Instead of the market regulating itself...

Good markets will regulate bad markets.

So it's still the market regulating itself.

And who are these people who "fundamentally understood the old system" other than the people who ran and profited from the old system?

It clearly isn't regulators.

So who's left except the Lloyd Blankfeins of the world? And why, if the LBs are profiting so hugely, will they want to reform the system that's served them so well? And in which they believe?

Beyond this...

It's the invisible handedness of the market that appeals to conservatives and to which they always appeal. Fiddle with the market, and it will almost always make things worse. Sometimes, much worse.

The market, in their view, is an organic system that moves and changes much like culture and society change organically when left alone--according to its own rules and impulses. Yes, bad things do happen. Unavoidable. But when you try to fix and avoid the problems, you aggravate a system that no one has the intellectual to fully comprehend.

The LBs of the world may "understand" the system theoretically, but it's now so complex and vast, no one can encompass it intellectually, literally wrap their minds around it, and control it. They can make money in it, but they can't really bend it to their will beyond manipulating things to maximize gains. The market has a mind of its own and will crush people who get in the way. The rich get crushed, too; it's just that they have a lot of money to survive the crushing, and they don't have to take a lot of risk to make a lot of money. 1% of a billion is a lot of dough.

The LBs set it in motion and keep adding new wrinkles to it which then lead to even newer and unanticipated wrinkles.

So how, then, even assuming they wanted to, are the LBs supposed to create new good markets to control the out-of-control old markets?

I'm reminded a bit of an eye operation I had as a child. I had a turned in eye, and they did surgery in which they detached and reattached the small muscles that control eye movements. The cosmetic outcome was good, but, as it was explained to me later, they can never put the muscles back in precisely the right spot, and that creates new vision problems. So you create new problems by messing with nature.