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The Citi gang gets away

The financial implosion that wrecked America was largely cooked up by Citigroup, not only in its kitchens of "innovation" but especially in its wide influence over the industry. Now what was once touted as the largest "financial services" company in the world is being dismantled. Among other things, it will sell its Smith Barney unit, credit-card business and consumer finance units. The Wall Street Journal observes that the final result will look much like the old Citicorp before Sandy Weill got his hands on it in 1998. Only without the integrity, market value and perhaps safety and soundness.

Unfortunately, the American taxpayers own a 7.8 percent stake in this dog (the Treasury alone gave a $45 billion infusion — 45 times the annual Amtrak budget). Maybe — who the hell knows what we're on the hook for, considering the secrecy with which the bailout has been handled. Who knows how many hundreds of billions of dollars have been thrown down the Citi-rathole by TARP and the Federal Reserve. And all for what? Did we also pay for the cheap undercoating and worthless extended warranty?

This institution that was deemed too big to fail has failed to unfreeze credit markets. Citigroup has succeeded in lavishly compensating its top executives and big-time traders, who jet away from the calamity with no consequences. In 2007, as the crisis became undeniable, then CEO Charles Prince, who had performed abysmally for shareholders, nevertheless made some $25 million. Robert Rubin, the Democrat brain trust on economics, was paid $17 million. This year, aided by "rescue" money from the taxpayers, Citi reportedly set aside $3 billion in bonuses.

Obviously the Citi never slept.

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Rebalancing our national portfolio

The rich are finally afraid. You can see it in their eyes. They're laying off their nannies. The smart ones are fleeing into Treasury notes, even though the yield is zero. According to the New York Times,

While this will lower the cost of borrowing for the United States
government, economists worry that a widespread hunkering-down could
have broader implications that could slow an economic recovery. If
investors remain reluctant to put money into stocks and corporate
bonds, that could choke off funds that businesses need to keep
financing their day-to-day operations.

Perhaps. But it might, just might, jolt Americans back to reality. That means an economy based on producing things of real value. And a re-valuation of business, which in this country means a re-evaluation of our very lives. It won't be easy, perhaps not even likely, because the dead hand of the past rests oh-so-heavy on everything we do. If it happened, however, it might just save us.

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Death of a salesman nation

Whatever its complicated and ambivalent historical roots, the ideal of Thanksgiving is offering gratitude for the grace of our creator, if you swing that way, or at the very least to others who came together to create even a moment of common purpose and bounty. It's about looking outside ourselves.

The problem of American holidays being ever more commercialized is old. But over the past decade, maybe longer, something else has overtaken us. We've gone from a nation with hucksters to being a nation of hucksters. Suffice it to say that this was not the great commercial republic that Hamilton had in mind. In God We Trust? No. Always Be Selling.

I thought of this as I read a Washington Post piece on how banking regulators were not actually regulating the industry, but rather acting as an advocate for it. Yes, ideology and its handmaiden deregulation are to blame for the financial catastrophe. But so is the perverse mutation of American optimism just as the economy became driven more and more by financial swindles.

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