The big banks are using the money to buy weaker banks, pay stockholder dividends, and hand out executive bonuses. (This is the pattern established during the previous Reagan and Bush recessions. The strong use their cash to buy up the weak. In this case it is OUR cash they are using.)
Instead of freeing up credit, banks are freezing consumers' credit, and charging more for it. How is this helpful?
Consumers afraid for their jobs and getting huge jumps in credit card fees and interest are still spending––but they are no longer buying. Much of what they used to spend on products they are now spending on interest and fees.
What happens next? As consumers stop buying things, manufacturers, distributors and stores start laying people off by the thousands.
Unregulated markets are not free markets; they are controlled by the powerful. They are managed by greed. (Are we surprised?) They are organized to benefit the fewest people possible in the name of "efficiency." Always Lower Prices are delivered at the cost of Always Lower Wages (and Always Bigger Bonuses for the owners of the Big Box.)
The other option isn't Socialism or Communism, it's called looking out for the American Middle Class. As Democrats and Republicans alike used to do, under Truman and Eisenhower and Kennedy and Johnson. Even under Nixon (who would be a Communist by McCain and Palin's definition.)
When more people are paid better, the economy booms; when fewer people get paid insanely the economy slowly strangles itself. This is the second time we've had to learn this. It happened once before under Coolidge and Hoover. It created the Great Depression.
This is the final proof about the "trickle down" fallacy, the cockeyed notion that if we paid the top one percent a bazillion dollars, that those dollars would find their way down to everybody else. They might, if we were sellers of $50,000 wristwatches or $2000 hairdressers or tony chefs or sellers of $500 loafers.
The average "beneficiaries" of this topheavy financial system are hardly benefited at all, they are underpaid workers of two and three jobs, industrial workers who've given up on the notion of a middle class life because they can't unionize. $7 an hour cleaners of $800 a night hotel rooms. Machinists who are being paid to train their cheaper replacements or box their machines to be shipped overseas.
The true engine of our economy isn't the banks who are hoarding the trillion dollars they got bailed out with. It is––it could be––well paid workers whose jobs are secure, who aren't ripped off by lenders, who trust their government to do honestly by them. But that engine has been stripped bare by the Republican theory of trickle-down.
The Republican years have been a disaster for most Americans. Even Alan Greenspan, the high priest of trickle down, has admitted he was wrong, surprised by the arrogant chicanery of the men in the executive suites. He was fooled. "Shocked, Shocked! to discover there was gambling going on in the casino!"
The solid Eisenhower and Kennedy economies were built upon the large middle class created by FDR's New Deal; it respected working people, it included them. The new Reagan-Bush-Bush (McCain?) Republican Economy was, in essence, a Ponzi Scheme. The question is: are a majority of Americans still content to be fooled by it?