Rubin said, in the recent interview, that he had his own qualms about derivatives, going back to his days as a managing partner at Goldman Sachs. He later wrote in a 2003 book that "derivatives, with leverage limits that vary from little to none at all, should be subject to comprehensive and higher margin requirements," forcing dealers to put up more capital to back the swaps. "But that will almost surely not happen, absent a crisis." Asked why he didn't suggest stricter capital requirements as an alternative in 1998, Rubin said, "There was no political reality of getting it done. We were so caught up with other issues that were so pressing. . . . the Asian financial crisis, the Brazilian financial crisis. We had a lot going on."
Asked why he didn't suggest stricter capital requirements as an alternative in 1998, Rubin said, "There was no political reality of getting it done. We were so caught up with other issues that were so pressing. . . . the Asian financial crisis, the Brazilian financial crisis. We had a lot going on."
So, ya see, if there's no crisis, there's not a hope of getting done what needs to be done; but when there is one, there are so many other things to do, sigh...
This is all part of the knock-on effects of the US and Britain's manipulations in Iran in the "50s. Rescuing and propping up the Shah was a brilliant success right up until it wasn't. The collateral damage from the Iranian Revolution was the humiliation of Carter and the victory of Reagan. I seriously doubt that Reagan could have won in '80 without the Iranian Hostage Crisis. Reagan had been a pitchman since the '50s and given the chance he was perfectly suited to pitch neo-classical economics to the public. Uncle Milty and his acolytes got places of influence again under Reagan. The post-Watergate reforms had not really yet been consolidated and proved easily subverted. One of the lasting contributions of Jimmy Carter, a practicing and believing Christian who strove to embody the moral and ethical values of Jesus in his personal and professional conduct, was to validate the legitimacy of the entry of the fundamentalist charlatans into US politics in a big way. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
