Time to Nationalize Citigroup?
Brad DeLong is my weathervane for sensible, moderate center-left thinking on economic policy. And he says it’s time to nationalize Citigroup:
No real point to merging it into JPMorgan Chase or Bank of America. And it is definitely too big to fail.
Who wants to be Deputy Assistant Secretary of the Treasury for Citigroup? [...]
Yep. Time to do it. Swedish model. No more of this “preferred stock capital injection” business. Common stock. And with commitment comes control.
I dunno, Robert Rubin? He knows both buildings. Probably not. But it is a question as the crisis drives us into deeper involvement in the financial sector. You don’t want these decisions being made by people who don’t know what they’re talking about (not me, for example) but it’s hard to find people who are knowledgeable about finance (as opposed to general economics) who don’t work in finance in a way that makes them compromised.
26 Responses to “Time to Nationalize Citigroup?”
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November 21st, 2008 at 9:22 am
What about the Vanguard people? I mean, I guess they might not be up on exotic securities and investment banking and whatnot, but they run a huge financial institution really well and responsibly, by most accounts.
November 21st, 2008 at 9:36 am
How about someone from the academic world? There are some great financial minds out there who have dedicated their lives to studying finances rather than just using them to make money.
November 21st, 2008 at 9:46 am
I dunno, Robert Rubin? He knows both buildings. Probably not.
Uh… Robert Rubin has been sitting on Citigroup’s board, collecting an absurd paycheck, as it wandered into the predicament it finds itself in today. No thank you.
November 21st, 2008 at 9:48 am
I dunno, Robert Rubin? He knows both buildings. Probably not.
That would be fine if it would keep him busy and out of the reregulation business.
You don’t want these decisions being made by people who don’t know what they’re talking about (not me, for example) but it’s hard to find people who are knowledgeable about finance (as opposed to general economics) who don’t work in finance in a way that makes them compromised.
Just so. At the same time, we’re going to be reinventing the financial sector anyways, so that doesn’t matter so much. That is, avoid compromised people is more important than having the exact expertise.
max
['I don't need smart, I need wise. I can hire smart.']
November 21st, 2008 at 10:07 am
It’s a turkey, why would we want to buy it? Can’t we sell it off to some foreign buyer? Venezuela (PDVSA) bought Citgo, can’t we convince Uncle Hugo that Citi fits? Then he could provide subsidized mortgages as well as subsidized home heating oil to Americans. ANd bond with Mayor Bloomberg, since they see to have the same views about staying if office indefinitely, although Uncle Hugo at least had the decency to put his proposal to a popular vote.
November 21st, 2008 at 12:00 pm
I think there are probably quite a few people on Wall Street who have not been compromised. These were the people who weren’t Masters of the Universe and worked in more traditional lines of finance. Actual number crunchers and traders who didn’t get involved in the new types of securities. People who worked for big bonuses compared to the rest of us, but what was considered chump change by many of the people who brought us this mess.
November 21st, 2008 at 4:23 pm
I’d think if you sent out a general call you could find plenty of people who once worked in finance and got fed up with the profligacy and excess and left for more productive endeavors. Or senior managers who retired when there was still a modicum of ethics and responsibility who might be enticed back to work.
November 22nd, 2008 at 2:35 am
You know who needs a job? Mitt Romney.
November 29th, 2008 at 6:05 am
In September 2007, with Wall Street confronting a crisis caused by too many souring mortgages, Citigroup executives gathered in a wood-paneled library to assess their own well-being. There, Citigroup’s chief executive, Charles O. Prince
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