Rubin’s Detail Deficit

Well, Robert Rubin was not picked as President elect Obama's Economic team at this time because he himself said that he was not interested in any positions offered by the upcoming Administration. But, it is the people that are picked by Mr. Obama's economic team are indeed the prodigies of Rubin, Larry Summers, Tim Geithner, they have all worked for Bob Rubin and the successes that this country had enjoyed during that period of economic expansion. Yes, it is pretty easy to criticize a person with that kind of immense knowledge about financial institutions but one has to look for the success that this secretary of treasury has brought to the success of this country's economy.

When he says that while he was in the treasury, he did not understand the complexity of the so called "Derivatives" or the swaption, he means it. Yes, he may have allowed this function to continue because of the pressure from the free marketer Republicans in the Congress. There were too many loose canons supporting the overwhelming "Deregulation" to continue while the Administration wanted to put some type of oversight implemented to curve that policy to continue. That was in the 90's but what happened once Bob Rubin and his party left Washington? It was the new Bush Administration that could have done something about this mess. Even they went further to implementing much more relaxed "Deregulation" agenda to continue that has brought us to this situation.

It is not that we should trigger finger pointing instead how well we can curve out a successful Financial Policy that will not jeopardize the American economy in the long run. We could still implement successful free market economy with proper transparency and oversight with responsible regulation that will not jeopardize the American economy. In my view, we need people like Robert Rubin's advice and consent as this President elect has asked for at this time of economic desperately in our history. Also, it is fair to point out that if it were not Bob Rubin's financial policy; we would not have had a country without a Deficit that this country had enjoyed in the 90's. It is thus Clinton, Bob Rubin that posted the first Budget surplus in 50 years of American Financial history. It is with that time has come that once again we can reclaim an era of responsible Government that will pursue policies of proper transparency, regulation and oversight that will have a positive impact in the American economy.

Ahh, the old refrain so often used by Alan Greenspan, I am not responsible. When most people take on a job they are responsible for the results of their work. I was just one of the pack, the rest of the pack is responsible, but I am not. Baloney, he was a leader of the pack. One of the best ways to assure a future repeat of this debacle is to not hold the leaders of the pack responsible. I have a theory that says deregulation MUST fail. My logic is that regulation is a response to a pre-existing problem. Therefore if the regulation is removed the original problem will return. If lack of regulation didn't work the first time, before the regulation existed, then there is no logical reason to believe that it will work the second time, after the regulation is removed. Unfortunately, this is so simple and obvious to the meanest intelligence that it is completely ignored by those sitting in the ivory towers making arcane pronouncements.

I have been a hands-on electronics engineer and technician for many years. The number of 'new and innovative' products I have seen that fail miserably because they ignored old, tried and true principles is almost endless. The number of products I have seen that worked exactly like they should work, easily and reliably, I can count on one hand. When I look at these 'new and innovative' financial products I see products that ignore the old, tried and true financial principles. I have seen products that spread risk and treat that the same as lowering risk. The risk doesn't disappear. When a single mortgage has one owner and fails there is a good chance that a workout can be negotiated. When a single mortgage has 10 owners a workout is virtually impossible. This actually increases the total risk, not decrease it.

One definition of a genius is a person who can take something simple and make it appear so complex as to appear impossible. Geniuses have been hired by Wall St. to develop these complex instruments. Unfortunately, these complex geniuses don't have leadership based on simple, but sound, financial principles to govern their direction. The leaders of these financial institutions and government agencies ARE responsible. If they aren't responsible then no one is responsible. And if no one is responsible then we are doomed to repeat the past.

The people who dismantled the legal structures put in place to prevent a repeat of the Great Depression are responsible for this recession. They knew, without any doubt, what they were doing when they did it.