The St. Regis Monarch Beach, the rich-people hotel that AIG executives partied at after getting all their bailout money, couldn't pay its bills and so now a bailed-out Citigroup owns it. And it's losing money. Your money.
It's more evidence, in case you needed it, that the federal bailout was little more than a collossal plunder, and all we're doing now is shifting tax-payer money around from failure to failure in service to the goal of keeping executives employed so they can still afford to stay at places like the St. Regis.
Here's how it works: You get a job, in order to make money. The federal government takes up to a third of that money in income tax. But don't worry, it's for your own good! Even though you are making money, AIG is not, so the federal government gives $85 billion of the money it took from you to AIG, which then spends $440,000 of it at the St. Regis on $210 spa treatments and $1,600-a-night rooms. AIG also gives $2.3 billion of that to CItigroup, because it owed them insurance payments on bad bets Citi had made. Oh, but we totally forgot to mention—even though Citi is getting paid all that money from AIG, it still wasn't making any money, so the federal government took another $45 billion of that money it took from your paycheck and gave it to Citigroup.
And then, even though the St. Regis is getting all that money from AIG for their retreats, business isn't so good, in part because of the public uproar over AIG paying all that taxpayer money for its retreats. Which means its owner can't make good on the $70 million owes to... Citigroup! So Citigroup takes over the St. Regis.
But! The St. Regis is a money pit, because of all the aforementioned outrage and on account of the fact that nobody has any money or jobs, and that the executive class-types who still do have jobs are too scared by all that outrage to book any retreats there. So Citigroup is actually losing money on the St. Regis. From the Los Angeles Times:
Becoming the owner of the resort will be expensive for Citigroup, which now will not only have to pay interest on the $230-million first mortgage, but also cover St. Regis' operating losses.
And Citigroup losing money is a bad thing, because, even though they made $4.3 billion last quarter, they're still in really bad shape, and probably won't make much money any time soon. Or so they say. But they do make enough money to offer executives $2 million per year. But just forget about that for now.
Because if Citigroup doesn't get better—and by "better," we don't really know what we mean since they made that $4.3 billion last quarter, but whatever—then the federal government might have to take more of that money from your paycheck and give it to them. Or even if it doesn't get more bailout money, it's still bad because the federal government owns about $27 billion worth of Citigroup. And the more money Citigroup makes, the more money it pays to the federal government, and the faster the federal government returns that money to you—just kidding about that last part.
To recap: The federal government owns a big piece of the obscenely expensive hotel that AIG executives spent hundreds of thousands of your dollars on after you bailed them out, and it's losing fucking money on it. The most important lesson to be learned here is this: If you soak a bandana in urine and wrap it around your face, it will mitigate the effects of tear gas. It's gross, but it works.
Illustration by the inimitable Steven Dressler