Citigroup vs Treasury

Citigroup's top brass has been tattling to the WSJ about how they don't like government oversight. The story is good, even if it's clearly tilted, source-wise, towards Citi rather than towards an Obama administration which is so fresh in office that it's still pretty leak-proof. And it's surely true that if the government is going to have control over Citi, it ought to set up some kind of mechanism to enact that control in a consistent manner. But of course it can't do that, because any such mechanism would immediately be taken as an instrument of de facto nationalization.

For all the story's sympathy towards Citi, too, the bank's CEO comes across as weak and pathetic:

In a recent phone call with a senior government official, Citigroup Inc. Chief Executive Vikram Pandit revealed who's on top in the new world of American finance.
"Don't give up on us," Mr. Pandit said, pleading with the official not to push out top management. "Give us a chance to execute."...
Last week, Mr. Pandit met with Lawrence Summers, the government's chief economic adviser, in the White House's West Wing. Mr. Summers made clear that he wouldn't discuss Citigroup specifically, and Mr. Pandit emerged from the meeting with no better idea of where the Obama administration stands in managing ties with the big bank.

Not that he comes across any worse than Tim Geithner:

Friday afternoon, after the bank's shares had closed the week at an 18-year low of $1.95, top executives reached out to the Office of the Comptroller of the Currency and the New York Fed... The conversations were constructive, but they couldn't progress much until they heard from Treasury...
Through the weekend, Citigroup didn't hear from Treasury officials. Then on Sunday evening, Mr. Pandit's phone rang. It was Treasury Secretary Timothy Geithner, calling with a message: "I think we just need to do something." Mr. Geithner was short on specifics...

No, Tim! "We need to do something, this is something, therefore we need to do it" is exactly what was wrong with Paulson's approach to your job. What your country needs from you is something much more thought-through and strategic. Oh, but wait, we can't do that either, for familiar reasons: with Congress unwilling to fund any further throwing of good money after bad, the only alternative is, yes, nationalization.

Indeed, as David Reilly says today, nationalization has already happened, to all intents and purposes. Instead of coming up with ever-more-elaborate ways of trying to pretend that it hasn't, let's just accept it, embrace it as a regrettable necessity, and move on. Otherwise we'll all be stuck in this horrible limbo indefinitely.