Nationalization  

We can all agree that the United States Treasury has chosen to inject money through the banks through the purchase of preferred shares.  When TARP (Troubled Asset Relief Program) was first conceived, the initial intention was the buy the mortgage backed assets from the banks, which would remove the "toxic assets" from their balance sheets and recapitalize the banks.  This method would have injected more liquidity and given the banks a clean slate but would transfer the liability of the declining value mortgage backed asset to the government and therefore the tax payer. However, the Treasury Department has now chosen the inject liquidity through the purchase of preferred shares.  

I have heard the opinion that this is nationalizing the bank system.  Wikipedia defines “nationalization” is the act of taking an industry or assets into the public ownership of a national government.    Even though the government does theoretically own a piece of the bank, it does not have any voting rights. TARP purchase of the preferred shares of banks is quite different then the nationalization of Venezuela's and Bolivia's oil and gas which the government took full control of the industry where the governments decides who to trade with and the prices to sell their commodities. The United States Treasury has chosen to inject liquidity to the system though the purchase of preferred stock which usually carry no voting rights but may carry superior priority over common stock in the payment of dividends and upon liquidation.  The decisions to run the companies still is the responsibility with the their respective boards and executives not the government of the United States.  The government decision the capitalize the companies through preferred shares gives a return on their investment and higher priority if a company were to go bankrupt. Please keep in mind the company that issues the preferred shares always has the option of retiring those shares.