Seth Klarman, billionaire investor and promoter of risk-averse value investing, is concerned. Seth thinks the U.S. should actually try capitalism. He's right, considering the current status of Detroit, with many other cities and states to follow. Living within your means is a good idea. Competition and the market are more effective tools than policies promoting 'fairness' and picking winners.
I tend to agree with Alan Greenspan, that bubbles can't be predicted. I'd go so far as to say they can't even be defined. You 'know them when you see them'. Didier Sornette would disagree and has some basis for his view. However, Sornette's model isn't necessarily predictive of bubbles, and rather charts obsessive investing behaviors. Not all obsessive behaviors lead to bubbles, though his model is still informative. Regardless of how much you trust Sornette's models (and I do), the question is less one of 'what do you do' and rather 'what don't you do'.
It's worth noting if you do something right, it usually appears that you did nothing at all.