I didn’t know this bit of Citibank history:

But I will say that if the recent history of our financial system tells us anything, it’s that it’s a miracle (and not in the good sense) that at least one bank—Citigroup—hasn’t already been taken over. This is a bank that was, by most accounts, technically insolvent in the early nineteen-eighties, as a result of the Latin American debt crisis. It was in serious trouble again in the early nineteen-nineties—Congressman John Dingell actually gave a speech in 1991 saying it was insolvent. And it’s been a major player in, and cause of, our current financial crisis, with a chorus of analysts declaring that, once again, its liabilities are greater than its assets. It does make you wonder how many lives it has, and it also makes you wonder why, after its earlier woes, regulators ever allowed it to get this big.

It seems to me that encouraging the growth of ever-larger financial institutions has actually been part of the regulatory strategy for avoiding ever needing to do something like seize Citigroup. When a bank’s in big trouble, one way to resolve the trouble is to fold it into something bigger. But now Citi’s gotten so big that only the federal government is big enough to provide a workable fix.

Commander James Kraska from the U.S. Navy writes in Foreign Policy about the damage to American interests being done by conservative opponents of the Law of the Sea Treaty. Specifically, with the United States not involved in the process, other countries are able to write rules that we don’t like but have no ability to stop.

This is, of course, a broader problem with the modern right’s blanket hostility to international law. The train still moves forward without us, but it does so less effectively and in a way that we’re not able to influence. As the world’s dominant power, we can kinda sorta get away with this kind of behavior, but it works less-and-less well with every passing year and only accelerates our relative decline.

This is mostly interesting because of the source’s institutional affiliation:

“I think they know how big it is, but they don’t want to say how big it is. It’s so big they can’t acknowledge it,” said John H. Makin, an economist at the American Enterprise Institute, referring to administration officials. “The lesson from Japan in the 1990s was that they should have stepped up and nationalized the banks.”

Instead, the Japanese first tried many of the same remedies that the Bush administration tried and the Obama administration is trying — ultra-low interest rates, fiscal stimulus and ineffective cash infusions, among other things. The Japanese even tried to tap private capital to buy some of the bad assets from banks, as Mr. Geithner proposed.

Yes, that AEI. It’s worth noting, as well, that Makin specifically lists the Japanese economy as one of his areas of specialty. One prominent line of argument I’ve heard against a “Swedish” solution to the financial crisis is the observation that the Swedish financial system was much smaller than the U.S. one, in virtue of the small size of the overall Swedish economy. I think this has some force. What worked in Sweden may not work in the United States. Japan, however, is much more a big economy like the United States. And what we have from there is a cautionary tale which shows that whether or not nationalization can be made to work in a big economy, half-measures definitely can’t.