I was brought up with 19th century beliefs, and Depression era values. My parents suffered greatly as children in the Depression. They expected another depression at any time, and passed that along to us children.
I was taught that capitalism couldn't work, because it relied on profits to continue, and that there would always come a time when profits would decrease, since the workers weren't paid the full value of their labor, and so were unable to buy enough back to keep profits coming to the capitalists.
But the genius of capitalism that we keep hearing about has kept it going for a century more than expected by 19th century dreamers. Two world wars and the great depression destroyed a lot of productive capacity, and the rebuilding after those disasters made it seem as if capitalism was booming. All you have to do is disregard the human misery caused by these tragedies, and it appears that all was well.
The military-industrial complex created much "value" that didn't have to be bought back by the producers and brought foreign dollars eager to buy the weapons of mass destruction that Americans produced. And the cheap labor and materials that America's military power provided the homeland made US worker's wages go farther.
Cheap foreign labor and endless credit seemed to work. Even though people have been warning that this can't last, it certainly seemed to go on long past the time it should have collapsed. Here's a warning from TWO years ago that it was all about to blow!
Now we're being told that the whole problem is greedy Americans who wanted to buy houses they couldn't afford. No, that's not the problem.
The problem is that Americans were given loans that were then packaged and resold again and again. Obviously, a loan for, say, $500,000, which is resold to speculators until it is "worth" $5,000,000 isn't really worth $5,000,000, because even if the loan resets at a higher rate, the homeowner can't pay that much money. Especially because half of working Americans make less than $40,000 a year. But the world economy has been propped up by this creation of "wealth" for the last 8 years, at least.
Back to basics. How can a people who make less than $40,000/year support the world's economy? No matter how little the Chinese workers make, at some point America can't buy their products.
And how can Americans who can't pay their mortgages pay enough taxes to buy out AIG, Fannie Mae, Freddie Mac, etc, etc, etc? The personal debt of Americans used to equal to the public debt (until last week).
These government buyouts are pretending that people who can't pay their credit card bills or their mortgages can now pay all that, plus interest and million dollar salaries to the CEOs, to boot.
So will capitalism finally collapse? And what will replace it?
I vote for cooperative sustainable peaceful relations among the people of this planet. I vote for production for use, not profit and a system that lives lightly on earth, instead of exploiting and polluting it. Our home planet, our only planet.
The alternative is mass misery, possible accompanied by war and/or famine, and a continued destruction of our ecosystem.
It seems like an easy choice. Oh, wait. There's no election that let's us decide.