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Despite the likelihood of future bailouts, the government articulated a consistent policy to deal with private enterprise failure, and there is no rule book for how the government should act This is not surprising; the philosophy of free market capitalism, so deeply engrained in the U.S. economic system, is difficult to reconcile with government's rescue of businesses that fail in that system. Unlike some other countries, the U.S. government does not invest surplus funds or engage in entrepreneurial activities for economic gain. The phrase "nationalizing private business" conveys serious negative connotations.

Accordingly, how the government behaves when it is a significant shareholder in private business is a question worthy of examination. Part II of this Article sets forth, as background, general principles of corporate governance as well as the T ARP bailout policy as articulated Congress and the executive branch. Part III then closely examines the government's actions as an equity holder. It begins with the closest parallel to the current situation, the Federal Deposit Insurance Corporation's (FDIC) 1984 acquisition of an eighty percent ownership interest in the public holding company of Continental Illinois National Bank and Trust Co. (Continental Illinois), which was, before its failure, one of the ten largest banks in the United States. The paper then looks at the 2008-09 bailouts of AIG, Citigroup, GM, Chrysler and Ally and shows that the government has developed a policy for how it acts as a shareholder. Moreover, notwithstanding the government's assertions of a "reluctant shareholder" policy, the government has been deeply involved in these companies as a creditor, regulator, and legislator.

Finally, in Part IV, I argue that government intervention in business has become sufficiently regular that the government should develop policies for the future so that its actions are more forthright and transparent. To that end, I set forth a modest proposal consisting of three suggestions.