The failure of free markets and a deregulated economy.

This is not meant to be a long diatribe against unfettered Capitalism.  Rather, it is a short commentary on why  free markets fail, and why the dogma behind it is corrupt.

Religion, the basis for moral and ethical construction of societies (going back to early human development away from nomadic tribes to that of villages and cities) was, and never will been perfect.  Even if the core of its dogma seeks perfection, harmony and love, we know from history that many misdeeds have been committed under its name and banner.  It is wrought by charlatans, misguided intentions, and people who wish to do evil under the guise of religion.  Yet for all its failings, religion is (generally), of all the labors of Man, guided by that intention for (doing what's right / moral) perfection, harmony and love.

Yet followers of Adam Smith and Ayn Rand seem to think that Capitalism - a system based on greed no less - is somehow perfection, in and of itself.  Adam Smith fans like Alan Greenspan have long pushed the idea that free markets are self-correcting.  How curious isn't it, that a system based on greed, should be considered perfect, even while one based on morality and ethics (religion) is knowingly and demonstratively flawed?

Capitalism and free markets aren't evil or bad systems, but they are certainly NOT inherently perfect in and of itself!  We have all learned through school, that the founders of the United States, knowing the faults of man and fearful of imbalance, developed a government based on checks and balances.  What free market advocates deride as government intervention, is in reality and in practice, the only check and balance of Capitalism: REGULATION.

Capitalism may set up the rating agencies to price risk, but it is not itself free of fraud and fool-proof, as was witnessed by the collapse of the mortgage market.  The packaged derivatives were marked as AAA, when in fact the rating agencies were being paid by these companies who were offering the derivatives, to rate them.  We even know from internal emails and whistle-blowers, that the rating agencies were knowingly playing along with the game, which eliminated their ability to provide any check or balance against these market products.  Fund managers and investors - basing their trust on the rating agencies - bought these derivatives thinking they were investing in safe, AAA-rated products.  A big fail on free markets!

It goes without saying, but Libertarians, Tea Party supporters and Conservatives who continue to push the idea that smaller government is better, are pushing America away from the unique and core American idea of checks and balances.

Beware of corrupt dogma.