No economy is immune to corrections, and some corrections HURT.
No economy will ever be immune to corruption, both from within and especially from those who are supposed to be regulating it.
Adam Smith’s ‘Hand’ is hard to see (it is invisible, after all) but markets that let it do its job will always fare better than those who try to force it. Sometimes the forcing comes from participants who try to ‘game’ the the system, sometimes it comes from governments who are trying to ‘save’ it. Sometimes they happen to be the same people, or their agents.
Will police ever be able to catch everybody committing crimes? Will an economy ever be able to be regulated to the point that no corruption ever causes someone to unfairly lose or earn money they don’t deserve? How much will it cost to create such a perfect form of regulation? Who will regulate the regulators? How do we determine what is an acceptable ratio of regulation-to-corruption?
How about we try the laws on the books first, punish the people who deserve to be punished (according to the laws) and then see how regulation needs to be adjusted?
How will the recent upheavals on Wall Street actually effect you, personally?

The truth is that Adam Smith’s invisible hand has always been a stupid fantasy. Trusting the market to regulate itself is as foolish as believing in god.

http://www.thisamericanlife.org/

Especially episodes #366 and #365

The Fed drove prices down, (and the real value of the dollar down with it.)

The clamouring had little to do with it compared with the burden of foreign debt, and the attempt to diminish it by diminishing the price of U.S. dollars.

I like the way this guy explained it (years before it happened.)

http://es.youtube.com/watch?v=MoSwkCog

Although he seemed like a jerk at the time, and my livelihood was greatly enhanced by banks offering my potential-customers very dangerous (to the banks) loans back then, I have to give him, and Ron Paul the recognition they deserve for trying to warn us that we were selling-out our true conservatism for a few pieces-of-silver-adjustable-rate-no-money-down-home-loans. And then, of course, dumping them on the wall street investors, (and many Chinese interests) filling the exchanges with improperly regulated CRAP.

@Legazpi Bill
<<I don’t know where you get the idea that the markets were “screaming for lower interest rates”
You’re right, of course, the markets weren’t, but lots of powerful economic pressure groups were. I think you’re interpreting the word “market” more literally than others.

Personally, I think the blame for this current mess lies firmly with the Reagan-Thatcher-Milton Friedman school of “Let’s stop actually producing things and turn the entire Western World into a service economy.” Crazy.

…and the ‘retiring’ Chairman of RBS will have a half a million a year pension – what happened to company directors being responsible for the stuff that goes on on their watch? Had this been a headteacher responsible for gambling away the teachers salaries he would have lost his pension and gone to jail.

http://www.telegraph.co.uk/news/3153626/Financial-crisis-German-minister-warns-of-far-Right-rise.html

Honestly, if it were drawn to my attention that I had engendered a sentence as atrocious as that I think I might top myself. “Brink” is the edge over a drop, so where is the brink of a meltdown? And why “meltdown” anyway, instead of “failure,” which at least works with “systemic?” And just what does “systemic” mean in the garbled sentence that has emerged? I mean, I can see what he wants it to mean, which doesn’t mean it does mean that, it means Humpty Dumpty is in charge of the International Monetary Fund. Furcrysache.