The Associated Press's Stephen Bernard, with the help of old reliables Jeannine Aversa and Martin Crutsinger, blew through almost 800 words (link is dynamic; 12:49 p.m. version is saved here for future reference, is now authored by Crutsinger, and is longer than what I originally read) about the deal between Uncle Sam and Citigroup, under which the government could end up with a 36% ownership stake -- almost certainly enough, as Citi's largest shareholder, to impose its will -- without mentioning the term.
Another precious tidbit is in the story's second-last paragraph (bold is mine):
Last month, Robert Rubin, a former Treasury Secretary who was a longtime Citigroup board member, and Win Bischoff, most recently chairman at Citigroup, both announced their retirement from the company.
"A" former Treasury Secretary?
Gee, until recently he was known as Democratic Treasury Secretary under Democrat Bill Clinton.
According to the press until relatively recently, Rubin was the one guy besides Alan Greenspan who was responsible for engineering the mid- and late-1990s prosperity. A Google News Archive search on ["Robert Rubin" Clinton prosperity] (typed as indicated between the brackets) for 1996 and 2005 returns over 200 results. One of those returned results refers to a Miami Herald article where Rubin is described as "the best (treasury secretary) since Hamilton."
Even more recently, Rubin, a January 10 Wall Street Journal item on Rubin's departure from the bank ("Rubin Departs Citi on a Low Note"; HT Paxalles recalls that WonderBob was "an economic adviser to Barack Obama's campaign."
But to AP, Bob Rubin is now just "a former Treasury Secretary." How convenient.
While we're in the neighborhood: Do Clinton and Rubin deserve credit for the late-1990s economy?
Uh, no. Actually, heck no.
That prosperity of the late-1990s took shape because of:
- The GOP takeover of Congress in 1994, effective January 1995.
- The modicum of spending control resulting from the GOP takeover. Even though Newt Gingrich & Co. "lost" the PR battle during the 1995 government shutdown, the restraints (relatively speaking) on spending growth that came about from it paid multi-year dividends. Yesterday, as I listened to Hannity, I was reminded that then-Ohio Congressman John Kasich was a major player in this drama, and deserves mountains of previously unrecognized credit for his role in it.
- Welfare reform. The Clinton Administration vehemently opposed welfare reform until it realized that the Boy President's continued vetoes would threaten his reelection. As a result of welfare reform, about a half-million people a year moved government dependency to producers producers of value from 1997-2000. Total caseload decreased by about 2 million a year.
- The GOP-inspired capital gains tax cut of 1997, which Rubin resisted. This move, more than any other single factor, explains why the federal budget went into surplus in the late 1990s, more than offsetting the negative impact of Clinton's 1993 tax increases. Of course, the press gave Clinton mostly undeserved credit. But without a GOP Congress, the idea of a cap-gains cut would never have gained any traction.
Getting back to Rubin, the Journal's January article added that "After collecting $115 million in pay, he (Rubin) leaves with his star diminished." But apparently not his own bank account.
Did anyone hear Barack Obama or anyone else on the president's team denounce Bob Rubin's stratospherically exorbitant reward for failure by name? Didn't think so.
Given the Obama administration's relentless talk-down of the economy until his sort-of State of the Union speech three days ago, the quote caption under Rubin's picture above ("liquidity is psychological") is bitterly ironic.
Citigroup is really "the Bob Rubin Bailout," and Rubin's nickname should henceforth be Bailout Bob.
Cross-posted at BizzyBlog.com.
