Cactus says' why don't we try a bit of captalism in these times'

Cactus says' why don't we try a bit of captalism in these times'? Catcus gives an example in which certain companies make the wrong technological decisions.

And if these companies go bankrupt, its not the end of the aerospace industry. The parts of these companies that are functional would be scooped up by other companies, provided they were deemed to serve some useful function going forward.

Cactus concludes with

And the solution to the whole financial mess is the same as the solution in my little fable: let the companies that made bad decisions fail, and end the subsidies the industry receives. In other words, let the bad banks die, let their counterparties die as they made equally bad decisions (its not like companies in just about any industry aren't able to figure out in many cases who their riskiest counterparties are, regardless of the industry they're in, as per this piece by Yves Smith), and end the banking industry's monopoly access to the Fed. A lot of banks will go bankrupt - after all, being a middleman is relatively easy work. But a) its unfair and b) inefficient.

Following this approach would lead to some term pain - a lot of it in fact, but that pain is going to be there no matter what approach we take, and that goes doubly so for the silly and counterproductive plan pursued first by the Bush and now Obama administrations. But in the long run, bringing the banking system into some semblance of capitalism will make everyone better off... except the grifters.

Emphasis Mine

The fundamental flaw in Cactus' argument is that the efficient operation of Capitalism leads to a concentration of capital. Cactus assumes in the example given that other firms will enter the market as others go bankrupt. The assumption is one of homeostasis in the Capitalist system.

The reality of Capitalism is different. The efficient operation of Capitalism leads to a monopoly in a technological niche by efficiently removing less able firms and raising the barriers to entry at each iteration of the development of technology. Monopolies are only overthrown when their technological edge becomes obsolete.

We are in this economic depression precisely because of the efficient operation of Capitalism - not the opposite. We need to change the social relations to change the outcomes.