Let us imagine a quick transition from the deeply irrational, ultimately unsustainable economic system we presently inhabit to a democratic, socialist economy, one in which enterprises are run democratically, and economic stability no longer requires keeping our capitalists happy. Suppose we do get a financial meltdown on the scale of the Great Depression. And suppose we had a government newly elected, determined to effect this transition.
The first thing would be to assure everyone, a la Franklin Delano Roosevelt, that there's nothing to fear but fear itself. I mean, we are not talking about a meteor crashing into the earth, or an incurable plague, or a nuclear war. Pieces of paper have suddenly lost their value. Our resources are still intact. Our skill base is still intact. There's no reason for ordinary people to lose their jobs or see their incomes plummet-no material reason, that is.
What next? Well, since the stock market has tanked, let the government step in and buy up those now near-worthless shares of the publicly-traded non-financial corporations. (The price tag may well be less than Paulson's $700b. The government can print the money, if need be. In a depression it's essential to stimulate the economy by pumping money into it.) Suddenly our government has controlling interest in all the major corporations. (Notice, these assets are not "expropriated" by the government. They are paid for at full market value.)