Robert E. Rubin

Robert E. Rubin served as a high level executive at Goldman Sachs from 1966 to 1992. He served as Secretary of the Treasury under William Jefferson Clinton. Following his term as treasury Secretary Rubin joined Citigroup in 1999 as an adviser to the bank’s senior executives and from November to December 2007 he served temporarily as Chairman.

Rubin pushed for the repeal of Glass-Steagall, the depression era law that separated commercial banks from investment banks so that bankers could not with depositor savings. After Citibank and Travelers Group merged making one of the largest banking insurance conglomerates in the world, Rubin went to work for Citi, making over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008. Rubin also supported deregulation and internationalization of the derivatives market, and was a key player in negotiating the Uruguay Round which resulted in the creation of the WTO and binding deregulatory rules in at the WTO in the FS sector.


 * Member, Africa Progress Panel

Record and controversies
Felix Salmon, writing in Blaming Rubin at his Reuters blog, outlined the following criticisms of Rubin's record:


 * He epitomized the way in which traders ousted investment bankers and turned investment banks into systemically-dangerous institutions by making them much larger than they had ever been in the past.
 * For all his vocal bellyaching about tail risk, he ultimately made his money as an arbitrageur, making leveraged bets that something with a 95% chance of happening was, indeed, going to happen. That’s a strategy which works until it doesn’t — but by the time it failed, Rubin had moved on to greater things.
 * He was one of those senior men at investment banks who encouraged risk-taking without understanding the risks which were being taken.
 * He was perfectly happy to see Larry Summers cheer on the single most disastrous deregulation of derivatives ever, the CFMA.
 * He allowed the illegal creation of Citigroup with a nod and a wink, knowing that Gramm-Leach-Bliley was just around the corner and would make Citigroup legal in retrospect.
 * He then collected his just rewards in the form of $126 million in pay from Citi, for a job which even Weisberg admits involved no managerial responsibility.
 * He turned the job of Treasury secretary into a job where the first priority was to make Wall Street happy, asking for nothing but cheap debt in return.
 * He institutionalized and epitomized the revolving door from Wall Street to Washington and back again.
 * He set himself up as a wise expert on risk, even as he had no idea what risks his own company was running.
 * He took on a job with significant power, but ducked any responsibility which might normally go with such power.
 * He specifically refused to take any responsibility for his recommendations to Weill and Prince on the subject of risk-taking.
 * He failed to push Prince to put in place any kind of succession plan, thereby creating a horrible vacuum at the top of Citigroup just as strong leadership was desperately needed.
 * He’s slippery and unapologetic in hindsight.

Related Sourcewatch articles

 * Bush administration

External resources

 * Sold Out - How Wall Street and Washington Betrayed America, Consumer Education Foundation, March, 2009.