My Indian readers may be in a panic today over the sudden collapse of their stock market, so for their benefit, let me offer a little history lesson.

America's stock markets crashed periodically throughout the 19th and early 20th centuries. These were known as "panics" and were given by year. The Panic of 1837, the Panic of 1893, the Panic of 1907. Enormous quantities of capital were wiped-out, and government intervention was demanded.

The intervention came, but stock collapses didn't stop taking the economy with them until decisive action was taken.

That action was the 1934 creation of the Securities and Exchange Commission. Well, it wasn't just the SEC's creation, but the ascension of its first chairman, Joseph P. Kennedy.

Yeah, as in father-of-Kennedy. That Kennedy. Ever wonder how the old bird got his dough? He was a stock market swindler, one of the best in the 1920s. Knew all the tricks. Used them, too. The story is he got out before the crash because he heard the shoe shine boys talking about their own stock picks, and recognized the market had grown frothy.

Kennedy cracked down. He dealt sternly with market manipulation. It took the market until 1954 to surpass its 1929 high, but New York was by then on its way toward being the world financial capital it is today.

You may not believe this, but Delhi could become the New York of the 21st century. To get there it needs to copy, not just Kennedy, but the self-regulation mechanisms the NYSE put into place later.

I'm proud to say India has done a lot of this work already. There is a version of the SEC, called the Securities and Exchange Board of India or SEBI. There are "circuit breakers" in against sudden market falls, which clicked into place today.

But the next steps have to be taken. SEBI needs to look closely at capital requirements for listing, and de-list all issues subject to easy manipulation. It should consider whether those circuit breakers should be tightened. A "blue-ribbon" panel of financial experts should be appointed by the new government, one with real credibility, that will air the dirty laundry of this crash in public, before the whole investing world, and aim to bring Indian stock regulation into the 21st century.

Do that and this is just a blip. Do that and you can start taking market share away from other stock exchanges. Do that and you can become really, really rich, over time.

In my view the underlying Indian economy is sound. There are problems in rural areas, huge problems that voters demand be addressed. The New Deal turned these problems into opportunities, with projects like Rural Electrification and the TVA, with public works. Those choices are before India today.

It won't be easy, and there are no guarantees. But India can still rise, it can both rise and shine.