If you had any doubt at all about the primacy of Wall Street over Main Street; the utter lack of transparency behind the biggest government giveaway in history to financial executives, and their shareholders, directors, and creditors; and the intimate connections the lie between Administrations — both Republican and Democratic — and the heavyweights on Wall Street, your doubts should be laid to rest.
A bailout was necessary – but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more.
Krugman continues, “Amazing how much damage the lame ducks can do in the time remaining.” This will all change on January 20? Right…
And Mark Thoma summarizes other reactions.
All that, and Felix Salmon isn’t optimistic.
In general, there’s no sense of finality here, of the government stepping in and taking charge of the situation. Instead, Treasury seems to hope that with $20 billion and some loan guarantees it will be able to help Citi muddle through for the time being. I suspect that it might end up disappointed.