Links between Citigroup, Robert Rubin, and government...graph.

Last edited Thu Dec 18, 2014, 01:17 PM - Edit history (1)

Elizabeth Warren was right: The links between Citigroup and government run deep

Washington's version of Six Degrees of Kevin Bacon is much less exciting than everybody else's. It's called One Degree of Citigroup, and it's not much of a game since so many economic policymakers have worked at the banking behemoth. It's exactly the point Elizabeth Warren made in a big speech last week, expressing anger that Citigroup and other big banks were able to weaken a key Wall Street regulation in the new government spending bill.

Courtesy Washington Post

In many ways, however, this isn't One Degree of Citigroup. It's One Degree of Robert Rubin. After his stint as President Bill Clinton's Treasury secretary, Rubin decamped for the newly-created Citigroup, which formed after Congress passed a law ending the Depression-era prohibition on banks and securities firms from operating under the same roof. And then Rubin's long list of proteges followed. It's been enough to turn Citigroup into a kind of government-in-exile for Democratic policymakers, with current and past employees including current Treasury secretary Jack Lew, former Office Management and Budget chief Peter Orszag and current U.S. Trade Representative Mike Froman.

Robert Rubin has had almost complete access to congress and has had a huge influence.

From 2006:

Robert Rubin gets the floor to himself to talk to new Congress folks.

From Greider at The Nation:
Same Old Same Old

So why does Pelosi begin the education of her freshman members with a seminar on Rubinomics? Robert Rubin, the Citigroup executive and former Treasury secretary, will appear solo next week before the party caucus to explain the economy. Pelosi has scheduled another caucus briefing on Iraq, but that includes five expert voices of varying viewpoints. Rubin gets the stage to himself.

When labor officials heard about this, they asked to be included since they have very different ideas about what Democrats need to do in behalf of struggling workers and middle-class families. Pelosi decided against it. This session, her spokesman explains, is only about "fiscal responsibility," not globalization and trade not the deterioration of wages and disappearing jobs. Yet those subjects are sure to come up for discussion. Rubin gets to preach his "free trade" dogma with no one present to rebut his facts and theories.

I remember Rubin told Howard Dean in 2003 to stop criticizing NAFTA, that he could not get him any big donations if he didn't. But actually what Dean said was sensible and geared to the people's needs.

But one thing bothers me about Dean, and I raise it with him. He (Dean) wants to renegotiate NAFTA to include labor and environmental standards—his lone departure from Clinton-style Rubinomics. Dean even says: "I actually had this argument with Bob Rubin, who totally disagrees with me, of course. But I think it's because Bob is fighting the last war. He said they use those arguments to try to undo NAFTA. I said, I know they use them to undo NAFTA, but now you've got NAFTA, and you're going to have NAFTA, now think about what this problem is. He said, you're right about the problem. Your analysis is right. I just don't have the solution. I'll get back to you when I do. I haven't heard back yet."

Dean's ideas were quite good. But they were just not wanted.

Dean's theory in a nutshell: The structure of wealth in the United States before labor unions resembled that in Third World countries today, so in order to create middle classes in the developing world, we need to bring labor unions to them.

....Won't Dean's plan make the price of goods go up? "Yeah," he says quietly. "But so what?" My 25 minutes are up. We've arrived in Osceola, the site of Dean's next talk, and I'm being ushered out of McFun by Dean's staff. But I think Dean realizes he's ended the interview on the wrong note because he quickly adds: "Because in return for making the price of goods go up, you've fixed the illegal immigration problem, you've fixed the drain of jobs problem, you've created a middle class that can buy American exports. There's a lot you get for that.