Here is an interesting article that begins "How do we protect the markets from their own overexuberance? By signaling that future failures won't get government bailouts."
I think he gets the framework of the solution right, but not the details, which is interesting in its own right. The market will not be helped by a government that sees its role as preventing all problems in the market. The market is a decentralized and messy thing, there will be downsides sometimes for some people. But clearly we have reached a place of inadequate transparency and inadequate understanding of the consequences of policies and of some individual choices. If we respond in a way that strengthens the rules of the road, but keeps the government out of the market--i.e. retain capitalism, we will be better off. If we decide the governments job is to prevent us from being "harmed" by the market, we are doomed.