And by the way, you weren't exactly correct about Abu Dhabi either. Per this article, it wasn't the Abu Dhabi government, but a group of investors. They did in fact buy an equity share but there's this:

ADIA has agreed not to own more than a 4.9% stake in Citi, and will have no special rights of ownership or control and no role in the management or governance of Citi, including no right to designate a member of the Citi Board of Directors.

The Democrats have offered no such guarantee. In fact, they are proposing exactly the opposite. Democrats are insisting on having a direct say in how corporate executives are compensated and in what sort of deals (and in what quantity) the corporations take part. In other words, the US government would have direct control, outside of the framework of democratic lawmaking, in how those companies operate.

Your last paragraph is pure nonsense. The RTC didn't make money at least not as far as I've been able to find. It cost us less than we thought it would, but the price tag was still verging on 400 billion dollars. We were still dealing with the deficits from that into the 1990s.

Aside from that, you seem to think that my interest here is purely partisan. That is a joke and you, who have been reading this blog for a long while, should know much better. I want the best possible resolution of this situation. The fact is that no matter what, lots of people are going to lose a lot of money. Those folks are the very ones you want punished. The people who will not be punished are the Democratic lawmakers and the former President who set this in motion years ago. When you start calling for some accountability from them, then perhaps I will take you seriously. Until then, well, you still think that Warren Buffet and the US government are interchangeable. That kind of piffle has no cure that I can provide.

You know, 20 years ago I came to the conclusion that I will never hear a Republican accept responsibility for anything. Still right on that one.

How's that? By law, a share is a share. It doesn't matter who owns it. It really doesn't matter whether it's the Abu Dhabi government, our government, or a private investor. Look, I've been involved in many startup companies. I always leave once they are up and running, and then I join a new startup. I've seen many a private bailout. And not a single one of them involved free money. They have always involved an equity stake. And look at what Warren Buffet just did. He bailed out Goldman Sachs by injecting $5 billion. He didn't just agree to buy bad holdings, he took equity. And he isn't stupid. In fact, he's the most successful investor in the history of humanity. But you think he's wrong. And I'll listen to you when you have 50 years of performance as good as Berkshire Hathaway. Until then, I think the strategy of insisting on equity for a bailout is a good one. It's what every private investment company insists on when offering a bailout. But you think the private investors don't know what they're doing. You think the government shouldn't take the same approach that has always worked for private investors. You're crazy, and I've been involved in private business long enough to know it.

The government did this before with the Resolution Trust Company. It worked well and still granted the rich man's welfare that Republicans crave. You had your cake and I had to buy it. And that's not good enough? You want the government to lose massive amounts of money on top of rewarding failure? I'm sorry, you can count me out. I'm willing to reward failure if I have to, but I'm not willing to lose money on this deal. We are the taxpayers. It's our money. We should make a profit. Period. And I'm sorry you think we should lose money just to keep the Republicans in power.

I'm sorry, but you're wrong on this. China doesn't own us any more than Japan owned us back in the 80s. When Abu Dhabi buys shares in our companies, it is a shareholder just like all the other shareholders. If our government buys into this, the effect is more direct and far more pernicious. It is the very definition of nationalization. Foreign companies and, yeah, governments have bought chunks of our companies before and they will continue to do so for a very long time. I doubt you can point to a single ill effect today of Abu Dhabi ownership of whatever company they bought.

As to your second point, Congress specifically directed the GSEs to increase their portfolio to a larger percentage of subprime mortgages. Congress also directed the GSEs to increase the availability of mortgages (hence the mortgage-based securities) The reason the private sector bought what the GSEs were offering is because they assumed, apparently poorly, that when Congress pushed the GSEs to offer them, they'd also back up the securities. Well, Congress didn't.

At one point, Andrew Cuomo ordered Fannie Mae to carry 50 percent of its portfolio in subprime mortgages.

In other words, Congress and the Clinton administration specific ally directed the GSEs to take on mounds of bad debt. They further directed the GSEs to push products into the private sector that encouraged private ownership of that bad debt. If Congress and HUD had not meddled in the mortgage industry in the first place, deciding who should and should not get mortgages, this mountain of bad debt simply would not exist.

As for the 'G' thing, the only influence our government had was in the implicit backing of debt. But AIG had the exact same implicit backing, didn't they? Too big to fail will always be too big too fail regardless of the law. We simply cannot let our financial system fail, so we must back it. And if we have to back it, maybe we should prevent them from over-leveraging themselves in the first place. I don't make bad investments because I will lose my shirt if I do. Why should people smarter than me be allowed to make bad investments and be bailed out? If they hold our balls, they should be forced to do so responsibly.

Because when our country takes ownership of our companies, it's called nationalization and it's a very bad thing for us to do. Did you really need me to answer that?

Umm, Freddie Mac and Fannie Mae were private institutions until very recently (privatized in 1968). We bought those private entities because they ran themselves into the ground. How is turning them back into the private entities that they were only a few months ago going to improve the situation? If you want to contribute to the debate, you really need to be talking about reality.

As for the equity shares, I'm really surprised you didn't complain so much when the government of Abu Dhabi was buying up equity stakes in our financial companies to shore them up. That was only a few months ago, and you had no problem with it. It seems you're okay with government ownership of private entities when it's a foreign government. So my question is this: why should Abu Dhabi get a better deal than the American taxpayer?