Monday, March 30, 2009

U.S. Government Violates Mexican Law

Mary Anastasia O’Grady points out an interesting issue in her Monday column in the March 30 issue of The Wall Street Journal. Our government now owns a third of Citibank, which in turn owns Mexico’s 2nd largest bank (Banamex), and Mexico has a law against foreign government ownership of its banks. Big problem …

Part of what makes macroeconomic policy so difficult in practice is that the decision makers in most countries aren’t on the ball enough to catch stuff like this.

The AIG bonuses that were specifically approved before they were more generally disparaged is a case in point.

What makes it worse is that neither one of these was a secret. The government could have found this stuff out if it wanted to. In retrospect though, it doesn’t even seem like they made an effort. That’s not a recipe for success in spending $800B in stimulus money.

Of course, perhaps it wasn’t success they were after: maybe it was just spending.

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