Here. What free market is that? First of all, the free market is not a static object. It is a dynamic process. Here is an excellent explanation:
The market is not a place or a person or a conspiracy. It is a process-a continuously adapting system of trial and error, experiment and feedback, freedom and responsibility. It rewards both discipline and risk taking, creativity and deferred gratification, foresight and learning from the past. The market process makes possible not only commercial activity but the countless voluntary associations that arise spontaneously when people are allowed the freedom to form their own bonds. Because it depends not on predetermined status but on contract-on choice and consent-the market is liberating. But it is not, as its critics charge, “atomistic,” except in the sense that atoms have a tendency to form molecules, which in turn create larger structures.
The market does, however, undermine central authority.
Here. That entire piece is worth reading.
Markets that currently exist are terribly distorted by too much political meddling. It has been this way for decades and did not magically appear with the election of Obama. The distortions have been made more visible by the financial mess and the government response. Take the real-estate industry, for example. The mortgage interest deduction, Fannie Mae and Freddie Mac subsidies, the too-big-too fail doctrine, heck even the Federal Reserve system itself are examples of political distortions in an industry. We are used to these subsidies and have come to think of them as the normal part of the economy. But they are not. There are thousands of pages of regulations behind them are enable politicians, regulators, and special interests to manipulate the market from behind the scenes. Lowering the minimum amount of a down payment to buy a house, for example, was a political decision. Bankers would not assume that kind of greater risk unless they could mitigate it, and they were able to because they could sell those risky mortgages to Fannie and Freddie who could then package them in MBS and CMO.
Here is a related piece by George Will on the Federal Reserve.