Here are Henry Paulson (L) and Robert Rubin (R) at Davos, 2009.
Henry Paulson was Chairman and CEO of Goldman Sachs, 74th US Treasury Secretary, and a member of the International Monetary Fund Board of Governors. Currently, Tim Geithner is Treasury Secretary, and in case you didn't know, Geither and Ben Bernanke are IMF BOG members. Paulson himself was recruited by a former Goldman Sachs banker, former White House Chief of Staff Josh Bolten. Paulson surrounded himself at Treasury with people he was comfortable with, and he was comfortable with people from Goldman Sachs: Neel Kashkari, Dan Jester, Steve Shafran, Robert Steel, etc. Small world isn't it?
Max Keiser accused Goldman Sachs of being the principal architect of the biggest financial crisis ever known and accused Paulson of lying through his teeth outrageously when he said "... we were not doing anything for the banks, just to help the banks, this was about the American people, about credit and credit availability..." Should we believe Paulson or Keiser? Paulson's Government position lent him an aura of power and authority in the minds of many credulous Americans, but the facts favor Keiser.
Robert Rubin worked 26 years at Goldman Sachs, was Vice Chairman and Co-Chief Operating Officer (1987-1990), Co-Chairman and Co-Senior Partner (1990-1992), was 71st US Treasury Secretary, and during eight years post-Government work at Citigroup, including a month-long stint as Chairman in 2007, he received more than $126 million in cash and stock.
Paulson, Rubin, and current Treasury Secretary Geithner were knee deep in recent Government efforts to bailout Citigroup. In the Citigroup bailout, announced late on a Sunday night, November 23, 2008, the Government indemnified the bank against potential losses on $306 billion in toxic assets. The bailout came days after Paulson made comments suggesting he would leave any future bailouts to the Obama administration. Tim Geithner, Citigroup's lead regulator, only withdrew from direct involvement with Rubin, Citigroup leaders, and the bailout planning after his name was leaked as Obama's nominee for Treasury Secretary. But, Citigroup's stock plunged the week before, and Rubin called Paulson to say the Government had to do something. On Monday morning after the bailout announcement, Citigroup's stock soared.
The rule there was typical of every aspect of this financial crisis. The people who caused the crisis remained in charge and shielded from financial harm. If it was illegal, it would clearly be a conspiracy, but since our system allows such odious conduct, it is more accurate to describe it as oligarchy or fascism, both of which are abhorrent to the American way of thinking about our political traditions, but neither of which are illegal.
Here is another familiar face, Laurence Summers.
Summers was 71st US Secretary Treasury. He made $2.7 million in speaking fees from the likes of Citigroup and Goldman Sachs, on top of his 2008 salary of $5.2 million, for his one-day-a-week job with hedge fund, D. E. Shaw. According to the NY Times, "The reporter Louise Story wrote that Summers had done consulting work for another hedge fund, Taconic Capital Advisors, from 2004 to 2006, while still president of Harvard." He is now Director of the White House's National Economic Council and President Obama's chief economic adviser.
Not everyone worked or works for Goldman Sachs. Who have we here?
Our current US Treasury Secretary and current US member of the IMF Board of Governors, Tim Geithner, and former US Treasury Secretary and alternate member of the IMF Board of Governors, Ben Bernanke, are not Goldman alumni. At least, THEY are not directly beholden to Goldman Sachs. But, where do they stand in the whole money-power picture? A little over a year ago, A. James Memmott wrote:
"He's [Geithner] now an insider himself, knee deep in the unfolding economic crisis, who has worked closely with former New York Fed chief Gerald Corrigan, former U.S. Fed chief Alan Greenspan and current Treasury Secretary Henry Paulson and head of the Federal Reserve Ben Bernanke.
Geithner's first job was with Kissinger Associates, where he worked with the former secretary of state. From there, he went to the U.S. Treasury Department, where he rose to become an aide to Lawrence Summers and Robert Rubin, treasury secretaries under Bill Clinton. He assisted these leaders in putting together bailouts, not of companies but of nations, including Mexico and Indonesia.
During the late 1990s, then the chairman of the Federal Reserve, Alan Greenspan also noticed Geithner. "That whole period was one long crisis," Greenspan told Portfolio. "(Geithner showed) a general understanding of the nature of what the problems were and what was required to right the system."
Geithner's circle of advisers and mentors was expanded in 2003 when he became head of the New York Fed, the most powerful of the government's 12 regional banks. When Bear Stearns, an investment bank, began to bleed money earlier this year as a result of the collapse of the sub-prime mortgage industry, the New York Fed took on damage-control duties.