Such wrath! Readers’ comments on Friday’s post about Bob Rubin were angrier than I ever expected. A half-dozen commenters suggested that the onetime U.S. Treasury Secretary, whose reputation collapsed along with the fortunes of Citigroup, should go to jail for bungling the job that he’s now leaving. On the one hand, I’m tempted to say: Calm down! There’s no evidence – not a whiff – that Rubin did anything criminal during his decade at Citi. At the same time, I’m fascinated by the visceral reaction. It speaks to the rage against just about everyone in power these days.
“Robert Rubin is worse than Bernard Madoff, and he belongs in jail along with Chuck Prince, Stan O’Neal, Dick Fulds(sic) and other Wall Street criminals. According to news stories, Madoff at least admitted to his sons that he was a liar and a crook and he made no excuses…,” writes Michael Heizer of New York City.
A half-dozen readers compared Rubin to Madoff. “Rubin advise the Obama administration? Why not drop all charges against Bernie Madoff and give him a key advisory position in the White House?” Says Eugene in San Jose, California. Eugene is referring to the fact that Rubin, after leaving Goldman Sachs and becoming President Clinton’s Treasury Secretary, enhanced his reputation in Washington – and now, having advised President-elect Obama, Rubin says he intends to engage more in public policy.
The wrath extends to Washington. “Rubin is nothing compared to [Treasury Secretary Hank] Paulson. Rubin may have ripped off his Corporation and the stockholders, but Paulson ripped the American people off,” writes Andy in Los Angeles. And from Brett in Irvine, California: “The people writing on this blog could do better running Washington then the current selfish crooks.”
There’s the random comment (so rare!) Defending the powers that be (or powers that were). “Wow, don’t we all want scapegoats in a time of crisis,” writes a reader called “Let’s get real” in Chicago. “I don’t think it was Rubin’s or anyone else’s fault. Our economy was at a full sprint because we all asked it to be. We all wanted to make money on our mortgages and maximize return on our stock portfolios.”
“Time to get up and get running again,” as “Let’s get real” says. As Citi gets a grip on risk and begins what may turn out to be a dismantling of the financial-services giant, management is reportedly nearing a deal to sell part of Smith Barney to Morgan Stanley.
Indeed, power is shifting all around the industry. While Vikram Pandit hangs on to his Citi CEO post (the board supports him for now), Morgan Stanley CEO John Mack could emerge as more than a mere survivor of the maelstrom. Creating value from a good asset, Smith Barney, that Citi can’t afford to keep would put Mack in the tiny club of bank bosses building a reputation these days. Bank of America’s Ken Lewis and JPMorgan Chase’s Jamie Dimon are in it. Though given the dire economic outlook, is this a club that you would want to be in?