In the December issue of Rolling Stone the journalist Matt Taibbi hits yet another grand slam exposing the murky world of Wall Street and Washington politics ("Obama's Big Sellout"). Taibbi provides a detailed and thoughtful analysis on the myriad connections between numerous Obama appointees and Robert Rubin, the Obama presidential campaign's economic advisor, and former Clinton Treasury Secretary who led the charge for the passage of the Gramm-Leach-Bliley Act of 1999, to create the megamerger that was to become Citigroup.
Rubin then left the Clinton Administration to lead Citigroup in their tumultuous downfall.
Below is a very brief synopsis of some of Taibbi's salient points. Any and all remarks in parenthesis are mine, and should not be attributed to Taibbi's article.
I would heartily urge everyone to purchase this issue of Rolling Stone as the article is as rich in detailed information as it is in Taibbi's wonderful writing style! The chart on page 46, "A Team of Rubins," is well worth the price of the magazine alone.
Near the beginning of the article, we learn that Michael Froman, Obama's fellow Harvard Law classmate and a high-level Citigroup executive, is tasked by Barry to select his economic team. Froman's first choice, of course, is Jamie Rubin, Robert Rubin's son.
Taibbi explains how these appointees are connected to Robert Rubin by way of either having worked for him, or with him, at Goldman Sachs, the Clinton Administration, Rubin's Hamilton Project (a "think tank" within the Brookings Institute "think tank" -- working expressly on Rubin's concept of a free-market philsophy and financial deregulation), and Citigroup.
During this timeframe when Froman is selecting Obama's economic team, Citigroup has received $25 billion in T.A.R.P. funds, as well as receiving another $20 billion in cash from the government and its agreement to "charge the taxpayers up to $277 billion in losses" on Citi's toxic assets; the very same toxic assets (CDOs) that Rubin urged them to peddle.
The list of Rubin's Rubes follow:
TIMOTHY GEITHNER: worked for Rubin during the Clinton Administration (Geithner's first position at the Treasury was with the George H.W. Bush administration; his first position on Wall Street was with Kissinger and Associates) and was head of the NY Federal Reserve Bank during the Citigroup "negotiations."
Position: Treasury Secretary
LEWIS ALEXANDER: the former chief economist at Citigroup who worked for Rubin during the Clinton Administration. While at Citigroup, Alexander wisely counseled them in 2007 that the housing crash was nothing to be concerned about. (What, me worry?)
Position: counselor to Treasury Secretary Timothy Geithner
GENE SPERLING: worked for Rubin during the Clinton Administration.
Position: counselor to Treasury Secretary Timothy Geithner
LAEL BRAINARD: worked for Rubin during the Clinton Administration.
Position: counselor to Treasury Secretary Timothy Geithner
LARRY SUMMERS: worked for Rubin in the Clinton Treasury and Rubin's input was reported to have been important in the selection of Summers for the position of Harvard University president.
Position: Director, National Economic Council
JASON FURMAN: worked for Rubin, both during the Clinton Administration and was one of the directors at Rubin's Hamilton Project.
Furman, an ardent supporter of NAFTA and other free-trade agreements, was the author of a pro-globalization report titled, "Walmart: A Progressive Success Story."
Position: Deputy Director, National Economic Council
DIANA FARRELL: worked for Rubin at Goldman Sachs. Farrell is with McKinsey Global Institute and was an author of their notorious report proclaiming the profitability of offshoring jobs. The study began with the assumption that it is profitable to offshore jobs, and ended with the conclusion that it is profitable to offshore jobs; long on fantasy, short on hard data!
(Farrell was also the editor on the book titled "Offshoring," which was highly favorable to labor arbitrage, i.e., the dismantling of the middle class and working class).
Position: Deputy Director, National Economic Council
MICHAEL FROMAN: Froman, who continued to work for Citigroup during the selection process, finally separated from them to stay on as both the international finance adviser on the National Economic Council as well as the deputy national security adviser on the National Security Council.
DAVID LIPTON: worked for Rubin at both Clinton's Treasury and at Citigroup.
Position: also enjoys dual appointments to the National Economic Council and the National Security Council.
GARY GENSLER: formerly with Goldman Sachs, he worked for Rubin during the Clinton Administration. While there, Gensler, along with Rubin, staunchly supported the passage of the Commodity Futures Modernization Act of 2000, which acted to deregulate --- and kill any oversight and transparency --- of credit derivatives traded over electronic exchanges along with all oversight of credit default swaps. (Can you say "economic meltdown certainty"?)
Position: Chairman, Commodity Futures Trading Commission
PETER ORSZAG: was the first director at Rubin's Hamilton Project and loves globalization and those mythological free markets. (Perhaps he confuses them with flea markets?)
Position: Director, Office of Management and Budget (OMB)
And over at the State Department: Deputy Secretary Jacob Lew, who worked with Rubin during the Clinton Administration, and for Rubin at Citigroup.
Also at State is the Undersecretary on Economics, Robert Hormat, who is connected to Rubin via Goldman Sachs.
And at the Federal Reserve we find Linda Robertson, senior adviser and former Enron lobbyist, who worked for Rubin at the Clinton Treasury.
Again, I would urge everyone to pick up a copy of the December issue or Rolling Stone for an outstanding and informative explanation of events.
We are truly fortunate to have the invaluable financial and economic reportage from the likes of Matt Taibbi, Nomi Prins, Pam Martens and those ladies and gentlemen over at Bloomberg News.
Watch this interview with Taibbi on Robert Rubin's takeover of Obama's White House:
Dylan Ratigan's interview with Taibbi on Obama's Big Sellout:
Change
I voted for Pres. Obama. I did so because I believed what he SAID during the campaign (besides there was no way in hell I was voting for McCain). I was quickly disappointed when he appointed Larry Summers as chief economic adviser and it got worse from there with Tim Geithner. IMO, the writing was on the wall - it was clear to me that we would not see any change particularly when it came to dealing with Wall Street.
Our times, particularly economically, require change or a transformation but unfortunately for working class Americans this Administration will not deliver on the change that is necessary for its prosperity let alone survival. Much of the problems we see today are a result of globalization and financialization. This administration appears to want to support the status quo regarding both.
I will give this administration a little more time before I declare I regret my vote. I still hope (wishful - maybe) that they will change course and realize the error of their ways but things don't look good.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
If we'd elected McCain
You would not have Geithner and Summers to regret. He's have appointed Bernanke to head the Fed and Phil Gramm for Treasury. Then we could see what the difference is between our political parties. Unfortunately, no other political parties have the price of admission in our system, and Ralph Nader doesn't have the political skill to be a serious candidate.
Frank T.
Frank T.
DIANA FARRELL
She has also has been huge in labor arbitraging Americans through guest workers, most notoriously H-1B and L-1.
It's unbelievable she even has a job! She writes pure economic fiction, corrupt "reports", clearly making $$$ from global labor arbitrage and yet she manages to get into the Obama team. Unbelievable, but if there is anyone who shows me the massive corruption, it's her.
Great post James! Rated up! I took the liberty of adding a couple of video clips with very good interviews with more information.
Dylan Ratigan has been doing a great job with his show as of late. I wish they would repeat Dylan's show daily instead of lame ass, insult du jour, beyond belief partisan Olbermann!
We've written numerous posts on Rubin's takeover of the Obama administration....
and believe this or not, there were a host of people who didn't want Hillary, believing she would be Rubin's puppet...
guess what! Rubin was playing both fields, he was loosely connected with Hillary but had his son heavily involved in the Obama administration.
Even the Solicitor General....
Thanks for the clips, appreciate the additions.
Just noticed that Elena Kagan, the Solicitor General, who has done some work in the past for Goldman Sachs, was appointed to her dean's position at Harvard Law by Larry Summers.
IT is such a small world after all.....
I think Taibbi is right on this one
it explains why we see no difference between Clinton-Bush-Bush-Obama. So much for representing the people.
Off Shoring Illusion
This is a fair rebuttal of Farrell's wacko ideas - there is no empirical evidence to back up any of the assertions made. Thousands of jobs and lives are being trashed based on this rubbish.
http://www.programmersguild.org/docs/mckinsey/index.htm
Taibbi struck a nerve.
First, Tim Fernholz and then Prof. Brad Delong.
Obama ran on a platform of "Change". The word and theme was everywhere. It was very explicit - Candidate Obama was the going change Washington. Candidate Obama won the following demographics:
1) An overwhelming number of African-Americans and Latinos;
and
2) Young people.
This is what put him "over the top". This was because of his "message". However, as Taibbi, points out something happened after the election. He calls it a "sellout" other may call something more diplomatic. But the bottom line is that his appointments and his policy decisions after the election contradict his message:
1) Larry Summers and Tim Geithner appointments speak volumes;
2) Mortgage modification program that coddled mortgage lenders;
3) This idea of cajoling, pleading and persuading Wall Street and big banks to do something for the good of the country;
4) To a less extent, the strategy and structure of the stimulus plan;
5) Even the current alleged job creating proposals that rely heavily on tax credits.
I bet if you ask the people in the demographics who put Obama "over the top" whether they believe there has been any CHANGE in Washington they would say HELL no.
Here is the thing. He had a mandate for CHANGE and he chose instead to support the notion that "trickle down" works by his unwavering support of Wall Street. Too many carrots and not enough sticks.
But this lack of CHANGE should not be surprising based on who he chose as his advisers.
It doesn't matter whether it's called a sell-out or something more diplomatic one thing for sure is that it is NOT CHANGE.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
And let me add
Pres. Obama's treasury department acquiesced in the dropping of the "plain vanilla" provision in the original CFPA. Its one thing to propose something and entirely another to propose something and actually fight/defend what you propose.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
ah, details, details
I did not actually read the original Taibbi article, although Robert Rubin's son being in the Obama camp, that's new, and I heard that during the campaign, so I guess it helped to really check original sources for that was reported in a lot of places and nice call out by these two...it was false.
So, ignoring these mistakes, the overall message from DeLong, that anyone bothering to read the actual Obama policies and votes would have realized he was more DLC than Hillary was and Bill was her hubby, so that's one hell of a surprise.
I'm not surprised at all by Obama's team, but more how people projected onto Obama whatever they wanted to believe and on trade, that was esp. disgusting for all one had to do was look in the Senate voting record to see Hillary, believe this or not, Ms. "I represent the Indian offshore outsourcing industry" herself Clinton, had a more progressive voting record on trade policy than Obama.
So, I see both sides of these criticisms, Taibbi, hey man, tighten it up, Delong, let Taibbi speak to all of those people who didn't quite read the fine print on Obama during the campaign.
But that's why EP exists and is officially non-partisan, so we put the focus on the fine print.
It's true the Treasury Secretary had superior derivatives regulation but the idea of Fed as "super regulator" overshadowed the dismantling of derivatives regulation I think. His proposal still had a lot of holes but now it's yet another "for show", like shareholders nonbinding voice vote on executive pay....
more Taibbi
Matt Yglesias is also pointing out that Congress is another huge problem.
So, it looks like Taibbi has stirred the blogosphere pot. My overall impression with the blogs and people generally is Obama is a huge disappointment and so is Congress.
I know Jeff Merkeley of OR ran on a very strong Populist rant and he also ran on "NO BAILOUTS" so his very first vote was....more bail outs....
and then he goes railing on some stupid tobacco product...
ya know what I mean, ignore health care, try to get nicotine banned as classified as heroin type...kind of like Pelosi, save some field mouse, screw the entire STEM occupational areas. I don't know if that's clear but there are a whole lot of liberals who will sell the middle class down the river on a dime, but use government money for their pet projects. It's like people who have fund raisers for poverty in the 3rd world, all billionaires and also stepping over the homeless on the stoop on the way to the ball, all the while going off on how awful 3rd world poverty is...(what's wrong with that picture?)
Anywho, in spite of the errors, basically Rubin's shadow is all over D.C. no doubt about it, that DLC type of corporate agenda is clearly everywhere. So good people are at least looking at it all by this major pot stir.