1) Capitalism has never failed. The so-called 'failures' of capitalism are all the result of government intervention, particularly the panics. Read Rothbard's History of Banking in America and his book on the Fed.

2) Socialism can't work, because an economy needs a pricing mechanism geared to economic fundamentals, and this is possible only under two conditions: (a) hard commodity based money, like gold or silver; (b) complete freedom in the exchange of money, i.e. a completely free market. To the extent that the monetary system is interfered with, the economic will become inflexible and corrupt. The result will be such things as panics.

3) The worst possible example of (2) is the creation of a central bank which has the exclusive right to issue soft money unbacked by a commodity, and no restrictions on its printing. I.e. the Federal Reserve. And socialists all called for a central bank of this sort.

4) Part of the reason the American people want these things is they don't understand the value of capitalism. America hasn't been capitalist in the original and true sense for over 100 years (probably before the Civil War). The big changes during and after the Civil War were basically government involvement in big business and banking - these crushed the country. The other reason, of course, is that the American people are inundated with socialist ideals from birth. No wonder they like the institutions. They no longer understand the nature and value of freedom.

5) Even if the people want this stuff, that says nothing about the true value of socialism.