Capitalism without failure is like religion without sin

We are in the midst of a very serious financial crisis, and our economy is under significant stress.
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We have been slow to face up to the fundamental problems in our financial system and reluctant to take decisive action with respect to failing institutions. ..................
We have been quick to provide liquidity and public capital, but we have not defined a consistent plan and not addressed the basic shortcomings and, in some cases, the insolvent position of these institutions.

We understandably would prefer not to "nationalize" these businesses, but in reacting as we are, we nevertheless are drifting into a situation where institutions are being nationalized piecemeal with no resolution of the crisis.
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The treasury has invested public funds, buying preferred stock in more than 400 financial institutions through the TARP program

Sweden, which experienced a real estate decline more severe than that in the united states, was able to resolve its banking problems at long term net cost of less than 2% of the GDP.
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Without going into great detail about the RFC, I will note four principles that, Jessse Jones the head of the RFC, employed in restructuring the banks. The first step was to write down the banks bad assets to realistic economic values. Next, the RFC would assess the character and capacity of bank management and make any needed and appropriate changes. The third step was to inject equity in the form of preffered stock, but this step did not occur until realistic asset values and capable management were in place. The final step was receiving dividends and eventually recovering the par value of the stock as the bank returned to profitability and full private ownership.
At one point in 1933, the RFC (reconstruction finance corporation) held capital in more than 40% of all banks, representing one third of the total bank capital according to some estimates, but because of the four principles of jesse jones, this was all carried out without net cost to the government or to the tax payers.