Cato: Bush and Obama have killed capitalism

"Do we still live in a capitalist country?

Is the U.S. drifting toward socialism?

Even using only the narrowest meaning of the word — government ownership of business — the answer is clearly yes.

Last year, the Bush administration trampled private property rights by expropriating 80 percent of AIG, Fannie Mae and Freddie Mac without shareholder approval. As should have been expected, that scared stockholders away from other financial stocks, depleting the banks' cushion of high-quality capital. "Capital injections" from TARP (thinly disguised debt) greatly aggravated that exodus of private capital. So did Treasury Secretary Timothy Geithner's frightening "stress test" threats to wipe out shareholders by converting government's preferred stock to common.

Like other flirtations with socialism, the Troubled Asset Relief Program has been an unmitigated disaster. Public capital simply displaced private capital, leaving taxpayers holding the bag. The expression "socialize the losses and privatize the gains" is only half right; both shareholders and taxpayers were losers."

http://www.cato.org/pub_display.php?pub_id=10042