What we saw in October was an old fashioned Panic. A couple of generations ago, schoolchildren learned about them in history class. The US had Panics in 1819, 1837, 1857, 1873, and 1893 resulting from real estate bubbles. And Panics in 1884, 1907 and 1932 due to bubbles in other asset classes.
Bubble cause Panics. No amount of regulation can stop bubbles from happening. It's not like they didn't try. After the bubble of 1720 derivatives and short selling were actually banned for decades (yes they had derivatives nearly four centuries ago--there is no true innovation in finance; the same old stuff gets recycled with new names.)
The British authorities tried strictly regulating money creation by the British Central Bank in 1845. Didn't stop the bubble and subsequent panic in 1847. America opted for a central bank after the 1907 Panic, but that didn't work all that well after 1929.
As long as income inequality is high, the rich will have the wherewithal to bid up asset prices to a point where a bubble can form. For nearly half a century after WW II, high taxes in the US kept income inequality too small to achieve the sort of sustained bull market needed to ignite a bubble.
It wasn't until the great boom of the 1990's that the rich finally had enough funds to bid up stocks to the highest levels ever seen and then some, an event that showed how "it was different this time". Only then did an old fashioned bubble develop in stocks. This bubble had official sanction by the passage of the 1997 capital gains tax cut which was intended to produce capital gains from a stock market that was already overvalued.
This bubble was deflated without event by aggressive Fed action that encouraged funds fleeing the stock market to go into real estate. And then in 2003, the government sanctioned another bubble by passing another decrease in capital gains taxes intended to stimulate capital gains in an overvalued real estate market.
This time the Fed was unable to deflate the bubble safely and so we got a Panic. Once again, central banks cannot stop these things, not in 1847, not in 1929 and not today.
Now if we end up with a full-scale Depression, it will take a long time to "recharge" and we won't have another Panic for maybe 20 years. If we manage to avoid a Depression, then we will be right back here within 10 years, unless taxes on the rich are raised worldwide to "drain the swamp" of cash available for asset purchase (i.e. investment).
It's really as simple as that. You can run a high tax, Panic-free economy like we did over 1945-1981 with the problems attendant to that, or you can continue the low-tax policy in place since 1981 and get periodic Panics.
There really is no free lunch. Each type of policy has its drawbacks. What we are going through now is one of the drawbacks of the low-tax economic policy.