In the March edition of Portfolio, John Cassidy details how the federal government (and taxpayers) essentially bailed out and nationalized much of the banking sector over the past 6 months.
Thus, while the current administration says it will remain hands-off during the credit crunch and bursting bubble, the truth of the matter is that hundreds of billions of dollars have been lent to failing institutions at rock bottom rates by various taxpayer financed institutions (e.g. FHLB).
In the end Cassidy muses that "in order to save capitalism, it is sometimes necessary to administer a stiff dose of socialism." This is odd if for no other reason then the fact that Cassidy spent the entire column discussing precisely how government intervention caused a misallocation of assests through poorly developed investment strategies (e.g. subprime loans).
Also, if you missed it yesterday, Speigel ran a piece ominously entitled "Worst Financial Crisis since 1931? German State-owned Banks on Verge of Collapse." You will never guess what poorly developed investment strategies they were involved with and the ballyhooed solution to the quagmire (hint: it rhymes with axepayer).
And an added bonus, today the British taxpayer was effectively called into action to subsidize a large failing bank, Northern Rock. What incentives does the government have to effectively manage it?
See also: The Theory of Money and Credit. Via Mike Ewens