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October 16, 2008

The Reason I Had To Kill You Is That The People Who Opposed My Killing You Didn't Do It In The Correct Manner

Robert Rubin opposed the regulation of derivatives when he was Secretary of the Treasury during the Clinton administration. Brooksley Born, head of the Commodities Futures Trading Commission, wanted to regulate them.

As the world financial system lies in smoking ruins today, whose fault is it that derivatives weren't regulated? As Robert Rubin eloquently explains today, it's her fault:

RUBIN: I do think it was a deterrent to moving forward. I thought it was counterproductive. If you want to move engage with parties in a constructive way. My recollection was...this was done in a more strident way.

Frederick Kagan supported the invasion of Iraq. Almost everyone else on earth opposed it.

As Iraq lies in smoking ruins today, whose fault is it? As Fred Kagan eloquently explains, it's their fault:

KAGAN: I think it's important to mention this—we have really suffered from the fact that the opposition to the war has not been constructive and that there have been many, many opportunities for critics of the war to challenge the administration on the way that it was fighting the war that had been missed as critics through the end of the 2004 presidential campaign focused on whether we should have gone to war or not at all.

It should go without saying that both Rubin and Kagan are graduates of Stutts.

—Jonathan Schwarz

Posted at October 16, 2008 02:15 PM

We have become the Germans. Not the Germans of today, but the adult ones from about 1950-1970. None of them ever saw anything, gave orders, or supported anyone during the Third Reich. The fault for those oh so regrettable misunderstandings or occasional excesses must be blamed on those few rotten apples in the proverbial barrel.
After 1970, the Germans did their soul-searching and, for Fuehrer's sake, found that indeedy, shit had happened, and it was Teutonic shit, at that.
Are we ever going to do any soul-searching for what happened in the name of "USA #1" between, say, 1955 and 2005? I bet 1.2 million Reichsmark against. Pity.

Posted by: donescobar at October 16, 2008 03:00 PM

I give Kagan unlimted credit for one thing: He's not blaming The Iraqis. Sure, they oppposed the war too but what's done is done. Since the war began they have not focused on whether we should have gone to war or not at all. Instead, they have sought to challenge the administration on the way that it was fighting the war. God Bless them! They sure have learned a lot about how handle Democracy over the last six years.

Posted by: cemmcs at October 16, 2008 03:11 PM

Unfortunately, Rubin is spot on re Brooksley Born. She was her own worst enemy and was viewed by even folks who would have been her "natural allies" as on a regulatory power grab. She totally defeated any attempt to have a reasoned discussion with other regulatory agencies or on Capitol Hill. She swaned around like a queen, never was able to communicate a coherent regulatory approach, and got everyone's backs up. Even those who thought derivatives should come under some sort of regulatory regime. So Greenspan and Gramm were able to totally roll her. Her lack of credibility undermined any chance Treasury might have had to start to bring derivatives under some sort of superivision. So Rubin didn't waste political capital on what was certain to be a losing cause. People's talents really do have an impact on what is politically feasible. And she was a walking disaster area for the Clinton admin.

Posted by: nadezhda at October 16, 2008 03:16 PM

I always begin every argument with somebody by announcing that I agree with them totally. Makes things so much easier.

Posted by: bobbyp at October 16, 2008 03:40 PM

Spot on. Also, in David Broder's universe, George Bush, Dick Cheney and the gang would have listened to reason if only people had spoken to them more politely.

Posted by: Batocchio at October 16, 2008 04:38 PM

nadezhda is the kinda guy/girl who blames the marginalized and the isolated for, well, being isolated and marginalized. Those who ostracize are always thoroughly justified in their efforts. After all, it fits the self-referential nature of their narrative. Might as well walk around with a mirror in front of your face.

Posted by: rich at October 16, 2008 05:43 PM

Sorry, rich, but you know not of what you speak. This wasn't the insider network marginalizing her in the Clinton admin or on the Hill.

I was an uninvolved, disinterested observer from the sidelines watchiing Brooksley in a variety of fora, including how she would try to trot her stuff in front of international audiences. She managed to alienate virtually everybody, from large countries and small, from industry to regulators who were seriously interested in the issues of how to regulate derivatives. She was tone deaf -- came across as unbelievably full of herself (her demands on her poor travelling entourage were over-the-top), power hungry, but incompetent. So it didn't surprise me at all that her push to claim jurisdication over derivatives went down in flames.

She's no marginalized reformer or crusader. A competent CFTC commissioner with decent political and communication skills would have been able to credibly put derivatives regulation on the agenda and got the SEC into the game, even if it probably would eventually have been defeated by the Greenspan-Gramm types. She was such a disruptive force that she herself made it impossible for Treasury to support her.

So cut the romanticized umbrage.

Posted by: nadezhda at October 16, 2008 06:33 PM

Sure, it goes back to the Brit upper class twits who, around 1938, sighed that we could have talked to Hitler if only the chap had been educated at Eton. The us vs them boiled down to the proper schoolboy lessons learned. They never understood thw Austrian mustache, who might have had one ball chewed off by an enraged Austrian mountain goat. A schoolboy lesson that's apt to inspire a crazy drive for Lebensraum. (So unlike the very rational empire-building Queen Victoria inspired among her loyal subjects.) That mirror in front of your face, some dare call it narcissism, does affect the vision.
Our Washington elite,for example, hated Clinton from the beginning, but for all the superficial reasons. To Sally Quinn he was the Arkansas redneck that even law school in New Haven didn't transform into one of "us." The rules of the game never change. Unless "ve ze pipple" change them, and the betting line in Baden-Baden is 1-400 on that happening.
Will we ever, I mean ever, get away from Nazi comparisons? I don't think so. The romance of our first Fascism! Unforgettable.

Posted by: donescobar at October 16, 2008 06:43 PM

Nadezhda, I believe you about this person, who I never heard of until two minutes ago. But her extreme character flaws in no way get anyone else off the hook. Are people going to say that they would have understood the dangers of derivatives if only this woman hadn't been a prima donna?

Posted by: Donald Johnson at October 16, 2008 08:00 PM

But they ALL got there on UR money, no matter how U look at it.

Posted by: Mike Meyer at October 16, 2008 09:15 PM

A competent CFTC commissioner with decent political and communication skills would have been able to credibly put derivatives regulation on the agenda and got the SEC into the game, even if it probably would eventually have been defeated by the Greenspan-Gramm types.

Wow, it's almost like you admitted right in the middle of the post that you have no point whatsoever, and that everything else you said was a ridiculous waste of breath.

Scape that goat, baby, scape it real good.

Posted by: dan at October 20, 2008 03:39 PM