Monday, November 24, 2008

Citigroup Gets Keys to the Candy Store While the Big 3 Can't Get a Candy Bar

Here's a joke for you--Ford, GM and Chrysler all engage in plans to turn around their companies prior to the financial crisis. They all engage in new technology development, organizational changes and financial upgrades. Granted, they still have problems, but they were at least working on them. Meanwhile, Citigroup is one of the main perpetrators of the mess we're currently going through. They gave away bad mortgages, sold them to the highest bidder as assets and basically undercut the market to get a stock advantage. Then they hit the skids when the rest of the country did, in large part to the tactics they used in the past ten years.

The punchline? Citigroup gets a huge multi-billion dollar bailout in the form of cash that does not have to be repaid while the automakers, who employ hundreds of thousands of people, can't even get a loan.

I just don't get how the auto industry became the proverbial red-headed stepchild of our economy. This focus on the financial and service industry is going to leave us a poorer country in the short and long runs. We have to have a manufacturing base to compete in this world. The financial sector has to be fixed, but just handing over the keys to the candy store to those who robbed the candy store and poisoned the customers in the first place isn't a great plan.

And yet we're willing to let the automakers go bankrupt and not the financial sector that was in large part to blame for this mess. I guess the lesson is just to foul things up as much as possible and then you'll get help. If you actually try to help yourselves, you're screwed.

1 Comment:

PinkLady said...

The bad news is that the crunch out there has already reached third world countries like ours. Why do the bad guys always get the last laugh?


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