QE2: so simple, even Tina Fey can understand it!

[reality_hammer]

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For those of us who remember, the Clinton administration was full of Goldman-Sachs people, too. Most notably: Robert Rubin. Rubin argued against the regulation of derivatives, earning rare criticism (in hindsight) from Clinton. Rubin correctly noted that people who invested in derivatives needed to understand the risks and regulations were more likely to cause a moral hazard (like with the subprime mortgage market). Unfortunately he failed to heed his own advice after leaving the Clinton administration.

Where did Rubin go after serving with the Clinton administration? Citigroup. While at Citigroup Rubin lobbied the Treasury on behalf of Enron and pushed policies like widespread investment in derivatives that led to the downfall of Citigroup. What was that about risk management, Robert? It's one thing to talk the talk; you also have to walk the walk!

Rubin on quantitative easing: it could work...or not. Gee, thanks, Robert! It's constructive to note that the only downside he sees is that it would be "limited" in effectiveness.

Kinda like your leadership at Citigroup, eh?

Is it any wonder that corporations led by these kind of people go under? Is it any wonder that these kind of people in government keep volunteering your money to bail them out? Rubin of all people understood the risks but also knew that lobbying the government for bailouts would be easier than attempting to educate clients (and possibly diminishing profits).

This is another thing for Republicans to work on. There's no reason why they can't either buy directly from the Treasury or (if the must by via a broker) use a blind auction mechanism so they look like any other buyer in the market.