Aw, I only just read David Leonhardt's article in the March 11 New York Times, so the newspaper is no longer taking comments, but I gotta say ...
First Leonhardt praises the distinguished authors of a book (Looting, published in 1993) which "argued that several financial crises in the 1980s, like the Texas real estate bust, had been the result of private investors taking advantage of the government."
Then Leonhardt notes, "This form of moral hazard — when profits are privatized and losses are socialized — certainly played a role in creating the current mess."
("Moral hazard" is an economist's term for "risky behavior" caused by such things as the existence of taxpayer guarantees of losses. For instance, the FDIC uses taxpayer money to insure individual bank accounts up to $100,000 [now $250,000] - just as the Fed is now using yet-to-be printed trillions in taxpayer money to buy - again - toxic "assets" that shouldn't have been bought in the first place.)
Finally, Leonhardt repeats his prescription to cure this lamentable tendency of Wall Street to "take advantage" of the poor old well-intentioned government: "If we don’t get rid of the incentive to loot, the only question is what form the next round of looting will take." And his prescription?
Non sequitur, to put it mildly. Statism turns the "incentive to loot" into the only operant motive for economic behavior and the entire economy into a moral hazard. Nationalization will make Ponzi schemes look like good old-fashioned bootstrap capitalism.
The American taxpayer, that stolid, solid, plodding workhorse of the world. Oh, we are Fortune's fool! The world seems to be betting that we'll keep on being played for one, too ... which is the saddest part.