From an interesting article on our government and current economic situation:
Once government has the deciding vote in the financial system, however, one of two things can happen. Government can try to get out of the financial business and restore decision-making to the private sector. Or it can use its new power for political ends.
Public officials have more power when the access to capital markets decreases. People can access capital either through capital markets or the government. Except for resorting to crime and reliance on family and friends, there are no other sources.
Yet, relying on government and the Federal Reserve to access capital is not the same as relying on banks and other financial institutions. Bankers make decisions about who gets the loans, and on what terms, based on the ability of entrepreneurs and managements to carry on successfully. But a government’s decision to finance ventures—as in the case of the auto industry—is based on political clout.
— Reuven Brenner, Chair of Business Management at McGill University