A little government control of capitalism is needed, but its a fine line. IMHO the pendulim has recently swung a bit to far towards socialism.

China is hardly unregulated capitalism, its a gready military dicatorship. You can't do anything without the governments involvement.

In an ideal world the government would reign the capitalistic markets in a bit when they get to hot, to avoid crash's, and prop them up a bit when they slow down. Sort of act like a counter balance.