Now that the nine big banks that received TARP funds have repaid the government, Wall Street and Washington are heralding a return to normalcy. But the status quo ex ante has not been restored. The bailout of failing financial institutions, and the willingness of corporate leaders to slurp up taxpayer handouts, has created a frighteningly familiar dynamic.

Few people would suggest cloning Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) now in conservatorship-limbo,...