One of the problems that Obama is facing in staffing his economic team is that a normally deep bench, Wall Street, is essentially off the roster. If Felix Salmon is on to something, the taint may be spreading into past administrations:
Up until now, I had a vague concept that Rubin's biggest mistake at Citi was to have spent too much time as a rainmaker, schmoozing clients, and not enough time sorting out internal problems. According to this story, however, Rubin was front and center in encouraging Citi's investment bank to take on more risk -- a strategy which had been hugely profitable at his former bank, Goldman Sachs. Did Rubin really think that he could turn Salomon Smith Barney into Goldman Sachs just by encouraging more risk-taking? I doubt it. But if Rubin wasn't spending much time on the trading floor, it's possible he was unaware of just how screwy Citi's risk management was
Rubin is one of the few icons of Wall Street who hasn't been stained with the fallout from the financial crisis--Republicans don't want to blame capitalist institutions, and Democrats don't want to imply that St. Robert of Clinton might not have miraculous economic healing powers. He thus somehow managed to survive a really colossal lapse during the Enron scandal with his reputation nearly intact. But it's looking less likely that he'll survive the Sack of the Citi.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.