Robert Rubin Mouthing Off: The Turd That Won’t Go Away

In General Interest by Jonathan Tasini0 Comments

Robert Rubin is like that turd that just won’t flush away. You know, no matter how many times you keep pressing the lever, it sticks around. That’s Robert Rubin. And here he is again, swirling around the toilet bowl of corrupt politics, of financial elite arrogance, mouthing off when, in a just world, he’d either be in jail, without a job or, at least, irrelevant.

You can’t make this up:

Robert Rubin, the former Treasury secretary who has served as a mentor to Mr. Summers in his political career and is among those pressing for his nomination as Fed chairman, criticized the Fed’s policies even more sharply on a panel at the Aspen Institute last month. His remarks suggested that the challenge confronting the next leader of the Federal Reserve was not to direct an attack, but instead to manage a retreat.

“The big risk, the important risk, and the one that could affect all of us is, ‘How are they going to get out of this thing?’ ” Mr. Rubin said. “I think that creates enormous uncertainties and creates a very, very difficult challenge for the Fed and a set of risks that I’ve just articulated that I at least find quite troubling.”

So, if you want to disqualify Larry Summers as the next chairman of the Federal Reserve Board, you don’t need to know more than the fact that he served as Rubin’s deputy at the Treasury Department.

To start off, I have argued for almost three years that Robert Rubin is a liar. I think it is provable that he lied to the Financial Crisis Inquiry Commission about what he knew about Citibank’s role in the financial crisis, and what his role was in that crisis. And when Citibank shelled out $730 million to settle a huge suit by investors who argued they had been mislead by Citibank’s leaders, Rubin dodged a bullet again because not a dime of that settlement came out of his pocket — it’s all shareholder money.

But, you see, Robert Rubin is skilled at one thing: avoiding responsibility. In one sense, there is something to admire when someone can mislead and screw up yet he ambles along, teflon-like, giving speeches, greasing the wheels for the Wall Street-Washington relationships and continuing to enrich himself. Awesome.

Second, he is, along with his mentor Bill Clinton, a central person responsible for setting the stage for the financial crisis — and Larry Summers was on the scene when Rubin, and Clinton, took a club to the Glass Steagall Act — the wall that separated investment banking from commercial bank. Rubin did this for one reason: to make sure that his Wall Street network could reap as much money as possible. I documented his dishonesty and role in destroying Glass Steagall in “The Audacity of Greed”  but some of the key parts are also here.

Third, and this is to the point of the quote in the beginning above, his attack on the Federal Reserve’s current policy to make a teensy effort to stimulate the economy underscores how the man really does not care about the desperation of millions of people because he lives in the elite world — I’m reminded of that world in Blade Runner. Rubin would be safely ensconced high above the poverty and dystopia while millions scraped along at the bottom.

The Rubin-Summers mentality is revealingly, and bizarrely, out of touch: they do not want regulatory oversight at a time that, in the wake of a colossal failure of oversight that led to global disaster, more oversight is needed.

They think only of Wall Street, and they can’t see the millions of people who barely survive.

Bond prices are what they care about, not full employment.

Look, I argue that this whole debate so far over the next leader for the Fed is just absurd and stupid.

But, having Robert Rubin as Larry Summers’ advocate should be, in a rationale world, a death knell for that candidacy.

But, it isn’t apparently.

Which is instructive about the mess we are in.

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