Menendez: It is not OK to spend money

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Mar 19 2009, 6:32 pm by Conor Clarke

Citigroup might spend $10 million to remodel its suite of executive offices. The bank says that it is reducing office space and head count, and that remodeling -- moving its executives from two floors to one -- will save money in the long run. Maybe what the bank says is wrong. I don't know. But in the post-AIG world, it seems you really don't need to advance any kind of argument to publicly embarrass a company:

"Maybe there's some rational argument" for the remodeling, said Senator Robert Menendez, a New Jersey Democrat and a member of the Senate Banking Committee. "But I think our friends in the banking and financial universe have to understand that they have to stop living in an alternate parallel reality." Given the nation's economic challenges, "people simply don't understand those types of expenditures," he said.

This makes me embarrassed that Robert Menendez is a US Senator. If there is a "rational argument" in favor of doing something that "people simply don't understand," what should the role of an elected offical be? One theory is that the elected official should support the "rational" policy in question, and attempt to offer the public "reasons" for why this is the right thing to do. Menendez's theory seems to be that an elected offical should act like a ignorant demogogue and indulge public ignorance. But maybe I'm stuck in the alternate parallel reality and just don't get what's going on here.

Comments (5)

martin peretz dispenser March 19, 2009 7:03 PM

well, no. It's like the mantra, "look at how much money I saved us today buying sale items!"

How do they plan on saving money via remodeling? Decreased utility bills? Fewer people? NYC real estate is insanely expensive, for that amount they could host their operations out of a warehouse in West Virginia...

Conor Clarke March 19, 2009 7:11 PM

I'm willing to believe that citi's claim that it'll save money w/ the remodeling could be wrong. maybe it is "irrational." (it's not going to be my default assumption, but I'll believe it.)

but I don't think you can take the position that it's wrong AND rational. (or even the position that it might be rational but it's still wrong.) that is menendez's position.

martin peretz dispenser March 19, 2009 8:25 PM

*maybe* there is. When you preface a statement with *maybe* that's a sign that you find such an action to be incredulous. Menendez clearly thinks that it's insane that they're spending money on renovating their building while being bailed out. There *might* be a justification for this, just like the easter bunny *might* actually exist. He's right: they are living in an alternate reality. They think they're princes.

Conor Clarke (Replying to: martin peretz dispenser) March 19, 2009 9:30 PM

occam's razor suggests that when you preface a declarative statement with "maybe," it suggests that you think it may be true!

but maybe I'm wrong.

in any event, why can't it be true? why is remodeling to save office space necessarily a crazy way to save money? at worst sen menendez is patronizing ignorance and at best he is leaping to conclusions.

martin peretz dispenser (Replying to: Conor Clarke) March 20, 2009 12:35 PM

here's a hypothetical.

I need a $5000 wastebasket in order to be productive. The logic goes like this.

1. I have self-esteem issues stemming from a privilege'd yet neglected childhood.

2. The $5000 wastebasket by dint of its aesthetic beauty and harmony makes me happy. Also the fact that the firm finds me valuable enough to expend so much on a wastebasket makes me feel worthwhile.

3. Therefore, I am happy and my productivity doubles.

That *may be* true. I think that Menendez, if he had truly believed their claim, would have said, "while savings can be realized, it's a bad signal".

anyways, this is a little silly. taken in the worst light, it's a trifling inconsistency.