Does CitiGroup deserve a government umbrella?
I guess the broader question, does any large commercial business deserve to be bailed out? Well, clearly Mom and Pop businesses fail every day. Yet, the government does nothing. Why do large conglomerates deserve special treatment?
The short answer is that there is some magical threshold where there are too many people who would lose their jobs as a result of the failure combined with possible economic ramifications. But, still, does that warrant a bailout? No.
If a business cannot run itself in a fiscally appropriate manner (large or small) it deserves to fail and go away. If any of your family is employed by CitiGroup or any financial company caught up in the turmoil of the financial sector crisis, I feel for you. But, that doesn’t mean that the company deserves to continue to exist if they cannot maintain profitability even in the toughest of times. Fiscal responsibility starts at the top of the company and trickles down to even the most bottom level employee.
What does this mean? It means, don’t request a new computer every year. Don’t ask for Herman Miller chairs and the most expensive ergonomic keyboard simply because you can. If the item is considered ergonomic, the company is almost obligated to make sure you get it. Buying all of these expensive amenities for your desk makes you fiscally irresponsible to the company if you don’t really need it (and, in most cases, you don’t). But, that’s not to say that this is responsible for CitiGroup’s problems.
Who knows where the money hemmorage is going inside these companies. But, clearly, it’s not going back into the business. Again, I ask, why do these companies deserved to be bailed out? What makes them special? I have no sympathy for large companies that can’t properly manage themselves. Neither should the government. Spending all of this money to prop up these badly run organizations is clearly counter to free enterprise.
In Free Enterprise you have to take the good with the bad. That means, when business is good, you profit. When it’s bad, you bankrupt and close. There needs to be no governmental cushion here to soften the fall.
Does CitiGroup or any other badly run business deserve an umbrella? What do you think?