If the FDIC takes over they have specific rules governing their process, including rule 1 : attempt to find a buyer.

In a market with no liquidity? Shouldn't take long.

When decisions are made for the "greater good", "society", "community" or whatever term you choose to soften the tyrannical rhetoric, individual liberty is surrendered to the State.

So I assume you must have a Schneider Fire Department, a Schneider school, a Schneider Police force, a Schneider roading department... need I go on? It is normal and necessary for citizens to band together and sacrifice absolute freedom for the greater good. You can't have "civilization" without it.

This helps to make my point about other countries needing a G-S.

Why would G-S have prevented the crisis? The part that got repealed erected a barrier between investment and commercial banking. And the majority of subprime exposure wasn't covered by G-S in the first place.

The best run banks did not get involved in the subprime debacle and are currently doing quite well, including a number which are expanding by purchasing FDIC takeovers.

That's because liquidity and confidence was forced back into the market. By government. To justify the above position you need to assert that these banks could have satisfied depositors if (say) 10% of depositors decided they wanted their $ out. Even the best banks would have breached their covenants and FDIC requirements if faced with a small run like that. For a proper run it would be game over, 100% government ownership in every direction.

This makes no sense. If a bank has insurance against its bad loans and then both the loans and the insurance fails, where is it to get the money to "prop-up" the insurer?

Banks have covenants and agreements with large lenders and institutions like FDIC. The mortgage insurances offered by AIG have allowed banks to lend out more of their $ while still complying. Loss of that insurance would require more cash to be found (where?) or worse, would have allowed big lenders to call in their loans. Survival of AIG was absolutely vital for the US banking industry for this reason alone.

However, that's not the case as those purchases involve both parties freely agreeing to the terms ahead of the purchase. TARP was forced on some banks and the rules keep changing.

TARP had to be fair. Why should Bank A that will go under same as Bank B be allowed to refuse to participate in the rescue? And if its executives truly believe they are immune to the market, they aren't competent to be left in charge.