$1000 from each and every living, breathing American man, woman and child has been earmarked by our government to inject capital and insure the company’s mortgage-backed securities. Sure enough, meetings are being held, phone calls are being made, plans are being hatched. Still, even knowing as little as I do about business and the economy, I know that the government should not trust part of the problem to act as a solution.
Let’s say for a moment that two buddies, Billy and Bobby, go out to the local T.G.I. Friday’s for a burger and a beer. Billy drove. During the course of the meal, however, Bobby doesn’t stop at one Budweiser, and each and every time he orders another beer, he orders one for Billy as well. By the time the burgers are done, and the last french fry is gone, both Billy and Bobby are highly intoxicated. Neither can walk straight. Neither can see straight. Billy is far too drunk to drive, but the restaurant is closing and the two do need to get home. Should Billy hand his keys to Bobby? Of course not. Bobby is largely the reason that Billy is too drunk to drive, and Bobby himself has shown that he sure isn’t capable of taking the wheel, either.
On Sunday, former Treasury Secretary Robert Rubin was described by The New York Times as “the architect of the bank’s strategy” and was identified as being front and center in Citigroup’s investment decision to take on more and more risk. As it turns out, the guy made more than $100 million doing part-time work as consultant and adviser for Citi, and counted his money as he drove the venerated bank into the ground in the name of taking on more and more risk in an attempt to keep pace with other banks like Morgan Stanley and Goldman Sachs.
Asked by the The New York Times whether he thought he made any mistakes at Citigroup, Rubin actually said no.
“I’ve thought a lot about that,” Rubin told the Times. “I honestly don’t know. In hindsight, there are a lot of things we’d do differently. But in the context of the facts as I knew them and my role, I’m inclined to think probably not.
The problem should not be part of the solution. If we’re looking to solve the problem of childhood obesity, should we name Rosie O’Donnell as the new health czarina? If we’re looking to bring objectivity back into journalism, should we ask Keith Olbermann to lead the charge?
This is a man who was caught making a back-channel telephone call to a Bush Treasury official in an attempt to delay the inevitable at Enron, a high-profile client of Citi as it breathed its last. His instincts are wrong and his attitude unapologetic, but not only is Robert Rubin still employed and trusted to bring Citigroup out of the quagmire he had such a hand in creating — his disciples are currently populating the economic team behind President-elect Barack Obama.
Obama has chosen New York Fed president Timothy Geithner as Treasury secretary, Peter Orszag as his budget guru, and Larry Summers as his head White House economics adviser. All three are Rubin disciples. Obama has even tapped Rubin’s own son to help him weed through the potential candidates for such appointments.
Still, for a moment, forget the folks in Obama’s ear — why is Rubin still affiliated with Citigroup? When Enron crumbled in a cloud of mismanagement, corruption and self-dealing, the American people were absolutely outraged. Outraged. They wanted heads to roll, jailhouse doors to clang shut. Yet here, nobody seems to care, and I don’t understand why.