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The Ghost of Robert Rubin

Posted by Larry Doyle on August 19, 2013 9:27 AM |

There was a point in time — pre-crisis, of course but in reality not all that long ago — when former Fed chair Alan Greenspan was viewed as almost god-like. Greenspan was supposedly smarter than all other central bankers. Well, those times have passed.

In retrospect, Greenspan has been shown to be a central player amid the cabal that controls our market and economy. In a recent commentary, Bloomberg’s Bill Cohan defines this group as The Club.

The Club has many wannabe members running around Washington and Wall Street, but the true inner circle of The Club consists of a small handful of power brokers and none bigger than Robert Rubin.

You remember Rubin, right? 

He of the $100+ million payout at Citigroup while the bank was run into the ground. He of the dismantling of any meaningful oversight of the derivatives markets that allowed for rampant and routine insider trading on Wall Street. He of shunning the whistleblower Richard Bowen who tried to draw attention to the massive volume of defective — if not fraudulently underwritten — mortgages purchased by Citi.

Yes, that Robert Rubin.

Many people — dare I say, most — in our country would hope that men like Robert Rubin might just fade away. But that is not how The Club works.

All we need to do is review the immediate history of the past 5 years to know that the power and money of The Club continues to wield its influence in immeasurable ways. In fact, this power and money has only gotten stronger since our crisis, despite the fact that many members of The Club were intimately involved in causing the crisis in the first place.

How will The Club next try to exert its hold over our nation? Making sure that one of its members, that being Larry Summers, runs the show at the Federal Reserve.  As Cohan so aptly states:

The real issue for Obama, who clearly remains in thrall to Summers and his substantial intellect, isn’t whether he picks Summers or Yellen. It is whether Bob Rubin and The Club will continue to dominate economic appointments and preside over a recovery that favors the rich.

I would not recommend betting against The Club.

Navigate accordingly.

Larry Doyle

Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.

For those reading this via a syndicated outlet or receiving it via e-mail or another delivery, please visit my blog and comment on this piece of ‘sense on cents’.

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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved. 

  • Jake

    Is this really true about the Dodd-Frank law?

    As of July 15, the law firm Davis Polk found that a total of 279 Dodd-Frank rulemaking requirement deadlines had passed. Of those, only 38.4 percent were met with finalized rules, while a total of 61.6 percent were missed.

    • LD

      Indeed it is.

      This law is actually little more than architectural blueprints subject to delays, changes, if not worse than that all at the hands of the industry lobby that dominate Washington. I address this in my book coming out in January

      • Jake

        I look forward to reading it – thank you – of course when they put the law into effect the economy will be doing “better” and therefore not as much regulation is needed – how shallow our economic memory is. I watch the housing market take off again and feel that as a country we haven’t learned anything.

        • LD

          You are right.

          They are counting on the public having a short memory.

          Certainly many do but there are also many who now know that the system is badly flawed.

  • Jay
  • Jim Wells

    Important to remember that one of Rubin’s final acts as he looted Citigroup was to convince then-President Bill Clinton not to oppose the Citi Chairman Sandy Weill’s criminal violation of the Glass-Steagall Act by combining Citibank and Travelers Insurance. Of course, this paved the way for the replacement of Glass-Steagall with the Gramm-Leach-Bliley Act of 1999 allowing government-insured banks to participate in all sorts of high-risk, nefarious activities which culminated in the Financial Crisis of 2008 and the almost total collapse of the global financial system. Quite a legacy. Ample reason not to trust him with anything more than taking out the trash.

    • Matt

      I was working on the Street at the time and remember asking my colleagues “Can Sandy do this? Isn’t this still illegal?”

      The repeal of Glass-Steagal was the most blatant example of retroactive lawmaking to benefit a specific case that I have ever seen.

  • Jim

    Yup, u got it right.

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