I kind of halfway agree with the OP, I just wouldn't consider it a flaw of capitalism.

From a capitalist point of view, blue collar jobs lost in the US to outsourcing and automation deserved to be lost. The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.

A true pro-capitalist party would admit that, rather than pander to coal miners and steel workers, and would try to make the US more competitive in the modern, global marketplace rather than try to drag the entire world back into the tar pit of American industrial dominance.

A true pro-capitalist party would even embrace socialist programs like nationalized healthcare and education, if that would make it easier for displaced workers to re-educate themselves and re-enter the workplace, and compete more readily with labor throughout the world, and take the burden of healthcare off of employers. Invest in infrastructure and technology. There's probably even a capitalist argument for basic income allowing the repeal of the minimum wage.

But "write as big a check as necessary and party like it's 1949" is just pandering, it's not even a serious attempt at a solution for anything.

> The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.

While not optimizing for the externality that those consumers are also the labor that's displaced thus destroying their ability to consume and thus not not a better solution for consumers after all.

The market is not magic, it fails often and it's very annoying to continually hear people brush off those failures with the no true Scottsman fallacy. If capitalism means to you only a perfect free market then it's a meaningless term because no such thing exists and more importantly that ivory tower definition is not what people are referring to when they use the word, capitalism as implemented in the real world is what they're referring to and jumping in and claiming "that's not capitalism" adds nothing to the conversation.

So yes, that is capitalism, because this kind of thing is exactly what capitalists do: they curry for favors from government to get into protected positions to avoid competition. Capitalism is what capitalists do, and this is exactly the shit they do. Crony capitalism is still capitalism.

> So yes, that is humanity, because this kind of thing is exactly what humans do: they curry for favors from government to get into protected positions to reap all the benefits.

FTFY. The problem you describe is a human problem that will happen in any system, capitalist, socialist or mix of the two. Power corrupts, absolute power corrupts absolutely. Capitalism simply provides power in a normal distribution proportional to wealth. Socialism provides power in a power law distribution and the head of that distributions constitutes absolute power.

I think he is saying that this is not capitalism. The existence of bailouts and government programs to direct the markets is not capitalism's 'need' for those programs, despite any politician's attempt to sell that idea.