Newsweek‘s Jacob Weisberg is tired of people picking on Robert Rubin. Sure, his critics to point to his involvement in the financial deregulation of the 1990s and his disastrous tenure at Citibank, but they’re wrong.
At least that’s what Weisberg tries to argue in his column “In Defense of Robert Rubin” (5/10/10). Weisberg admits early on that he “helped Rubin write a memoir,” but not to worry–this column is all Weisberg.
And he writes: “To me, the most wrong-headed accusation is that Rubin prevented effective regulation during the Clinton years.” This is a false charge because Rubin’s
view has always been that the financial system needs to be protected from market excesses. Rubin regarded derivatives as risky because of the way they could magnify market moves and implicate interconnected financial institutions.
OK, that’s what he believed; what did he do as Treasury secretary? He helped push deregulatory policies. But Weisberg tells us that that this had a lot to do with the fact that his deputy Larry Summers ridiculed his ideas. It’s a rather unconvincing argument.
But the same pattern held during Rubin’s tenure at Citigroup, where (according to Weisberg) Rubin had no power over much of anything–hence, the company’s spectacular collapse cannot be pinned on him. Weisberg uses a peculiar analogy to drive home his point:
But even with a more conventional kind of authority, it’s unrealistic to think he could have prevented the mistakes that necessitated a government bailout of Citi. The assumption that the rating agencies knew their business, a key enabler of the subprime meltdown, is analogous to the view before the Iraq War that Saddam Hussein had WMD. There are a lot of people who now scoff about what an obvious fallacy this was and not many who can point to doubts expressed at the time.
The fact that “not many” elites can claim to have been right about Iraq shouldn’t be confused with the fact that there were ample reasons to be skeptical of the Bush administration’s WMD claims; it’s just that elite media (including Newsweek) tended to ignore or dismiss those facts, and the people who pointed them out. It wasn’t hard to find the evidence, though; United Nations weapons inspectors were very visibly failing to find the Iraqi weapons the White House insisted were there.
The corporate media mythology about the Iraq War has long held that no one could have known things that some people did know. Weisberg wants the same standard to apply to the financial meltdown–and particularly to his friend Robert Rubin. Lucky for him he’s got a column in Newsweek he can use to make that case.