“It was a little noted event when last fall, during the height of the presidential election campaign, the Treasury Department released Timothy Geithner’s phone records. To the extent anyone paid attention at all—and let’s face it, almost no one did—financial reporters were struck that the Treasury secretary’s most frequent contact was Larry Fink of BlackRock, the world’s largest money manager and Geithner’s principal conduit to his many friends on Wall Street. But the even more telling name of Geithner’s regular confidants, as the Financial Times noted, was the second one on the frequent-contact list: Robert Rubin.
That might seem odd; after all, it’s been nearly a decade and a half since Geithner worked for Rubin, who is long retired from public life. But Bob Rubin was no ordinary employer. The former Treasury secretary under Bill Clinton all but created Timothy Geithner as we know him today, raising him from a junior Tokyo Embassy staffer to undersecretary of the Treasury in the mid-to-late-’90s, and later sponsoring the still-boyish bureaucrat as president of the New York Fed in 2003 (against resistance from the head of the search committee, Paul Volcker, who according to The Wall Street Journal barked: “Who’s Geithner?”). As he almost always has, Rubin prevailed, and for nearly four years his former protégé has lorded over America’s financial system.
“The Results Are In
Over the past four years Geithner has come through for the team big time, and the results of his hands-off approach to the chief perpetrators of the worst financial hangover since the 1930s are now in: The basic structure of Wall Street has not changed and arguably has gotten more dangerous. Geithner will likely go down in history as the Treasury secretary who helped avert a second Great Depression—it’s how he sees his own legacy, and he deserves a lot of credit for that—but also as the man who allowed Bob Rubin’s baby, Wall Street, to resurrect itself as a place dominated by the giant, too-big-to-fail banks that still loom over our collective future.
“The Obama administration consciously let this happen, its many critics say. Geithner and Co. is “enthralled with Wall Street,” says Dennis Kelleher, the head of Better Markets, an advocacy group. “None of [the Rubinites] have been able to come grips to with fact that they laid the seeds” for the 2008 financial crisis, and “that has prevented accountability anywhere down the line.” It has also blinded the administration from addressing the deeper systemic nature of Wall Street’s pathology, Kelleher says. Or as Johnson puts it: “The whole culture of the White House and Treasury is still a Wall Street trading culture.””
Read full National Journal story here