A name you never hear when people talk about what hollowed out the US economy in the past few years.
Rubin’s former bank Citigroup (now under the leadership of Chuck Prince) is out with the begging bowl, asking the Fed to bail it out (it’s neck deep in subprimes through its affiliates). That’s really what the new deal, financed by three major banks but put together by the Fed, is all about – saving the hides of a few big banks that waded too deep (through their affiliates) into the subprime slime.

There are cries for Prince’s head, and for the genius Rubin to return and rescue his old bank….

Now, it’s true the banking crisis is unfolding on Prince’s watch, not Rubin’s. Just as poor Ben Bernanke’s been left holding the bag that the canny Greenspan shoved into his hand. But wait a minute — Sossides and Patridge-Hicks, the pair who are credited with having invented the structured investment vehicles (SIVs) that are now falling apart under the weight of bad subprime debt, devised their schemes in the late 1980s and refined them through the 1990s. That was the period when Rubin first left Goldman Sachs for the Treasury Secretary’s office and then left that office for Citigroup, and when Goldman itself (under Jon Corzine) was heavily involved with schemes for off-balance sheet book-cooking (MIPs) of its own; that was also when Enron was swelling up like a poisoned pup with schemes (SPEs) that uncannily resemble the present-day SIVs. What are the odds that Rubin did not know what was going on somewhere along the line, did not aid and abet it, and did not waltz away to leave the cleaning up of the mess to others, ala Alan Greenspan? Slim to none, I would say.

Mind you, it was the same El Roberto who bailed out banks and bondholders in the Mexican crisis, in Brazil., in Russia etc., etc., et. nauseating cetera through the long, long, 1990s…

Hailed as a genius of capitalism, he acted more like a welfare king who used government moolah (or government subsidized moolah) to snatch his bad deals out of the flames.

Of course, the media took him at his face-value — which, like that of the old buck, was a little inflated.

They treated him with massive awe and not enough shock, quite overlooking the fact that it was Rubin, along with Larry Summers and Jeff Sachs, who did the most to turn the Russian economy into a gambling den for bankers, broke down the wall between the commercial and merchant banks in the US, in the course of consolidating the banking system through the repeal of the Glass -Steagall Act ….and much, much more.

It was Rubin who put in that call to the Treasury Secretary’s office (after his own departure to greener pastures), all in the greater good of stopping the bond- rating agencies from downgrading Enron’s bonds – a call that would have been plainly illegal had he not already changed the law that said so just before the Clintons departed office (with a prescience that was just short of god-like).

Yessir – it’s the Rube we need to hear from..

(Check out my own mortal prescience in these pieces on Goldman Sachs, Paulson, IMF gold tinkering, and Malcolm Gladwell’s strange defense of Ken Lay, to get more of the low-down on high finance…)