According to Citigroup, our latest bailout recipient, no scheme is too left-wing to fail.
Businesses that politicians deem vital to the national interest aren’t being allowed to fail in America today, and the bigger they are, the more help they get from the government. So it’s not much of a surprise that the fine points of yet another bailout package are being worked out behind closed doors, this time for Citigroup.
Again, not surprisingly, the latest recipient of government largess is a big donor to political candidates and parties. It’s the 15th largest corporate giver, according to the Center for Responsive Politics, donating $25.1 million since 1989 in roughly even portions to the two parties. When Citigroup begged for taxpayer help, the Bush administration and congressional leaders took the call. Don’t expect a policy change from President-elect Obama’s incoming Secretary of Bailouts, Tim Geithner, and Larry Summers, soon to be head of the National Corporate Welfare Council.
It’s just the latest in a never-ending series of bailouts that Chicken Little commentators and status quo fetishists say we simply must have — or else. Companies aren’t even being asked to submit to the minor indignity of a bankruptcy proceeding before lawmakers rush in with 18-wheelers full of cash. It’s easier just to fork over taxpayer money. Forget Joseph Schumpeter’s “creative destruction.” Today the rule is survival of the un-fittest.
The complex bailout plan hatched over the weekend for Citigroup calls for the federal government to back about $306 billion in loans and securities and invest about $20 billion directly in the mammoth financial services company. The Citigroup handout brings the potential tab for Uncle Sam’s ever-expanding bailout portfolio to almost $7.8 trillion or roughly half the value of all goods and services produced in the U.S. annually.
But is it necessary? So far all the bailouts collectively have failed to inspire much confidence in investors. The Citigroup rescue may lift stock prices briefly but don’t count on it giving rise to long-term bullishness.
AND IF EVER THERE was a company that didn’t deserve a bailout, it’s Citigroup, a Big Government lovers’ bank that funds just about every trendy left-wing cause in America.
Long before it started drowning in red ink, the poster child for so-called corporate social responsibility was a longtime donor to left-wing pressure groups such as Jesse Jackson’s Rainbow/PUSH Coalition and Henry Paulson’s Nature Conservancy. In tax year 2003, Citigroup’s foundation gave 20 times more money to groups on the left than to groups on the right, according to Capital Research Center’s 2006 study of Fortune 100 foundation giving. (Foundation Watch, August 2006.)
Citigroup’s foundation has given a staggering $1.4 million to the alarmist World Resources Institute, as well as $509,000 to ACORN in recent years. The ACORN funding included a $500,000 grant to ACORN’s American Institute for Social Justice, which offers Saul Alinsky-style training in community organizing. Other donations to liberal groups include the Aspen Institute ($762,500), Rainbow/PUSH ($750,000), Nature Conservancy ($380,000), Rainforest Alliance ($200,000), and the Council on Foreign Relations ($50,000).
The company’s 7th Annual Citizenship Report is a dazzling compendium of all the supposed good works Citigroup claims to be doing — with its shareholders’ money. It includes reports on its commitment to diversity and to “sustainable” economic development, along with friendly greetings from Mindy Lubber, president of Ceres, the enviro-leftist investment network, and Janet Murguia, head of the liberal National Council of La Raza.
La Raza, by the way, is the same group, that, along with ACORN and the Greenlining Institute, helped to cause the subprime mortgage meltdown. After decades of demanding more loans for racial minorities, the group performed a dramatic about-face as mortgage markets collapsed, suddenly warning that lenders, realtors, and investors who bought up subprime loans could be sued under a federal law that forbids housing discrimination. It was the lenders’ responsibility to “match families to the sustainable loans that they should have gotten in the first place,” said Murguia.
But in the Citizenship Report, Murguia is all smiles. She asserts that “[b]y working together, NCLR and Citi can effectively tackle the barriers to asset development that Latino families face and eliminate the racial-ethnic wealth disparity.”
Attempting to eliminate that wealth disparity worked out really well, didn’t it? Now Citigroup faces extinction in large part precisely because it signed on to leftist groups’ crazy push to give subprime mortgages to people who couldn’t afford to pay them.
MEANWHILE, VISIONS of fat underwriting fees and commissions are dancing in Citigroup’s head. The company is keeping its fingers crossed that economy-crippling carbon emission controls are enacted. The company wholeheartedly buys into Al Gore’s global warming fantasies.
Citigroup Research put out a self-serving report, “Carbon Trading: The Sky’s the Limit,” last year, that’s irrepressibly bullish on future carbon-related investment opportunities. The paper cites the prediction by the CEO of Abu Dhabi Future Energy Co. (ADFEC) that in 2012 the carbon market will be worth $40 billion, and predicts that cap-and-trade is coming to the U.S. Not surprisingly, the report extols the virtues of controlling carbon dioxide emissions through carbon trading, rather than through the imposition of a carbon tax: Investment firms can’t earn commissions and fat underwriting fees from a carbon tax.
Last year the company said it intends to direct $50 billion “over the next 10 years to address global climate change through investments, financings and related activities to support the commercialization and growth of alternative energy and clean technology among the clients and markets it serves, as well as within its own businesses and operations.”
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?