As it happens, I agree with our libertarian readers that the market would efficiently self-regulate to overcome problems like this, so technically no nationalisation is necessary. But "efficiency" and "self-regulation" aren't interested in emotive side issues like whether you lose your house, job and possessions in the process. A govt elected by voters has to pay less attention to efficiency than to what voters who've lost their houses, jobs and possessions might think of the govt. So let's hear it for democracy - the libertarians in their Randian ideological purity would see you go under and consider it a beneficial weeding out of the weaklings. Fuck 'em.
Most interesting feature of the linked article above:
Paulson had briefed the US presidential candidates Barack Obama and John McCain at the weekend about the plan. McCain gave it his backing, but Obama said he would reserve judgment. "We have to protect taxpayers and not bail out shareholders and management," he said.
Oh yeah - the divide between left and right is just so clear in this election, huh?