If America's political leadership has not collapsed, as Gerard contends, then what would a true collapse of leadership look like should it occur?

Helena Handbasket, Thousand Oaks, California, USA

Perhaps Liz in St Paul, MN, USA would like to re-read the title!

SaM, Hampshire,

The person who is "smug" about Australia and Canada had better look again. The wolf is at the door and you are not immune. Especially Canada where 80% of ythe exports go GUESS WHERE??
Australia is already showing signs of severe economic weakness.
Now tell me again how you are immune?

JLK, Portland,

Wonderful piece !

Jay, Dixzie, USA

Your title is wrong - The US has NOT embraced socialism, our leaders have. 90% of the American public DID NOT WANT THIS BAILOUT. Bush needs to go, but a lot of Congress needs to go with him, Starting with Nancy Pelosi and Barny Frank.

Liz, St. Paul, MN, USA

It isn't $700 billion.
Why do the media keep banging on about this figure? If they cared to read the bill or the previous drafts they would see that it is a maximum of $700 Billion, at any one time. After two years of toxic loan processing the final bill for the taxpayers will be a trillion plus.

Stu Peters, Nova Scotia,

In Britain, the government is more to blame than any other participant in the whole scandalous affair. It has made more money out of indebtedness than any business or bank which is probably why nothing was done to stop the proliferation of individual debt. Easy funding for Stupid socialist excesses.

Abe, Manchester, UK

"Capitalism is flexible enough to bend when the financial hurricanes blow".
Capitalism has bent to manifest itself as socialism! Besides the nationalisation, competition is lost out as mergers have taken place, market forces are smothered and market is bucked.

simon, LONDON,

Looking from the north I wonder what we are doing wrong: banks not failing, GDP growing slightly, employment stable, an election debate where the candidates actually talk to each other, candidates for prime minister not claiming to shoot defenseless animals. Maybe there is a "third way".

Patrick, Toronto, Canada

The blame for the sub-prime interest mortgage market should and does still rest on one group of people: The Sub-Prime Borrowers. I'm 4 years out of school making good money - I can't afford a mortgage yet. Why do my contemporaries think they are entitled to one? Or families with WAY more expenses?

Kyle, Burbank, CA, USA

samuel glasgow - Interesting comment given that the UK has the largest debt of any OECD country and the most in the developed world other than Egypt, Hungary and Pakistan.UK people have more debt than all of EU people put together. Scotland-over 45% of economy is govt spend. Truly can't continue.

KR, Cap Ferrat, FRANCE

The role of the Fed is not monolithic. It is not there to create growth and has been very much focused on killing inflation for decades. The Democrats are bleating about regulation because they know full well that they, and they alone are responsible for the origin of this problem. Bleat on Dems

Michael, London,

The root cause is that President 's Carter and Clinton degreed together with the PCbrigade. That persons regardless of low or no income should be allowed to have unsecured loans. Wall St. bundled and sold on as legitimate financial investments making vast profits.Gv'ment shld share the blame here.

ann, london,

criticising the bailout plan, but aside from Bernake and Paulson, who else has divined the consequences of NOT bailing out and trying to prop up the financial system? If the bailout fails, will our credit cards and checking accounts be worth anthing?????

Tom, Hollywood, USA

The outlay to bail out Wall St will be more than $700b. Try doubling that. Also, when a person or a country spends more than they receive in wages or tax, after a while they will go down. Maybe not now or tommorrow but eventually.

Samuel, Glasgow,

I don't necessarily agree with the article, but my wife does, so that should make you feel better.

Richard, Phoenix, USA

What's perfectly comprehensible is also supremely sad: government policy is one thing, but mass behavior is another. And Americans' behavior is horrific: rock bottom savings rates and an "I deserve it now" credo. Individual Americans can save themselves, but Americans as whole are failing us all!

Barry, La Jolla, USA

You rightly quote the repeal of the Glass-Steagall Act but this is a double-edged sword. The act prevented commercial banks becoming involved in investment banking activities. The repealing permitted the mobilisation of commercial banking capital into the frenzied securitisation which ensued

brian, Huddersfield, UK

The beauty of capitalism, like rock and roll and advertising is that it caters to the masses. To lose sight of this is to, at the very least, render capitalism superfluous.

glenn schaefer, holbrook, us

America hasn't has capitalism since 1913, when the Federal Revserve was created. A central bank is a pillar of the Communist manifesto. We have oligarchial collectivism just like Europe with more socialism being introduced at a rapid pace along with the police state.

James, tampa, fl, USA

Great article, great sense of proportion and perspective. And don;t you just love iut when those loathsome, smug, priggish, chauvanist Eurotits get egfg all over their sanctimonious faces. I hope their entire edifice falls on top of them.

Billy Barnett, HK,

Gerard: Isn't it funny the crisis hit weeks before the vote? Quite possibly we are seeing deja vu all over again a la "it's the economy, stupid." That was a lie in 1992 and just might be a lie now. No "plaudits with Marx and Engels" here, but more likely Joseph Goebbels.

George, Stillwater , Oklahoma

It should be remembered that the function of the Fed is to promote growth, not to control inflation, therefore it is easier for it to rush to cut interest rates. However markets have trumped central banks rates for a year now which is why a slump is inevitable.

roger sykes, christchurch,

Very good article, Mr Baker.

But there remains a massive oversight in UK and US reporting on the "Anglo-Saxon Model".

Both Canada and Australia's banks are in *very good shape*.

Why? Gee...does the term "regulation" ring any bells?

Of course, the UK completely overlooks Canada's housing model.

stephen saines, toronto, canada

I think the real problem is not that "Europe" refuses to recognize the crisis, but that some parts see it before others. Ireland sees that it needs to bail out its banks, but Germany is in denial - so far - and there is no EU Treasury or policy. Tell me again how the Euro is a "single" currency?

jon livesey, Sunnyvale, CA/USA