Surprise! Warren Buffett negotiated a better deal with Goldman Sachs than the Treasury Department did

Justin, I disagree with you. I believe that there is a higher standard for investment returns when the taxpayer's money is spent. As Bagehot believed, the terms of any bailout should be onerous, both in order to deter future bailouts, but also to reward the public for it's largess. There is no such thing as saving a system. There are certain banks that can be saved or not. As such, one has to deal with each bank as a separate entity, and place terms on it that are at least as good as a private investor should get, otherwise they could give the terms to a private investor. In some cases, this simply means giving the government more equity than a private investor would get. Other solutions might also work.

Reification leads to believing that a system needs to be saved, and that leads to an easing of concrete conditions that should be imposed on actual individual entities. A concrete example is when an individual on a team breaks a rule, and is let off easier than an individual because it would hurt the team. If you let the player continue playing, you should make the punishment harsher in other ways. Otherwise, you're just allowing behavior that will continue forever.

I'm not sure I believe this, but, I think I do.