Nobody should be allowed the “who knew?” defense when it comes to the current mortgage and financial crisis — least of all anyone with a regulatory background. It should be a rule, like the rule that says anyone who dug us into this foxhole doesn’t get a say as to how we should best get ourselves out of it. Until then, we’ll have to add former Treasury secretary and “senior counselor” at Citigroup, Inc. (C) Robert Rubin to our own list of of the Who-Knew-Crew™ here at HousingWire. Why? Because Rubin had the gall to tell the Wall Street Journal in an interview Monday that “nobody was prepared for this,” and then went so far as to suggest he — like former Federal Reserve chairman Alan Greenspan — has seen his reputation unfairly sullied by the credit crisis that seemingly no financial exec thus far has ever thought would come. And why, pray tell, was nobody prepared? Rubin, of course, was part of the board that voted in 2004 and again in 2005 to lever up at Citi’s balance sheet, and to dive headlong into risky mortgages. But he now says the company just didn’t execute his plan correctly. Or, at least, that’s his story to the WSJ, and he’s sticking to it. It’s at least ironic that Rubin’s mea non-culpa came on the same day as a biting Associated Press story on failed regulatory policy. At least, as biting as you’ll ever see the AP get, which said that Bush administration officals “ignored remarkably prescient warnings that foretold the financial meltdown.” “Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch is quoted as writing to U.S. regulators in Jan. 2006; she lost her job one year later when her employer went out of business thanks to the nascent meltdown. The AP account details how proposed legislation designed to hem in questionable lending practices was stymied by an industry lobby that had grown flush with cash and powerful on Capitol Hill, thanks to members’ surging profits during the housing boom. But back to the irony. In this instance, it comes from the fact that Rubin served as Treasury secretary under the first and second Clinton administrations, underscoring a point driven home in the most recent issue of HousingWire Magazine (dropping into mailboxes this week): the history of mortgage banking, and housing in general, as a political football is one that is longer than most think. It extends well enough across both political spectrums that each party can conveniently ignore its own role in generating this historic mess and point fingers at the other. Case in point here is an attempt by GOP faithful as of late to pin the subprime meltdown on Fannie Mae (FNM) and Freddie Mac (FRE). It’s demonstrably wrong, and spectacularly misinformed, but none of that matters in the partisan trenches. (Almost equally bad, by the way, is posturing by key Congressional Democrats who now say they tried to pass legislation to stop this mess in 2006 but were stymied. But that’s a story for a different history lesson.) The point here is that this is a complex, multi-faceted mess. And that means we didn’t end up here because one single group can be caught holding something akin to a smoking gun. Complexity, however, is a poor excuse for lack of foresight — especially for those that are supposed to trade in the craft of having foresight. As I noted in last week’s viewpoint column, many of you that read HW today do so precisely because this site began as a blog that was among the first to call the mortgage meltdown. And we’ll hopefully be just as accurate going forward in covering the recovery of mortgages, housing, and the broader financial markets. A guy like Rubin, who ran the Treasury for eight years, should under no circumstances be given a free hall pass because he didn’t see this coming. Same goes for Bernanke, who has been seen recently pulling out a similar excuse. That sort of sentiment rings doubly true for me on a day like today, when we’ve lost undoubtedly the most prescient writer I’ve seen in any financial market, and perhaps the best voice the mortgage banking industry has ever had. I can most assuredly tell every HW reader that Tanta — who I hope every one of you have had the opportunity to read — saw this coming. Frankly, on a day like today, I don’t feel like letting Rubin get away with this particular brand of nonsense. Hopefully, neither do any of you. Write to Paul Jackson at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.