Robert Rubin has always been known for his calm steadiness—perfect, one might say, for the age of “No-Drama Obama.” At cabinet meetings in the Clinton administration, after the jabbering and posturing in the room had died down, the president would turn to his Treasury secretary, who had been quietly listening, and ask, “Bob, what do you think?” Rubin would modestly tell the president what to do. Rubin’s self-effacement was always a bit of shtick. Asked about, say, the German economy, he would throw up his hands, feign ignorance, and mention in passing that he had just spoken to the German finance minister. Unlike his partner, former Federal Reserve Chairman Alan Greenspan, Rubin was not a free market ideologue. But by the end of the 1990s, economic orthodoxy in the Democratic party was known as Rubinomics (a term Rubin himself would never use), meaning, roughly, a belief in free trade, fiscal restraint, and deregulation of financial markets. Pretty much everyone who really knew and understood the interaction of Washington and the marketplace had worked for Rubin. It is no wonder that so many of President-elect Obama’s top economic players, including his Treasury Secretary Tim Geithner and his chief economic adviser Larry Summers, are Rubin protégés.

It’s all perfectly logical and explicable, except that Rubin arguably helped create the financial crisis that Obama now must fix. As Treasury secretary, Rubin pushed to allow banks to get into riskier businesses, and as a high-level official at Citigroup for the past nine years he and his colleagues at Citi have presided over the near collapse of an institution that will require a massive taxpayer bailout because it is too big to fail. Citi got $25 billion as part of the original bailout; last week it got an additional $20 billion, as well as a guarantee from the government to backstop losses it takes on $306 billion in bad assets.

“Everyone agrees we have to save Citi, so we’re throwing hundreds of billions at it because it was so poorly managed, and yet there’s Robert Rubin sitting right there in the middle of it and he’s been looked to as a wise man,” says Dean Baker, cofounder of the Center for Economic and Policy Research, a left-leaning think tank in Washington. “It’s outrageous. We’re turning to the same people who made this mess in the first place.”

Newsweek

December 8, 2008