Failure has to be allowed and this is not in dispute. The point is that the lack of proper regulations and oversight creates a situation in which businesses not only fail but also hurt millions (billions) of innocent people all over the world. Why should computer programmers in Dallas or car manufacturers in Mexico lose their jobs just because some greedy bankers in NJ were giving away million dollar zero-down mortgages to people who did not qualify for even a car loan, greedy brokers in NY were packaging those mortgages into risky derivatives and greedy stupid analysts at S&P and Moody's were giving those worthless "securities" AAA ratings?
The point is not that failure has to be allowed as it certainly does. The point is that "free market" leads to economic disasters affecting entire countries and is therefore a failed theory at least in its pure form. Oversight and regulations are needed to prevent the kind of failure that can bring down the economy of the entire planet for decades to come. Now that it has already happened the government is not bailing out failed businesses, it's bailing the entire world out of a disastrous financial calamity, the government is bailing itself out of their obsession with free markets which has turned out to be a costly and dangerous mistake.
