Uncle Sugar to Sell Citibank Stake for Big Profit

Our federal government is preparing to sell its stake in Citibank, and it stands to make a tidy profit in so doing.

This is, of course, good news. Bailing out the big banks maintained enough liquidity and credibility in the financial markets to keep money flowing, albeit irregularly, through the worst of the financial crisis. Uncle Sugar took a risk in shoring up Citibank and others--the risk of being stuck long term with penny stock that remained worth pennies.

But now that the sale is being prepared, the government is set to make tens of billions.

We note the following about this:

• We'll be told that the money is being made by "taxpayers," that we're being "paid back" for what we put in. The truth is that the government borrowed the money to make this purchase, and the money will not be returned to the taxpayers but will marginally reduce the money being borrowed presently for the Christmas wish-list that our Santa-in-Chief continues to fulfill.
• We'll be reminded what a brilliant move of Obama's the purchase was, forgetting Hank Paulson's (and by extension Dubya's) role in 2008 in initiating the emergency moves on liquidity.
• Ignored will be GM and Chrysler, apparently set to be wards of the state for the foreseeable future. As we have noted repeatedly, it's one thing to preserve giant financial institutions as a means of keeping money flowing through the economy, and it's quite another to put a manufacturing company with inherent competitive disadvantages on life support.

So we celebrate the end of government ownership of Citibank even as we decry the ongoing pillaging and ponziing that pressure the populace with the potential for pauperization.