Critics of the "free market" have felt rather triumphant lately. They have been blaming the financial crisis on mythical deregulation (despite no major deregulation of the financial sector being passed during Bush's term) and are ready to usher us out of the era of the "free market" and into the era of major government regulation, oversight, and control.
The problem with this argument is that the completely untamed, unregulated, unwieldy "free market" hasn't been around in the financial sector for a long, long time. The government has for several decades played a major role in designing the rules, incentives, and institutions in financial markets, so it only makes sense that we look at the government's role in creating this mess, not just the supposedly new-found greed of Wall Street CEO's.
Robert Bruner, dean of UVA's business school, explains here.
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