http://gregmankiw.blogspot.com/2009/02/nationalization-or-pre-privatization.html http://gregmankiw.blogspot.com/2009/02/nationalization-or-pr... "Nationalizatio

http://gregmankiw.blogspot.com/2009/02/nationalization-or-pre-privatization.html http://gregmankiw.blogspot.com/2009/02/nationalization-or-pr... "Nationalization, or Pre-privatization?" More discussion on the same theme. 'Bankruptcy could become, in effect, a massive bank recapitalization. Essentially, the equity holders are told, "Go away, you have been zeroed out." The debt holders are told, "Congratulations, you are the new equity holders." Suddenly, these financial organizations have a lot more equity capital and not a shred of debt! And all done without a penny of taxpayer money!' That last sentence is a bit over-optimistic...