It seemed like a popping champagne corks early New Year's Eve for the stock market when it was announced that the Abu Dhabi Investment Authority bought a 4.9% stake for $7.5 billion in Citigroup, the largest financial institution in the US. Citigroup had been reeling because of its integral part in the subprime mortgage crisis.

Its former CEO, Charles Prince III had jumped ship with the usual golden resignation package and this incompetent was replaced by his former adviser and biggest supporter, Robert Rubin.  Illogical, but you read that right.  This buy in by Abu Dhabi Investment Authority occurred on Rubin's watch.

However, not everyone was celebrating the news.  Because of their greedy role in the subprime mortgage debacle and subsequent credit crunch, the biggies now need capital of their own.  As one investor put it, "It's a bitter pill to swallow to admit that the problems in the market have reached the point where companies that could traditionally fund themselves now need external sources of capital."  But their greed created the disastrous "problem."

Another critic says of the transaction, 

"A comparable absurdity would be Americans selling their houses and forever being renters in order to gain the requisite funds to, in the newly sacrosanct modern tradition, line up at big box electronic retailers in the cold early hours of the morning after Thanksgiving.

"Wait a minute. As a matter of fact, that's precisely what the Americans who took out home equity loans to spend away the appreciated wealth locked up in their homes have done. It's no wonder that Citigroup doing the same thing looks so normal.

"In essence, in commencing the process of selling away America's remarkably innovative and profitable financial system, the country will now be paying a rent, in the form of the profits accruing to Abu Dhabi and the other SWF buyers that must surely follow its lead, equal to what it once collected for itself."

But Democratic leaders on Capitol Hill and other Dems inside the beltway, like Hillary Clinton, think Robert Rubin, Bill Clinton's former Treasury Secretary, is a genius.  A genius for Wall Street but not necessarily for typical Americans. 

As Robert Kuttner points out,  "...taking on the most powerful Democratic Party interest group of them all -- Wall Street -- is viewed as a sign of recklessness, unsoundness, demagoguery, and political suicide. A mark of Wall Street's ubiquitous power in defining the limits of the politically thinkable is that its power is hardly noticed. The personification of this power is Robert Rubin." 

Even Paul Krugman, who has great respect for Rubin, says Rubinomics is not the way to go and quotes another economist, Brad DeLong who said, “Rubin and us spearcarriers moved heaven and earth to restore fiscal balance to the American government in order to raise the rate of economic growth. But what we turned out to have done, in the end, was to enable George W. Bush’s right-wing class war: his push for greater after-tax income inequality.”

Democrats need to remember their party's roots and that what is good for Wall Street may not be good for regular working Americans.