Is the Bailout Package a Capitalist Agenda?

Like most people I have been wondering what the rationale behind the bailout package is. Especially in light of the fact that the huge amounts of money being pumped into these financial institutions is yet to start trickling down to main street. One of the reasons given in support of the bailout package is that there was no credit and as a direct consequence of such lack banks were not willing to lend money to businesses. So the government was going to put these vast sums of money into the 9 banks so that credit would start flowing again and businesses would run as normal.

Unfortunately, even after putting huge amounts of cash into financial institutions, credit is yet to start flowing. One wonders therefore if the ostensible reason given for the bailout is indeed true. Or could it be that the banks are hoarding this money? And if they are hoarding money from the bailout why is the state silent about it? Do the banks know something that we do not know? Could there be a bigger and more devastating crash waiting to happen around the corner?

The treasury Secretary has said on more than one occasion that the bailout is working. Obviously from his vantage viewpoint he knows something that us lesser mortals do not know. As far as we can see, credit is still difficult to come by in spite of the bailout.

But from my angle what is even worse is that for all the reasons adduced in its favor, the bailout apparently rewards those whose businesses have patently failed. No reason has been advanced why Lehman Brothers was allowed to fail and other failing banks propped up with government money. Aware of this 'double standard' the administration has come out with a new rationale: These banks were too big to be allowed to fail. What does size have to do with it? That it failed and did so because of the bad decisions made by management does not mean it should be redeemed at tax payers' expense. If it was too big, why was breaking it up into smaller parts ever considered as an option?

And where does that leave those banks who have not been affected by the credit crunch when the government rewards failure. Is not that encouraging them to fail? And where does that leave competition which is the bedrock of capitalism? The logical step to this bailout is socialism. Despite all that is claimed for it, the bailout is a sure road to government intervention in the economy and a cynical way of introducing socialism through the back door.