Not so much for election reasons, but for simple, practical policy reasons later on.
Why? Rubin worked hand-in-hand with Wall St. and Alan Greenspan to
prevent the derivatives market from being properly regulated. And now we see today what derivatives -- mortgage-backed securities and credit default swaps -- have wrought: global financial ruin.
http://www.nytimes.com/2008/10/09/business/economy/09greenspan.html?pagewanted=3&emMs. Born was concerned that unfettered, opaque trading could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it,” she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.
Ms. Born’s views incited fierce opposition from Mr. Greenspan and Robert E. Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Mr. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.
(snip)
Ms. Born declined to comment. Mr. Rubin, now a senior executive at the banking giant Citigroup, says that he favored regulating derivatives — particularly increasing potential loss reserves — but that he saw no way of doing so while he was running the Treasury.
(snip)
Mr. Greenberger asserts that the political climate would have been different had Mr. Rubin called for regulation. Exactly. Rubin never called for derivatives regulation during his tenure as Treasury Secretary.
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