Citigroup’s $50 Million Jet and the Culture of Corporate Entitlement

Naked Capitalism looks at Citigroup’s purchase of its new $50 million corporate jet, just as the bank keeps itself afloat with billions of dollars in government bailout money, and concludes it represents a culture of corporate entitlement that has became entrenched in recent years.

From Naked Capitalism:

Even if there were a rationale for Citi buying a corporate jet now (which I cannot fathom, given their horrid financial [condition]), why buy new? There are no doubt plenty of used jets for sale right now.

This incident illustrates the degree to which a corporate/financial elite has developed in the US. Top executives feel they have a right to fly on private jets. If the company is, say, a Wal-Mart, with a lot of operations in remote areas where access by commercial flights is indirect, private jets make sense (Sam Walton famously flew his own plane to visit stores). But for Citigroup, where the vast majority of their operations are in major, well served financial centers, it’s hard to justify (the usual rationale is that the top brass can discuss business on a private plane, while they cannot do so on commercial flights. Funny how that was seldom seen as a justification in the early 1980s, when executives were for the most part content to fly first class).

I agree that the jet is hard to justify. I also think it will come up again and again, as Citi almost certainly will ask taxpayers for more funds. If Citi is in such bad shape, maybe that is an argument to nationalize it — and then put someone in charge with a little more common sense than to buy a corporate jet in the middle of a financial crisis.