[Blogging way over my head — fair warning.]
So, who was in charge of Citigroup when it was taking on unsustainable risk the past few years? Bob Rubin.
Who was a big advocate of using derivative products to stabilize markets and control risk? Bob Rubin.
Now, none of this means that Geithner and co. are necessarily cut from exactly the same cloth as Rubin. And in contrast to what we've usually seen from the Bush adminstration, we might expect this group of folks to be more ideologically flexible, and to actually adjust their beliefs and strategies in reaction to new and unexpected realities. In other words, they may have all learned something. I'm particularly hopeful that they'll all recognize the harmfulness of the ability of derivatives to obfuscate risk, rather than actually get rid of it.
Still, skepticism and scrutiny are warranted. I am not one to complain that there aren't enough “progressives” in Obama's appointments; but his folks so far certainly don't get a free pass — they've got something to prove.
BTW, Brad DeLong's got an interesting post defending Citi and Rubin, essentially saying they're victims of the broader dynamic.