Well, my perspective would say that the system is corrupted(Fractional reserve banking a fraud, etc). Regulators sleeping at the wheels are probably in bed with the bankers. The hubris of the federal regulatory system and the people who manages it, thinks that they can manage the economy yet at the same time be non-corrupt. Then there are the big hubris of corporations that thinks they can manages risks with mathematical models and financial engineers.

Many of the same ideas is said in the article.

However, I propose a different, radical solution. Get rid of the banking regulatory framework, stop bailing out corporations, and get rid of legal tender law. Do nothing. Let the big guys fall. Let the economy readjust themselves to the fact of reality.

At this point in our economic development history, the interventions were so vast and deep that we don't know which way is up and which way is down. Democratic governments have produced thousands of new laws that complicated business dealing. Then lobbyists can sneak some laws in that prop up industries. When an intervention does goes wrong, another intervention is put in place to solve it. If there is an urgent social problem, the solution is to make new laws to solve it.

Wouldn't life be better with a few simple business laws that everyone can understand and follow?

Yet, those government people and their special groups managed to mess it up by padding taxation code, punishment for firing union workers, and punishment for alleged racial discrimination.

The more complicated a system of rules is, the more potential for corruptions, opportunities for conflict of interests, and regulators getting away not doing their job.(Hence the saying, "when a law is made, the first thing that will be brought is the law.")

I don't think the solution is more democracy. Voters are not really rational, nor will they have much interest in defending themselves from the myriad of special interest groups that permeates and compete in the democratic institution. Political and economic education is hard when you have million of citizens worrying about their own lives and competition within their section. Now they have to worry about what the local government, the state government, and the federal government is doing with these mega-corporations. Then they got to worry about the local regulators with their code, and finally have to face an IRS audit every once in a while. At that point, it become rational to become ignorant because of the cost of educating oneself is higher than the potential benefit would provide.

Is there a solution? I don't know. But I am content to let the system fall apart since political will is not going to acknowledge the reality about the many deficiency in economic policies(Which cause mass distortion of incentives in market actors), and the system of perverse incentive that exists within the government itself.

However, I am pretty excited about emerging technologies and the effort of libertarians to look for non-political means to solutions, especially the "anti-capitalistic free marketeers" varieties.(No, it does not involve warfare, or election of officials, and you don't have to worry about rioting)

I would say it involves a lot of makerbots, creativity, entrepreneurship. It is building a better economic foundation that isn't found on lot of debts, lies, and kickback. From there we can build a new framework of rules that's very strong on the basic. A framework that doesn't suffer from the mass confusions of laws added every years. Eventually, an alternative society would emerge out of a network of entrepreneurs, their connection with the community, and their customers. That alternative society would co-exists side by side and seamlessly with the other society at large.

But it requires a lot of stratagems and making a right of exits unknown or seemly nonthreatening to officials. It's a difficult problem to solve.

On the other hand, we could try to found a new country on the ocean sea, which is known as seasteading. It is probably a pipe dream, but the seasteading movement got some very realistic and pragmatic people. These individuals look for economic efficiency and business models in their seastead. They aren't try to build huge utopias complete with casino, strip club, and all the extravagances.

Again, seasteading and new countries are seen as a threat. Countries get nervous when there is a new neighbor on the scene. They will try to destroy the threat. It will require a brilliant amount of political stratagems and common sense on the behalf of the seasteaders to fend off nervous nation-states.

If the seasteading movement succeeded, no longer will we be restricted to an industry of 200 governments, many of them are not any good, and the best is mediocre at most. There would be a thousand governments, and that mean real competition. Terrestrial government now have to improve services and efficiency or face mass migration from their citizens to thousand of little nations on the high sea. We might not even need that many, as evidenced with the appearance of Firefox, opening up and intensifying the competition in the browser market.

Anyway, enough talking for me. The solutions if anything, is probably going to be hard to implement. It's probably deceptively simple. It will probably make the population mad. It might be something completely unexpected, even to me. But there is one thing that I am pretty sure, democracies doesn't work.

(Sorry for the wall of texts)