This post has been read 2103 times!
I am getting back to finishing a good book called “The Unwinding“, which portrays the downfall of this country using short biographies of Americans who represent facets of American culture.
I got to the chapter on Robert Rubin tonight. That man did more to destroy the global economy and cause the 2008 financial collapse, which Americans are still suffering from today, than any other person.
He started his career at Harvard, where all the crooks start. He apparently got accepted because his lawyer father introduced him to the Dean of Admissions. He then became a lawyer, but was not good enough to be partner, so he went into Wall Street.
At Goldman Sachs in the 1970’s, which was a small place at the time, he created the now-infamous derivatives trading desk that all of Wall Street copied. Derivatives are what Warren Buffet called weapons of mass destruction.
Then, he began to become the go-to guy for raising money from Wall Street for politicians. That got him his job at the White House under Bill Clinton. This is were he did the real damage.
Rubin persuaded President Clinton to repeal Glass-Steagall with the Gramm-Leach-Blilely bill. This allowed the Wall Street banks to become big hedge funds (Of note, I worked for Merrill lynch, and we were trading $10 Billion in borrowed money in an internal hedge fund, thanks to Robert Rubin and Clinton. Merrill went belly-up after 2008, two years after I quit the place in disgust).
Then, to allow those banks to make obscene money on trading risky derivatives, he got congress to pass, and Bill Clinton to sign, the “Commodity Futures Modernization Act”, which banned any regulation of derivatives. This was the last law that Clinton signed in the cover of night before leaving office. Rubin had left the White House by then, so he distanced himself from this scandalous law years later.
From the time Robert Rubin began at Goldman Sachs to the time he left Wall Street, the financial sector grew to become 30% of all corporate profits, which is insane. Banks do not make anything. This portion of the GDP is all imaginary.
Under Rubin and Greenspan, the “one percenters” came to life. The top one percent increased their wealth by 300%, whereas the middle class increased income by only 20%.
Thanks to the repeal of Glass-Steagall, Citigroup was created by the merger of Citicorp and Travelers. That merger would not have been allowed under Glass-Steagall. Rubin went to work for Citigroup after he left the White house, making the revolving door an acceptable part of the establishment.
Under Rubin, as he was a senior leader at Citigroup in the 2000’s making $15 Million a year for doing almost no work, flying on the corporate jet for personal fishing trips, the world suffered the global financial collapse of 2008. This was caused by banks having too much toxic bad debt in the form of CDO’s.
Well, you guessed it. Robert Rubin had steered Citigroup into buying so many CDO’s that the bank become insolvent (Obama wanted to liquidate Citigroup but Timmy Giethner refused). Of course, when grilled by congress in 2010, Rubin claimed that he had no decision making capability at Citigroup.
Robert Rubin was never charged with any wrongdoing for his role at Citigroup, nor were any other of the schmucks in Wall Street who blindly followed Goldman Sachs over the cliff by loading up on CDO’s. He retained his hundreds of millions of dollars that he “earned” from Wall Street and lives somewhere overlooking Central Park right now.
(This essay was paid for by the Committee to Elect Elizabeth Warren)