Wednesday, December 03, 2008

My Treasury Secretary

was better than yours:

What is clear is that Mr. Rubin encouraged changes that led Citi to the brink of collapse. Which brings us to his best (only?) argument to shareholders. Mr. Rubin was reportedly critical to securing the latest federal bailout of Citi -- $20 billion in preferred shares plus taxpayers taking on most of the risk in a $306 billion portfolio of dodgy assets. This is on top of the $25 billion in Citi preferred shares that taxpayers bought in October. Giving Mr. Rubin the benefit of the doubt that he is the fixer who delivered the federal cash, this could make his paycheck appear more reasonable to many shareholders.

Or perhaps Mr. Rubin will be a victim of his own Beltway success. The U.S. government, with a 7.8% stake, is now a major Citi shareholder. The activist investors known as American taxpayers might just decide that they have no more dollars to spend on "constructive parts of the environment" with "no line responsibilities."

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