"Taking equity stakes in banks 'is something that is on the table,' says Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable. 'It would be an extraordinary measure for an extraordinary time'" (U.S. News & World Report).

This isn't the first time the federal government has gotten involved with a banks. The bad seed was planted with the First Bank of the United States (1791-1811), proposed by Alexander Hamilton (see Tom DiLorenzo's new book). The bad seed was replanted with the Second Bank of the United States (1816-1836).

This second bank was the subject of McCulloch v. Maryland (1819), the case where Chief Justice Marshall paved the way for the growth of the federal leviathan by capitalizing on the ambiguity of the infamous "elastic clause":

Among the enumerated powers, we do not find that of establishing a bank or creating a corporation. But there is no phrase in the instrument which, like the articles of confederation, excludes incidental or implied powers; and which requires that everything granted shall be expressly and minutely described. Even the 10th amendment, which was framed for the purpose of quieting the excessive jealousies which had been excited, omits the word "expressly," and declares only that the powers "not delegated to the United States, nor prohibited to the States, are reserved to the States or to the people"; thus leaving the question, whether the particular power which may become the subject of contest has been delegated to the one government, or prohibited to the other, to depend on a fair construction of the whole instrument. The men who drew and adopted this amendment had experienced the embarrassments resulting from the insertion of this word in the articles of confederation, and probably omitted it to avoid those embarrassments.

Although, among the enumerated powers of government, we do not find the word "bank," or "incorporation," we find the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. The sword and the purse, all the external relations, and no inconsiderable portion of the industry of the nation, are entrusted to its government. It can never be pretended that these vast powers draw after them others of inferior importance, merely because they are inferior. Such an idea can never be advanced. But it may with great reason be contended, that a government, entrusted with such ample powers, on the due execution of which the happiness and prosperity of the nation so vitally depends, must also be entrusted with ample means for their execution.

But the constitution of the United States has not left the right of Congress to employ the necessary means, for the execution of the powers conferred on the government, to general reasoning. To its enumeration of powers is added that of making "all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this constitution, in the government of the United States, or in any department thereof."

The Constitution has been a dead letter for two hundred years.