There are two prevailing interpretations of the recent financial and economic unpleasantness.  Liberals tend to blame the Reagan/ Conservative order which, they say, has prevailed since the 1980s.  The financial collapse shows it to be a failure, they say.  Others suspect the true cause is that the New Deal Order, which Reagan et al did not really change, is no longer viable.  Walter Russel Mead has some intersting thoughts on the latter thesis.  In the 1970s, he says, the private sector side of that order fell apart:

As the old system dissolved, companies had to become more flexible.  As industry became more competitive, private sector managers had to shed bureaucratic habits of thought.  Lifetime employment had to go.  Productive workers had to be lured with high pay.  The costs of unionization grew; in the old days, government regulators simply allowed unionized firms to charge higher prices to compensate them for their higher costs.  The collapse of the regulated economy (plus the rise of foreign competition from developing countries) made unions unsustainably expensive in many industries.

But the government side did not.  It is crashing now.  It simply costs more than we can afford, and does not deliver goods and services nearly as well as do private companies. (Perhaps I should say truly private companies, and not ones that are overly regulated, like health insurance companies).

The collapse of a social model is a complicated, drawn out and often painful affair.  The blue model has been declining for thirty years already, and it is not yet finished with its decline and fall.  But decline and fall it will, and as the remaining supports of the system erode, the slow decline and decay is increasingly likely to bring on a crash.

Meanwhile, Arnold Kling argues,

that there is a discrepancy between trends in knowledge and power. Power in the United States is remarkably concentrated. We are creating increasingly specialized knowledge, which means that the information needed to make good decisions is located outside of Washington, D.C. And yet we have a central government attempting to do for 300 million people what governments in places like Singapore, Hong Kong, Denmark, and Switzerland do for many fewer people. . . .

These days, most of the people who complain that the U.S. is ungovernable are looking for solutions that would allow progressive technocrats to be even more powerful. I believe that the solution is to decentralize government.

To push things a bit further.  Reagan did what was politically feasible in the 1980s. As a result, he gave the New Deal Order an extra twenty or thirty years.  Finance became an industry in and of itself, rather than the industry that supports and enables the others.  Manufacturing in the U.S., meanwhile, remains difficult thanks to a regulatory structure that is out of date. The goal should not be simply to scrap these anachronistic regulations, but rather to change them to make them less onerous. Obama is right, we need a new politics. The trouble is that the "new" politics he wants is an extension of the the old politics that got us in trouble in the first place.