Bailouts

Nationalize Citigroup

Felix Salmon was heralding the failure of Citigroup before almost anybody else, and after the megabank’s bailout, he predicted that it would fail again. So, with Citigroup and Bank of America both on the brink of failure, pay attention to Salmon: “I can't see a solution to this problem short of nationalizing both Citi and BofA, and summarily firing the hapless Vikram Pandit along with the overambitious Ken Lewis. … Nationalization is a messy solution, and one which will make no one happy. But it's better than desperately trying to kick the ball down the field until the banks come back in a few weeks for even more money. If we've learned anything from the last Citi bailout, it's that small interventions don't work. What's needed now is a complete revamp of both banks' capital structures, and a brand-new owner.”