The former Fed chairman says that the means are now available to turn the economic tide. "Financial authorities, in the United States and elsewhere, are now in a position to take needed and convincing action to stabilize markets and to restore trust," he writes in a WSJ oped. He then cites all the efforts being made by the Federal Reserve, Treasury Department and central banks around the globe - efforts that so far have not shown much success. But he still seems hopeful:

The extraordinary interventions by the government (and taxpayer) should be ended as soon as reasonably feasible. That rebuilding will be the job of another day -- of a new administration here in the U.S., of finance ministries and central banks working together. It must draw upon the strength of the now chastened private sector. It will require more understanding of the risks embedded in so-called financial engineering and of the perverse compensation incentives that have exalted risk over prudence. There is, and must be, recognition of the essential role that free and competitive financial markets play in a vigorous, innovative economic system. There needs to be understanding, in that context, that financial ups and downs -- and financial crises -- will be inevitable, even with responsible economic policies and sensible regulation. But never again should so much economic damage be risked by a financial structure so fragile, so overextended, so opaque as that of recent years.

"Now chastened private sector"? We'll see.