I don't think its possible to have an over-abundance of capital for the stock market, although there can be an under-abundance of stocks worthy of hat capital. Abhoring that little vacuum, investors decided to lower their standards rather than increase the supply of worthwhile enterprises in which to invest. Any way, that situation is rectifying itself (btw - thanks in so small part to the GWB administration - they're doing a lot of good tinkering to set the economy and market back on sounder economic principles than was present a decade ago, not to mention pretty aggressively going after the bad' capitalists).
Now, what Welchs comments have to do with the price of eggs in Albuquerque during a full moon, I'm still scratching my head over. And if you think this economy is 'broken,' you've definitely been buying into too much leftist trash. I predict you will look back on this economy and wonder how it was that you didn't see it for what it was. Just take a minute to compare today's economic meeasures with, say, those of the Carter years just so you can see the glaring differences (even realizing you are too young to really understand what double digit inflation, interest, unemployment etc. are like to live through), or for that matter in aggregate with any other period in our history.
You do understand, don't you, that GDP is not based on how many dollars exist. There could only be a single dollar in the whole country, but if that dollar changed hands fast enough our economy would be fine. What you need to focus on is productivity. Of course our labor isn't profitable making trinkets the Chinese can make for far lower cost. That's because our productivity is so high in comparison. It doesn't make economic sense to use a bulldozer to plant a flower. Which is not to say owning a bulldozer is not a profitable enterprise compared to owning a trowel. It just means we have to apply our productivity to different tasks. High productivity does two things. It affords more 'leisure' (i.e. a better standard of living) and also affords more exploration into other productive pursuits (new capitalist enterpise). It means change. Increasing productivity necessarily means "loss" of certain labors to to other markets and disruptions to the way things are, but that is by no means a 'breaking' of the economy. Just the opposite, it foretells vigorous new growth. As a Greenie, you should appreciate that. Recycling that dead tree into the earth is a good harbinger, not a sign of a dead forest.
I think productivity increase is good. I think China industrializing is good. As far as the US becoming more and more a high productivity service economy, i think that's good as well. As I said in a recent post, I guess I am really more against monopoly capitalism than capitalism. Meaning more anti-Verizon than anti-Wal-Mart.