When it's raining out, some friends of mine joke about doing the "Bob Rubin dance" -- managing to make it in between the raindrops without ever getting wet.
I just got done watching Mr. Rubin's testify this morning before the Financial Crisis Inquiry Commission, and, well, while he wasn't soaked, Mr. Rubin certainly got damp. Highlights:
Mr. Rubin, without directly quoting Jamie Dimon's explanation that a financial crisis is "something that happens every five to seven years," echoed it, saying, "As long as we've had capital markets, we've had crises."
He tried to place blame on the company's risk managers, saying, "They saw triple-A securities and saw de minimis risk."
He echoed Lloyd Blankfein and Rodgin Cohen in calling for stricter capital requirements. "Leverage constraints have to be substantially increased," he said.
He said the story about him opposing the regulation of derivatives while Treasury secretary is false. "I was not opposed to regulation of derivatives, quite the contrary," he said.
None of this seemed to go over particularly well with the members of the Commission. Its chairman, the former treasurer of California, Phil Angelides, noted that Mr. Rubin was earning a $1 million a year salary and a $14 million annual "guaranteed bonus," and asked him, "Do you bear central responsibility for the near collapse, but for the U.S. government, of Citigroup?" Mr. Rubin didn't answer directly, though Citi's former CEO, Charles Prince, piped up that it wasn't Mr. Rubin's fault.
Mr. Angelides followed up: "You either were pulling the levers or asleep at the switch."
The Republican vice chairman of the commission, Bill Thomas, piled on: "It's really hard for us to believe."
Mr. Thomas doesn't have much private sector experience, and Mr. Angelides, as Calfornia treasurer, was partly responsible for Calpers, which has its own problems.
One can understand and even perhaps sympathize with Mr. Rubin's desire not to get hounded by a bunch of appointed public-sector people into making extravagant admissions of guilt that could have legal consequences for him in other venues. One can understand that he doesn't want to play along with an effort to make him a public villain in a crisis where there is plenty of blame to go around and where there are plenty of other blameworthy individuals.
It can't have been a particularly pleasant morning for him. Still, don't shed any tears: Mr. Rubin maintains his establishment respectability as co-chairman of the Council on Foreign Relations and as a member of the Harvard Corporation, the university's seven-member governing board. And members of the Financial Crisis Inquiry Commission noted that none of the compensation he earned while Citigroup was booming was clawed back after the company floundered to the point where it needed funding from the taxpayers.
