I just watched Michael Moore's Capitalism: A Love Story and was glad to know that we do have a good alternative to capitalism (democracy). How exactly this would play out is left, I suspect, to Michael's next blockbuster.
My neighbor said that he thought the only problem with capitalism is that it isn't alway moral and that what we need is moral capitalism, where profit isn't the main goal. This seems a little like phone sex, or maybe phone sex where you talk about nothing but the weather. The beauty of capitalism is that if you are focused on profit and your customer is a shopper, in the end both will be served well. Here is an interesting discussion on Morality and Capitalism.
So why did capitalism almost tank the country? Why did banks take risks that in hindsight looked foolish. Was this a fault of capitalism? Did the banks know that no one would let them fail? Did they play us to the hilt? I don't know.