Gerald Friedman, economics professor, University of Massachusetts
The end of US capitalism? I really doubt it.
This is a very serious financial crisis and if mishandled could become a serious recession even a depression, but it is unlikely to be as bad as the Great Depression of 1929-40 as the authorities have learned to co-operate in crises.
More importantly, a capitalist system - or any social system - can only be brought down by an opposing system supported by a rising economic class.
There is no such contender on the horizon right now to challenge capitalism. So, we'll continue to muddle along.
Still, it will be bad all around unless we change direction. An effective anti-depression strategy would help those with bad mortgages so that they will be able to make payments on their mortgages and keep their houses; such a policy would help the banks by allowing for a "trickle-up" effect.
Instead, the Federal Reserve is trying to hold back the tide of defaults and foreclosures by helping the top.
At best, this will transfer the costs to average Americans, who lose their homes, watch their neighbours lose their homes, and will in many cases lose jobs when construction and other businesses fail.
Foreigners will be hurt too because many banks and other financial institutions outside the US have invested heavily in US securities including mortgages and stocks and bonds in US investment banks.
