Matthew Yglesias and Paul Krugman both suggest that taxpayers should get “a stake in the upside” (Krugman’s words) in return for bailing out the financial industry. But that’s unlikely to happen due to conservatives’ deep-seated hostility to government ownership of private industry. During the debate over Social Security privatization, many people pointed out that we could capture the upside of private equity investment (high returns) without the downside of individual accounts (high management costs, poor investing decisions) if the government simply invested Social Security funds in the market. But conservatives (including Alan Greenspan) killed this idea, warning of the dangers of government interference in private markets. Obviously the dire situation on Wall Street has changed the terms of the debate, making it possible for the government to buy almost 80% of AIG without protest, but it’s still not clear that the Bush administration would want the government taking equity stakes in all the companies it bails out.