This story is quite bothersome to me. Indeed, it seems that the author has specifically written it to be bothersome to her readers. I suspect, though – given that her audience is the liberal blogging community “Huffington Post” – that they are not likely to share my reasons for concern.
“The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet . . .”
Oh, the horror. These uppity executives – fresh off a government bailout – are now spending your money and mine on a new jet. Well, we can’t have that. Good thing the new sherriff in town just called them up and told them to “fix it.”
. . . except that, as it always is, the real story is more complicated than that.
If one reads the actual article from which this HuffPo writer is getting her ideas, one sees the following:
“Citigroup had argued it was selling two of its four other planes to pay for this one, that the new jet would be more efficient and, besides, it had already signed a contract for the jet. Breaking that deal would cost the bank millions in penalties.”
So let me get this straight. Instead of selling off two old, inefficient, probably less-environmentally-friendly jets to buy one newer, more efficient one, this troubled financial institution will break its contract and lay out millions of dollars in exchange for . . . nothing.
Why? Because “The One” has spoken.
This is, to me, the most disturbing piece of the whole episode. No laws were passed, no regulations were signed, no hearings were held . . . the President just had his spokesperson call up these guys and tell them to “fix it.”
. . . and as a result of his demand, a major U.S. company altered a multi-million dollar business decision and backed out of a major contract.
That, my friends, is scary. I thought we lived in a (relatively) free market society.
From the article again (as the ABC news writer apparently can’t resist injecting a little political commentary into his “news” story):
“It doesn’t help to win votes when corporations appear to use taxpayer cash on luxury perks and outsize bonuses for Wall Street titans.” (emphasis added)
There you have it. The White House has to keep up appearances, and the free market be damned! It doesn’t matter that the federal government had no business shelling out your money to save these companies in the first place (and this extends to both the Bush and Obama administrations, and both parties in congress – all of whom are equally to blame).
Frequently over the last year or so, I’ve gotten the feeling that when I am old, I will look back and fondly remember the America I used to live in – an America which . . . particularly with this week’s latest $800 billion-and-up boondoggle . . . is rapidly spending its way out of existence. We can debate endlessly the question of whether financial execs really need a corporate jet at all . . . but at the end of the day, that’s for their stockholders to decide, not the President.