Even At Citigroup, Money is Fungible

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It's great that Citigroup is lending again, but it's strange to see headlines like, "Citigroup Lends Nearly $45 Billion in TARP Funds." Money is fungible! Citigroup received $45 billion in TARP funds, but the money it lends can come from any corner of its coffers -- each dollar is equally effective.

This is really a minor point. But I thought it was annoying when banking executives claimed that their bonus payments "would come out of operating revenue, not government bailout funds." That was a terrible argument and it deserved to be heartily mocked. By the same principle, banks don't deserve any special praise when they decide to start lending again using special "government bailout funds" instead of regular plain-vanilla dollars. 

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.
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