The Affluentialist

Earth to the Press: Where’s Robert Rubin?

Remember the early rush of press scrutiny that followed the surprise announcement of John McCain’s Veep choice? The virtually unknown Sarah Palin was the subject of intense media interest in those first days. As the Alaskan Governor prepared for her new national role, the press became more and more heated in their demands for a “press conference”. Even after interviews with individual journalists, including Charlie Gibson of ABC and Katie Couric of CBS, the press corps continued to demand a formal conference.

Well, Sarah came and went and, to my knowledge, the press conference never happened. The press failed to get their man—or, in this case, woman. But, lordy, it's all we heard about for three weeks of the campaign. It's worth noting that her Democratic counterpart, Joe Biden, who went on to victory, received only a fraction of the coverage that Palin did. Could it be that the press was more interested in catching a gaffe-prone beauty queen on video than hearing from the real newsmakers?

If you already have a jaded opinion about the press, then you won't be surprised to hear that there’s another incredibly important world figure, one who’s influence on the global financial stage touches literally every power center in this financial crisis, which the press has virtually ignored: Citigroup advisor and former Clinton Treasury Secretary, Robert Rubin.

If the press did have the stones to interview Rubin, perhaps they’d ask him about his final days as Treasury secretary, where he played an instrumental role in helping to repeal the Glass-Steagall act, which cleared the way for creating the highly leveraged mega-financial institutions we’re struggling to unravel today. Or what he had in mind when he took a job immediately after the Clinton administration with the very monster he helped to bring to life, Citibank, to advise them on how to maximize the opportunity he’d helped create during his tenure in Washington.

Maybe they’d ask him about his role within the globe’s most powerful private financial institution, Citibank, and how he failed to provide good guidance regarding their financial positions at every level, creating a more than $300 billion liability that they still haven’t come fully clean on. Or they’d ask him why he thinks he still hasn’t been called to testify in front of Congress about what happened at Citi during his tenure. Perhaps he, or someone else, can explain to me why heads are supposed to roll whenever a financial institution dips into to the $700 billion T.A.R.P. fund, including calls for the dismissal of the second Citi CEO in as many years, but no one ever suggests that Rubin has any culpability in this.

In fact, Rubin is the last man standing at Citi. The former CEO, the senior risk management, the senior derivatives traders have all been let go because of their role in nearly crippling Citibank. Meanwhile Rubin hasn’t even offered up one shred of explanation as to his role at the center of a global financial meltdown. Why should he? He’s only the Chairman of the bank?

When asked, he says he doesn’t have day-to-day responsibility of Citi, and therefore, he’s not responsible for the actions of the firm. Does that sound reasonable? According to New York Post, the bank’s paid him $107 million since joining Citi in 1999. Chairman, a nine-figure pay package and no responsibility? Where do I find that job?

Yes, Citi is a mess, and yes, Rubin’s at the center of it and yes, the taxpayers are going to have to dig them out of the mess he and the rest of them created. Sounds like every other story these days on Wall Street. What’s so different about this one? Why should Rubin have to submit to a press conference while other Masters of the Universe don’t?

Because Rubin is also at the center of the Obama administration’s new financial staff. He’s got close ties to virtually every important figure now being considered for a finance-related position in Obama’s White House, from National Economic Council leader Lawrence Summers to Treasury Secretary pick, Tim Geithner. Rubin has these guys on speed dial and they, along with other key Obama picks, are considered “Rubinistas.”

Now, don’t get me wrong: Robert Rubin is smart. He’s an asset to our collective financial intelligence. But why, oh why hasn’t the press or the Congress asked – strike that, insisted—that he explain his role, one that began more than 10 years ago while a government official, and continued straight through the Bush era (enriching him fabulously) leading him right into the seat of both financial and political power, without ever having been elected, ever having been questioned, ever having been threatened with losing his job, even though he’s presided over the most spectacular financial failure since the Depression?

Why did the press demand access to a half-baked Vice Presidential candidate but has given a free pass to a genuine Wizard of Oz? And where’s the U.S. Congress in all of this?

To the press, I have a question and a follow up question:

Why is Robert Rubin getting a such kid gloves treatment from the press?

And my follow up question:

What the #*&%?# is going on?

Call For a New Era of Austerity

The United States, the wealthiest nation in the world, has become the biggest debtor nation in the world. That simple, untenable, disgraceful fact explains much of what ails the stock market, the housing market, even the price of food at the grocery market.

It is a lack of leadership that is substantially responsible for our current sorry state of affairs. Leaders are supposed to show us the way. Instead, what we’ve had for decades, for my entire lifetime, I believe, is leadership that has chosen to pursue personal riches--in the form of money, power and satisfaction--at the expense of the people they represent.

And it continues today. Even on a daily level we endure these slights and abdications of leadership. Today, I read that the lame duck congress doesn’t have enough support from the Republican party to convene and seriously consider a stimulus package and a bailout for the auto industry. Whatever one thinks of these programs, the fact that our officials aren’t even going to get together to explore them is shameful. Instead, as power passes from one administration--and one party--to the next, the message from the losing party is: “not my problem.”

We’ve got approximately two months before the new administration takes office, along with a significant shift in congressional power. What difference will two months make? The potential for disaster over the next two months is great. From Wall Street to Main Street, everyone agrees that we’re in for a world of hurt in the short term.

The current state of affairs, whether we consider what’s gone on for decades, for eight years or for the past couple of months, or even the forecasts for the next couple of months, must primarily be blamed on a lack of leadership from all quarters.

Many are hopeful that things are about to change. Whatever one thinks of President-elect Obama politically, his victory was proof that our nation has the capacity to move forward. He represents a sea change in the previously intractable issue of race in this country. I don’t think it’s hyperbole to believe that he can help us address our economic principles as well.

We must address them at home, too. While the willingness of our governments--red, blue, local, state and federal--to spend more than it has is the root cause of so much of what ails this nation, it is also that same syndrome which effects virtually every American household as well. What ails our country has also infected our homes.

We can be hopeful that a new message of restraint will come from a new administration. Even given the historical perceptions of democrats, there’s early evidence that the soaring oratory of the newest White House resident will include a call for fiscal prudence and a return to the values of an earlier time.

With that in mind, I am putting in my two cents for a new era of austerity, both from the top down as well as from the bottom up. Every household--from the White House to your house--needs to re-consider its poor savings and debt-driven spending habits and work towards this new reality of personal financial responsibility. In order to be successful, it needs to happen at every level, including legislative, cultural and spiritual.

America’s government showed great leadership in the 1960s by taking up an unpopular civil rights agenda at a legislative and oratorical level. It took, arguably, forty years for these ideas to fully take root in America. We’re more mature as a nation now and ideas travel faster. We can’t afford to sacrifice several generations while we re- center our fiscal compass. If we take that long, there may not be much of an American ideal to save anymore.