Between running my business, tracking the Sam Adams story and everything else on my plate last week, I fell behind on my newsfeeds. My feeds have become more important to me because I have been listening to NPR less and less lately. I think the ongoing mantra of layoff numbers is counterproductive to economic recovery. Since their reporting focuses on the problem, rather than the solution, the news only feeds the fear, which then leads to shareholders panicking with the end result of more layoffs. I am appalled at the recent rate of job loss, but until the media refocuses its energy to include more focus on recovery, I am taking a radio hiatus.
One of the very nice things about newsfeeds is the ability to filter out what I don’t care about. This is a critical feature given that my feeds include international media, and I just couldn’t care less about local cricket scores (even though I understand the important role cricket matches play in many communities). Since the $700 Billion Troubled Assets Relief Program (TARP) was intended as a solution to the current economic crisis, I have been tracking how the first appropriation of $350 Billion is being spent.
That is how I encountered this article. Just to refresh people’s memories, TARP was intended to infuse cash into the banking system so that banks would have money to lend to consumers and businesses. Financial institutions received hundreds of millions of TARP funds even when they publicly stated that they were not going to use the funds as intended:
At the Palm Beach Ritz-Carlton last November, John C. Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in federal bailout money.
“Make more loans?” Mr. Hope said. “We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”
Despite my foreknowledge of what I strongly believe should be a criminal misappropriation of tax dollars, I was still shocked when I read that Citigroup had ordered a brand new $50 million dollar corporate jet with their $45 Billion TARP funds. At the same time, Citigroup executives were trying to quietly sell two of their existing corporate jets, worth $27 million each. Fortunately for us lowly taxpayers who have to fly coach on commercial airlines, President Obama learned of the intended purchase and instructed Citigroup executives to “fix it.”
That still leaves me with several questions. Will Citigroup actually use that $50 million that they had allocated to the corporate jet for consumer and/or business loans? Will they still sell the two jets that they have been trying to quietly unload? If so, what are the chances that the entire $104 million will actually go towards true economic recovery?