Citizen Stock


New Orleans        All weekend the national papers, radio, and television tried to get a handle on what the notion of nationalization might mean when thinking about the banking and auto industries.  Word flowing out of the negotiations with Citi indicates that the US might have as much as a 40% stake in the company as the bailout dollars are converted to stock.
    One of the more painful slaps at the current Citi situation was some wag’s comment that we were now at the point where it is cheaper to buy a share of Citi stock (now listed at less than $2.00 per share) rather than use a Citi ATM (pretty much $2.00 a pop).  Ouch!
    Part of the claim is that some fine day along the “by and by” these investments will pay off as the companies recover, recapture their valuation, and pay back the loans.  Sweden supposedly did well in a similar situation and made some money re-privatizing banking institutions there, though as Times columnist Gail Collins says, we can’t follow Sweden’s lead on anything:  “it’s a rule.”
    Why are we not reading that as taxpayers footing this bill — some estimates are now at over $1500 per person — we will be issued stock in these new, what should we call them, federalized institutions?  One would think the Republicans, if no one else, false free marketers would be promising all of us a couple of shares in these new enterprises.
    Why not?  If these are going to be good investments over the next 5 or 10 years, it would be a negligible lift for the government as part of the quid pro quo to offer a couple of shares to all taxpayers at some level.  Perhaps stock only has a value now of $1 or so and cannot be traded, but why not give all taxpayers something tangible for these trillion dollar expenditures and a stake in some future citizen wealth?
    Stock in Citi, GM, AIG, and others would finally have a real meaning and what would happen to these companies would be something all of us watched with more than passing interest if the government instead of just throwing money in that direction, gave us a piece of this crumbling rock.