Capitalism on Trial

As Junk Bonds has pointed out there will be much analysis written about these tumultuous times. I read something worthwhile by Krugmann today about the proposed plan from Bernanke and Paulson.

here's the link: http://krugman.blogs.nytimes.com/2008/09/24/a-700-billion-slap-in-the-face/

Why can't the government get the same terms as Warren Buffet did for his Goldman preferred shares. He gets dividends, and warrants for his cash. Shouldn't Amercians get the same for their 700 billion? Why must they socialize the losses, and privatize profits?

What they should really do with their 700 billion is to charter some new banks, and with fractional reserve banking this should generate at least 7 trillion in new loans and credit. Let the weak ones die. This is how capitalism ought to work.