Talking Points Memo, November 25, 2008
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The taxpayers are coughing up tens of billions of dollars because Citigroup was run by incompetent people. As the Washington Post reminds us today, one of those people, Robert Rubin, was formerly a close associate of the two top government officials in charge of the bailout. He knew Treasury Secretary Henry Paulson from his days at Goldman Sachs before he joined the Clinton administration. Rubin worked with New York Federal Reserve Board president Timothy Geithner when he was Treasury Secretary.
While it's nice to see old friends working together, this one really raises some concerns. There are tens of billions of taxpayer dollars being tossed around with minimal accountability. It is difficult to see why we should let Citigroup continue to be run by the crew that made it a ward of the state, especially when one member of this crew is such good friends with the people controlling the money.
Robert Rubin and the rest of the top management should be sent packing, just as was done with AIG. Anything less looks like a case of hyper-crony capitalism that would embarrass the "crony capitalists" that Rubin and his followers used to rail against back in his days at Treasury.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer. He also has a blog on the American Prospect, "Beat the Press," where he discusses the media's coverage of economic issues.