You need someone with the political will to say "you know what, more deregulation is not always a good thing". To make sensible regulations. To regulate against the enormous financial rewards given to those who take risks and seek short-term financial gain at the cost of long-term stability. To actually admit that market fundamentalism was a major factor in causing the global financial meltdown, and if it had not been for major government intervention it would have been a lot, lot worse.

The Tea Party and others seem to think that the problem was that market fundamentalism was not allowed to go far enough, and was not allowed to fix the crisis all by itself. Absolute belief in free markets has an almost religious fervour in some quarters.

Think of the left wing-right wing spectrum model; with pure communisim on the left and pure capitalism on the right.  Pure socialism is the mid-point.

Pure capitalism is not a good thing.  You'll have a society of a few elite "haves" and many "have nots".  It probably wouldn't sustain if the majority of the population did not have the ability to consume what the capitalists produced, never mind social instability.  Perhaps the middle class might consist of those in security related employment to protect the interests of the elite. In sum, the big fish would gobble up the small fish and at some point there would be no more small fish to support the big fish (a market made up of the general population).  Only the exceptionally cognitively elite could thrive in such a society.

Pure communism isn't a good thing either.  There is no reward for harder work, innovation, originality, etc.  Incentives to produce and take risks (develop an innovative new product) are totally lacking.  Such a society won't progress beyond mere sustanance of its populace.  Of course human nature being the way it is, there will be some elites.  Namely those that run the government-owned market.  They'll take whatever they want to reward themselves and justify it.

Socialism can be expensive to a society (high taxes) especially if there is a significant segment of the population that requires public economic assistance.

In my opinion, a moderately capitalistic society is a good thing.  Work, creativity and entrepreneurship should be rewardable.  There needs to be incentives.  There comes a point when marginal tax hikes become a deterrant.

Some government regulation is essential.  The financial industry is probably the most obvious one.  It is also important in other industries such as auto and food namely for universal safety reasons.  Any government regulation ought to be kept as simple as possible as to mitigate its hindrance on free enterprise activities.

That's always seemed obvious to me, and it's hard for me to understand how someone can argue otherwise.  Unregulated capitalism leads to exploitation first, and self-destruction second.  The firms that fared best were those that opted out of the dominant game being played, but few people looked ahead long enough to see the obvious crash coming.  Some of the newer players probably didn't even know there was another way to play--I've heard stories of people trying to get fixed rate mortgages, and having to deal with junior lenders who didn't know how to write up that type of contract.

Inevitably, what always seems to happen is everyone builds a single house of cards, then when one buckles under the weight everyone loses--even the people who aren't playing get caught in the avalanche.

Jayn, I totally agree.

The problem is that during a boom/bubble like the one that existed before the crisis, there often isn't another way to play.

Being a risk-averse fund manager or CEO during such a time, seeking more sustainable returns, is more than likely to see you replaced by someone who will get the returns that the market expects.

A risk-averse company which seeks more sustainable returns is rewarded with a lower share price by a market which expects higher returns. And that company becomes a takeover target for companies which are less risk-averse and thus have a stronger share price.

The market is not all-knowing and often operates under a herd mentality.

Pure socialism in not the midpoint, nor is it what you're describing it as: progressivism kicked up a notch. Socialism is one of any number of ideologies advocating worker control of the means of production, and is very specifically, in Marxist philosophy, the intermediate revolutionary stage between Capitalism and Communism in which a dictatorship of the proletariat (as in, the rule of the working class) is established, to protect the revolution from reactionary elements and provide the force to re-order society, so that (hypothetically) the state can be dissolved, and a non-exploitative, communist society can be established.

I get the impression sometimes that, to a lot of US Republicans. socialism is anything that is not pure unrestrained free-market dog-eat-dog capitalism.

Pure unrestrained free-market dog-eat-dog capitalism.  They will call interference anything that strikes fear in the american heart.

It is not only republicans. Legislators work for lobbiests, and do not represent us at all.  All the recently elected, esp, are deeply in debt to oil, insurance, financial, etc corporations.