A friend asked me to comment on something to do with the current economic mess. I wrote back about what I believed to be the core problem (with minor changes):
The bizarre bit therefore is not the behaviour of the individual bankers, which was wholly rational, but the behaviour of those who owned shares in banks and failed to spot the fault line in the business model.
Once seen in this light, nationalisation appears less attractive because the same applies. Governments are elected on five year mandates at best, politicians have limited careers and aren't betting their own money. So the same risk of bad lending applies - just with political motivations instead of personal gain involved. Replacing blind faith in the City with blind faith in Westminster doesn't fix the problem. It's being blind to risk that's the issue.