I don’t know about you, but these days it seems I spend most of my waking hours simply trying to keep my head from exploding. Sun up to sun down we’re battered by economic news, none of it very perky to be honest, while experts from the current administration, the incoming administration, the media and Punditville try to demonstrate their command of the situation.
Meanwhile the line for government bailout money keeps growing as new industries and companies shuffle up to Congress with tin cups and those big sad eyes previously seen only on velvet paintings of kittens.
Citigroup deftly showed other big companies how to play bailout bingo earlier this week. They got theirs in record time even though most of the nation didn’t know they were in trouble until a few minutes before the check was written. By the way, lost in the back pages of the Citi story is an interesting sidebar about former Citi director and senior advisor Robert Rubin.
In case you’re not familiar with Robert Rubin, he was treasury secretary during the Clinton Administration and joined Citi in 1999 as a trusted smart guy. How smart? Reporting shows he made somewhere in the region of $100 million while working with the organization. Rubin claims that he studiously avoided any daily management issues, in part because Citi over the past few years has had some bad management issues. So that $100 million wasn’t for management, it was for things like schmoozing, making big picture pronouncements, pondering and muttering smart things in the CEO’s ear while glancing furtively side to side.
He left in August of this year after helping to fill the bucket of poo but before it was thrown at the fan. Rubin’s also been working as an economic advisor to Obama’s transition team. It appears that several Rubin protégés, proponents of Rubinomics, are being positioned within the new Obama administration.
So here’s what I find amusing, in a curl-up-in-a-fetal-position-and-scream-loudly kind of way.
Remember during the campaign how this whole economic mess, according to the Obama camp, was the fault of the Bush administration and the past 8 years? They had all those excellent slogans… we can’t afford four more years of the same… remember? I don’t want to say that a lot of people bought that crap, but anytime you tried to talk about actual economic history and how this mess evolved, most people glazed over and muttered “past 8 years… more of same… must change.”
Well, just this Sunday while enjoying a piping hot cup of joe and a danish, I was reading through the Sunday papers. Being desirous of news from all sides, I always start with the New York Times. Eventually I finish up with Guns & Ammo. The Times had a story on the front page entitled Citigroup Pays for a Rush to Risk.
The story continued on the inside pages and on page 34, paragraph 15 of the story I came dangerously close to throwing myself off my deck. Here’s paragraph 15:
“When he (Robert Rubin) was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.”
Is the New York Times now suggesting that the Democrats might have had something to do with our current economic troubles? I mention this only because the Dems (to their credit) made piles of hay off the economic crisis leading up to election day… it was those damn Republicans and their addiction to deregulation. What a load of crap.
Imagine my surprise now, after the election, when the other side of the story gets a little play in the liberal press. Turns out the Obama camp might’ve put one over on us. Well played Obama campers.
Regardless, Citi executives apparently showed up to Congress with a better business plan than the fellas from the auto industry. The Democrats, led by Nancy Pelosi, were all set to write a check to GM, Ford and Chrysler when the latest poll numbers came in showing the public was strongly against the auto bailout. Upon seeing that, Pelosi and crew got tough and insisted on plenty of camera time so they could be seen asking super difficult questions like “What will you do with the money?” and “How many cup holders are in a 2006 Suburban?”.
The auto executives stared gormlessly into the faces of their inquisitors. It became uncomfortable to watch, a bit like old episodes of Mr. Ed where you have to watch Wilbur make a fool of himself yet again because the damn horse won’t ‘fess up to talking. When asked if they have a business plan, one of the auto executives, I believe it was Shemp, muttered “… been meanin’ to get me one of them.” Clearly things were not going well.
While those car guys got bupkus for now, I suspect Congress slipped them a note saying meet me in the alley and we’ll get something sorted out. According to PWB statistical research, the auto industry executives will receive assistance from the government once they figure out how to pull their heads out of their backsides. Wearing cheaper suits and carpooling to the next hearing will likely cement the deal.
There’s so much else to discuss this week but Bobo the talking intern just poked his head in the door and announced everyone is heading down to Buzzy’s lounge for redistribution of beer and wings. Tonight’s seminar at the lounge is entitled “Obama – the new Lincoln or the new FDR?” It’s part of the ongoing seminar series put on by Buzzy called “Crap that makes your head explode”. It’s been very popular.
Intern number two studiously clipped all the articles comparing Obama to Lincoln and she’ll weigh them against all the articles describing Obama as the new FDR. Intern number three will give a practical demonstration of just how much $700 billion is using nothing more than coasters and Slim Jims and then we’ll finish up with a rousing rendition of Those Were the Days. Finally, we’ll sit quietly staring into cold tasty beverages while remembering how the New Deal sent the US into a new recession back in 1938 before WWII showed up to revive the economy.
By the way, last week’s question to the PWB faithful… “Bail or no bail?” It was a resounding victory for the No Bail crowd. Many of you pointed out that government assistance might be palatable if we had any confidence that the government could provide proper restrictions and oversight. Unfortunately, many of those same readers expressed doubt that the government could do either.
Not to worry. According to a Bloomberg News study, current bailout promises and planned expenditures only total approximately 7 trillion dollars. So there’s still time for fiscal prudence.
As always, we look forward to your comments, thoughts and insight.
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Til’ next week, stay safe.
Mike Baker served for more than 15 years as a covert field operations officer for the Central Intelligence Agency, specializing in counterterrorism, counternarcotics and counterinsurgency operations around the globe. Since leaving government service, he has been a principal in building and running several companies in the private intelligence, security and risk management sector, including most recently Prescience LLC, a global intelligence and strategy firm. He appears frequently in the media as an expert on such issues. Baker is also a partner in Classified Trash, a film and television production company. Baker serves as a script consultant, writer and technical adviser within the entertainment industry, lending his expertise to such programs as the BBC's popular spy series "Spooks," as well as major motion pictures.