Those who prefer a well-regulated, European-style economy are gloating these days about the meltdown on Wall Street. It would be easy to assume that the events of the last few weeks are proof-positive that capitalism simply doesn't work.
However, the current debacle reminds me of GK Chesterton, who said, "The Christian ideal has not been tried and found wanting; it has been found difficult and left untried." Same could be said for capitalism.
The basis of capitalism is that it taps personal greed as a means to achieving the ends of proper distribution of goods and services. Capitalism works because most people are ultimately selfish. However, for the system to work, the selfish capitalists must face the consequences of bad decisions. Risk, not the Fed, is the proper regulator of a free market.
The problem with the United States is that the government always steps in and takes away the risk. Everyone knows this, so there's no reason not to overextend. The same is true of the way we distribute land. Build wherever you want! Spend however you want! The government will rebuild your house if a hurricane washes it away, and buy off your bad debt when the NINJAs can't pay.
This is not a free market. It's a free lunch. And, someday, someone will have to pay for it. Looks like someday soon.
Pursuit of fiscal happiness begins with Need and progresses into Want as a Capitalist society grows wealthy. The need for food turns into the want for better food, and more of it.
Selfishness comes into play when one person's desire, or Want, becomes more important to that person than another person's Need. I want sushi more than I want you to have rice.
Of course, that doesn't account for all the truly altruistic people among us. Here, have half of my sushi. I like those people lots. I also like sushi. Mmmm, sushi.
I agree that we are not letting capitalism work. All of the problems we are now dealing with are caused by incompetent or ill intentioned people tampering with the free markets, trying to control outcomes. I have been watching this fail since Johnson's Great Society and Nixon's wage and price controls. It has always failed when the state tries to control markets. They could better control the tide by statute. In this country our politicians are our most dangerous enemy.