Cop. Out. City.

But as far as I can tell, there is no dialogue between Obama and his critics on this.  The farthest he's gone is saying he'll stand behind Geithner and Geithner is a great guy.  

The government, in its race to stop the bleeding, will typically need to wipe out some of the national champions--now hemorrhaging cash--and usually restructure a banking system that's gone badly out of balance. It will, in other words, need to squeeze at least some of its oligarchs.

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, [...] Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk--at least until the riots grow too large.

Eventually, as the oligarchs in Putin's Russia now realize, some within the elite have to lose out before recovery can begin.

[...]

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets)[...]

But there's a deeper and more disturbing similarity: elite business interests--financiers, in the case of the U.S.--played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

[...]

The great wealth that the financial sector created and concentrated gave bankers enormous political weight--a weight not seen in the U.S. since the era of J.P. Morgan (the man).[...] But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

[...]

the American financial industry gained political power by amassing a kind of cultural capital--a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. [...] Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America's position in the world.

[...]

To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards--contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.

"The Quiet Coup"

The phrase that will come back to haunt these Democrats, and one they will be uttering in mournful tones in November of 2010 and again in November of 2012 is "we didn't have the votes," because if they keep this up, no one will find them worth voting for again.

I'm not sure they know how to get control and legislate the agenda the American people elected them to enact.

If so, please postulate as to how.  We are Japan in the 90's not because of the recap plans or methods being deployed.  We are Japan of the 90's because we have no production economy of any substance in the near future.

Where will the jobs come from?  How will home prices recover in less than ten years? Will people continue to be under water working 3 crappy part time jobs for several years or will they just cede and move into bankruptcy like the record number of others doing it?

The problem with your argument is that it does not address the liquidity issue of the american public and the question really is do we want two to three years of a horrible economy or 10 years of a crappy one.

The next five years in our economy will be what it will be nationalization or not.  the costs or bailout would move to social programs, prison and FDIC payments and a bankruptcy lawyers will become the wall streeters of the 80's and 90's.