Bailout beneficiary Citigroup buys $50 million luxury corporate jet

As ordinary Americans hunker down and forgo new car purchases, new home purchases and even steak at the restaurant, the executives at Citibank see no need to scale back on planned purchases.

Of course, Citibank has received $45 billion in bailout money so far, so why worry.

Citibank recently went ahead with the purchase of a $50 million Dassault Falcon 7X luxury jet, according to this story.

The plane seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center.

Granted, Citigroup had placed the order two years ago, well before the current meltdown, but sometimes it makes more sense to give up the deposit and do the right thing.

After all, Citigroup already has two 10-year-old Dassaults, which it is now trying to unload for $27 million each.

What gets me are some of the apologistic comments on the story, which seem to have been placed by trolls (no attempt made to correct faulty grammar):

Poster bsmbdt wrote: Im sorry, but doesnt spending $50M on a jet put that very $50M into the economy? I mean the Jet maker , pays their employees and taxes, and hires employees and vendors, etc. CITI also pays taxes, and then hires pilots , mechanics, and staff, not to menton the maintenance folks, etc. Now each of those folks went and bought food, gas, clothing, heat for their houses/apartments, some bought houses, others condos, and cars, etc. etc. etc. Im sorry but have we become so clueless that we cant think through what buying a $50M aircraft does for plain old people like you and me? Are we that dense now that all we can do is knee jerk react?

I can think of better ways for Citigroup to spend OUR bailout money. Make loans available to small businesses and regular folk.

slcraigre wrote: You've got to be kidding? Has the Post now dranl the Kool-Aide too? That Jet was ordered years ago. It took 1000s of hours of manpower and hundreds of companies making parts to produce it. You want all those employess and companies to give back that money?
What has happened to your journalistic integrity?
If CITI had a contract with you for ad space would you let them just cancel on a whim?

Actually, newspaper ad contracts get broken all the time. And the newspaper rarely does anything about it because it wants the advertiser to return when there actually is money to spend. At the very worst, an advertiser that pulls back might have to eat a deposit, but in 99% of cases print advertising is not paid for until it publishes.

Clairesolt wrote: All this scandal mongering about airplanes and carpetsa just tells me that out journalissts can't understand multi billion business. If I have a credit card balance or mortgagr or car loan, that does not mean that the bank can follow me around the grocery store and comment on what I buy. Oh look! She is buying filet, Shouldn't we write in her contract that she can onlly have hot dogs?

No, the bank can't follow you around. But if you can't pay back your credit card balance or you are late with a payment, it can dramatically increase the interest rate, effectively putting you in the hotdog-eating crowd. It can impose a credit limit. How do you think Citigroup makes its money? By being a nice lender?

What it boils down to is this: Citigroup has accepted help from we, the taxpayers. In fact, in its $45 billion bailout, it has claimed approximately $150 for every man, woman or child in the United States. And since the government doesn't actually have the bailout money, but is instead printing more money or borrowing it, we are paying for this through increased interest on government debt, or decreased personal purchasing power because of dillution of dollar value.

I'd rather that Citigroup not have taken delivery of the new jet, and also sold their old jets. If they have somewhere to fly, get in line with the rest of us at Southwest.

Here's what Citigroup got. Fast-forward to about 2 minutes to see pictures of the lush interior.

Bailout money goes toward bank bonuses

As further proof of the foolhardiness of these bank bailouts, it appears that Merrill Lynch execs were paid nearly $4 billion in bonuses just days before new Lynch owner Bank of America got another $20 billion in TARP funds. See a story here.

And, these bonuses were paid out a month ahead of schedule. Does anyone smell rotten fish?

The politicization of bank bailouts

Of course we know that some of the bank bailouts have been made possible by having friends in very high places.

So far, most of those have come at the discretion of appointed leaders within the Treasury. As such, it's a little harder to nail down the exact way in which strings are being pulled.

Now, a Wall Street Journal story indicates that Democratic Representative Barney Frank appears to have influenced legislation to benefit OneUnited Bank in his home state of Massachusetts.

As head of the House Financial Services Committee, Frank is in a position to do such things. Unfortunately, he's not alone, according to the story:

Several Ohio banks received funds after Ohio's congressional delegation complained bitterly about the treatment of Cleveland-based National City Corp., which regulators forced into a merger rather than provide with cash. And in Alabama, the state's top banking official says a windfall there -- five banks are slated to receive funds -- is testament to the influence of two powerful Alabama lawmakers who sit on key congressional committees.

If we want to keep political favoritism out of the private sector, which is one of the things President Obama campaigned for, then we need to simply let these banks fail. Sell the assets to the highest bidder. If no one buys the debts, well I guess the debts are forgiven.

How much further down the road to corporate welfare must we go?