Robert Rubin: Exposed

Many citizen activists have tried to inform the public about the criminal activity of Robert Rubin during the Clinton administration. Today, finally, the "paper of record," The New York Times in an article on why Citigroup (aka citi, Citibank, Citicorp) is melting down titled, "The Reckoning – Citigroup Saw No Red Flags Even as It Made Bolder Bets”, (dated November 22, 2008) set out the basic facts for all to see:

"When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

" And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another."

What the New York Times failed to mention (and the journalist had much to cover in the article, and limited space), was that Rubin and Alan Greenspan openly engaged in criminal activity. They violated their oaths of office by letting Citigroup and other banks know that they could go ahead and act as if they were already deregulated, even before Congress actually passed the laws that Rubin was pushing. Bill Clinton, of course, was complicit (as were leading Republicans and other leading Democrats including Vice-President elect Joe Biden (the Senator from Mastercard).

Rather than repeat myself, I'll refer you to my earlier postings:

Gramm-Leach, Glass-Steagall, and Bill Clinton

Housing, the Credit Squeeze, and Glass-Steagall Act

You can get some somewhat-sanitized information on Robert Rubin at Wikipedia.

Can we recycle crooks from past administrations to be Barack Obama advisors? Yes We Can!

Gramm-Leach-Bliley, Glass-Steagall, and Bill Clinton

In the last couple of weeks some of the nationally known pundits, and the Barack Obama campaign, have started talking about how the Gramm-Leach-Bliley banking bill, which overturned the Great Depression-era Glass-Steagall act, has played a major part in the mortgage finance disaster of 2007-2008. I posted an article, Housing, the Credit Squeeze, and Glass-Steagall Act, back on February 4, 2008, when no one wanted to talk about the subject.

During an election, if the economy is bad, there is a tendency to blame everything on the party in power. Senator Obama's attacks on Senator McCain about Gramm-Leach-Bliley are not unjustified. However, Obama's party, the Democratic Party, was just as responsible for repealing Glass-Steagall as the Republican Party. Given Barack's spineless political career we can surmise that he would have voted for Gramm-Leach like everyone else, had he been in the Senate or House of Representatives at that time.

At the shallowest level, we are simply seeing the usual political-economic cycles that have been taking place since the first flint ax was traded for the first sea shell. Mixing ordinary banking (taking deposits, making loans) with Wall Street style banking (creating and trading stocks, bonds, and more complex financial instruments) was clearly a cause of the Great Depression. So Congress built a firewall with Glass-Steagall. At the time the bankers were bankrupt and unable to bribe their way out of the situation.

But when no fire transited from banking to brokerage houses, or vice-versa, for a number of decades, pressures began to build. That firewall did not just prevent fires, it prevent people from making quick bucks. Flexible politicians were found, particularly new ones who did not remember the Great Depression. One of the most flexible modern politicians was Bill Clinton, a Democrat. He named Robert Rubin to be his Secretary of the Treasury, and he kept Alan Greenspan as Federal Reserve Chairman. Think of these men as voracious predators with no respect for anything put power and money. Together they put in place the key "reform" that allowed the rapacious mortgage and derivatives frenzy of 2004-2006. Now taxpayers will be further burdened to clean up the mess.

So what is Senator Barack Obama going to do about it if he becomes President? What will Senator McCain do about it if he becomes President? The standard answer seems to be: make the Federal Reserve more powerful. None of the old "power to the people" solutions are even conceived of, except perhaps by Green Party candidate Cynthia McKinney. But it was the Federal Reserve that helped pressure Congress into repealing Glass-Steagall.

Politicians will say anything to get elected. Congress, not the President, is supposed to write the laws. Most American citizens vote without knowing anything about their representatives in Congress. Until people are better informed and more able to exercise power directly, don't expect any major changes in our system.