Borrowed Time: Two Centuries of Booms, Busts, and Bailouts at Citi

There’s a lot more to the story of the bank that was “too big to fail” than the 2008 crisis—and it doesn’t look good, insist Freeman, assistant editor of the Wall Street Journal editorial page, and McKinley, an attorney. Citigroup, the beneficiary of a “bailout culture” formed by an unhealthy relationship between Wall Street and Washington, secured aid by portraying itself as a helpless victim. The company’s long history, however, tells a different story: of a giant that has frequently floundered, yet has not just survived but, thanks to government intervention, profited off financial panics. The authors relate the long, fraught history of Citigroup since its early-19th-century origins, describing its incompetent early management, its pre-Depression CEO “Sunshine Charlie” Mitchell (who blithely found “no cause for alarm” regarding the stock market in 1928), and bailout-era CEO Vikram Pandit, who pleaded with federal officials, “Don’t give up on us.” Citi received $45 billion from the U.S. government, the most of any bank, but, Freeman and McKinley assert, its claim of being subject to circumstances beyond its control should have been received far more skeptically. This is the first book to focus on Citigroup’s handling of the 2008 financial crisis, and readers looking for new insight on the Great Recession will find much here. (Aug.)