Doug wrote
>
>I may be missing some historical precedents (like lemon socialism - the
>nationalization of failing industries), but I think they began in their
>modern form in the early 1970s, at least in the U.S., with the Penn Central
>and Franklin National bailouts, and with sovereign entities, the New York
>City fiscal crisis of 1975. Later on there was Chrysler, Mexico,
>Continental Illinois, etc.
>
>
If by bailout we're talking about an intervention that substantially preserves the value of existing debt or even equity, then I'm afraid you're a bit off on this. Penn Central & the Franklin National were recognizably classical bankruptcies. In both cases equity was pretty much wiped out, and their unsecured debt eventually paid off pennies on the dollar. Of course in both cases there were interventions by banking authorities to avoid spillover, but you would find the first J.P.Morgan doing this a hundred years ago. For U.S. bailouts in the "preservative" sense I think Lockheed was the first & then Continental Illinois.
John Mage