Our nation's 44th president, a man whose pictures from his twenties show a leanness that speaks of more than a passing familiarity with Ramen noodles, has put his foot down. Citicorp, the latest bank to need bailout funds, has requested 40 billion of our money - oops, excuse me, that's 40 billion from our "available credit balance" - to get through the latest slump in the economy.
This is the very same Citigroup that has been widely lambasted by the press over the last few days for planning to upgrade a corporate jet to a new model, ordering one that would cost Citigroup fifty million dollars.
This Obama White House did not float a trial balloon in the press. This Obama White House did not make a half-hearted plea to beg the Citigroup execs to do the right thing. This Obama White House got on the phone with whoever it is who counts at Citigroup yesterday, and told them to make this go away.
Today, Citigroup no longer has a 50 million jet on order. Or a 40 million one, or 20 million – there will be no new jet at all.
This is finally starting to make some kind of sense.
Will there be anything that the rest of the government’s elected representatives – the Senate and the House of Representatives – take from this kind of leadership? Could it possibly inspire them to quit bitching over whose sneaky backdoor proviso gets to be in a stimulus package and motivate them to put some financial relief squarely in the pockets of those individual citizens who they claim to represent?
If no one else has told President Obama this yet, then I will – there are only two kinds of legacies you will have. You will either be the first African American president, or the president who brought the nation back to its senses. So you might as well govern by relying on your common sense, rather than worry about the pundits or the polls.
All these glowing references to Rahm Emanuel's newly discovered "kinder and gentler" side in the press lately seem to be an attempt to sell us a bill of goods. As a veteran of the financial services industry, I can imagine how graphic and foul-mouthed Mr. "Kinder and Gentler" Emanuel might have acted on the phone with Citigroup once the door was closed, if it was in fact he who delivered the message.
The sad thing about the financial services business is that's the only kind of language they seem to respond to - that ugly, vile, "let me describe how I will violate you" type of exchange that leaves no doubt in the recipients mind that the shit they are standing in is real, real deep. There are no gentlemen in these thin air businesses - trying to treat them like they are is a waste of time.
Maybe these lily-livered banking execs will finally understand that the gates they live behind aren’t strong enough to keep us out if they continue to act like fiscally irresponsible idiots over and over again.
The good thing is, the "rope a dope" of the campaign trail is over. With no more opponents to tire out, President Obama is coming out swinging.
The great thing is, he is coming out swinging for us - the American people. Now that he's eating more than Ramen noodles, I think he may be able to go the distance.
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As a taxpayer, I am grateful to his being assertive in his actions toward Citibank.
One has to wonder if #43 would have grounded the same jet? I would dare to say he would not have.
(rated)
I am reminded of JFK who faced down the steel industry long ago. After the dust settled, he had this to say:
"My father always told me businessmen were SOBs."
Sounds like our boy figured it out on his own.
Looks like we are on a steady diet of good news!
"Bailout Recipients Hosted Call To Defeat Key Labor Bill"
http://www.huffingtonpost.com/2009/01/27/bank-of-america-hosted-an_n_161248.html
and listen to some of the stuff that was said.
"Bank of America is now not only getting bailout money. They are lending their name to participate in a campaign to stop workers from having a majority sign up [provision]," said Stephen Lerner, Director of the Private Equity Project at SEIU. "The biggest corporations who have created the problem are, at the very time, asking us to bail them out and then using that money to stop workers from improving their lives."
Lerner is obviously biased, but the bottom line is, YOU and your fellow citizens are the ENEMY, nothing more than eyeballs to be aggregated, buying power to be maxed out, pockets to be picked.
I don't know if Emanuel was the one who made the call or calls - but it sure makes for a good story imagining that he did.
What the realities of the actual aborted transaction are may come out later - probably a couple of million in penalties for breaking the agreement unless there is a strong waiting list.
As Bush is the only president of my adult life, I can honestly say that this is the first time, as an adult, there's been another adult in charge of the country.
Can someone please forward the address for Expedia.com to the Citi Group folk?
Also, Citi claims to be reducing their fleet from 5 to 2 planes. They said something about using the money from selling existing planes to pay for the new one. Of course, they could just reduce that number to corporate jets to zero.
My point is that sometimes it is worth reading beyond the headlines.
rated
Look, corporate jets are portrayed as a sign of corporate excess. "Why can't those fat cats just fly coach like the rest of us" is the usual statement. People act as if only the c-level execs get on those jets.
That perception is not reality.
First of all, a lot of companies use their corporate aircraft to fly their staff around. If you're Citi, and you've got to fly a team of investment bankers to Tokyo from New York right now, it very well may be cheaper to fly them on a corporate jet than to have them fly commercial AND it will take a lot less time. And they can work on whatever they have to during the flight.
On top of that, even if we assume the use of the corporate jets is restricted to only the folks who have the penthouse suites in the corporate headquarters, it may still be worth it.
When you fly commercial, what do they make you do before they leave the gate?
Turn off your phone.
For a company like Citi, with operations throughout the world, do you really want your top execs to be out of touch for 12 hours at a time?
Finally, that plane was paid for and ordered long before Citi took a dime of TARP money. So to say it came with taxpayer funds is simply not accurate. It's disingenuous at best, and it's a lie at worst.
Corporate aircraft can be a very beneficial asset if used properly. A lot of companies do use them properly.
It's when you get guys like Kozlowski using them to fly Christmas trees around that they become wasteful. And in that case, it is the use of the tool, not the tool itself, that's the problem.
Thank you. Good article.
thanks for this news!!! f***ing right on!!!!! can't believe they had the balls to order a new jet. i love obama more everyday.:)
mary
There aren't very many moment to moment decisions a CEO has to make, but I will concede that execs in a modern global world can make good use of a corporate jet.
Jets and yachts are ordered well in advance of when you take delivery - true.
But to bow down to cats who throw away billions the way you flush toilet paper, and then turn around and take our money because they can't get it from anywhere else is ridiculous.
Any bank in the world they got that kind of cheese from would have them jumping through restrictive covenants like trained monkeys.
The corporate world will not stop if you exiled the top 1oo exec teams in the nation to an atoll in the South Pacific with electricity or running water.
Cleaning house every once in awhile brings the bullshit out into the light.
"Pressured by the Obama administration, Citigroup Inc. reversed course and said it will not take delivery of a corporate jet it previously planned to purchase."
http://www.google.com/hostednews/ap/article/ALeqM5hhiE9y_NtCV3wMLmx8IG8e8cUv7AD95VMVIG0
By AP / STEPHEN BERNARD
Contributors - AP White House Correspondent Jennifer Loven/AP Business Writer David Koenig.
From TIME magazine:
"An official in President Barack Obama's administration reached out to Citigroup on Monday to reiterate Obama's position that such jets aren't "the best use of money at this point," and are "an outrageous use of funds" for a company getting taxpayer dollars, said a White House official who spoke on condition of anonymity to more freely describe private conversations."
http://www.time.com/time/business/article/0,8599,1874289,00.html
By AP / STEPHEN BERNARD
Amazing - actually listening to the suggestions from the man who is handing you money to save the company you are running with your abundant and endless supply of self-proclaimed talent.
It still makes a better story, though, if you imagine Emanuel doing the dirty work. That's the good thing about having your own keyboard - you can write what you want.