Reply #13: Wiping out shareholders is never a good idea

[Warpy]

but while a firm is temporarily nationalized, all trade in the stock should be forbidden. It would just sit in the portfolio doing nothing until such time as the firm turned enough of a profit to pay its debt and be restored to the private sector.

Don't forget there are a lot of old folks out there who invested in their stock precisely because they were so large. Large means safe to a lot of folks out there and it was a conservative investment. You'd be wiping out a lot of what they survive on and hope to pass to their children.

Nationalizing a corporation to destroy the corporate culture that led to its demise is a great idea, but not in perpetuity. Government appointees tend to become just as corrupt as private management over time, and should know that the arrangement is temporary.

However, yes, the economy built on a lot of debt churned into fantasy profits for the wealthy is dead. Let's hope we can raise another rational economy on its ashes. Let's hope we can keep it this time.