Why Citigroup should have got their new jet

Yesterday Obama put pressure on Citigroup to cancel their order of a 45 million dollar jet. Citigroup had received 45 BILLION DOLLARS a few months ago from the Federal government because they were on the verge of going out of business. The government decided Citigroup was too big to fail. Too many people would lose their jobs, and just about every American would be effected negatively by the collapse of Citigroup. So fueled with the best of intentions the government spent 45 billion dollars to keep Citigroup alive.

According to Henry Paulson the former Treasury Secretary, Citigroup and in fact all of the banks didn't want the bailout, because they were afraid the government would start tinkering with their business. Paulson had to assure them that the Feds would stay out of their affairs, but wanted them to take the money to keep the credit markets flowing.

The banks fear started to come true yesterday with the call from Obama. The point isn't whether buying a jet is the proper move for the bank. The point is once government gets involved in your business they want to run it. That's tinkering with the free market. What about the jet manufacturer that lost a 45 million dollar sale because of Obama's call? Are they going to have to layoff people now? Would there have been any pressure from Obama if Citigroup was spending 45 million on electric cars for their executives? What if the 45 million was for solar panels to help power their banks? Will all future purchases have to get government approval?

If the government hadn't bailed out Citigroup, those people buying the 45 million dollar jet would be out of a job by now. The market would be falling deeper in to a recession. Thousands more would be unemployed. But the reality is that's what the market needs. Once we hit our bottom we can start to rebuild. The best thing would be for us to get to our bottom fast so we can get out of this quicker. Instead of dragging it out for years or even a decade like we did with the socialist programs of the 30's, or Japan in the 90's. Unfortunately that doesn't seem to be the mood of the country who continue to pray for a miraculous turn around brought on by the super intelligence of a few men in Washington. You could gather 1 million of the most brilliant men in Washington and they can't legislate us out of this. It was legislation that tinkered with the free market and got us in to this!

Citigroup should have gotten their jet, and run their business as they see fit. If they go out of business, other banks would get more business and hire more people. Instead they caved and have given government more leverage to expect them to respond to more "advice" in the future.