This is a very, very serious crisis of capitalism: it has been the build-up of private borrowing that has kept the system going, and it's coming unstuck. The whole system is unwinding; the other day we saw the biggest nationalisation in the history of humanity (Freddie and Fanny) today it's AIG, and that still isn't enough.
A great financial economist and historian called Michael Hudson talks about how the US economy is basically fictitious, based on pretend earnings and pretend values. This will only genuinely become a crisis of capitalism if people generally become aware that much of the growth and prosperity produced by capitalism is a fiction, and if the consensus about where the real global value lies shifts radically. In other words, if people stop believing that apparently wealthy countries actually are producing wealth (see also http://michael-hudson.com)
We will see a shift in power away from the US, and towards the developing world - to countries such as Brazil and the Gulf states that have commodities to sell, and to China, where the savings ratio is high. We are going to see a new world order. America as a driver of the global economy is finished.
In the late 19th century and also in the 1930s, the impact of depression made people begin to question whether the free market and a completely unfettered form of capitalism was the best form of organising society. In both periods it encouraged on the left the idea of a complete social transformation through revolution, and also encouraged people to devise various schemes for social reform. The problem now - unlike in the 1880s, when people discovered the ideas of socialism, and in the 1930s, when it seemed that communism was the solution - is that the left doesn't have a coherent alternative vision. But this might change.
Some people, faced with recession, tend to hunker down, but others confront the government and demand a better deal, and that gives the left hope.
Like it or not, Capitalism is not dead: like a phoenix it seems to be able to rise from its ashes, and take new, different forms. To defend itself from the dangers posed by fast spreading Communist ideals in many Western countries, in the 30s it embraced the Keynesian solution: Roosevelt's New Deal could deliver many of the things that the left is calling for - more public spending, more training and education.
Maybe now, after realising that the era of financial gambling, unfettered consumerism, real estate speculation and growth supported by fraudulent credit tools is over, capitalism might resort to jumping on the green bandwagon, and starting a green new deal, which would employ large numbers of people to insulate homes, retrofit power plants, develop greener technologies, and carry out major environmental works.
Or it might become nastier, exploiting people and planet even more...but going down this route will be its death knell!