Today's Times has a lengthy piece on what got Citigroup into trouble. In general, the plot line is not surprising -- broad problems of corporate culture, lax internal oversight of potentially risky practices, a big, risky and ultimately disastrous move into mortgage-backed securities. There's a lot of criticism of Chuck Prince who inherited the CEO job from Sandy Weill in 2003.

But through all of it, woven into the tale, is the name Robert Rubin.

Rubin, of course, was President Clinton's second Treasury Secretary (1995-99) and his key economics advisor (perhaps even Secretary-in-waiting) as head of the National Economic Council during Clinton's first term. During the 1990s and into this decade Rubin was credited as the key architect of Clinton's economic turnaround and economic expansion.

The Times article notes that in the 1990s, Rubin played a key role helping "loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities." That part we know. And it's fair to note that there was a broad, though very ill-judged and ill-fated, consensus in favor of these reforms at the time.

After leaving Treasury, Rubin signed on as a director and senior advisor at Citigroup, an entity he had helped to make possible by advocating the aforementioned deregulation. Rubin was also, along with Alan Greenspan, a staunch opponent of regulating derivatives.

The Times article notes, with less specificity than I'd like, that Citi's very size, not just its corporate culture, led it into such risky waters. But this passage in particular jumped out at me ...

For some time after Sanford I. Weill, an architect of the merger that created Citigroup a decade ago, took control of Citigroup, he toned down the bank's bond trading. But in late 2002, Mr. Prince, who had been Mr. Weill's longtime legal counsel, was put in charge of Citigroup's corporate and investment bank.

According to a former Citigroup executive, Mr. Prince started putting pressure on Mr. Maheras and others to increase earnings in the bank's trading operations, particularly in the creation of collateralized debt obligations, or C.D.O.'s -- securities that packaged mortgages and other forms of debt into bundles for resale to investors.

...

"Chuck Prince going down to the corporate investment bank in late 2002 was the start of that process," a former Citigroup executive said of the bank's big C.D.O. push. "Chuck was totally new to the job. He didn't know a C.D.O. from a grocery list, so he looked for someone for advice and support. That person was Rubin. And Rubin had always been an advocate of being more aggressive in the capital markets arena. He would say, 'You have to take more risk if you want to earn more.' "

As you probably know, Rubin has become a key economics advisor to President-elect Obama and is advising the transition, though he seems neither in line for nor interested in a formal appointment. But Rubin's hand does seem present at so many turns in Citigroup's undoing that I see no way of getting around asking what sort of advice he's giving.

Before going any further, I know this post has some of the feel of a gotcha. Some of the best or most successful reformers have been those who knew what needed fixing because they played a big part in creating the mess in the first place. And I've always thought there was something small-minded and immature about trying to strike this or that person from the realm of reasonable debate because they were "wrong" about, say, Iraq, whether the supposed error was in 1991 or 2003. But it's a record that's hard to ignore in present circumstances. And I'm curious whether anyone can point me to any recent (and in this context I'd say the last six months or so) statements or interviews with Rubin that shed light on his current thoughts on what led us to this point.

Robert Reich outlines Obama's economic recovery plan in waiting.

Transcript.

NYTimes report.

NBC reports.

Robert Reich explains.

Barack Obama uses his Presidential YouTube Address to call for a massive public-works program to create new jobs and update the country's infrastructure. That and other political news in today's Election Central Saturday Roundup.

Tom Hayden on the US-Iraq Status of Forces Agreement and the fate of Iraq's detainees.

Have you ever seen this guy before?

His name is Mike Duncan.

He's the head of the Republican party, chairman of the RNC.

From TPM Reader JB, a former GOP Hill staffer who's moved on to greener pastures ...

How many Congressional Republicans had political identities distinct from that of President Bush, while Bush was still popular among Republican voters?

The answer to this question -- awfully damned few -- is a big reason why the Republican setbacks in the 2006 election cycle were followed by more setbacks in 2008. For years, GOP Congressmen and Senators did what the White House told them to do and said what the White House told them to say; even Republican legislators who had been in Congress long before George Bush was elected President tied themselves tightly to him, avoiding public disagreement on any of the salient issues, particularly Bush's tax cuts, Iraq and terrorism policy and initiatives sponsored by the Vice President.

Obviously 9/11 and the spike in public support for Bush afterward was a big part of this. But the nationalization of American politics, and the vastly greater ability campaign professionals now have to target likely supporters in everything from Congressional redistricting to Election Day turnout activities also contributed -- because most Republican legislators were elected in districts that would support Republicans unless something unusual happened, something that made being a Republican an electoral liability.

Bush took care of the rest himself. When his great popularity among Republicans turned into modest popularity only among Republicans, the GOP legislators who had identified themselves with him and his White House/campaign organization had no where to go. A final factor in 2008 was the fact that many Republican legislators still had safe seats, even while the GOP brand nationally was in free fall. These legislators were hearing from their constituents what they had since 2001 -- support the President -- and they did.

Well, what happened, happened for the Republican Party, and the question Republicans now have to ask themselves is what they are for now that they cannot any longer just be for Bush. It's a question that could take years to answer if Barack Obama turns out to be a bad President. If he turns out to be an effective President, it could take a generation or more.

Can we make it a condition that Richardson can only become Commerce Secretary if he agrees to grow back his beard?

A few Friday afternoon leaks big enough to make a splash:

Hillary will accept Secretary of State offer.

Timothy Geithner will be Obama's pick for Treasury Secretary.

Bill Richardson is a serious contender for Commerce Secretary.

With all the usual off-the-record and thinly sourced caveats, of course.

The Franken camp claims the Coleman lead is now down to double digits.

One anonymous reader questions the question ...

I think it's a mistake to pin most of the blame for GOP decline on the intransigence of the Congressional Republicans. Yes, they failed to distance themselves from an unpopular President, but there was always a limit to the distance they might have achieved. What were they supposed to do, campaign on their opposition to the President's policies? When has a congressional party ever established real separation, in the public mind, from a sitting President?

On the eve of the 2006 elections, the NYTimes put Bush's job approval at just 34%. The conventional wisdom was that this represented an ebb tide for the GOP, and that the next election would put a fresh face on the party and allow it to recapture ground. So Republicans stuck to their guns, figuring it couldn't get any worse. As a tactical decision, it was hardly crazy. But three things happened. Things got worse. Defying precedent and probability, Bush's approval numbers sank even further: this time around, to 22%. Then, the Democrats nominated the most compelling candidate to run for executive office in more than a generation. And that candidate decided to keep the campaign focused squarely on the legacy of the Bush administration.

If there's a connection between these two disasters, it can be found in the unwillingness of the GOP to acknowledge when theory diverges from practice. Its foreign policy failed, but it wouldn't acknowledge that. Then its economic policy failed, and it wouldn't acknowledge that, either. Voters have little patience for politicians who seem blind to their own mistakes.

True. There's only so far a congressional party can realistically go in separating itself from its own incumbent president. But I'm not sure that's precisely the issue. And this does focus my attention on how much of this was about Iraq -- both as an issue in itself and as a proxy. As the reader notes, it was "the unwillingness of the GOP to acknowledge when theory diverges from practice. Its foreign policy failed, but it wouldn't acknowledge that. Then its economic policy failed, and it wouldn't acknowledge that, either." In other words, it wouldn't have taken attacking the president himself, just not so clearly taking his dictation on critical issues. I would also note that the reason President Bush's popularity managed to fall from 34% to the unbelievably low level of 22% was closely tied to his and his party's unwillingness to take any cognizance of the results of the 2006 election. Not everyone will shift their support from positions they deeply believe in, just because they're unpopular. And usually that's a good thing -- at least as a matter of personal character. But parties as a whole will usually be more attentive to their demonstrable political interests, even if they can't see when practice departs from theory.

TPM Reader DS (and a number of others) makes a good point ...

You missed one thing about the 2006 elections, something I think was more important than corruption (although not unconnected):

Katrina.

Katrina confirmed everyone's worst fears about the Bush administration and incompetence - many were worried already because the Iraq well wasn't going so well, but they gave him the benefit of the doubt until Katrina. At that point everything people (even many who voted for Bush and GOP) suspected was not only true, but worse than imagined.

Suddenly the curtain fell away and everyone could see what a catastrophe we'd been led into and that the GOP cheerled these incompetents all along the way.

Katrina was the moment - look at the polls - the floor fell out from Bush and the GOP at that exact moment.

This is very true. Though, as DS suggests, I think Katrina was more a catalyst. Unfortunately, by the 2006 election, Katrina as an issue in itself had largely moved off the public radar in all but the places directly affected. But it was a profound catalyzing event. It really settled the public mind on the keys issues of hyper-politicization, cronyism and incompetence which had been which had been minority beliefs prior to Fall 2005 and became majority viewpoints afterwards. It also served as a confirmation and metaphor for the unfolding disaster in Iraq. So this is a critical part of the story. But I still think it was Bush and Iraq -- opinions on both of which had been decisively affected by Katrina -- that drove the 2006 wave.

When you get Hillary, you usually get Bill, too, but what about the rest of the foreign policy team she would bring with her to State -- and how well would they mesh with Obama's team?

Back to back wave elections for one party, like 2006 and 2008, are extremely uncommon in American history. So what are the roots of the 2008 election? Clearly, the trends operated on many levels, some of which will be more apparent to historians in the future than they are to us today. But even now, even over the last eighteen months, there's one cause that remains a mystery to me and for which I've seen no really adequate explanation.

I'd put it something like this.

After the 2006 election, it was very clear that the public had turned strongly against President Bush and the Iraq War. The turn of the public mood wasn't limited to those two issues. There was the general backdrop of discontent with corruption in the executive branch and Congress, and other issues too. But those were the two big, resonating issues.

For a brief interlude after the election, it looked like the congressional GOP might move into some sort of quasi-opposition to the president, at least distance themselves significantly from him. If you remember, there was a brief period of equivocation on Iraq. And then, nothing. Within a month or so, it was clear that elected Republicans were doubling down on President Bush, the Iraq War and pretty much everything else. And that decision was reflected in the presidential nominating campaign as well.

But it's really the congressional GOP that is what I'm most interested in. I remember through 2007 thinking, What am I missing here? How is this not going to lead to another slaughter in 2008? And of course that is exactly what happened. The only thing surprising in retrospect is how aggressively the Republicans seemed to court the disaster.

Let me open it up for discussion. What happened?

Book Clubbin' on Bart Gellman's Angler: Was Dick Cheney's overstretch made possible by excessive political success or did he profit from failure?

We've been arguing it out all week at Cafe. And next week, we'll keep digging into the twisted remains of the last eight years with a special discussion of Charles Homans' upcoming story in the Washington Monthly: "The Last Secrets of the Bush Administration: How to Find Out What We Still Don't Know."

You know where to find us.

The initial reports of Attorney General Mukasey's collapse last night sounded very grim. But his friends and family must now be breathing a deep sigh of relief. According to a Justice Department statement just moments ago, doctors at George Washington University Hospital gave him various stress and cardiac tests overnight. And they all came up normal. So they appear to have ruled out a stroke or cardiac event. And they expect he'll be released from the hospital later today.

If there's anything the last decade and one half has taught us it is too look very skeptically at purportedly generational political trends. But the latest Gallup poll data is still very telling about the immediate political moment. While the Republican party had a real image problem leading up to the November election, improbably, it's gotten dramatically worse since the election. In October, the GOP's favorable/unfavorable was 40%/53%. Now it's fav. 34% / unfav. 61%. So almost twice as many people have an unfavorable view of the GOP as a favorable one.

Things can change quickly, especially in such unpredictable, unstable times. But major political parties don't get much more unpopular than that.