US president-elect Barack Obama Saturday announced plans to create 2.5 million new jobs:
I have already directed my economic team to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011 – a plan big enough to meet the challenges we face that I intend to sign soon after taking office.
About the economic team, the New York Times informs us:
The president-elect’s choices for his top economic advisers – Timothy F. Geithner as Treasury secretary, Lawrence H. Summers as senior White House economics adviser and Peter R. Orszag as budget director – are past proteges of Mr. Rubin, who held two of those jobs under President Bill Clinton. Even the headhunters for Mr. Obama have Rubin ties: Michael Froman, Mr. Rubin’s chief of staff in the Treasury Department who followed him to Citigroup, and James P. Rubin, Mr. Rubin’s son. All three advisers – whom Mr. Obama will officially name on Monday and Tuesday – have been followers of the economic formula that came to be called Rubinomics: balanced budgets, free trade and financial deregulation, a combination that was credited with fueling the prosperity of the 1990s.
Meanwhile the US approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank. The Financial Times’ chief business commentator writes:
The downfall of Citigroup has taken place over a long time and involved many people, but attention is now focussing on the role of Robert Rubin, the former US Treasury Secretary, who is a Citi director and senior adviser and was briefly its chairman. Mr Rubin has had an influential role at Citi since being brought on board by Sandy Weill in 1999 but has not been an executive. Having formerly been co-chairman of Goldman Sachs, he preferred to exercise influence behind the scenes. (…) Now, of course, a big loss has been disclosed at Citi and various people are asking what Mr Rubin had to do with it. That was among the subjects covered in a long article in The New York Times on Saturday. It found that Mr Rubin and Chuck Prince, Citi’s former chairman and chief executive, played “pivotal roles” in the bank’s disastrous push into underwriting and trading collateralised debt obligations. The man in charge of this effort was Tommy Maheras, the former head of capital markets at Citi, who lost his job a year ago, shortly before Mr Prince resigned. Mr Rubin was then influential in selecting Vikram Pandit to succeed Mr Prince…
Obama couldn’t choose a better deus ex machina to solve the current economic and financial crisis than former Treasury Secretary Robert E. Rubin’s disciples. It’s like calling the rapists to give therapy for rape victims. Fasten your belt folks!