The choice is between a lightly or tightly regulated economy. The former is highly competitive, innovative, and dynamic -- but periodically visited by wrenching crises. The latter is more stable, but slower growing.

We do know what has worked just fine in the past, so Mr. Greenspan chooses his conclusion based on his ideology, not the facts. So-called "mixed" economies have proven quite successful on numerous occasions. The post-war boom is one such example, one that social conservatives are still nostalgic about. The Scandinavian countries still operate such an economy, and the "Asian Tigers" based their spectacular economic growth on this model (before the IMF neoliberals put them over a barrel and helped plunder their economies). Just on performance issues alone the choice really is clear: we need to go back to that more "tightly" regulated model.

Salon readers might be licking their lips at that prospect but it would be a global phenomenon.

No, not at all. I do not look forwards to any economic catastrophe, any more than you or anyone else does. You seem to present a false dilemma, though: either the Fed bails them out as they did or they go under. But there are other alternatives. In the early 1990's Norway suffered a banking crisis (brought on by deregulation, whaddayaknow) that threatened to undermine their financial system. 2/3ds of the banks were affected. The government stepped in and averted disaster. But it did not do so without conditions. Those banks that were in the deepest trouble had their shares written down to zero. The stockholders were not bailed out, but the banks were. In effect, the government expropriated the banks; taxpayers thus got something for their bailout.

It must also be pointed out that the Norwegian government, unlike our own sad excuse for one, was ahead of the curve and was planning this rescue while some bank executives were still congratulating themselves on a job well done. Most likely they were able to do this because there was no incestuous relationship between regulators and the regulated, as in this country.

You can read all about it here:

http://www.norges-bank.no/Pages/Article____13822.aspx

For the last 2 decades we have heard Democratic candidates denigrated over and over again. Feminine. French. Prevaricator. Liar. Serial Liar. Girlie Men. They have been Swift Boated, Love Canaled, Love Storyed, Willie Hortoned. And now we are shocked, shocked! that HRC was called a whore (not an uncommon accusation of any politician, by the way). Randy Rhodes didn't start this. It's now par for the course, thanks to our friends on the Right, and we'd better get used to it, and learn to deal with it. Because no-one is going to suspend Limbaugh, Savage, et. al. for doing the same come the general election, when the Democratic nominee's supporters go crying about it.

As for whether she deserves the appellation, let me provide this quote, which destroyed any appeal she might have still had with me:

“I think that since we now know Sen. (John) McCain will be the nominee for the Republican Party, national security will be front and center in this election. We all know that. And I think it’s imperative that each of us be able to demonstrate we can cross the commander-in-chief threshold

“I believe that I’ve done that. Certainly, Sen. McCain has done that and you’ll have to ask Sen. Obama with respect to his candidacy,”

There you have it. In order to shore up her fading campaign hopes she unfavorably compares her Democratic opponent, her own party's likely nominee, to the Republican! Inexcusable. No doubt we will hear this again in the fall--coming from McCain's camp. Thanks, HRC, for bringing a McCain presidency just a little bit closer to reality.

Purely or highly socialist economies either don't take those risks and don't grow in the first place, or, they live with permanently high strutural unemployment as a result, which typically leads the same place.

Any specific examples? As presented here this sounds like a fact free talking point which says nothing more than "yeah, but socialism is worse." And what is a "purely socialist" and what is a "highly socialist" economy? "Socialist" is one of the most misused and misunderstood terms, thanks to years of propaganda from the capitalist Right--who use the term to describe everything from communism to a single-payer health care system--so it's impossible to know what is meant by the term without some definition.

At any rate, as a counterexample, I shall point out that the Scandinavian countries have largely socialist systems in place with mixed economies (kind of like Keynesianism on steroids) and have prospered. In fact, Sweden was one of the countries that suffered the least during the Great Depression, largely due to the aggressive economic intervention undertaken by their socialist government. Sweden continues to prosper, and I don't doubt that yet again they will emerge less damaged by this crisis than we will.

The proliferation of a vast array of complex financial instruments that are sliced and diced and recombined in a bewildering variety of forms and bought and sold and traded by thousands of parties across the globe...

My wife used the term "risk laundering" when we were discussing these instruments about a year ago. Like money laundering, risk laundering ought to be illegal. The whole idea of the marketplace is that an investor can assess risk versus value, reaping the rewards of making a good decision, and paying the price for making a bad one. But by obscuring the risks this fundamental working of the marketplace is disrupted, and what we are left with is what Noam Chomsky describes as socialized risk, privatized profits.