(Huffington Post) -- For anyone who thinks that big Wall Street and Big Government aren't joined at the hip, promoting policies and laws that keep each other fat and happy often at the expense of the American taxpayer, consider the career of Robert Rubin. Rubin, of course, is largely gone from the public scene after spending 10 disastrous years as a board member and senior executive at Citigroup, the banking giant that epitomizes all that is wrong with American finance, and before that, a largely successful run as Treasury Secretary in the Clinton Administration, which he joined after running another controversial bank, Goldman Sachs. But his legacy looms large, mainly because I believe he was one of the reasons why the financial crisis occurred in the first place.
Citigroup, with nearly $1 trillion in customer deposits, is and always was Too Big To Fail, meaning that because of its size and scope, and the fact that it safe keeps FDIC insured customer deposits, the Federal government wouldn't just let the bank implode as it did Lehman Brothers. Too many people would be hurt, and not just the Wall Street types. That's why during the height of the financial crisis, policy makers in both parties threw hundreds of billions of dollars at Citigroup to save it from going bust.
Despite all of this, as I show in my new book about the financial crisis, The Sellout, Rubin advocated policies at Citigroup that put the massive bank in jeopardy, and with that put the entire financial system in peril. He was one of the strongest supporters for the bank to begin taking more risk through bond trading, which ultimately led to the firm's downfall, and its government bailout. He had a seat on the Citigroup board, but from that vantage point, he never saw how the firm's risk profile was growing out of control. He was a senior executive at the firm with the lofty title of "Chairman of the Executive Committee," and yet he has time and again explained to me that he had "no operating responsibilities" to monitor the bad behavior that got the firm in trouble in the first place. More than that, Bob Rubin helped kill the very law that would have prevented Citigroup from being a company in the first place, and would have saved taxpayers a lot of money. -- Charles Gasparino...Cont'd...LINK
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