We’ve already done some nationalizing

Kevin Drum is right:

And one more thing while we're on the subject: Since you, the American
taxpayers, are now the owner of AIG, you're also the main sponsor of
the Manchester United football club. The last time I mentioned this,
the season was young and our club was mired in 14th place. But I'm
happy to report that since the U.S. takeover of AIG in September, our plucky lads have been playing well and Man U now leads the Premier League.

The more general point is that nationalizing AIG, or quasi-nationalizing AIG, hasn't solved the basic problems there.   Nationalization is hardly to blame for these problems, but the post-collapse AIG has been a mess, bleeding money and lacking accountability.  You might claim: "they didn't nationalize it the right way" and maybe they didn't.  Still, once you proceed down the nationalization path, you have to live with the nationalizations you will get, not the nationalizations as a professor might recommend they be done.  The AIG transition was overseen by Bernanke and Geithner and of course Congress isn't nearly as smart or as well-informed as those two guys. 

Beware.  The mere ability to write, from the sidelines, "it should be done like X" doesn't eliminate the lessons of public choice economics.


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