Apparently there's talk going around normally laissez-faire-friendly circles that we should nationalize the banks, kind of like the Swedes did when their financial system was going pear-shaped in the 1990s. (The Wonkette site linked to here contains links to FT articles at the bottom that are a lot more information-friendly.) The advantage here would be that the taxpayers would stop being sugar-daddies and start being shareholders in the banks - meaning that if the banks are managed back to health, we come out okay revenue-wise when we sell the banks back to shareholders in the private sector. (Which kinda means we buy banks from ourselves and sell them back to ourselves when we're done with them. Economics makes no sense.)
Anyway, I don't see this as a particularly bad idea. If we're going to bail out banks, and it seems we've made the decision to do so, we might as well go all-in with it. The half-assed way we've been conducting the bailout hasn't done a damn thing where loosening up credit markets is concerned, and it's far from clear that we'll see that money again if banks get back on their feet.
I still think it would have been best to let one of the investment houses go into bankruptcy proceedings - this would have panicked people a little bit, but it would have settled once and for all what those damn mortgage-backed securities were worth and could have saved us a lot of trouble in the long run. But we're past that point now, and as long as we're involved with this bailout, we might as well do it right.