"We have seen the free-market ideal almost thoroughly discredited in the past two years."

How so?

The financial crisis had two main sources:

1.) OPEC, a cartel of state-socialist tyrannies that taxes the productive and humane world by restricting production of fuel by government fiat to artificially increase prices. It managed to jack up the price of oil fourteenfold between 1999 and 2008. Were 70% of the world's oil reserves not under its control (including all the cheapest and easiest-to-get stuff), and oil a normal commodity traded in the world market like any other, the market price of oil would be stable and low, and the crushing OPEC tax on the world economy would not have existed.

2.) Systematic malinvestment mandated by a vast array of government laws and regulations, enforced by a staggering horde of prosecutors and bureaucrats in many agencies at many levels of government. The malinvestment took the form of forcing or pressuring lenders for political reasons to hand out loans to those who, based on the numbers, did not deserve them at all, or not at the terms offered. Had the market been allowed to freely operate, loans would have flowed to those who had the credit, asset to debt ratio, collateral, and payment history to merit them, and let them chips fall where they may. Instead, "disparities" in loan allocation, framed as "redlining", "discrimination", "withholding the American Dream from under-served communities" etc, became the bugaboo to be avoided at all costs, including economic rationality. The implicit government guarantee of Fannie and Freddie impeded proper market pricing of the high risk of these loans, propping up sales and encouraging speculation that would not otherwise have occurred.

And yet it is the free market rather than government that has been discredited?

None so blind as those who REFUSE to see.

What evidence do left-wingers have that Bush deregulated anything, or that deregulation caused the crisis? Bush increased regulation in 2002, Sarbanes Oxley.

Even Greenspan’s lowering of the Fed rate, was Government interference.

Government collusion, distortion, corruption and interference caused the crisis. The housing and banking crises were caused by Government interference.!

Bush was a bad leader, but Obama’s solution to every issue is (1) More Government, (2) More Spending and (3) More Taxing.

Obama’s policies are an exponential increase on Bush’s bad policies, while exponentially increasing debt.

Protectionism is not free trade. Google and read The Economist Magazine’s cover article on Obama’s “Economic Vandalism” by introducing tariffs on Chinese tires. All rational thinkers are moving to oppose Obama’s bad policies. The Economist once endorsed this radical left-winger, because they though he would be a moderate. But Obama is left of Che now.

Liberals: Instead of blaming businessmen for Government caused failure, blame Government for taxing business so much that they are forced to relocate oversees. Blame unions for increasing costs; and blame Government for distorting and increasing healthcare costs that Obama wishes to compound by taxing business even more.

Free trade means free trade. Our goal should be to make the USA the best place to do business again. Obama is harming us greatly. In fact, he is harming humanity as a whole, by attacking capitalism, the ideology that brought hundreds of millions out of poverty in the last decade. Obama is an arrogant idiot, who is factually and morally wrong on just about everything that matters.

Carney: Your diatribe is laughable if not pathetic. Let’s start with OPEC. Most of the OPEC countries are a dictatorship or monarchy such as the state run by the Saudi Royal Family, the largest OPEC producer. Very few, if any, OPEC members are socialist models, except maybe Venezuela. Moreover, while OPEC certainly does control the supply of oil, they have little to do with demand, (from the U.S., EU, China, Japan, etc.)which on the global commodity market is the real driver of price. The weak dollar also has a lot to do with the price/bbl since the oil is commoditized in dollars. While I certainly have no love for OPEC, let's just pretend for a moment that the world's largest reserves were in the U.S. Do you really think that oil would be any less on the commodities market because the U.S. controlled the supply? Think again. In actuality, it would probably be higher. For example, most of the time the Saudis are trying to reduce the extraction rate at OPEC meetings because the want the supply of oil to last longer.

Your second assertion is not just laughable, but patently absurd. "Systematic malinvestment mandated by government regulations" Give me a break! Malinvestment, absolutely, but "mandated", hardly. It was exactly the lack of regulation that caused this economic debacle in the first place. Every economist, and including the grand architect of this melt down, Greenspan himself, has made it clear that unbridled risk and greed precipitated the huge collapse of the big financial houses and banks. Irrationality was the order of the day. Yes, the consumer home buyer bought into the "American dream" of home ownership whether they could afford it or not, but the snake-oil mortgage lenders and greedy real estate brokers were there to wantonly hand out the money, not giving a damn whether these buyers could pay the mortgage . And to compound the absurdity, the big banks and financial house bought this paper (including Freddie and Fannie, by the way) and leveraged it out as risk free investment vehicles to everything from pension funds to municipalities across the globe. It was a house of cards driven by pure greed and blind hubris. And there was G.W. Bush in the middle of all this, clueless as usual, trumpeting how the economy was strong because it was every American's right to home ownership. The really reprehensible thing is how it continues to be business as usual with the big banks, taking the big risks, rewarding them with big bonuses, and just continuing down the road to next big bubble with arrogance and greed. I fault the Obama administration for not coming down much harder on these practices and getting the regulations so desperately needed into place. Your assertion that there were government regulations in place to cause this malinvestment is beyond ludicrous. There was no regulation and there was no way to reign in the unbridled greed.

Dead Head - Economists don’t use the word “greed” which a leftwing caricature of “rational self interest” Only left-wingers who want to spread class warfare, and fan economic envy and racial hatred (at those greedy white, Jewish and Asian bourgeois) use the word greed.

Beside it is socialist greed that lead to Soviet people turning over their neighbors to death camps for having a few extra eggs, and it was socialist greed that lead to 140 million worldwide deaths.

Provide empirical research about anything you’ve asserted. You cannot because your dogma is false. On the other hand, I can provide tons of research supporting the superiority of free markets. I understand you feel your false dogma is fact. Research proves otherwise.

You are the one who asserted that the government mandated malinvestment.

http://mises.org/story/3752 Greedy-bastard economics is used to separate responsibility from blame for financial bubbles. For instance, the housing and bad-loan bubble was widely blamed (especially by those overseeing government regulations) on greedy loan originators and unregulated markets. This blame was used to promote increased government intervention as a cure.

But government's hand was everywhere you looked in any serious attempt to understand the alleged "market failure." The Fed's maintenance of interest rates far below what the level of savings would actually sustain made housing falsely profitable. Allegations of redlining led to implicit government requirements that banks lend to borrowers who didn't meet conventional financial standards, and whom banks knew often couldn't repay their debts.

Under pressure for financial malfeasance and other failings, Fannie Mae and Freddie Mac made it clear that they were in the market for "bad" loans in a big way (well over $1 trillion). Given that their hidden subsidies (particularly implicit government guarantees worth over $2 billion a year and lower capital requirements than the rest of the financial system) had made Fannie and Freddie by far the dominant players in mortgage lending, this declaration told others that bad loans were far safer than they really were. No matter how bad the loans, Fannie and Freddie would take them off your hands. When that implicit guarantee suddenly dissolved, market participants (worldwide, not just in the United States) were suddenly faced with the real risks and far-lower values of these assets.

Even the latest healthcare "reform" reflects greedy-bastard economics. Pundits blame insurance companies for rising healthcare costs, yet ignore the plethora of government mandates and restrictions, not to mention subsidies to subgroups of citizens (e.g., the elderly or poor), which raise the costs to everyone else. Similarly, insurance companies are blamed for excessive administrative costs, even though these are directed largely at dealing with fraud, government impositions, and the supposedly obvious waste of profits.

Cus: You don't even know what the word empirical means let alone socialism. You're like a pig in shit: you only smell what you want to smell and what you wallow in. I'm all for free markets and capitalism. I've made money through the stock market. Capitalism driven by greed has been with us since the rise of mercantilism and the middle class in the early middle ages. You're an idiot, and represent the distortion of the issues that is going on in our country today. Get a life.

Mercantilism is not capitalism, because the economic pie is infinite. Keynesians (socialists on demand) are more like mercantilists, not free market supporters.

A socialist, who brags about making money, is a hypocrite, because you don’t want to give your wealth to the Government - but you want to take mine.

Sneering and name calling are not rational arguments. Yet that the best leftwing has to offer.

Thinking takes effort.

bordhead, every OPEC nation has a nationalized oil sector in which the state has a monopoly of ownership, production, and revenue. The state may enter into deals with foreign entities when it needs their expertise, but the fact remains that they are all state-socialist when it comes to oil. Where oil is drilled, how much is extracted, etc. all happens as a result of government orders, not free individuals voluntarily cooperating from mutual self-interest. The form of government that each OPEC state has (monarchy, military dictatorship, presidency for life, one-party republic, etc) is irrelevant to this issue, as is the degree of freedom in the rest of the economy or society (typically quite constrained as well). Again, the key is that the world's strategically critical resource of transportation fuel is under the control of a cartel whose raison d'etre is to deliberately produce less than it can, so as to increase prices.

Also, you carefully ignore the issue of loan capital being diverted to the unworthy, BY GOVERNMENT REGULATORS OR GSE'S, or as a result of political pressure by elected officials and outside activists. Since loans to high-risk, low-collateral, low-income, high-debt, low-reliability, bad-credit individuals and demographics have a high rate of default, lenders have a Hobson's choice. Try to shield themselves from high rates of non-payment by having an appropriately high interest rate or other tough conditions (and thus be accused of "predatory lending"), or refuse to hand out loans they are likely to lose money on compared to loans that are being requested by other more promising prospects (and then be accused of "redlining"). Most, especially when confronted with aggressive swarms of bullhorn wielding mobs yelling about racism (see ACORN, Al Sharpton's National Action Network, etc), quickly yield and hand over protection money, including in the form of below-market rate loans.

The real greed you should be going on about is of loudmouth borrowers who use muscle and intimidation and racial politics and political pressure to get loans they were unqualified for. With those loans on the books, it took Fannie and Freddie slapping an implicit taxpayer bailout promise to make these high risk asset bundles attractive to investors, at which point they simply responded to the artificial government created incentives and played a key role in creating a market that was artificially overheated, again as a direct result of distortions of the market caused by government.

Cus: I never stated or implied that mercantilism was capitalism. That was solely your fabrication. Mercantilism is a logical precursor to Capitalism, since supply and demand and the production of products must be in place before capitalization can take place. Of course captialism can also be applied to services in addition to goods, as is case today. But the engine of Captialism must have consumers to take the good off the hands of the producers. And, if you haven't noticed lately, the U.S. is the largest consuming nation in the history of civilization.

Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes (you think! Sure as hell seems like the case today) and therefore advocates active policy responses by the public sector, including monetary policy actions by the central back and fiscal policy actions by the government to stabilize output over the business cycle. Bernanke has done an admiral job of this considering the debacle caused by Greenspan. For all practical purposes, Keynesian economics has really functioned as a middle road between laissez-faire capitalism and socialism, and therefore is routinely attacked from both the right and the left. We are seeing a resurgence in Keynesian thought, brought on primarily by the world wide economic crisis and the excesses (the greed & risk I speak of) of large financial houses and banks. While I don't subscribe entirely to Keynesian thought, we are sorely in need of some type of government regulation to control these large financial houses and their excesses. You can scream about free market all you want, but we are all paying mightily for their monumental greed and irresponsibility in the end, and only a damn fool would think that any type of regulation to mitigate these kind of excesses would stifle free markets. What do you think caused the economic meltdown? If allowed to continue unabated again, this will simply lead to more excesses and another bubble, and next time the global economy will not recover.

In your narrow little world anyone who disagrees with you is labeled a socialist, which by the way I am not. And why would I want to give my wealth to the government, and how can I take your wealth by making astute decisions in the stock market. Sorry to tell you pal, but there ain't no free lunch. You no doubt feel very entitled to your entitlements like SS, Medicare, etc., which clearly represent the socialism that you rant about, of which you will gladly partake of. Talk about hypocrites. I hate labels, which is all you and your ilk can deal with. You know nothing of my political leanings, and I have only pointed out (correctly) where you are wrong. BTW, you remain an idiot.