No Clintonite Robert Rubin Dems in Obama Administration, Please
In late April, I wrote a posting titled: "Obama Needs To Avoid the Bob Rubin's of the Democratic Party."
It included this: "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.
"Then, in January I included this is a posting, 'As reported by Bloomberg news via Truthout last year, 'AFL-CIO leaders, contending Democrats won the midterm elections because of voter concern about job security and stagnant wages, say it's time to set aside the free-trade policies touted by Rubin.'
" 'We need to review the Rubin agenda that's led to millions of lost jobs and declining standard of living for the middle class," said United Steelworkers President Leo Girard. 'It's an agenda that has been very good for Citigroup and the financial community because they've been abor to finance the relocation of jobs and refinance the trade deficits.'
" Organized labor has long been at odds with "Rubinomics," the phrase coined to describe President Bill Clinton's economic policy, masterminded by Rubin, to promote free trade and reduce the budget deficit...
"Jonathan Tasini seems to agree with me regarding Mr. Rubin...And, indeed, Rubin is still being pointed to by both Democratic presidential candidates as a wise person who should be called on to fix the mess. Am I missing something here? Do you think any regular worker who messed up royally would last a New York minute and his or her job--not to mention being rewarded like a king? The answer is obvious.'
Now, an article in Asia Times weighs in with this: "The political dynamics in 1932 have similarities with that of the upcoming 2008 presidential election in the aftermath of the credit market crisis that broke out in August 2007. The main difference between 1932 and 2008 is that, unlike in 1932, when Democrats could disclaim policy responsibility for the 1929 crash, they cannot deny in 2008 the responsibility of the two-term Bill Clinton administration (1993-2001) for the credit bubble that burst in 2007. Another difference is that the full impact of the final bursting of the serial bubbles will not be fully felt until after the 2008 election. The 1932 election was held in the midst of a severe depression.
"It was Robert Rubin, special economic assistant to Clinton and later Treasury secretary, who worked out what has come to be known as Rubinomics, the strategy of dollar hegemony through the promotion of unregulated globalization of financial markets based on a fiat dollar that also forced deregulation on the US financial market. (See US dollar hegemony has got to go, Asia Times Online, April 11, 2002.)
"The argument that financial market regulation would reduce US competitiveness because it would force US financial institutions to relocate overseas had assumed an air of immaculate logic in the ideological context of neo-liberal globalization during the Clinton years. That neo-liberal mentality set the stage for US government abdication of regulatory responsibility over the financial sector and allowed the free market to move towards the inescapable path of eventual self-destruction, despite historical experience of the Roaring Twenties and the New Deal having shown the need for regulation to rein in the suicidal excesses of financial free markets.
"These ever-bigger bubbles were generated by increasingly sophisticated and complex debt instruments that carried synthetic credit ratings structured in linked hierarchies of risk exposures and marketed worldwide as "safe" investments to supposedly nondiscretionary conservative institutional investors managing the money of clients who normally were not in any position to take such risks.
"Through much of the Clinton administration, the Greenspan Fed kept short-term interest rates too low for too long for a healthy economy, notwithstanding the alleged safety provided by sophisticated hedging of risks. Towards the end of the Clinton presidency, an abnormal term structure on interest rates was created in early 2000 by the Greenspan Fed finally raising short-term Fed Funds rate targets to fight inflation while the Treasury under Larry Summers was pushing down long-term rates by buying back 30-year Treasury bonds with funds from a Federal budget surplus derived from a debt bubble, flooding the market with excessive cash.
"As all market participants know, an inverted rate curve is a classic signal for recession down the road.
"George W Bush won the November 2000 presidential election along with the bursting of the Clinton debt bubble. The Greenspan Fed again came to the rescue by turning on the fiat money spigot to fund a housing bubble mistaken as a miraculous boom, applauded by a grateful Congress overtaken with unquestioning awe and blind adulation normally reserved only for living gods. (See The Presidential Election Cycle Theory and the Fed, Asia Times Online, February 24, 2004).
"The policy of moral imperialism brought spectacular terrorist attacks on the US homeland, forcing the Bush administration, less than nine months in office, to turn Clinton's foreign war of moral imperialism into a global war on terrorism that some have estimated will cost up to US$2 trillion or 20% of US gross domestic product, a cost even a Goldilocks economy cannot afford. The 9/11 2001 terrorist attacks on the US homeland gave the Fed a convenient excuse to flood the market with massive liquidity. The Goldilocks economy got a new lease on life from the global war on terrorism, allowing structured finance to blossom as a regime of global financial terror. The destruction of 9/11 goes pale against the still-unfolding destruction of the 2007 credit crunch."
As I said in my April posting: "Obama needs to look elsewhere for true Democratic economists and financial experts, not Clintonite DLCers, like Bob Rubin, who are actually Republicans.
"Obama says it shouldn't be business as usual Washington style. Rubin, Bill Clinton's former Treasury Secretary, was an integral part of the Citigroup's greedy involvement in the mortgage disaster...he is not a wise man, and should not be called upon to help "fix" the mess of which he was a part.
"Barack needs to get up to speed on the Bob Rubin pseudo-Democrat types and avoid them."
It included this: "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.
"Then, in January I included this is a posting, 'As reported by Bloomberg news via Truthout last year, 'AFL-CIO leaders, contending Democrats won the midterm elections because of voter concern about job security and stagnant wages, say it's time to set aside the free-trade policies touted by Rubin.'
" 'We need to review the Rubin agenda that's led to millions of lost jobs and declining standard of living for the middle class," said United Steelworkers President Leo Girard. 'It's an agenda that has been very good for Citigroup and the financial community because they've been abor to finance the relocation of jobs and refinance the trade deficits.'
" Organized labor has long been at odds with "Rubinomics," the phrase coined to describe President Bill Clinton's economic policy, masterminded by Rubin, to promote free trade and reduce the budget deficit...
"Jonathan Tasini seems to agree with me regarding Mr. Rubin...And, indeed, Rubin is still being pointed to by both Democratic presidential candidates as a wise person who should be called on to fix the mess. Am I missing something here? Do you think any regular worker who messed up royally would last a New York minute and his or her job--not to mention being rewarded like a king? The answer is obvious.'
Now, an article in Asia Times weighs in with this: "The political dynamics in 1932 have similarities with that of the upcoming 2008 presidential election in the aftermath of the credit market crisis that broke out in August 2007. The main difference between 1932 and 2008 is that, unlike in 1932, when Democrats could disclaim policy responsibility for the 1929 crash, they cannot deny in 2008 the responsibility of the two-term Bill Clinton administration (1993-2001) for the credit bubble that burst in 2007. Another difference is that the full impact of the final bursting of the serial bubbles will not be fully felt until after the 2008 election. The 1932 election was held in the midst of a severe depression.
"It was Robert Rubin, special economic assistant to Clinton and later Treasury secretary, who worked out what has come to be known as Rubinomics, the strategy of dollar hegemony through the promotion of unregulated globalization of financial markets based on a fiat dollar that also forced deregulation on the US financial market. (See US dollar hegemony has got to go, Asia Times Online, April 11, 2002.)
"The argument that financial market regulation would reduce US competitiveness because it would force US financial institutions to relocate overseas had assumed an air of immaculate logic in the ideological context of neo-liberal globalization during the Clinton years. That neo-liberal mentality set the stage for US government abdication of regulatory responsibility over the financial sector and allowed the free market to move towards the inescapable path of eventual self-destruction, despite historical experience of the Roaring Twenties and the New Deal having shown the need for regulation to rein in the suicidal excesses of financial free markets.
"These ever-bigger bubbles were generated by increasingly sophisticated and complex debt instruments that carried synthetic credit ratings structured in linked hierarchies of risk exposures and marketed worldwide as "safe" investments to supposedly nondiscretionary conservative institutional investors managing the money of clients who normally were not in any position to take such risks.
"Through much of the Clinton administration, the Greenspan Fed kept short-term interest rates too low for too long for a healthy economy, notwithstanding the alleged safety provided by sophisticated hedging of risks. Towards the end of the Clinton presidency, an abnormal term structure on interest rates was created in early 2000 by the Greenspan Fed finally raising short-term Fed Funds rate targets to fight inflation while the Treasury under Larry Summers was pushing down long-term rates by buying back 30-year Treasury bonds with funds from a Federal budget surplus derived from a debt bubble, flooding the market with excessive cash.
"As all market participants know, an inverted rate curve is a classic signal for recession down the road.
"George W Bush won the November 2000 presidential election along with the bursting of the Clinton debt bubble. The Greenspan Fed again came to the rescue by turning on the fiat money spigot to fund a housing bubble mistaken as a miraculous boom, applauded by a grateful Congress overtaken with unquestioning awe and blind adulation normally reserved only for living gods. (See The Presidential Election Cycle Theory and the Fed, Asia Times Online, February 24, 2004).
"The policy of moral imperialism brought spectacular terrorist attacks on the US homeland, forcing the Bush administration, less than nine months in office, to turn Clinton's foreign war of moral imperialism into a global war on terrorism that some have estimated will cost up to US$2 trillion or 20% of US gross domestic product, a cost even a Goldilocks economy cannot afford. The 9/11 2001 terrorist attacks on the US homeland gave the Fed a convenient excuse to flood the market with massive liquidity. The Goldilocks economy got a new lease on life from the global war on terrorism, allowing structured finance to blossom as a regime of global financial terror. The destruction of 9/11 goes pale against the still-unfolding destruction of the 2007 credit crunch."
As I said in my April posting: "Obama needs to look elsewhere for true Democratic economists and financial experts, not Clintonite DLCers, like Bob Rubin, who are actually Republicans.
"Obama says it shouldn't be business as usual Washington style. Rubin, Bill Clinton's former Treasury Secretary, was an integral part of the Citigroup's greedy involvement in the mortgage disaster...he is not a wise man, and should not be called upon to help "fix" the mess of which he was a part.
"Barack needs to get up to speed on the Bob Rubin pseudo-Democrat types and avoid them."
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