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I don't know... From a practical standpoint you can find examples of the government bailing out companies and good things resulting and you can find examples of the government bailing out companies and bad things resulting. To me it seems like it should be a case-by-case thing: will the economy benefit from the bailout, will the  company get back on its feet and stop the self-destructive behavior, and will the taxpayers see a ROI?

It's like what my dad said to me last weekend: "I've already lived through one Great Depression, I don't want to live through another one." I'll wax less philosophical about whether the government SHOULD intervene as long as it DOES work, because I've heard enough stories from him about how awful that was.

I haven't looked into the issue in depth, but I would think that outright nationalization is the "best" choice.  Otherwise its government taking on risk while private parties get any profits that might be realized.

Also fining the executives / boards of the failed companies would make the populists happier.

In general I'm opposed with some limited exceptions

Perhaps if the industries in question were more regulated, bailouts wouldn't be necessary?

Investors wonder: who's next?

"We have seen a 'too big, too important to fail' instance," said William Gross, the chief investment officer of the bond fund Pimco. "The market wonders: which institution is too small to bail out? Where is the dividing line? They seem to have picked on the regional banks as potential candidates to be the ones too small to bail out."

Banking analysts put out reports warning against the sector. Goldman Sachs said regional banks may cut their dividends to restore capital — pushing down shares of banks like Zions Bancorporation and First Horizon National. And Lehman Brothers said that Washington Mutual, the nation's largest savings and loan, might end up with a whopping $26 billion in cumulative losses.

Which then begs the question: once you start bailing these guys out, where do you draw the line between who gets helped and who doesn't?

Plus they donate a lot of money to political campaigns.

How about this:  Shore up the companies whose CEOS all voluntarily resign.

ScifiterX wrote:

Without insanely high severance packages

Correction: with NO severance packages.

The company's not asking you to leave, the US is.

Metacell wrote:

ScifiterX wrote:

Without insanely high severance packages

Correction: with NO severance packages.

The company's not asking you to leave, the US is.

What's the point of being an incompetent CEO if you can't get a good severance package?

The correct answer is to give a short speech about how it is imperative to not create companies that are "too big to fail", because they then start acting that way. Explain how being irresponsible should not be a reason for a bailout.

At the end, mention that the US isn't going to do squat for Fannie or Freddie, and let them go into bankruptcy like any other business that took on WAY too much risk. Sell 'em off piecewise to any and all comers, and start looking at CRIMINAL prosecutions for some of the former employees.

Anything else is a waste of time and taxpayer money.

The Fannie and Freddie bailout is simply going to delay the inevitable a tiny, tiny bit. Just like the .com bubble burst didn't mean the end of computers, the real estate bubble burst won't mean the end of real estate. It will simply mean that people will once again spend in proportion to the value that they are receiving - not just for hype, hype, hype!