The end of capitalism?

One aspect of the much analysed cataclysm in the financial markets that bothers me is the implicit admission by the US administration that capitalism is dead. When the times are good, the capitalist makes money. When the times are bad, the public bails out the capitalist with a mega size cheque. Ok, this is an extreme statement. The public is buying the junk that is killing the capitalist. Actually the public is doing it so that 'markets can function'. Well. Hello. As per me, this is also part of capitalism - creative destruction needs to happen. It must not be stopped.

Per me, some of the consequences of the US administration's actions will last a lifetime - a) the world has seen the birth of the largest market manipulator ever - the US government. Ban short sales. Pour in the billions. Go after sellers. Where was this concern when firms were levering themselves up 30 times? (I kid you not - Lehman had $600 billion of debt, and $26 billion of equity!!). I wish I could get the same treatment - I will lever my meagre networth 30 times, make money when I can, and if I lose it all, I will look forward to Uncle Sam to capitalise me. What this tells every speculator is that everyone loves a rising market. So go ahead and plunge!!
b) who ultimately pays for this mess? Partly, the US taxpayer - he gets taxed more so that the US can fund its GIGANTIC fiscal deficit. But ultimately, 'Helicopter' Ben can just print more US dollars to bridge any gap between revenue and expense. This depreciates the dollar, screws exporters in (for example) India, spikes oil (and other commodity) prices, fuelling global inflation, so again screws India, and reduces the value of Asia's massive dollar reserve holdings (screwing, yet again, good old India).

I still think that the market will win out in the long term - such market manipulations will postpone the inevitable in the short run, but in the long run we will still see the necessary de-levering required to restore balance to the markets. But in the long run, we are all dead. So let us leave these minor problems for our children.