The problem is not that the banks have squandered their investor’s capital. The problem is that the government is giving them taxpayer money and leaving the equity and debt holders in place. That is NOT capitalism. NO tax payer dollars should have been invested until ALL existing equity holders and debt holders were wiped out – that is what the FDIC is supposed to do – take over insolvent banks, but Washington is not following the plan that has worked for decades.
For those with short memories, the reason private ownership is better than public is so that our country doesn’t go the way of the USSR, Cuba, Venezuela and EVERY other country that experimented with socialism (including Sweden and Spain). Each of them only (re)discovered it made everyone equally poor then gave it up.
