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Meet Robert Rubin: The Man In Charge
http://www.zerohedge.com/news/meet-robert-rubin-man-chargeIt’s enough to keep a 74-year-old plenty busy. But not enough to shake questions about just how wise and thoughtful Robert Rubin really is, especially on the fourth anniversary of a financial crisis in which he played a pivotal, under-examined role. Rubinomics—his signature economic philosophy, in which the government balances the budget with a mix of tax increases and spending cuts, driving borrowing rates down—was the blueprint for an economy that scraped the sky. When it collapsed, due in part to bank-friendly policies that Rubin advocated, he made more than $100 million while others lost everything. “You have to view people in a fair light,” says Phil Angelides, co-chair of the Financial Crisis Inquiry Commission, who credits Rubin for much of the Clinton-era prosperity. “But on the other side of the ledger are key acts, such as the deregulation of derivatives, or stopping the Commodities Futures Trading Commission from regulating derivatives, that in the end weakened our financial system and exposed us to the risk of financial disaster.”
After he stepped away from Treasury in 1999, Rubin moved to Citigroup (C), and until 2009 he served as chairman of the executive committee and, briefly, chairman of the board of directors. On his watch, the federal government was forced to inject $45 billion of taxpayer money into the company and guarantee some $300 billion of illiquid assets. Taxpayers ended up with a 27 percent stake in Citigroup, which was sold in 2010 at a cumulative profit of $12 billion. Rubin gave up a portion of his contracted compensation—and was still paid around $126 million in cash and stock during a tenure in which his serenity has come to look a lot more like paralysis. “Nobody on this planet represents more vividly the scam of the banking industry,” says Nassim Nicholas Taleb, author of The Black Swan. “He made $120 million from Citibank, which was technically insolvent. And now we, the taxpayers, are paying for it.”
...
“Most people see him as your sort of archetypical buttoned-down Wall Street guy,” says President Clinton, acknowledging the perception that Rubin favored the financial sector. Clinton, for one, doesn’t buy it, and cites numerous examples of Rubin advocating for policies that ran counter to his own economic interest. “When we had to give up the broad-based middle-class tax cut to reach our deficit reduction targets, he was one of the strongest supporters I had in not giving up the proposal to double the Earned Income Tax Credit. He said, ‘We can’t do that. It’ll move millions of poor people who are working out of poverty.’ You wouldn’t expect somebody who had spent a career on Wall Street, making and helping other people make millions and millions of dollars, to be in there arguing. But he was just as strong as [Secretary of Labor Robert] Reich was. He said, ‘We’ve got to keep that.’ And we took a lot of heat for it.”
Rubin’s selflessness, whether in economic policy or the day-to-day management of the Treasury, is a frequent theme of his admirers. Sheryl Sandberg, the chief operating officer of Facebook (FB), worked at Treasury after she graduated from Harvard Business School in 1995. In her first meeting with Rubin and a dozen senior staffers, she hid in the back of the room, hoping to turn invisible. “I’m young and brand new at Treasury, and I did not know much,” says Sandberg, now 43. Rubin called on her anyway. “He said, ‘You’re new. You may see things we’re missing.’ And it was a really powerful lesson, because he was showing everyone that you take opinions and you get feedback from everyone. He wasn’t going to be curtailed by hierarchy or titles.”
After he stepped away from Treasury in 1999, Rubin moved to Citigroup (C), and until 2009 he served as chairman of the executive committee and, briefly, chairman of the board of directors. On his watch, the federal government was forced to inject $45 billion of taxpayer money into the company and guarantee some $300 billion of illiquid assets. Taxpayers ended up with a 27 percent stake in Citigroup, which was sold in 2010 at a cumulative profit of $12 billion. Rubin gave up a portion of his contracted compensation—and was still paid around $126 million in cash and stock during a tenure in which his serenity has come to look a lot more like paralysis. “Nobody on this planet represents more vividly the scam of the banking industry,” says Nassim Nicholas Taleb, author of The Black Swan. “He made $120 million from Citibank, which was technically insolvent. And now we, the taxpayers, are paying for it.”
...
“Most people see him as your sort of archetypical buttoned-down Wall Street guy,” says President Clinton, acknowledging the perception that Rubin favored the financial sector. Clinton, for one, doesn’t buy it, and cites numerous examples of Rubin advocating for policies that ran counter to his own economic interest. “When we had to give up the broad-based middle-class tax cut to reach our deficit reduction targets, he was one of the strongest supporters I had in not giving up the proposal to double the Earned Income Tax Credit. He said, ‘We can’t do that. It’ll move millions of poor people who are working out of poverty.’ You wouldn’t expect somebody who had spent a career on Wall Street, making and helping other people make millions and millions of dollars, to be in there arguing. But he was just as strong as [Secretary of Labor Robert] Reich was. He said, ‘We’ve got to keep that.’ And we took a lot of heat for it.”
Rubin’s selflessness, whether in economic policy or the day-to-day management of the Treasury, is a frequent theme of his admirers. Sheryl Sandberg, the chief operating officer of Facebook (FB), worked at Treasury after she graduated from Harvard Business School in 1995. In her first meeting with Rubin and a dozen senior staffers, she hid in the back of the room, hoping to turn invisible. “I’m young and brand new at Treasury, and I did not know much,” says Sandberg, now 43. Rubin called on her anyway. “He said, ‘You’re new. You may see things we’re missing.’ And it was a really powerful lesson, because he was showing everyone that you take opinions and you get feedback from everyone. He wasn’t going to be curtailed by hierarchy or titles.”
much more at the link.
