Layoffs in an Economic Downturn

(This is a response to the New York Times article linked above)

For decades we've been told that in the long run laissez faire capitalism will produce the best economy. This type of situation (massive layoffs in an economic downturn) illustrates the tension between the former and the latter. Our economy needs more people to be put to work; the capitalists would rather lay people off to keep their stockholders happy, and indeed may need to do so in order to keep their companies solvent. Even our government is asking the auto companies to trim their payrolls in return for bailout money, at the same time as the stimulus package is supposed to be largely for the purpose of producing jobs.